Weyerhaeuser Company v. U.S. Fish and Wildlife Service

Environmental Law

Argument: October 1, 2018

Decision: November 27, 2018

Petitioner BriefWeyerhaeuser Company

Respondent BriefU.S. Fish and Wildlife Service

Court below: 5th Circuit Court of Appeals

Court below: 5th Circuit Court of Appeals

The Supreme Court sends an environmental case back down for further review.

This case was originally filed by a timber harvester, Weyerhaeuser Company, seeking to avoid environmental regulation of its land ("Unit 1"). The U.S. Fish and Wildlife Service labeled the property a "Critical Habitat" for an endangered species of frog, the dusty gopher frog. 

Weyerhaeuser v USFWS - Decision.png

Weyerhaeuser argued the agency didn't have the right to label Unit 1 a "Critical Habitat," and the designation is going to cost it a lot of money. Weyerhaeuser and the rest of the owners of Unit 1 have big plans to prepare the land for development.

The land

Dusty gopher frogs now live only in Mississippi, but they used to live in Louisiana and specifically in Unit 1. They used some ponds in Unit 1 - ephemeral ponds - that have particular qualities necessary for the frogs' breeding season. There aren't too many dusty gopher frogs left (around 135 adults, according to FWS), so FWS is trying to help them recover. FWS declared it would need to preserve Unit 1, not just the ponds but also the surrounding space which would serve as traveling grounds for the frogs between the ponds and their non-breeding spaces.

The arguments on the Critical Habitat designation

Weyerhaeuser argued FWS exceeded its authority when it designated Unit 1 as a "Critical Habitat" for the frogs. According to Weyerhaeuser, under the Endangered Species Act an area can only be a "Critical Habitat" if it has all of the characteristics the species would need for survival. Unit 1 has the ponds that frogs used to use for breeding season, but Weyerhaeuser claims the state of the area has changed in recent years due to development. Unit 1 no longer provides suitable habitat. It would require a lot of work to turn Unit 1 into a suitable habitat ("fire treatment" to change the land qualities). Because the land is not currently even habitable by the frogs, Unit 1 cannot be a "Critical Habitat."

The agency (FWS) admits that the frogs don't live in Unit 1 now, but argues that doesn't matter. The agency argues the land is suitable for habitation by the dusty gopher frogs. Although it might need some modification, that does not prohibit the agency from designating the land as a "Critical Habitat" to the species.

Weyerhaeuser's additional argument on the economic impact analysis

FWS is supposed to account for the economic harm of making a Critical Habitat determination. If the costs of the designation (limits on development, for example) will outweigh the benefits, then the agency should not make the designation. FWS did the economic impact analysis, but Weyerhaeuser argues the agency didn't properly account for all of the costs. Weyerhaeuser said the designation would cost it and the other owners $20-$34 million in permitting and lost development opportunity and argued that the agency neglected to account for the costs correctly.

Agency decision-making

Agencies are bound by federal laws that give them authority. Aside from the guidelines provided in those laws, the agencies have a lot of discretion. However they can't abuse their discretion (can't act "arbitrarily" or "capriciously"). The Administrative Procedure Act (another federal law) allows parties to sue an agency for abuse of discretion.

When Weyerhaeuser sued the US Fish and Wildlife Service, it argued 1) the agency didn't abide by the Endangered Species Act's definition of "Critical Habitat"; and 2) the agency abused its discretion when it evaluated the economic impact of the "Critical Habitat" designation.

The lower courts’ decisions

The lower courts were reluctant to challenge the agency's authority on both of these questions. They didn't dive too far into the meaning of "Critical Habitat." It said the agency could label land critical to a species regardless of whether the habitat was "habitable." Thus, the lower courts didn't make any decisions about what "habitable" actually means. Currently being habited? Able to be habited now? Able to be habited with modifications?

Furthermore, the lower courts refused to review the agency's economic impact analysis. Weyerhaeuser challenged, saying of course a court can review whether the agency abused its discretion in conducting the cost-benefit analysis.

Weyerhaeuser was in a losing position when it appealed to the Supreme Court.

Supreme Court ruling

The Supreme Court ruled the lower courts would have to look harder at the agency's actions. Both questions - the Critical Habitat designation and the economic impact analysis - needed to be addressed more clearly. 

The Supreme Court said of course a piece of land must be "habitable" in order to be a "Critical Habitat." The lower courts will have to think through what it means to be "habitable." And the economic impact analysis is indeed reviewable by a court. Because the lower courts did not review whether the agency improperly accounted for the costs and benefits of the designation, they will have to dive back in. The Court said, "This is the sort of claim that federal courts routinely assess when determining whether to set aside an agency decision as an abuse of discretion under [the Administrative Procedure Act]."


Earlier (Pre-Argument) Report:

A "Critical Habitat" designation has a timber harvester asking the High Court for help.

Weyerhaeuser Company owns a piece of a land parcel called "Unit 1" in Louisiana. And possibly more importantly, Weyerhaeuser has a deal with the rest of the owners of the Unit 1 that Weyerhaeuser can harvest timber from the property to ready the space for development. 

But the development plans may end up soiled. The U.S. Fish and Wildlife Service (FWS) has declared that Unit 1 is a "Critical Habitat" for an endangered species of frog, the dusty gopher frog.

Weyerhaeuser v USFWS

Dusty gopher frogs now live only in Mississippi, but they used to live in Louisiana and specifically in Unit 1. They used some ponds in Unit 1 - ephemeral ponds - that have particular qualities necessary for the frogs' breeding season. There aren't too many dusty gopher frogs left (around 135 adults, according to FWS), so FWS is trying to help them recover. FWS declared it would need to preserve Unit 1, not just the ponds but also the surrounding space which would serve as traveling grounds for the frogs between the ponds and their non-breeding spaces.  

Weyerhaeuser: Unit 1 is not a "Critical Habitat"

Weyerhaeuser sued FWS. The company argued FWS exceeded its authority when it designated Unit 1 as a "Critical Habitat" for the frogs. That depends on how you read the Endangered Species Act. 

According to Weyerhaeuser, an area can only be a "Critical Habitat" if it has all of the characteristics the species would need for survival. Unit 1 has the ponds that frogs used to use for breeding season, but Weyerhaeuser claims the state of the area has changed in recent years due to development. Unit 1 no longer provides suitable habitat. It would require a lot of work to turn Unit 1 into a suitable habitat ("fire treatment" to change the land qualities). Because the land is not currently even habitable by the frogs, Unit 1 cannot be a "Critical Habitat."

Moreover, FWS is supposed to account for the economic harm of making such a determination. When Weyerhaeuser told FMS about the $20-$34 million the designation would cost in terms of permitting and lost development opportunity, the agency didn't account for it correctly and simply said the biological benefits outweighed it.

FMS's response: the habitat is "Critical"

FMS says the agency is only acting to "conserve" the species. That's what the Endangered Species Act tells the agency to do. And "conservation" in the Act is the "use of all methods and procedures which are necessary to bring any endangered species or threatened species to the point [of non-endangerment]. The Act allows FWS to designate an area which currently is uninhabited by the species if the current spaces are inadequate to conserve the species.

FWS admitted that Unit 1 isn't in perfect condition for the frogs at the moment, but they are hopeful that the area can become suitable for the frogs. The agency would like to work with the landowners and perhaps help the landowners get some federal funding for development plans which could work in favor of the frogs as well.

Once the designation kicks in, private parties aren't bound to take any actions. They just can't modify the habitat in a way that would cause injury or death to a member of the endangered species. The timber harvesting could still go on, and development might not even need federal approval. That would depend on whether the landowners are trying to fill in certain types of wetlands.  

Chevron Deference

Generally, once the analysis gets into the specifics of an agency's expertise, courts are supposed to defer to agencies. The Chevron v. NRDC case in 1984 set the standard. As long as the Act could be reasonably interpreted to allow the agency to take a given action, the court will trust the agency's judgment.

Where the act says uninhabited areas can be designated if habited areas are inadequate, the court might see if the agency made a reasonable effort to determine that the habited areas are inadequate, but under Chevron, a court might not question the details of that decision.

In this case, FWS went through a detailed process in deciding Unit 1 was needed. So the argument is tougher on Weyerhaeuser. Weyerhaeuser must argue that the Act specifically does not allow any areas that currently aren't a complete environmental fit for the frogs to be designated "Critical Habitats." The statute doesn't say that exactly, so Weyerhaeuser is seeking to imply that conclusion by combining several pieces of the Act.

Disapproval of Chevron

Disapproval of the Chevron doctrine has come from the conservative end of the spectrum, with arguments that it leaves agency power unchecked. Over the years since Chevron has been the rule, it has been debated and judges have found ways to avoid applying it.

Here is an article outlining recent views of the Justices on Chevron. Notably, it references a concurrence from Justice Kennedy in a case of the 2017 term questioning the way Chevron is applied. Kennedy just retired and his potential replacement, Kavanaugh, has disapproved of Chevron too. 

However, because Chevron is the current precedent, it would take a confident Supreme Court to overturn it. This case does not present the most controversial application of Chevron, so it may not be the right case in which to do it.

The Supreme Court will hear arguments on October 1, 2018. 


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