In 2005, the National Marine Fisheries Service (NMFS) designated the Green Sturgeon as a threatened species under the Endangered Species Act (ESA). When a species is considered threatened, under ESA, agencies are required to designate critical habitat for that species. Critical habitat is land that is essential to the conservation of the species and may require special management considerations or protections. In determining whether or not to exclude an area from critical habitat ESA says an agency “may exclude any area from critical habitat if [it] determines that the benefits of such exclusion outweigh the benefits of specifying such area as part of the critical habitat.” (16 U.S.C. § 1533(b)(2).) In 2010, NMFS designated over 11,000 square miles of marine habitat, 897 square miles of estuary habitat, and riverine habitat as critical habitat for the Green Sturgeon.

Following the designation, the Building Industry Association of the Bay Area and Bay Planning Coalition (collectively BIABA) sued. The court granted summary judgment in favor of NMFS. It stated that NMFS had a nondiscretionary duty to consider the economic impact of all critical habitat designations, but was not required to use any particular methodology, NMFS had complied with that duty, and NMFS’s decision not to exclude areas was not reviewable. BIABA appealed, and, in Bldg. Industry Assn. of the Bay Area v. U.S. Dept. of Commerce (9th Cir., July 7, 2015, No. 13-15132) __ F.3d __ (2015 U.S.App.LEXIS 11645), the Ninth Circuit affirmed the district court’s decision in its entirety.

First, the Ninth Circuit held ESA did not require NMFS to follow a specific methodology when designative critical habitat. ESA Section 4(b)(2) provides:

The Secretary shall designate critical habitat… on the basis of the best scientific data available and after taking into consideration the economic impact… The Secretary may exclude any area from critical habitat if he determines that the benefits of exclusion outweigh the benefits of specifying such area as part of critical habitat, unless he determines, based on the best scientific and commercial data available, that the failure to designate such an area as critical habitat will result in the extinction of the species concerned.

16 U.S.C. § 1533(b)(2).

BIABA asserted that this section requires the agency to assess whether the economic benefits of excluding an area from designation outweigh the conservation benefits of including the area. The court was not convinced. The court stressed that the word “may” in the statute suggested that the agency has discretion in whether or not to balance economic benefits. NMFS’s interpretation was reasonable given the statute’s language, and the court was required to defer to NMFS’s interpretation.

BIABA also argued that NMFS violated ESA because it did not consider the economic impacts in all of the areas considered for designation, but only those that were considered high risk. The court said this approach was within NMFS’s powers because the Green Sturgeon was unlikely to survive without these high risk areas, and NMFS was only statutorily required to designate an area if extinction of the species would otherwise occur.

Finally, BIABA argued the district court incorrectly held decisions by NMFS not to exclude areas are not reviewable by courts. The court disagreed. Section 4(b)(2) explains that the decision to exclude areas from designation is always completely discretionary, and in no circumstance is exclusion required under section 4(b)(2). The court held there is no basis under section 4(b)(2) for reviewing the decision not to exclude areas from designation, so there is no basis for reviewing BIABA’s claim.

Key Point

ESA Section 4(b)(2) does not require agencies to follow a specific balancing-of-benefits methodology. Section 4(b)(2) is a discretionary process through which agencies include or exclude areas for designation. An agency’s decision not to e