In a 5-4 decision rendered June 25, 2007, the U.S. Supreme Court held that the Endangered Species Act (ESA) does not necessarily take precedence over other congressional mandates. In National Assn. of Home Builders v. Defenders of Wildlife,1 the Court addressed a confrontation between two powerful federal laws. The question before the Court was whether delegation of the Clean Water Act (CWA) permit program to the State of Arizona, which is mandatory under the CWA if nine statutory criteria are met, triggers the equally mandatory provisions of the ESA that federal action agencies “insure” the well being of listed species through consultation with federal fish and wildlife agencies. The Court refused to add ESA consultation as a “tenth criterion” for delegation to states under the CWA. It found reasonable an agency rule that exempts certain federal actions from the consultation requirement. The case has important implications for the Northwest in that it could directly impact ongoing litigation related to operations of the Federal Columbia River Power System (FCRPS).
By way of background, ESA § 7(a)(2)2 requires federal action agencies to consult with either or both of the National Marine Fisheries Service and U.S. Fish and Wildlife Service (USFWS)3 in order to “insure that any action authorized, funded, or carried out by such agency . . . is not likely to jeopardize the continued existence of any endangered species or threatened species.” Previously, this has been broadly construed to extend consultation requirements upon virtually any federal action that could affect listed species, including EPA action under the CWA.
CWA § 402 established a National Pollution Discharge Elimination System (NPDES) permit program initially administered by EPA. However, in § 402(b)4 Congress provided a means by which the states may apply to EPA for delegation of the NPDES program if nine criteria are met. The criteria relate to the state having adopted the regulatory infrastructure needed to implement the program. If the criteria are met, then § 402(b) provides that EPA “shall approve each submitted program” for transfer to the state.
For previous delegations to states, EPA had consulted with the fish and wildlife services under ESA § 7. Indeed, when Arizona applied for delegation in the present case, EPA initiated consultation with the USFWS. The USFWS saw no direct impact on listed species from the delegation, but was concerned about indirect effects due to increased issuance of discharge permits by the state, and urged EPA to take that into account. EPA disagreed, partly on the basis that CWA § 402(b) provided no authority to consider more than the specified nine criteria. The matter was referred to the national offices of the two agencies for resolution, and USFWS issued a biological opinion that concluded no jeopardy would result to listed species. In the ensuing litigation, EPA asserted it had no duty at all to consult under ESA § 7.
The Supreme Court agreed with EPA that the nine criteria in CWA § 402(b) are mandatory and EPA lacked discretion to add what Justice Samuel Alito, writing for the Court, deemed a “tenth criterion.” That is, though ESA might require consultation in most cases, in the matter of delegation of NPDES program authority, ESA’s mandatory provisions run head on into those of the CWA. Imposing ESA § 7 consultation on top of CWA § 402(b) criteria would constitute a repeal or amendment of the CWA by implication, which courts disfavor.
To solve this problem, the Court turned to a regulation adopted by the USFWS that interprets ESA § 7(a)(2) to apply only to agency actions “in which there is discretionary Federal involvement and control.”5 The Court concluded, “This interpretation harmonizes the statutes by giving effect to the ESA’s no-jeopardy mandate whenever an agency has discretion to do so, but not when the agency is forbidden from considering such extra statutory factors.” Slip Op. at 18. This interpretation is entitled to Chevron6 deference due to the “fundamental ambiguity” caused by the competing mandates in the ESA and CWA that cannot be resolved by the statute alone.
In reaching this conclusion, the Court distinguished its earlier holding in TVA v. Hill, 437 U.S. 153 (1978). In that case, the Court held that ESA § 7 allowed of no exemptions and reflected congressional intent to give endangered species primacy over the primary missions of other federal agencies. However, Justice Alito noted that TVA was decided before the USFWS regulation exempting non-discretionary acts was adopted, and that the facts in TVA were that the federal agency had some discretion to put the dam into operation.
Justice John Stevens, joined by Justice David Souter, Justice Ruth Bader Ginsburg, and Justice Stephen Breyer, dissented in the opinion and argued for a remand to the EPA. Justice Stevens acknowledged the competing statutory mandates contained in the ESA and CWA. Citing previous opinions of the Court (TVA and Babbit v. Sweet Home Chapter, Communities for Great Ore., 515 U.S. 687 (1995)) and congressional discussion of the proposed ESA, his dissent also noted that Congress intended the ESA to apply as a first priority and without exception, and purposefully omitted all phrases that would have qualified § 7’s force. The majority’s decision, Justice Stevens contends, fails in its duty to give full effect to both the ESA and the CWA, where possible, by observing in the ESA an exemption for mandatory agency action that Congress neither included nor contemplated. The dissent challenged the majority’s acquiescence in the EPA’s opinion that § 7 of the ESA does not apply to non-discretionary agency actions on the grounds that the EPA is not charged with administering the ESA and is therefore not owed such deference.
Further, Justice Stevens explored alternative possibilities for harmonizing the requirements of the two acts, suggesting that the EPA has more discretion in carrying out the requirements of the CWA than the majority admitted. First, the § 7 mandate that the EPA consult with agencies designated by the Departments of the Interior and Commerce to determine the proposed action’s potential harms to endangered species could steer the EPA through the process of transferring oversight of the NPDES to states by looking for “reasonable and prudent alternatives” to any aspects of the state’s system that might jeopardize endangered species while still implementing the transfer. Second, even once administrative authority over the NPDES has been transferred to the state, the EPA retains oversight over the state’s system. The EPA requires each state to enter into a Memorandum of Agreement (MOA) before the transfer of authority takes place that could include requirements that the state abide by the ESA or sufficiently protect endangered species in order to maintain its authority to administer the NPDES.
This case has important implications for the Pacific Northwest. Just this past April the Ninth Circuit Court of Appeals affirmed Judge James Redden’s striking down of the 2004 Biological Opinion for operating the FCRPS.7 The central argument advanced by NMFS was that since the Lower Snake River dams were authorized and funded by Congress, it lacked discretion to consider their presence as an element of the Biological Opinion. In other words, the dams were deemed part of the environmental baseline, and NMFS could lawfully consider only the incremental operational changes in its Biological Opinion. The Ninth Circuit rejected this argument in its entirety. While the massive FCRPS presents more complexity than issues surrounding transference of NPDES authority to Arizona, NMFS’ argument in the FCRPS case has certainly been given new life by the Court’s decision in National Home Builders v. Defenders of Wildlife.
NMFS may be expected to argue that National Home Builders requires re-examination of its argument that it lacked discretion to consider the existence of the federal dams in its biological opinion. Opponents may seize upon the distinction drawn by Justice Alito between the situation in TVA and in National Home Builders. That is, Congressional authorization of the Lower Snake dams may not be so specific as to constitute a mandate in conflict with ESA. Opponents may also seize upon Justice Stevens’ effort to find a middle ground if the FCRPS legislation is not as specific as CWA § 402(b). We will continue to monitor the case and report on developments.
1 551 U. S. _____ (2007), Slip Opinion.
2 16 U. S. C. § 1536(a)(2).
3 NMFS is a unit within the Department of Commerce with ESA authority over anadromous fish and marine wildlife. USFWS is an agency within the Department of the Interior with responsibility for resident fish and terrestrial and avian wildlife.
4 33 U.S.C. § 1342(b).
5 50 CFR § 402.03.
6 Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984).
7 National Wildlife Federation v. NMFS, 481 F.3d 1224 (9th Cir. 2007).