Douglas County, a Political Subdivision of the State of Oregon v. Bruce Babbitt, Secretary of the Interior, United States Department of the Interior, Douglas County, a Political Subdivision of the State of Oregon v. Bruce Babbitt, and Headwaters, Inc. Umpqua Valley Audubon Society, Defendants-Intervenors-Appellants

Citations: 48 F.3d 1495; 95 Cal. Daily Op. Serv. 1361; 95 Daily Journal DAR 2438; 40 ERC (BNA) 1225; 1995 U.S. App. LEXIS 3532Docket: 93-36013

Court: Court of Appeals for the Ninth Circuit; February 23, 1995; Federal Appellate Court

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Secretary of the Interior Bruce Babbitt and intervenors Headwaters, Inc. and Umpqua Valley Audubon Society appeal a district court's summary judgment favoring Douglas County, Oregon, which claimed the Secretary did not comply with the National Environmental Policy Act (NEPA) in designating federal land as critical habitat for the Northern Spotted Owl under the Endangered Species Act (ESA). The district court issued permanent injunctive relief, nullifying the critical habitat designation, but stayed the order pending appeal. The court has jurisdiction under 28 U.S.C. § 1291 and affirmed in part, reversed in part, and remanded the case.

The ESA allows the Secretary to list species as threatened or endangered and mandates the designation of 'critical habitat,' defined as areas essential for species conservation. This designation must be based on the best scientific data available, considering economic and other relevant impacts. The Secretary must adhere to specific procedures for public notification and comment regarding critical habitat designations. Furthermore, designating an area as critical habitat prohibits federal actions likely to harm that habitat.

NEPA requires federal agencies to prepare detailed statements on environmental impacts for major federal actions affecting human environmental quality, including unavoidable adverse effects, alternatives to proposed actions, short-term versus long-term environmental impacts, and any irreversible resource commitments involved.

An environmental impact statement (EIS) is a procedural requirement ensuring agencies consider the environmental implications of their actions and keep the public informed. An environmental assessment (EA) helps determine if an EIS is necessary based on the significance of a proposed action's environmental impact. 

On June 26, 1990, in response to environmental litigation, the Secretary listed the Northern Spotted Owl as a threatened species under the Endangered Species Act (ESA) but did not designate critical habitat due to insufficient information. A court ordered the Secretary to propose a critical habitat designation by April 30, 1991, and to finalize it as soon as regulations permitted. 

On May 6, 1991, the Secretary proposed designating over 11.6 million acres as 'proposed critical habitat' and indicated plans to revise based on public comments. Despite public hearings where 364 testimonies were gathered, the Secretary decided an EA and EIS were unnecessary, citing a policy from 1983 that exempted ESA determinations from NEPA requirements. This policy was supported by relevant case law and guidance from the Council on Environmental Quality (CEQ). 

Douglas County submitted comments on May 30, 1991, alleging NEPA noncompliance. Following this, on August 13, 1991, the Secretary revised the critical habitat proposal to 8.2 million acres, excluding private and most state lands, and maintained the position that an EA was not required. 

Finally, on January 15, 1992, the Secretary issued a final critical habitat designation of 6,887,000 acres, all federal land, accompanied by a comprehensive analysis of the factors influencing this decision.

Douglas County initiated a lawsuit in the U.S. District Court for the District of Oregon on September 25, 1991, seeking declaratory and injunctive relief, primarily alleging that the Secretary failed to adhere to the National Environmental Policy Act (NEPA) in the designation of critical habitat. The Secretary contested the County's standing to file the suit. Following the final designation's publication, all parties submitted motions for summary judgment. The district court ruled that Douglas County had standing and granted summary judgment in its favor, concluding that NEPA was applicable to the Secretary's habitat designation actions. Consequently, the court set aside the critical habitat designation until NEPA compliance was achieved, and then stayed this order pending appeal.

On appeal, the Secretary and Headwaters contended that the district court's ruling was erroneous, particularly challenging the County's standing and arguing that NEPA procedures were displaced by the Endangered Species Act (ESA) procedures in the context of critical habitat designations. Headwaters further claimed that an Environmental Impact Statement (EIS) was unnecessary as the federal action did not alter the natural environment and requiring one would undermine both NEPA and ESA objectives. 

The appellate court reviewed the standing de novo, following the Supreme Court's criteria from Lujan v. Defenders of Wildlife, which necessitates that a plaintiff demonstrate (1) an injury in fact that is concrete and particularized, (2) a causal connection between the injury and the defendant's actions, and (3) a likelihood that the injury would be remedied by a favorable court decision. Additionally, a plaintiff must show that their injury falls within the “zone of interests” protected by the relevant statute, in this case, NEPA, which is designed to protect environmental interests rather than economic ones. To deny the County's standing, it would need to be proven that its interests were fundamentally at odds with NEPA's objectives, and such inconsistency would need to be substantial enough to suggest Congress did not intend to allow the suit.

Douglas County claims standing based on multiple injuries, including procedural injury, proprietary interests, impacts on citizen quality of life, wildlife harm, and resource management interests. The court finds that procedural standing is sufficient to support the County's claims, rendering other standing arguments unnecessary. The County specifically cites procedural injuries due to the U.S. Fish and Wildlife Service's (FWS) failure to prepare an environmental document analyzing alternatives and cumulative effects. Citing *Lujan v. Defenders of Wildlife*, the court emphasizes that procedural standing requires two elements: a plaintiff must have a procedural right to protect concrete interests and possess a threatened concrete interest. The County meets the first criterion because NEPA allows local agencies, like Douglas County, to comment on federal actions concerning environmental standards. The County's concrete interest is its proprietary interest in lands adjacent to critical habitats, which could be negatively impacted by federal land management practices. An affidavit from Kenneth Hendrick, the County's Land Department director, indicates concerns over how federal practices may affect adjacent lands, particularly regarding pest and fire management. The court recognizes these concerns as plausible interests within NEPA's protective zone, allowing the County to assert procedural rights without needing to demonstrate immediate harm or redressability, consistent with *Lujan* case law.

The County fulfills Lujan's procedural standing requirements, possessing a procedural right and a concrete interest that could be negatively impacted by the critical habitat designation, aligning with the interests NEPA aims to protect. The standard of review for a district court's summary judgment is de novo. The application of NEPA to the Secretary's decision on critical habitat designation is a novel issue. NEPA mandates that federal agencies comply with Environmental Impact Statement (EIS) requirements for major federal actions significantly affecting the environment. The Supreme Court emphasizes that NEPA's directive to consider environmental factors must not be overlooked. However, certain agency actions may fall outside NEPA's scope if existing laws prevent compliance. An example provided is the Flint Ridge case, where requiring an EIS conflicted with statutory duties under another law. The current designation of critical habitat does not involve strict time constraints, indicating that such a conflict does not exist here. Consequently, the argument that NEPA must apply in the absence of a conflict is rejected; thus, NEPA does not apply to the critical habitat designation in this case.

ESA procedures for designating critical habitats have effectively replaced NEPA requirements, similar to the findings in Merrell v. Thomas regarding FIFRA. In Merrell, it was established that NEPA did not apply to EPA's pesticide registration under FIFRA because Congress created distinct procedures for each statute and chose not to impose NEPA on FIFRA. This legislative history indicated an intent for FIFRA processes to supplant NEPA's protocols.

Likewise, the legislative history of the ESA reveals Congress's intent for ESA procedures to supersede NEPA requirements for critical habitat designations. Following NEPA's enactment, Congress amended the ESA in 1978 to provide a specific process for critical habitat designation, which included considerations of economic impacts. The House Committee Report emphasized the need for flexibility in the ESA requirements and aimed to enhance the listing and public notice processes, ensuring thorough data surveys and community input before final decisions.

The ESA process mandates that the Secretary publish designations in the Federal Register, notify affected states and organizations, summarize the designations in local media, and hold public hearings when requested. This structured approach to public participation mirrors the displacement of NEPA's procedural requirements, as seen in FIFRA. The Secretary is required to analyze the effects of the designation, including economic and scientific data, addressing NEPA-related concerns about environmental impacts positively affecting the species involved. Overall, the ESA's critical habitat designation process fulfills NEPA's goals of public notice and participation without requiring NEPA compliance.

The statute in question reflects a compromise that limits the application of NEPA (National Environmental Policy Act) requirements, similar to the findings in Merrell. Applying NEPA to the registration process under FIFRA (Federal Insecticide, Fungicide, and Rodenticide Act) was deemed detrimental to Congress's intended process for pesticide registration. The same reasoning applies here, as Congress established a specific procedure for the Secretary to follow regarding endangered species, and requiring an Environmental Impact Statement (EIS) would obstruct efforts to enhance environmental conditions.

The Endangered Species Act (ESA) contains distinct mandates, particularly regarding the critical habitat designation process, which requires the Secretary to designate areas essential for species survival, without the discretion to consider environmental impacts in extinction cases. Congress implicitly accepted the Secretary's policy of not preparing EISs for critical habitat designations, as evidenced by the 1988 ESA amendments that left critical habitat provisions unchanged despite past judicial interpretations suggesting NEPA's non-application.

The Secretary's 1983 decision to forgo Environmental Assessments (EAs) and EISs for critical habitat designations was not contested by Congress in subsequent amendments, indicating that this interpretation aligns with congressional intent. Douglas County's argument, based on a conference committee report from the 1978 ESA amendments suggesting notification of local governments regarding critical habitat designations, does not clearly support the idea that Congress intended NEPA to apply to these designations, especially since the language did not become part of the final statute and is not definitive about requiring an EA or EIS.

The district court determined that NEPA applies to critical habitat designations, referencing the Senate's 1978 debate on the issue, which indicated Congress's choice not to explicitly clarify NEPA's applicability to ESA designations. The County cited Jones v. Gordon, asserting it should guide the analysis regarding NEPA's relevance; however, the court found that Jones does not conclusively establish that an irreconcilable conflict between NEPA and other statutes is the only means to exempt actions from NEPA requirements. The court noted that procedural safeguards under ESA and the Administrative Procedure Act sufficiently check the Secretary's discretion in critical habitat designations.

Furthermore, the court concluded that NEPA does not mandate an Environmental Impact Statement (EIS) for actions that do not alter the natural environment. It emphasized that NEPA's purpose is to enhance and protect the environment, and thus, an EIS is unnecessary for federal actions aimed solely at conservation. The Supreme Court's interpretation of NEPA reinforces that the statute's focus is on the physical environment—air, land, and water—rather than broader impacts on human health and welfare.

An Environmental Impact Statement (EIS) is unnecessary under the National Environmental Policy Act (NEPA) when an action does not alter the natural environment. Legal precedent supports this, such as in Sabine River Authority v. U.S. Department of Interior, where the Fifth Circuit ruled that acquiring a negative easement that prevents development did not constitute a significant change to the physical environment, thus not requiring an EIS. Similarly, the court in National Association of Property Owners v. U.S. stated that an EIS is not needed to “leave nature alone.” The district court, however, incorrectly assumed that designating critical habitat would change the environment, overlooking that natural environments continuously evolve without human interference. Headwaters argues, and this position is supported, that when federal actions prevent human interference, an EIS is not warranted.

Additionally, NEPA does not apply to the designation of critical habitats under the Endangered Species Act (ESA), which serves to further NEPA's goals without necessitating an EIS. NEPA aims to enhance human welfare by assessing the environmental impacts of actions, while the ESA focuses on preventing species extinction. By designating critical habitats, the Secretary supports environmental preservation, and requiring an EIS would impede these efforts. The district court's reasoning, which diverged from the rationale applied in Pacific Legal Foundation, fails to consider that the same analysis supporting the non-application of NEPA in ESA contexts is relevant here.

The court in *Pacific Legal Foundation* determined that applying the National Environmental Policy Act (NEPA) to species listing under the Endangered Species Act (ESA) would undermine the ESA's objective, as the ESA prohibits the Secretary from considering environmental impacts in such listings. The Secretary is only permitted to consider economic impacts and other relevant factors when designating critical habitats. The district court's interpretation that the phrase "any other relevant impact" allows for a broader analysis under NEPA is considered misguided, as the impacts must be relevant to the ESA's designation process, which focuses on species preservation. Furthermore, the Secretary lacks the discretion to conduct the extensive environmental analysis required by NEPA in the context of critical habitat designations.

The Sixth Circuit noted that applying NEPA to the ESA would not enhance NEPA's goals because the Secretary does not possess the authority to consider factors outside of those explicitly listed in the ESA. While the district court claimed NEPA applies to all significant federal actions unless there is a clear statutory conflict, the court disagrees, referencing a prior case to argue that NEPA did not apply to the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) due to Congressional intent.

Additionally, the court in *Pacific Legal Foundation* highlighted that the legislative histories of both NEPA and ESA indicate no requirement for an Environmental Impact Statement (EIS) prior to species listing or critical habitat designation. Ultimately, the analysis from *Pacific Legal Foundation* is deemed applicable to the current case, supporting the conclusion that applying NEPA to the ESA would not serve the objectives of either statute.

Douglas County has standing to contest the Secretary's decision not to prepare an Environmental Impact Statement (EIS) prior to designating critical habitat for the Northern Spotted Owl due to procedural injury. However, the court finds that the National Environmental Policy Act (NEPA) does not apply to the Secretary's habitat designation under the Endangered Species Act (ESA) for several reasons: (1) the ESA procedures for critical habitat designation were intended by Congress to supersede NEPA requirements; (2) NEPA is not applicable to actions that do not alter the physical environment; and (3) applying NEPA in this context would not support the objectives of either statute. The court emphasizes the importance of protecting unique resources such as old growth forests and species within them, and expresses concern that NEPA could be used as an obstructionist tool against environmental protection. The decision is affirmed in part, reversed in part, and remanded for further consideration in alignment with these views, with each party responsible for its own legal costs. The ruling also clarifies that the Fish and Wildlife Service's actions will be attributed to the Secretary of the Interior, noting a change in the Secretary's identity in the litigation. Legal precedents are cited to support the recognition of standing based on procedural injury, with indications that this standing may arise from either statutory provisions or the existence of concrete interests at stake.

In prior cases such as Friends of the Earth, Pacific Northwest, and Coleman, the assumption was that plaintiffs with specific environmental interests possess a right to ensure proper adherence to applicable procedures, independent of whether the challenged statutes explicitly confer procedural rights. The district court appropriately aligned the "geographic nexus" test from earlier Ninth Circuit rulings with the "concrete interest" requirement established in Lujan. While Lujan allows for standing based on future consequences of actions, it does not specify the necessary probability of such events occurring, although the court believes that the potential environmental harm from a future dam construction is reasonably probable. 

Further, the court notes that while certain categorical exceptions to NEPA exist, they are not applicable in this instance. The defendants' argument regarding statutory displacement, although not presented in the lower court, can still be raised on appeal as a legal issue. The 1978 House Bill language regarding critical habitat designation later became part of the Endangered Species Act (ESA). Some courts have applied a "functional equivalent" test to exempt agency actions from NEPA, suggesting that ESA procedures could serve as a substitute for NEPA requirements. However, the defendants in this case did not invoke the functional equivalent argument, leading the court to refrain from discussing it. The County misinterprets the distinction between the "displacement" and "functional equivalent" arguments, as the former implies Congress intended to replace one procedure with another, while the latter indicates procedural similarities. Lastly, plaintiffs retain the right to challenge the Secretary's compliance with the ESA's procedural requirements under the Administrative Procedure Act (APA).

Amici Timber argue that if an Environmental Impact Statement (EIS) is not mandated for critical habitat designation, the Secretary must still prepare an Environmental Assessment (EA) to determine the necessity of an EIS. This argument is flawed; if an EIS is not required for critical habitat designations under the Endangered Species Act (ESA), then an EA would be unnecessary. Amici Timber also claim that the National Environmental Policy Act (NEPA) requires an EIS for actions that maintain the status quo, citing cases that primarily addressed procedural adherence to NEPA without disputing its applicability. The court clarifies that discussions of EIS in those cases do not imply endorsement of its necessity where it was not contested. Additionally, while Amici Timber reference a case regarding hydroelectric plant relicensing, it is deemed inapplicable due to concerns over impacts on fish populations, which differ from the context of the spotted owl critical habitat designation that does not pose similar threats. The court also notes its prior decision that actions maintaining the status quo do not necessitate an EIS.