In Arizona Cattle Growers’ Association v. Salazar (PDF), the U.S. Court of Appeals for the Ninth Circuit upheld a Fish and Wildlife Service (“Service”) determination that under the Endangered Species Act (“ESA”), critical habitat for the threatened Mexican spotted owl is not limited to areas where the owl actually resides, but can encompass areas that the owl uses with sufficient regularity that it is likely to be present during a reasonable span of time.  That standard means the thousands of miles of migratory bird flyways used by ESA-listed birds could become protected critical habitat. The decision also held that when implementing the ESA’s requirement to decide whether the costs of designating an area as critical habitat outweigh the benefits, the Service need not include costs caused by the critical habitat designation if such costs can also be attributed to listing the species.

Arizona Cattle Growers’ made two arguments on appeal: (1) that the Service impermissibly treated areas in which no owls are found as “occupied” under the ESA, and (2) in the Service’s determination of the economic impacts of the critical habitat designation, the Service used a “baseline” approach that did not account for economic impacts of the critical habitat designation that are also attributable to the listing decision.

The Ninth Circuit began its analysis by citing the ESA’s definition of critical habitat, which includes (1) specific areas within the geographical area occupied by the species at the time it is listed which have physical or biological features that are essential to the conservation of the species and which may require special management considerations or protection and (2) areas outside the geographical area occupied by the species at the time listed that are essential for the conservation of the species. In order for these latter “unoccupied” areas to be designated, they must be “essential for the conservation of the species.”  Arizona Cattle Growers’ argued that the Service treated unoccupied areas as occupied to avoid the more stringent requirement for designating unoccupied areas.

The court stated that whether an area is “occupied” consists of two components, frequency and uncertainty. Frequency is a factor when owls are shown to have only an intermittent presence in an area and uncertainty is a factor when the Service has reason to believe that owls are present in an area, but lacks conclusive proof of their presence. With respect to the frequency component, the court rejected the argument that “occupied” must be interpreted to mean areas that the species “resides in” and stated that the Service has “has authority to designate as ‘occupied’ areas that the owl uses with sufficient regularity that it is likely to be present during any reasonable span of time.” The court reaffirmed its ruling in Gifford Pinchot Task Force v. Fish and Wildlife Service, 378 F.3d 1059 (9th Cir. 2004), that critical habitat is not limited to areas necessary for the species’ survival but also includes areas necessary for the conservation, i.e., recovery, of the species.

The only limitation the court placed on designating critical habitat is that the Service cannot determine that “areas unused by owls are occupied merely because those areas are suitable for future occupancy.” However, the court noted that determining whether an area is occupied or merely will be occupied in the future is complicated in the context of migratory species, and that the “fact that a member of the species is not present in an area at a given instant does not mean that the area is suitable only for future occupancy if the species regularly uses the area.” Given that vast land areas of the United States are part of the migratory bird flyways, the court’s opinion paves the way for all of these areas to become critical habitat for listed species.

As to the uncertainty factor in designating critical habitat, i.e., the data needed to support a decision, the court held the Service is not required to justify its decision “with absolute confidence” because the “ESA accepts agency decisions in the face of uncertainty.” Giving the Service vast discretion, the court said that “factual questions” of whether an area is used with sufficient frequency to be critical habitat “are within the purview of the agency’s unique expertise.” This standard would apply to all agency decisions under the ESA.

Finally, the court addressed the ESA provisions that the Service can exclude areas from critical habitat based on the economic burden of the designation, unless exclusions would result in extinction of the species. At issue was whether the Service was required to attribute to the critical habitat designation those economic burden that would exist even in the absence of the designation. Arizona Cattle Growers argued that any economic burden from designating an area must be counted in the economic analysis, even if the same burden is already imposed by listing the species, and would exist even if the area were not designated. Arizona Cattle Growers cited the Tenth Circuit’s decision in New Mexico Cattle Growers’ Association v. Fish and Wildlife Service, 248 F.3d 1277 (10th Cir. 2001). The Ninth Circuit rejected approach adopted by the Tenth Circuit and held that the Service permissibly attributed the economic impacts of protecting the owl as part of the baseline and was not required to factor those impacts into the economic analysis of the effects of the critical habitat designation.