The U.S. Supreme Court has denied (pdf) two petitions that sought to have the Court resolve a Circuit split regarding the evaluation of economic impacts of critical habitat designations under the federal Endangered Species Act. The Court’s action leaves in place two recent decisions by the United States Court of Appeals for the Ninth Circuit upholding the use of the so-called “baseline” methodology by the U.S. Fish and Wildlife Service ("Service"). Under the “baseline” methodology, the Service restricts the evaluation of economic impacts of a potential critical habitat designation to the impacts of the designation alone and does not consider the cumulative impact of the critical habitat designation and the listing of the endangered species. Arizona Cattle Growers’ Assn. v. Salazar, 606 F.3d 1160 (9th Cir. 2010) (pdf); Home Builders Assn. of Northern California v. U.S. Fish & Wildlife Serv., 616 F.3d 983 (9th Cir. 2010) (pdf).
In sharp contrast to the above cases, the United States Court of Appeals for the Tenth Circuit invalidated the Service’s use of the “baseline” methodology. New Mexico Cattle Growers Ass’n v. U.S. Fish & Wildlife Serv., 248 F.3d 1277 (10th Cir. 2001) (pdf). The Tenth Circuit held that the Service’s use of the “baseline” methodology rendered an economic analysis relying on the baseline approach "virtually meaningless" because it allowed the agency, in all cases, to find no economic impact to the critical habitat designation. As a result, in states within the Tenth Circuit, the Service evaluates the “co-extensive” economic impacts of listing and the critical habitat designation. Use of the “co-extensive” methodology typically results in much higher estimates of economic impacts.