U.S. Supreme Court Restricts Endangered Species Act, Section 7, Consultation Requirements to “Discretionary” Actions of Federal Agencies

In National Association of Homebuilders v. Defenders of Wildlife, ___ U.S. ___, the U.S. Supreme Court addressed an apparent conflict between mandatory provisions of the Clean Water Act (CWA) and the Endangered Species Act (ESA).

CWA SS 402(b) provides that the EPA “shall approve” transfer of National Pollution Discharge Elimination System (NPDES) permitting authority to a state upon application and a showing that the state has met nine specified criteria. Section 7(a)(2) of the ESA requires federal agencies to consult with other designated agencies (such as the Fish and Wildlife Service) to “insure” that a proposed agency action is unlikely to jeopardize an endangered or threatened species. Thus, the case presented a question as to whether EPA, in reviewing an application for the transfer of permitting authority which met the nine specified criteria, must also consult with designated agencies regarding the transfer’s effect on endangered and threatened species.

 
Here, Arizona sought authorization to take over the state’s NPDES permitting program. The state submitted an application demonstrating compliance with the nine specified criteria in CWA SS 402(b), and EPA initiated consultation with the Fish and Wildlife Service (FWS) to determine whether the transfer of authority would adversely affect any listed species. Noting that the consultation requirement applies only to federal-and not state-agencies, FWS requested that potential impacts of future permits issued by Arizona without consultation with FWS be taken into consideration. EPA declined, stating that the transfer of authority was not the source of those future impacts. Instead, EPA concluded that the nine statutory criteria had been met and approved the transfer, noting in its approval that the ESA SS 7(a)(2) requirements had been satisfied. Defenders of Wildlife sought review of EPA’s decision and the National Association of Homebuilders was granted leave to intervene.

 
The Supreme Court first addressed respondent’s argument that EPA’s statement that SS 7(a)(2) had been satisfied was an acknowledgement that such consultation was required. The Court concluded the statement was dictum, and should not be construed as an acknowledgement that consultation was required, rather then undertaken voluntarily. The Court further noted that a literal application of SS 7(a)(2) would effectively add an additional requirement to the list of considerations under the CWA. The Court interpreted the language of CWA SS 402(b) as establishing “a ceiling as well as a floor.” A literal interpretation of SS 7(a)(2) “raises that floor and alters SS 402(b)’s statutory command.” The Court resolved the conflict by looking to the implementing regulations for SS 7(a)(2) promulgated by FWS and National Marine Fisheries Service (NMFS).

 

The Court noted that the regulations stated that SS 7 applied to “all actions in which there is discretionary Federal involvement or control” (emphasis added by Court). The Court concluded that this interpretation of the statute meant that the consultation requirements would not apply to “actions (like the NPDES permitting transfer authorization) that an agency is required by statute to undertake once certain specified triggering events have occurred.” Therefore, EPA had correctly declined to add an additional criterion to the non-discretionary determination under CWA SS 402(b).

Justice Stevens filed a dissent, in which he argued that in TVA v. Hill, 437 U.S. 153 (1978), the Supreme Court had found that protection of endangered species was to be given “priority over the primary missions of federal agencies,” and that SS 7 “admits of no exception.” In any case, the dissent argued that a determination to transfer authority under the CWA was the type of discretionary action to which SS 7 applied. The majority’s decision, argued Justice Stevens, “fails to give the [ESA] its intended effect.”