Weyerhaeuser argued the agency didn’t have the right to label Unit 1 a “Critical Habitat,” and the designation is going to cost it a lot of money. Weyerhaeuser and the rest of the owners of Unit 1 have big plans to prepare the land for development.

The land

Dusty gopher frogs now live only in Mississippi, but they used to live in Louisiana and specifically in Unit 1. They used some ponds in Unit 1 – ephemeral ponds – that have particular qualities necessary for the frogs’ breeding season. There aren’t too many dusty gopher frogs left (around 135 adults, according to FWS), so FWS is trying to help them recover. FWS declared it would need to preserve Unit 1, not just the ponds but also the surrounding space which would serve as traveling grounds for the frogs between the ponds and their non-breeding spaces.

The arguments on the Critical Habitat designation

Weyerhaeuser argued FWS exceeded its authority when it designated Unit 1 as a “Critical Habitat” for the frogs. According to Weyerhaeuser, under the Endangered Species Act an area can only be a “Critical Habitat” if it has all of the characteristics the species would need for survival. Unit 1 has the ponds that frogs used to use for breeding season, but Weyerhaeuser claims the state of the area has changed in recent years due to development. Unit 1 no longer provides suitable habitat. It would require a lot of work to turn Unit 1 into a suitable habitat (“fire treatment” to change the land qualities). Because the land is not currently even habitable by the frogs, Unit 1 cannot be a “Critical Habitat.”

The agency (FWS) admits that the frogs don’t live in Unit 1 now, but argues that doesn’t matter. The agency argues the land is suitable for habitation by the dusty gopher frogs. Although it might need some modification, that does not prohibit the agency from designating the land as a “Critical Habitat” to the species.

Weyerhaeuser’s additional argument on the economic impact analysis

FWS is supposed to account for the economic harm of making a Critical Habitat determination. If the costs of the designation (limits on development, for example) will outweigh the benefits, then the agency should not make the designation. FWS did the economic impact analysis, but Weyerhaeuser argues the agency didn’t properly account for all of the costs. Weyerhaeuser said the designation would cost it and the other owners $20-$34 million in permitting and lost development opportunity and argued that the agency neglected to account for the costs correctly.

Agency decision-making

Agencies are bound by federal laws that give them authority. Aside from the guidelines provided in those laws, the agencies have a lot of discretion. However they can’t abuse their discretion (can’t act “arbitrarily” or “capriciously”). The Administrative Procedure Act (another federal law) allows parties to sue an agency for abuse of discretion.

When Weyerhaeuser sued the US Fish and Wildlife Service, it argued 1) the agency didn’t abide by the Endangered Species Act’s definition of “Critical Habitat”; and 2) the agency abused its discretion when it evaluated the economic impact of the “Critical Habitat” designation.

The lower courts’ decisions

The lower courts were reluctant to challenge the agency’s authority on both of these questions. They didn’t dive too far into the meaning of “Critical Habitat.” It said the agency could label land critical to a species regardless of whether the habitat was “habitable.” Thus, the lower courts didn’t make any decisions about what “habitable” actually means. Currently being habited? Able to be habited now? Able to be habited with modifications?

Furthermore, the lower courts refused to review the agency’s economic impact analysis. Weyerhaeuser challenged, saying of course a court can review whether the agency abused its discretion in conducting the cost-benefit analysis.

Weyerhaeuser was in a losing position when it appealed to the Supreme Court.

Supreme Court ruling

The Supreme Court ruled the lower courts would have to look harder at the agency’s actions. Both questions – the Critical Habitat designation and the economic impact analysis – needed to be addressed more clearly.

The Supreme Court said of course a piece of land must be “habitable” in order to be a “Critical Habitat.” The lower courts will have to think through what it means to be “habitable.” And the economic impact analysis is indeed reviewable by a court. Because the lower courts did not review whether the agency improperly accounted for the costs and benefits of the designation, they will have to dive back in. The Court said, “This is the sort of claim that federal courts routinely assess when determining whether to set aside an agency decision as an abuse of discretion under [the Administrative Procedure Act].”

Earlier (Pre-Argument) Report:

A “Critical Habitat” designation has a timber harvester asking the High Court for help.

Weyerhaeuser Company owns a piece of a land parcel called “Unit 1” in Louisiana. And possibly more importantly, Weyerhaeuser has a deal with the rest of the owners of the Unit 1 that Weyerhaeuser can harvest timber from the property to ready the space for development.

But the development plans may end up soiled. The U.S. Fish and Wildlife Service (FWS) has declared that Unit 1 is a “Critical Habitat” for an endangered species of frog, the dusty gopher frog.