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Otay Mesa Property L.P. v. U.S. Dep't of the Interior

May 27, 2010

OTAY MESA PROPERTY L.P., ET AL., PLAINTIFFS,
v.
U.S. DEPARTMENT OF THE INTERIOR, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Rosemary M. Collyer United States District Judge

MEMORANDUM OPINION

The owners of 143 acres of property on Otay Mesa in San Diego County, California, sue the U.S. Fish and Wildlife Service ("FWS") to cancel its designation of this portion of their property as critical habitat for the endangered San Diego fairy shrimp under the Endangered Species Act, 16 U.S.C. § 1531 et seq. The Court now considers the parties' cross-motions for summary judgment.

The government's evidence that the San Diego fairy shrimp actually "occupied" the property at the time it was designated is distinctly thin. Plaintiffs argue that without such proof, no habitat can be designated as "critical." Having failed to designate critical habitat when it listed the San Diego fairy shrimp as endangered, FWS did so years later after being reminded of its obligation by a lawsuit. The passage of time necessarily forced FWS to assume that what it discovered later had existed earlier. Because the San Diego fairy shrimp live in vernal pools on land and move rarely, it cannot be said that this assumption was irrational. In addition, while the Court may not have reached the same conclusions as the agency on how to perform the economic analysis of critical habitat designation, that is not what is required. Reviewing the final rule at issue, the Court concludes that FWS is entitled to Chevron*fn1 deference. Summary judgment will be entered for the Defendants.

I. STATUTORY BACKGROUND

Much could be written about the Endangered Species Act ("ESA"), but a short synopsis of the relevant provisions should suffice. The purpose of the ESA is to conserve and protect endangered and threatened species and the ecosystems on which they depend. 16 U.S.C. § 1531(b). A species is endangered if it is "in danger of extinction throughout all or a significant portion of its range." Id. § 1532(6). Ken Salazar, the Secretary of the Interior (sued here in his official capacity only), is responsible for non-marine species and administers the ESA through FWS, which has delegated authority to list animal species as either endangered or threatened. Id. § 1533(a). This determination is to be made on the basis of the best available scientific and commercial data. Id. § 1533(b).

FWS also must designate critical habitat for any endangered or threatened species by final regulation published concurrently with the final rule listing the relevant species as threatened or endangered, "to the maximum extent prudent and determinable." Id. § 1533(a)(3)(A). The Secretary "may, from time-to-time thereafter as appropriate, revise such designation." Id. § 1533(a)(3)(A)(ii). Critical habitat is defined in the ESA as:

(i) the specific areas within the geographical area occupied by the species, at the time it is listed [as endangered or threatened under the statute], on which are found those physical or biological features (I) essential to the conservation of the species and (II) which may require special management considerations or protection; and (ii) specific areas outside the geographical area occupied by the species at the time it is listed . . . , upon a determination by the Secretary that such areas are essential for the conservation of the species.

Id. § 1532(5)(A). The "physical or biological features essential to the conservation of the species" are known as "primary constituent elements." Designation of Critical Habitat for the San Diego Fairy Shrimp ("2007 Final Rule"), 72 Fed. Reg. 70,648, 70,663 (Dec. 12, 2007) .

The FWS must designate critical habitat "on the basis of the best scientific data available and after taking into consideration the economic impact, the impact on national security, and any other relevant impact, of specifying any particular area as critical habitat." 16 U.S.C. § 1533(b)(2). Any area may be excluded if FWS "determines that the benefits of such exclusion outweigh the benefits of specifying such area as part of the critical habitat." Id.

II. FACTS

Pursuant to this statutory scheme, FWS published a final rule on February 3, 1997, listing the San Diego fairy shrimp (Branchinecta sandiegonensis) as an endangered species. Determination of Endangered Status for the San Diego Fairy Shrimp, 62 Fed. Reg. 4,925 (Feb. 3, 1997). The San Diego fairy shrimp is a small aquatic crustacean that lives in vernal pools (shallow depressions that hold water seasonally) and other ephemeral basins. See 72 Fed. Reg. 70,648. Vernal pools tend to occur in clusters called "complexes" that are hydrologically connected. Id. at 70,648. For this reason, FWS believes that vernal pool ecosystems are "best described from a watershed perspective," which includes "all areas around a vernal pool complex needed to collect rainfall and adequately fill the vernal pool basins within the vernal pool complex." Id. San Diego fairy shrimp feed on algae, diatoms, and particulate organic matter. Id.

San Diego fairy shrimp were first distinguished taxonomically in 1993, listed as endangered in 1997, and included in a recovery plan for seven vernal pool species in Southern California in 1998. Id. at 70,657. In other words, scientists barely had recognized the existence of San Diego fairy shrimp before FWS declared them to be in danger of extinction.

These little crustaceans are found only in vernal pools in southwestern coastal California and northwestern Baja California, Mexico. Id. The pools fill with water during fall and winter rains and evaporate in the spring. Id. "Adult San Diego fairy shrimp are usually observed from January to March." Id. at 70,664. Depending on the timing of the annual rainfall, the time when adult fairy shrimp are present may be earlier or later in any given year. Id. The San Diego fairy shrimp hatches and matures within seven (7) to ten (10) days from the time the pools fill with water. Id.

The San Diego fairy shrimp disappear after about a month, but shrimp will continue to hatch if subsequent rains result in additional water. Only a small portion of the eggs hatch each time the vernal pools fill with water; other eggs stay dormant in the soil. Id. The San Diego fairy shrimp are able to persist in vernal pools over the course of several seasons, even if conditions are not ideal for successful reproduction. Id. The pools range in depth from two (2) to twelve (12) inches. Id. at 70,665. San Diego fairy shrimp are distinguishable from other vernal pool crustaceans. Id. at 70,648.

In 1998, the Center for Biological Diversity (an intervenor in this matter) sued to compel FWS to designate critical habitat for the San Diego fairy shrimp after the agency failed to do so when it listed the shrimp as endangered. Southwest Ctr. for Biological Diversity v. Berg, Civ. No. 98-1866 (S.D. Cal. filed Oct. 14, 1998). Then, when FWS issued its final critical habitat designation in October 2000, it was sued by several industry groups. See Building Indus. Ass'n v. Norton, Civ. No. 01-7028 (C.D. Cal. filed Aug. 13, 2001). In response, FWS sought a voluntary remand of its rulemaking record for further consideration. The District Court in the Central District of California, Western Division, Judge Stephen D. Wilson, granted the motion:

The Service's motion for voluntary remand of the gnatcatcher and fairy shrimp critical habitat designations is GRANTED in light of the analysis of economic impact under 16 U.S.C. § 1533(b)(2) set forth by the Tenth Circuit in New Mexico Cattle Growers.*fn2 The Court agrees that New Mexico Cattle Growers is correctly decided, and the Service must reconsider the economic impact of these two critical habitats in accordance with the Tenth Circuit's teachings.

Natural Resources Defense Counsel v. United States Dep't of the Interior, 275 F. Supp. 2d 1136, 1156 (C.D. Cal. 2002). FWS proposed that it would follow the dictates of New Mexico Cattle Growers and analyze all of the costs of designating critical habitat even if some of those costs were also caused by the designation of the fairy shrimp as endangered. Id. at 1141-42. That, however, is not what happened. Instead, FWS returned to its initial policy, by which it discounts all economic impacts of listing a species as endangered because such impacts are below the "baseline" from which FWS then distinguishes and calculates the economic impacts of only critical habitat designation as above the "baseline." See A.R. (Addendum to San Diego Fairy Shrimp Draft Economic Analysis at 4) at 018300 ("The current practice of [FWS] in its economic analysis of proposed critical habitat regulations is to estimate the impacts occurring as a result of baseline regulations and then estimate the impacts that are incremental to that baseline . . .").

FWS proposed revised critical habitat on April 22, 2003, Designation of Critical Habitat for the San Diego Fairy Shrimp ("2003 Proposed Rule"), 68 Fed. Reg. 19,888, and published the current final revised critical habitat designation on December 12, 2007. 2007 Final Rule, 72 Fed. Reg. 70,648. Plaintiffs here are all partnerships or corporations that own parcels of unimproved land in the Otay Mesa area of San Diego County, California. The land owned by Plaintiff Otay Mesa Property, L.P., includes 74.55 acres of land that have been designated as critical habitat for the San Diego fairy shrimp. Compl. ¶ 1. One hundred-twenty (120) acres of land owned by Plaintiff Rancho Vista Del Mar and eighty (80) acres of land owned by Plaintiff Otay International, LLC, also have been so designated. Compl. ¶ 2 & 3.

Plaintiffs filed this Complaint on March 3, 2008. The parties then filed cross-motions for summary judgment. The Court denied those motions without prejudice and ordered additional briefing on August 13, 2009. After reviewing the parties' supplemental briefs, the ...


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