Skipper v. United States Fish and Wildlife Service

• Court: District Court, S.D. Alabama
• Decided: August 21, 2025
• Docket: 1:21-cv-00094
• Status: Unknown

Opinion

IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF ALABAMA SOUTHERN DIVISION THOMAS GRAY SKIPPER, et al., ) ) Plaintiffs, ) ) v. ) ) CIVIL ACTION NO. 21-00094-JB-B UNITED STATES FISH AND WILDLIFE SERVICE, ) et al., ) ) Defendants. )

ORDER I. INTRODUCTION This matter is before the Court on the Plaintiffs’ Motion for Summary Judgment (Doc. 47) and the cross-motions for summary judgment filed by the Federal Defendants (Doc. 57) and the Defendant-Intervenor (Doc. 59). The parties seek judgment as a matter of law on the Plaintiffs’ challenge to the U.S. Fish and Wildlife Service’s (“FWS” or the “Service”) final rule designating critical habitat for the black pinesnake under the Endangered Species Act (“ESA”). Having reviewed the motions, briefs, declarations, administrative record, and the applicable law, the Court finds that the Service’s designation of Units 7 and 8 as “occupied” critical habitat and its economic impact analysis were arbitrary and capricious. Accordingly, Plaintiffs’ Motion for Summary Judgment is GRANTED in part and DENIED in part. The Federal Defendants’ and Defendant-Intervenor’s Cross-Motions for Summary Judgment are DENIED in part and GRANTED in part. The Final Rule is VACATED as it pertains to Units 7 and 8 and REMANDED to the Service for further proceedings consistent with this opinion.1 II. FACTUAL AND PROCEDURAL BACKGROUND

This case concerns the FWS’s designaUon of criUcal habitat for the black pinesnake, a large, nonvenomous constrictor naUve to longleaf pine ecosystems in porUons of Mississippi and Alabama. See 80 Fed. Reg. 60,468-69 (Final LisUng Rule); AdministraUve Record (hereaZer “AR”) 147-150. Because it spends most of its Ume underground, the black pinesnake is said to be “difficult to locate even in areas where it is known to occur.” (AR 396). Historical threats include habitat fragmentaUon from urbanizaUon, agriculture, fire suppression, and road mortality,

resulUng in isolated populaUons vulnerable to inbreeding and stochasUc events. See 80 Fed. Reg. at 60,481; see also Doc. 81 at 20. In 1999, the Service placed the black pinesnake on the list of candidate species for lisUng under the ESA. (AR 61). On October 7, 2014, the Service published a proposed rule to list the pine snake as threatened. (Id; 70 Fed. Reg. 60,406). In March 2015, the Service published a

proposed rule to designate criUcal habitat of 338,100 acres and opened a public comment period. (Id.). Finally, on October 6, 2015, the Service officially listed the black pinesnake as a threatened species under the ESA. See 80 Fed. Reg. 60,468 (Oct. 6, 2015). The proposed designaUon idenUfied physical and biological features essenUal to conservaUon, including upland pine-

1 As a preliminary ma/er, the Federal Defendants move to strike por:ons of Plain:ffs’ brief that refer to documents not included in the administra:ve record. (Doc. 61). Judicial review of agency ac:on under the APA is generally confined to the administra:ve record. See Fla. Power & Light Co. v. Lorion, 470 U.S. 729, 743-44 (1985) (“[T]he focal point for judicial review should be the administra:ve record already in existence, not some new record made ini:ally in the reviewing court.” (quo:ng Camp v. Pi7s, 411 U.S. 138, 142, (1973))). However, given the Court’s findings below, which are based solely on the un-supplemented administra:ve record, the mo:on is moot. The Court has not relied on the extra-record materials in reaching its decision. Accordingly, the Mo:on to Strike is DENIED as moot. dominated forests with reduced shrub layers and suitable burrowing sites. Id. at 60,480–81. At the same Ume, the Service issued a “4(d) rule” restricUng certain land use acUviUes such as longleaf pine conversion and significant subsurface disturbance. See id. at 60,489; 50 C.F.R. §

17.42. On October 11, 2018, the Service revised its proposed rule and the criUcal habitat designaUon and re-opened a new comment period. (AR 389). On February 26, 2020, the Service published its Final Rule designaUng criUcal habitat for the species, encompassing approximately 324,679 acres across eight units in Alabama and Mississippi. (AR 411; see also 85 Fed. Reg. 11,238 (Feb. 26, 2020)). Units 7 and 8 are located in Clarke County, Alabama. Unit 7 comprises approximately 33,395 acres—enUrely privately owned

Umberland—and Unit 8 comprises 5,943 acres, of which 2,100 acres are privately held, and 3,843 acres are state-owned lands in the Fred T. SUmpson Special Opportunity Area. (AR 411; Doc. 47 at 7-8). The plainUffs are Umberland owners and family trusts whose land falls within Units 7 and 8. (Id. at 11–12). They allege the designaUon reduces property values, interferes with land use,

and sUgmaUzes their property. (Id. at 12–13). The Service concluded that both Units 7 and 8 were “occupied” by the pinesnake at the Ume of lisUng, relying primarily on a small number of historical sighUngs. (AR 413). In Unit 7, the Service cited one pinesnake sighUng in the twenty years preceding the lisUng and four older anecdotal sighUngs—all on the perimeter of the designated area. (Doc. 47 at 8–9 (ciUng AR 413)). For Unit 8, the Service relied on two sighUngs from the 1990s, neither of which occurred on the designated private land. (Id.). No pinesnakes

were observed during a 2008–2009 field survey of either unit. (Id.; see also AR 398; AR 1968). The Service produced an economic analysis by it’s contractor, Industrial Economics, Inc., in support of its designaUon. (AR 27). That analysis used the “baseline” approach, excluding costs aiributable to the ESA lisUng itself and focused only on incremental costs associated with the

habitat designaUon. (AR 27; Doc. 47 at 9–10; Doc. 57 at 17). The Service’s draZ economic analysis esUmated incremental administraUve costs of $33,000 to $42,000 annually from SecUon 7 consultaUons, concluding no exclusions were warranted under ESA secUon 4(b)(2).2 (See AR 21– 43). Although the analysis acknowledged the potenUal for diminished land values and public sUgma, it did not quanUfy those losses and concluded that the designaUon would not impose significant costs. (AR 38–40; AR 44–53; Doc. 57 at 21).

Finally, the Service cerUfied under 5 U.S.C. § 605(b) that no regulatory flexibility analysis was required under the RFA, reasoning that criUcal habitat designaUons do not directly regulate small enUUes but rather solely regulate federal agencies. (AR 418–20; Doc 47. at 10; Doc. 57 at 8, 25). PlainUffs objected to that conclusion during the rulemaking process, submimng comments regarding the economic impact on small Umber operaUons. (AR 400–02).

AZer the Service issued its Final Rule, PlainUffs sent a 60-day noUce of intent to sue and subsequently filed this acUon challenging the designaUon under the ESA, APA, and RFA. (Doc. 47 at 10–11). III. APPLICABLE LAW A. The Endangered Species Act The Endangered Species Act represents what the Supreme Court has called “the most

comprehensive legislaUon for the preservaUon of endangered species ever enacted by any

2 See page 6, infra, regarding Sec:on 7 consulta:on. naUon.” Tenn. Valley Auth. v. Hill, 437 U.S. 153, 180 (1978); 16 U.S.C. §§ 1531–1544. The Act’s stated purpose is to provide a program for the conservaUon of such species and the ecosystems upon which they depend, reflecUng a congressional policy “to halt and reverse the trend toward

species exUncUon, whatever the cost.” Tenn. Valley Auth., 437 U.S. at 184; see also 16 U.S.C. § 1531(b). Under SecUon 4 of the ESA, the Secretary of the Interior, acUng through the Service, determines whether to list a species as “endangered” (in danger of exUncUon) or “threatened” (likely to become endangered in the foreseeable future). See 16 U.S.C. § 1532(6), (20). This biological determinaUon must be made “solely on the basis of the best scienUfic and commercial

data available.” 16 U.S.C. § 1533(b)(1)(A). This is a strict standard likely intended to ensure the decision is insulated from poliUcal or economic pressures. Once a species is listed, it is generally unlawful for any person to “take” that species. See 16 U.S.C. §§ 1538(a)(1)(B), 1532(19). The term “take” is defined expansively to mean “to harass, harm, pursue, hunt, shoot, wound, kill, trap, capture, or collect.” Id. § 1532(19). The Service’s regulaUons have further clarified that

“harm” includes not only direct physical injury but also significant habitat modificaUon or degradaUon that “actually kills or injures wildlife by significantly impairing essenUal behavioral paierns, including breeding, feeding or sheltering.” 50 C.F.R. § 17.3 (2024). This broad prohibiUon is a primary source of the ESA’s regulatory impact on private land use. See 50 C.F.R. § 17.3; see also Doc. 47 at 3; Doc 57 at 5 n.2. In addiUon to lisUng, the ESA requires the Service to concurrently designate “criUcal

habitat” for listed species. 16 U.S.C. § 1533(a)(3)(A)(i). Unlike the purely scienUfic lisUng decision, the designaUon of criUcal habitat involves a mulU-faceted analysis. The designaUon must be based on “the best scienUfic data available,” but it can only be made “aZer taking into consideraUon the economic impact, the impact on naUonal security, and any other relevant impact, of specifying any parUcular area as criUcal habitat.” Id. at § 1533(b)(2). Exclusions can be

made to a “criUcal habitat” designaUon “if [the Secretary] determines that the benefits of such exclusion outweigh the benefits of specifying such area as part of the criUcal habitat.” Id. However, this exclusion provision itself has an exclusion clause; if the Secretary “determines, based on the best scienUfic and commercial data available, that the failure to designate such area as criUcal habitat will result in the exUncUon of the species concerned,” that area cannot be excluded from the designaUon. Id.

The statute defines two disUnct types of criUcal habitat: “occupied” and “unoccupied.” Occupied criUcal habitat consists of “the specific areas within the geographical area occupied by the species at the Ume it is listed” that contain the physical or biological features essenUal for its conservaUon. 16 U.S.C. § 1532(5)(A)(i). Unoccupied criUcal habitat consists of “specific areas outside the geographical area occupied by the species,” but only upon a more demanding

determinaUon that such areas are “essenUal for the conservaUon of the species” can this laier type of habitat be properly designated. Id. at § 1532(5)(A)(ii). A criUcal habitat designaUon does not create a park or a wildlife refuge and does not, on its own, prohibit private acUviUes on private land. The primary legal effect of a criUcal habitat designaUon is triggered by SecUon 7, which establishes a consultaUon process for federal agencies. Id. at § 1536. SecUon 7 requires every federal agency to ensure that any acUon it

authorizes, funds, or carries out is not likely to “jeopardize the conUnued existence” of a listed species or “result in the destrucUon or adverse modificaUon of [criUcal] habitat.” Id. at § 1536(a)(2). This “consultaUon” requirement means that a private landowner may face project delays, modificaUons, or addiUonal miUgaUon requirements if their proposed acUvity requires a federal permit or funding. See 50 C.F.R. pt. 402.

B. The AdministraQve Procedure Act Enacted in 1946, the AdministraUve Procedure Act (“APA”) is “a check upon administrators whose zeal might otherwise have carried them to excesses not contemplated in legislaUon creaUng their offices.” U.S. v. Morton Salt Co., 338 U.S. 632, 644 (1950). It provides the default framework for judicial review of final agency acUons. See 5 U.S.C. §§ 701–706. The APA empowers federal courts to ensure that agencies act within the bounds of their statutory

authority and engage in a process of reasoned decision-making. See, e.g., Loper Bright Enterprises v. Raimondo, 603 U.S. 369, 391-96 (2024) (explaining “the tradiUonal concepUon of the judicial funcUon” as adopted in the APA). The APA instructs reviewing courts to “hold unlawful and set aside” agency acUons, findings, and conclusions found to be “arbitrary, capricious, an abuse of discreUon, or otherwise not in accordance with law.” Id. at § 706(2)(A).

This standard, while at Umes deferenUal, is not toothless. A court may not subsUtute its own policy judgment for that of the agency, but it must conduct a “thorough, probing, in-depth review” of the agency’s reasoning—oZen referred to as the “hard look” doctrine. See CiCzens to Pres. Overton Park, Inc. v. Volpe, 401 U.S. 402, 415 (1971). An agency’s acUon is arbitrary and capricious if it: …has relied on factors which Congress has not intended it to consider, enUrely failed to consider an important aspect of the problem, offered an explanaUon for its decision that runs counter to the evidence before the agency, or is so implausible that it could not be ascribed to a difference in view or the product of agency experUse. Motor Vehicle Mfrs. Ass’n of U.S., Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983). The agency must arUculate a “raUonal connecUon between the facts found and the choice made” in the administraUve record. Id.

C. The Regulatory Flexibility Act The Regulatory Flexibility Act (RFA) was enacted by Congress in 1980 in response to concerns that federal agencies were promulgaUng uniform regulaUons without sufficient consideraUon of their disproporUonate impact on small enUUes, which frequently lack the insUtuUonal resources of larger organizaUons to absorb compliance burdens. 5 U.S.C. §§ 601– 612; see also Pub. L. No. 96-354, 94 Stat. 1164 (1980). The objecUve of the RFA is to oblige

agencies to tailor their regulatory acUons to the scale of the enUUes being regulated. See 5 U.S.C. § 601. To this end, the RFA imposes specific procedural requirements upon the rulemaking process. When an agency issues a noUce of proposed rulemaking, it is generally required to prepare an “iniUal regulatory flexibility analysis” (IRFA) that evaluates the rule’s anUcipated

impact on small businesses, small governmental jurisdicUons, and small nonprofit organizaUons. Id. at § 603(a). Such an analysis must contain, inter alia, a descripUon of the affected small enUUes and a discussion of any significant alternaUves to the proposed rule that would achieve the statutory objecUves while minimizing the economic burden. Id. at § 603(b). Upon promulgaUon of a final rule, the agency must then prepare a “final regulatory flexibility analysis” (FRFA) that addresses public comments and specifies the measures adopted to miUgate the rule’s impact. Id.

at § 604(a). The RFA contains a significant exempUon from these analyUcal duUes. An agency is relieved of the obligaUon to prepare an IRFA or FRFA if the head of the agency cerUfies that the rule will not “have a significant economic impact on a substanUal number of small enUUes.” Id.

at § 605(b). This cerUficaUon is not a perfunctory exercise; it must be published in the Federal Register and be substanUated by a statement arUculaUng the factual basis for the agency’s conclusion. Id. A disposiUve issue in RFA jurisprudence is the scope of the requisite analysis. The prevailing judicial interpretaUon holds that the RFA’s requirements are acUvated only when a rule directly regulates small enUUes. See, e.g., Mid-Tex Elec. Coop., Inc. v. FERC, 773 F.2d 327, 342 (D.C. Cir. 1985). Consequently, an agency is typically not obligated to conduct an RFA analysis for

impacts that are deemed an indirect consequence of a regulaUon primarily directed at other parUes. For instance, a rule that directly regulates states, which in turn regulate small businesses, has been held not to trigger the RFA’s requirements for the promulgaUng federal agency. Id. at 342–43.3 An agency’s adherence to the RFA is subject to judicial review under the arbitrary and

capricious standard of the APA. Id. § 611(a). IV. STANDARD OF REVIEW Summary judgment is appropriate when the administraUve record shows that there is no “genuine issue material fact” and the movant is enUtled to judgement as a maier of law. Fed R. Civ. P. 56(a). Review of agency acUon under the ESA is governed by the standards of the APA.

3 Regarding the Plain:ffs’ third claim of an invalid RFA cer:fica:on under Sec:on 605(b), the Court finds their arguments unpersuasive and DENIES this por:on of their mo:on for summary judgment. The Court finds the Secretary acted within its proper discre:onary scope when it cer:fied that the cri:cal habitat designa:on did not have a “significant economic impact on a substan:al number of small en::es.” 5 U.S.C. §§ 604(a). However, for the reasons explained throughout the remainder of this opinion, the Court s:ll find the remedy of vacatur in regard to Unit 7 and 8 is unaffected by the validity of the RFA. Weyerhaeuser Co. v. U.S. Fish & Wildlife Serv., 586 U.S. 9, 12 (2018). As previously stated, the APA requires a reviewing court to “hold unlawful and set aside agency acUon, findings, and conclusions found to be . . . arbitrary, capricious, an abuse of discreUon, or otherwise not in

accordance with law.” 5 U.S.C. § 706(2)(A). The party seeking summary judgment bears “the iniUal burden to show the district court, by reference to materials on file, that there are no genuine issues of material fact that should be deiced at trial.” Clark v. Coats & Clark, Inc., 929 F. 2d 604, 608 (11th Cir. 1991). The “party seeking summary judgment always bears the iniUal responsibility of informing the district court of the basis for its moUon, and idenUfying those porUons of ‘the pleadings, deposiUons, answers to interrogatories, and admission on file,

together with the affidavits, if any,’ which it believes demonstrate the absence of a genuine issue of material fact.” Id. (quoUng Celotex Corp. v. CatreP, 477 U.S. 317, 323 (1986)). Once the moving party has met its burden, Rule 56(c) “requires the nonmoving party to go beyond the pleadings and by [his] own affidavits, or by the ‘deposiUons, answers to interrogatories, and admissions on file,’ designate ‘specific facts showing that there is a genuine

issue for trial.’” Celotex, 477 U.S. at 324. To avoid summary judgment, the nonmoving party “must do more than show that there is some metaphysical doubt as to the material facts.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). “On the other hand, the evidence of the nonmovant must be believed and all jusUfiable inferences must be drawn in [his] favor.” ThyssenKrupp Steel USA, LLC v. United Forming, Inc., 926 F. Supp. 2d 1286, 1290 (S.D. Ala. 2013) (ciUng Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (U.S. 1986)). Nevertheless, if

the nonmoving party fails “to make a sufficient showing on an essenUal element of her case with respect to which she has the burden of proof,” the moving party is enUtled to summary judgment. Celotex, 477 U.S. at 323. This Court’s review of the Service’s legal interpretaUons of the statutes it administers is

shaped by the Supreme Court’s recent decision in Loper Bright Enterprises, 603 U.S. 369 , which overruled the doctrine of Chevron deference.4 Whatever statutory ambiguiUes exist in the present case are not “implicit delegaUons” to the Service for their own unbridled explanaUon. Id. at 373. Thus, this Court will not defer to the Service’s statutory interpretaUons but will instead exercise its independent judgment to “determine the best reading of [a] statute and resolve [any] ambiguity.” Id. While not given complete deference, this Court will sUll consider the FWS’s “body

of experience and informed judgment,” among other informaUon in the record. Skidmore v. SwiU & Co., 323 U.S. at 140. (1944). As elucidated in Loper Bright, “an agency’s interpretaUon of a statute ‘cannot bind a court,’ but may be especially informaUve ‘to the extent it rests on factual premises within [the agency’s] experUse.’” 603 U.S. at 402 (quoUng Bureau of Alcohol, Tobacco and Firearms v. FLRA, 464 U.S. 89, 98, n. 8 (1983)).

V. ANALYSIS A. Standing and JurisdicQon Standing consists of three elements: the plaintiff must have suffered an injury in fact, the defendant must have caused that injury, and a favorable decision must be likely to redress it. Lujan v. Defenders of Wildlife, 504 U.S. 555, 561 (1992). Plaintiffs bear the burden to establish these three elements of Article III standing. Id. The Court is satisfied that Plaintiffs have standing

under Article III to bring these claims and that the Court has jurisdiction to review the critical

4 Chevron U.S.A. Inc. v. Natural Resources Defense Council, 467 U.S. 837 (1984). habitat designation. Plaintiffs own land within Units 7 and 8 that were designated as critical habitat. (Doc. 48; Doc. 50). Although Plaintiffs seek vacatur of the Final Rule in its entirety, their standing is limited to the designation of Units 7 and 8. They claim the designation causes them

concrete injury by diminishing the economic value of their property from negative perceptions attached to the critical habitat designation and by imposing additional regulatory burdens on any use of their land. (Doc. 47 at 11-19). These injuries are neither speculative nor generalized; they are specific to the Plaintiffs’ properties. See Lujan, 504 U.S. at 560-61. 1. Actual Injury DesignaUon of private land as criUcal habitat has an immediate impact on property value

and potenUal development opportuniUes. See Weyerhaeuser Co., 586 U.S. at 19 n.1 (2018). The record contains evidence that the mere presence of a criUcal habitat label can create a public percepUon of regulatory risk, leading to reduced market value of the land. (AR 44). The Service’s own economic analysis acknowledged 65,000 acres of privately owned land within the designaUon, with a total value of $180 million that could be subject to such percepUon effects,

though the Service was “unable to esUmate” the degree of economic harm. (Id. at 53). Units 7 and 8 comprise approximately 35,495 acres of privately owned land. AR 413. Even absent a current sales transacUon, the reduced value of PlainUff’s land caused by the designaUon is a real economic harm. See Weyerhauser, 586 U.S. at 19 n.1 (noUng decrease in market value of land as a result of criUcal habitat designaUon was a concrete injury sufficient for ArUcle III standing). PlainUffs’ land, thousands of acres of Umber and rural land, stands to lose economic value or face

significant use restricUons. This economic injury is sufficiently concrete and imminent and is parUcularized to PlainUffs. It is not a diffuse harm shared by the general public. See Lujan, 504 U.S. at 560-61. 2. Traceability and Redressability

PlainUffs’ injuries are traceable to the Service’s acUons—specifically, to the designaUon of PlainUffs’ land as criUcal habitat. But for that designaUon, PlainUffs’ property would not be subject to the adverse modificaUon standard or any constraints beyond those already in place from the species lisUng. If the designaUon is vacated on PlainUffs’ lands, any future federal- agency acUons on those lands would no longer require consideraUon of adverse modificaUon of criUcal habitat. Thus, the injury flows from the challenged rule. VacaUng the Final Rule on Units

7 and 8 would also sufficiently redress PlainUffs’ injuries. It would eliminate the criUcal habitat designaUon on their lands, thereby liZing the regulatory burden and any sUgma aiached to the land. PlainUffs’ property would sUll be subject to the ESA’s other provisions. However, the criUcal habitat-specific duUes would no longer apply. This is significant relief. Economically, removing the designaUon should allow property values to recover from any sUgma associated with being

designated as criUcal habitat. Accordingly, the Court concludes that PlainUffs have saUsfied ArUcle III standing. The designaUon of their land in Units 7 and 8 imposes concrete economic harms that are directly traceable to the Service’s acUons. This harm would be sufficiently redressed by vacatur. Although PlainUffs lack standing to challenge the Final Rule beyond their property, their claims as to Units 7 and 8 are properly before the Court.

B. The Record does not Support the Service’s “Occupied” CriQcal Habitat DeterminaQon First, the Court must consider whether the Service properly concluded that Units 7 and 8 were “occupied” by the species at the Ume of lisUng. PlainUffs contend that these areas were unoccupied by the black pinesnake in 2015 and that the Service’s decision to treat them as

occupied was not based on the best available science. (Doc. 47 at 25). The ESA’s text draws a clear disUncUon between occupied and unoccupied areas. If an area falls within the geographical area occupied by the species at the Ume of lisUng, it can be designated if it contains the features essenUal to conservaUon. See 16 U.S.C. § 1532(5)(A)(i). If an area is outside that occupied geographical area, the Service must make an affirmaUve determinaUon that the area is essenUal for the conservaUon of the species to designate it. Id. at § 1532(5)(A)(ii). In the absence of a

statutory definiUon, the ordinary meaning of “occupied… by the species” would be areas where the species is present or at least rouUnely present.5 The Service presents an unconvincing argument that if an area is suitable habitat for the black pinesnake, the snake is likely to occupy that area. The ESA requires the Service to use the “best available science” when making such

determinaUons, yet the record lacks concrete evidence that the black pinesnake was present in Units 7 and 8 at the Ume of lisUng. The Service’s assumpUon of the black pinesnake’s occupying Units 7 and 8 is unsupported by observaUonal data and falls short of the evidenUary standard required under the ESA. Although there is no binding Eleventh Circuit precedent on this issue, persuasive authority from other circuits exposes the weakness of the Service’s determinaUons.

5 See Loper Bright Enters., 603 U.S. at 406-12 (overruling Chevron, 467 U.S. at 837, and holding that courts must exercise independent judgment in determining the best reading of a statute, without deferring to an agency’s interpreta:on). Accordingly, the Court need not defer to the Service’s interpreta:on of “occupied” habitat under the ESA, but must instead apply tradi:onal tools of statutory construc:on to determine its meaning. For example, in Alaska Oil & Gas Ass’n v. Jewell, 815 F.3d 544, at 561 (9th Cir. 2016), the Ninth circuit upheld an “occupied” criUcal habitat designaUon for polar bears based on detailed tracking studies showing consistent movement through the designated area. By contrast, the Service’s

reliance on sparse, decades-old anecdotal sighUngs of an elusive species renders its occupancy determinaUon speculaUve at best. While standards for occupancy may vary by species, the complete lack of recent observaUonal data significantly undermines the Service’s “occupied” determinaUon under the ESA’s “best available science” requirement. Indeed, this case is a far cry from Jewell, where the FWS’s occupancy determinaUon for polar bears was upheld based on robust satellite telemetry data showing their regular movement

and use of the designated areas. Id. The record here contains no such compelling evidence. The facts here are more closely analogous to those in Otay Mesa Property, L.P. v. U.S. Dep’t of Interior, 344 F. Supp. 3d 355 (D.D.C. 2018). In Otay Mesa, the FWS designated 57 acres as “occupied” or, alternaUvely, “unoccupied” criUcal habitat for the Riverside fairy shrimp, even though the shrimp themselves were only found within a single one-acre stock pond on the property. Id. at 360. The

agency jusUfied its expansive designaUon by poinUng to the presence of essenUal physical features—the watershed—on the surrounding 56 acres. Id. The court rejected this as an improper conflaUon of the statutory requirements. It held that the agency must first idenUfy the area the species actually occupies and then determine where the essenUal features are found within that occupied area. Id. at 371. An agency cannot use the presence of suitable habitat to expand the boundaries of “occupied” territory beyond where the species is actually found. Id.

The Service makes the same analyUcal error here. It has taken a few sporadic sighUngs on the edges of the designated units and, by poinUng to the existence of suitable pine forest throughout the area, has extrapolated those sighUngs to declare tens of thousands of acres “occupied.” Just as the FWS could not declare 56 acres of dry land “occupied” by an aquaUc shrimp in Otay Mesa, it cannot declare thousands of acres of forest “occupied” by an elusive snake based on a handful

of fleeUng encounters. Such a determinaUon “runs counter to the evidence before the agency” and is the essence of arbitrary acUon. Motor Vehicle Mfrs’ Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983). C. The Service’s Economic Impacts Analysis under 4(b) was Insufficient The Services’s economic analysis of the potenUal impacts of the criUcal habitat designaUon on PlainUffs’ land missed the mark. The Service claims in its analysis that no

economic harm stems from negaUve land percepUons aiached to the designaUon. (Doc. 57-2 at 16). (“PlainUffs assert that the DesignaUon will likely cause a reducUon in property values as a result of negaUve percepUons of land designated criUcal habitat . . . however their argument is unsupported by competent evidence”). However, the Service based this conclusion on an analysis that was never conducted. As evidenced in the record, due to data limitaUons, the Service could

not esUmate the magnitude of any economic injury that could be caused from negaUve percepUons of the land due to the criUcal habitat designaUon. (AR 53). The ESA requires the Service to consider the “economic impact...of specifying any parUcular area as criUcal habitat.” 16 U.S.C. § 1533(b)(2). This mandate has created a circuit split regarding the proper methodology for such analysis. There is presently no binding authority in the Eleventh Circuit regarding the type of economic analysis method mandated by the ESA. The

Service urges this Court to adopt the “baseline” approach endorsed by the Ninth Circuit which seeks to isolate the costs aiributable solely to the designaUon itself, over and above the economic burdens already imposed by the species’ lisUng. (Doc 57 at 16–17). The PlainUffs argue for the “co-extensive” approach required by the Tenth Circuit that considers all economic impacts of the designaUon, regardless of whether those costs are also aiributable to the lisUng. (Doc. 47

at 20). This Court finds the Tenth Circuit’s reasoning to be more faithful to the statutory text and purpose. In New Mexico Cattle Growers Ass’n v. U.S. Fish & Wildlife Serv., the Tenth Circuit invalidated the baseline (sometimes called “incremental”) approach. 248 F.3d 1277 (10th Cir. 2001). The court found that the Service’s own regulations at the time defined the “adverse modification” standard for critical habitat so similarly to the “jeopardy” standard for species

listing that nearly all economic impacts could be attributed to the pre-existing listing, leaving no meaningful costs to be analyzed at the critical habitat stage. (Id. at 1283). This regulatory overlap, the court concluded, rendered the economic analysis required by Congress “a meaningless exercise.” Id. at 1285. The core of the Tenth Circuit’s holding is that any methodology that prevents a full accounting of the economic consequences of a designation—

thereby precluding a meaningful balancing of benefits and costs—is contrary to the statute. Id. The Ninth Circuit took a different view in Arizona Cattle Growers’ Ass’n v. Salazar. 606 F.3d 1160 (9th Cir. 2010). It rejected the Tenth Circuit’s reasoning, but did so on narrow grounds. The Ninth Circuit argued that the premise of the New Mexico Cattle Growers decision was faulty because the underlying FWS regulation that conflated the “adverse modification” and “jeopardy” standards had since been invalidated by other courts. Id. at 1173. Because the two standards

were now distinct, the Ninth Circuit reasoned, the baseline approach was no longer meaningless and was therefore permissible. Id. This Court finds the Ninth Circuit’s reasoning in Arizona Cattle Growers unpersuasive because it mistakes a symptom for the disease. The Tenth Circuit’s logic does not depend on the existence of the specific, now-invalidated regulation. Rather, it addresses the fundamental

structural flaw of the baseline approach itself. The baseline methodology, by its very design, will always seek to attribute as many costs as possible to the pre-existing listing, thereby minimizing the “incremental” costs of the critical habitat designation. This creates an analytical framework that is inherently biased against a full and fair consideration of economic impacts. Whether the overlap between the jeopardy and adverse modification standards is 99% (as it was under the old regulation) or some lesser amount, the baseline approach still systematically undercounts

the true economic burden of the designation and prevents the Service from conducting the robust cost-benefit analysis that Section 4(b)(2) requires. The Tenth Circuit’s approach, in contrast, ensures that all economic consequences flowing from the designation are considered, which is the only way to give effect to Congress’s clear directive to “tak[e] into consideration the economic impact” before making a final decision. 16 U.S.C. § 1533(b)(2). This Court therefore

adopts the reasoning of the Tenth. D. Failure to Analyze or Weigh Exclusion of Units 7 and 8 Even if the Service had employed a valid economic methodology, its ulUmate decision not to exclude Units 7 and 8 was arbitrary and capricious. The ESA grants the Secretary discreUon to exclude an area if “the benefits of such exclusion outweigh the benefits of specifying such area as part of the criUcal habitat.” 16 U.S.C. § 1533(b)(2). In Weyerhaeuser, the Supreme Court

confirmed that this discreUonary decision is not immune from judicial review; it must be the product of a raUonal process. 586 U.S. at 25-26. An agency acUon is arbitrary if it has “enUrely failed to consider an important aspect of the problem.” State Farm, 463 U.S. at 43. Here, the Service enUrely failed to consider the important aspect of public amtudes and their impact on the economic analysis. The administraUve record contains the Service’s own economic analysis,

which explicitly idenUfies “public amtudes about the limits and costs that the Act may impose” as a source of “real economic effects,” including diminished property values. (AR 44). Having idenUfied this significant impact, the Service was obligated to grapple with it. Instead, it threw up its hands, claiming that “due to data limitaUons, we are not able to esUmate the magnitude of any potenUal impact on property values.” (AR 53). An agency cannot make a raUonal decision if it is unaware of a key part of the equaUon.

The Service’s statutory duty is to weigh the benefits of exclusion (e.g., avoiding economic harm) against the benefits of inclusion (conservaUon). By failing to quanUfy or even qualitaUvely analyze a known, significant economic cost, the Service effecUvely leZ one side of the scale empty. Its subsequent “weighing” process was therefore a hollow exercise. As the Supreme Court made clear in Weyerhaeuser, the Service must be able to arUculate a raUonal basis for its decision not

to exclude. See 586 U.S. at 25-26. No raUonal basis can be found when the agency ignores a criUcal factor in its analysis. As a result, its decision not to exclude Units 7 and 8, reached without a full and fair consideraUon of a major benefit of exclusion, was not the product of reasoned judgment. The Court finds the Service failed to properly analyze the potenUal economic impact of the criUcal habitat designaUon on PlainUffs’ land. Therefore, the Service’s failure to analyze this important aspect of the problem renders its decision not to exclude Units 7 and 8 an abuse of

discreUon. VI. CONCLUSION The APA provides that courts “shall… hold unlawful and set aside” agency acUons found to be arbitrary, capricious, or otherwise not in accordance with law. 5 U.S.C. § 706(2)(A). This

remedy is not discreUonary. Courts rouUnely vacate agency acUons when they are unsupported by the administraUve record or suffer from legal error. See Weyerhaeuser Co., 586 U.S. at 26. As set forth above, the Services’ acUon suffers from mulUple deficiencies. The designaUon of Units 7 and 8 was not supported by evidence of occupancy at the Ume of lisUng and the Service also relied on an economic analysis that failed to consider quanUfiable impacts. These failures mirror those in Kansas Natural Resource CoaliCon, where the district court vacated the rule

outright due to the Service’s refusal to consider economic costs. See Kansas Nat. Res. Coal., 2024 U.S. Dist. LEXIS 9486, at *50–52. Given the scope and severity of the Service’s decisions, the Court concludes that vacatur — not mere remand — is appropriate. Vacatur will eliminate the current regulatory burden on PlainUffs’ land and ensure that any future designaUon complies with statutory and procedural requirements.

The Supreme Court has instructed that vacatur should be limited to the unlawful porUon of a rule where the remainder is severable. See Weyerhaeuser, 586 U.S. at 26. Although PlainUffs seek vacatur of the Final Rule in its enUrety, their standing is limited to the designaUon of Units 7 and 8. Accordingly, the Court VACATES the Final Rule only as to Units 7 and 8. The remainder of the criUcal habitat designaUon remains in effect.

DONE and ORDERED this 21st day of August, 2025. /s/ JEFFREY U. BEAVERSTOCK CHIEF UNITED STATES DISTRICT JUDGE