Court Declines To Delist Pygmy-Owl, Although Listing Declared Arbitrary

On June 25, 2004, Judge Susan Bolton of the U.S. District Court in Arizona declined to remove the Arizona population of Pygmy-owls from the ESA's list of endangered species. While she refused to de-list the Owl, she remanded the matter back to the Fish and Wildlife Service (FWS), effectively stating that if anyone is going to de-list the Owl it is going to be the Bush Administration--not her. Judge Bolton ordered FWS to report back to her by January 31, 2005, with a status report on the Agency's reconsideration of the Owl's listing rule (as well as the re-designation of critical habitat for the Owl.) However, she also refused to establish any firm deadline by which FWS must decide one-way-or-the-other on the Owl's listing, or its critical habitat designation.

Background
In September 2001, Judge Bolton ruled in favor of NAHB and vacated the then-existing critical habitat designation for the Owl. At that time, however, she also decided that the species was properly listed under the ESA, rejecting NAHB's argument that the very listing of the Arizona population of Pygmy-owls was flawed.

NAHB appealed the listing aspects of Judge Bolton's decision to the Ninth Circuit Court of Appeals. In August 2003, the Ninth Circuit agreed with NAHB. It decided that the administrative record compiled by FWS did not show that the Arizona population of Owls was "significant to the taxon as a whole" — a requirement of FWS's policy for listing "distinct population segments" of species. Because the "significance" criterion was not satisfied, the Ninth Circuit decided that FWS's action in listing the Arizona population of Owls was tainted by a substantive defect. As FWS failed to articulate a rational basis for listing the Arizona Owl population, the Ninth Circuit ruled that the agency's action was "arbitary and capricious." This decision was significant. Since the ESA's enactment, it was the first time that an appeals court ever declared the listing of a species "substantively flawed." See NAHB v. Norton, 340 F.3d 835, 852 (9th Cir. 2003).

The Ninth Circuit remanded the matter back to Judge Bolton, for her to issue an order consistent with the Ninth Circuit's reasoning. Last fall, NAHB filed papers with Judge Bolton's court, arguing that de-listing the Arizona population of Owls would be the only action consistent with (1) the Ninth Circuit's express finding that the listing was "arbitrary and capricious," and violated FWS's very own policy for listing population segments of species, and (2) the Administrative Procedure Act's command that a court must "set aside agency actions...found to be arbitrary, capricious...or otherwise not in accordance with law." 5 U.S.C. Sec. 706(2). After an intensive lobbying effort, NAHB convinced Assistant Secretary Manson's office to adopt our position. Indeed, FWS filed court papers agreeing that the only remaining course of action was for Judge Bolton to de-list the Arizona population of Owls.

Judge Bolton's Ruling:
But Judge Bolton would not go so far. While she declined to de-list the Owl population in Arizona, she left the de-listing option open to FWS. The prime motivation for Judge Bolton's decision can be summed up in a single sentence. She wrote: "Should this Court vacate the Listing Rule, the twenty to forty birds comprising the Arizona pygmy-owl population would be entirely without protection under the ESA during the remand period; no comparable protections are afforded by other statutory schemes." Slip op. at 7. Judge Bolton also envisioned that, although FWS has failed to justify its listing decision throughout the prolonged history of this litigation, the agency may be able to articulate some rational basis if it has yet another bite-at-the-apple on remand. Slip op. at 8. Finally, Judge Bolton also stated that "the Court cannot discern any great prejudice to [NAHB or its members]" if the Listing Rule is left in place while FWS has another chance to reconsider its action on remand. Slip op. at 9. In other words, in her view our members suffer no real harm or injury by leaving the Owl's listing in place — despite the fines, imprisonment, and criminal and civil penalties that could mount against property owners if they "take" Owls or modify their habitat.

NAHB staff are exploring the legal and policy implications of this latest decision. [ return to top ]