Another Court Upholds Endangered Species Act Ruling, But . . .

Every Circuit Court of Appeals that has addressed the constitutionality of the Endangered Species Act (ESA) as applied to an intrastate species has ruled in favor of the government.  The Fifth Circuit Court of Appeals recently followed all of the other Circuits.  However, in the face of an en banc rehearing request, certain members of the court wrote a strong opinion suggesting that the panel decision was not correct.

In 1983, the Purcells (GDF Realty or GDF) bought 216 acres in Travis County, TX.  The property consists of seven parcels and is characterized by karst topography, which contains caves and sinkholes.  In 1988, the U.S. Fish and Wildlife Service “listed” five species of “karst invertebrates” as endangered under the Endangered Species Act.  All five species live in caves and sinkholes and are found on the GDF property.  In 1993, the FWS added a sixth species that can also be found on the property.  GDF Realty Investments, Ltd. v. Norton, 326 F.3d 622, 624-27 (5th Cir. 2003). 

GDF Realty attempted to develop its property since 1983.  Pursuant to the ESA, before a property owner can develop property in a way that may unintentionally “take” an endangered species, the landowner must obtain an incidental take permit from the FWS.  16 U.S.C. § 1539(a).  Habitat modification that injures an endangered species qualifies as a “take.”  After numerous agency battles and two court cases, in 1998, the FWS formally advised GDF that it would not issue a “take” permit.  Therefore, GDF filed two actions in federal court; a Fifth Amendment takings claim in the Court of Federal Claims, and a Commerce Clause challenge in District Court.  GDF put the Fifth Amendment case is on hold until the Commerce Clause challenge was completed. Id.

The Federal Government is a government of enumerated powers.  One of these powers is “to regulate Commerce among the several States . . ..” U.S. Const. art. I, § 8, cl. 3.  GDF argued that Congress may not regulate the “taking” of karst invertebrates because “taking” such an invertebrate does not effect interstate commerce.  The District Court disagreed.

On appeal, the Fifth Circuit began its analysis by citing the Supreme Court’s United States v. Lopez, 514 U.S. 549 (1995)  case and explaining that Congress may constitutionally regulate, “the use of the channels of interstate commerce;” “the instrumentalities of interstate commerce;” and “activities having that substantially affect interstate commerce.”  As the karst invertebrates only live in Texas, the court analyzed the case to determine whether “taking” cave bugs substantially affects interstate commerce.  This is often referred to as the third Lopez category.  To determine whether an activity has a substantial effect on interstate commerce, the intrastate activity may either directly impact commerce or may, aggregated with all other similar activities, impact commerce.  The FWS agued that taking cave bugs did both.

The court held that taking cave bugs did not directly substantially affect commerce.  It disagreed with the FWS’s contentions that cave bugs directly affect commerce because of the scientific interest in and the future possible use of cave bugs.  The court, however, did agree that in the aggregate, taking cave bugs does affect interstate commerce.  It held: “ESA is an economic regulatory scheme; the regulation of intrastate takes of the Cave Species is an essential part of it.  Therefore, Cave Species takes may be aggregated with all other ESA takes.” GDF Realty Investments, 326 F.3d at 640.  

Subsequently, GDF sought a rehearing en banc.  Though the Fifth Circuit denied the rehearing, six judges wrote a dissent from the denial.  The dissent questioned how the panel could find in favor of the FWS while:

Offer[ing] little reasoning why any take of a Cave Species is (a) part of a larger “economic regulatory scheme; (b) so essential to the larger national scheme that the accidental crushing of one Cave Species underfoot (or even the diminutive species’ destruction) threatens to undo the national program; and (c) so significant to the commerce clause the Congress, for the first time in U.S. history, is authorized to aggregate purely intrastate, non-economic activity.  GDF Realty Investments, Ltd. v. Norton,--- F.3d ----, 2004 WL 396975 (5th Cir. Feb 27, 2004).

On May 27, 2004, GDF filed a Petition for Certiorari to the U.S. Supreme Court.  In its petition, GDF explained that though various courts have found that the Congress may regulate intrastate, non-economic endangered species under its Commerce Clause authority, they have used different tests to do so.  The government must respond to the petition by August 05, 2004.  Thus, the Supreme Court should rule on GDF’s request by the end year.
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