The amphibian Rana sevosa is popularly known as the “dusky gopher frog”—“dusky” because of its dark coloring and “gopher” because it lives underground. The dusky gopher frog is about three inches long, with a large head, plump body, and short legs. Warts dot its back, and dark spots cover its entire body. Final Rule To List the Missisippi Gopher Frog Distinct Population Segment of Dusky Gopher Frog as Endangered, 66 Fed.Reg. 62993 (2001) (Final Listing). It is noted for covering its eyes with its front legs when it feels threatened, peeking out periodically until danger passes. Markle Interests, LLC v. United States Fish and Wildlife Serv., 827 F.3d 452, 458, n. 2 (C.A.5 2016). Less endearingly, it also secretes a bitter, milky substance to deter would-be diners.
That is how Chief Justice Roberts described the frog species at issue in his November 27, 2018 opinion for the Court in Weyerhaeuser Company v. United States Fish and Wildlife Service, a case in which the Supreme Court vacated and remanded a CA5 decision upholding the Service's designation of land in St. Tammany's Parish, Louisiana, as "critical habitat" of the frog.
The case has returned to the same Fifth Circuit panel (Reavley, Owen, Higginson) that decided it initially, but questions remain. In the riveting post that follows, I summarize the Court's opinion and make some limited predictions regarding what might happen on remand. More importantly, though, I explain that though the Court's failure to mention Chevron in its analysis might seem like the judicial equivalent of "cover[ing] its eyes with its front legs [because] it feels threatened," the Court is not, in fact, a dusky gopher frog.
Critical-habitat designations under the Endangered Species Act
When the Secretary of the Interior lists a species as endangered under Endangered Species Act, he must also designate the "critical habitat" of that species. The ESA defines “critical habitat” as:
(i) the specific areas within the geographical area occupied by the species . . . 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 . . . upon a determination by the Secretary that such areas are essential for the conservation of the species. 
Before designating an areas as "critical habitat," the Secretary must “take into consideration the economic impact” and other relevant impacts of the designation. He may “exclude any area from critical habitat if he determines that the benefits of such exclusion outweigh the benefits of designation,” unless exclusion would result in extinction of the species.
The Service's decision to designate Unit 1 as "critical habitat" of the dusky gopher frog
The Service listed the dusky gopher frog as an endangered species back in 2001, triggering its obligation under the ESA to designate the frog's "critical habitat." The Service designated as part of that critical habitat an area in St. Tammany Parish, Louisiana. The frog had once lived on the site, which the Service dubbed "Unit 1," but not since 1965. The Service concluded that Unit 1 met the statutory definition of "unoccupied critical habitat" for the frog because its rare "ephemeral ponds" and distance from other frog populations made it "essential for the conservation of the species."
A report on the probable economic impact of the Service's proposed designation found that designating Unit 1 as critical habitat might bar future development of the site, depriving its owners of up to $33.9 million. The Service weighed those costs against the conservation benefits of its proposal, concluded that the costs were not disproportionate to the benefits, and finalized its decisions designating Unit 1 as critical habitat.
The district court and the Fifth Circuit uphold the Service's critical-habitat designation
The owners of Unit 1 (Weyerhaeuser and a group of family landowners) sued to challenge the Service's designation of Unit 1 as critical habitat, arguing that the closed-canopy timber plantation on Unit 1 could not be critical habitat for the frog because the frog only lives in open-canopy forests. Judge Feldman of the U.S. District Court for the Eastern District of Louisiana upheld the designation.
The landowners also challenged the Service's decision not to exclude Unit 1 from the frog's critical habitat, arguing that the Service had failed to adequately weigh the costs and benefits of designating the site, had used an unreasonable method for estimating the economic impact involved, and failed altogether to consider several categories of costs. Judge Feldman approved the Service's approach and declined to consider the Service's decision not to exclude Unit 1.
The Fifth Circuit affirmed in a divided opinion. Judge Higginson wrote for the majority, which included Judge Reavley, and Judge Owen dissented. According to the majority, the ESA's definition of critical habitat does not include a "habitability requirement," and the Service's decision not to exclude Unit 1 was committed to agency discretion by law and thus not subject to judicial review. The court denied rehearing en banc by an 8-6 vote. Chief Judge Stewart and Judges Dennis, Prado, Southwick, Haynes, Graves, Higginson, and Costa voted to deny rehearing en banc. Judges Jolly, Jones, Smith, Clement, Owen, and Elrod would have reheard the case, and Judge Jones wrote a dissent from the denial, which Judges Jolly, Smith, Clement, Owen, and Elrod joined.
The Supreme Court vacates and remands.
In an 8-0 opinion written by Chief Justice Roberts, the Supreme Court vacated and remanded the Fifth Circuit's decision. Justice Kavanaugh, who had not yet been confirmed when the Justices heard oral argument on October 1, did not participate in the case.
The Court first held that "critical habitat" must also be "habitat." That is plain, the Court explained, not only from common sense, but also from statutory context. In particular, the Court noted that 16 U.S.C. §1533(a)(3)(A)(i)--the sole source of authority for critical-habitat designations--states that when the Secretary lists a species as endangered, he must also "designate any habitat of such species which is then considered to be critical habitat." That provision confirms that "[o]nly the 'habitat' of the endangered species is eligible for designation as critical habitat." If a particular site is "essential for the conservation of the species" but is not "habitat," the Secretary lacks authority to designate it as critical habitat.
Because the Fifth Circuit concluded that "critical habitat" designations under the ESA were not limited to areas that qualified as habitat, it did not interpret the term "habitat" in §1533(a)(3)(A)(i). Nor did it review the Service's administrative findings with respect to Unit 1. The Court therefore vacated and remanded the case to the Fifth Circuit "to consider these questions in the first instance."
The Court also rejected the Fifth Circuit's holding that the Secretary's decision not to exclude an area from critical habitat under §1533(b)(2) is "committed to agnecy discretion by law" and therefore not subject to judicial review. The Court explained that §701(a)(2) of the Administrative Procedure Act creates a “basic presumption of judicial review” of agency action. 5 U.S.C. §701(a)(2). Although the presumption is rebutted when a particular decision is “committed to agency discretion by law,” that exception applies only to "those rare provisions drawn so that a court would have no meaningful standard against which to judge the agency's exercise of discretion.” Section 1533(b)(2), the Court held, does not fall within that narrow exemption. The Court's rationale is worth repeating here in full:
[Section 1533(b)(2)] describes a unified process for weighing the impact of designating an area as critical habitat. The provision's first sentence requires the Secretary to “tak[e] into consideration” economic and other impacts before designation, and the second sentence authorizes the Secretary to act on his consideration by providing that he “may exclude any area from critical habitat if he determines that the benefits of such exclusion outweigh the benefits of “ designation. The word “may” certainly confers discretion on the Secretary, but it does not segregate his discretionary decision not to exclude from the mandated procedure to consider the economic and other impacts of designation when making his exclusion decisions. The statute is, therefore, not “drawn so that a court would have no meaningful standard against which to judge the [Secretary's] exercise of [his] discretion” not to exclude. Weyerhaeuser's claim—that the agency did not appropriately consider all the relevant statutory factors meant to guide the agency in the exercise of its discretion—is the sort of claim that federal courts routinely assess when determining whether to set aside an agency decision as an abuse of discretion. The Court of Appeals should consider in the first instance the question whether the Service's assessment of the costs and benefits of designation and resulting decision not to exclude Unit 1 was arbitrary, capricious, or an abuse of discretion.
Why no mention of Chevron?
I mentioned above that I worked on two amicus briefs filed in this case on behalf of the Chamber of Commerce of the United States. In those briefs, we argued that the Fifth Circuit’s decision contravened the Supreme Court's teaching that a vigorous application of Chevron's reasonableness test is an essential protection against ultra vires agency action. As many commentators have noted, however, Chief Justice Roberts' opinion for the unanimous Court never even mentions Chevron. So, you might ask, what gives?
There are, as I see it, a few possible explanations for the Court's Chevron silence. First, it could come down to headcounting. Recall that only eight Justices participated in the decision. If the Chief Justice knew that an opinion that avoided the Chevron thicket would result in a unanimous, though admittedly narrow, 8-0 opinion, but a broader pronouncement on the ins and outs of our favorite deference doctrine would result in a divided (and perhaps equally divided) decision, he might well have kept mum on Chevron because he preferred the narrow-but-unified result.
The Chief Justice is known to prefer unanimous decisions as a general matter, but he may have had good reason to prefer a unanimous-but-narrow opinion here anyway. Although the Court's holding that "critical habitat" must be "habitat" is unquestionably an important one, the imoprtance of its emphasis in on the "strong presumption" in favor of judicial review of agency action and the narrowness of the exception for decisions "committed to agency discretion by law" should not be underestimated. Perhaps the Chief Justice's silence on Chevron was the price he paid for a unanimous opinion on that point.
Second, the Court may have been silent on Chevron because the statutory interpretation issue ended up hinging on the Fifth Circuit's approach to interpreting the statute, not the agency's. As the Chief Justice's opinion explained, the Fifth Circuit had failed to consider or decide whether Unit 1 was "habitat" for purposes of §1533(a)(3)(A)(i). The Court remanded for the Fifth Circuit to answer that question in the first instance. The opinion never assesses the agency's interpretation of the statute.
Finally, and relatedly, the Court's resolution of this statutory question without resorting to Chevron arguably reinforces separation of powers by demanding that lower courts do the job of saying what the law is themselves before invoking deference doctrines like Chevron. By focusing on the Fifth Circuit's efforts at statutory interpretation instead of the agency's, the Court reaffirms the primacy of the judiciary with respect to matters of statutory interpretation.
I admit that last one is a stretch, but I enjoy this kind of thing, so you'll have to humor me. And before you dismiss my point out of hand, remember that the author of Weyerhaeuser once said this in a dissenting opinion:
The Court touches on a legitimate concern: Chevron importantly guards against the Judiciary arrogating to itself policymaking properly left, under the separation of powers, to the Executive. But there is another concern at play, no less firmly rooted in our constitutional structure. That is the obligation of the Judiciary not only to confine itself to its proper role, but to ensure that the other branches do so as well.
An agency's interpretive authority, entitling the agency to judicial deference, acquires its legitimacy from a delegation of lawmaking power from Congress to the Executive. Our duty to police the boundary between the Legislature and the Executive is as critical as our duty to respect that between the Judiciary and the Executive. See Zivotofsky v. Clinton, 566 U.S. ––––, ––––, 132 S.Ct. 1421, 1428 (2012).
City of Arlington v. F.C.C., 569 U.S. 290, 327 (Roberts, C.J., dissenting). That case, which happens to be one of favorite Supreme Court decisions of all time, affirmed a Fifth Circuit opinion written by Judge Owen--the very Judge who dissented from Judge Higginson's majority opinion in Weyerhaeuser (and who remains on the panel now that the case is back in the Fifth Circuit after remand). Who says the D.C. Circuit decides all the important admin-law cases?
What happens next?
Predicting what will happen in this case on remand is no easy task, but a few things can be said. First, the Supreme Court gave the Fifth Circuit pretty clear instructions regarding its tasks:
The Court of Appeals concluded that “critical habitat” designations under the statute were not limited to areas that qualified as habitat. See 827 F.3d, at 468 (“There is no habitability requirement in the text of the ESA or the implementing regulations.”). The court therefore had no occasion to interpret the term “habitat” in Section 4(a)(3)(A)(i) or to assess the Service's administrative findings regarding Unit 1. Accordingly, we vacate the judgment below and remand to the Court of Appeals to consider these questions in the first instance.
. . . .
Because it determined that the Service's decisions not to exclude were committed to agency discretion and therefore unreviewable, the Court of Appeals did not consider whether the Service's assessment of the costs and benefits of designation was flawed in a way that rendered the resulting decision not to exclude Unit 1 arbitrary, capricious, or an abuse of discretion. Accordingly, we remand to the Court of Appeals to consider that question, if necessary, in the first instance.
On the statutory-interpretation issue, much will depend on how the government decides to argue that Unit 1 qualifies as habitat. It is hard to know what the government will do because, as Chief Justice Roberts noted, the government's view of what the statute requires appears to have changed as this case has progressed through the judicial-review process. I would assume, though, that the government's options for arguing that Unit 1 is "habitat" will be limited to some extent. Under Chenery, for instance, the agency will not be permitted to supply some new basis for upholding its designation and will instead be confined to the reasons it gave for making that designation in the first place. SEC v. Chenery Corp., 318 U.S. 80, 95 (1943). I'm not familiar enough with the administrative record to know what, if anything, the agency said regarding Unit 1's "habitat"-status in its final decision designating Unit 1 as critical habitat, but I would not be surprised if that is a major point of contention between the parties on remand.
The question will be whether an area that cannot currently sustain a species can nevertheless qualify as "habitat" for the species if, through modifications, it can be converted into an area capable of sustaining the species. If so, the next question will then be whether there is limiting principle. In other words, is habitat limited to areas that can sustain the species with reasonable modifications, or something else? The parties will also surely dispute whether Unit 1 can be modified to sustain the species at all, and if so, whether the modificaitons required are too involved to justify treating Unit 1 as habitat.
With respoect to whether the Service's decision not to exclude Unit 1 was an abuse of discretion, even less can be said because the lower courts both declined to address the issue. Chief Justice Roberts did give us a starting point, though:
The use of the word “may” certainly confers discretion on the Secretary. That does not, however, segregate his discretionary decision not to exclude from the procedure mandated by Section 4(b)(2), which directs the Secretary to consider the economic and other impacts of designation when making his exclusion decisions. Weyerhaeuser's claim is the familiar one in administrative law that the agency did not appropriately consider all of the relevant factors that the statute sets forth to guide the agency in the exercise of its discretion. Specifically, Weyerhaeuser contends that the Service ignored some costs and conflated the benefits of designating Unit 1 with the benefits of designating all of the proposed critical habitat. 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 § 706(2)(A). See Judulang v. Holder, 565 U.S. 42, 53 (2011) (“When reviewing an agency action, we must assess ... whether the decision was based on a consideration of the relevant factors and whether there has been a clear error of judgment.” (internal quotation marks omitted)).
Section 4(b)(2) requires the Secretary to consider economic impact and relative benefits before deciding whether to exclude an area from critical habitat or to proceed with designation. The statute is, therefore, not “drawn so that a court would have no meaningful standard against which to judge the Secretary's exercise of his discretion” not to exclude. Lincoln, 508 U.S., at 191.