Bldg Indust Assn v. Babbitt, Bruce

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued September 25, 1998 Decided November 24, 1998

No. 97-5255

Building Industry Association of Superior California, et al.,

Appellants

v.

Bruce Babbitt, Secretary of the Interior, et al.,

Appellees

Environmental Defense Center, et al.,

Intervenors

Appeal from the United States District Court

for the District of Columbia

(No. 95cv00726)

Lawrence R. Liebesman argued the cause for appellants.
With him on the briefs was Rafe Petersen. Duane J. Desid-
erio entered an appearance.

Elizabeth Ann Peterson, Attorney, U.S. Department of
Justice, argued the cause for appellees. With her on the
brief were Lois J. Schiffer, Assistant Attorney General, and

David C. Shilton, Attorney. Robert L. Klarquist, Attorney,
entered an appearance.

Neil Levine argued the cause for intervenors Environmen-
tal Defense Center and Butte Environmental Council. With
him on the brief was Anne Spielberg.

James B. Dougherty was on the brief for amicus curiae
National Wildlife Federation.

Robin L. Rivett and Anne M. Hayes were on the brief for
amici curiae Pacific Legal Foundation, et al.

Before: Edwards, Chief Judge, Wald and Sentelle,
Circuit Judges.

Opinion for the Court filed by Circuit Judge Sentelle.

Sentelle, Circuit Judge: Appellants, Building Industry
Association of Superior California, et al. (collectively "BIA")
appeal from a judgment of the United States District Court
for the District of Columbia upholding a decision of the
United States Fish and Wildlife Service ("FWS") to list as
endangered or threatened under the Endangered Species
Act, 16 U.S.C. ss 1531 et seq. ("ESA"), four different species
of "fairy shrimp." The district court certified the listing
claim under Rule 54(b) of the Federal Rules of Civil Proce-
dure, but provided no reason for its certification. While in
some applications Rule 54(b) requires merely entry of a final
order and an "express determination" that there is no just
reason for delay, we hold that, in cases such as this where it
is not evident that certification is appropriate, further expla-
nation by the district court may be necessary. Having con-
cluded that the district court's certification is inadequate
under this standard of review, we dismiss the appeal as
outside our jurisdiction.

I. Background

A. Statutory Framework

Under Section 4(a) of the ESA, the Secretary of the
Department of the Interior determines whether to list a
species as "endangered" or "threatened." 16 U.S.C.

s 1533(a). An "endangered species" is "any species which is
in danger of extinction throughout all or a significant portion
of its range." 16 U.S.C. s 1532(6). A "threatened species" is
"any species which is likely to become an endangered species
within the foreseeable future throughout all or a significant
portion of its range." 16 U.S.C. s 1532(20). "To the maxi-
mum extent practicable," within 90 days after receiving a
petition of an interested person to list a species, the Secretary
is charged with making a finding concerning whether listing
is warranted. 16 U.S.C. s 1533(b)(3)(A). If the listing may
be warranted, the Secretary must make a determination
either that the petitioned action is not warranted, warranted,
or warranted but precluded within 12 months of receiving the
petition. 16 U.S.C. s 1533(b)(3)(B). The Secretary deter-
mines whether a given species is an "endangered species"
under a number of statutorily specified factors found in 16
U.S.C. s 1533(a)(1), "solely on the basis of the best scientific
and commercial data available." 16 U.S.C. s 1533(b)(1)(A).

The ESA states that at the same time the Secretary is
making this listing decision, the Secretary must, "to the
maximum extent prudent and determinable," designate a
"critical habitat" for the listed species. 16 U.S.C.
s 1533(a)(3). Nevertheless, there are circumstances under
which a critical habitat designation need not be made concur-
rently with the listing decision. Where such designation is
not prudent or critical habitat is not determinable, FWS
regulations require that "the reasons for not designating
critical habitat ... be stated in the publication of proposed
and final rules listing a species." 50 C.F.R. s 424.12(a).

B. Procedural Background

Fairy shrimp are tiny crustaceans found in California's
Central Valley region. They inhabit vernal pools-seasonally
wet, isolated water bodies. On May 8, 1992, FWS published
a rule proposing to list five species of fairy shrimp as endan-
gered pursuant to Section 4 of the Endangered Species Act
and solicited public comment. 57 Fed. Reg. 19,856-862.
After receiving comments from the public on the proposed

listing, on September 19, 1994, FWS published its final rule
listing three of the five species of fairy shrimp as "endan-
gered" and one of the five species as "threatened." 59 Fed.
Reg. 48,136-153. However, FWS did not designate a critical
habitat for the fairy shrimp species it had listed, concluding
that "the publication of precise maps and descriptions of
critical habitat in the Federal Register would make these
species more vulnerable to incidents of vandalism." Id. at
48,151.

BIA brought suit in the district court, challenging both
FWS's final listing decision and its failure to designate a
critical habitat. On July 25, 1997, the district court ruled on
motions for summary judgment, upholding FWS's decision to
list the fairy shrimp and remanding to FWS for the limited
purpose of clarifying or reconsidering its decision to forego
designating a critical habitat. Building Indus. Ass'n of Supe-
rior California v. Babbitt, 979 F. Supp. 893, 906 (D.D.C.
1997). FWS filed an additional report on September 26, 1997,
providing additional support from the administrative record
and articulating additional factual and legal bases for its
decision not to designate a critical habitat. On October 13,
1997, the Environmental Defense Center filed a response,
criticizing the FWS finding as insufficiently supported in the
record. On October 27, 1997, FWS filed a response to BIA's
motion, defending its decision not to designate critical habitat.
Pursuant to Rule 54(b), on January 6, 1998, the district court
certified for appellate review those issues relating to FWS's
decision to list the fairy shrimp.

II. Discussion

A. The Jurisdictional Question

United States circuit courts are courts of limited jurisdic-
tion. See generally U.S. Const. Art. III, ss 1, 3. We do not
have appellate jurisdiction over every decision of a district
court, but only "final decisions," subject to some exceptions
for appealable interlocutory decisions not applicable here. 28
U.S.C. ss 1290, 1291. The determination of what constitutes
a final decision is not normally a difficult one. Generally, a

court may assume that for a judgment to be appealable it
must be final " 'as to all the parties, [and] as to the whole
subject-matter and as to all the causes of action involved.' "
Andrews v. United States, 373 U.S. 334, 340 (1963) (quoting
Collins v. Miller, 252 U.S. 364, 370 (1920)). However, such
an absolute rule of total finality poorly serves the real world
of complex litigation. Our rules of civil procedure accommo-
date reality in Rule 54(b), which provides that in the case of
litigation involving joined claims or parties, "the court may
direct the entry of a final judgment as to one or more but
fewer than all of the claims or parties...." However, the
court may do so "only upon an express determination that
there is no just reason for delay and upon an express
direction for the entry of judgment." Our jurisdiction over
the present controversy arises under that provision, if we
have jurisdiction at all.

Therefore, before we approach the merits of appellants'
claim, we must first determine whether the order of the
district court allowing the partial summary judgment as to
the listing claim is final and appealable under Rule 54(b).
The question is jurisdictional. Haynesworth v. Miller, 820
F.2d 1245, 1253 (D.C. Cir. 1987). If we have no jurisdiction
over a cause purportedly before us, then it is our duty to
dismiss the cause. Id. Having considered the question in
this case, and examined the briefs and the supporting record,
we conclude that we do not have jurisdiction and therefore
must dismiss this appeal.

B. Review of the District Court's Rule 54(b) Certification

Determination of the exceptional cases qualifying for Rule
54(b) certification is initially the province of the district court,
which "function[s] as a 'dispatcher,' " deciding which less-
than-totally final dispositions meet the standard for finality
set forth in the Rule and therefore qualify for certification.
The Supreme Court has long recognized that the placement
of this decision in the discretion of the district court is a wise
one, as that court is "the one most likely to be familiar with
the case and with any justifiable reasons for delay." Sears,

Roebuck & Co. v. Mackey, 351 U.S. 427, 437 (1956). There-
fore, the law affords considerable discretion to the district
courts in making the certification decision under Rule 54(b).
However, "with equally good reason, any abuse of that discre-
tion remains reviewable by the Court of Appeals." Id.

In Sears, the Supreme Court offered initial guidance for
our review of the district court's exercise of that discretion.
Under Sears, we should consider as legitimate grounds for
the dismissal of such an appeal as outside our jurisdiction any
of the following:

(1) that the judgment of the District Court was not a
decision upon a "claim for relief,"

(2) that the decision was not a "final decision" in the
sense of an ultimate disposition of an individual claim
entered in the course of a multiple claims action, or

(3) that the District Court abused its discretion in certi-
fying the order.

Id. at 436. The first two of these grounds appear to be
questions of law, which presumably we would review for error
on the record, making a de novo decision as to the question of
law. Cf. Summers v. Department of Justice, 140 F.3d 1077,
1079-80 (D.C. Cir. 1998) (setting forth the standard of review
for summary judgments); Herbert v. National Academy of
Sciences, 974 F.2d 192, 197-98 (D.C. Cir. 1992) (discussing
standard of review applicable to issues of fact and law in
appeal from dismissal for lack of subject matter jurisdiction).
The third question, by its terms, sets forth an abuse of
discretion standard of review.

In applying the abstract standards of Sears to the concrete
district court decision before us, we will first consider how
much on-the-record decisionmaking we can require of the
district judge in a Rule 54(b) certification review. The Rule
itself sets a basic minimum standard. Before we can acquire
appellate jurisdiction, Rule 54(b) requires that the district
court must have entered an "express determination that there
is no just reason for delay and ... an express direction for
the entry of judgment." Fed. R. Civ. P. 54(b). The express

direction and determination is a bright-line requirement. We
will not imply a Rule 54(b) determination. " 'Absent an
express direction for entry of judgment, an order that dispos-
es of less than all the claims--no matter with what firmness
and apparent finality--is not appealable.' " Everett v. US
Airways Group, Inc., 132 F.3d 770, 773 (D.C. Cir. 1998)
(quoting with approval 15A Charles Alan Wright, Arthur R.
Miller, and Edward H. Cooper, Federal Practice and Proce-
dure s 3914.7, at 544 (2d ed. 1992)). This presents no
problem on the present record as the district court complied
with the requirements of Rule 54(b) for an express determi-
nation and direction. Our difficulty is that the court's reason-
ing behind the declaration is not express and is not apparent
from the record.

Can we, in our review of a Rule 54(b) certification, require
more of the district court than compliance with the express
determination and express direction set forth in the Rule? In
many, perhaps most, of the small number of cases we review
under this rubric, we might not even ask that question.
Where the district court's reasoning is apparent to us, or
discernible from other parts of the record, we would perhaps
find literal compliance with the Rule quite sufficient. Howev-
er, this is not such a case. Fortunately, the Supreme Court
has provided further guidance.

In Curtiss-Wright Corp. v. General Electric Co., 446 U.S. 1
(1980), the Supreme Court reviewed a decision of the Third
Circuit dismissing an appeal brought on Rule 54(b) certifica-
tion. Expanding on the reasoning from Sears, the Court
outlined the three steps we set forth above and made it
explicit that the district court should undertake the analysis
in the order set forth. That is, the district court should not
certify under Rule 54(b) until it has determined "that it is
dealing with a 'final judgment.' " Id. at 7. The decision for
certification must constitute "a 'judgment' in the sense that"
it determines a claim for relief. Id. Further, "it must be
'final' ... 'an ultimate disposition of an individual claim
entered in the course of a multiple claims action.' " Id.
(quoting Sears, 351 U.S. at 436). Neither of these steps
seems to present any insurmountable problem in the present

controversy, and if our analysis ended there, we might well be
willing to accept the district court's certification.

But our analysis does not end there. Under the terms of
the Rule and the directions of Curtiss-Wright, once the
district court has found finality, it "must go on to determine
whether there is any just reason for delay." Id. at 8. The
Court in Curtiss-Wright explicitly declared that "[n]ot all final
judgments on individual claims should be immediately appeal-
able, even if they are in some sense separable from the
remaining unresolved claims." Id. It is at that point that
the district court most explicitly performs that function which
the Sears Court described as "dispatcher"; that is, it is then
that the court must "determine the 'appropriate time' when
each final decision in a multiple claims action is ready for
appeal." Id. (quoting Sears, 351 U.S. at 435). It is that
decision which rests in the discretion of the district court. In
making that decision, the court must exercise its discretion
" 'in the interest of sound judicial administration.' " Id. at 10
(quoting Sears, 351 U.S. at 437). Before departing from the
norm, that is, determining that there are "no just reasons to
delay" and entering a final judgment on one of multiple
claims, a district court "must take into account judicial admin-
istrative interests as well as the equities involved." Id. at 8
(emphasis added). Thus, a district court should properly
consider "such factors as whether the claims under review
were separable from the others remaining to be adjudicated
and whether the nature of the claims already determined was
such that no appellate court would have to decide the same
issues more than once even if there were subsequent ap-
peals." Id.

As the district court did not supply its reasoning on this
point, and as the record appears silent on the point, we are
unable to adequately perform the review prescribed under
Sears and Curtiss-Wright. True, the recitation of the "no
just reason for delay" language is sufficient for literal compli-
ance with the Rule. Nonetheless, it is not in itself sufficient
to base an adequate review of the district court's exercise of
its discretion. Rothenberg v. Security Management Co., 617
F.2d 1149, 1150 (5th Cir. 1980) ("[W]hen the case is of such a
nature that the reasons for the 54(b) certification are unclear,

it may be necessary for adequate appellate review to require
that the district court's reasons be stated."). As the Eleventh
Circuit has noted, in cases in which the district court does not
set forth its reasons for determining that there is no just
cause for allowing the normal delay, "we do not get the
benefit of its experience and reasoning." In re Southeast
Banking Corp. v. Bassett, 69 F.3d 1539, 1546 (11th Cir. 1995).
As the Bassett court further stated, in such cases "we do the
best we can without that assistance, but any deference we
might otherwise accord such a ruling will be nullified by the
absence of a meaningful explanation." Id. This is such a
case.

As we noted in the beginning of this opinion, the separable
claims involve the alleged errors of the Secretary in making a
finding that listing is warranted, and in his determination of a
critical habitat for the listed species. It appears to us that
these two decisions under 16 U.S.C. s 1533 and 50 C.F.R.
s 424.12(a) arise from a nexus of fact and law so intertwined
that if we decide the one now, we may nonetheless face many
of the same questions in determining the other later. As the
Supreme Court expressly held in both Sears and Curtiss-
Wright, a district court certifying a claim under Rule 54(b)
must apply the proper considerations "to assure that applica-
tion of the Rule effectively 'preserves the historic federal
policy against piecemeal appeals.' " Curtiss-Wright, 446 U.S.
at 8 (quoting Sears, 351 U.S. at 438). As we cannot on the
record before us determine that the district court in this case
fulfilled that obligation, we conclude that the Rule 54(b)
certification before us is not proper.

III. Conclusion

For the reasons set forth above, we conclude that we do not
have appellate jurisdiction over this claim. This appeal is
therefore dismissed.