Sierra Club v. U.S. Fish & Wildlife Service

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 00-30117

SIERRA CLUB,
Plaintiff-Appellant,

versus

U.S. FISH AND WILDLIFE SERVICE; NATIONAL MARINE
FISHERIES SERVICE,
Defendants-Appellees.

Appeal from the United States District Court
For the Eastern District of Louisiana

March 15, 2001

Before HIGGINBOTHAM, WIENER, and DENNIS, Circuit Judges.

PATRICK E. HIGGINBOTHAM, Circuit Judge:

This case requires us to assess the validity of agency action

under the Endangered Species Act (ESA).1 Appellant challenges the

refusal of the U.S. Fish and Wildlife Service (FWS) and the

National Marine Fisheries Service (NMFS) to designate "critical

habitat" for the Gulf sturgeon. Appellant contends that this

decision relied on an invalid regulation and is therefore arbitrary

and capricious. We agree and now reverse.

1
16 U.S.C.A. § 1531 et seq. (2000).
The Gulf sturgeon is a large, wide-ranging fish that can reach

up to fifty years of age and five-hundred pounds in size. The

sturgeon is one of the few anadromous species in the Gulf of

Mexico, migrating between fresh and salt water. The sturgeon spends

spring and summer in the Gulf Coast rivers from Louisiana to

Florida.2 In the winter months, the sturgeon returns to the waters

of the Gulf of Mexico to feed. Although the sturgeon once supported

a major commercial fishery, habitat destruction and overfishing

conspired to bring about a population collapse.3 This alarming

decrease in population led to the sturgeon's listing as a

threatened species in 1991.4

The listing of the sturgeon as a threatened species triggered

the "critical habitat" provisions of the ESA. The ESA requires the

Secretary of the Interior to "designate any habitat of such species

which is then considered to be critical habitat" concurrently with

the listing of the threatened species, unless a statutory exception

applies.5 Although the Secretary invoked two one-year statutory

2
See Decision on Designation of Critical Habitat for the Gulf
sturgeon, 63 Fed. Reg. 9967, 9969 (Feb. 27, 1998).
3
See id. at 9967, 9971.
4
See Threatened Status for the Gulf sturgeon, 56 Fed. Reg.
49653 (Sept. 30, 1991); see also 16 U.S.C.A. § 1533(c)
(articulating the listing mechanism for the Endangered Species
Act). A "threatened species" is defined as "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.A. § 1532(20).
5
16 U.S.C.A. § 1533(a)(3)(A).

2
extensions from the listing date,6 no critical habitat was

designated for the sturgeon by the deadline.7

In 1994, the Orleans Audubon Society filed suit in the United

States District Court for the Eastern District of Louisiana,

seeking to compel the Department of the Interior to decide whether

to designate critical habitat for the sturgeon. While the

litigation was pending, the Department assured the Orleans Audubon

Society and the district court that it was in the process of

designating critical habitat for the sturgeon. The FWS prepared a

draft proposal to this effect, which stated that critical habitat

designation would provide additional benefit to the sturgeon. The

court ordered the Department on August 9, 1995, to "take all

appropriate action," prompting the Department to render a decision.

On August 23, 1995, the FWS and the NMFS8 signaled an abrupt

change of course. The Services decided not to designate critical

habitat for the sturgeon, finding that it was "not prudent" to do

6
See 16 U.S.C.A. §§ 1533(b)(6)(A), 1533(b)(6)(C)(ii).
7
At the time of the sturgeon's listing, the Secretary
refrained from designating critical habitat, finding that
"designation of critical habitat may be prudent for the Gulf
sturgeon but is not now determinable." 56 Fed. Reg. at 49656. The
Secretary set May 2, 1995, as the deadline for a final decision.
See id.
8
The ESA divides responsibility for endangered or threatened
species between the Department of Interior and the Department of
Commerce. 16 U.S.C.A. § 1533(a)(2). The Secretaries of these
agencies delegated their authority concerning fresh water and
marine endangered species to the FWS and NMFS. See 50 C.F.R. §
402.01(b) (2000). The FWS and NMFS jointly made the decision not to
designate critical habitat in this case.

3
so.9 The Services concluded that designation would not provide

additional benefit to the species beyond other statutory regimes

and conservation programs in place.10 In the wake of this decision,

the Gulf States Marine Fisheries Commission approved a

comprehensive Recovery/Management Plan for the Gulf sturgeon.11

The Orleans Audubon Society amended its complaint to challenge

the Services' refusal to designate critical habitat. The district

court found that the Services had failed to articulate a rational

basis for their finding that designation was "not prudent."12

Although the Services' decision described various programs that

would ostensibly provide benefit to the sturgeon in lieu of

designation, the court found no evidence in the record to support

this assertion. It therefore remanded to the Services for action in

accordance with the best scientific evidence available.

On February 27, 1998, the Services decided on remand that

critical habitat designation remained "not prudent."13 The Services

found that designation would not provide any additional benefit to

9
See Decision on Designation of Critical Habitat for the Gulf
Sturgeon, 60 Fed. Reg. 43,721 (Aug. 23, 1995).
10
See 60 Fed. Reg. at 43,722-23.
11
The ESA contemplates the development of recovery plans to
promote "the conservation and survival" of endangered and
threatened species. 16 U.S.C.A. § 1533(f)(1).
12
See Orleans Audubon Soc'y v. Babbitt, No. 94-3510 S (E.D.
La. Oct. 28, 1997) (unpublished).
13
See Decision on Designation of Critical Habitat for the Gulf
sturgeon, 63 Fed. Reg. 9967 (Feb. 27, 1998).

4
the sturgeon.14 The Sierra Club challenged this decision in the U.S.

District Court for the Eastern District of Louisiana. Although the

district court conceded that the regulation on which the Services

based much of their reasoning, 50 C.F.R. § 402.02, appeared to

conflict with the language of the ESA, the district court granted

summary judgment in favor of the Services. The court found that the

Services's conclusions were "minimally rational" and supported by

the best scientific evidence available. Sierra Club appeals the

court's ruling.

In 1973, Congress enacted the ESA as a "means whereby the

ecosystems upon which endangered species and threatened species

depend may be conserved," and "to provide a program for the

conservation of such endangered species and threatened species."15

The ESA defines "conservation" as "the use of all methods and

procedures which are necessary to bring any endangered species or

threatened species to the point at which the measures provided [by

the ESA] are no longer necessary."16 As the district court observed,

the objective of the ESA is to enable listed species not merely to

14
See id. at 9973.
15
16 U.S.C.A. § 1531(b).
16
16 U.S.C.A. § 1532(3).

5
survive, but to recover from their endangered or threatened

status.17

To achieve this objective, Congress required the Secretary of

the Interior to designate a "critical habitat" for all listed

species.18 The ESA defines occupied critical habitat as "the

specific areas within the geographic area occupied by the species,

at the time it is listed . . . 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."19 In addition to "occupied habitat,"

the ESA contemplates the designation of "unoccupied critical

habitat." Unoccupied habitat is composed of the "specific areas

outside the geographical area occupied by the species at the time

it is listed . . . upon a determination by the Secretary that such

areas are essential for the conservation of the species."20

Once a species has been listed as endangered or threatened,

the ESA states that the Secretary "shall" designate a critical

17
See 50 C.F.R. § 402.02 (2000) ("'Recovery' means improvement
in the status of listed species to the point at which listing is no
longer appropriate under the criteria set out in" the ESA)
(emphasis omitted); 63 Fed. Reg. at 9968 ("[T]he Act defines
'conservation' to mean recovery of the species").
18
See 16 U.S.C.A. § 1533(a)(3); Bennett v. Spear, 520 U.S.
154, 157-58 (1997).
19
16 U.S.C.A. § 1532(5)(A)(i).
20
16 U.S.C.A. § 1532(5)(A)(ii).

6
habitat "to the maximum extent prudent or determinable."21 The ESA

leaves to the Secretary the task of defining "prudent" and

"determinable."22 According to Interior Department regulations,

critical habitat designation is "not prudent" where either of two

conditions is met: "(i) [t]he species is threatened by taking or

other human activity, and identification of critical habitat can be

expected to increase the degree of such threat to the species, or

(ii) [s]uch designation of critical habitat would not be beneficial

to the species."23 Although the ESA does not define the scope of the

"not prudent" exception, the statute requires the Secretary to make

the designation decision "on the basis of the best scientific data

available and after taking into consideration the economic impact,

and any other relevant impact, of specifying any particular area as

critical habitat."24

Critical habitat designation primarily benefits listed species

through the ESA's consultation mechanism. Section 7(a)(2) of the

21
16 U.S.C.A. § 1533(a)(3).
22
See 16 U.S.C.A. § 1533(h); TVA v. Hill, 437 U.S. 153, 172
(1978).
23
50 C.F.R. § 424.12(a)(1) (2000). The circumstances under
which designation is not "determinable" are not relevant to this
case. However, agency regulations indicate that designation is not
determinable when "(i) [i]nformation sufficient to perform required
analyses of the impacts of the designation is lacking, or (ii)
[t]he biological needs of the species are not sufficiently well
known to permit identification of an area as critical habitat." 50
C.F.R. § 424.12(a)(2) (2000).
24
16 U.S.C.A. § 1533(b)(2); Bennett v. Spear, 520 U.S. 154,
172 (1997).

7
statute requires federal agencies to consult with the Secretary to

"insure that any action authorized, funded, or carried out by such

agency . . . is not likely to jeopardize the continued existence of

any endangered species or threatened species or result in the

destruction or adverse modification" of that species's critical

habitat.25 Thus, regardless of whether critical habitat is

designated, an agency must consult with the Secretary where an

action will "jeopardize the continued existence" of a species. If

critical habitat has been designated, the statute imposes an

additional consultation requirement where an action will result in

the "destruction or adverse modification" of critical habitat.

Although the ESA does not elaborate on the two consultation

scenarios discussed above, 50 C.F.R. § 402.02 defines each in terms

of the effects of agency action on both the survival and recovery

of the species. Thus, to "jeopardize the continued existence of" a

species is "to engage in an action that reasonably would be

expected, directly or indirectly, to reduce appreciably the

likelihood of both the survival and recovery of a listed species in

the wild."26 This "jeopardy standard" is similar to the regulation's

description of "destruction or adverse modification" of critical

habitat. The regulation defines "destruction or adverse

modification" as "a direct or indirect alteration that appreciably

25
16 U.S.C.A. § 1536(a)(2).
26
50 C.F.R. § 402.02 (emphasis added).

8
diminishes the value of critical habitat for both the survival and

recovery of a listed species."27

III

The 1998 critical habitat decision by the Services relied on

the "not prudent" exception to the ESA. The Services noted, first,

that "[c]ritical habitat, by definition, applies only to Federal

agency actions."28 They observed that agencies would have to engage

in "jeopardy consultation" under the ESA where agency action could

jeopardize the existence of a listed species.29 The Services

reasoned that virtually any federal action that would adversely

modify or destroy the Gulf sturgeon's critical habitat would also

jeopardize the species' existence and trigger jeopardy

consultation. Relying on the definitions of the destruction/adverse

modification and jeopardy standards in 50 C.F.R. § 402.02, the

Services concluded that designation of critical habitat would

provide no additional benefit to the sturgeon beyond the

protections currently available through jeopardy consultation.30

27
Id. (emphasis added).
28
Decision on Designation of Critical Habitat for the Gulf
sturgeon, 63 Fed. Reg. 9967, 9969 (Feb. 27, 1998).
29
See id. at 9969; 16 U.S.C.A. § 1536(a)(2).
30
See 63 Fed. Reg. at 9969.

9
The Services also considered the merits of critical habitat

designation in light of federal and state statutory prohibitions

against taking members of the species; the water quality standards

set by Gulf Coast states; the federal Clean Water Act; and the

priority tasks of the Recovery/Management Plan established for the

sturgeon.31 The Services concluded that, where the protections

afforded by these measures proved insufficient to safeguard the

survival of the sturgeon, jeopardy consultation would be

sufficient.32

The Services further noted that it was rare for agency action

to adversely modify or destroy critical habitat without also

jeopardizing the existence of the species. The Services concluded

that these rare instances might involve federal action in the

unoccupied critical habitat of an endangered species.33 Because

critical habitat designation would protect the survival and

recovery of the endangered species in a manner not afforded by

jeopardy consultation, designation would be beneficial in those

instances. Since the sturgeon is merely a threatened species,

however, the Services reasoned that expansion of its population

into unoccupied critical habitat would not be necessary for both

31
See id. at 9972-73.
32
See id.
33
See id. at 9969.

10
survival and recovery.34 Later in the decision, the Services stated:

"Protection of unoccupied habitat is . . . essential for full

recovery, but not for survival of the Gulf sturgeon."35 Designation

of unoccupied habitat was therefore deemed not prudent.36

Sierra Club contends that the regulation which informs much of

the Services' 1998 decision facially conflicts with the ESA.37 We

34
See Decision on Designation of Critical Habitat for the Gulf
sturgeon, 63 Fed. Reg. 9967, 9969 (Feb. 27, 1998).
35
Id. at 9973.
36
See id. at 9973.
37
The district court found that Sierra Club brought a facial
challenge to 50 C.F.R. § 402.02. The court noted that the Services
not only failed to object to this approach, but also made
responsive arguments to the merits of the facial challenge. The
court treated the issue as having been tried by the consent of the
parties. See Fed. R. Civ. P. 15(b) (2000). On appeal, both parties
have presented argument on the validity of the regulation. Although
the administrative record for the regulation is not before this
Court, that is of no moment. Our review is limited to interpreting
the extent to which the regulation is consistent with the statute—a
task which we are competent to perform without the administrative
record. See INS v. Cardoza-Fonseca, 480 U.S. 421, 447 (1987) ("The
judiciary is the final authority on issues of statutory
construction.") (quoting Chevron, U.S.A., Inc. v. Natural Resources
Defense Council, Inc., 467 U.S. 837, 843 n.9 (1984)).
Sierra Club contends merely that the regulation conflicts with
the statute. It does not address the reasonableness of the
decision-making process engaged in by the Services in framing the
regulation. Consequently, we need not review the regulation under
the Administrative Procedure Act (APA). See Texas Office of Pub.
Util. Counsel v. FCC, 183 F.3d 393, 410 (5th Cir. 1999) (noting
that "arbitrary and capricious review" under the APA differs from

11
review a regulation interpreting the ESA under Chevron, U.S.A.,

Inc. v. Natural Resources Defense Council, Inc.38 The first step of

the Chevron inquiry requires us to determine whether Congress has

"directly spoken to the precise question at issue."39 Reversal is

warranted only where an agency interpretation is contrary to "clear

congressional intent."40 Step two of Chevron applies when the

statute is either silent or ambiguous. Under these circumstances,

the court determines whether the agency interpretation is a

"permissible construction of the statute."41 We reverse only if the

agency's construction is "arbitrary, capricious or manifestly

contrary to the statute."42 Deference is warranted where the

agency's construction is permissible.43

With the appropriate standard of review in mind, we turn to

the merits of Sierra Club's challenge to 50 C.F.R. § 402.02. Sierra

Club observes that the regulation defines the jeopardy and

Chevron review in that the former focuses on the reasonableness of
the agency's decision-making process rather than the reasonableness
of its interpretation).
38
467 U.S. 837 (1984).
39
Chevron, 467 U.S. at 842.
40
Id. at 843 n.9.
41
Id. at 843.
42
Id. at 844.
43
Id. at 843; see also Texas Office of Pub. Util. Counsel v.
FCC, 183 F.3d 393, 409-10 (5th Cir. 1999).

12
destruction/adverse modification standards in terms of both

survival and recovery. Arguing that the regulation consequently

equates the two consultation standards, Sierra Club asserts that 50

C.F.R. § 402.02 violates a cardinal principle of statutory

construction—i.e., "to give effect, if possible, to every clause

and word of a statute . . . rather than to emasculate an entire

section."44 Sierra Club argues that the ESA contemplates two

separate standards and that the regulation impermissibly conflates

the two consultation standards.

We are unpersuaded by this argument. The mere fact that both

definitions are framed in terms of survival and recovery does not

render them equivalent. Significantly, the destruction/adverse

modification standard is defined in terms of actions that diminish

the "value of critical habitat" for survival and recovery.45 Such

actions conceivably possess a more attenuated relationship to the

survival and recovery of the species. The destruction/adverse

modification standard focuses on the action's effects on critical

habitat. In contrast, the jeopardy standard addresses the effect of

the action itself on the survival and recovery of the species. The

44
Bennett v. Spear, 520 U.S. 154, 173 (1997).
45
50 C.F.R. § 402.02 (emphasis added).

13
language of the ESA itself indicates two distinct standards;46 the

regulation does not efface this distinction.

Sierra Club also contends that the regulation "sets the bar

too high" for the destruction/adverse modification standard. Sierra

Club argues that the regulation's requirement that an action affect

both survival and recovery conflicts with the ESA. According to

Sierra Club, the ESA requires consultation where an action affects

recovery alone; it is not necessary for an action to affect the

survival of a species.

On this point, we are in agreement with Sierra Club. The ESA

defines "critical habitat" as areas which are "essential to the

conservation" of listed species.47 "Conservation" is a much broader

concept than mere survival. The ESA's definition of "conservation"

speaks to the recovery of a threatened or endangered species.48

46
See Greenpeace v. National Marine Fisheries Serv., 55 F.
Supp. 2d 1248, 1265 (W.D. Wash. 1999) ("Although there is
considerable overlap between the two, the Act established two
separate standards to be considered."); Conservation Council for
Hawai'i v. Babbitt, 2 F. Supp.2d 1280, 1287 (D. Haw. 1998) ("[T]he
ESA clearly established two separate considerations, jeopardy and
adverse modification, but recognizes . . . that these standards
overlap to some degree.").
47
See 16 U.S.C.A. § 1532(5)(A).
48
Compare 16 U.S.C.A. § 1532(3) (defining "conservation" as
"the use of all methods and procedures which are necessary to bring
any endangered species or threatened species to the point at which
the measures provided pursuant to this chapter are no longer
necessary"), with 50 C.F.R. § 402.02 ("'Recovery' means improvement
in the status of listed species to the point at which listing is no
longer appropriate under the criteria set out in" the ESA).

14
Indeed, in a different section of the ESA, the statute

distinguishes between "conservation" and "survival."49 Requiring

consultation only where an action affects the value of critical

habitat to both the recovery and survival of a species imposes a

higher threshold than the statutory language permits.50

The legislative history of the ESA affirms the inconsistency

of 50 C.F.R. § 402.02 with the statute.51 A 1978 regulation defined

"critical habitat" for purposes of the ESA as "any air, land or

water area . . . the loss of which would appreciably decrease the

likelihood of the survival and recovery of a listed species or a

49
See 16 U.S.C.A. § 1533(f)(1) (stating that recovery plans
should be crafted "for the conservation and survival" of endangered
and threatened species); see also Sullivan v. Stroop, 496 U.S. 478,
484 (1990) ("[I]dentical words used in different parts of the same
act are intended to have the same meaning."); United States Savings
Ass'n of Texas v. Timbers of Inwood Forest Assocs., 484 U.S. 365,
371 (1988) ("Statutory construction . . . is a holistic endeavor.
A provision that may seem ambiguous in isolation is often clarified
by the remainder of the statutory scheme—because the same
terminology is used elsewhere in a context that makes its meaning
clear . . . .").
50
Admittedly, survival is a necessary condition for recovery;
a species cannot recover without survival. The mere fact that a
concept such as survival is a precondition of or implicit in a
statutory term does not grant it independent significance. Consider
a hypothetical law protecting the rights of individuals to swim in
rivers and streams of their choosing. One who prevents such
activity violates the ordinance. Although the concept of "swimming"
implies action by a live human being, one does not have to both
stop the swimming and terminate the life of the swimmer to violate
the statute. Yet this is the logic employed by the Services in
interpreting the ESA.
51
See INS v. Cardoza-Fonseca, 480 U.S. 421, 449 (1987)
(affirming that legislative history may be consulted in determining
the Congressional intent under the first step of Chevron analysis).

15
distinct segment of its population . . . ."52 Although Congress was

aware of this regulatory interpretation of the statute,53 it chose

not to adopt this approach when it amended the ESA in 1978 to

define critical habitat. Instead, Congress employed the current

statutory definition, which is grounded in the concept of

"conservation."54 As a House Report accompanying a subsequent

appropriations bill indicated, the 1978 amendments "significantly

altered" the agency definition of critical habitat, which was

phrased in terms of effects on both survival and recovery.55 The

Services' definition of the destruction/adverse modification

standard in terms of survival and recovery is consequently an

52
50 C.F.R. § 402.02 (1978) (emphasis added). The 1978
regulation also contained a definition of "destruction or adverse
modification" that is virtually identical to the current
definition. The 1978 definition read: "a direct or indirect
alteration of critical habitat which appreciably diminishes the
value of that habitat for survival and recovery of a listed
species." Id. The only salient difference between the two
definitions is that the current definition refers to "both survival
and recovery." See 50 C.F.R. § 402.02 (2000) (emphasis added).

53
See H.R. Rep. No. 95-1625, at 7-8 (1978), reprinted in 1978
U.S.C.C.A.N. 9453, 9458.
54
See Endangered Species Act Amendments of 1978, Pub. L. No.
95-632, § 2, 92 Stat. 3751, 3751 (codified as amended at 16
U.S.C.A. § 1532(5)(A)). The original version of the ESA included a
definition of "conservation" which is identical to the present
version. Endangered Species Act of 1973, Pub. L. No. 93-205, §
3(2), 87 Stat. 884 (codified as amended at 16 U.S.C.A. § 1532(3)).
55
See H.R. Rep. No. 96-167, at 5-6 (1979), reprinted in 1979
U.S.C.C.A.N. 2557, 2561-62.

16
attempt to revive an interpretation that was rejected by Congress.56

We further note that 50 C.F.R. § 402.02 renders it less likely

that critical habitat will be designated. Because of the higher

threshold imposed by defining the destruction/adverse modification

standard in terms of both survival and recovery, federal agencies

would be required to consult with the Department of Interior less

frequently than if the standard were defined in terms of recovery

alone. Because the jeopardy standard already requires agencies to

consult with the Department where their actions would affect both

the survival and recovery of a species, it is less likely that the

Services would discern additional benefit from designating critical

habitat. Consequently, the Services are more likely to find

designation "not prudent." This result is in tension with the

avowed intent of Congress that a "not prudent" finding regarding

critical habitat would only occur under "rare" or "limited"

circumstances.57 In practice, the Services have inverted this

intent, rendering critical habitat designation the exception and

56
Cf. Runyon v. McCrary, 427 U.S. 160, 174-75 (1976) (noting
that Congress's rejection of a legislative proposal militates
against interpreting a statute consistent with that rejected
proposal).
57
See H.R. Conf. Rep. No. 97-835, at 24 (1982), reprinted in
1982 U.S.C.C.A.N. 2860, 2865; H.R. Rep. No. 95-1625, at 16-17
(1978), reprinted in 1978 U.S.C.C.A.N. 9453, 9466-67; see also
Enos v. Marsh, 769 F.2d 1363, 1371 (9th Cir. 1985) (stating that
the FWS "may only fail to designate a critical habitat under rare
circumstances").

17
not the rule.58 The rarity of designation is attributable, in part,

to the manner in which the Services have defined the jeopardy and

destruction/adverse modification standards.59

Based on the manifest inconsistency between 50 C.F.R. § 402.02

and Congress's "unambiguously expressed intent" in the ESA,60 we

find the regulation's definition of the destruction/adverse

modification standard to be facially invalid.61

58
See S. Rep. No. 106-126, at 2, 4 (1999) (observing the
infrequency of critical habitat designation in practice and noting
that the "not prudent" exception was intended to be exercised "only
rarely"); Thomas F. Darin, Comment, Designating Critical Habitat
Under the Endangered Species Act: Habitat Protection Versus Agency
Discretion, 24 Harv. Envt'l L. Rev. 209, 224 (2000) (noting that,
by 1999, the Services had only designated critical habitat for 120
out of 1,181 listed species).
59
See Pamela Baldwin, The Role of Designation of Critical
Habitat under the Endangered Species Act, CRS Report for Congress,
at 5-6 (1999) (tracing the infrequency of critical habitat
designation to the Service's definition of the destruction/adverse
modification standard); Darin, supra n.58, at 224 (noting that the
"not prudent" rationale was the most common reason for not
designating critical habitat and stating that the FWS employed a
"strained interpretation" of that exception).
60
Chevron, U.S.A., Inc. v. Natural Resources Defense Council,
Inc., 467 U.S. 837, 842-43 (1984).
61
We emphasize that our holding applies only to the definition
of "destruction or adverse modification." The remainder of 50
C.F.R. § 402.02—including the regulation's definition of
"jeopardize the continued existence of"—is unaffected by our
ruling.

18
We now turn to the substance of the 1998 decision. The

district court found the 1998 decision to be valid, despite the

facial conflict between 50 C.F.R. § 402.02 and the ESA. The court

found that the decision was not arbitrary and capricious because

"the agencies considered all of the necessary factors, which extend

beyond the scope of the regulation, and articulated minimally

rational conclusions that are supported by the factual record." The

court further noted that the decision was based on the best

scientific data available.

Sierra Club contests the court's findings, arguing that the

Services' reliance on 50 C.F.R. § 402.02 went to the heart of its

decision. Sierra Club contends that the agency further

misinterpreted the ESA by concluding that designation of unoccupied

habitat is never beneficial for threatened species. Finally, Sierra

Club argues that the 1998 decision was arbitrary and capricious

because the Services failed to consider the informational benefits

associated with critical habitat designation. We address each of

these contentions in turn.

In addition to our power to review agency interpretations

under Chevron, we may review the reasonableness of an agency's

decision-making process under the Administrative Procedure Act

19
(APA).62 We reverse agency action that is "arbitrary, capricious,

an abuse of discretion, or otherwise not in accordance with law."63

Review is generally limited to the record in existence at the time

the agency made its decision.64 Our scope of review is narrow; we

may not weigh the evidence in the record pro or con.65 Our task is

to ensure that the agency "considered the relevant factors and

articulated a rational connection between the facts found and the

choice made."66

The district court concluded that the 1998 decision was not

arbitrary or capricious, despite its reliance on a possibly invalid

regulation. The court implicitly invoked the doctrine of harmless

error, which the APA applies to review of agency action.67 Agency

mistakes constitute harmless error only where they "clearly had no

bearing on the procedure used or the substance of decision

62
See 5 U.S.C.A. § 706(2) (2000). The administrative record
for the Services' 1998 decision is before this Court.
63
5 U.S.C.A. § 706(2)(A).
64
See 5 U.S.C.A. § 706 (2000); Camp v. Pitts, 411 U.S. 138,
142 (1973).
65
See State of Louisiana ex rel. Guste v. Verity, 853 F.2d
322, 327 (5th Cir. 1988).
66
Baltimore Gas & Elec. Co. v. Natural Resources Defense
Council, Inc., 462 U.S. 87, 105 (1983); see also Verity, 853 F.2d
at 327.
67
See 5 U.S.C.A. § 706 (noting that "due account shall be
taken of the rule of prejudicial error").

20
reached."68 This Court has affirmed that "[a]bsence of such

prejudice must be clear for harmless error to be applicable."69

Given the extent to which 50 C.F.R. § 402.02 permeates the

1998 decision, we do not find that prejudice was clearly absent.

The Services expressly found that designation of unoccupied

critical habitat was necessary to the recovery, but not the

survival, of the sturgeon.70 In this instance, the invalid

regulation directly informed the Services' conclusion that

designation was not warranted. Moreover, the Services' evaluation

of the merits of critical habitat designation was premised on the

view that jeopardy consultation was "functionally equivalent" to

consultation under the destruction/adverse modification standard.71

This position was based on the fact that 50 C.F.R. § 402.02 defined

both standards in terms of survival and recovery.72 As we have

concluded that the regulatory definition of the destruction/adverse

modification standard is flawed, this "functional equivalence"

68
United States Steel Corp. v. EPA, 595 F.2d 207, 215 (5th
Cir. 1979) (quoting Braniff Airways v. CAB, 379 F.2d 453 (D.C. Cir.
1967)).
69
Id.; see also Texas v. Lyng, 868 F.2d 795, 799 (5th Cir.
1989).
70
See 63 Fed. Reg. at 9973.
71
See id.
72
See id.

21
argument is untenable.73 The 1998 decision also considered the

benefits of designation in light of existing protections outside

the ESA consultation mechanism (e.g., state and federal clean water

laws). However, this analysis was further guided by the "survival

and recovery" threshold.

We note that the Services' reliance on 50 C.F.R. § 402.02 also

led them to erroneous conclusions regarding the benefit of

designation for threatened species. Submerged in the 1998 decision

is the contention that designation would only be "beneficial" in

relation to the unoccupied habitat of certain endangered species.74

The Services reasoned that "[s]ince threatened species such as the

Gulf sturgeon are, by definition, not currently at risk of

extinction, but are rather anticipated to become so in the

73
We also question the rationale underlying the entire 1998
decision—i.e., that designation is not "beneficial" to a species
where it is less beneficial than other existing protections. As the
Ninth Circuit observed in a recent opinion, "[n]either the Act nor
the implementing regulations sanctions nondesignation of habitat
when designation would be merely less beneficial to the species
than another type of protection." Natural Resources Defense Council
v. Department of Interior, 113 F.3d 1121, 1127 (9th Cir. 1997).
However, as the ESA is ambiguous on this point, we are unprepared
to conclude that the Services' interpretation is an impermissible
construction of the statute. See Chevron, U.S.A., Inc. v. Natural
Resources Defense Council, Inc., 467 U.S. 837, 843 (1984).
74
See Decision on Designation of Critical Habitat for the Gulf
sturgeon, 63 Fed. Reg. 9967, 9968-69 (Feb. 27, 1998).

22
foreseeable future, unoccupied critical habitat would not be

immediately required for their survival."75 This conclusion was

based, in part, on the regulation's definition of the

destruction/adverse modification standard in terms of both survival

and recovery.

Although we find the Services' reasoning to be flawed on the

preceding basis alone, we note an additional source of error: the

Services' argument would effectively prevent all threatened species

from receiving critical habitat designation. It is difficult to

reconcile this result with the ESA, which states that critical

habitat "shall" be designated for threatened, as well as

endangered, species.76 The agency's interpretation would read these

provisions out of the statute.77 In light of the preceding errors,

it is of no moment that the Services may have based their

conclusions on the "best scientific data available."78 Given the

extent of the Services' reliance on an invalid regulation, we

conclude that the 1998 decision was arbitrary and capricious.

75
Id. (emphasis added).
76
See 16 U.S.C.A. §§ 1533(a)(3), (b)(6)(C); see also Sierra
Club v. Glickman, 156 F.3d 606, 615-16 (5th Cir. 1998) (recognizing
the mandatory obligation of all agencies to conserve listed
species).
77
See Bennett v. Spear, 520 U.S. 154, 173 (1997).
78
See 16 U.S.C.A. § 1533(b)(2).

23
Sierra Club also contends that the Services failed to consider

the informational benefits associated with critical habitat

designation. Sierra Club correctly notes that, while the

consultation requirement only applies to federal agencies, the ESA

as a whole applies to private and state actors.79 Critical habitat

designation provides informational benefits to the public, state

and local governments, and scientific organizations.80 The ESA also

contemplates the participation of these entities in the designation

process.81

Nothing in the ESA or its accompanying regulations

affirmatively requires the Services to consider these benefits when

rendering a habitat decision. Although the ESA imposes on the

79
See 16 U.S.C.A. § 1538 (prohibiting the taking of species
by "any person"); 16 U.S.C.A. § 1539 (giving the Secretary the
power to issue permits for incidental taking of species); 16
U.S.C.A. § 1536(d) (prohibiting the applicant for an incidental
take permit from irreversibly committing resources pending
consideration of the application); 16 U.S.C.A. § 1540(g) (giving
private citizens the right to sue to enforce the ESA); see also
Loggerhead Turtle v. County Council, 148 F.3d 1231, 1246 (11th Cir.
1998); Hawksbill Sea Turtle v. Federal Emergency Mgmt. Agency, 126
F.3d 461, 479 n.13 (3d Cir. 1997).
80
The ESA requires the publication of a proposed rule
designating critical habitat in both the Federal Register and a
local newspaper. See 16 U.S.C.A. § 1533(b)(5). The Services must
also notify state and local governments regarding a proposed
designation. See id. Finally, the ESA states that the Secretary may
provide notice of proposed designation "to such professional
scientific organizations as he deems appropriate." Id.
81
See 16 U.S.C.A. § 1533(b)(5)(B), (b)(5)(E); Conservation
Council for Hawai'i v. Babbitt, 2 F. Supp. 2d 1280, 1288 (D. Haw.
1998).

24
Secretary the open-ended requirement that he take into account "any

other relevant impact" of designation, the statute is silent as to

which impacts are relevant in any given case.82 Public participation

following the notice of proposed habitat designation may provide

agencies with valuable information as they prepare to render a

final decision. However, this participation is not a benefit

resulting from designation; it is a component of the decision-

making process.

We do not deny the informational value of habitat designation.

Heightened public awareness of the plight of a listed species and

its habitat may facilitate conservation efforts. However, this type

of informational benefit is conceivable for any rule promulgated

after a period of notice and comment.83 We are unprepared to

conclude that the Service must consider this potential benefit in

every instance.84 Given the ambiguity of the ESA's description of

the "other relevant impacts" warranting consideration, the

Services' failure to expressly consider the informational benefits

of habitat designation was not arbitrary or capricious action.85

82
See 16 U.S.C.A. § 1533(b)(2).
83
Cf. 5 U.S.C.A. § 553(c) (2000). It is not unreasonable to
conclude that most rules would function more effectively with
heightened public awareness.
84
This Court is therefore in disagreement with the holding in
Conservation Council for Hawai'i, 2 F. Supp. 2d at 1288.
85
We do not find that the Services failed to "consider[ ] the
relevant factors" by not considering these informational benefits.
See Baltimore Gas & Elec. Co. v. Natural Resources Defense Council,

25
As the Services relied on an invalid regulation, however, we

find that the 1998 decision was arbitrary and capricious. On

remand, the Services will be given the opportunity to reconsider

their decision in light of the appropriate legal standards.86

We REVERSE the decision of the district court and REMAND to

the district court, with instructions to remand to the FWS and NMFS

for proceedings not inconsistent with this opinion.

REVERSED and REMANDED.

Inc., 462 U.S. 87, 105 (1983).
The district court appears to have found that the Services took
into account the informational benefits associated with
designation. In the 1998 decision, the Services analyzed the
benefits of critical habitat designation in light of the
"informational or procedural" tasks associated with the
Recovery/Management Plan for the sturgeon. See 63 Fed. Reg. at
9973. However, it is far from clear that the "priority tasks"
outlined in the recovery plan implicated the same kind of
informational benefits provided by the notice and participation
provisions of the ESA.
86
See Federal Election Comm'n v. Akins, 524 U.S. 11, 25 (1998)
("If a reviewing court agrees that the agency misinterpreted the
law, it will set aside the agency's action and remand the case—even
though the agency (like a new jury after a mistrial) might later,
in the exercise of its lawful discretion, reach the same result for
a different reason.").