Otay Mesa Property, L.P. v. United States Department of the Interior
144 F. Supp. 3d 35
D.D.C.2015Background
- Plaintiffs Otay Mesa Property, L.P., Rancho Vista Del Mar, and Otay International, LLC own 57 acres (Subunit 5c) in San Diego County that include a one-acre vernal/stock pond where Riverside fairy shrimp have been documented. Plaintiffs plan a landfill/recycling facility on the property.
- In 2012 the U.S. Fish and Wildlife Service (FWS) issued a Final Rule designating 57 acres of Subunit 5c as critical habitat for the endangered Riverside fairy shrimp, including the pond and surrounding watershed.
- Administrative surveys (2000, 2001, 2011) found shrimp cysts and adults in the pond; FWS identified primary constituent elements (PCEs) including vernal pool wetland, watershed uplands, and impermeable soils/topography.
- FWS prepared an economic analysis using the baseline (incremental) methodology and concluded incremental costs of designation would be limited; it declined to prepare an EIS, relying on the position that NEPA does not apply to critical-habitat rules outside the Tenth Circuit.
- Plaintiffs sued under the Administrative Procedure Act (APA) challenging (1) FWS’s critical-habitat determination for Subunit 5c, (2) the economic analysis methodology/application, and (3) the absence of NEPA analysis. Parties cross-moved for summary judgment.
- The district court (Judge Ketanji Brown Jackson) denied both summary-judgment motions without prejudice as to one discrete evidentiary gap: the submitted administrative record omitted the topographic/hydrologic materials the FWS relied on to justify designating the full 56-acre watershed area, so the court ordered supplementation limited to that factual issue.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing to sue | Otay Mesa argued it will suffer concrete economic injury (increased cost/delay or loss of landfill project) from the critical-habitat designation. | Defendants argued plaintiffs failed to submit declarations/evidence proving imminent injury and thus lack Article III standing. | Court held Otay Mesa has standing: administrative record plus declaration show injury, traceability, and redressability; NEPA "zone of interests" satisfied. |
| Whether Subunit 5c meets ESA critical-habitat criteria (occupied/unoccupied; watershed) | Otay Mesa argued the property does not qualify: pond is isolated, insufficient evidence of occupancy at listing, and surrounding 56 acres not shown to be watershed essential to conservation. | FWS argued surveys show shrimp and cysts in the pond, PCEs exist, and watershed uplands are essential and properly included; alternative findings (occupied or essential unoccupied habitat) are statutorily permissible. | Court held FWS’s determinations that the pond is occupied and that surrounding watershed is essential were rational and entitled to deference, but the record submitted lacked the specific maps/data showing how FWS delineated the 56-acre watershed—so court requested supplementation. |
| Economic analysis methodology/application | Otay Mesa argued FWS improperly used the baseline (incremental) approach, failed to account for the landfill’s social/benefit value, and relied on generic residential-development assumptions incompatible with zoning. | FWS defended using baseline methodology (changed over time with case law), said incremental costs were minimal and acknowledged the landfill plans but explained designation would not meaningfully change development constraints. | Court held the baseline method is a permissible agency interpretation entitled to Chevron deference; FWS’s economic analysis and application here were reasonable and adequately explained; plaintiff waived some challenges for failing to raise them in comments. |
| NEPA applicability | Otay Mesa argued FWS must prepare an EIS or EA before designating critical habitat. | FWS argued NEPA does not apply to critical-habitat designations (outside the Tenth Circuit), so no EIS/EA was required. | Court agreed with Ninth Circuit approach (Douglas County): FWS reasonably declined NEPA analysis here; no NEPA violation. |
Key Cases Cited
- Bangor Hydro-Elec. Co. v. FERC, 78 F.3d 659 (D.C. Cir. 1996) (agency as arm of Dept. of Interior; background on delegation)
- N.M. Cattle Growers Ass’n v. U.S. Fish & Wildlife Serv., 248 F.3d 1277 (10th Cir. 2001) (criticizing baseline approach; discussion of economic-analysis methodologies)
- Ariz. Cattle Growers’ Ass’n v. Salazar, 606 F.3d 1160 (9th Cir. 2010) (endorsing incremental/baseline approach for critical-habitat economic analysis)
- Motor Vehicle Mfrs. Ass’n v. State Farm, 463 U.S. 29 (1983) (arbitrary-and-capricious standard requires reasoned explanation)
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992) (Article III standing requirements)
- Chevron U.S.A. Inc. v. Natural Resources Defense Council, 467 U.S. 837 (1984) (deference framework for agency statutory interpretation)
- Douglas County v. Babbitt, 48 F.3d 1495 (9th Cir. 1995) (NEPA does not apply to critical-habitat designations)
- Catron County v. U.S. Fish & Wildlife Serv., 75 F.3d 1429 (10th Cir. 1996) (contrary: NEPA applies to critical-habitat designations)
- Otay Mesa Prop. L.P. v. U.S. Dept. of Interior, 646 F.3d 914 (D.C. Cir. 2011) (precedent addressing related critical-habitat disputes involving same property)
- Marsh v. Oregon Natural Resources Council, 490 U.S. 360 (1989) (deference to agency scientific judgments)