A Supreme Court Win for Manufacturers’ Land-Use Rights

By November 28, 2018Shopfloor Main

Yesterday, the U.S. Supreme Court issued a ruling that will help protect manufacturers against far-reaching federal land use restrictions. The NAM’s Manufacturers’ Center for Legal Action (MCLA) filed an amicus brief in the case—Weyerhaeuser v. United States Fish and Wildlife Service. The case involves the U.S. Fish and Wildlife Service’s (FWS) designation under the Endangered Species Act of 1,544 acres of private property in Louisiana as “critical habitat” for an endangered species of frog.

The landowners subject to the critical habitat designation in Weyerhaeuser sued the FWS to challenge the critical habitat designation for their property, arguing that their land is neither “habitat” nor “critical” because the frog does not inhabit the land and could not even survive there under current conditions. FWS countered that the frog could hypothetically survive on the land if the landowner were to cut down all the trees, plant a different type of tree, wait for the new trees to grow and then periodically burn the trees and regrow new trees to promote certain vegetation necessary for the frog’s survival.

The landowners also challenged the FWS’s failure to exclude the land from the critical habitat designation after FWS applied a cost-benefit test to determine whether the costs to the landowner outweighed the benefits to the frog. FWS argued that its decision was immune from judicial review because it has absolute discretion to make such a determination.

Owners of land designated as critical habitat face major federal restrictions on the use of their land and typically a significant reduction in their property’s value. With more than 1,500 different birds, mammals, amphibians, fish, plants and insects currently listed as either endangered or threatened, any land, infrastructure or factory site located within a species’ critical habitat could be impacted. The costs to individual businesses can reach into the millions of dollars.

The U.S. Supreme Court granted review to answer two questions: (1) whether the Endangered Species Act prohibits designation of private land as unoccupied critical habitat that is neither “habitat” nor essential to species conservation; and (2) whether an agency decision not to exclude an area from critical habitat because of the economic impact of designation is subject to judicial review. The MCLA’s brief supported the landowner on both questions.

The Supreme Court largely punted on the first question but delivered a solid win for manufacturers on the second question. It declined to rule on whether the land at issue is critical habitat because it concluded that the lower courts did not determine as a threshold matter whether the land is even “habitat” for the frog. The Supreme Court remanded that determination to the Fifth Circuit Court of Appeals.

The second holding was a clear win for manufacturers. The Supreme Court ruled that an agency’s application of a cost-benefit test to determine whether to exclude land from a critical habitat designation is subject to judicial review. This holding will benefit manufacturers subject to future critical habitat designations by allowing them to challenge critical habitat designations in court.

Manufacturers face a tangled web of federal, state and local land use restrictions that can limit their ability to create jobs and generate prosperity for their companies, their communities and the nation. The MCLA engages in cases like this to ensure a reasonable application of the laws that balances environmental protection with economic development. We were proud to argue on behalf of manufacturers in this case by filing an amicus brief in support of the landowner.

Peter Tolsdorf

Peter Tolsdorf is the vice president of litigation and deputy general counsel at the National Association of Manufacturers.

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