Case 1:18-cv-01138-JB-JFR Document 43 Filed 10/13/20 Page 1 of 241 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW MEXICO NORTHERN NEW MEXICO STOCKMAN’S ASSOCIATION and OTERO COUNTY CATTLEMAN’S ASSOCIATION, Plaintiffs, vs. No. CIV 18-1138 JB\JFR UNITED STATES FISH & WILDLIFE SERVICE and GREG SHEEHAN, Principal Deputy Director & Acting Director of the United States Fish & Wildlife Service, in his official capacity, Defendants, and CENTER FOR BIOLOGICAL DIVERSITY and WILDEARTH GUARDIANS, Intervenors. MEMORANDUM OPINION AND ORDER THIS MATTER comes before the Court on: (i) the Plaintiffs’ Opening Brief in Support of Petition for Review, filed August 8, 2019 (Doc. 26)(“Petition”); (ii) Petitioners’ Brief on Remedy, filed December 6, 2019 (Doc. 40)(“P. Remedy Brief”); (iii) Federal Respondents’ Brief on Remedy, filed December 6, 2019 (Doc. 41)(“D. Remedy Brief”); and (iv) Respondent- Intervenors’ Brief on Remedy, filed December 6, 2019 (Doc. 42)(“I. Remedy Brief”). The Court held a hearing on October 31, 2019. The primary issues are: (i) whether Plaintiffs Northern NM Stockman’s Association (“Northern NM Stockman’s Association”) and Otero Cattleman’s Association (“Otero Cattleman’s Association”)(collectively, “the Stockman’s Associations”) suffer economic injury to establish associational standing under Article III of the Constitution of the United States of America to challenge the decision made by Defendants United States Fish & Wildlife Service and its Principal Deputy director and acting director, Greg Sheehan (collectively, “Fish & Wildlife”), to designate land on which members of the Stockman’s Associations graze cattle as critical habitat designation1 (“the designation”) for the New Mexico Meadow Jumping Mouse (“Jumping Mouse”); (ii) whether Fish & Wildlife’s use of the “incremental effects” 1The Endangered Species Act requires Fish & Wildlife to designate “critical habitat” for all species that Fish & Wildlife lists as threatened or endangered. 16 U.S.C. § 1533(a)(3)(A)(i). See 16 U.S.C. § 1532(5) (defining “critical habitat”). Case 1:18-cv-01138-JB-JFR Document 43 Filed 10/13/20 Page 2 of 241 approach2 -- which the United States Court of Appeals for the Tenth Circuit explicitly rejected in 2001, see New Mexico Cattle Growers Ass’n v. U.S. Fish and Wildlife Service, 248 F.3d 1277, 1285-86 (10th Cir. 2001)3 -- when Fish & Wildlife considered economic impacts associated with the designation, violates Section 4(b)(2) of the Endangered Species Act, 16 U.S.C. § 1552(b)(2), and the Administrative Procedure Act, 5 U.S.C. § 706 (“APA”); (iii) whether Fish & Wildlife abused its discretion by not considering designation costs, such as compensating the members of the Stockman’s Associations for reducing the value of their water rights with respect to property 2 In New Mexico Cattle Growers Association v. U.S. Fish and Wildlife Service, 248 F.3d 1277, 1285 (10th Cir. 2001), the United States Court of Appeals for the Tenth Circuit described the “incremental effects approach” in the following manner: The Endangered Species Act (“ESA”), which controls CHDs [critical habitat designations], requires FWS [Fish & Wildlife] to perform an economic analysis of the effects of the CHD before making a final designation. 16 U.S.C. § 1533(b)(2). In order to determine what the “economic impact” of a [critical habitat designation] will be, FWS has adopted an incremental baseline approach (the “baseline approach”). The baseline approach utilized by FWS is premised on the idea that the listing of the species (which will occur prior to or simultaneously with the CHD will have economic impacts that are not to be considered. The primary statutory rationale for this position comes from 16 U.S.C. § 1533(b)(1)(A), which states that listing determinations be made “solely on the basis of the best scientific and commercial data available.” Thus, the baseline approach moves any economic impact that can be attributed to listing below the baseline and, when making the [critical habitat designation], takes into account only those economic impacts rising above the baseline. New Mexico Cattle Growers Ass'n v. U.S. Fish & Wildlife Serv., 248 F.3d at 1280. 3In New Mexico Cattle Growers Association v. U.S. Fish and Wildlife Service, the Tenth Circuit rejected Fish & Wildlife’s use of the incremental approach, concluding that “the baseline approach to economic analysis is not in accord with the language or intent of the [Endangered Species Act].” 248 F.3d at 1285. The Tenth Circuit rationalized the holding based on its statutory interpretation of the text of the Endangered Species Act: The statutory language is plain in requiring some kind of consideration of economic impact in the [critical habitat designation] phase. Although 50 C.F.R. § 402.02 is not at issue here, the regulation's definition of the jeopardy standard as fully encompassing the adverse modification standard renders any purported economic analysis done utilizing the baseline approach virtually meaningless. We are compelled by the canons of statutory interpretation to give some effect to the congressional directive that economic impacts be considered at the time of critical habitat designation. Bridger Coal Co./Pac. Minerals, Inc. v. Dir., Office of Workers’ Compensation Programs, 927 F.2d 1150, 1153 (10th Cir. 1991)(“We will not construe a statute in a way that renders words or phrases meaningless, redundant, or superfluous.”). Because economic analysis done using the FWS's baseline model is rendered essentially without meaning by 50 C.F.R. § 402.02, we conclude Congress intended that the FWS conduct a full analysis of all of the economic impacts of a critical habitat designation, regardless of whether those impacts are attributable co-extensively to other causes. New Mexico Cattle Growers Association v. U.S. Fish and Wildlife Service 248 F.3d at 1285. - 2 - Case 1:18-cv-01138-JB-JFR Document 43 Filed 10/13/20 Page 3 of 241 within the designation, an interference which the Stockman’s Associations allege amounts to a taking under the Fifth Amendment to the Constitution of the United States of America; (iv) whether the Stockman’s Associations administratively waived their claims challenging Fish & Wildlife’s decision not to exclude particular units of land -- Units 3 and 44 -- from the designation, because no Stockman’s Associations members raised this issue for these units, except for subunit 3C, during the proposed designation’s public comment period; (v) whether a sufficiently reasoned explanation supports Fish & Wildlife’s conclusion not to exclude Units 3 and 4 from the designation, because it could not identify any disproportionate costs; and (vi) whether the Court should vacate the designation in its entirety, or tailor vacatur in a manner that leaves untouched critical habitat protections for the Jumping Mouse, should the Court remand to Fish & Wildlife to comply with its statutory obligations. The Court concludes that: (i) the Stockman’s Associations show sufficient concrete economic injuries to establish Article III associational standing to challenge Fish & Wildlife’s critical habitat designation for the Jumping Mouse species; (ii) Fish & Wildlife’s decision to use the incremental effects approach to consider economic impacts associated with the designation is consistent with the Endangered Species Act’s § 4(b)(2); (iii) Fish & Wildlife did not abuse its discretion by failing to consider other designation costs, such as compensating the members of the Stockman’s Associations for reducing the value of their water rights, and the interference with members’ water rights does not amount to a taking under the Fifth Amendment; (iv) the Stockman’s Associations administratively waived their claims challenging Fish & Wildlife’s decision not to exclude Units 3 and 4 from the designation because no member of the Stockman’s Associations raised any challenge to the inclusion of these units, except for subunit 3c, during the proposed designation’s public comment period; (v) notwithstanding the waiver, however, Fish & Wildlife has provided a sufficiently reasoned explanation to support its conclusion not to exclude Units 3 and 4 from the designation pursuant to the Endangered Species Act’s § 4(b)(2) and its internal Section 4(b)(2) Policy governing its decision-making standards regarding exclusion. Furthermore, because of the Court’s rejection of the Stockman’s 4Units 3 and 4 of the designation are located within the State of New Mexico’s Jemez and Sacramento Mountains, respectively, and the subunits comprising units 3 and 4 are in the following locations: (i) 3A -- San Antonio: San Antonio Creek; (ii) 3B -- Rio Cebolla; (iii) 3C -- Rio de las Vacas; (iv) 4A -- Silver Springs: Silver Springs Creek; (v) 4B -- Upper Peñasco: Rio Peñasco; (vi) 4C -- Middle Peñasco: Rio Peñasco; (vii) 4D -- Wills Canyon: Mauldin Springs; and (viii) 4E -- Agua Chiquita Canyon: Agua Chiquita Creek. Endangered and Threatened Wildlife and Plants; Designation of Critical Habitat for the New Mexico Meadow Jumping Mouse; Final Rule, 81 Fed. Reg. 14,264, 14,297-98 (Mar. 16, 2016)(to be codified at 50 C.F.R. pt. 17) - 3 - Case 1:18-cv-01138-JB-JFR Document 43 Filed 10/13/20 Page 4 of 241 Associations challenges here, it deems remedy unnecessary in this case. If the Court were to have ruled favorably on any one of the aforementioned questions, however, the Court would not still vacate the critical habitat designation in its entirety; rather, it would tailor vacatur in a narrow manner as to address only the units in which the Stockman’s Associations’ members show concrete injuries. This tailored vacatur, therefore, would leave untouched remaining units of the critical habitat designation. FACTUAL BACKGROUND This case involves Fish & Wildlife’s designation of critical habitat (“the designation”) for the New Mexico Meadow Jumping Mouse (“the Jumping Mouse”) pursuant to the Endangered Species Act, 16 U.S.C.