New Mexico Cattle Growers Association v. United States Fish and Wildlife Service

In 1995, the Fish and Wildlife Service (FWS) (defendant) issued a final rule that listed the southwestern willow flycatcher (flycatcher), a small bird that nests in riparian riverbeds, as endangered. The FWS did not move forward with issuing a critical habitat designation (CHD) for the flycatcher until directed by district court in 1997. The Endangered Species Act (ESA) required the FWS to perform an economic analysis of the CHD before making a final designation. To determine economic impact, the FWS adopted an incremental baseline approach (the baseline approach) based on the idea that a species is listed before or simultaneously with a CHD and the listing will have economic impacts that were not to be considered for the CHD’s economic-impact analysis. The baseline approach thus takes any economic impact caused as a result of the listing and moves it below the baseline. When making a CHD, only the economic impacts that rose above the baseline were considered. The FWS took the position that the impacts of a listing and CHD were co-extensive and that a CHD did not create any material effects or impacts. Thus, the FWS used the baseline approach to determine that the flycatcher CHD would result in no additional economic effects beyond those caused by listing and thus would have no economic effect. New Mexico Cattle Growers Association (Cattle Growers) (plaintiff) filed suit in district court, arguing that the FWS’s adoption of the baseline approach to measuring the economic impact of the CHD was an erroneous construction and violation of the ESA. The district court dismissed Cattle Grower’s complaint, and Cattle Growers appealed.