National Ass'n of Home Builders v. Defenders of Wildlife
The Court ruled that the Environmental Protection Agency was not required to consider harm to endangered species when transferring water-pollution permitting authority to Arizona, because federal law left the agency no choice but to approve the transfer once the state met nine specific criteria.
The decision limits how far the Endangered Species Act can reach into other federal programs, holding that its species-protection duty applies only when an agency has discretion to say no — a rule that could affect many other mandatory federal programs.
“The question presented is whether §7(a)(2) effectively operates as a tenth criterion on which the transfer of permitting power under the first statute must be conditioned. We conclude that it does not.”
States the central question and the Court's answer at the outset of the opinion.
How it got here: A divided Ninth Circuit panel vacated EPA's approval of Arizona's water-permit program transfer; the EPA and a home builders' trade group sought Supreme Court review to resolve a circuit split.
The Case in Depth
What happened
Arizona applied to take over administering its own water-pollution permitting program from the EPA. Wildlife officials worried the shift might indirectly harm species like the pygmy owl and a rare cactus by enabling more development. Environmental groups sued to block the transfer after EPA approved it, arguing the agency had to weigh those species impacts before proceeding.
The question before the Court
Could the Endangered Species Act add an extra species-protection requirement onto a Clean Water Act rule that otherwise required the EPA to approve a state's water-permit program?
The Court's answer
No — the Endangered Species Act's requirement that agencies avoid jeopardizing protected species applies only to actions an agency has discretion over, not to actions a statute commands it to take. Because the Clean Water Act required the EPA to approve Arizona's permit-transfer application once the state met nine specific criteria, the EPA had no discretion to add species protection as a tenth requirement.
The Court deferred to the wildlife agencies' own regulation limiting the Endangered Species Act's reach to discretionary actions, finding that reading harmonized the two statutes without letting one silently repeal the other. It also ruled that the EPA's shifting statements during the review process were not so contradictory as to make its final decision arbitrary and capricious.
Curious how the Court got there? See the step-by-step legal reasoning →
Why it matters
States seeking to take over federal water-permitting duties can rely on meeting the Clean Water Act's nine listed criteria without a separate endangered-species review blocking approval. More broadly, federal agencies carrying out other mandatory statutory duties gain assurance that the Endangered Species Act won't automatically add new conditions to those duties, though agencies retain ongoing oversight and other tools to protect species.
What changes now
The case is sent back to the Ninth Circuit for further proceedings consistent with the ruling, meaning Arizona's permit-transfer approval stands. The decision is a final merits ruling establishing that the Endangered Species Act's consultation duty doesn't override other federal statutes requiring mandatory agency action, though it leaves open other avenues, like state permitting agreements, for protecting species.
What this does not decide
The Court did not decide whether EPA's separate actions -- such as providing funding to Arizona or later objecting to individual state permits under its ongoing oversight authority -- might still trigger Endangered Species Act review; it said those issues were outside the scope of this case.
Concurrences and dissents
Dissent — Justice Stevens
“These cases present a problem of conflicting “shalls.””Opens the dissent by framing the clash between two mandatory statutory commands.
Justice Stevens argued the majority misread the wildlife agencies' own regulation and ignored TVA v. Hill's holding that the Endangered Species Act 'admits of no exception' for any federal agency action, discretionary or not. He offered two alternative ways to harmonize the statutes -- using the ESA's built-in consultation and 'reasonable and prudent alternatives' process, or using EPA's oversight agreements with states -- and would have remanded to the agency as arbitrary and capricious.
Dissent — Justice Breyer
Justice Breyer joined Stevens' dissent but wrote separately to flag concern about how far the Endangered Species Act's reach might extend to unrelated agencies. He argued that grants of discretionary authority always carry implicit limits, illustrating with examples from pipeline permitting and drug approval statutes to show the majority's reasoning about 'mandatory' language proves too much.
How the Court got there
The legal reasoning, step by step
- The Court first asked whether EPA's approval was 'arbitrary and capricious' under the deferential standard from a 1983 case, which asks whether an agency ignored an important problem, relied on improper factors, or gave an implausible explanation; the Court found the agency's shifting statements during review did not meet that bar because courts review only an agency's final action.
- Turning to the statutory question, the Court framed the case as a clash between two mandatory commands: the Clean Water Act's command that EPA 'shall' approve a state permitting transfer once nine listed criteria are met, and the Endangered Species Act's command that agencies 'shall' ensure their actions don't jeopardize protected species.
- Applying the canon against implied repeals -- the rule that courts should avoid reading one law as silently overriding another unless Congress clearly meant to -- the Court found that treating the species-protection duty as a tenth criterion would rewrite the Clean Water Act's exclusive list.
- Because the statutory language left a genuine ambiguity about which mandate should control, the Court applied Chevron deference, under which courts defer to a reasonable agency interpretation of an ambiguous statute, and looked to the wildlife agencies' own regulation.
- That regulation limits the Endangered Species Act's consultation duty to actions involving 'discretionary Federal involvement or control.' The Court found this a reasonable way to harmonize the two statutes, since an agency cannot be the legal cause of, or prevent, an outcome it has no power to alter.
- Applying that reasoning, the Court concluded the water-permit transfer was non-discretionary once Arizona met the nine Clean Water Act criteria, so the Endangered Species Act's species-protection duty never attached, and it distinguished a prior case, TVA v. Hill, as not having addressed this discretionary/non-discretionary distinction.
Doctrinal impact
Cases affected by this decision
Distinguishes TVA v. Hill (437 U. S. 153)
Says Hill never addressed whether the Endangered Species Act covers non-discretionary agency actions.
Reaffirms Chevron U. S. A. Inc. v. Natural Resources Defense Council, Inc. (467 U. S. 837)
Applies its two-step framework to defer to the wildlife agencies' interpretation of an ambiguous statute.
Reaffirms Department of Transportation v. Public Citizen (541 U. S. 752)
Relies on its principle that an agency isn't the legal 'cause' of an action it has no discretion to prevent.