Court Opinion

ID: 34427
Source: CourtListenerOpinion
Date Created: 2010-04-25 19:16:10+00
Date Added: 2024-06-11T14:57:04.889879
License: Public Domain

United States Court of Appeals
                                                                Fifth Circuit
                                                             F I L E D
                       REVISED MARCH 25, 2004
                                                            February 27, 2004

                                        Charles R. Fulbruge III
           UNITED STATES COURT OF APPEALS       Clerk

                     FOR THE FIFTH CIRCUIT

                        ____________________
                              No. 01-51099
                          ____________________

GDF REALTY INVESTMENTS, LTD; PARKE PROPERTIES I, LP;
PARKE PROPERTIES II, LP

                Plaintiffs - Appellants

   v.

GALE A NORTON, Secretary, US Department of the Interior;
MARSHALL P JONES, Director, US Fish & Wildlife Service

                Defendants - Appellees

        Appeal from the United States District Court for the
                 Western District of Texas, Austin.
          ON PETITION FOR REHEARING AND REHEARING EN BANC
(Opinion 3/26/03, 5 Cir.,_______, _______ F.3d ______)
Before DAVIS, BARKSDALE, and DENNIS, Circuit Judges.
PER CURIAM:

     The Petition for Rehearing is DENIED and the court having
been polled at the request of one of the members of the court and
a majority of the judges who are in regular active service not
having voted in favor, (FED. R. APP. P. and 5TH CIR. R. 35) the
Petition for Rehearing En Banc is also DENIED.

                                   1
EDITH H. JONES, Circuit Judge, joined by JOLLY, SMITH, DEMOSS,
CLEMENT and PICKERING, Circuit Judges, dissenting from the denial
of rehearing en banc:
            A majority of the court has refused to rehear this

significant Endangered Species Act case en banc.                      I respectfully

dissent.     For the sake of species of 1/8-inch-long cave bugs,

which lack any known value in commerce, much less interstate

commerce, the panel crafted a constitutionally limitless theory

of federal protection.           Their opinion lends new meaning to the

term reductio ad absurdum.

            The   panel     holds     that     because      “takes”    of    the        Cave

Species    ultimately     threaten       the    “interdependent        web”    of        all

species, their habitat is subject to federal regulation by the

Endangered Species Act.              Such unsubstantiated reasoning offers

but   a    remote,     speculative,          attenuated,      indeed        more        than

improbable   connection         to   interstate      commerce.        Chief    Justice

Marshall stated in Cohens v. Virginia, 19 U.S. 264 (1821), that

Congress   has    no   general       right     to   punish    murder    or    felonies

generally.        Surely,       though,      there     is    more     force        to     an

“interdependence” analysis concerning humans, and thus a more

obvious series of links to interstate commerce, than there is to

“species.”    Yet the panel’s “interdependent web” analysis of the

Endangered   Species      Act    gives    these      subterranean      bugs    federal

protection that was denied the school children in Lopez and the
rape victim in Morrison.    The panel’s commerce clause analysis is

in error.

I.    Background

            To recap the facts, this case involves a 20-year effort

to develop a large tract of land west of Austin, Texas.         This

once-rural property contains a cluster of limestone caves.     After

obtaining all necessary state and local permits, the landowner-

appellants began commercial development.      Between 1988 and 1993,

however, the United States Fish and Wildlife Service (“FWS”),

designated six species (“Cave Species”) of tiny bugs, which dwell

solely in the caves and never emerge on the surface of the land,

as endangered under section 4 of the ESA.          See 16 U.S.C. §

33(a)(1).     Pursuant to section 9(a)(1) of the ESA, it became

unlawful to take a member of the endangered species.        A “take”

means to “harass, harm, pursue, hunt, shoot, wound, kill, trap,

capture or collect . . . .” 16 U.S.C. § 1532(19).            The ESA

broadly defines “harm” as including significant modifications or

degradations of a habitat which kill or injure protected wildlife

“by   significantly   impairing   essential    behavioral   patterns,

including breeding, feeding or sheltering.”     50 C.F.R. § 17.3.

            After years of wrangling with and attempting to appease

the FWS, the landowners remained unable to commercially develop

their land.    Accordingly, they sued on the theory that the ESA

                                  3
“take” provision is unconstitutional as applied to these Cave

Species.      The district court granted summary judgment to FWS,

finding that it would be “hard-pressed to find a more direct link

to interstate commerce than a Wal-Mart.”                    GDF Realty Investment,

Ltd. v. Norton, 169 F.Supp 2d 648, 662 (W.D. Tex. 2001).                           On

appeal,     the   panel    affirmed    the       district     court’s   judgment   on

wholly different grounds.

II.    Discussion

             Congress’s power “to regulate commerce . . . among the

several states . . .” is, like all enumerated powers, subject to

outer limits.       See United States v. Lopez, 514 U.S. 549, 556-57

(1995); Solid Waste Agency of North Cook County v. U.S. Army

Corps of Engineers, 531 U.S. 159, 173 (2001) (reiterating that

“the grant of authority to Congress under the commerce clause,

though broad, is not unlimited”).                  The commerce clause “may not

be extended so as to embrace effects upon interstate commerce so

indirect and remote that to embrace them, in view of our complex

society, would      effectually        obliterate       the   distinction     between

what   is   national      and   what   is       local   and   create    a   completely

centralized government.”          NLRB v. Jones and Laughlin Steel, 301
U.S. 1, 37 (1937).

             It is unnecessary to recapitulate the Supreme Court’s

Lopez and Morrison cases at any length.                   See, generally, United

                                            4
States v. Morrison, 529 U.S. 598 (2000).                      Lopez defines three

categories of federal regulation that are consistent with the

commerce clause.            Lopez 514 U.S. at 558.               At issue here is

whether federal regulation of the Cave Species is permissible

under the third Lopez category — i.e., whether takes of the Cave

Species “substantially affect interstate commerce.”                       Lopez, 514
U.S. at 558-59.1

               In Lopez, reiterated in Morrison, the Court outlined

four       considerations    in    determining         whether   purely   intrastate

activity      substantially       affects       interstate    commerce:     (1)   the

commercial or economic nature of the intrastate activity; (2) the

presence of a jurisdictional element in the statute; (3) the

existence       of   congressional      findings         or   legislative    history

demonstrating        a   link     between        the    regulated    activity     and

interstate commerce; and (4) how attenuated is the link between

the intrastate activity and its effect on interstate commerce.

See Morrison, 529 U.S. 609-12 (2000).2

       1
     The panel found, and the parties do not dispute, that the
first two Lopez categories, involving the channels or
instrumentalities of interstate commerce, do not justify
regulation of the Cave Species. GDF Realty, 326 F.3d at 629.
       2
     Pertinent parts of the Endangered Species Act contain no
statutory jurisdictional link between federal regulation and
interstate commerce. Likewise, legislative history and
congressional findings fail to tie species protection to
commerce. These parts of the analysis concerning federal regula-
tion of intrastate activity do not favor FWS.

                                            5
             In certain instances, an intrastate activity alone may

substantially affect interstate commerce.                   See Jones and Laughlin

Steel, 301 U.S.    at    22    (NLRB       order    concerning      unfair    labor

practices at a steel mill directly affected interstate commerce).

In   other     instances,         “the   regulation        can     reach    intrastate

commercial activity that by itself is too trivial to have a

substantial     effect       on     interstate        commerce     but     which      when

aggregated with similar and related activity, can substantially

affect interstate commerce.”             United States v. Ho, 311 F.3d 589,

599 (5th Cir. 2002); see also Wickard v. Filburn, 317 U.S. 111,

127-28 (1942).

             As an initial matter, the panel correctly determined,

unlike other courts, that the “regulated activity” under the ESA

is Cave Species takes, not the appellants’ planned commercial

development     of     the   land.       GDF      Realty, 326 F.3d    at     633-34

(recognizing that “looking beyond the regulated activity . . .

would    ‘effectually        obliterate’        the     limiting    purpose      of    the

Commerce Clause”) (citing Jones and Laughlin Steel, 301 U.S. at

37); Ho, 311 F.3d at 602 (recognizing that the regulated activity

at   issue   was     asbestos      removal,       rather    than    the    plaintiff’s

commercial enterprise); but see Rancho Viejo, LLC v. Norton, 323
F.3d 1062 (D.C. Cir. 2003) (finding that the regulated activity

                                            6
was not the ESA take but rather the “construction of a commercial

housing development”).

            Next the panel examined whether Cave Species takes,

alone, have a “direct relationship” with and substantial effect

on interstate commerce.           GDF Realty, 326 F.3d at 637.                  FWS

offered two theories for such a “direct relationship:”                   (1)    the

“substantial” scientific interest the Cave Species generate; and

(2) possible future commercial benefits.                     The panel properly

rejected    each    argument    as     speculative     or    too   attenuated    to

commerce.

            The panel finally turned to FWS’s argument that Cave

Species     takes,    although         intrastate      and     non-economic      in

themselves, may be aggregated with all other endangered species,

permitting    the    entirety     of    the    regulatory      scheme    to    pass

constitutional muster.3         “At issue is what circumstances must be

present in order to justify aggregation when, as in this case,

intrastate    activity    has    a     de    minimis   effect      on   interstate

commerce.”    GDF Realty, 326 F.3d at 638.                  The panel concluded

that this case warranted aggregation under Lopez and Morrison,

because FWS’s actions are essential to preserving an “economic”

     3
     The appellants concede that, if aggregated with all
endangered species, the Cave Species takes would have a
substantial effect on interstate commerce.

                                         7
regulatory program.        Id. at 639.     I respectfully disagree.           The

panel’s approval      of   aggregation    in   this    case   would   not     only

sustain every conceivable application of the ESA, but entirely

undercuts Lopez and Morrison.

            To explain the problem, a brief historical review of

the aggregation principle is required.           This court recognized in

Ho that the aggregation principle “reached its zenith in Wickard,

‘perhaps    the    most    far-reaching    example     of     commerce   clause

authority   over    intrastate    activity.’”         Ho, 311 F.3d   at   599

(quoting Lopez, 514 U.S. at 560).          In Wickard, the Supreme Court

upheld regulation of an intrastate farmer’s personal consumption

of home-grown wheat under the Agricultural Adjustment Act of 1938

because, “. . . his contribution [to the wheat market], taken

together with that of many others similarly situated, is far from

trivial.”   Wickard, 317 U.S. at 127-28.         A primary purpose of the

act in question was, as the Court noted, “to increase the market

price of wheat and to that end to limit the volume thereof that

could affect the market.”        Id. at 90.

            After Wickard, the Court has sustained commerce clause

legislation using aggregation in instances where Congress was

regulating commercial activity.           See Katzenbach v. McClung, 379
U.S. 294 (1964) (prohibiting refusal of restaurant service to

interstate travelers); Heart of Atlanta Motel v. United States,

                                      8
379 U.S. 241 (1964) (prohibiting refusal of hotel accommodations

to interstate travelers); Maryland v. Wirtz, 392 U.S. 183 (1968)

(regulating wages of employees of business engaged in interstate

commerce);    Perez       v.     United     States,         402 U.S. 146     (1971)

(regulating loan sharking); Hodel v. Virginia Surface Mining and

Reclamation    Association,452          U.S.      246      (1981)      (regulating      coal

industry);    see    Lopez, 514 U.S.        at   560    (recognizing       these

“examples are by no means exhaustive, but the pattern is clear”).

          In both Lopez and Morrison, by contrast, the federal

government’s efforts to sustain non-economic criminal laws under

the commerce clause through aggregation were rebuffed.                        In Lopez,

only Justice Breyer’s dissent accepted the theory that discrete

instances of gun possession in a school zone, when aggregated,

increased the costs of crime and reduced national productivity so

as to justify the Gun-Free School Zones Act of 1990.                         See Lopez,
514 U.S. at 618-624 (Breyer, J. dissenting).                        The Court majority

rejected aggregation, because it would allow Congress to regulate

“all activities that might lead to violent crime, regardless of

how tenuously they relate to interstate commerce.”                          Id. at 564.

The Court concluded that, “if we were to accept the government’s

arguments,    we    are   hard    pressed        to    posit     any    activity     by   an

individual that Congress is without power to regulate.”                           Id.

                                           9
           Likewise,      in    Morrison,          the    Court    rejected    arguments

concerning the aggregate effects of sex-based crime on national

productivity, increased medical and other costs, and a decreased

supply and demand for interstate goods.                      Morrison, 529 U.S. at

615.   Again, the Court concluded that aggregation “would allow

Congress   to    regulate       any    crime       as    long     as   the   nationwide,

aggregated      impact    of    that   crime        has    substantial       effects    on

employment, production, transit or consumption.”                             Id. (adding

that “the concern we expressed in Lopez that Congress might use

the Commerce Clause to completely obliterate the Constitution’s

distinction     between    national      and       local    authority        seems   well-

founded”) (citing Lopez, 514 U.S. at 564).

           Together, these cases strongly suggest that when the

Supreme Court has sustained Commerce Clause regulation under the

aggregation principle, “the regulated activity was of an apparent

commercial character.”          Morrison, 529 U.S. at 611.               Nevertheless,

Morrison     declined      to    create        a     categorical        rule    “against

aggregating the effects of non-economic activity,” even as it

observed, “thus far in our nation’s history our cases have upheld

Commerce Clause regulation of intrastate activity only where the

activity is economic in nature.”               Id. at 613.

           The panel recognized that “[i]n light of Lopez and

Morrison, the key question for purposes of aggregation is whether

                                          10
the nature of the regulated activity is economic.”            GDF Realty,
326 F.3d at 630.       The panel conceded that “in a sense, Cave

Species takes are neither economic nor commercial.           There is no

market for them; any future market is conjecture.”            GDF Realty,
326 F.3d at 638.       The panel added that “[i]f the speculative

future medical benefits from Cave Species makes their regulation

commercial, then almost anything would be.”           Id.    Furthermore,

“there is no historic trade in the Cave Species, nor do tourists

come to Texas to view them.”       Id.    Finally, the panel rejected

the   government’s    argument   that    Cave   Species     takes    become

commercial in character once aggregated with other endangered

species.     Id.     “To accept such a justification would render

meaningless any ‘economic nature’ prerequisite to aggregation.”

Id.

           Nevertheless,   the   panel   aggregated   the   Cave     Species

takes with all takes of all endangered species because:             (1) they

are part of a larger regulation that is “directed at activity

that is economic in nature” and (2) the intrastate activity (Cave

Species takes) is an “essential part of the economic regulatory

scheme.”   Id. at 639 (internal citations and quotations omitted).

           How the panel’s conclusion follows from its generally

excellent preceding discussion of Lopez and Morrison, I cannot

fathom.    The panel offers little reasoning why any take of a Cave

                                   11
Species is (a) part of a larger “economic” regulatory scheme;

(b)     so    essential       to     the    larger       national    scheme       that   the

accidental crushing of one Cave Species underfoot (or even the

diminutive species’ destruction) threatens to undo the national

program; and          (c)    so    significant      to    the   commerce     clause      that

Congress, for the first time in U.S. history, is authorized to

aggregate purely intrastate, non-economic activity.

               It is undeniable that many ESA-prohibited takings of

endangered species may be regulated, and even aggregated, under

Lopez        and    Morrison        because        they    involve      commercial        or

commercially-related               activities       like     hunting,       tourism      and

scientific research.               On this basis, the Fourth Circuit decision

in    Gibbs    v.     Babbitt,      214 F.3d 483,    493-96    (4th    Cir.    2000),

approved federal red wolf regulations.                     Under reasoning like that

in Gibbs, aggregation may be sustained on a species-by-species

basis or across certain categories of species.                          The pursuit of

hunting       trophies,      for    instance,       affects     markets     for    hunting,

outfitting, taxidermy, etc.                 Where the link between endangered

species       takes    and    commercial      or     economic    activity     is     plain,

courts need not be concerned about the limits of the aggregation

principle.

               But in this case, there is no link — as the panel

concedes — between Cave Species takes and any sort of commerce,

                                              12
whether tourism, scientific research, or agricultural markets.

Compare Gibbs, 214 F.3d at 493-95.               The cautions expressed in

Morrison   about    aggregation    of    wholly       intrastate   non-economic

activity   should   be   taken    seriously      by    the   courts.    See   GDF

Realty, 326 F.3d at 628.        Elsewhere in its opinion, the panel was

quite emphatic about this, saying “the possibility of future

substantial effects of the Cave Species on interstate commerce .

. . is simply too hypothetical and attenuated from the regulation

to pass constitutional muster.”              Id. (citing Morrison, 529 U.S.

at 612) (emphasis in original).

           When the panel nevertheless approves the application of

the ESA to these Cave Species, its opinion becomes confusing and

self-contradictory.      First, the panel attempts to convert the ESA

to an economic regulatory statute by opining that the majority of

species takes would result from economic activity, and “the Cave

Species takes would occur as a result of plaintiffs’ planned

commercial development.”        GDF Realty, 326 F.3d at 639.           The panel

had, however, rejected this argument earlier, when it found that

the regulated activity is the take, not the planned commercial

land development.      GDF Realty, 326 F.3d at 633-34.             As the panel

itself   understood,     this   “analysis      would    allow   application   of

otherwise unconstitutional statutes to commercial actors, but not

non-commercial actors.          There would be no limit to Congress’

                                        13
authority to regulate intrastate activities, so long as those

subjected to the regulation were entities which had an otherwise

substantial connection to interstate commerce.”                 Id. at 634.4

            Second, the panel states that Cave Species takes are

essential    to     the    ESA,   because      any    take    of    any     species

“threaten[s] the interdependent web of all species.”                    GDF Realty,
326 F.3d at 640 (internal quotations omitted).                Under the panel’s

approach, “the essential purpose of the ESA is to protect the

ecosystems upon which we and other species depend.”                     Id. (quoting

H.R. Rep. No. 93-412, at 10).         Further, every take is “essential”

to   the   ESA   because   the    extinction    of   any     species      risks    the

extinction of all species, and the extinction of all species

could lead to the extinction of ecosystems.                GDF Realty, 326 F.3d

at 640.     At one level, this is no more than the “but-for-causal

chain” approach twice rejected by the Supreme Court in Lopez and

Morrison.        Hence,    “the   Lopez     Court    declined      to    apply     the

aggregation principle in conjunction with long chains of causal

inference    that    would    have   been      necessary      to   arrive     at     a

substantial effect on interstate commerce.”                   United States v.

Wang, 222 F.3d 234, 239 (6th Cir. 2000).                An even more obvious

      4
     Arguably, Congress could pass a statute prohibiting anyone
engaged in interstate commerce from “taking” endangered species.
But Congress did not do so in these parts of the statute.

                                       14
dissonance between the panel opinion and Lopez, Morrison and the

Constitution is that the Commerce Clause regulates commerce, not

ecosystems.5

            Third, while the panel acknowledges the Supreme Court’s

concern that federal legislation under the Commerce Clause must

have a limiting principle so as not to obliterate the distinction

between that which is truly national and that which is local, the

panel’s conclusion tramples that precept.           The panel concludes,

summarily, that its “interdependent web” approach “will not allow

Congress to regulate land use or wildlife preservation.”               GDF

Realty, 326 F.3d at 640.        I disagree.    Once the FWS designates a

species as endangered, the Government has functional control over

the land designated as its habitat.            If such authority is not

justified    by   a   federal    interest     in   regulating   interstate

     5
     That a true, not merely conjectural, economic activity must
be the subject of Congress’s regulation is reinforced by our
court’s debates over the Hobbs Act. In United States v.
Robinson, 119 F.3d 1205 (5th Cir. 1997), the panel reasoned that
any robbery of a business that has an effect on interstate
commerce under the Hobbs Act’s express jurisdictional
requirements may be aggregated with other similar crimes for
purposes of establishing a “substantial effect.” Here, there is
no jurisdictional element, and the only aggregate effect
articulated by the panel is on biodiversity, which the panel
somehow equates with “economic” or commercial activity. It seems
clear, though, that biodiversity is a condition of nature, not a
human activity. The panel’s opinion goes farther than Robinson
in permitting aggregation to overcome a commerce clause
challenge.

                                     15
commerce, it “would result in a significant impingement of the

States’ traditional and primary power over land and water use.”

Solid Waste Agency, 531 U.S. at 173-74.6

                 Perversely, federal protection of the Cave Species has

become a device to thwart not only these appellants’ prospects of

land development but also the State’s construction of a highway,

the quintessential modern artery of commerce.                        See “Dateline

Texas:       Officials at Odds over Spider Habitat,” Houston Chron.,

Feb.       22,   2004,    at   35A   (to    get   federal   approval   for   highway

construction over two limestone caverns housing the Cave Species,

“state highway administrators must find a site in Williamson

County       that    is    also      home   to    the   endangered     species   and

permanently preserve that site”).

       6
     Contrary to recent Supreme Court authority, the panel
interprets the Endangered Species Act extremely broadly to permit
the federal government to regulate a matter of unique local
concern. See Solid Waste Agency, 531 U.S. at 172-173
(Congressional authority must be narrowly construed “where the
administrative interpretation alters the federal-state framework
by permitting federal encroachment upon a traditional state
power.”). Further, “where an otherwise acceptable construction of
a statute would raise serious constitutional problems, [courts]
will construe the statute to avoid such problems unless such
construction is plainly contrary to the intent of Congress.” Id.
(quoting Edward J. DeBartolo Corp. v. Fla. Gulf Coast Bldg. &
Constr. Trades Council, 485 U.S. 568, 575 (1988)). Regulation of
land use is traditionally the province of state and local
governments. Hess v. Port Auth. Trans-Hudson Corp., 513 U.S. 30,
44 (1994).

                                             16
            The    panel    also    concludes,      without   explanation,   that

“the     link”    between    Cave    Species     takes    “and   a   substantial

commercial effect is not attenuated.”                 GDF Realty, 326 F.3d at

640.   The panel’s reasoning — all takes are essential, therefore,

all takes have a substantial commercial effect — is circular.

Even aside from this problem, the Fifth Circuit and other courts

have   recognized     that    in    an   otherwise     constitutional     federal

regulatory scheme, some applications may go too far.                  See e.g.,

United States v. Collins, 40 F.3d 95, 99 (5th Cir. 1994) (robbery

of an individual citizen not covered under the Hobbs Act); United

States v. Wang, supra (same);            United States v. Quigley, 53 F.3d
909, 910-11 (8th Cir. 1995).              In fact, the panel’s reasoning

contradicts      Collins,    inasmuch     as   it    would    authorize   federal

criminal prosecution under the ESA of a landowner, or even an FWS

agent, who climbed down into one of the caves in order to study

the Cave Species and crushed one.               See 16 U.S.C. §§ 1538-1540;

compare Rancho Viejo, supra, 323 F.3d at 1080 (Ginsburg, J.,

concurring) (“. . . our rationale for concluding the take of the

arroyo    toad    affects    interstate       commerce   does    indeed   have   a

logical stopping point . . . Just as important, however, the lone

hiker in the woods, or the homeowner who moves dirt in order to

landscape his property, though he takes the toad, does not affect

interstate commerce.”).

                                         17
             In    the   end,    the     panel          is   unable      to     refute     the

attenuation concern of Lopez and Morrison because its analysis

rests on the false implication that all takes of all species

necessarily relate to an ecosystem, which by its very grandiosity

must at some point be “economic” in actuality or in effect.                               This

is precisely the reasoning rejected by the Supreme Court.                                  Not

all     crime     is   “economic”      for     commerce         clause        purposes,     in

actuality or effect, even though any or all of its human victims

may   become      impoverished.        Not        all    crimes      against     women     are

“economic” in practicality or effect, despite the same possible

consequences.          The   Commerce    Clause          does   not    regulate      crime,

sexual inequity, or ecosystems as such — it regulates commerce.

Thus,    I   reiterate:         many    applications            of    the      ESA   may    be

constitutional, but this one simply goes too far.                         To be faithful

to the Supreme Court’s principles in Lopez and Morrison and this

court’s Commerce Clause decisions, we should rehear this case en

banc.

                                             18