Common Sense Prevails in Regulatory Flexibility Act Case

Yesterday, PLF successfully defeated an attempt to dismiss its lawsuit that would require the government to follow its own laws and regulations. At issue is the Regulatory Flexibility Act (RFA), which requires that the government conduct an economic analysis on the costs to small businesses whenever it regulates them. The U.S. Fish & Wildlife Service designated as “critical habitat” 1.8 million acres of land in California, without conducting an economic analysis as required by the RFA. On behalf of the California Cattlemen’s Association, the California Farm Bureau Federation, and the California Wool Growers Association, PLF sued the Fish & Wildlife Service to force its compliance with the RFA.

The Fish and Wildlife Service, along with an intervening party the Center for Biological Diversity, attempted to convince a judge to dismiss our claims by arguing (1) small business owners cannot suffer economic harm from critical-habitat designations and (2) only other federal agencies—and not individuals and businesses (represented by our clients)—are regulated by designations. The trial court judge issued his opinion denying their motions to dismiss saying, “common sense is on [PLF’s clients’] side.”

The Defendants argued that critical-habitat designations could not possibly cause economic injury to small business owners like farmers and ranchers, and thus, our claim should be dismissed. But the critical-habitat designation here affects 1.8 million acres of land, and many of our clients’ members are already feeling the costs of this designation through compliance with new stringent requirements. The judge agreed, finding that “common sense tells me that a 1.8 million acre land use rule will have some impact on ranchers and farmers who utilize the land,” and that our clients will likely suffer harm as a result of this designation.

Further, the judge expressly refuted the government’s argument that critical-habitat designations affect only other federal agencies. “[T]his is a Final Rule that requires one federal agency to consult with another federal agency about the Final Rule’s impact on land use, although the ultimate impact of these consultations will be felt by small entities like the Plaintiffs and their members…. Defendant Zinke may not avoid the requirements of the RFA by passing the conductor’s baton from his right hand to his left.” The judge also held that “it would run contrary to the RFA’s design if one component of the Department of Interior could escape the requirement that the agency prepare a regulatory flexibility analysis for a final rule by simply ordering a sister agency to implement the rule on its behalf.”

Luckily, today common sense has prevailed, and our clients will get to continue their fight.

Be sure to check out the case page, as well as some of our previous blog posts here and here!