On June 25, 2007, the U.S. Supreme Court issued a 5-4 split decision in National Association of Home Builders v. Defenders of Wildlife, 2007 WL 1801745, that is expected to have far-reaching implications. The decision addressed the intersection of two independent statutes--the Clean Water Act (the "CWA") and the Endangered Species Act (the "ESA")--and answered the twin questions of whether the ESA constitutes a "super statute" that effectively overrides or repeals other statutes, and whether the ESA consultation requirement can be read to impose additional substantive obligations on an agency to protect listed species when such obligations are otherwise absent under the agency’s organic authority.

The case arose as a result of the Environmental Protection Agency’s (the "EPA") decision to transfer the National Pollutant Discharge Elimination System program under CWA section 402(b) to the state of Arizona. That section of the CWA provides "that the EPA ‘shall approve’ a transfer application unless it determines that a state lacks adequate authority to perform the nine functions specified in the section." 33 U.S.C. § 1362(b).

The Supreme Court’s decision confirms that the list under CWA section 402(b) is both exclusive and mandatory and is not to be enlarged by the ESA. The Court emphasized that because Arizona’s application satisfied all nine criteria, the EPA lacked the discretion to make any decision other than to approve the transfer to Arizona, and the consultation requirement under ESA section 7(a)(2) was simply not triggered in this case. As reasoned by the Court, any other interpretation would have resulted in a partial repeal of the CWA, with the ESA imposing a 10 criterion on the transfer of permitting authority a result that the Court went to great lengths to reject. According to the Court, "nothing in the text of section 402(b) authorizes the EPA to consider the protection of threatened or endangered species as an end in itself when evaluating a transfer application."

The majority’s opinion has the effect of scaling back the breadth with which the Ninth Circuit had previously inflated the consultation provision. ESA section 7(a)(2) requires each federal agency to ensure that any action authorized, funded or carried out by such agency is not likely to jeopardize the continued existence of any endangered or threatened species. 16 U.S.C. §1536 (a)(2). In reversing the Ninth Circuit’s opinion in this case, the majority opinion deferred to the ESA’s implementing regulations and held that the consultation requirement does not override other statutory authorities and is only triggered when a federal agency undertakes a discretionary agency action, as stated in 50 C.F.R. § 402.03. Conversely, an agency is not obligated to engage in the consultation process when it undertakes an action that is mandated by statute. The Court explained that when an agency is required to do something by statute, it simply lacks the power to ensure that such action will not jeopardize endangered species, and thus, in those situations, is not obligated to conduct a consultation under ESA section 7(a)(2).

In overruling the Ninth Circuit, the majority further admonished that the Ninth Circuit’s reading of ESA section 7(a)(2) would not only have abrogated CWA section 402(b)’s statutory mandate, but would also result in the implicit repeal of many other categorical statutory commands. By way of example, the Court cited with approval the District of Columbia Circuit’s decision in Platte River Whooping Crane Critical Habitat Maintenance Trust v. FERC, 962 F.2d 27 (D.C. Cir 1992) (holding that ESA section 7(a)(2) is not triggered when the Federal Energy Regulatory Commission issues an annual license under section 15 of the Federal Power Act).

The decision also whittled away at the Court’s seminal 1978 ESA opinion in Tennessee Valley Authority v. Hill 437 U.S. 153 (1978) ("TVA"). In that case, the Court concluded that