The following article was originally published in the San Francisco Daily Journal on January 12, 2015. ©2015 Daily Journal Corporation.

Prairie Dogs v. Congress

By David Metres and Joshua Bloom

A recent ruling by a Utah federal judge, although directed at the Endangered Species Act (ESA), may have far-reaching implications on Congress' commerce clause powers. In a first-of-its-kind ruling, U.S. District Judge Dee Benson struck down the application of the ESA to a species - the Utah prairie dog - whose habitat is wholly within a single state. People for the Ethical Treatment of Property Owners v. U.S. Fish & Wildlife Serv., 13-00278 (D. Utah Nov. 4, 2014) ("PETPO").

The court ruled that Congress' power does not extend to a purely intrastate species, the regulation of which has no apparent nexus to economic activity. Therefore, the court held that Congress exceeded its powers under the commerce clause and the necessary and proper clause of the U.S. Constitution in authorizing the U.S. Fish and Wildlife Service to regulate the Utah prairie dog. If upheld by the 10th U.S. Circuit Court of Appeals (after a likely appeal by the government) and followed by other federal courts, the ruling would significantly curtail the ESA's reach. More than half the species regulated by the ESA exist entirely in one state and, under Benson's reasoning, the regulation of many such species would have no obvious nexus to economic activity.

More significantly, the decision may provide a vehicle for the courts to further limit Congress' power to pass laws relying on its expansive commerce clause authority. If upheld, Congress could find its authority to legislate further constrained - not just on environmental issues, but on a broad array of activities now regulated under Congress' commerce clause power.

District Court: Congress Exceeded its Commerce Clause Power

Generally, Congress' commerce clause power extends to legislation addressing (1) the channels of interstate commerce, (2) the instrumentalities of interstate commerce, or persons or things in interstate commerce, and (3) activities that substantially affect or substantially relate to interstate commerce. United States v. Lopez, 514 U.S. 549 (1995).

The plaintiffs in PETPO argued the prairie dog is found solely within Utah's borders and has no substantial effect on or relation to interstate commerce. The government conceded that the Utah prairie dog is a purely intrastate species, residing only in Utah, but pointed to a long line of circuit court decisions that upheld ESA regulation of intrastate species on commerce clause grounds. See San Luis & Delta-Mendota Water Authority v. Salazar, 638 F.3d 1163 (9th Cir. 2011) (Delta smelt living only in California); Alabama-Tombigbee Rivers Coalition v. Kempthorne, 477 F.3d 1250 (11th Cir. 2007) (Alabama sturgeon living only in Alabama); Rancho Viejo LLC v. Norton, 323 F.3d 1062 (D.C. Cir. 2003) (arroyo toad living only in California); GDF Realty Investments Ltd. v. Norton, 326 F.3d 622 (5th Cir. 2003) (six species of subterranean, cave-dwelling invertebrate spiders and beetles living only in Texas); Gibbs v. Babbitt, 214 F.3d 483 (4th Cir. 2000) (red wolf living only in North Carolina); Nat'l Ass'n of Home Builders v. Babbitt, 130 F.3d 1041 (D.C. Cir. 1997) (Delhi Sands flower-loving fly living only in California).

But the Utah court did not adopt the broad view put forth in those cases, and held the regulated activity itself - in this case, the take of the species - is the touchstone for the interstate commerce effects. The court ruled that the "substantial effect" test does not focus on the effect of the prairie dog's ESA protections on interstate commerce, but instead on the effect on interstate commerce caused by take of the Utah prairie dog. Applying this focus, the court determined that take of the prairie dog does not substantially affect interstate commerce. The court reasoned that the Utah prairie dog had no commercial value and no other substantial effect on interstate commerce.

The court also rejected the government's argument that the necessary and proper clause authorizes the ESA rule because the rule is essential to the regulatory scheme created by the ESA. The court found that the rule was not essential because it would not "affect the national market for any commodity regulated by the ESA."

Finally, the court rejected the government's argument that take of all intrastate non-commercial species could be aggregated to satisfy the necessary and proper clause, finding that take of different species could not be aggregated to justify a special rule affecting only one species.

Newest Case Limiting Congress' Power?

The Utah court did not acknowledge congressional findings that maintaining biological diversity by preserving species was a key purpose of the ESA. When considering the ESA legislation, Congress noted the economic value that such species may provide, finding that the value of the planet's biological "genetic heritage is, quite literally, incalculable." H.R. Rep. No. 93-412 (1973). But while the object of the regulation - preserving endangered species - may implicate an incalculable natural endowment, it is a much more difficult argument to show that the regulated activity - here, the take of the prairie dog - may have a substantial effect on economic activity. See Gonzales v. Raich, 545 U.S. 1 (2005).

Although the Utah court's view may conflict with every appellate court to review the constitutionality of the ESA's regulation of intrastate species, it finds some common ground with more recent Supreme Court cases addressing Congress' commerce clause power. In several cases, the court has shown willingness to reject Congress' findings regarding effects on interstate commerce.

In United States v. Morrison, 529 U.S. 598 (2000), Congress had specifically found that violence affects interstate commerce by deterring potential victims from traveling, diminishing work productivity, increasing demand for medical costs and other services, and creating other impacts on victims and their families. The court ruled that Congress' findings did not save the statute's constitutionality. Likewise, in its recent ruling regarding the Affordable Care Act, the court rejected congressional findings of the impacts of the individual mandate on interstate commerce. See National Federation of Independent Business v. Sebelius, 2012 DJDAR 8999.

Further, the court has intimated its concerns regarding congressional overreach when the focus of federal environmental regulation is confined to one state. In a decision limiting the reach of the Clean Water Act, the court noted there are "significant constitutional questions" raised by relying on Congress' commerce clause power to regulate intrastate isolated wetlands with no apparent connection to interstate commerce. See Solid Waste Agency of Northern Cook County v. U.S. Army Corps of Eng'rs, 531 U.S. 159 (2001).

And astute court watchers will remember the hue and cry raised during the nomination of Chief Justice John Roberts because of a dissenting opinion he wrote as a judge on the U.S. Court of Appeals for the D.C. Circuit, contending that ESA regulation of the intrastate "hapless" arroyo toad cannot rely on the commerce clause as its authority. See Rancho Viejo LLC v. Norton, 334 F.3d 1158 (D.C. Cir. 2003).

While it may be too early to predict how the 10th Circuit would rule, let alone the Supreme Court, the court's recent commerce clause jurisprudence suggests that not only is scope of the ESA under fire, but that aspects of other environmental statutes - such as the breadth of Clean Water Act jurisdiction - may face similar pressures, and, beyond that, other federal statutes addressing crime, civil rights and social issues may also be in play.

Joshua A. Bloom was a partner and David M. Metres is an associate with Barg Coffin Lewis & Trapp LLP.