The U.S. Secretary of Interior (Secretary) listed the northern spotted owl as a threatened species in 1988 and has since been ordered to designate critical habitat for the owl.[1] In publishing an initial critical habitat proposal, the Secretary stated that he did not need to prepare an environmental assessment (EA) pursuant to the National Environmental Policy Act (NEPA). After the Secretary issued final designation of critical habitat, DouglasCounty sued, alleging that the Secretary violated NEPA in designating critical habitat. The district court held that DouglasCounty had standing to bring the suit and granted the County's motion for summary judgment on the NEPA claim.

Addressing standing, the Ninth Circuit stated that in bringing a claim under the Administrative Procedure Act, the plaintiffs needed to fall within the zone of interests that NEPA seeks to protect. DouglasCounty alleged procedural injury, injury to its proprietary interests, injury to its citizens' quality of life, injury to wildlife in the county, and injury to its resource management interests. The court held that DouglasCounty had a proprietary interest in managing lands adjacent to the critical habitat and therefore suffered concrete injury. Because the county had been accorded a procedural right by NEPA that allows local agencies to comment on proposed federal actions,[2] the injury to its proprietary interests was enough to grant the county a procedural injury claim. The court therefore did not address whether DouglasCounty would have standing based on any of its other claims.

In addressing the question of whether NEPA applies to the designation of critical habitat, the Ninth Circuit determined that an EIS was not necessary in this context. Although the ESA and NEPA did not provide an issue of "irreconcilable" statutory conflict, the court determined that by creating a different procedural mechanism for choosing critical habitat under the ESA Congress had rendered the NEPA procedure superfluous. In addition, Congress had the opportunity to amend the ESA after the Sixth Circuit had determined that NEPA was not applicable to designations of critical habitat. However, it did not amend the ESA to explicitly require the Secretary to prepare an EIS when designating critical habitat.

The Ninth Circuit then addressed whether NEPA requires an EIS for actions that do not alter the natural physical environment. The court held it does not because the purpose of NEPA is to "improve the environment and prevent further irreparable damage" and the purpose of an EIS is to alert agencies to potential environmental damage. Therefore, an EIS is unnecessary when agency action does not alter the "natural, untouched physical environment."