FOR PUBLICATION
`
`UNITED STATES COURT OF APPEALS
`FOR THE NINTH CIRCUIT
`
`CENTER FOR BIOLOGICAL
`DIVERSITY,
`
`
`
` v.
`
`
`UNITED STATES FISH AND
`WILDLIFE SERVICE,
`
`
`
` v.
`
`
`ROSEMONT COPPER COMPANY,
`
`
`
`
`
`
` No. 20-15654
`
`D.C. Nos.
`4:17-cv-00475-
`JAS
`4:17-cv-00576-
`JAS
`4:18-cv-00189-
`JAS
`
`OPINION
`
`Plaintiff-Appellee,
`
` Defendant-Appellee,
`
`
`
`
`Intervenor-Defendant-
`Appellant.
`
`Appeal from the United States District Court
`for the District of Arizona
`James Alan Soto, District Judge, Presiding
`
`Argued and Submitted September 23, 2022
`Pasadena, California
`
`Filed May 17, 2023
`
`
`
`
`

`

`2
`
`CTR. FOR BIOLOGICAL DIVERSITY V. USFWS
`
`
`
`
`
`
`
`
`Before: Sandra S. Ikuta, Danielle J. Forrest, and Holly A.
`Thomas, Circuit Judges.
`
`Opinion by Judge Forrest;
`Partial Concurrence and Partial Dissent by
`Judge H.A. Thomas
`
`SUMMARY*
`
`Environmental Law
`
`In a case in which intervenor Rosemont Copper
`Company challenges the U.S. Fish and Wildlife Services’s
`(FWS) designation of certain areas in southern Arizona as
`critical habitat for jaguar under the Endangered Species Act
`(ESA), the panel affirmed the district court’s vacatur of the
`FWS’s designation of the challenged area as occupied
`critical habitat; reversed the district court’s grant of
`summary judgment in favor of the FWS regarding its
`designation of that same area and of Subunit 4b as
`unoccupied critical habitat; vacated the grant of summary
`judgment in favor of the Center for Biological Diversity
`(Center); and remanded with directions that the case be
`returned to the agency for further proceedings.
`This litigation was initiated by the Center after the FWS
`concluded that Rosemont’s proposed mine project would not
`destroy or adversely modify
`the designated critical
`habitat. Rosemont intervened and filed crossclaims against
`
`* This summary constitutes no part of the opinion of the court. It has
`been prepared by court staff for the convenience of the reader.
`
`

`

`
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`CTR. FOR BIOLOGICAL DIVERSITY V. USFWS
`
`3
`
`the FWS, arguing that certain of its critical-habitat
`designations for the jaguar violated the Administrative
`Procedures Act (APA) and the ESA. This case concerns
`only Unit 3, which covers 351,501 acres and spans several
`counties and mountain ranges, including the Santa Rita
`Mountains; and Subunit 4b, which covers 12,710 acres and
`is a corridor connecting the Whetstone Mountains and the
`Santa Rita Mountains.
`The FWS argued that the district court erred in rejecting
`the FWS’s designation of Unit 3 as occupied critical habitat,
`and Rosewood argued that the district court erred in
`upholding the FWS’s designation of Unit 3 and Subunit 4b
`as unoccupied critical habitat because the standard the FWS
`used was something less demanding than essential for the
`conservation of species. First, the panel held that the only
`plausible construction of “essential” in the ESA’s definition
`of “critical habitat” is area that is indispensable or necessary
`to
`conservation, not merely beneficial
`to
`such
`efforts. Second, the panel considered whether the FWS’s
`critical habitat designations of Unit 3 and Subunit 4b were
`proper. Because the FWS designated the northern Santa Rita
`Mountains as occupied critical habitat based on irrelevant
`photographs from decades after the jaguar was listed as
`endangered and a single timely sighting from a different
`mountain range, the panel affirmed the district court’s
`conclusion that the FWS’s challenged occupied critical-
`habitat designation was arbitrary and capricious.
`Next, the panel addressed Rosemont’s argument that the
`FWS failed to follow its regulation governing unoccupied
`critical-habitat designations. This court discussed the
`operative version of 50 C.F.R. § 424.12(e) in Bear Valley
`Mut. Water Co. v. Jewell, 790 F.3d 977 (9th Cir. 2015). The
`FWS and the Center argued that Bear Valley foreclosed
`
`
`
`

`

`4
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`CTR. FOR BIOLOGICAL DIVERSITY V. USFWS
`
`Rosemont’s argument that the FWS erred by not sequentially
`considering both adequacy and essentiality. The panel held
`that imposing a sequential analysis to determine whether
`designation of unoccupied critical habitat is proper does not
`violate Bear Valley, which acknowledged both
`the
`inadequacy-of-occupied-habitat
`and
`essentiality-of-
`unoccupied-habitat requirements and upheld the FWS’s
`challenged designation where these requirements were both
`met. Because the panel concluded that Bear Valley did not
`displace the agency’s interpretation of Section 424.12(e), the
`panel considered whether the FWS’s designation of Unit 3
`and Subunit 4b as unoccupied critical habitat complied with
`Section 424.12, as interpreted by the agency.
`The panel held that because the FSW did not comply
`with Section 424.12(e) by addressing whether designated
`occupied critical habitat was adequate
`to address
`conservation goals, its designation of Unit 3 and Subunit 4b
`as unoccupied critical habitat was arbitrary and
`capricious. The panel rejected the dissent’s position that the
`FWS could properly consider the adequacy of areas
`occupied at the time of designation not just the time of listing
`in deciding whether designation of unoccupied areas was
`essential. The panel agreed with the Tenth Circuit that the
`governing version of Section 424.12 required the FWS to
`consider a species range at the time of listing because any
`other reasoning would be inconsistent with the ESA. The
`panel held further that even if the FWS should consider
`whether areas occupied at the time of designation, rather
`than listing, were inadequate to conserve the species, the
`FWS’s analysis still fell short because it did not explain why
`the areas that it found were occupied when it made its
`unoccupied critical habitat designations were inadequate to
`conserve the jaguar. The panel concluded that the FWS did
`
`

`

`
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`CTR. FOR BIOLOGICAL DIVERSITY V. USFWS
`
`5
`
`not provide a rational connection between the facts found
`and the choice made, or articulate a satisfactory explanation
`to justify its designations of Unit 3 and Subunit 4b as
`unoccupied critical habitat.
`Finally, Rosemont challenged the district court’s refusal
`to remand for reconsideration of the FWS’s economic-
`impact analysis. The panel held that Rosemont had not
`waived this issue. Rosemont’s argument that the FWS
`needed to revisit its economic-impact analysis became
`relevant only after the district court concluded that the FWS
`used the wrong standard in determining that Rosemont’s
`Mine would not adversely affect the designated critical
`habitat and remanded for the FWS to reconsider that
`issue. Thus, it was not improper for Rosemont to raise the
`argument for the first time on appeal. The panel held,
`however, that directing the FWS to reconsider its economic-
`impact analysis was premature at this point.
`The panel concluded that it need not reach whether the
`FWS violated the APA in concluding that Rosemont’s Mine
`would not adversely modify the Unit 3 and Subunit 4b
`critical-habitat designations, which the Center argued in its
`motion for summary judgment.
`Concurring in part and dissenting in part, Judge H.A.
`Thomas agreed with the majority that the district court
`correctly vacated the FWS’s designation of Unit 3 as
`occupied critical habitat. She also agreed it would be
`premature
`to vacate
`the FWS’s economic-impact
`analysis. She dissented from the majority’s holding that the
`district court erred in upholding the FWS’s designation of
`Unit 3 and Subunit 4b as unoccupied critical habitat. She
`would hold that, when considered as a whole, the record
`amply supported the FWS’s determination that habitat
`
`
`
`

`

`6
`
`CTR. FOR BIOLOGICAL DIVERSITY V. USFWS
`
`within the United States—and the designated units in
`particular—were critical to the conservation of the jaguar as
`it faces threats elsewhere in its range.
`
`
`COUNSEL
`
`Julian W. Poon (argued), Theodore J. Boutrous Jr., Bradley
`J. Hamburger, Zachary Freund, and Virginia L. Smith,
`Gibson Dunn & Crutcher LLP, Los Angeles, California;
`Norman D. James and Bradley J. Pew, Fennemore Craig
`P.C., Phoenix, Arizona; George O. Krauja, Fennemore Craig
`P.C., Tucson, Arizona; Lauren M. Kole, Gibson Dunn &
`Crutcher LLP, Denver, Colorado; Michael J. Rusing, Rusing
`Lopez & Lizardi PLLC, Tucson, Arizona; for Intervenor-
`Defendant-Appellant.
`
`Allison N. Henderson (argued), Center for Biological
`Diversity, Crested Butte, Colorado; Marc D. Fink, Center for
`Biological Diversity, Duluth, Minnesota; Brendan R.
`Cummings, Center for Biological Diversity, Oakland,
`California; Roger Flynn, Western Mining Action Project,
`Lyons, Colorado; for Plaintiff-Appellee.
`
`Andrew M. Bernie (argued), Andrew C. Mergen, Sommer
`H. Engels, and Amelia G. Yowell, Attorneys; Todd Kim,
`Assistant Attorney General; Environment and Natural
`Resources Division, United States Department of Justice;
`Washington, D.C.; Simi Bhat, Attorney; Natural Resources
`Defense Council; San Francisco, California; Andrew A.
`Smith, Attorney; United States Attorney’s Office;
`Albuquerque, New Mexico; for Defendant-Appellee.
`
`
`
`
`

`

`
`
`CTR. FOR BIOLOGICAL DIVERSITY V. USFWS
`
`7
`
`OPINION
`
`
`FORREST, Circuit Judge:
`
`Rosemont Copper Company (Rosemont) challenges the
`U.S. Fish and Wildlife Service’s (FWS) designation of
`certain areas in southern Arizona as critical habitat for jaguar
`under the Endangered Species Act (ESA). Rosemont seeks
`to develop a copper mine and related processing facilities in
`the area within and adjacent
`to
`the critical-habitat
`designations. This litigation was initiated by the Center for
`Biological Diversity (Center) after the FWS concluded that
`Rosemont’s proposed mine project would not destroy or
`adversely modify the designated critical habitat. The Center
`alleged that the FWS and the United States Forest Service
`violated the Administrative Procedures Act (APA) in
`approving Rosemont’s proposed mining project. Rosemont
`intervened and filed crossclaims against the FWS, arguing
`that certain of its critical-habitat designations for the jaguar
`violated the APA and the ESA. All parties moved for
`summary judgment.
`The district court concluded that the FWS erred in
`designating occupied critical habitat in the northern Santa
`Rita Mountains because the record did not establish that
`jaguar occupied this area when this species was listed as
`endangered in 1972. Ctr. for Biological Diversity v. U.S.
`Fish & Wildlife Serv., 441 F. Supp. 3d 843, 872 (D. Ariz.
`2020). But it upheld the FWS’s designation of this same area
`and an adjacent area as unoccupied critical habitat. Id. at
`872–73. The district court also granted summary judgment
`in favor of the Center on its claim that the FWS violated the
`APA by improperly using a heightened standard in
`determining that Rosemont’s mining project was not likely
`
`
`
`

`

`8
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`CTR. FOR BIOLOGICAL DIVERSITY V. USFWS
`
`to destroy or adversely modify designated critical habitat for
`the jaguar and remanded for the FWS to conduct a proper
`analysis. Id. at 855–57. Rosemont argues that if this case is
`remanded, the FWS should be instructed to reconsider its
`economic-impact analysis that was part of the basis for its
`critical-habitat designation. We conclude that the district
`court correctly vacated the FWS’s occupied critical-habitat
`designation but erred in upholding the FWS’s unoccupied
`critical-habitat designations. Therefore, we reverse the grant
`of summary judgment in favor of the FWS, vacate the grant
`of summary judgment in favor of the Center, remand with
`instructions for the district court to vacate the FWS’s
`critical-habitat designations, and remand to the agency for
`further proceedings consistent with this opinion.
`I. BACKGROUND
`A. The Endangered Species Act
`The ESA is “the most comprehensive legislation for the
`preservation of endangered species ever enacted by any
`nation.” Tennessee Valley Auth. v. Hill, 437 U.S. 153, 180
`(1978). It directs the Secretary of the Interior to “determine
`whether any species is an endangered species or a threatened
`species.”1 16 U.S.C. § 1533(a)(1). The Secretary publishes
`in the Federal Register “a list of all species determined . . .
`to be endangered species and a list of all species determined
`
`1 A “species” includes “any subspecies of fish or wildlife or plants, and
`any distinct population segment of any species of vertebrate fish or
`wildlife which interbreeds when mature.” 16 U.S.C. § 1532(16). An
`“endangered species” is “any species which is in danger of extinction
`throughout all or a significant portion of its range,” and a “threatened
`species” is “any species which is likely to become an endangered species
`within the foreseeable future throughout all or a significant portion of its
`range.” Id. § 1532(6), (20).
`
`

`

`
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`CTR. FOR BIOLOGICAL DIVERSITY V. USFWS
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`9
`
`. . . to be threatened species.” Id. § 1533(c)(1). Upon listing
`a species as endangered or threatened, the Secretary is
`required to “concurrently . . . designate any habitat of such
`species which is then considered to be critical habitat.” Id.
`§ 1533(a)(3)(A)(i). Critical habitat designations must be
`based on the conditions that existed at the time of listing, id.
`§ 1532(5)(A), and “the best scientific data available and after
`taking into consideration the economic impact, . . . national
`security, and any other relevant impact, of specifying any
`particular area as critical habitat.” Id. § 1533(b)(2).
`B. The Jaguar
`The jaguar (Panthera onca) is a large felid found in
`South America, Central America, Mexico, and
`the
`southwestern United States. The jaguar’s total range spans
`over 3 million square miles. The portion of this range in the
`United States is less than one percent. Although “[t]he
`probability of long-term survival of the jaguar is considered
`high in 70 percent of the currently occupied range,” the
`population is decreasing because of many biological
`challenges,
`including
`the
`jaguar’s
`“large
`spatial
`requirements.”
`More than 30,000 jaguars likely still live in the wild.
`About 600 of those are found in northwestern Mexico. No
`breeding pair of jaguars has been documented in the relevant
`area of the United States. There are only three undisputed
`records of female jaguars with cubs in the United States––
`the most recent being in 1910.2 There is a single record of a
`
`2 The FWS followed a classification protocol for reports of jaguar present
`in the United States based on the degree of certainty or validity of the
`report. For example, a “Class I record” is substantiated by physical
`
`
`
`
`

`

`10
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`CTR. FOR BIOLOGICAL DIVERSITY V. USFWS
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`female jaguar in the United States in 1963, but it is disputed.
`There have been no confirmed sightings of female jaguar in
`the United States since 1963. The FWS identified undisputed
`Class I records of eight or nine unique jaguars (all males)
`within the United States between 1962 and 2013. One of
`these included a jaguar that was shot in southern Arizona in
`1965. “Jaguars in the United States are understood to be
`individuals dispersing north from Mexico . . . where the
`closest breeding population occurs about 210 km (130 mi)
`south of the U.S.-Mexico border.”
`The FWS first listed the jaguar as endangered in 1972.
`The average lifespan of a jaguar is approximately ten years.
`“[T]he jaguar was included only on the foreign species list”
`because the jaguar was believed to be extinct in the United
`States.3 90-Day Finding on a Petition to Revise Critical
`Habitat for the Jaguar, 86 Fed. Reg. 49985-01, 49986 (Sept.
`7, 2021). The FWS issued a proposed rule in 1980 to list the
`jaguar as a domestic endangered species, but the proposed
`rule was withdrawn in 1982. The FWS did not list the jaguar
`as an endangered species in the United States until 1997.
`Despite the later designation of the jaguar as a domestic
`
`
`evidence (e.g., a skin, skull, or photograph) and considered “‘verified’ or
`‘highly probable.’” A Class II record has “detailed information of the
`observation,” but no physical evidence and is considered “‘probable’ or
`‘possible.’” Disputed records include those where “the validity of the[]
`location[] is questionable because of the suspicion that the[] [observed]
`animals were released for ‘canned hunts.’”
`3 The categorization of the jaguar as an endangered species on the foreign
`species list was in accordance with the Endangered Species Conservation
`Act of 1969 (ESCA), a precursor to the Endangered Species Act of 1973,
`which maintained separate listings for foreign species and species native
`to the United States. See 90-Day Finding on a Petition to Revise Critical
`Habitat for the Jaguar, 86 Fed. Reg. 49985-01, 49986 (Sept. 7, 2021).
`
`

`

`
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`CTR. FOR BIOLOGICAL DIVERSITY V. USFWS
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`11
`
`endangered species, the FWS treats its 1972 listing as the
`jaguar’s listing date within the United States because “it was
`always [FWS’s] intent . . . to consider the jaguar endangered
`throughout its entire range when it was listed as endangered
`in 1972.”4
`The FWS did not designate critical habitat for the jaguar
`when it listed the jaguar as a domestic endangered species in
`1997. The FWS concluded that a critical habitat designation
`in the United States was “not prudent” because “the primary
`threat to [jaguars] in the United States is direct taking rather
`than habitat destruction,” and the “[p]ublication of detailed
`critical habitat maps and descriptions in the Federal Register
`would” be counterproductive.
`In 2006,
`the FWS
`reconsidered its decision not to designate critical habitat and
`again decided against making such a designation.
`The FWS changed course on designating critical habitat
`for the jaguar in 2009. That year, the FWS’s 2006
`determination not to designate critical habitat for the jaguar
`was vacated by a federal court. See Ctr. for Biological
`Diversity v. Kempthorne, 607 F. Supp. 2d 1078, 1094 (D.
`Ariz. 2009). On remand in that litigation, the FWS
`concluded that “the designation of critical habitat for the
`jaguar would be beneficial” to conservation of the species.
`Based on this changed position, the FWS “convened a
`binational Jaguar Recovery Team in 2010.” The team was
`tasked with “synthesiz[ing] information on the jaguar,
`focusing on [a]n area comprising jaguars in the northernmost
`portion of their range.”
`In April 2012, the Jaguar Recovery Team issued a
`“Recovery Outline for the Jaguar.” The Recovery Outline
`
`4 Rosemont does not dispute 1972 as the time of listing.
`
`
`
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`12
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`CTR. FOR BIOLOGICAL DIVERSITY V. USFWS
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`divided the jaguar’s range into two “recovery units”: the
`Northwestern Recovery Unit (NRU) and the Pan American
`Recovery Unit. Each unit has “core areas” with “persistent
`verified records of jaguar occurrence over time and recent
`evidence of reproduction.” They also have “secondary
`areas” that “contain jaguar habitat with historical and/or
`recent records of jaguar presence [but] with no recent record
`or very few records of reproduction.” Secondary areas “are
`of particular interest when they occur between core areas and
`can be used as transit areas through which dispersing
`individuals can move, reach adjacent core areas, and
`potentially breed.”
`The Recovery Outline focused on the NRU, which
`contains two core areas and secondary areas.
` The
`northernmost section of the NRU—a secondary area that
`extends into Arizona and New Mexico—is the area at issue
`in this case. This section of the NRU does not connect two
`core areas. The area that extends into the United States
`contains approximately 12,386 square miles, which is
`roughly 0.36% of the jaguar’s current range. A map of the
`NRU is included as Appendix 1.
`The Recovery Outline stated that “jaguars in the U.S. are
`thought to be part of a population, or populations, that occur
`largely in Mexico.” And based on the evidence available,
`“any conclusions about the conservation importance of the
`habitat types in which jaguars have occurred or might occur
`in Arizona and New Mexico are preliminary and can vary
`widely.” However, “the region to the south of Arizona and
`New Mexico is especially critical for the recovery of the
`jaguar in the southwestern U.S. because the source
`population is likely in central Sonora[, Mexico].”
`
`

`

`
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`CTR. FOR BIOLOGICAL DIVERSITY V. USFWS
`
`13
`
`Relying on the Recovery Outline, the FWS published a
`proposed rule in 2012 designating approximately 838,000
`acres in southern Arizona and New Mexico as critical habitat
`for the jaguar. The FWS revised its initial proposal and
`sought additional public comment in 2013. The Arizona
`Game and Fish Department (Arizona) objected to critical
`habitat being designated for the jaguar within that state.
`Specifically, Arizona argued that “designating critical
`habitat for the less than 1% of historic jaguar range which
`occurs in the U.S. would jeopardize the credibility and long-
`term viability of the ESA,” and that “recovery of jaguar is
`entirely reliant on conservation action in the 99+% of its
`habitat found south of the international border.” Rosemont
`also submitted comments that the area within its proposed
`mining project should be excluded from the FWS’s critical-
`habitat designations.
`The FWS published its Final Rule on March 5, 2014
`(Final Rule). See Endangered and Threatened Wildlife and
`Plants; Designation of Critical Habitat for Jaguar, 79 Fed.
`12572, 12573 (Mar. 5, 2014). The Final Rule designated
`764,207 acres in southern Arizona and southwestern New
`Mexico as critical habitat. Id. at 12572. The designated area
`includes six units, four located in Arizona (Units 1–4), one
`that straddles the Arizona/New Mexico border (Unit 5), and
`one located in New Mexico (Unit 6).5 Id. The FWS also
`designated several subunits within those units. Id. at 12591.
`This case concerns only Unit 3 and Subunit 4b. Unit 3 covers
`351,501 acres and spans several counties and mountain
`ranges, including the Santa Rita Mountains. Id. at 12572.
`
`5 The Tenth Circuit addressed challenges to the FWS’s designation of
`Units 5 and 6 as critical habitat in New Mexico Farm & Livestock Bureau
`v. United States Department of Interior, 952 F.3d 1216 (10th Cir. 2020).
`
`
`
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`

`14
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`CTR. FOR BIOLOGICAL DIVERSITY V. USFWS
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`Subunit 4b covers 12,710 acres and is a corridor connecting
`the Whetstone Mountains and the Santa Rita Mountains. Id.
`at 12593. A map of Units 1 through 4 is included as
`Appendix 2.
`The FWS explained that in determining the occupancy
`of the jaguar at the time of listing, it was considering
`evidence from 1962 through 1982 (10 years before and after
`the listing date) because the “consensus” is that the average
`lifespan of a jaguar is 10 years. Id. at 12581. The FWS
`considered areas in which jaguars had been reported from
`1982 to the present to be occupied given “it is likely those
`areas were occupied at the time of the original listing, but
`jaguars had not been detected because of their rarity, the
`difficulty in detecting them, and a lack of surveys for the
`species.” Id. The FWS then determined that Unit 3 was
`“occupied” by jaguar in 1972 and designated this area
`occupied critical habitat. Id. at 12593. The FWS based this
`determination on an undisputed Class I record of a jaguar in
`1965, photos of a male jaguar in the Santa Rita Mountains in
`2012 and 2013, and its finding that the mountain ranges
`within Unit 3 contained all the “primary constituent
`elements” (PCEs) for jaguars. Id. PCEs are “those specific
`elements of the physical or biological features that provide
`for a species’ life history processes and are essential to the
`conservation of the species.” Id. at 12587. Acknowledging
`uncertainty in its conclusion that Unit 3 was “occupied” at
`listing, the FWS also analyzed whether Unit 3 was properly
`designated as “unoccupied” critical habitat. Id. at 12607–08.
`The FWS found that it was because there was evidence of
`recent occupancy in Unit 3, the area contained features that
`constitute jaguar habitat, and the area contributed to the
`jaguar’s persistence. Id.
`
`

`

`
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`CTR. FOR BIOLOGICAL DIVERSITY V. USFWS
`
`15
`
`The FWS designated Subunit 4b only as unoccupied
`critical habitat. Id. at 12593–94. The FWS concluded that
`this area was essential to the conservation of the species
`because it connected the Whetstone and Santa Rita Mountain
`ranges and “represent[ed] areas through which a jaguar may
`travel between Subunit 4a and Mexico.” Id. at 12611.
`C. Rosemont’s Mining Project
`Rosemont’s proposed copper mine and related mineral-
`processing facilities (Mine) are located in the northern Santa
`Rita Mountains in Pima County, Arizona. Applying for the
`necessary federal authorizations and permits for its Mine,
`Rosemont consulted
`twice with federal agencies on
`endangered-species issues and requirements under the ESA.
`During both consultations, the FWS considered whether
`Rosemont’s Mine was likely to destroy or adversely modify
`the jaguar’s critical habitat that the FWS had designated. The
`FWS issued a biological opinion after each consultation
`(2013 and 2016 Biological Opinion) and concluded both
`times that the Mine was “not likely [to] destroy or adversely
`modify” critical habitat for the jaguar. Accordingly, the FWS
`declined to exclude Rosemont’s project area from its critical-
`habitat designation because “the construction and operation
`of the Rosemont Mine would not . . . adversely modify
`designated critical habitat” and the resulting economic costs
`from the designation, if any, would be limited.
`D. Procedural Background
`In September 2017, the Center sued the FWS, alleging
`that it violated the APA in issuing its 2016 Biological
`Opinion and approving Rosemont’s Mine. Rosemont
`intervened as a defendant and crossclaimed, arguing that the
`FWS violated the ESA and the APA by designating Unit 3
`
`
`
`

`

`16
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`CTR. FOR BIOLOGICAL DIVERSITY V. USFWS
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`and Subunit 4b as critical habitat for the jaguar. The parties
`cross-moved for summary judgment.
`The district court granted the FWS’s and the Center’s
`motions for summary judgment and denied Rosemont’s
`motion. Ctr. for Biological Diversity, 441 F. Supp. 3d at
`871–75. The district court agreed with Rosemont that the
`FWS erred in determining that Unit 3 was occupied by the
`jaguar when it was listed, but it held that the FWS properly
`designated Unit 3 and Subunit 4b as unoccupied critical
`habitat. Id. at 872–74. The district court also granted
`summary judgment to the Center on its claim that the FWS’s
`2016 Biological Opinion improperly used a heightened
`standard in determining that Rosemont’s Mine was not likely
`to destroy or adversely modify critical habitat for the jaguar.
`Id. at 855–57.
`timely appealed. Thereafter, Rosemont
`Rosemont
`petitioned the FWS to revise its critical-habitat designations
`to exclude the area where the Mine is located in the northern
`Santa Rita Mountains.6 We stayed Rosemont’s appeal
`pending the FWS’s ruling on Rosemont’s petition. In
`September 2021, the FWS denied Rosemont’s petition,
`finding that it “does not present substantial scientific or
`commercial information indicating that [the northern portion
`of Unit 3 and Subunit 4b] are not essential for the
`conservation of the species.” 90-Day Finding on a Petition
`
`
`6 Rosemont’s motion requesting that we take judicial notice of its
`Petition to Revise the Critical Habitat for the Jaguar Species, filed with
`the FWS on November 11, 2020, is granted. See Anderson v. Holder, 673
`F.3d 1089, 1094 n.1 (9th Cir. 2012) (noting that “[w]e may take judicial
`notice of records and reports of administrative bodies.” (internal
`quotation marks and citation omitted)).
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`to Revise Critical Habitat for the Jaguar, 86 Fed. Reg. at
`49988.
`
`II. DISCUSSION
`We review the district court’s summary judgment rulings
`de novo to determine whether the FWS’s challenged actions
`were “arbitrary, capricious, an abuse of discretion, or
`otherwise not in accordance with law.” 5 U.S.C. §
`706(2)(A); Ariz. Cattle Growers’ Ass’n v. Salazar, 606 F.3d
`1160, 1163 (9th Cir. 2010). Agency action is arbitrary and
`capricious when the agency “relie[s] on factors which
`Congress has not intended it to consider, entirely fail[s] to
`consider an important aspect of the problem, [or] offer[s] an
`explanation for its decision that runs counter to the evidence
`before the agency.” Motor Vehicle Mfrs. Ass’n v. State Farm
`Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983); see also
`Michigan v. EPA, 576 U.S. 743, 750 (2015) (“Not only must
`an agency’s decreed result be within the scope of its lawful
`authority, but the process by which it reaches that result must
`be logical and rational.” (quoting Allentown Mack Sales &
`Serv., Inc. v. NLRB, 522 U.S. 359, 374 (1998))).
`The first issue for decision is whether the FWS’s
`designations of Unit 3 and Subunit 4b as critical habitat were
`proper. Because we conclude that they were not, we do not
`reach whether
`the FWS correctly determined
`that
`Rosemont’s Mine would not adversely affect
`those
`designated critical habitats, the subject of the Center’s
`motion for summary judgment. We also reject Rosemont’s
`argument that the district court erred by not requiring the
`FWS on remand to reconsider its economic-impact analysis
`related to its critical-habitat designations because that issue
`is premature.
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`A. Critical Habitat Designations
`As previously stated, when a species is listed as
`endangered or threatened, the Secretary of the Interior must
`“concurrently . . . designate any habitat of such species
`which is then considered to be critical habitat.” 16 U.S.C. §
`1533(a)(3)(A)(i). Habitat may be designated as critical if it
`is “essential” to the “conservation of the species.” Id.
`§ 1532(5)(A). The ESA identifies two types of critical
`habitat: occupied and unoccupied. Id. An area may be
`designated as “occupied” critical habitat if the species is
`present in the area when the species is listed, and the area
`has the “physical or biological features (I) essential to the
`conservation of the species and (II) which may require
`special management considerations or protection.” Id.
`§ 1532(5)(A)(i). The species need not be physically present
`permanently for an area to be designated as occupied; the
`area simply must “contain” the species. Ariz. Cattle
`Growers’ Ass’n, 606 F.3d at 1165. Stated another way, an
`area is occupied if the species “uses [it] with sufficient
`regularity that [the species] is likely to be present during any
`reasonable span of time.” Id. Unoccupied areas, or areas
`where the species is not present at listing, can be designated
`as critical habitat only if the Secretary determines “that such
`areas are essential for the conservation of the species.” 16
`U.S.C. § 1532(5)(A)(ii).
`While the ESA requires that both occupied and
`unoccupied areas be “essential” to conservation before they
`can be designated as critical habitat, id. § 1532(5)(A)(i)–(ii),
`the standard for designating unoccupied critical habitat is
`“more demanding” than the standard for designating
`occupied critical habitat. Home Builders Ass’n of N. Cal. v.
`U.S. Fish & Wildlife Serv., 616 F.3d 983, 990 (9th Cir.
`2010). When the FWS made the designations challenged in
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`this case, its governing regulations instructed that “[t]he
`Secretary shall designate as critical habitat areas outside the
`geographical area presently occupied by a species only when
`a designation limited to its present range would be
`inadequate to ensure the conservation of the species.” 50
`C.F.R. § 424.12(e) (2012) (emphasis added).7
`The FWS argues that the district court erred in rejecting
`the FWS’s designation of Unit 3 as occupied critical habitat.
`Rosemont argues that the district court erred in upholding
`the FWS’s designation of Unit 3 and Subunit 4b as
`unoccupied critical habitat because the standard the FWS
`used was something less demanding than “essential for the
`conservation of the species.”
`1. Definitions
`Congress did not define “essential” as used in the ESA’s
`“critical habitat” definition. Therefore, we begin by
`identifying its “ordinary or natural meaning.” HollyFrontier
`Cheyenne Ref., LLC v. Renewable Fuels Ass’n, 141 S. Ct.
`2172, 2176 (2021) (citation omitted). There is significant
`agreement about the ordinary meaning of “essential”: it
`refers to something that is indispensable or necessary. See
`Ameri