## Facts

- The U.S. Fish and Wildlife Service (FWS) listed the San Diego fairy shrimp as endangered in 1997.
- Otay Mesa Property, L.P., Rancho Vista Del Mar, and Otay International, LLC owned land in San Diego County near the U.S.–Mexico border.
- In 2007, FWS designated 143 acres of the owners’ land as critical habitat for the shrimp.
- The designation relied primarily on a single February 7, 2001 observation of four adult shrimp in a tire rut on a dirt road on the property.
- Multiple additional surveys in 2001, conducted during the period when shrimp are detectable, found no shrimp on the property.
- FWS nonetheless concluded the land was “occupied” by the shrimp at the time of the 1997 listing, reasoning in part that shrimp can persist through dormant eggs in soil.
- The landowners challenged the designation under the Endangered Species Act (ESA) and the Administrative Procedure Act (APA); the district court granted summary judgment to FWS, noting the evidentiary record was thin.

## Issues

1. Whether substantial evidence supported FWS’s determination that the 143 acres were “occupied” by the San Diego fairy shrimp at the time of the 1997 listing, permitting designation as critical habitat under ESA § 3(5)(A)(i).
2. Whether FWS’s reliance on speculative inferences about dormant eggs satisfied the APA’s evidentiary requirements.
3. Whether a court may uphold the designation on an alternative “unoccupied but essential” theory not adequately invoked or explained by the agency.

## Decision

- The D.C. Circuit reversed the grant of summary judgment for FWS and remanded with instructions to vacate the 143-acre critical-habitat designation and return the matter to the agency.
- The court held the administrative record lacked substantial evidence that the property was occupied in 1997.
- The court declined to sustain the designation on an “unoccupied but essential” rationale because FWS had not adequately relied on or justified that statutory basis.
- The ruling affected only the 143-acre designation at issue, not the remainder of the broader critical-habitat rule.

## Legal Principles

- Under the APA, an agency’s factual determinations supporting an ESA critical-habitat designation must be supported by substantial evidence in the administrative record.
- A single post-listing observation, without additional record support tying it to occupancy at the listing date, may be insufficient to establish “occupied” habitat at the time of listing.
- The ESA’s “best scientific data available” requirement does not excuse the absence of evidentiary support; it does not permit findings resting on speculation rather than record evidence.
- Courts may not affirm agency action based on post hoc rationalizations or statutory theories the agency did not adequately articulate and support in its decisionmaking record.
- The ESA distinguishes between “occupied” critical habitat (within the occupied area at listing) and “unoccupied but essential” critical habitat; the agency must clearly identify and justify the prong it invokes.

## Conclusion

The court set aside the 143-acre critical-habitat designation because FWS failed to produce substantial record evidence that the land was occupied by the San Diego fairy shrimp at the 1997 listing and could not salvage the designation through an unarticulated “unoccupied but essential” theory.


Otay Mesa Prop., L.P. v. U.S. Dep’t of the Interior, 646 F.3d 914 (D.C. Cir. 2011)