## Facts

- Environmental and animal-protection organizations challenged federal regulations implementing the Endangered Species Act (ESA) incidental take permit (ITP) and habitat conservation plan (HCP) program.
- The challenged framework included the 1998 “No Surprises” rule, which gave ITP holders assurances that agencies would not require additional mitigation beyond the approved HCP to address unforeseen circumstances, subject to specified limits.
- During the litigation, the Fish and Wildlife Service promulgated a 1999 “Permit Revocation Rule” (PRR) defining when an ITP could be revoked in light of the No Surprises assurances.
- The PRR substantially narrowed revocation authority compared to the prior regulation, limiting revocation largely to circumstances threatening the “survival and recovery of the entire species,” and only after other measures were inadequate.
- Plaintiffs amended their complaint to allege the PRR was unlawfully issued without APA notice-and-comment and conflicted with ESA conservation duties.
- The parties filed cross-motions for summary judgment.

## Issues

1. Whether the PRR was a substantive (legislative) rule requiring notice-and-comment rulemaking under APA § 553, or an interpretive/clarifying rule exempt from those procedures.
2. Whether the procedural defect in the PRR required vacatur and remand, and whether the No Surprises rule had to be remanded as well because it operated in tandem with the PRR.
3. What remedies were appropriate under APA § 706, including vacatur, remand, interim injunctive relief, and a deadline for agency action.

## Decision

- The court held the PRR was a substantive rule that required notice-and-comment procedures under APA § 553.
- The court found the agency did not provide an adequate opportunity for public comment before issuing the PRR; the PRR was therefore procedurally invalid.
- The court vacated the PRR and remanded it to the agencies.
- Because the PRR and the No Surprises rule functioned as an integrated scheme, the court remanded the No Surprises rule as well for agency reconsideration together with the PRR.
- The court enjoined application of the No Surprises rule during the remand period.
- The court ordered the agencies to complete remand proceedings within one year.
- On the cross-motions, plaintiffs prevailed in part and defendants prevailed in part.

## Legal Principles

- A rule that substantively changes existing regulatory standards or curtails agency discretion has the force of law and is a legislative rule requiring notice-and-comment under APA § 553, regardless of the agency’s “clarification” label.
- Restricting an agency’s enforcement or revocation authority can constitute a substantive change because it alters legal consequences for regulated parties and limits the agency’s ability to respond to changed conditions.
- When regulations operate as a single policy scheme, a court may treat them as inseverable for remedial purposes and remand both if one is procedurally defective.
- Under APA § 706, procedurally invalid rules are typically vacated and remanded; courts may also issue interim relief to prevent continued application of an invalid regulatory regime while the agency conducts further proceedings.

## Conclusion

The court ruled that the ESA permit revocation regulation materially narrowed agency authority and therefore was a legislative rule adopted in violation of APA notice-and-comment requirements; it vacated and remanded that rule and, because the revocation and No Surprises regulations worked together, remanded the No Surprises regulation as well while temporarily barring its application and requiring agency reconsideration within one year.


Spirit of the Sage Council v. Norton, 294 F. Supp. 2d 67 (D.D.C. 2003)