Can Congress Regulate Intrastate Endangered Species Under the Commerce Clause

In Spring 2003, both the 5th Circuit and the D.C. Circuit agreed that Congress has the authority under the Commerce Clause to protect intrastate endangered species on private lands under the Endangered Species Act (ESA), but used completely opposite reasoning to reach the same result. The 5th Circuit in GDF Realty v. Norton rejected the government's argument that the economic impact of the commercial development regulated under the statute was the appropriate focus for whether the statute has a substantial effect on interstate commerce. Instead, the 5th Circuit concluded that intrastate spiders and beetles, which have no economic value, do have substantial impacts on interstate commerce when their impacts are aggregated with the impacts of all other protected species, and that aggregation of all endangered species is appropriate because of the "interdependence of all species." However, in Rancho Viejo v. Norton, the D.C. Circuit adopted the reasoning that the 5th Circuit had explicitly rejected, concluding that the "regulated activity is Rancho Viejo's planned commercial development, not the arroyo toad that it threatens." On July 22, 2003, the D.C. Circuit by a 7-to-2 vote denied Viejo's request for a rehearing en banc. In separate dissenting opinions, Judges Sentelle and Roberts each cited GDF in arguing that Viejo was inconsistent with recent Supreme Court Commerce Clause decisions (Lopez & Morrison) by inappropriately focusing on the commercial development rather than on the toad.While Lopez and Morrison do not directly answer whether GDF or Viejo provide a better Commerce Clause analysis, Viejo's commercial activities approach is arguably both over and under-inclusive. It is potentially over-inclusive because the government arguably could regulate any indirect non-economic activities of a large commercial enterprise even if the non-economic activities have nothing to do with interstate commerce. On the other hand, Viejo's commercial activities approach is arguably under-inclusive because the government could regulate large construction projects or businesses, but not hikers, off-road vehicles or perhaps individual homeowners even though in the aggregate they could cause significant harm to many species.GDF's approach of aggregating all endangered species regardless of their commercial value might seem questionable in light of Lopez and Morrison's emphasis that the Commerce Clause is generally limited to regulating activities that have significant economic impacts on interstate commerce. However, there is a rational basis for Congress's assumption in the ESA that it is necessary to preserve all endangered species because there is a strong interdependency among all species and ecosystems that the loss of any endangered species must be avoided to prevent harm to interstate commerce. Thus, the GDF court correctly concluded that protecting commercially insignificant endangered species is an essential component of a larger regulatory scheme that is valid under the Commerce Clause.