The dull veneer of this case, however, is deceiving. This is potentially the most important ESA case the Court has heard since TVA v. Hill, 437 U.S. 153 (1978). It squarely raises the question of how far Section 7 consultation duties extend. EPA argued unsuccessfully below that the Clean Water Act required it to delegate authority to Arizona once the state met the requirements specified in that Act for permitting programs, which don't explicitly include protection of threatened and endangered species. According to EPA, although the Endangered Species Act, passed after the CWA delegation provision, required it to consult with FWS on the effects of delegation, it didn't provide the authority to condition delegation on features not specified in the CWA.
This case potentially has ramifications for any number of other situations in which the executive branch under the current administration has unsuccessfully argued that it lacks the authority to protect listed species. That argument has been made, for example, about the operation of water projects and federal dams.
The facts of this case also powerfully illustrate the difficulties inherent in our current, highly fragmented, environmental regulatory system. It wouldn't matter whether the FWS got to review the delegation of permitting authority if Arizona's subsequent permitting decisions were effectively constrained themselves by the ESA. In theory, they are. Both state permitting decisions and the permitted discharges themselves will remain subject to the prohibitions on take of ESA section 9. But section 9 does not require advance study of the impacts of a proposed action on a listed species; risk-taking dischargers are free to go ahead with their projects and put the burden of proving take on opponents.
That, in turn, may well be difficult under the facts of this case. The concern is not that permitted water pollution will itself harm listed species in the state's streams, it is that development, which requires a permit for discharges during the construction process, will destroy the habitat of terrestrial species.
Because this connection is somewhat tenuous, the question of whether section 7 is subject to the same proximate cause analysis the Court imposed on section 9 claims in Babbitt v. Sweet Home Chapter of Communities for a Great Oregon, 515 U.S. 687 (1994), becomes important. If section 7 requires consideration of these sorts of indirect results of federal actions, it may well not matter whether the NPDES delegation decision itself is subject to section 7. The US provides considerable funding for state clean water programs. Those funding decisions are more explicitly discretionary than the delegation decision, and therefore more clearly subject to section 7. Perhaps the US cannot help fund an Arizona program that doesn't account for the indirect effects of permitting decisions on endangered species, even if it can allow Arizona to implement such a program on its own.