Within a week, both the Fifth and D.C. Circuits upheld the takings prohibitions of the Endangered Species Act (ESA) of 1973, as applied to species found only in single states, against Commerce Clause challenges. Both cases reach the same result, but the legal analysis used to get there could hardly be more different. In GDF Realty, the Fifth Circuit found the requisite "substantial impact" on commerce by treating the species themselves as commodities and aggregating the economic impact of all endangered species "takings". The D.C. Circuit, by contrast, held in Rancho Viejo that the true object of ESA regulation is not endangered species, but the commercial development that threatens them, which plainly falls within Congress's powers to regulate under the Commerce Clause. The two courts saved the threatened arroyo toads and subterranean invertebrates, but they read the Endangered Species Act as if it were two different statutes.
This curious divergence can only be understood in light of the unsettled state of Commerce Clause jurisprudence following United States v. Lopez and United States v. Morrison. Those two decisions upended fifty years of conventional wisdom about the limits on Congress's power under the Commerce Clause – namely, that there were effectively none – and left lower courts with an uncertain new framework to apply. Of the two cases considered here, Rancho Viejo represents the abler attempt to square the ESA with the new Commerce Clause doctrine, because its analysis is more objective than GDF Realty's and more clearly satisfies the strictures of Lopez and Morrison. But like GDF Realty, Rancho Viejo must present the ESA's impact on commerce, which is peripheral in the statutory design, as the Act's core object – must turn the ESA "inside out," so to speak – in order to justify it under the Commerce Clause. This cramped conception of the statute does not convincingly justify all of its applications. The shortcomings of Rancho Viejo do not represent sloppiness on the part of the D.C. Circuit, however. Instead, they reflect the failure of the Lopez and Morrison framework to meet the Supreme Court's stated aspiration to distinguish "between what is truly national and what is truly local".
Jud Mathews, Turning the Endangered Species Act inside Out, 113 Yale L.J. 947 (2004).