An area is eligible for designation as critical habitat under § 1533(a)(3)(A)(i) only if it is habitat for the species. That provision, the sole source of authority for critical-habit designations, states that when the Secretary lists a species as endangered he must also “designate any habitat of such species which is then considered to be critical habitat.” It does not authorize the Secretary to designate the area as critical habitat unless it is also habitat for the species. The definition allows the Secretary to identify a subset of habitat that is critical, but leaves the larger category of habitat undefined. The Service does not now dispute that critical habitat must be habitat, but argues that habitat can include areas that, like Unit 1, would require some degree of modification to support a sustainable population of a given species. Weyerhaeuser urges that habitat cannot include areas where the species could not currently survive. The Service, in turn, disputes the premise that the administrative record shows that the frog could not survive in Unit 1. The Court of Appeals, which had no occasion to interpret the term “habitat” in § 1533(a)(3)(A)(i) or to assess the Service’s administrative findings regarding Unit 1, should address these questions in the first instance.

2. The Secretary’s decision not to exclude an area from critical habitat under § 1533(b)(2) is subject to judicial review. The Administrative Procedure Act creates a “basic presumption of judicial review” of agency action. Abbott Laboratories v. Gardner, 387 U.S. 136, 140, 87 S.Ct. 1507, 18 L.Ed.2d 681. The Service contends that the presumption is rebutted here because the action is “committed to agency discretion by law,” 5 U.S.C. § 701(a)(2), because § 1533(b)(2) is one of those rare provisions “drawn so that a court would have no meaningful standard against which to judge the agency’s exercise of discretion,” Lincoln v. Vigil, 508 U.S. 182, 191, 113 S.Ct. 2024, 124 L.Ed.2d 101.

*2 Section 1533(b)(2) describes a unified process for weighing the impact of designating an area as critical habitat. The provision’s first sentence requires the Secretary to “tak[e] into consideration” economic and other impacts before designation, and the second sentence authorizes the Secretary to act on his consideration by providing that he “may exclude any area from critical habitat if he determines that the benefits of such exclusion outweigh the benefits of “ designation. The word “may” certainly confers discretion on the Secretary, but it does not segregate his discretionary decision not to exclude from the mandated procedure to consider the economic and other impacts of designation when making his exclusion decisions. The statute is, therefore, not “drawn so that a court would have no meaningful standard against which to judge the [Secretary’s] exercise of [his] discretion” not to exclude. Lincoln, 508 U.S., at 191. Weyerhaeuser’s claim—that the agency did not appropriately consider all the relevant statutory factors meant to guide the agency in the exercise of its discretion—is the sort of claim that federal courts routinely assess when determining whether to set aside an agency decision as an abuse of discretion. The Court of Appeals should consider in the first instance the question whether the Service’s assessment of the costs and benefits of designation and resulting decision not to exclude Unit 1 was arbitrary, capricious, or an abuse of discretion.

Alliance, an unincorporated association, petitioned for a peremptory writ of mandamus directing District to vacate and set aside its approval of the Project and prepare an environmental impact report (EIR) in accordance with the California Environmental Quality Act (CEQA) and its accompanying Guidelines. Following a hearing on the matter, the court granted the petition and entered a judgment in favor of Alliance. District unsuccessfully moved to vacate the judgment on the basis of mootness.

On appeal, District argues it did not need to prepare an EIR because there was no substantial evidence in the administrative record supporting a fair argument that the Project may have a significant effect on the environment; its initial study/negative declaration adequately described the Project and baseline physical conditions; and the superior court erroneously denied its motion to vacate the judgment. We reject these contentions and affirm the judgment. There was substantial evidence in the record supporting a fair argument that the Project may have a significant effect on biological resources and air quality.⁵ In addition, District’s initial study/negative declaration was defective: it did not sufficiently describe the Project as a whole or baseline physical conditions. Finally, the court’s denial of District’s motion to vacate judgment was not improper according to the appellate court.