Conservation groups say Congress exceeded its authority by intervening in an ongoing court case to remove the wolves from the endangered species list without bothering to amend the underlying law and by presuming to exclude its action from judicial review.
Jay Tutchton, a lawyer for several groups challenging the delisting, said lawmakers sought to take a "politically expedient shortcut" that violates the constitutional separation of powers between the courts and Congress.
But government lawyers said the delisting, tucked into a budget bill signed into law by President Barack Obama in April, effectively amended the Endangered Species Act by making a special exemption for wolf populations in the Rockies.
The gray wolf become the first animal ever taken off the endangered list by an act of Congress rather than through a process of scientific review.
Wolves were once hunted, trapped and poisoned to the edge of extinction, but their recovery in the Northern Rockies has brought them into conflict with ranchers, farmers and sportsmen who see the animal as a growing threat to livestock and big-game animals, such as elk.
Environmentalists say the impact of wolves on cattle herds and wildlife is overstated, and they fear removal of federal safeguards could push the wolf back to the brink of extinction.
The controversy has been especially heated in the Rockies, where gray wolves were reintroduced over the vehement objections of ranchers in the mid-1990s.
The estimated 1,200 wolves in Idaho and Montana remain under control of state wildlife agencies now devising management plans that call for killing hundreds of the animals, mostly through public hunting. About 300 wolves in Wyoming are still federally protected for the time being.
The two sides argued their case in a two-hour hearing in Missoula, Montana, before U.S. District Judge Donald Molloy, who had ruled in favor of environmentalists last August when he struck down a similar delisting plan implemented in 2009 by the U.S. Fish and Wildlife Service.
Molloy ruled at the time that the agency had violated the Endangered Species Act by treating Montana and Idaho wolves differently from those in Wyoming. Molloy held that they all had to be managed together as a single population.
Molloy again rejected the delisting plan in April when it was presented as a negotiated settlement between the federal government and 10 conservation groups. Several other environmental organizations continued to oppose it.
Just days later, Congress voted to override Molloy's decision and put the Fish and Wildlife Service's plan into effect.
Government lawyer Andrea Gelatt said on Tuesday that Congress was entitled to effectively amend federal laws, such as the Endangered Species Act, by carving out exemptions to them, saying lawmakers may "speak by language of exceptions."
But Molloy, who promised a prompt decision in the case, pressed her on the question of restricting court oversight.
"Then why is it not subject to judiciary review?" he asked. "This indirectly says, 'We don't like the result of this, so we're reversing the court's decision and telling the agency to go ahead and do something illegal.'"