SPOKANE, Wash. (AP) -- The U.S. Fish and Wildlife Service improperly failed to make a decision about protecting the rare pygmy rabbit in eight Western states, according to a lawsuit filed in federal court by an environmental group.

Western Watersheds Project's lawsuit, which was filed last week, wants the agency to make a decision on whether to grant endangered species protection to the tiny rabbits. Courts had previously demanded the decision, which is long overdue.

"This case will be settled very quickly by the U.S. Fish and Wildlife Service because they are violating a court order right now and have no defense," predicted Jon Marvel of Western Watersheds, which is based in Hailey, Idaho.

A spokesman for the service did not immediately return a telephone message left at their Reno, Nev., office.

Pygmy rabbits, which weigh up to one pound and can fit in a man's palm, have been decreasing in numbers for years in the West because of habitat loss, which reduces their ability to escape predators.

"They are the smallest rabbits in the western hemisphere," Marvel said. "They are the cutest small rabbit in the world."

The rabbits need plenty of ground cover to avoid predators and soil that is conducive to digging their own burrows. The sage-steppe environment that used to cover much of the West was ideal and they once roamed some 100 million acres, Marvel said.

But much of that has been gobbled up by agriculture and construction, he said.

The lawsuit was filed Wednesday in federal court in Boise, Idaho, where a judge in 2007 reversed the agency's decision not to protect the rabbit and ordered a new ruling. In January 2008, the agency concluded that protecting the rabbit "may be warranted."

But since then, the agency has missed a 12-month deadline for making a final decision.

"The service is now over a year overdue in issuing a 12-month finding," the lawsuit said.

In 2003, the federal government listed pygmy rabbits in eastern Washington as endangered, and efforts to reintroduce the rabbits there failed as the animals were devoured by predators.

Because the rabbits are already listed in Washington, the new study covers California, Oregon, Nevada, Idaho, Montana, Wyoming and Utah.

The Fish and Wildlife Service has three options. It can decide that protection is not necessary; it can decide that listing the rabbits as threatened or endangered is warranted, triggering a yearlong round of studies and comments, or it can decide that protection is warranted but precluded by higher priority activities.