CHAPTER 3 CRITICAL HABITAT DESIGNATION AND THE PROHIBITION OF DESTRUCTION AND ADVERSE MODIFICATION OF CRITICAL HABITAT

• Jurisdiction: United States

Endangered Species Act
(Nov 2015)
CHAPTER 3
CRITICAL HABITAT DESIGNATION AND THE PROHIBITION OF DESTRUCTION AND ADVERSE MODIFICATION OF CRITICAL HABITAT
Donald Baur
Partner
Perkins Coie
Washington, DC
Norman D. James
Director
Fennemore Craig, P.C
Phoenix, Arizona

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DONALD BAUR is a partner with Perkins Coie LLP in Washington, D.C. Don has over 30 years of experience in environmental and natural resources law. He served as an attorney in the Office of the Solicitor of the U.S. Department of the Interior and as General Counsel of the U.S. Marine Mammal Commission before joining Perkins Coie in 1987. Don provides federal-policy-level and project-specific counseling as well as legislative and litigation assistance in a wide range of environmental and natural resources areas, with a special emphasis on water law, wildlife and endangered species, public land and energy resources, protected areas, coastal/ocean law, and Indian law. Don regularly counsels his clients on various land management transactions and regulatory proceedings arising under public land laws, the Endangered Species Act (ESA), the Marine Mammal Protection Act (MMPA), the National Environmental Policy Act (NEPA), the National Historic Preservation Act (NHPA), the Clean Water Act (CWA), coastal/ocean and public land laws, and all natural resource and Native American laws in Alaska. A significant portion of Don's practice is also devoted to various Indian law issues, including trust land and gaming transactions, tribal acknowledgment, and development of contracts between the private sector, local and state governments, and tribes.

NORMAN D. JAMES is a Director in the Phoenix, Arizona office of Fennemore Craig, P.C. His practice emphasizes natural resources and environmental law, including federal laws and programs such as the Endangered Species Act, NEPA, the Clean Water Act, the National Forest Management Act, and the Federal Land Policy and Management Act. His work focuses on litigation in the federal courts and dealing with federal agencies on rulemaking proposals, permitting, and other administrative and regulatory matters. Mr. James' clients include mining companies, land developers, ranchers, water districts, and their trade associations. Mr. James has represented parties in a number of Endangered Species Act cases, including Nat'l Ass'n of Home Builders v. Defenders of Wildlife, 551 U.S. 664 (2007) (challenge to EPA's approval of Arizona's application to administer the NPDES program on ESA grounds); Az. Cattle Growers' Ass'n v. Salazar, 606 F.3d 1160 (9th Cir. 2010) (challenge to critical habitat designated for the Mexican spotted owl); Defenders of Wildlife v. Flowers, 414 F.3d 1066 (9th Cir. 2005) (challenge to Clean Water Act permit issued on ESA grounds); Nat'l Ass'n of Home Builders v. Norton, 340 F.3d 835 (9th Cir. 2003) (challenge to listing the Arizona population of the pygmy-owl as an endangered species and the designation of the species' critical habitat); and Az. Cattle Growers' Ass'n v. U.S. Fish and Wildlife Service, 273 F.3d 1229 (9th Cir. 2001) (challenge to incidental take statements restricting livestock grazing on federal grazing allotments in Arizona). He also has represented clients in commenting on proposed rules listing species and designating critical habitat, including proposed rules concerning the yellow-billed cuckoo, jaguar, Gunnison sage grouse, wolverine, boreal toad, southwestern willow flycatcher, pygmy-owl, and spikedace and loach minnow. Mr. James received his undergraduate degree from Stanford University (B.A. 1977) and his law degree from the University of Utah College of Law (J.D. 1981). He is listed in Best Lawyers in America (Energy Law, Environmental Law, Natural Resources Law and Water Law), Chambers USA (Band 1, Environmental Law), and Southwest Super Lawyers (Energy and Natural Resources Law).

TABLE OF CONTENTS

I. INTRODUCTION: WHY IS CRITICAL HABITAT IMPORTANT?

II. STATUTORY AND REGULATORY BACKGROUND

A. The 1973 Act and the Services' Regulatory Definition

B. The 1978 ESA Amendments

1. House Bill 14104

2. Senate Bill 2899

3. The Final Law

4. Subsequent ESA Amendments

C. The Services' Post-Amendment Rulemakings

D. Judicial Interpretations of Critical Habitat's Scope and Purpose

E. The Services' Proposed Critical Habitat Rules

III. PROCEDURAL REQUIREMENTS FOR DESIGNATING CRITICAL HABITAT

A. The Timing of Designation

1. The Designation of Critical Habitat Is "Not Prudent"

2. Critical Habitat Is "Not Determinable"

B. The Designation Process

C. Identification Requirements

D. Compliance with NEPA

IV. IMPORTANT ELEMENTS OF CRITICAL HABITAT DESIGNATION

A. Use of the "Best" Scientific Data

B. Occupied vs. Unoccupied Critical Habitat Areas

1. The Test For Occupancy

2. The Timing of Occupancy

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C. Physical or Biological Features Essential to the Conservation of the Species

D. Features that Require Special Management or Protection

V. EXCLUSIONS FROM CRITICAL HABITAT

A. Overview

B. The Legislative and Regulatory History of Section 4(b)(2)

C. The Evaluation of Economic Impacts

1. New Mexico Cattle Growers Rejects the Baseline Approach

2. The Baseline Approach Is Approved

3. The Services Codify the Baseline Approach

4. Examples of Economic Analyses

5. A Parting Shot: Why New Mexico Cattle Growers Was Correctly Decided

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I. INTRODUCTION: WHY IS CRITICAL HABITAT IMPORTANT?

One of the most controversial aspects of the Endangered Species Act ("ESA")¹ is the designation of critical habitat for species that have been listed as endangered or threatened. The agencies that administer the ESA, the U.S. Fish and Wildlife Service ("FWS") and the National Marine Fisheries Service ("NMFS") (jointly called the "Services" below), must designate a species' critical habitat at the time a species is listed "to the maximum extent prudent and determinable."² Critical habitat normally should be occupied by members of the species, and consist of specific areas that contain "physical and biological features" which are "essential to the conservation of the species" and "require special management considerations or protection."³ Specific areas that are not occupied may be designated as critical habitat "upon a determination by the Secretary that such areas are essential to the conservation of the species."⁴

Once designated, critical habitat may have significant impacts on land and resource uses as a result of the Section 7 consultation process. Section 7(a)(2) of the ESA requires federal agencies to ensure that "any action authorized, funded, or carried out by such agency ... is not likely to jeopardize the continued existence of any endangered species or threatened species or result in the destruction or adverse modification of [critical] habitat of such species."⁵ Thus, federal actions may not proceed if they would destroy or adversely modify a listed species' critical habitat, unless an exemption is granted by a cabinet-level committee called the Endangered Species Committee.⁶ Moreover, federal agencies must "consult" with the relevant Service prior to proceeding with a proposed action to ensure that the "jeopardy" and "adverse

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modification" standards imposed by Section 7(a)(2) are not violated.⁷ Despite statutory deadlines, consultations on larger projects, particularly where multiple species are involved, are time-consuming and expensive for project proponents, and often result in project modifications.

The term "action" is broadly defined in the Services' Section 7 consultation regulations and includes "all activities or programs of any kind authorized, funded, or carried out, in whole or in part, by Federal agencies in the United States or upon the high seas."⁸ The term includes "the granting of licenses, contracts, leases, easements, rights-of-way, permits, or grants-in-aid."⁹ Consequently, the issuance of various federal permits and authorizations in connection with private land uses may trigger the application of Section 7(a)(2).

As federal regulatory programs have expanded, an increasing number of non-federal activities require some sort of federal permit or approval, or have some other federal nexus that triggers Section 7 and the duty to avoid the adverse modification of critical habitat. For example, many landowners are required to obtain federal permits to discharge fill material under Section 404 of the Clean Water Act¹⁰ in order to conduct land use activities. Mining and oil and gas operations are frequently conducted on federal land, or require rights-of-way across federal land, which require authorization by a federal agency.

Critical habitat is particularly problematic when it includes land unoccupied by members of the species, because in the absence of critical habitat, Section 7(a)(2) would not be triggered.¹¹ Thus, federally authorized or funded activities taking place in areas that are not occupied by members of a species normally will not be subject to Section 7(a)(2) unless critical habitat is present. Therefore, the designation of an area as critical habitat is likely to result in restrictions on land and water uses that go beyond those caused by a species' listing and application of the Section 7 jeopardy prohibition.

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This problem has been exacerbated by the increasing amount of critical habitat that is typically designated for listed species, much of which is not occupied by the species and is not essential for the species' continued existence.¹² Instead, unoccupied areas are set aside for future population expansion--a practice Congress strongly criticized in 1978 when it amended the ESA to restrict critical habitat, as explained below. The typical justification for designating vast areas as critical habitat is that these areas are needed to recover the species.

For example, in 2013, the FWS designated 208,973 acres of critical habitat along 1,227 miles of...