A critical discussion of critical habitat designations: is compliance with the National Environmental Policy Act required?

• Author: Coleman, Mele N.

1. INTRODUCTION II. BACKGROUND A. The National Environmental Policy Act of 1969 1. Overview of NEPA 2. The Council on Environmental Quality's Implementing Regulations 3. Clarifying the Boundaries of NEPA: Judicially Created Exemptions to NEPA B. The Endangered Species Act of 1973 1. Overview of the ESA 2. Section 4 of the ESA and Its Implementing Regulations C. Summary of the Circuit Split on NEPA's Application to Critical Habitat Designations 1. The Ninth Circuit's Approach 2. The Tenth Circuit's Approach III. HOW THE CIRCUIT SPLIT AFFECTS AGENCY PRACTICE IV. A CRITICAL ANALYSIS OF THE CURRENT JUDICIAL APPROACHES A. The Ninth Circuit Should Not Rely on Douglas County's "Displacement" Exemption B. The Tenth Circuit Should Re-Examine the Catron County Rationale V. A FRESH PERSPECTIVE ON HOW TO RESOLVE THE CIRCUIT SPLIT A. The Functional Equivalence Exemption Should Apply to Critical Habitat Designations B. Federal Actions That Do Not Alter the Physical Environment Do Not Trigger NEPA VI. CONCLUSION I. INTRODUCTION

   The following discussion of critical habitat designations stems from a story about two little fish and an owl that began over twenty years ago. The Endangered Species Act of 1973 (1) (ESA) plays a key role in the story.

   The ESA aims to conserve endangered and threatened species and protect the ecosystems on which such species depend. (2) To carry out this purpose, section 4 of the ESA requires that the Secretaries of the United States Department of the Interior and the United States Department of Commerce (Secretaries) list species that they determine are in need of the ESA's protections as "endangered" or "threatened," (3) and, "to the maximum extent prudent and determinable," (4) concurrently designate habitat that they find is "essential to the conservation" (5) of such species as "critical habitat." (6) The Secretary of the Department of the Interior implements the ESA through the United States Fish and Wildlife Service (FWS) and the Secretary of the Department of Commerce implements the ESA through the National Marine Fisheries Service (NMFS), (7) a sub-agency of the National Oceanic & Atmospheric Administration (NOAA). (8) Once a species is listed under section 4, it can receive the safeguards afforded by the most protective provisions of the ESA--section 7 and section 9. (9)

   Section 9 of the ESA applies broadly to "any person" (10) and prohibits various actions that affect listed species, (11) including the significant modification or degradation of habitat. (12) Unlike section 9, "Section 7 applies only to federal agencies." (13) Among other things, section 7 requires that each federal agency consult with the agencies that implement the ESA to "insure that any action authorized, funded, or carried out by such agency ... is not likely to ... result in the destruction or adverse modification of [a species' critical habitat]." (14)

   Because compliance with section 7 limits the use of federal lands that are designated as critical habitat, plaintiffs whose livelihoods are intertwined with the use of such federal lands have litigated over the validity of critical habitat designations. (15) Such litigation has been most controversial when focused on the issue of whether critical habitat designations require compliance with the National Environmental Policy Act of 1969 (16) (NEPA). (17) This controversial issue is the focus of the sixteen-year-old circuit split that truly began over twenty years ago because of two little fish and an owl. (18)

   At first, the two little fish (19) and the owl share similar stories. In 1986, FWS listed the spikedace (Meda fulgida) and the loach minnow (Tiaroga cobitis) as threatened pursuant to the ESA, (20) in part because human activities significantly decreased and degraded the habitat available to the two fish. (21) Similarly, FWS listed the Northern spotted owl (Strix occidentalis caurina) (spotted owl) as threatened in 1990, (22) in part because timber harvesting and natural catastrophes significantly decreased the amount of suitable habitat available to the species. (23)

   The spikedace and loach minnow were historically found throughout the Gila River system--a river system that flows through Arizona and New Mexico in the United States, and the state of Sonora in Mexico. (24) Even though their ranges have been significantly reduced by both the loss and disturbance of habitat, and the spread of non-native species, these two little fish can still be found in Arizona and New Mexico. (25) Similarly, the spotted owl, which was historically found in coniferous and mixed-conifer hardwood forests throughout the Pacific Northwest, (26) can still be found throughout its range, even though decades of intense timber harvesting significantly reduced and fragmented the owl's once-continuous forest habitat. (27)

   In 1992, FWS designated nearly 6.9 million acres of federal land in California, Oregon, and Washington as spotted owl critical habitat. (28) Similarly, FWS designated critical habitat for the two fish in 1994--approximately 95 miles of river in New Mexico and Arizona for the spikedace, (29) and 159 miles of river in the same area for the loach minnow. (30) In accordance with its 1983 policy, which states that FWS need not comply with NEPA when adopting rules "pursuant to Section 4(a) of the [ESA]" (31) (e.g., critical habitat designations), FWS did not comply with NEPA for any of the three designations. (32) Two counties affected by the designations--Catron County, New Mexico, and Douglas County, Oregon--brought suit against FWS, (33) arguing that critical habitat designations are not exempt from NEPA. (34) The counties prevailed in district court, and FWS appealed. (35) This is where the species' stories diverge.

   Presented with similar facts, the Courts of Appeals reached different conclusions. In 1995 the Ninth Circuit, presiding over Douglas County's case, held that "NEPA does not apply to the designation of a critical habitat," (36) and thus affirmed the validity of the spotted owl critical habitat designation. In 1996, the Tenth Circuit, presiding over Catron County's case, held that critical habitat designations do require NEPA compliance, (37) and thus set aside the spikedace and loach minnow critical habitat designations. (38) In 2012, after two other suits successfully challenged the validity of subsequent critical habitat designations for the two fish, (39) FWS designated 710 miles of river as critical habitat for the spikedace and loach minnow, (40) and changed the status of the species from threatened to endangered. (41) If the 2012 spikedace and loach minnow critical habitat designation is left undisturbed, the two little fish waited twenty-six years for critical habitat, while the spotted owl waited only five.

   This Comment examines both sides of this controversy in an attempt to provide an objective and fresh perspective (42) on the issue of whether critical habitat designations require NEPA compliance. Part II provides the necessary context for understanding this complex policy problem by summarizing: 1) NEPA, its relevant provisions and implementing regulations, and judicially-created exemptions; 2) the ESA and its relevant provisions and implementing regulations; and 3) the reasoning behind the Circuit split. Part III discusses how the Circuit split affects agency practice. Part IV critically analyzes the current judicial approaches taken by the Ninth and Tenth Circuits. Part V suggests that critical habitat designations should not require NEPA compliance because: 1) application of the functional equivalence exemption is appropriate, and 2) federal actions that do not alter the physical environment do not fall under the purview of NEPA. And finally, Part VI concludes that: 1) the agencies that designate critical habitat should adopt the legal arguments provided by this paper and jointly develop policies that improve their ability to maximize conservation while waiting for the judiciary to resolve the split; 2) the courts outside of the Ninth and Tenth Circuits, particularly those within the D.C. Circuit, should seriously consider the legal arguments presented by this paper; and 3) ff presented with the opportunity, the United States Supreme Court should resolve this controversy to enable the agencies that designate critical habitat to develop consistent national policies on NEPA compliance and maximize their efforts to conserve endangered and threatened species.

2. BACKGROUND

   The following background sections discuss what is essential about NEPA, the ESA, and the split between the Ninth and Tenth Circuits to understanding the complex policy problem of whether critical habitat designations require NEPA compliance.

   1. The National Environmental Policy Act of 1969

      NEPA, "the first major environmental law in the United States," (43) was enacted by Congress in December 1969, and signed into law by President Richard Nixon on January 1, 1970. (44) Without much opposition, (45) NEPA became the country's "basic national charter for protection of the environment" (46) by establishing environmental policies, setting goals, and providing means to carry out and achieve those policies and goals. (47)

      1. Overview of NEPA

         The stated purpose of NEPA is:

         To declare a national policy which will encourage productive and enjoyable harmony between man and his environment; to promote efforts which will prevent or eliminate damage to the environment and biosphere and stimulate the health and welfare of man; to enrich the understanding of the ecological systems and natural resources important to the Nation; and to establish a Council on Environmental Quality. (48) In practice, however, NEPA's broad purpose is referred to as having "twin aims" because "it 'places upon an agency the obligation to consider every significant aspect of the environmental impact of a proposed action'" and "it ensures that the agency will inform the public that it has indeed considered...