The no surprises policy: Contracts 101 meets the Endangered Species Act.

• Jurisdiction: United States
• Date: 22 September 1997
• Author: Baur, Donald C.

1. INTRODUCTION

   "No Surprises" became part of the Endangered Species Act (ESA)(1) vocabulary when Secretary of the Interior Bruce Babbitt and Secretary of Commerce Ron Brown announced the policy in August 1994.(2) The policy made a big splash, but in actuality it did not establish a new mechanism for applying the ESA to lands. Instead, the new policy held out for full application one of the tools for ESA implementation set forth by Congress twelve years earlier.

   As Congress noted when enacting the 1982 amendments to the ESA, the intent was that

   the Secretary may utilize [section 10(a)] to approve conservation plans

   which provide long-term commitments regarding the conservation of tasted

   as well as unlisted species and long-term assurances to the proponent of

   the conservation plan that the terms of the plan win be adhered to and

   that further mitigation win only be imposed in accordance with the terms

   of the plan.(3)

   In other words, Congress recognized that a mechanism was needed to enlist nonfederal entities in proactive habitat conservation if the goals of the ESA were to be achieved. However, because habitat conservation plans (HCPs) are voluntary,(4) Congress also recognized that assurances must be provided to pLan participants to encourage them to make commitments to species conservation efforts.

   The Clinton Administration's announcement of a policy for providing No Surprises assurances helped usher in the `Era of the HCP.' The No Surprises Policy announcement also inspired a host of new ESA sound bites. No surprises,(5) "a deal is a deal,"(6) and the call for ever-increasing degrees of regulatory "certainty"(7) became the rallying cries of many regulated entities. Environmental groups opposed to the Policy counterattacked with slogans like "nature is full of surprises" and "species need certainty too."

   Much of the debate about the Policy has become nothing more than a battle of catchy phrases. This rhetorical gunplay has polarized the issue. Nonetheless, as is true of so many controversies under the ESA, there is a middle ground rooted in the terms of the policy itself. This article describes that middle ground and demonstrates why No Surprises assurances are workable, and necessary for any effort to conserve species on nonfederal lands. However, before this middle ground can be discussed, four fundamental principles must be accepted.

   First, long-term, multi-species, large-scale HCPS that include provisions to protect unlisted species must be considered worthwhile. If these plans are considered desirable, a No Surprises Policy is essential. Without the Policy, these plans would not be developed.

   Second, the fact that No Surprises assurances are contract terms must be recognized. The precise content of the assurances for a specific HCP will be determined by the negotiating positions of the applicant and the agencies, and through public participation.

   Third, even though nature is full of surprises, HCPS can be developed with assurances to a landowner in a manner that benefits species and provides the means to respond to the changes of nature without imposing unfair burdens on the permit holder. Most HCP applicants are willing to agree at the outset to adjustments in their plans to meet new problems that may develop. What applicants will not accept is subsequent unilateral decision making by the federal government which imposes new conditions.

   Finally, the No Surprises Policy itself must be understood. Rather than giving away the store on species conservation, the Policy simply promises that the government will abide by the terms of the negotiated deal.

   With these principles in mind, this article seeks to sort through much of the rhetoric generated by the No Surprises Policy. Part II of the article traces the history of the section 10(a) HCP provisions of the ESA, from the development of the San Bruno Mountain HCP to the enactment of the HCP amendments and through to the present. The section 10(a) HCP provisions were largely modeled on the San Bruno plan. This history is important to any analysis of the assurances in the No Surprises Policy, primarily because it shows that the idea of providing assurances to property owners entering into long-term conservation plans did not spring to life with the Clinton Administration's announcement of the Policy. Assurances were part of the San Bruno plan, and in enacting the section 10(a) amendments, Congress intended that assurances would also be part of any future plans developed under the amendments.

   Part III of the article traces the history of the No Surprises Policy itself and analyzes its provisions in detail Part m also describes the significant impact that the Policy has had on habitat conservation planning on nonfederal lands, setting forth several examples of large-scale plans that likely would not have been negotiated without the assurances provided by the Policy. Finally, Part IV discusses some of the controversy that has surrounded No Surprises assurances and responds to the concerns raised by both the environmental and scientific communities.

2. THE HISTORY OF THE SECTION 10(A) HABITAT CONSERVATION PLANS AND INCIDENTAL TAKE PERMIT PROVISIONS

   Congress enacted the Endangered Species Act (ESA) in 1973 to "provide a means whereby the ecosystems upon which endangered species and threatened species depend may be conserved, [and] to provide a program for the conservation of such . . . species. Toward this goal section 9 of the Act generally prohibits the "take" of any endangered or threatened species by "any person."(9) "Take" includes all activities that harass, harm, wound, or kill a protected species.(10) In 1975, the United States Fish and Wildlife Service (USFWS) broadly defined "harm" to include acts which "significantly disrupt essential behavioral patterns"(11) and result in "significant habitat modification or degradation."(12) The courts have upheld this aspect of the take prohibition, beginning in 1979 with an U.S. district court opinion from Hawaii finding that a state program maintaining feral sheep and goats in the critical habitat of the endangered Palila bird and causing destruction of that habitat clearly fell within the agency's definition of harm.(13) The decision was upheld by the Ninth Circuit, which found that the district court s conclusion that the program was harming the species was "consistent with the Act's legislative history showing that Congress was informed that the greatest threat to endangered species is the destruction of their natural habitat."(14) Several years later, the Ninth Circuit again upheld a finding that the State's game management program for a separate species of feral sheep constituted harm to the endangered Palila under the revised USFWS definition of harm.(15) The Service s definition of harm was also recently upheld by the U.S. Supreme Court.(16)

   Early in the history of the ESA it became clear that the strict prohibitory language of section 9, particularly in regard to habitat modification, could have harsh results, possibly causing significant limitations on all development or resource use within the habitat of a listed species. The habitat conservation planning amendments to section 10(a) in 1982 largely resulted from the reaction of developers and resource users to the scope of the section 9 prohibitions.

   1. The San Bruno Mountain Habitat Conservation Plan

   With the potential for an absolute ban on any take, no matter how limited, especially in the context of habitat modification, the development community began to recognize that the ESA was unable to address situations where a property owner's otherwise lawful activities might result in some limited incidental take of a protected species. A landowner would be held liable despite taking careful steps to minimize the impact on protected species.(17) In 1978, one large corporate landowner planning a massive development project on the San Bruno Mountain near San Francisco was confronted with this potential consequence of section 9 head on, and the concept of habitat conservation planning began.

   San Bruno Mountain is the primary habitat for two species of butterflies--the mission blue butterfly, a species listed under the ESA in 1976 as endangered,(18) and the callippe silverspot butterfly, which was proposed for listing in 1978.(19) The mountain's grasslands also provide habitat for the garter snake and species of rare insects.(20) In 1980, with the listing of the callippe silverspot butterfly still pending, the USFWS revised its proposal to designate portions of the mountain as critical habitat for the butterfly.(21) The proposed critical habitat substantially overlapped the remaining areas on the mountain designated for development, threatening to eliminate almost all of the developer's planned construction. Faced with several options, environmentalists, developers and local government officials agreed to seek a negotiated solution to conserve the butterflies while allowing some development to proceed. The planning thus began for the first habitat conservation plan (HCP).(22)

   The San Bruno Mountain HCP was based on extensive biological studies conducted by the County of San Mateo and funded by private landowners.(23) Encompassing an area of over 3,000 acres, the plan protects in perpetuity approximately 90 percent of the butterflies' habitat.(24)

   The plan incorporated many features that are considered by some to be essential to current HCPs. These features include focused biological research, extensive monitoring of the population health of the butterflies, and habitat enhancement activities including gorse removal and habitat restoration.(25), The plan operator has the responsibility for these activities, and to ensure that they are undertaken, conservation efforts must be summarized in annual reports to the USFWS.(26) The plan provided for a permanent source of funding to support the necessary conservation activities on the mountain in the form...