Let the Frogs Have It, Even When They Are Not There!

On August 22, 2014, U.S. District Judge Martin L.C. Feldman (Eastern District, Louisiana) issued a significant order¹ dealing with the standards for designation of “critical habitat” for an endangered species under the Endangered Species Act (ESA), including habitat that is both “occupied” and habitat that is “unoccupied” at the time of listing.

At issue in Markle was the designation of critical habitat that was unoccupied.  The plaintiffs, including a privately-owned tree farm, alleged that United States Fish and Wildlife Service's (Service) inclusion of unoccupied areas in its final designation of critical habitat for the dusky gopher frog was arbitrary and capricious.  The court disagreed, finding that the contested area was appropriately designated.  Judge Feldman found that Congress did not define unoccupied habitat in the same manner as occupied habitat; and unlike the requirement for occupied habitat, Congress did not require the Service to find all of the physical and biological features (called PCE's) to designate the area as critical.  Instead, Congress had given the Service discretion, and the Service's designation of unoccupied lands was reasonable because it was supported by a determination that this unoccupied area was “essential for the conservation of [the] species”;²and, that “designation limited to its present range would be inadequate to ensure the conservation of the species.”³

Judge Feldman also found the Service's economic analysis⁴ was not arbitrary and “did not identify any disproportionate costs that are likely to result from the designation.”  According to the court, the Service was not required to exercise its “discretion to exclude any areas from this designation of critical habitat for the dusky gopher frog based on economic impacts,” even though it acknowledged that the “present value impacts . . . of [losing] development in 100 percent of [unoccupied critical habitat] was “$33.9 million.”  Apparently, the court did not consider such an outcome as a disproportionate cost caused by the designation.

So what happens to the private land that is designated as critical habitat?  Even private unoccupied lands are protected from harm if and when the ESA's federal agency consultation mechanism is triggered through a request for a federal permit or approval.  If there is no federal action, then the impact is less severe.  However, when the private land owner needs a federal permit under Clean Water Act's section 404⁵ for example, then the U.S. Army Corps of Engineers (Corps) must consult with the Service on any actions “authorized, funded, or carried out by” the agency to ensure that their actions do “not result in the destruction or adverse modification of habitat[.]”⁶  If the Corps determines that issuing a 404 permit on the private lands “may affect . . . critical habitat”, the Corps and the Service must engage in “formal” consultation.⁷  If Service finds that a section 404 permit is likely to adversely modify critical habitat, Service must suggest reasonable and prudent alternatives that the Corps could take to avoid adverse modification.⁸  “Reasonable and prudent alternatives” must be “economically and technologically feasible.”⁹

If a private party's action has no federal nexus (if it is not authorized, funded, or carried out by a federal agency), no affirmative obligations are triggered by the critical habitat designation.  In other words, absent a federal nexus, the Service cannot compel a private landowner to make changes to restore his designated property into optimal habitat.

This is a significant decision.  It deals with the standards and proof for designation of unoccupied land as critical habitat.  It draws the pathway for determining that unoccupied areas may be designated as critical if the Service determines that protection is “essential for the conservation of the species.”  Given the Service's three current proposals to alter the rules governing critical habitat under ESA, the decision could result in a marked increase in the Service's authority and discretion.  For example, the three new proposals are likely to increase designations of both occupied and unoccupied habitat by:  (1) changing the definition of “adverse modification” of critical habitat;¹⁰ (2) adding a second proposed rule to describe the scope and purpose of critical habitat and to clarify the procedures and criteria utilized when critical habitat is designated¹¹; and, (3) limiting the policy regarding exclusions from consideration as critical habitat.¹²

Public comments on all three proposals can be submitted through later this fall.  Comments must be submitted separately for each proposed rule or policy.¹³  Also, as the U.S. Environmental Protection Agency (EPA) and the Corps consider a new “jurisdictional waters” definition¹⁴ that could dramatically increase the reach of the Clean Water Act and sweep ephemeral streams and ponds in forested areas to require Section 404 permits, this case and current regulatory action suggest an increasing ESA pressure on private lands and private actions.

All told, Markle is a wickedly complicated docket,¹⁵ but the stakes are high.  But fighting and litigation over the ESA in the 5th Circuit¹⁶ continues to be lively and filled with surprises.

Finally, there are more frogs to be contested in the future.  In the Pacific Northwest, the Service announced¹⁷ that it would protect another rare frog¹⁸ found only in the Pacific Northwest.  As a result, the Oregon spotted frog will be listed as threatened under the Endangered Species Act.  That frog¹⁹ was identified by the Service as a candidate species in 1991 and is part of an ongoing effort to fast-track listing decisions of hundreds of species resulting from a settlement with the Center for Biological Diversity.  Last year, the Service proposed designating about 68,000 acres and 24 stream miles as critical habitat for the frog and a final rulemaking is expected in the “near future.”

Considering all these developments, it is important to watch this space.  For some, these developments are ominous signs about how inflexible the ESA has become.  Others may be cheering “Let the frogs have it,” even when they are not there.  

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¹ See: Markle Interests, LLC v. United States Fish and Wildlife Service, et al. (Civil Action Nos. 13–234, 13–362, 13–413).

² 50 C.F.R. § 424.12(b).

³ 50 C.F.R. § 424.12(e).

⁴ In the Service's Economic Analysis, the Service quantified impacts that may occur in 20 years following designation by constructing and analyzing three scenarios.

⁵ 33 U.S.C. § 13432(1).

⁶ 16 U.S.C. § 1536(a)(2).

⁷ 50 C.F.R. § 402.14(a).

⁸ 50 C.F.R. § 402.14(h)(3).

⁹ 50 C.F.R. § 402.02.

¹⁰ “The direct or indirect alteration that appreciably diminishes the conservation value of critical habitat for listed species.  Such alterations may include, but are not limited to, effects that preclude or significantly delay the development of the physical or biological features that support the life-history needs of the species for recovery.”

According to ESA advocates, the new definition is intended to emphasize the important role critical habitat plays in species recovery, as habitat loss and modification is often a leading cause of species' decline.”

¹¹ This would involve several minor modifications to the existing regulations, including a new definition of “physical and biological features” used in the definition of critical habitat, which will dramatically increase the features that could be used to support the occurrence of ephemeral or dynamic habitat conditions

¹² Allowing the Service (and NMFS) to consider the impacts on partnerships and conservation plans, the economy, national security, and tribal lands, among others, when determining what areas should be excluded from critical habitat.

¹³ Go to the Federal eRulemaking Portal http://www.regulations.gov/ and enter the appropriate Docket Number in the search box:

FWS-HQ-ES-2012-0096 for regulation changes for designating critical habitat; FWS-R9-ES-2011-0072 for regulation changes relating to definition of destruction or adverse modification; and, FWS-R9-ES-2011-0104 for the proposed policy.

¹⁴ Definition of “Waters of the United States” Under the Clean Water Act, 79 Fed. Reg. 76, 22188.

¹⁵ There were nine cross-motions for summary judgment considered by the Court.

 ¹⁶ The 5th Circuit Court of Appeals recently demonstrated a willingness to restrain the ESA in The Aransas Project v. Shaw, 13-40317, 2014 WL 2932514 (5th Cir. June 30, 2014), where a three-judge panel found that a Texas state agency's issuance of a permit allowing private parties to withdraw upstream water was not a foreseeable cause of the downstream deaths of 23 endangered whooping cranes and that the chain of causation from permit issuance to the death of the birds was too attenuated and too remote to support an ESA “taking” claim against the permit issuer.

¹⁷ Final rule published in the August 29, 2014 Federal Register, 79 Fed. Reg. 168, 51658.

¹⁸ Range can be found from southwestern British Columbia down to Oregon's Klamath Basin.

¹⁹ According to the Service, the Oregon spotted frog is most threatened by the destruction of its wetland habitat.