ESA Law Alert: U.S. Fish and Wildlife Service and NMFS Propose Significant Changes to Critical Habitat Regulations

Legal Alert

On May 12, 2014, the U.S. Fish and Wildlife Service and the National Marine Fisheries Service (the “Services”) jointly issued three interrelated proposals concerning the designation of critical habitat under the Endangered Species Act (“ESA”). The designation of critical habitat under the ESA ensures consultation with the Services before federally funded or approved actions affecting such areas may proceed. Designation does not create wildlife refuges; however, under Section 7 of the ESA, federal agencies are required to ensure that their actions (i.e., undertaking a federal action or otherwise funding or authorizing a non-federal project) are not likely to destroy or adversely modify critical habitat. As a result, designations complicate and may discourage or impair activities on public and private lands, or otherwise devalue lands designated as critical habitat. As such, critical habitat designations are frequently controversial.

The joint proposals published on May 12 include two proposed rules and a draft policy characterized as clarifications and modifications that will “provide for a credible, predictable, and simplified critical habitat-designation process.” However, the proposals appear to represent a dramatic shift in the Services’ intended approaches to both designating critical habitat and to evaluating whether proposed actions may destroy or adversely modify critical habitat. Historically, the Services have considered critical habitat designations to provide minimal, if any, conservation benefit to a listed species not already provided by Section 7's jeopardy standard. The joint proposals, however, seek to (1) more clearly contrast the “destruction or adverse modification” of critical habitat from what it means to “jeopardize the continued existence of” a listed species, and (2) formalize and expand the Services’ discretion in establishing critical habitat.

First, the Services propose a new definition of “destruction or adverse modification” of critical habitat. Under the new definition, “destruction or adverse modification” means an appreciable reduction in “the conservation value of critical habitat.” The “conservation value” of critical habitat is tied to its role in the recovery of a listed species. Moreover, the value is based not only on the current status of the critical habitat but on the critical habitat’s potential to support recovery. Additionally, “appreciably” is loosely defined to mean “relevant.” Accordingly, the Services’ proposal would introduce an ambiguously defined lower bar for “adverse modification” under the ESA, which, if adopted, would decrease the predictability of Section 7 consultations and increase the likelihood of adverse modification findings.

In their second proposed rule, the Services propose to amend several existing regulations governing critical habitat designations so as to substantially expand the Services’ ability to designate large habitat areas based upon vague and discretionary principles. For example, the Services propose to define the previously undefined term “geographical area occupied by the species” to include those areas periodically used by a species, even where the evidence of use is indirect or circumstantial. Additionally, the Services propose (1) a definition of “physical or biological features” that “clarifies” that the features may be dynamic or ephemeral habitat characteristics, (2) to delete the term "primary constituent element" (“PCE”) (and all references to it) from 40 C.F.R. § 424.12, (3) to lower the standard for special management findings, and (4) to express a likelihood that the agencies will increasingly use their authority to designate areas outside of a species range (i.e., unoccupied areas) by finding those areas “essential” to the species conservation and recovery. Combined with the Services’ proposal that critical habitat be designated “on a scale determined by the Secretary to be appropriate,” these proposed amendments would substantially increase (and formalize) the Services' discretion, and increase the likelihood of critical habitat designations of vast landscapes based upon poorly defined criteria such as occurred with the now judicially invalidated designation of an area larger than the State of California as polar bear critical habitat.

The proposed elimination of PCEs from the critical habitat designation process and the Services’ statement that physical and biological features do not need to be present at the time of designation are particularly troubling. The express language of the ESA limits the ability of the Services to designate critical habitat to those areas where the PCEs “are found.” 16 U.S.C. § 1532 (5)(A) (defining critical habitat as the “specific areas within the geographic area occupied by the species … on which are found those physical or biological features … essential to the conservation of the species”). Moreover, courts have held that PCEs must be “found” in an area as a prerequisite to designation and, thus, that the Services cannot designate an area as critical habitat based on a “mere hope” that PCEs will be found in a tract of land in the future. See Cape Hatteras Access Pres. Alliance v. U.S. Dep’t of Interior, 344 F. Supp. 2d 108, 122 (D.D.C. 2004). By providing the Services with increased discretion to designate areas as critical habitat based upon a discretionary judgment that the necessary physical and biological features may develop, the proposed rule greatly expands the Services' ability to designate vast habitat areas, with minimal scientific support.

Finally, the draft policy issued by the Services provides guidance on how the Services will implement exclusions from critical habitat under Section 4(b)(2). Among other changes, the draft policy proposes limitations on the exclusion of lands subject to voluntary conservation measures, establishes a presumption against the exclusion of federal lands, and emphasizes that exclusions are both entirely matters of agency discretion and “rare.”

The May 12 proposals are not intended to apply retroactively to pre-existing designations or past ESA consultations. Nonetheless, if adopted, the proposals will significantly change the landscape for critical habitat designations. Public comment on the proposals is requested and comments are due by July 11, 2014.

Stoel Rives has a broad depth of experience covering all aspects of the ESA, including advising on critical habitat issues and issues involving endangered and threatened species. If you have any questions about the issues raised in this alert, please contact a key contributor.

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