January 23, 2002

Ninth Circuit Clarifies Scope of U.S. Fish and Wildlife’s Authority to Regulate Land

Holland & Knight Newsletter
Rafe Petersen

In December 2001, the U.S. Court of Appeals for the Ninth Circuit issued a ruling that could greatly benefit landowners concerned about the presence of endangered species on their properties. In Arizona Cattle Growers’ Association v. U.S. Fish and Wildlife Service, No. 99-16102 (December 17, 2001), the court held that the USFWS acted arbitrarily and capriciously by issuing Incidental Take Statements under the Federal Endangered Species Act (ESA) that impose terms and conditions on land use permits, when either there was no evidence that the endangered species existed on the land or no evidence that a "take" (defined as "habitat modification resulting in the actual death or injury to a listed species") would occur if the permit were issued. The court held that USFWS would have to demonstrate that a "take" of protected species was "reasonably certain to occur."

This holding could curtail the ability of USFWS to condition or to restrict land uses in situations when endangered species or their habitats are not clearly present. Under this ruling, for activities covered by the Ninth Circuit (California, Arizona, Hawaii, Nevada, Idaho, Montana, Oregon, Washington, and Guam) USFWS will have to provide specific evidence that the activity would lead to a "take" of the species in situations when it issues an incidental take statement as part of a Section 7 ESA consultation.

This case stemmed from a challenge by the cattlemen to the Incidental Take Statements set forth in the Biological Opinions issued by USFWS in consultation with the Bureau of Land Management (BLM) and the U.S. Forest Service in response to ACGA’s application for cattle grazing permits in Southeastern Arizona. In its Biological Opinion on the permits, USFWS concluded that ongoing grazing activities on 21 of 22 allotments at issue would not jeopardize the continued existence of any protected species or result in the destruction or adverse modification of any critical habitat. It determined, however, that ongoing grazing activities would incidentally take members of one or more protected species in each of the 22 allotments, and it issued Incidental Take Statements (ITS) for each of those allotments.

The ITS included specific conditions that would immunize the ranchers from ESA Section 9 take liability and penalties for harm to endangered species committed during activities that are otherwise lawful. The court noted that, although the action agency and permittee are "technically free to disregard the Biological Opinion and proceed with its proposed action . . . it does so at its own peril. . . . Consequently, if the terms and conditions of the ITS are disregarded and a taking does occur, the action agency or the applicant may be subject to potentially severe civil and criminal penalties under Section 9."

Hence, given the potential liability of not complying with the conditions in the ITS, the conditions "exert a powerful coercive effect" that cannot be ignored. As a practical matter, parties that hope to receive approval for federal permits must agree to comply with the terms and conditions of the ITS.

The court addressed the standards for determining when USFWS must issue an ITS. Fundamentally, "an ITS must be predicated on a finding of an incidental take." The court concluded that USFWS "acted in an arbitrary and capricious manner by imposing terms and conditions on land use permits, where either there was no evidence that the endangered species existed on the land or no evidence that a take would occur if the permit were issued." In making its finding that there was "no rational basis" to conclude that a take will occur, the court rejected USFWS’s position that the definition of "take" under Section 7 of the ESA should be interpreted broadly to require issuance of an ITS when harm to a listed species is "possible" or "likely." The court rejected the notion that Sections 7 and 9 ought to be interpreted differently, holding that there must be a reasonable basis for concluding that a taking will occur as a result of the activity in question. Significantly, the court then noted that "there is no evidence that Congress intended to allow the Fish and Wildlife Service to regulate any parcel of land that is merely capable of supporting a protected species."

Central to this finding was that USFWS failed to present evidence that an indirect taking would occur absent the existence of the species on the property. The practical effect is that USFWS has to present more than speculative evidence that habitat modification would impact a listed species. "The agency has a very low bar to meet, but it must at least attain it. It would be improper to force [the ranchers] to prove that the species does not exist on the permitted area, as the Fish and Wildlife Service urges, both because it would require [the ranchers] to meet the burden statutorily imposed on the agency, and because it would be requiring it to prove a negative." Hence, USFWS must "establish a link between the activity and the taking of species before setting forth specific conditions." It remains to be seen whether other circuits will adopt the Ninth Circuit’s reasoning.

The new Corps wetlands nationwide permits were published in the January 15, 2002, Federal Register. A summary will be available in the next edition of the Environmental Newsletter

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