May 20, 2014

Proposed Endangered Species Act Regulations Would Revise Rules and Protections Related to "Critical Habitat"

Proposal Would Significantly Expand Critical Habitat Protection Under the Federal Endangered Species Act
Holland & Knight Alert
Rafe Petersen


  • The proposed regulations would considerably change the regulatory definitions related to "critical habitat" and "adverse modification," increasing agency discretion to designate and protect areas that do not presently contain features essential to the conservation of the species.
  • The result of the proposed changes would cause extensive expansion of the impact of the Endangered Species Act (ESA) on private lands across the United States.

The United States Fish and Wildlife Service and the National Marine Fisheries Service (together "Services") proposed two new rules and a policy related to the Services' process of protecting and designating "critical habitat" for species protected pursuant to the Endangered Species Act (ESA). (See the U.S. Fish & Wildlife Service news release: Federal Agencies Propose Revised Rules to Improve Implementation of the Endangered Species Act, May 9, 2014.) The proposal was made on May 12, 2014. Collectively, the proposed rules and draft policy guidance would radically change the regulatory definition and significance of "critical habitat," resulting in a considerable expansion of the impact of the ESA on private land.

Background: ESA Provisions Related to Critical Habitat

Concurrently with listing a species as threatened or endangered, Section 4 of the ESA requires the Services to designate critical habitat "to the maximum extent prudent and determinable" utilizing "the best scientific data available and after taking into consideration the economic impact, and any other relevant impact, of specifying any particular area as critical habitat." 16 U.S.C. §§1533(a)(3); (b)(2). ESA Section 3(5)(A) defines critical habitat as "the specific areas within the geographical area occupied by the species, at the time it is listed ... on which are found those physical or biological features (I) essential to the conservation of the species and (II) which may require special management consideration or protection." 16 U.S.C. §1532(5)(A)(i). In addition, the Services may designate "specific areas outside the geographical area occupied by the species at the time it is listed ... upon a determination by the Secretary that such areas are essential for the conservation of the species." 16 U.S.C. §1532(5)(A)(ii). "Except in those circumstances determined by the Secretary, critical habitat shall not include the entire geographical area which can be occupied by the threatened or endangered species." 16 U.S.C. §1532(5)(C).

Once critical habitat is designated, the ESA prohibits other federal agencies from engaging in actions that adversely modify critical habitat. 16 U.S.C. §1536(a)(2). While this restriction does not directly apply to private parties, the designation of critical habitat on private land is burdensome to private parties due to the fact that any private activity with a federal nexus must go through the ESA Section 7 process. ESA Section 7 requires that all federal agencies "shall, in consultation with and with the assistance of the Secretary, insure that any action authorized, funded, or carried out by such agency ... is not likely to jeopardize the continued existence of any endangered species ... or result in the destruction or adverse modification of habitat of such species[.]" (Emphasis added.) 16 U.S.C. §1536(a)(2). Thus, as a practical matter, the designation of critical habitat affects private parties whose development plans may impact a federally listed species and require federal entitlements, such as permits issued by the U.S. Army Corps of Engineers or the Environmental Protection Agency (EPA), or if there is no federal nexus, a Habitat Conservation Plan from the Service.

Regulatory Change: The Proposed Definition of "Adverse Modification"

The first proposed regulation would revise the definition of "adverse modification" of critical habitat. (See the U.S. Fish & Wildlife Service and National Marine Fisheries Service proposed rule, 50 CFR Part 402.) This regulation responds to two separate court decisions (in 2001 and 2004) that set aside the 1986 definition of "adverse modification." The 1986 regulations defined "destruction or adverse modification" as "a direct or indirect alteration that appreciably diminishes the value of critical habitat for both the survival and recovery of a listed species. Such alterations include, but are not limited to, alterations adversely modifying any of those physical or biological features that were the basis for determining the habitat to be critical." (50 C.F.R. §402.02). The courts invalidated the definition for failure to properly require consideration of the impact of adverse modification on recovery of the species in favor of focusing on survival. Sierra Club v. U.S. Fish and Wildlife Service, 245 F.3d 434 (5th Cir. 2001); Gifford Pinchot Task Force v. U.S. Fish and Wildlife Service, 378 F.3d 1059 (9th Cir. 2004).

Under the proposed regulation, "destruction or adverse modification" is defined as "a 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." The requirement to focus on the conservation value of the species is likely to be controversial in that it appears to push recovery efforts onto private landowners. In determining whether the action will "appreciably diminish" the conservation value of the critical habitat, the proposed rule calls for the Services to look at whether the effects are "noticeable" rather than "significant" and requires the Services to examine factors such as whether recovery of the species will be delayed, less likely, or more difficult.

Focusing on "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" is a significant departure from current practice in that it would allow the Services to seek protection for habitat features that are not there presently or are of poor quality. Further, under the proposed standard, any impact could be argued to be likely to delay recovery or make it more difficult.

Regulatory Change: The Proposed Changes to the Critical Habitat Designation Process

The second proposed regulation would amend the procedures related to designating critical habitat. (See the U.S. Fish & Wildlife Service and National Marine Fisheries Service proposed rule, 50 CFR Part 424.) The regulatory changes proposed are described by the Services as "minor changes to the regulations to: better describe the scope and purpose of critical habitat, add and remove some definitions, and clarify the criteria for designating critical habitat." Some of the changes are minor as the Services state. However, others are not. Specifically, the Services propose to define the previously undefined term "geographical area occupied by the species" as "the geographical area which may generally be delineated around the species' occurrences, as determined by the Secretary (i.e., range). Such areas may include those areas used throughout all or part of the species' life cycle, even if not used on a regular basis (e.g., migratory corridors, seasonal habitats, and habitats used periodically, but not solely by vagrant individuals)." While couched as an attempt to "clarify the critical-habitat-designation process," the reality is that this new definition would expand the area that could be designated to include land that is not occupied by the species and land occupied only marginally.

The Services also propose a definition for the term "physical or biological features," which is used in the statutory definition of "critical habitat" to assist in identifying the specific areas within the entire geographical area occupied by the species that can be designated. The proposed definition allows inclusion of "habitat characteristics that support ephemeral or dynamic habitat conditions." This would allow the Services to designate land where they believe that there may have been the required features if they believe there is a "reasonable expectation of that habitat occurring again." As with the proposed definition of "adverse modification" discussed above, this change would allow the Services to prospectively designate habitat that does not currently have the features that would make it "critical" to the species.

Policy Change: Exclusions to Critical Habitat Designations

Finally, the proposed policy is intended to clarify how the Services consider exclusions from critical habitat designations. (See the U.S. Fish & Wildlife Service and National Marine Fisheries Service announcement of draft policy and solicitation of public comment regarding implementation of Section 4(b)(2) of the Endangered Species Act.) Under Section 4 of the ESA, the Services may "exclude any area from critical habitat if [they] determine[] that the benefits of exclusion outweigh the benefits of specifying such area as part of the critical habitat, unless [they] determine[], based on the best scientific and commercial data available, that the failure to designate such area as critical habitat will result in the extinction of the species concerned." 16 U.S.C. §1533(b)(2)." As the Services themselves state, conducting an exclusion analysis under Section 4(b)(2) involves balancing or weighing the benefits of excluding a specific area from a designation of critical habitat against the benefits of including that area in the designation.

With respect to certain types of land, the proposed policy sets forth several categories of information to be used in that balancing, including the effect of habitat conservation plans (HCPs), candidate conservation agreements and safe harbor agreements. It requires the Services to examine a series of factors such as the conservation benefits of the plans, the level of review and the use of monitoring. The policy also addresses potential exclusion of tribal lands, stating that the Services will give "great weight" to tribal concerns. With respect to economic considerations, the proposed policy states the following: "When the Services are determining whether to undertake a discretionary exclusion analysis as a result of the probable incremental economic impacts of designating a particular area, it is the nature of those impacts, not necessarily a particular threshold level, that is relevant to the Services' determination."

Historically, the Services excluded areas within tribal lands, habitat conservation lands, candidate conservation agreements and safe harbor agreements from critical habitat and the Services' consideration of economic impacts have also been subject to multiple lawsuits. The proposed policy, however, shows a distinct shift to a case-by-case analysis focusing on conservation benefits both on the land and economics side.

Conclusion: Importance of Critical Habitat Is Expanding

Overall, the proposed regulations and policy show a distinct shift towards vesting a great deal of discretion in the Services regarding what lands should be considered critical habitat and what activities will be deemed to adversely modify that habitat. This shift will expand significantly the importance and role of critical habitat in future permitting decisions. With several hundred species in line to be considered for listing as threatened or endangered pursuant to a court-ordered settlement between the Services and two environmental groups, it is very likely that the amount of private land designated as critical habitat will expand exponentially in the next two years.

Comments on both of the proposed regulations and the draft policy are due July 11, 2014.

Holland & Knight's National Environmental Team and our West Coast Land Use and Environment Group has extensive experience helping clients understand and navigate this type of proposed regulations. We handle permitting and entitlement work for projects all over the United States, including in California.


Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem. Moreover, the laws of each jurisdiction are different and are constantly changing. If you have specific questions regarding a particular fact situation, we urge you to consult competent legal counsel.

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