By Diane Kindermann Henderson and Cori M. Badgley
The Ninth Circuit Court of Appeals upheld a biological opinion (“BO”) by the U.S. Fish & Wildlife Service (“FWS”) authorizing the destruction of critical habitat for three species, where the BO applied a percentage formula to ascertain whether there would be adverse modification or destruction of critical habitat. The Ninth Circuit concluded, “The FWS’ determination that critical habitat would be destroyed was not inconsistent with its finding of ‘no adverse modification.’ After all, the project would affect only a very small percentage of the total critical habitat or vernal pool fairy shrimp, vernal pool tadpole shrimp, and slender Orcutt grass.” (Butte Environmental Council v. U.S. Army Corps of Engineers (9th Cir. 2010) 607 F.3d 570.)
Formal consultation under Section 7 of the federal Endangered Species Act is required when the property for which a federal permit is sought contains federally listed species or designated critical habitat that may be affected by the permit decision. If formal consultation is required, FWS or the National Oceanic and Atmospheric Administration will issue a biological opinion stating whether the permit action is likely to jeopardize the continued existence of the listed species or adversely modify or destroy its critical habitat. The Ninth Circuit’s decision in this case put a new twist on the debate over what constitutes adverse modification to critical habitat by upholding a black and white mathematical percentage formula applied by FWS in its BO to determine whether critical habitat destruction jeopardized listed species or adversely impacted their critical habitat.
In 2005, after years of researching potential sites for economic development, the City of Redding issued a draft Environmental Impact Statement (“EIS”) regarding the proposed development of the 678 acre Stillwater Business Park located on wetlands along Stillwater Creek. In December 2006, the FWS issued a thorough written BO on the project. The BO stated that more than half of the 678 acre project site contained vernal pool species critical habitat. Specifically, the project site contained 356.6 acres of critical habitat shared by the vernal pool fairy shrimp (threatened) and the vernal pool tadpole shrimp (endangered). The project would destroy 234.5 acres of this critical habitat. It would also directly affect 0.56 acres and indirectly affect 6.42 acres of the crustaceans’ aquatic habitat. As for the threatened slender Orcutt grass, the site contained 500 acres of critical habitat, 242.2 acres of which would be destroyed.
In calculating the loss of each species, the BO then applied a percentage comparison to total nationwide critical habitat. For the fairy shrimp, the 234.5 acre destruction under the project when compared to the nationwide total of existing 597,821 acres of fairy shrimp critical habitat resulted in a 0.04% destruction of the fairy shrimps’ total nationwide inventory. As to the tadpole shrimp, the 234.5 acres that would be destroyed under the project only amounted to 0.1% of the tadpole shrimps’ 228,785 acres of total critical habitat nationwide. As to the slender Orcutt grass, the 242.2 acres to be destroyed under the project amounted to 0.26% of the plant’s total nationwide critical habitat of 94,213 acres. The FWS’ conclusion was that “the proposed project would not result in the adverse modification or destruction of critical habitat for those species.”
Butte Environmental Council (“Council”), a nonprofit environmental organization, filed suit against the U.S. Army Corps of Engineers, that issued the federal permit, and FWS. The district court granted summary judgment in favor of the federal agencies. The Council then appealed to the Ninth Circuit.
The Council raised four arguments, each of which was rejected by the Ninth Circuit. First, the Council argued that FWS applied an improper definition of “adverse modification” that did not account for the “recovery needs” of the affected species as required under the Ninth circuit case of Gifford Pinchot Task Force v. U.S. Fish and Wildlife Service (9th Cir. 2004) 378 F.3d 1059 (“Gifford”). The Court rejected the Council’s allegations noting that the BO expressly stated that it “does not rely on the regulatory definition of ‘destruction or adverse modification’,” but instead relies on the statute and the Ninth Circuit decision in Gifford to complete its analysis with respect to critical habitat.
Second, the Council asserted that the finding of “no adverse modification” conflicted with the FWS’ finding of acreage to be destroyed as part of the project. In rejecting this argument, the court noted that Gifford did not alter the rule that adverse modification occurs only where there is a “direct or indirect alteration that appreciably diminishes the value of critical habitat.” (50 C.F.R. § 402.02.) The court further opined that “an area of species critical habitat can be destroyed without appreciably diminishing the value of the species’ critical habitat overall.” The court concluded that FWS’ determination that critical habitat would be destroyed was therefore not inconsistent with a finding of “no adverse modification.”
Third, opposing the formula applied by FWS, the Council went on to argue that the focus on the project’s impact to the species nationwide inventory of critical habitat “mask[ed] the Project’s localized impact.” The court swiftly disposed of this argument stating that there was nothing in the record to demonstrate that a localized risk was improperly hidden by use the of the large scale nationwide comparison and analysis.
In the Council’s fourth and final argument, it faulted the FWS for failing to address the rate of loss of critical habitat for each of the species at issue. There is however, no obligation in either the ESA or its implementing regulations for the FWS to calculate a rate of loss. Therefore, the court concluded that FWS’ finding of no adverse modification was neither arbitrary nor capricious, where the FWS applied the proper definition of adverse modification and reasonably concluded that the effects of the proposed project would not appreciably diminish the value of the species critical habitat.
This decision supports the use of a percentage analysis based on the comparison of nationwide critical habitat acreage to the project specific acreage impact. As with any project, consultants and the federal agencies that use this methodology will want to ensure that the analysis is fully supported by the record, but as long as the analysis is supported, the Ninth Circuit Court of Appeals has effectively approved the comparison of nationwide acreage to project specific acreage to determine the adverse impact to critical habitat.
Diane G. Kindermann Henderson is a partner at Abbott & Kindermann, LLP and Cori M. Badgley is an associate. For questions relating to this article or any other California land use, real estate, environmental and/or planning issues contact Abbott & Kindermann, LLP at (916) 456-9595.
The information presented in this article should not be construed to be formal legal advice by Abbott & Kindermann, LLP, nor the formation of a lawyer/client relationship. Because of the changing nature of this area of the law and the importance of individual facts, readers are encouraged to seek independent counsel for advice regarding their individual legal issues