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California Endangered Species Act Compels Consideration of Economic Objectives. Court of Appeal Upholds Validity of Pacific Lumber Company Habitat Conservation Plan

By: Robert D. Thornton

In a precedent-setting interpretation of the California Endangered Species Act, ("CESA") the California Court of Appeal held that CESA "compels consideration to [the applicant’s] economic objectives."  The Court also held that the "fully mitigate" requirements of CESA allow short-term impacts to an endangered or threatened species where the impacts will be addressed over the life of the permit.  Further, CESA does not require applicants to mitigate for the impacts of unforeseen circumstances.  Environmental Protection Information Center ("EPIC") v. California Department of Forestry and Fire Protection (First District Court of Appeal December 12, 2005). 


The Court of Appeal rejected environmental challenges to the Pacific Lumber Company’s habitat conservation plan concerning timber harvest activities on the Company’s 200,000 acres in Humboldt County.  The Company prepared the HCP as part of the historic transaction that resulted in the sale of the Headwaters Forest to the United States and the State.  Nossaman represented the Company on the habitat conservation plan and the related federal and state permits and in the sale of the Headwaters Forest.


Discussion:  CESA authorizes the Department of Fish and Game to authorize incidental take of endangered and threatened species.  Fish and Game Code, § 2081, subd. (b).  CESA requires that the impacts of the taking be "fully mitigated."  Importantly, CESA provides that (1) minimization and mitigation measures shall be "roughly proportional" in extent to the impact of the taking, and that (2) when several mitigation measures are available, the measures shall maintain the applicant’s objectives to the greatest extent possible.  Id.  Prior to the EPIC decision, no appellate court had interpreted these important provisions of CESA.


In EPIC, environmental plaintiffs challenged the habitat conservation plan and CESA incidental take permit issued to the Pacific Lumber Company for its timber harvesting operations.  The environmental groups argued that Pacific Lumber’s permit violated CESA because the permit authorized short-term impacts to the marbled murrelet would be mitigated over a long period of time.  They also asserted that the "No Surprises" assurances in the HCP violated the "fully mitigated" obligation because Fish and Game agreed that Pacific Lumber is not required to mitigate for impacts of "unforeseen circumstances."  The environmental groups also argued that the HCP violated CESA because the HCP required Fish and Game to balance impacts on the murrelet with Pacific Lumber’s operational needs.


The Court rejected all of the above claims and affirmed the validity of the Pacific Lumber HCP and incidental take permit.  The Court concluded that the CESA "fully mitigated" obligation does not prohibit short term impacts where the impacts will be mitigated over the life of the permit.  The Pacific Lumber HCP acknowledged that harvesting activities would have short term impacts on the murrelet, but that the impacts would be fully mitigated over the 50-year term of the HCP through the measures in the HCP. 


The Court rejected the environmental group’s challenges to the No Surprises assurances in the HCP.  The Court concluded that since CESA only imposes mitigation obligations for "purposeful activities", applicants do not have an obligation to mitigate for unforeseen circumstances. 


The Court also rejected the environmental groups’ claims that the HCP violated CESA because it required Fish and Game to recognize the Company’s operational needs for harvests in murrelet areas.  The Court stated that CESA "not only allows but expressly compels giving consideration to economic objectives." 


The Court’s decision makes it clear that the Department of Fish and Game must consider applicant’s economic objectives.  The decision interprets the CESA "fully mitigated" obligation to allow impacts of the incidental take to be addressed over the life of the permit.


One aspect of the Court’s decision is disappointing.  As is the case with many CESA permits, Fish and Game authorized incidental take of several unlisted species in the event that the unlisted species were listed as endangered or threatened in the future.  The Court concluded that CESA did not authorize the issuance of incidental take permits prior to the time that a species is listed as endangered or threatened.  Nevertheless, the Court utilized the severability provisions of the HCP Implementation Agreement to uphold the validity of the HCP and permit.  Permit applicants are advised to carefully consider this aspect of the Court’s decision in determining whether and how to obtain future incidental take authority for unlisted species.

Robert Thornton is a Partner in Nossaman’s Irvine office and has practiced environmental law for over twenty-eight years.  He represents landowners, resource developers and public agencies on a variety of environmental matters and is nationally recognized as an expert on the Endangered Species Act and regional habitat conservation plans.  He can be reached at (949) 833-7800 or

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