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California Supreme Court Issues Precedent-Setting California Endangered Species Act Decision

By: Robert D. Thornton, Paul S. Weiland
07/23/08

In a decision with mixed results for public infrastructure agencies and for private development, on July 17, the California Supreme Court interpreted the California Endangered Species Act to require permit applicants to "fully mitigate" for impacts of natural disasters on endangered species subject to CESA.[1] At the same time, the Court rejected claims that the common law public trust doctrine imposed separate and additional obligations to protect endangered species.

The decision will likely have a major impact on public agency and private development activities in many parts of the State. The decision may make it more difficult for the State to address the water supply and other critical infrastructure challenges facing the State.

Background to the Supreme Court Decision

The case arose out of the 20 year controversy regarding the management of forest lands owned by the Pacific Lumber Company in Humboldt County. As part of the so-called "Headwaters Forest" agreement, the state and federal fish and wildlife agencies (Department of Fish and Game, U.S. Fish and Wildlife Service, and the National Marine Fisheries Service) issued permits to the Company authorizing take of a number of endangered and threatened species (as well as unlisted species) incidental to timber harvests and other activities on timberlands in Humboldt County.

The agreement entered into between the state and federal agencies and Pacific Lumber provided "no surprises" assurances to Pacific Lumber. The Department of Fish and Game agreed that it would not impose additional or different mitigation or compensation requirements on Pacific Lumber in the event of unforeseen events. The Department of Fish and Game also agreed that it would not impose additional mitigation or compensation requirements on Pacific Lumber in the event of certain foreseeable "changed circumstances" except as provided in the approved habitat conservation plan.

In a unanimous decision, the Court of Appeal rejected[2] the plaintiff environmental group’s challenge to the CESA incidental take permit in holding that the "no surprises" assurances provided to Pacific Lumber did not violate CESA and did not violate the public trust doctrine. (Environmental Protection Information Center v. California Department of Forestry and Fire Protection (2005) 134 Cal.App.4th 1093.)

Summary of Supreme Court Decision

The Supreme Court affirmed, in part, and reversed, in part, the Court of Appeal’s decision. The Supreme Court affirmed the Court of Appeal on the public trust issue -- holding that the "no surprises" assurances provided to Pacific Lumber by the Department of Fish and Game did not violate the common law public trust. Importantly, the Court stated that the "fully mitigate" standard is a creature of statute (CESA) and that the public trust doctrine does not impose this requirement. (Slip Op. at p. 70.)

The Court reversed the Court of Appeal on the "no surprises issue" and concluded that the "no surprises" assurances provided by the Department to Pacific Lumber violate CESA because: (1) CESA does not expressly authorize regulatory assurances, and (2) While a CESA permittee is not required to mitigate for impacts of natural disasters, the "full mitigation" obligation applies where "these impacts are exacerbated by the permit holder’s own subsequent purposeful activities . . . ." (Slip Op. at pp. 59-66.)

Implications of the Decision

The decision raises uncertainty regarding key provisions of the 1997 amendments to the California Endangered Species Act. The 1997 amendments reflected a compromise between the development and environmental communities concerning the extent of the CESA’s "fully mitigate" obligation, including that any mitigation must be "roughly proportional" to the impact, and that where various measures are available to meet the "fully mitigate" standard, the "measures required shall maintain the applicant’s objectives to the greatest extent possible." (Fish & Game Code, § 2081, subd. (b)(2).)

The Court of Appeal recognized that this language imposes certain limitations on the "fully mitigate" requirement and "expressly compels giving consideration to economic objectives." (134 Cal.App.4th at 1135).

The Supreme Court stated that the language of the 1997 CESA amendments:

    [M]erely provides that when that obligation can be met in several ways, the way most 
    consistent with a landowner’s objectives should be chosen. It does not relieve the
    landowner of the obligation to fully mitigate its own impacts.

(Slip Op. at p. 65.)

The Supreme Court opinion suggests that permit applicants may be required to mitigate for the impacts on listed or candidate species of rare events such as large fires and floods "if the events themselves change conditions in such a way as to necessitate additional mitigation measures." (Slip Op. at p. 67.) On the other hand, the Court stated:

    To be sure, there is no obligation for a permit holder to mitigate the impacts
    of the natural disasters themselves when it did not contribute to them. But
    when these impacts are exacerbated by the permit holder’s own subsequent
    purposeful activities, then section 2081(b)(2) mandates the full mitigation of
    the impacts of a take, guided by the principle of rough proportionality.

(Silp Op. at p. 66.)

The Court’s discussion of a permit holder’s obligation to mitigate for "exacerbation" of natural events "as guided by the principle of rough proportionality" will almost certainly be the subject of additional litigation and controversy.

The decision recognizes that the Legislature intended to authorize regulatory assurances pursuant to the Natural Community Conservation Planning Act so that the Court’s holding is limited to CESA. Furthermore, the Court’s interpretation of State law has no impact on the authority of the federal wildlife agencies to provide no surprises assurances pursuant to the federal Endangered Species Act. The federal courts have upheld the validity of the federal "No Surprises" rule. (Spirit of the Sage Council v. Kempthorne (D.D.C. 2007) 511 Fed.Supp.2d 31.)[3]

Robert Thornton 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 rthornton@nossaman.com.

Paul Weiland is the Land Use Practice Group Leader at Nossaman. He counsels clients regarding environmental and land use matters and litigates such matters in trial and appellate courts under a variety of statutes, including the Endangered Species Act. He can be reached at 949.833.7800 or pweiland@nossaman.com.


[1] Nossaman filed an amicus brief in this matter in support of respondents on behalf of California Building Industry Association, Building Industry Legal Defense Foundation, California Business Properties Association, Imperial Irrigation District, Kern Water Bank Authority, and Consulting Engineers and Land Surveyors of California.

[2] The Court of Appeal concluded that CESA did not authorize the Department of Fish and Game to authorize incidental take of unlisted species. The State and Pacific Lumber did not seek review of this aspect of the Court of Appeal decision.

[3] Nossaman represented the National Association of Home Builders and other intervenors in the Spirit of the Sage Council litigation in defense of the "No Surprises" Rule.

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