Proposed Critical Habitat Rules Change Reach of the Endangered Species Act

The U.S. Fish and Wildlife Service and the National Marine Fisheries Service have proposed two important new rules implementing the critical habitat provisions of the Endangered Species Act (ESA).  79 Fed.Reg. 27060 (May 12, 2014); 79 Fed.Reg. 27066 (May 12, 2014).  The proposed rules expand the regulatory definition of "critical habitat" and "adverse modification" – key ESA terms governing federal agency actions on tens of millions of acres of public and private land throughout the nation.  The proposed new rules raise difficult issues for transportation agencies because of the practical limitations on the ability of linear transportation projects to avoid critical habitat in many cases. 

The federal wildlife agencies also proposed a new policy governing the exclusion of areas from critical habitat based on economic and other impacts.  79 Fed.Reg. 27052 (May 12, 2014).  Collectively, the proposed rules and policy constitute the most significant regulatory interpretations of the ESA since the Clinton Administration.  They will almost certainly trigger significant public controversy.

With limited exceptions, the ESA requires the wildlife agencies to designate critical habitat for every threatened and endangered species.  The ESA prohibits federal agency actions that "adversely modify" critical habitat. 16 U.S.C. § 1536(a)(2).  The ESA also requires the wildlife agencies to weigh and balance the economic and other impacts of designating critical habitat and authorizes the exclusion of areas from critical habitat based on these impacts.  16 U.S.C. § 1533(b)(2).  The critical habitat provisions of the ESA stimulated a tsunami of litigation by the environmental and regulated communities resulting in the reevaluation of dozens of critical habitat designations. 

The proposed new definition of "adverse modification", in part, responds to decisions by two federal circuit courts that the existing definition was inconsistent with the ESA.  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).

Important components of the proposed rules include the following:

1. Elimination of restrictions on the designation of critical habitat in areas that are not occupied by the species;

2. Broad discretion to designate critical habitat in degraded and sub-optimal habitat areas and in areas that do not presently contain features essential to the conservation of the species;

3. Interpretation of "adverse modification" to include actions that affect that value of critical habitat for the recovery of the species;

4. Interpretation of "adverse modification" to include activities that significantly delay habitat features supporting recovery of the species; and

5. Establishment of "adverse modification" standard based on impacts to the conservation value of the critical habitat areas as a whole.

The proposed policy describes an approach to the use of statutory authority to exclude areas from critical habitat based on economic and other impacts.  Congress amended the ESA in 1978 to authorize the agencies to exclude areas from critical habitat "if the benefits of . . . exclusion outweigh the benefits of specifying such area as part of the critical habitat."  16 U.S.C. § 1533(b)(2).  Since 1978, the agencies' policy governing the use of the exclusion authority has varied widely. For many years the Fish and Wildlife Service routinely excluded tribal lands areas and areas within approved habitat conservation plans (HCPs), candidate conservation agreements and safe harbor agreements from critical habitat.   In recent years, however, the Service has designated critical habitat on tribal lands and within areas with approved HCPs and other conservation agreements.   

The public comment period on the proposed rules and on the policy closes on July 11, 2014.