The endangered species listing of the Lesser Prairie Chicken (LPC) was set aside by a Texas federal court on Tuesday in litigation closely watched by oil and gas interests in the Permian Basin as well as ranchers, farmers and others in west Texas, New Mexico, Oklahoma, Kansas and Colorado. And, while the Court’s decision is important to those entities, it will likely have an impact far beyond those areas, as one of the first court decisions to thoroughly evaluate nascent efforts by industry to fend off a spate of new potential Endangered Species Act (ESA) listings.

At issue in the case was how the U.S. Fish and Wildlife Service (FWS) evaluated the rangewide conservation plan (Plan) put together by and in the affected states. Faced with the potential listing of the LPC, the states put together the Plan to encourage private LPC conservation efforts in the hope that those private efforts would preclude the need for listing of the species. Despite completion of the Plan and its initiation, the FWS listed the LPC as threatened under the ESA.

In the ensuing lawsuit, the primary issue was whether FWS properly evaluated the Plan in light of its Policy for Evaluation of Conservation Efforts When Making Listing Decisions (PECE).

The Plan functions like many similar recent efforts (related to the Sand Dunes Lizard and Sage Grouse, for example), in which participants pay an enrollment fee. That fee is used to implement conservation measures, and more money for funding these measures comes from participants that damage LPC habitat. Landowners and others who enroll LPC habitat to be preserved receive payments and other economic incentives.

Given that the Plan was so new at the time of the listing decision, FWS expressed concerns about whether it would be implemented, the degree of participation which would occur, the degree to which it would be funded and, significantly, that not listing the LPC would discourage participation in the plan. The Court rejected these concerns.

The Court’s opinion contains detailed analysis about what deference should be afforded the FWS as well as FWS’s rationale for its decision. In the end, the Court drew a sharp distinction between new conservation plans and existing ones. The Court stressed that, here, “[a]lthough no landowners had yet to enroll, the enrollment period was ongoing and, in fact, had just opened. This fact is important because PECE is intended to look forward and make a projection as to the number of landowners it anticipated.” New plans, said the Court, do not have to show the level of success required of existing plans.

For existing plans, FWS must “be able to show that the plan has contributed to the elimination of one or more threats to the species. . . such that the species no longer meets the definition of threatened or endangered.” But new plans have a lesser standard, only having to “be certain that the . . . effort improves the status of the species at the time of the listing decision.” This is done by determining “whether a fledgling effort ‘improves’ a species’ status by evaluating (1) the projected likelihood that a given effort will actually be implemented and (2) the projected effectiveness of that effort.” “If FWS has confidence the effort will be effective in the future at adequately reducing or eliminating a threat to the species, as well as confidence the effort will be implemented, that consideration may influence FWS to not list the species as threatened or endangered.” (emphasis added). For new plans, “FWS should have considered factors not presently included in the record, such as prior industry and landowner participation in other conservation efforts in the area and FWS’s assessment of RWP’s incentives (e.g., Was it a good deal? Would those incentives make landowner participation more likely?).”

In light of the current press of listing decisions, this distinction is critical. With FWS set to make dozens of significant listing decisions over the next few years, industry’s primary effort at preempting those decisions is a push to implement voluntary measures. Many – like those for the sage grouse – are enormous undertakings involving millions of acres. It will take time to get these efforts negotiated, subscribed and implemented. Judging these efforts by a forward-looking examination of their potential success rather than a backward-looking review of their actual success will mean that they have a much greater chance at successfully fending off listings and should incentivize industry to keep creating and participating in them. And that’s good for both the species and for industry.