This article originally was published by Law360 on June 22, 2018.

On April 26, 2018, the U.S. Fish & Wildlife Service issued new guidance to its regional directors to facilitate the evaluation and negotiation of Endangered Species Act Section 10(a)(1)(b) incidental take permits, or ITPs, with private parties proposing activities that involve modification of endangered species habitat. The guidance has significant implications for private project proponents considering whether to undertake the often time-consuming and costly process of seeking an ITP and preparing a habitat conservation plan, or HCP, in support of that application. Acknowledging the importance of understanding what constitutes “take” of a listed species in deciding whether an ITP is needed, the guidance emphasizes that habitat modification is not considered take unless it is “likely” to result in the actual death or injury of listed wildlife. Further, the guidance clarifies that the decision whether to apply for a permit is up to the applicant and prohibits agency staff from asserting that a permit is mandatory.

Background and Legal Framework

Congress enacted the ESA in 1973 to protect endangered and threatened species and the habitat on which they depend.1 Section 9 of the act makes it unlawful for any person, including public and private entities, to “take” an endangered or threatened species.2 However, ESA Section 10(a)(1)(b) authorizes FWS to issue permits to private parties to take listed species when the agency finds, among other things, that the taking will be “incidental” to otherwise lawful activities, the impacts of taking will be minimized and mitigated to the maximum extent practicable, and the taking will avoid jeopardy to the affected species.3 ITP applicants must submit a HCP in support of their application outlining the impact that will likely result from the take, the steps the applicant will take to monitor, minimize and mitigate such impacts, alternatives to avoid take and an explanation why those alternatives were rejected.4

The role of habitat modification in ESA implementation and enforcement has long been debated and litigated, with the focus on the extent to which habitat modification alone constitutes a prohibited take. The ESA defines “take” as “harass, harm, pursue, hunt, shoot, wound, kill, trap, capture or collect, or attempt to engage in any such conduct.”5 Current FWS regulations further define “harm” as “an act which actually kills or injures wildlife. Such an act may include significant habitat modification or degradation where it actually kills or injures wildlife by significantly impairing essential behavioral patterns, including breeding, feeding or sheltering.”

Case law has reviewed the meaning and scope of “harm” under the ESA. In Babbitt v. Sweet Home Chapter of Communities for a Greater Oregon,6 the U.S. Supreme Court upheld the current regulatory definition of “harm”, finding that habitat modification can constitute “harm” — and, therefore, a prohibited Section 9 “take” — if the habitat modification results in actual death or injury to wildlife; the court emphasized that “every term in the regulation’s definition of ‘harm’ is subservient to the phrase ‘an act which actually kills or injures wildlife.’” The court found that FWS’s definition was a reasonable interpretation of the ESA because “Congress intended ‘take’ to apply broadly to cover indirect as well as purposeful actions.”7 Later cases such as Defenders of Wildlife v. Bernal8 and Arizona Cattle Grower’s Ass’n v. U.S. Fish and Wildlife Service9 also confirmed that, to qualify as “harm” under the ESA, habitat modification must result in actual death or injury to wildlife. The Arizona Cattle Grower’s decision also held that, although “harm” could be prospective, the mere potential for harm is insufficient; rather, a take must be “reasonably certain to occur.”

The New FWS Guidance Memorandum

Acknowledging that an understanding of what constitutes take under the ESA is “[a]n essential component of analysis needed to determine whether an ITP is needed,” the guidance clarifies the circumstances under which activities involving habitat modification may cause “harm” that necessitates an ITP. The guidance emphasizes that habitat modification, in and of itself, does not necessarily result in take in every situation. Consistent with its review of regulatory history and case law, the guidance concludes that “the actual killing or injury of wildlife” is the most significant element of “harm.” Accordingly, habitat modification activities may qualify as “harm” only if all three of the following conditions are met:

  1. The modification of habitat is significant;
  2. The modification significantly impairs an essential behavior pattern of a listed species, including breeding, feeding or sheltering; and
  3. The significant modification of habitat, with a significant impairment of an essential behavior pattern, is likely to result in the actual death or injury of wildlife.

The guidance memorandum includes a questionnaire to guide a prospective applicant’s evaluation of the potential for habitat modification activities to result in take and requires FWS staff to direct potential applicants to the guidance and questionnaire in response to inquiries about whether their actions need an ITP.

The guidance endorses the “technical assistance” that FWS staff regularly provide to potential applicants for an ITP; agency staff may advise private parties on FWS regulations and policies, as well as the potential for incidental take to occur. Nevertheless, according to the guidance, it is “vital” for FWS staff to recognize that the potential applicants must decide for themselves whether to apply for an ITP. Agency staff may not use mandatory language — such as stating that a permit is “required” — in preapplication communications with the prospective applicant. Recognizing that the ITP and HCP process is applicant-driven, the guidance explains that the threshold determination of whether to develop an HCP and apply for a permit “ultimately rests with the project proponent. Project proponents can take Service input into account and proceed in a number of ways, based upon their own risk assessment. They may proceed (at their own risk) as planned without a permit, modify their project and proceed without a permit or prepare and submit a permit application. Based on their own biological, legal and economic risk assessments, project proponents are free to proceed without a permit at their own risk if they so choose.”

Finally, the guidance concludes that, because the definition of “harass” in the ESA is restricted to intentional or negligent acts or omissions, activities resulting in harassment of listed species may not be covered by a Section 10(a)(1)(b) permit, since by definition such permits are available only for takings “incidental” to lawful activity.10

Implications for Prospective Permittees

This guidance provides important clarity and greater certainty that will foster conservation partnerships between FWS and private parties. Because habitat modification is a common feature of private projects, the guidance will aid in the risk analysis of project proponents considering whether to invest substantial resources in pursuing an ITP or to proceed without one. However, the implications of the guidance — particularly on the issues of habitat modification and take — extend beyond that initial determination, helping to ensure consistent evaluation of habitat modification in relation to take issues in a number of contexts.

For example, where application of the guidance leads a private party to pursue an ITP, the guidance also will help steer successful negotiations between the applicant and FWS on three critical issues: which habitat modification activities specifically require permit coverage; the impacts of taking on the listed species; and the mitigation to be provided in the HCP. The guidance will provide useful sidebars to help ensure that take and its impacts are properly defined and adequately mitigated, but that the regulatory and management burden imposed by the ITP are not out of proportion to what is actually needed. In our experience, completing a careful analysis and reaching agreement with FWS on these critical issues within a reasonable time frame is essential to the success and defensibility of the HCP and ITP.

Further, although the guidance is focused on the ESA Section 10 ITP process for private project proponents, its direction on habitat modification and harm also will guide the take evaluation in the ESA Section 7 interagency consultation process, and likely will guide the FWS evaluation of potential enforcement actions arising from take concerns.

The guidance’s clarification that the potential applicant must decide whether to apply for an ITP will be welcome to potential applicants who will value obtaining FWS advice without being pressured to apply for an ITP that may not be necessary, where the actual risk of take is very low (e.g., where potential habitat is unoccupied) or the activity is easily modified to reduce the risk of take. In fact, the guidance emphasizes that agency staff should not process ITP applications that are submitted solely as “insurance” when take of listed species is unlikely.

The guidance reflects the reality that both the right and the burden of deciding whether to apply for an ITP falls squarely on the prospective applicant, which must make complicated and often difficult decisions about the potential for incidental take, the need for an ITP and the significant investment of time and resources that an HCP process entails. The restriction on FWS staff’s advice does not actually change the risk calculation for the potential applicant, which has always borne the enforcement risks associated with failing to obtain an ITP that is actually needed. The confirmation of the applicant’s rights and responsibilities should further motivate potential applicants to make well-informed and carefully evaluated decisions. Further, to be clear, the guidance does not prohibit FWS from providing advice if potential applicants request it, including on the potential for their habitat modification activities to result in take. Indeed, FWS’ technical assistance is vital to that evaluation by even the most sophisticated potential applicant.