The two Services implementing the Endangered Species Act (ESA), the U.S. Fish and Wildlife Service and National Marine Fisheries Service, recently released three proposals for public comment that address different aspects of "critical habitat" under the ESA. 79 Fed. Reg. 27053, 27063, and 27066 (May 12, 2014). These proposals would affect how critical habitat is defined, the methods the Services use to designate it, and the elements the Services will consider in consultations on discretionary federal actions to determine whether such actions will result in "destruction or adverse modification" of critical habitat. ESA Section 7(a)(2), 16 U.S.C. 1536(a)(2). Each proposal is summarized below. The public comment periods for these proposals end on July 11, 2014. Affected trade associations and industries should consider commenting.
REVISED DEFINITION OF "ADVERSE MODIFICATION" OF CRITICAL HABITAT
Perhaps the most important proposal is the long-awaited redefinition of "destruction or adverse modification" of critical habitat (AdMod). 79 Fed. Reg. 27060-66 (May 12, 2014). AdMod is one of the two standards in ESA § 7(a)(2) for determining whether a discretionary federal agency action substantively complies with ESA § 7. The proposed rule replaces a regulatory definition that the Services ceased to apply in 2004, after the Fifth and Ninth Circuits declared that it was inconsistent with the ESA. The courts explained that the regulatory definition failed to incorporate the "conservation" or improvement role imposed on "critical habitat" by the statute. The Services' regulatory definition at the time prohibited a federal action only when that action's adverse modification of critical habitat would harm the "survival" of a listed species. See Gifford Pinchot Task Force v. U.S. Fish and Wildlife Service, 378 F.3d 1059, 1069-71 (9th Cir. 2004); Sierra Club v. U.S. Fish and Wildlife Service, 245 F.3d 434, 441-42 (5th Cir. 2001).
The proposed AdMod Rule accepts those courts' analyses. Further, the proposed AdMod definition is consistent with the Services' informal interpretation of AdMod from 2004 to 2014. The proposed rule defines AdMod as follows:
Destruction or adverse modification means a direct or indirect alteration that appreciably diminishes the conservation value of critical habitat for listed species. Such alterations may include, but are not limited to, effects that preclude or significantly delay the development of the physical or biological features that support the life-history needs of the species for recovery.
79 Fed. Reg. at 27061. This definition includes a new term, "conservation value," which the Services intend to "embod[y] the intended recovery role of critical habitat." Id. at 27062. In consultation on a federal action, the Services will first determine the conservation value of critical habitat that may be affected by the action, and then determine whether the proposed action will "appreciably diminish" that value. The proposed AdMod Rule would clarify how that analysis takes place. The Services explain that "the question is whether the 'effects of that action' will appreciably diminish the conservation value of the critical habitat as a whole not just in the area where the action takes place." Id. at 27603.
This holistic analysis of critical habitat impacts is one of the aspects of the proposal rule that is favorable to regulated interests. Similarly the Services would allow human uses/degradation of some small areas of critical habitat. Id. These positions are consistent with the Services' representations that designation of critical habitat does not create an inviolate wildlife sanctuary.
However, other elements of the proposal may be adverse to the regulated community's interests. For instance, the Services acknowledge that they will need to apply these standards "cautiously" to avoid a standard that is "either too sensitive . . . or not sensitive enough." This implies that the Services will retain substantial discretion in making AdMod determinations under this proposed rule, and those discretionary determinations could be difficult to challenge in litigation. Trade associations whose members have operations that could be impacted by application of the AdMod standard to the tens of millions of acres of designated critical habitat should consider commenting within the 60-day comment period.
PROPOSED RULES ON DESIGNATING CRITICAL HABITAT
The second set of proposed rules would amend the 50 C.F.R. Part 424 provisions for designating critical habitat. The draft rules are intended to grant the Services greater discretion in designating critical habitat and reduce some of the costs of that process. While some of the draft rules are housekeeping edits, there are some substantive changes that could be of interest to particular commenters on, and users of, critical habitat.
Several of the proposed rules define various portions of the complex ESA § 3(5) definition of "critical habitat." Some of these definitional changes would have substantive impacts. For example, ESA § 3(5) has different subparts on possible designation of critical habitat inside and outside the "geographical area occupied by the species." Proposed § 424.02 would define this to mean the "area ... delineated around the species' occurrences ... (i.e., range)," and not the smaller set of habitats actually occupied by a listed species. 79 Fed. Reg. 27066, 27068-69.
Further, the proposed rule and its preamble remove any preference for designating areas inside the species' current range to the exclusion of areas outside the range. See id. at 27069-73. The preamble states: "[a]s the effects of global climate change continue to influence distribution and migration patterns of species, the ability to designate areas that a species has not historically occupied is expected to become increasingly important." Id. at 27073. Unless this policy is altered, broader areas may be designated as critical habitat in the future to account for species' response to climate change, meaning broader areas would be affected by the AdMod constraint.
The proposal also defines the "physical and biological features" of critical habitat that a listed species depends upon, eliminating the former – and overlapping – concept of "primary constituent elements" of critical habitat. Id. at 27069-70. In another proposed definition, the Services define the ESA § 3(5) phrase "special management considerations or protection" to allow designation where critical habitat protections would be "useful" (instead of necessary) for a listed species. Id. at 27070.
Finally, the definition section of the preamble includes an announcement of policy interpretation that is potentially adverse to regulated community interests. The unusual ESA § 3(16) definition of "species" includes not only a biological species, but also a "subspecies" and a "population segment of any species of vertebrate fish and wildlife which interbreeds when mature." The final phrase allows the listing of a distinct population segment (DPS) even when the biological species itself is not imperiled. Although the Services are not proposing to change this definition, they are using this preamble to announce their "longstanding interpretation" of the phrase "interbreeds when mature": "members of the same species or subspecies in the wild that would be biologically capable of interbreeding if given the opportunity, but all members need not actually interbreed with each other." Id. at 27070. This eliminates some of the rigor required before listing a DPS and allows listing a broader DPS made up of different populations that do not actually interbreed. The Services claim their interpretation is intended to reflect the understanding that biological species are defined by their ability to interbreed, but they do not address the potential statutory interpretation problem with their position: a DPS, by definition, must be made up of individuals of the same species, so interpreting the phrase "interbreeds as mature" as simply "reflecting" that biological concept effectively writes the phrase out of the statutory definition of DPS.
In addition to definitional changes, the proposed Part 424 amendments alter the process for designating critical habitat under the Secretary's initiative (the procedures for handling citizen petitions to designate critical habitat remain unchanged). Id. at 27070-74. Proposed § 424.12(b) and (e) strive to grant the Services more discretion on whether to designate only the small individual areas occupied by a listed species (e.g., a series of wetlands), or to designate a broader area (e.g., all wetland areas within an external boundary). Id. Further, proposed revisions to § 424.12(a) reflect the case law that the Service must designate critical habitat in most instances. The Service can find critical habitat designation is not "prudent" or "determinable" only in limited situations. Id. at 27071.
PROPOSED POLICY ON EXCLUSIONS FROM DESIGNATED CRITICAL HABITAT
ESA § 4 requires that critical habitat be designated by notice-and-comment rulemaking. ESA § 4(b)(2) directs the Service to assess the economic impact of designating areas to be critical habitat. 16 U.S.C. § 1533(b)(2). Further, the provision allows the Service to exclude areas from critical habitat on economic or other public interest grounds, and allows public comment to reduce the size of critical habitat below the biologically optimum size for recovery of a species.
The Services' proposed policy emphasizes that the decision to exclude areas from critical habitat is solely within their discretion and then addresses situations where the Services generally will exclude, and not exclude, certain lands from becoming designated critical habitat. See 79 Fed. Reg. 27052-59 (May 12, 2014). Most importantly for the private sector, the proposed policy encourages voluntary habitat conservation initiatives by non-federal actors. It does so by providing an assurance that non-federal lands committed to operational ESA § 10 habitat conservation plans (HCPs), safe harbor agreements (SHAs), and candidate conservation agreements with assurances (CCAAs) generally will be excluded from being designated as critical habitat.
"However, promises of future conservation actions in draft CCAAs, SHAs, and HCPs will be given little weight in the discretionary exclusion analysis." 79 Fed. Reg. 27055. Thus, lands must be formally committed to a conservation agreement by the time a critical habitat designation is being considered in order to have a substantial likelihood of being excluded from critical habitat.
More generally, the proposed policy states that that the Services "will focus our [possible ESA § 4(b)(2)] exclusions on non-Federal lands." 79 Fed. Reg. 27057. Federal land management agencies are expected to continue to take the lead on conservation of listed species. Federal lands normally will be excluded from critical habitat only when there are conflicts with military or homeland security interests. See id.
The Services' three proposals on critical habitat matters will create a busy 60-day comment period for those affected by critical habitat issues. While this overview highlights a few issues in the proposals, it is not intended to be exhaustive. Trade associations should carefully review the package and decide which elements of the critical habitat initiatives warrant public comment.