On August 25, 2010, the US Court of Appeals for the Ninth Circuit ruled in Northern California River Watch v Wilcox (Case No 08-15780) that privately-owned wetlands adjacent to navigable waters of the United States do not qualify as “areas under Federal jurisdiction” for purposes of the Endangered Species Act (16 U.S.C. § 1531 et seq., the “ESA”). Accordingly, because the ESA only prohibits the take of endangered plant species in “areas under Federal jurisdiction,” the Court’s ruling means that the ESA does not prohibit the take of endangered plants on privately held wetlands, even where those wetlands are subject to the jurisdiction of the U.S. Army Corps of Engineers (the “Corps”). The wetlands at issue in Northern California River Watch were adjacent to “navigable waters” as defined in the Clean Air Act (33 U.S.C. § 1251 et seq.), and therefore any development in those wetlands were within the permitting jurisdiction of the Corps. But the Court found a distinction between Corps jurisdiction and the reach of the ESA.

In Northern California River Watch, developers seeking to develop private property in Sebastopol, California and scientists from the California Department of Fish and Game removed an endangered Sebastopol meadowfoam plant from a wetland on the property. An environmental group sought to prosecute the developers and CDFG staff for an illegal “take” under the ESA, but the Court held the ESA’s take provisions were inapplicable because the private wetland was not an “area under Federal jurisdiction.” The Court noted in particular that extending the reach of the ESA in such a manner risks going down a slippery slope – “areas under Federal jurisdiction” could potentially be read to include land anywhere within the country’s borders. The Court found no support in the ESA for extending the “take” jurisdiction of the U.S. Fish and Wildlife Service (the “Service”) in such a manner. For now, the Court held that “areas under Federal jurisdiction” include lands under the control of the federal government through ownership, leasehold-estates or conservation easements, but not wetlands adjacent to navigable waters.

The Court also found that while the Service had argued as amicus curaie that the ESA’s reach should not be commensurate with Corps jurisdiction, the Court’s decision was not based on any deference to the Service because the Service had not yet issued any formal regulatory interpretation on the matter. Applying the well-established two-part test from Chevron, U.S.A., Inc. v. Natural Resources Defense Counsel, Inc., 467 U.S. 837 (1984) (“Chevron”), the Court held that while the ESA prohibits take in an “area under Federal jurisdiction,” the Service has not yet promulgated any official rule or guidance designating what constitutes an “area under Federal jurisdiction,” so its interpretation was entitled to no deference. In Chevron, the Supreme Court set out a two-part test for determining whether a court should defer to an administrative agency’s interpretation of a statute. In step one, the Court reviews whether the statute is clear, or whether Congress clearly intended that it could be interpreted by an administrative agency and whether such an interpretation was lawfully promulgated. Under step two, the Court looks to whether the administrative interpretation evidences a “reasonable policy choice.” With respect to the ESA, the Ninth Circuit found that although the definition of an “area under Federal jurisdiction” was unclear and open to administrative interpretation, the Service never promulgated any clear interpretation of its meaning. However, the Court closed its Opinion by noting that the Service could in the future issue a regulatory definition of “areas under Federal jurisdiction” that might satisfy the Chevron test for judicial deference and either broaden or restrict the reach of the ESA. So stay tuned.

Link to opinion.