On August 16, 2012, the Center for Biological Diversity (“Environmentalists”) submitted a Notice of Intent to Sue alleging that the United States Army Corps of Engineers’ (“COE”) reauthorization of 48 nationwide permits (“NWP”) and authorization of two new NWPs failed to comply with the Endangered Species Act (“ESA”). Among the 50 NWPs challenged are: #12 - Utility Line Activities; #14 – Linear Transportation Projects, #16 – Return Water From Upland Contained Disposal Areas; #17 – Hydropower Projects; #25 - Structural Discharges; #29 – Residential Developments; #33 – Temporary Construction Access and Dewatering, #39 – Commercial and Institutional Developments, #42 Recreational Facilities; #43 Stormwater Management Facilities; and new Permit A – Land-Based Renewable Energy Generation Facilities. As discussed below, it is difficult to overstate the potential for such a lawsuit to disrupt a host of construction projects previously thought to have little or no adverse effect on species listed under the ESA, including projects that already have been authorized by one of the 50 NWPs. At a time when the construction industry struggles with a weak economy, this potential litigation could damage the fragile recovery.

COE Clean Water Act (“CWA”) Permits

Pursuant to Section 404 of the CWA, the COE issues two main types of permits that authorize discharge of dredge and fill material into the navigable waters (including wetlands) of the United States: 1. Individual permits issued on a case-by-case basis which require public notice and comment; and 2. General permits issued on a state, regional, or nationwide basis for any category of activities involving discharges if they are similar in nature and will only have minimal cumulative adverse effect on the environment. All of the 50 NWPs targeted by the Environmentalists are general permits and, as such, require no public notice and are designed to regulate with little, if any, delay or paperwork those activities having minimal environmental impacts. The Environmentalists’ fundamental legal argument is that, even if individual projects authorized under a NWP have no adverse effect on species listed under the ESA, the COE has still failed to comply with the ESA’s obligation that it insure that actions it authorizes under a NWP as a cumulative whole are not likely to adversely affect such species.

The COE’s Obligation To Consult  

Pursuant to the ESA:

Each Federal agency shall, in consultation with and with the assistance of the [U.S. Fish and Wildlife Service or the National Marine Fisheries Service], utilize their authorities to insure that any action authorized, funded, or carried out by such agency is not likely to jeopardize the continued existence of any endangered species or threatened species or result in the destruction or adverse modification of [critical habitat] . . . .

The Environmentalists contend that the COE violated the ESA when it failed to submit any of its 50 NWPs for formal consultation with the Fish and Wildlife Service as to the effect of those permits on terrestrial species. Little more is said in the Notice of Intent to Sue about this aspect of the Environmentalists’ lawsuit.

Of course, the COE’s NWPs are more likely to authorize projects that potentially impact aquatic species and, in this regard, the COE did engage in formal consultation with National Marine Fisheries Service (“NMFS”) as to the effects of its NWPs on species listed under the ESA. NMFS concluded, however, that:  

[COE] has not structured its proposed Nationwide Permit Program so that the [COE] is positioned to know or reliably estimate the general and particular effects of the activities that would be authorized by the proposed Nationwide Permits on the quality of the waters that would receive those discharges and, by extension, be positioned to know or reliably estimate the general and particular effects of those discharges on endangered and threatened species.

Because of this uncertainty, NMFS would not agree that the NWPs were in compliance with the COE’s obligations under the ESA. Instead, NMFS identified certain alternative measures that the COE is to implement in an effort to ascertain and then mitigate impacts to listed species and habitat caused by projects authorized under its NWPs. Upon receiving notice of such proposed alternatives from NMFS, the COE must: terminate its action (i.e., rescind the NWPs); or implement NMFS’ proposed alternatives; or seek an exemption from the Cabinet-level Endangered Species Committee – something which very rarely has been granted.

Adoption of NMFS’ proposed alternatives would impose a host of new regulatory obligations, including: data collection from individual permit holders by the COE as to the effects of their activities on listed species and habitat, submission of this data to the NMFS for formal consultation regarding the cumulative impact of the NWPs on water quality, and the establishment of “performance triggers” for the NWP program if certain water quality levels are not met. Notably, the performance triggers require the COE to suspend or revoke NWPs for a given area when the specified water quality levels are not met. In short, an elaborate, new regulatory system of reporting by permit holders, data collection by the COE, and oversight by the NMFS would be established in order to quantify and maintain water quality standards to benefit species listed under the ESA and their habitat. The concluding line of NMFS’ review of the NWPs states that the COE is required to notify NMFS of its final decision on implementation of the proposed alternatives. The Environmentalists maintain that the COE has not done so and as a result the NWPs under which the COE is currently operating (and by extension projects authorized under them) violate the ESA.

Conclusion

The potential implications of the threatened litigation under the ESA range across a number of industries that rely on the COE’s authorization of projects under a NWP as a primary means of complying with the ESA. The fact that NMFS has criticized the NWP program and offered alternatives (that the COE is yet to adopt) to ameliorate its effects on listed species and their critical habitat may undermine COE’s legal position should compliance with the alternatives proposed by NMFS would usher in heightened regulatory obligations for permit holders and the agencies alike that, at a minimum, will result in greater delay in project approval. How the COE will react to the August 16, 2012 Notice of Intent to Sue, which allows the Environmentalists to bring a “citizens suit” under the ESA after waiting 60 days, remains to be seen.