As renewable energy projects proliferate across the United States in response to federal and state mandates and incentives, there are increasing clashes between this green form of energy and environmental regulations issued under a complex web of national and local laws. Opponents of a project—often environmental groups or organizations of local residents concerned about aesthetics or property values—are now commonly filing lawsuits to halt, delay or force changes in the project, alleging violations of the environmental laws.

Of necessity, wind and solar energy projects (and the infrastructure and transmission facilities that serve them) are often best sited in areas containing rare flora and fauna, great natural beauty or protected wetlands. Failure to address proactively the environmental issues that arise as a result can easily lead to government- or citizen-initiated litigation or agency action that interferes with a project’s completion. It also risks potentially severe civil monetary penalties, and even criminal penalties of fines and imprisonment.

Renewable energy investors and developers are well advised to take special care to ensure early in a project that they understand, and comply with, the many facets of federal, state and local environmental laws, and also make an assessment of the risk and cost of litigation. This alert outlines some of the key areas in which environmental litigation is a significant risk for renewable energy projects.

The Endangered Species Act

More than 1,250 animals and plants across the United States are listed by the federal government as “endangered” or “threatened,” which gives them special protection under the Endangered Species Act (ESA). These creatures or plants can vary substantially and include miniscule subsurface invertebrates, flies that appear for a few weeks each year, coastal butterflies, invertebrates that breed in evanescent ponds and washes, nesting or migrating birds, or wolves with huge hunting ranges, to mention only a few that our lawyers have dealt with in ESA actions during recent years. The need to site wind and solar energy projects in areas that combine maximum wind and sun exposure with the availability of adequate land for development makes conflicts with endangered species protection a significant issue for these projects.

The ESA’s Statutory and Regulatory Scheme: The “Take” Prohibition.

US federal and state policies increasingly favor renewable energy sources. But the US Supreme Court has long held that in adopting the ESA in 1973, “Congress intended endangered species to be afforded the highest of priorities” and aimed to “halt and reverse the trend toward species extinction, whatever the cost.” TVA v. Hill, 437 U.S. 153, 174, 184 (1978). There is no exemption from the ESA for green energy projects. The clash between them typically comes to a head in the application of Section 9 of the ESA, 16 U.S.C. § 1538(a)(1)(B), which makes it unlawful to “take” any endangered species. A “take” is broadly defined to include any action that will “harass,” “harm,” “wound” or “kill” any member of a protected species. 16 U.S.C. § 1532(19). Federal regulators have interpreted this provision to bar any action that “disrupt[s] normal behavioral patterns” with regard to “breeding, feeding, or sheltering.” 50 C.F.R. § 17.3. Prohibited acts include any “modification or degradation” of habitat that “actually kills or injures wildlife” by interfering with “essential behavioral patterns”—a far-reaching limitation on “habitat modification” that has been endorsed by the Supreme Court. Babbitt v. Sweet Home Chapter, 515 U.S. 687 (1995).

Accordingly, any wind, solar or other renewable energy project that impinges on the life of an endangered species—whether by destroying or disrupting habitat, or injuring protected creatures in turbines or on service roads—triggers Section 9. Litigation examples include NAHB v. Babbitt, 130 F.3d 1041 (D.C. Cir. 1997), which required costly modification of a public hospital complex and access road to avoid disturbing habitat of the Delhi Sands flower-loving fly, and GDF Realty Investments v. Norton, 326 F.3d 622 (5th Cir. 2003), which halted development due to the presence of six species of nearly microscopic subterranean invertebrates in caves and sinkholes. And the cost of engaging in a take without following the proper procedures is high: civil fines up to $25,000 per violation, criminal fines of $50,000, and one year’s imprisonment. Magnifying the risks, it is not only government regulators that may sue to enforce the ESA: “any person” with standing, such as local residents or environmental groups, may initiate a civil suit to allege that an unlawful take has occurred or to enjoin a future take. 16 U.S.C. § 1540(g). Environmental litigation has become a standard tool for those opposed to a particular development.

Incidental Take Permits And Habitat Conservation Plans.

If a project is likely to involve a take, the developer should obtain an “incidental take permit” from the federal Fish & Wildlife Service (FWS). Obtaining a permit requires preparing a “Habitat Conservation Plan” that sets out steps to minimize and mitigate the harm to endangered species. Negotiations with FWS and other interested federal and state agencies about the proposed plan may result in significant modifications of a project being required (assuming it is allowed to proceed at all), as well as costly steps such as creating or preserving off-site habitat as mitigation. FWS continues to monitor compliance with the final plan—as may neighbors and environmental organizations, which can sue if they believe violations have occurred.

Critical Habitat Designations.

For many listed species, the federal government has designated areas, sometimes very large, of “critical habitat.” For example, it has recently proposed designating 70,000 square miles of critical habitat off the West Coast for the endangered leatherback sea turtle. Whenever projects in those areas involve federal land, federal funding or federal agency approval—as is commonly the case with commercial renewable energy projects—modifications may be required even if no take will occur as a result of the project. For example, wind projects proposed for California’s High Desert intersect critical habitat designated for the desert tortoise, potentially giving opponents additional leverage in efforts to micromanage the project.

National Environmental Policy Act.

Projects on federal land, involving federal funding or involving federal agency action (e.g., a right of way from the US Bureau of Land Management, a Clean Water Act permit to fill wetlands or a federally managed transmission line) generally trigger the National Environmental Policy Act (NEPA). NEPA requires completion of an Environmental Impact Statement (EIS) for “major Federal actions significantly affecting the quality of the human environment.” 42 U.S.C. § 4332(2)(C). Every EIS must provide a “full and fair discussion of significant environmental impacts” of the proposed agency action. 40 C.F.R. § 1502.1. There are programmatic EISs specific to solar and wind developments that structure (and hopefully streamline) the EIS inquiry for projects located on lands administered by the Bureau of Land Management (BLM).

NEPA, if triggered, requires a public process. State and federal agencies, Native American tribes, local residents, environmental groups and other interested parties all have the right to comment on a proposed EIS, which must take into account impacts not only on endangered species but also on wildlife in general. Significant delays in a project may result. And NEPA decisions, including a finding of “no significant impact” that eliminates the need to prepare an EIS, are subject to judicial review. Many states have their own versions of NEPA. NEPA litigation is commonplace and is often used by opponents to try to halt or delay private projects.

Migratory Bird Treaties.

Migratory birds are also protected from takes by the federal Migratory Bird Treaty Act (MBTA), which implements international treaties that the United States has signed. This protection applies even to birds that are not endangered. Some 800 species are covered, and violations carry civil and criminal penalties—including up to six months imprisonment for unknowing violations, or two years for knowing violations. See United States v. Moon Lake Elec. Ass’n, 45 F. Supp. 2d 1070 (D. Colo. 1999), in which a electric utility was found criminally liable for failing to install bird guards on power lines that killed migratory birds.

The saving grace of the extremely broad MBTA is that it can be enforced solely by the US government—there is no private right of action. See Flint Hills Tallgrass Prairie Heritage Foundation v. Scottish Power, 2005 WL 427503 (D. Kan. Feb. 22, 2005), aff’d, 147 F. App’x 785 (10th Cir. 2005), which held that the MBTA provided no cause of action to a group seeking to halt a wind energy development. And it is selectively enforced, typically only in the most serious cases in which environmental requirements have been willfully ignored or consultation with federal wildlife agencies has been deliberately avoided. Nevertheless, environmental groups have made efforts—so far unsuccessful—to enforce the MBTA indirectly by suing government agencies under the Administrative Procedure Act for failure to act. Sierra Club v. Martin, 110 F.3d 1551 (11th Cir. 1997); Center for Biological Diversity v. Pirie, 201 F. Supp. 2d 113 (D.D.C. 2002), vacated as moot, 2003 WL 179848 (D.C. Cir. Jan. 23, 2003). It would not be surprising to see wind project opponents try this tactic when simpler options, such as an ESA take lawsuit, are not available.

The Indiana Bat Case

One recent wind project that has resulted in litigation clearly illustrates the critical need to accurately identify and to squarely confront ESA requirements at the start of any development. In Animal Welfare Institute v. Beech Ridge Energy LLC, 2009 WL 4884520 (D. Md. Dec. 8, 2009), a national environmental group and a local community organization opposed Invenergy’s Beech Ridge project, a major wind farm to be constructed along Appalachian ridge lines in Greenbriar County, West Virginia. The suit alleged that the construction and operation of the turbines would be a take of endangered Indiana bats in violation of the ESA. Six months after filing suit, the plaintiffs obtained a far-reaching injunction that, while allowing completion of 40 turbines already under construction, barred construction of another 80-plus turbines and prohibited operation of any turbines except during the bats’ November 16 to March 31 hibernation period. To do more to develop the project in the future, the district court held, Beech Ridge would have to obtain an incidental take permit from the FWS.

The court credited experts retained by the plaintiffs in holding that Indiana bats were virtually certain to be killed or injured by the project during the spring, summer, and fall. That finding alone will require careful attention to the possible presence of Indiana bats for wind projects throughout the bats’ range, which covers not only the mid-Atlantic states, but also parts of the Midwest and New Englan d.

The principal lesson of the Beech Ridge case is that it is important for developers and their advisers to ensure that an adequate survey is made to determine whether endangered species (or, under the CWA, jurisdictional wetlands) are present at a site. The trial judge was highly critical of efforts made by the developer’s environmental consultant to detect the bat at the site, including his failure to use “survey methods such as acoustical detectors, thermal imagery, and radar” that had been suggested by FWS, or to survey over a sufficient time period. The consultant’s low-tech and season-limited mist netting and cave surveys were deemed inadequate. Further, the judge found the defendant developer’s expert the “least compelling” of the experts testifying as to the survey measures and their sufficiency.

The court rejected the developer’s argument that bats could be protected by post-construction adaptive management techniques, observing that these would be discretionary and might not be effective. According to the court, only an incidental take permit could impose binding construction and operational requirements to protect the bat.

As Beech Ridge has informed the court in a motion for relief from the terms of the injunction, the restrictions imposed would cause loss of revenue of tens of millions of dollars and threaten the company’s ability to access economic stimulus funds. Ironically, conducting the full study urged by FWS and the court and seeking an incidental take permit may not have spared Beech Ridge those burdens, given the delays that often occur in the permitting process, especially when there are vocal and well-funded opponents to a project. Animal Welfare Institute is the first federal judicial decision we are aware of that addresses the application of the ESA to wind energy projects, but it certainly will not be the last. And it is likely to embolden environmental and community opponents of commercial wind projects to take to the courts.

The Clean Water Act

Green energy projects may also run into the requirements of the federal Clean Water Act (CWA). The CWA protects all waters and wetlands that are connected—even very remotely—to navigable rivers and waterways. Though the uplands that are the preferred site of many turbine projects usually will not impinge on areas covered by the CWA, associated power transmission lines and construction roads usually do. Lowland and coastal projects often impact CWA-protected areas. Indeed, even desert “washes” that are wet for a few hours once or twice a year have been held to be covered by the CWA. Accordingly, desert solar arrays may implicate the statute.

Although the Supreme Court has held that isolated ponds are beyond CWA jurisdiction, the meaning of “isolated” is open to interpretation and the subject of much litigation, requiring that the developer of any project touching on ponds, wetlands, saturated soils or land that is habitat for wetland plants proceed with caution and in consultation with counsel and wetland experts. See SWANCC v. U.S. Army Corps of Engineers, 531 U.S. 159 (2001); Rapanos v. United States, 547 U.S. 715 (2006). Proposed federal legislation would define covered waters even more broadly. As with the ESA, heavy civil penalties, criminal fines and imprisonment are possible for violations, and civil enforcement may come at the hands of private plaintiffs, such as neighbors and environmental groups, as well as state or federal regulators.

The most pertinent provision of the CWA for renewable energy investors and developers is Section 404, 33 U.S.C. § 1344, which prohibits disturbing jurisdictional waters or wetlands in such a way that fill material is added to them. “Addition” of “fill” material is very broadly defined. Regulators have taken the position that even bicycling through a wetland, or plowing it, is a violation. Building turbines, solar arrays, transmission facilities or access roads over wetlands implicates this prohibition, as may many ordinary construction activities associated with the project. Any fill is unlawful unless it is covered by a Section 404 permit, which must be obtained from the US Army Corps of Engineers and state environmental agencies. As with ESA incidental take permits, CWA fill permits may be conditioned on project modifications, construction requirements and the provision of mitigation—and may involve a lengthy and costly process that, as noted, includes the risk of government or private litigation.

Historic Preservation and National Monument Designations

Beyond these environmental statutes, historic preservation laws may present another hurdle to some wind developments. Cape Wind’s project to build the first US offshore wind farm in Nantucket Sound appeared, after nearly a decade, to have obtained the necessary approvals. But now petitions by local Native American tribes seek to have the Sound listed on the federal National Register of Historic Places, adding yet another layer of approval to the development process. As with the ESA and CWA, a National Register listing may be initiated by a private party opposed to a renewable energy project for idiosyncratic reasons—yet such a listing comes with the potential for delays and increased costs and may threaten the ability to develop at all.

Expansion of National Monument status to areas of peak wind or solar potential comes with the same risks. In a recent example, following lobbying by environmental groups that perceived a threat from proposed renewable energy projects to the preservation of the Mojave Desert, Senator Feinstein of California introduced legislation in Congress to designate part of the desert as a National Monument. A number of wind and solar developers that had proposed to build large projects in the area have already announced that they will seek to relocate rather than to fight the legislation or to attempt to develop in the Mojave Desert notwithstanding the National Monument designation.

State and Local Environmental Laws

The not-in-my-backyard (NIMBY) sentiments of local residents may also readily be expressed in terms of environmental protection or related concerns. Wabaunsee County, Kansas—which lies in the heart of the south-central US wind belt—banned outright all commercial wind development on grounds, among others, that it is incompatible with the rural and scenic nature of the county and would interfere with “nature tourism.” That ban destroyed the value of wind development leases, leading to a long-running battle in the Kansas courts over whether the county law violates the US Constitution. (Mayer Brown recently filed an amicus brief to the Kansas Supreme Court, arguing on behalf of wind energy interests that the ban is unlawful. It can be found at www.appellate.net/briefs/windcoalitionfinal.pdf. The case is Zimmerman v. Wabaunsee County, No. 98,487 (Kan.).) Similar bans have been implemented or proposed at the state or local level in Converse County, Wyoming, in the North Carolina mountains, and in the Catskills, New York town of Bovina, among other locations.

State-enacted statutes add another layer of regulatory approval and litigation potential to a project. Offshore wind farms close to shore, for example, may have to contend with state laws like the Massachusetts Ocean Act, under which an Ocean Management Plan has been adopted that designates two percent of the planning area for commercial wind energy development, including Buzzards Bay. Restrictions imposed by that plan were in part a response to the presence in Buzzards Bay of breeding populations of the endangered roseate tern. Any water-based development within three miles of the coast (nine miles for some states) will typically require state as well as federal permitting. Onshore, state coastal zone management regulations will typically apply to projects close to the coast.

Across the country, states have erected a web of environmental regulations and permitting requirements, including state NEPA statutes, that may apply to a project and that have the potential to engender litigation. For example, Wyoming has designated more than 25 per cent of that state as a “core area” of habitat for the greater sage grouse—which is not a federally listed endangered or threatened species—thereby imposing stringent habitat management requirements on developments within that area.

Common Law Torts

Even properly permitted projects are often the subject of private nuisance suits from neighbors alleging that they would be adversely affected by noise or vibrations from wind turbines, by light reflected off turbine blades, by the threat of injury or property damage from broken blades or ice throws, or by visual blight. Such claims are governed by state law, and some states have held them to be permissible. For example, Burch v. NedPower Mount Storm, LLC, 647 S.E.2d 879 (W. Va. 2007), allowed a suit based on noise, unsightliness and diminished property values to proceed.

Private tort claims are sometimes settled for their nuisance value, but plaintiffs have fared poorly in the courts when these claims have been litigated, with judges dismissing suits or juries returning defense verdicts. Thus in Rankin v. FPL Energy, LLC, 266 S.W.3d 506, 513 (Tex. App. 2008), aesthetic claims were dismissed and the jury verdict in favor of a wind farm was upheld on noise claims. Noise, vibrations and reflected light from turbines generally will not be sufficiently intense and disruptive to meet nuisance standards. Plaintiffs are unlikely to do better in these suits in the future as technological advances in turbines address their concerns and state and federal policies increasingly encourage renewable energy development. We predict, nevertheless, that private nuisance suits will continue to be a common reaction by neighbors to new projects.

This article can only touch the surface of the regulatory thicket that surrounds renewable energy development. The complex web of national and state statutes, rules and common law that may apply to any project provides opportunities for opponents to litigate that every investor and developer will want to avoid or mitigate.