Imposing Limits on Incidental Take Statements: Arizona Cattle Growers v. FWS

Norman D. James
Fennemore Craig, P.C.

The U.S. Fish and Wildlife Service (FWS, Service) increasingly uses its authorities under the Endangered Species Act (ESA), 16 U.S.C. § 1531, et seq., to regulate land use activities. The Service often does so in the context of interagency consultation under Section 7 of the ESA by, for instance, requiring project modifications to avoid finding adverse effects on species protected under the ESA. A common mechanism used by the Service to control, restrict or prohibit land use activities in a Section 7 consultation is through incidental take statements (ITSs) issued pursuant to Section 7(b)(4), 16 U.S.C. § 1536(b)(4), to entities whose otherwise lawful activities will kill or injure listed species. If, during Section 7 consultation, FWS determines that the proposed action will not violate the "no jeopardy" standard, but will incidentally take members of a species, the agency is required to issue an ITS. 16 U.S.C. § 1536(b)(4). The ITS, which is contained in the biological opinion, must specify the amount or extent of take that is anticipated and any reasonable and prudent measures (RPMs), and terms and conditions (T&Cs) that implement them, necessary to minimize take. Theoretically, these "cannot alter the basic design, location, scope, duration or timing of the action, and may involve only minor changes" to the proposed action. 50 C.F.R. § 402.14(i)(2). In practice, however, the "minor change" rule seems to be frequently ignored and RPMs that the Service mandates can have significant impacts on a project.

In the past, the Service has required project modifications during Section 7 consultation and has issued ITSs when listed species are not present or when it is uncertain whether listed species will actually be adversely affected or taken. The Ninth Circuit Court of Appeals recently limited the Service's ability to use ITSs in this manner in a case involving grazing and potential impacts to a number of aquatic species. In Arizona Cattle Growers' Ass'n v. U.S. Fish and Wildlife Service, 273 F.3d 1229 (9th Cir. 2001), the Ninth Circuit upheld the district court's ruling that the Service violated the ESA by issuing ITSs restricting livestock grazing without evidence that take of listed species would occur in violation of Section 9. Id. at 1241-1243. The court's decision limits the Service's ability to use ITSs to restrict land use activities without evidence that individual members of a species are present and will actually be killed or injured by that activity.

While ITSs are beneficial to landowners whose activities are likely to violate Section 9, the protection an ITS affords comes at a price. The holder of an ITS, for instance, must strictly comply with the RPMs and T&Cs included in an ITS or risk losing coverage under the ITS, and become subject to civil and criminal penalties or citizens suits. Such RPMs and T&Cs are as varied as the activities with which they are associated.

For example, in ITSs issued for livestock grazing, the Service commonly requires that livestock be excluded from riparian areas containing designated critical habitat. On its face, this may seem appropriate, but the Service has also included RPMs and T&Cs designed to protect "suitable" or "potential" habitat or habitat that is many miles downstream of the action area. The Service asserts such exclusions are necessary to prevent "indirect effects" of livestock grazing, such as increased sediment loads resulting from trampling of upland areas. The restrictions can jeopardize the viability of a grazing operation and compromise the exercise of state-based water rights.

Another example of RPMs and T&Cs that significantly affect land uses arises in the context of consultations on Clean Water Act (CWA) permits issued in conjunction with real estate development. Federal permits issued under CWA Sections 402 (specifically the storm water discharge permits issued for construction activities) or 404 (placement of dredged or fill material) are necessary in most parts of the country and provide a federal nexus allowing the Service to assert regulatory control over a project. For example, the Service may limit development density or require the long-term maintenance of vegetation as migration corridors through a project site as part of the ITS, which in turn become part of the CWA permit. As in the case of grazing permits, these requirements are often intended to protect or enhance areas deemed suitable for listed species, as opposed to minimizing take. These restrictions have a significant impact on a project's bottom line.

When a proposed action will take members of a listed species, the ITS provides the holder necessary protection from civil fines, civil and criminal prosecution and citizens suits. When an ITS is issued for a project that is unlikely to "take" members of a listed species, however, the RPMs and T&Cs can impose onerous regulatory burdens unnecessarily borne by the permit holder. The Ninth Circuit's holding in Arizona Cattle Growers is significant because it restricts the Service's ability to regulate land use activities in the absence of evidence that species will actually be killed or injured. According to the court, any other interpretation "would allow the Fish and Wildlife Service to engage in widespread land regulation even where no Section 9 liability could be imposed." Arizona Cattle Growers, 273 F.3d at 1240. It would be "nonsensical" to require the issuance of an incidental take statement in the absence of evidence that takings cognizable under Section 9 will occur as a result of the permitted activity. Id. at 1242.

In the wake of Arizona Cattle Growers, the Service is revisiting its practice of issuing ITSs when there is little evidence of species presence or of harm to the species. As a result, it is expected that many federal permit applicants caught up in the Section 7 consultation process will see fewer restrictions imposed on their projects. This trend is likely to be even more pronounced in cases involving aquatic systems because it is typically more difficult to establish species presence and harm to species in aquatic environments.