The Nickel Report

On July 14, 2026, the US Fish and Wildlife Service (FWS) and the National Marine Fisheries Service (NMFS) (together, Services) issued a final rule rescinding the regulatory definition of “harm” under the Endangered Species Act (ESA) and thereby shifting its interpretation of the ESA’s “take” prohibition to no longer extend to habitat modification. This rule marks the administration’s latest protected species-related deregulatory action and will become effective 60 days after publication, on September 14, 2026. The final rule is highly controversial and has already drawn legal challenges in three different suits.

Background

Under the ESA, “take” is defined as “to harass, harm, pursue, hunt, shoot, wound, kill, trap, capture, or collect, or to attempt to engage in any such conduct.” 16 U.S.C. § 1532(19). For decades, ESA implementing regulations have defined “harm” as “an act which actually kills or injures wildlife” including “significant habitat modification or degradation where it actually kills or injures wildlife by significantly impairing essential behavioral patterns, including breeding, feeding or sheltering.” See 50 C.F.R. § 17.3 (emphasis added).

The concept of “significant habitat modification or degradation” embedded in the “harm” definition has been a source of controversy over the years and was challenged in federal court in in the early 1990s in Babbitt v. Sweet Home Chapter of Communities for a Great Oregon. Ultimately, in Sweet Home, the Supreme Court upheld FWS’s definition of “harm” to include habitat modification, in part based on the application of Chevron deference to FWS’s rulemaking. 515 U.S. 687, 703 (1995).

The dissent in Sweet Home, however, authored by Justice Scalia, would have held that interpreting “take” to cover habitat modification is too broad an interpretation. Id. at 735-736 (Scalia, J., dissenting).

Final Rule

 Relying heavily on Justice Scalia’s dissent in Sweet Home and the Supreme Court’s more recent decision in Loper Bright Enterprises v. Raimondo, which eliminated Chevron deference, the Services now conclude that the prior regulatory definition does not reflect the best reading of the ESA. In their view, “harm,” like the other verbs in the statutory definition of “take,” is better understood to require an affirmative act directed immediately and intentionally against a particular animal, not an act or omission that indirectly and accidentally causes injury to a population of animals.

The final rule rescinds the regulatory definition of “harm” in its entirety. In support of this action, the Services maintain that the statutory term “take” is sufficiently clear and that a replacement regulatory definition of “harm” is unnecessary. 

Importantly, this revision is prospective only. The Services state that the final rule does not require that any prior permit or incidental take statement that relied on the prior definition of “harm” be reevaluated. 91 Fed. Reg. 43,300, 43,302 (July 14, 2026). The final rule preamble notes, however, that this rule may lessen existing burdens in some circumstances, such as where a permittee that is mitigating only for habitat impacts that were considered “take” when their permit was issued chooses to “return their permit in order to not have to continue expending resources to mitigate.” Id. at 43,305.

Legal Challenges

This final rule has already been challenged in three separate cases by two groups of environmental non-governmental organizations and the Swinomish Indian Tribal Community and the Squaxin Island Tribe.¹ All three suits similarly seek declaratory and injunctive relief to declare the final rule unlawful and set it aside under the Administrative Procedure Act, ESA, and the National Environmental Policy Act.

Court decisions on any emergency relief sought are expected over the next few months.

Implications for Project Proponents

Under this final rule, incidental take authorization will no longer be required for activities that result in habitat modification. The Services will interpret the statute to prohibit activities that actually kill or injure listed species.

However, habitat modification can still be considered in section 7 consultations when evaluating whether the proposed action will result in the continued existence of listed species or “the destruction or adverse modification critical habitat of such species.” 91 Fed. Reg. at 43,304. The rulemaking does not prohibit landowners from implementing conservation plans and agreements that are more comprehensive than what the ESA requires. Nor does it prevent states from regulating habitat impacts under state law.

With this rule, fewer activities will require incidental take authorization. In assessing the need for coverage, project developers should evaluate the likelihood that activities may directly kill or injure listed species. There may be some uncertainty for FWS and NMFS staff in applying this standard in the early days of the rule’s implementation. Project developers should also track pending litigation and status of the rule to inform project strategy.  

[1] See Ctr. for Biological Diversity, et al. v. Burgum et al., 2:26-cv-02474 (W.D. Wash. filed on July 14, 2026); Env’t Prot. Info. Ctr, et al. v. Nat’l Marine Fisheries Serv., et al., 3:26-cv-07176 (N.D. Cal. filed on July 14, 2026); Swinomish Indian Tribal Cmty. and Squaxin Island Tribe v. Nat’l Marine Fisheries and United States Fish and Wildlife Serv., 2:26-cv-02473 (W.D. Wash. filed on July 14, 2026).