The Nickel Report

As the Trump administration is pushing forward on its deregulatory agenda and, in particular, its efforts to improve the Endangered Species Act (ESA) and its implementation by the US Fish and Wildlife Service (FWS) and National Marine Fisheries Service (NMFS) (together, the Services), the Supreme Court is poised to hear a landmark case on designation of critical habitat under the ESA that could provide some guideposts for the Services’ new regulations.

On April 2, 2018, the Services sent over a package of proposed ESA regulations to the Office of Management and Budget (OMB) that would likely result in significant changes for the ESA program and could streamline certain ESA-related federal permitting requirements.  The three proposals are as follows:

• ESA Consultation Regulations: The Services have submitted to OMB proposed revisions to the ESA section 7 consultation regulations. While the details of the proposal are not yet publicly available, DOI’s Regulatory Reform Plan signaled its intent to modernize guidance and regulations governing interagency consultation pursuant to ESA section 7(a)(2), which is often a significant hurdle for federal permitting. FWS noted that it was considering ways to improve the section 7 consultation regulations to create efficiencies and streamline the consultation process through targeted revisions to the regulations and/or guidance. Similarly, the Service’s 2018 regulatory agenda characterized this anticipated proposal as regulations “to clarify and improve the section 7 consultation” process.
• Elimination of “Blanket Section 4(d) Rule”: FWS has submitted to OMB a proposal to change the “blanket section 4(d) rule” for purposes of future species listings. This proposal was obtained by the press and has now been made publicly available. Threatened species are not automatically subject to the same “take” prohibitions as endangered species. ESA section 4(d) allows the Services to regulate take of threatened species if “necessary and advisable” for the conservation of the species. 16 U.S.C. § 1533(d). While NMFS makes these determinations on a case-by-case basis for each species listed as threatened, decades ago FWS promulgated a regulation prohibiting the take of all threatened species, known as the “blanket section 4(d) rule.” 50 C.F.R. § 17.31(a). This FWS regulation extends the ESA’s take prohibition to all threatened species under FWS jurisdiction. 16 U.S.C. § 1538(a). FWS will occasionally adopt species-specific rules that often exempt certain activities from the FWS blanket rule’s prohibition of take. For example, when FWS listed the lesser prairie chicken as threatened, it also issued a section 4(d) rule pursuant to which take would be authorized if the permittee participated in the Range-wide Conservation Plan. Under the proposal that is now under review at OMB, threatened species would not be automatically subject to ESA section 9 take prohibitions. Instead, for each species FWS lists as threatened in the future, it would promulgate appropriate regulations to put in place prohibitions, protections, or restrictions tailored specifically to that species. The regulatory change would apply prospectively to species listed as threatened after the effective date of any final rule.
• Revisions to Critical Habitat Rules: Finally, the Services have submitted to OMB two proposed rules that would reconsider the Obama administration’s 2016 critical habitat designation criteria and definition of “adverse modification.” The 2016 critical habitat rules were challenged by a group of thirteen states and industry. Those challenges raised concerns regarding the breadth of critical habitat designations and increased likelihood of “adverse modification” determinations under the 2016 rules. More expansive designations of critical habitat would mean more ESA section 7 consultations on federal actions. Where the effects of the federal action overlap critical habitat boundaries, consultation would be required on potential effects to the critical habitat—including whether adverse modification to those areas is likely. While the details of these proposals are not yet publicly available, the proposed revisions may seek to address the litigants’ concerns with the breadth of the 2016 rules.

At the same time as these ESA reforms are under consideration by the White House, the Supreme Court is set to review the extent of the Services’ authority to designate critical habitat in Weyerhaeuser Co. v. U.S. Fish and Wildlife Service, a timber company’s challenge to the FWS designation of approximately 1,500 acres of private land in Louisiana as critical habitat for the endangered dusky gopher frog. A divided panel of the US Court of Appeals for the Fifth Circuit upheld FWS’s designation, even though the land at issue is unoccupied by the frog, cannot be occupied by the frog unless the land is significantly altered for the frog’s benefit, and does not play any supporting role in sustaining the frog or its habitat.

The case, which is set for oral argument on October 1, 2018, will be the first case the Justices hear upon return from their summer recess and, if Judge Brett Kavanaugh is confirmed by then, it could be his first case on the bench. It will be the first ESA case decided by the Supreme Court in more than a decade.

The Supreme Court’s ruling in the Weyerhaeuser case could provide some key guidance on the circumstances under which the Services can designate as critical habitat areas that are not actually occupied by the listed species. It will also likely address whether a decision by the Services not to exclude an area from a critical habitat designation because of the economic impact is subject to judicial review. Accordingly, this ruling could set some key limits that will inform and could potentially alter the Services’ proposal to amend the critical habitat designation criteria.