June 18, 2014

Options for Developers Absent Approved 4(d) Limits


The central focus of species protection under the Endangered Species Act (ESA) is its prohibitions on the "take" of listed species without the specific authorization of the U.S. Fish and Wildlife Service (FWS) or National Marine Fisheries Service (NMFS). These prohibitions apply to every person and entity subject to the jurisdiction of the United States. A take of a listed species is a violation that can result in civil and criminal penalties.

The threshold question for any landowner or developer is whether his or her activities will "take" a listed species. The ESA defines "take" very broadly and can be either a direct effect or an indirect effect on the species. In the case of land development effects on listed salmon or trout, a take typically results from a modification or destruction of habitat that adversely affects breeding, spawning, rearing, migration, feeding or sheltering and causes death or injury to the species. To find out if development activities will take a listed species, a consultant can be retained to conduct data searches or on-site surveys to determine first, if there are species present on the site and, second, if there is potential for a take. Alternatively, NMFS or FWS can be contacted for guidance.

Once a listed species or its habitat is confirmed on a project site and the possibility of a take exists, there are several options. If a local jurisdiction has adopted a program to protect species that has been approved by NMFS as a Section 4(d) "limit," development activities that are consistent with that program will be exempt from liability for a take, i.e., they limit liability if a take results from activities covered by that program.

The 4(d) rule is not mandatory, however. It is not a list of prohibited activities and there is no requirement for any person or jurisdiction to develop or adhere to a limit. Section 4(d) is only one way that take of a listed species may be authorized under the ESA.

When there is no approved local government 4(d) limit, a developer has the following options:

1. "Self-permitting"

Here, the developer designs and constructs the project or modifies activities so that there is no take of a listed species. The upside of this option is that there is no lengthy and costly federal approval process. The downside is that avoiding a take may be extremely expensive or even infeasible. Most importantly, there is no legal protection if the project is later determined to cause a take of the listed species, since there has been no federal authorization for a take.

2. Develop and submit a program to NMFS for approval as a Section 4(d) limit.

The NMFS Section 4(d) Rule lists the activities that are likely to result in a take of salmon and the impacts that must be evaluated and addressed in any program submitted to NMFS for approval as a 4(d) "limit". NMFS also specifies the features that must be included for a program to receive approval and sets "Properly Functioning Condition" ("PFC") as the goal that must be achieved by the limit. PFC as it applies to habitat means that the habitat meets the biological requirements of the species. That is, it comes as close to natural conditions as possible. A program may be approved as a limit if the activities (1) won't impair an existing PFC; (2) won't degrade already impaired habitat; or (3) won't impair progress toward PFC.

This is not a viable option for most developers. Because the program requirements are substantial, the costs to the developer to prepare a biologically and legally sufficient program for submittal to NMFS will be substantial. A team of experts will be needed to prepare the assessments, evaluations, and conservation, mitigation and monitoring measures. Moreover, submittal of a sufficient proposed limit does not guarantee timely agency review. NMFS has said that it will give priority for review to the proposed limits of governmental agencies and to the most comprehensive (in terms of acreage covered) proposals.

3. Apply for an ESA Section 10 "incidental take" permit.

This permit allows a take of a listed species if it is incidental to an other wise lawful activity and if the developer submits a Habitat Conservation Plan ("HCP") to NMFS or FWS that minimizes the take's impact on the species. The HCP includes an assessment of the impacts to the species and measures that will be implemented by the developer to monitor, minimize and mitigate such impacts.

This option presents the same obstacles to most developers as the 4(d) limit: it is extremely expensive and extremely time consuming. Development and approval of a plan can take several years. Also, NMFS would likely give priority consideration to governmental agency plans and comprehensive, multi-jurisdictional plans.

4. Obtain an ESA Section 7 federal "incidental take statement".

Projects that receive any federal funding or require a federal permit are considered "federal actions" and are subject to Section 7 of the ESA. Federal agencies are required to consult with NMFS or FWS if the activities they permit or fund "may affect" a listed species or their critical habitat. If NMFS or FWS finds that there will be impacts to the listed species, a Biological Opinion will be issued assessing the impacts and specifying the measures that the permit applicant must implement to minimize the impacts. If the applicant agrees to implement the measures, an "incidental take statement" will be issued that allows the federal agency and the applicant to take the listed species but avoid liability under Section 9 of the ESA.

Note that Section 7 is not optional. If a developer must obtain a federal permit, such as a wetland fill permit, the application for the permit triggers Section 7 requirements. Many developers require some form of federal permit and therefore Federal agencies are taking steps to assure that they are in compliance and meet their Section 7 obligations with respect to these permits. For example, in 1998, the EPA reissued its National Pollution Discharge Elimination System (NPDES) General Permits for Storm Water Discharges from Construction Activities that includes conditions to ensure protection of ESA listed species. Storm Water Pollution Prevention Plans must include measures to protect listed species and their habitat and failure to abide by these measures invalidates permit coverage. Further, in 1999, a draft Memorandum of Agreement among EPA, NMFS, and FWS was issued to coordinate the Clean Water Act and ESA Section 7 requirements. Copies of draft permits must be submitted to NMFS and FWS. If either agency is concerned about adverse effects on a listed species, a consultation will occur with EPA and the appropriate state agency, which can result in conditions being imposed upon the permit to reduce impacts to the species. The permit applicant may participate in the Section 7 consultations.

5. Ignore the Endangered Species Act altogether and proceed with development.

This can be a very risky and is, in reality, not an option. The ESA has become a very useful weapon in the arsenal of the anti-development interests. Under the ESA, private citizens and interest groups can seek injunctions to stop development. Moreover, even if a take is never proven, the costs to the developer in legal fees and work stoppage can be substantial.

Second, most development activities require state or local permits or approvals. Government entities are "persons" under Section 9 of the ESA and may not "cause to be committed any offense" prohibited by the ESA. Government officials who approve actions that take listed species can themselves be subject to civil or criminal sanctions. For example, in 1998, the FWS threatened legal action against Riverside County, California officials if they approved development permits in Stephen's kangaroo rat habitat. Thus, to avoid sanctions, agencies may require assurances by the developer of no take or will condition permits on compliance with local conservation plans or the recommendations of environmental interests.


Of the above options, ones such as the 4(d) limit and Habitat Conservation Plan, which are very costly and involve lengthy approval processes, are not viable options for the average developer. Self-permitting and avoiding the ESA are not practical options either. The reality is that the ESA cannot be avoided. Developers need permits and local governments and federal agencies are taking their obligations under the ESA very seriously. The best avenue for the developer is to work cooperatively with these agencies to obtain the necessary permits for development. This course is not without its costs and time delays. It will likely require the assistance of biological, engineering and legal consultants. And, it may involve protracted negotiations with the agencies and perhaps environmental interests. While it will not avoid liability for take of a listed species, which can only be obtained through Section 4(d), Section 7 and Section 10 programs, it will afford some degree of protection. Developers should encourage local governments to prepare programs that can be proposed to NMFS or FWS as 4(d) limits, so that developers may take advantage of this protection from take liability if they so choose. And, once a decision has been made to prepare a proposed limit, developers should participate in the public process to develop the proposal.

This article is intended to inform the reader of general legal principles applicable to the subject area. It is not intended to provide legal advice regarding specific problems or circumstances. Readers should consult with competent counsel with regard to specific situations. For more information on this topic, please contact marketing@jordanramis.com or call (888) 598-7070.


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