A development project in Redding that would destroy critical habitat for endangered species may proceed because the affected habitat constitutes a small percentage of habitat available nationwide, the Ninth U.S. Circuit Court of Appeal has ruled. 

The Ninth Circuit's decision puts a new twist on the debate over what constitutes "adverse modification" to critical habitat by upholding a black and white mathematical percentage formula applied by the U.S. Fish and Wildlife Service (FWS). Using the formula, a FWS biological opinion determine there would not be adverse modification or destruction of critical habitat of three species native to the Central Valley.

"The FWS's determination that critical habitat would be destroyed was not inconsistent with its finding of ‘no adverse modification,'" Judge Diarmuid O'Scannlain wrote for the court. "After all, the project would affect only a very small percentage of the total critical habitat or vernal pool fairy shrimp, vernal pool tadpole shrimp, and slender Orcutt grass."

Formal consultation under Section 7 of the federal Endangered Species Act is required when the property for which a federal permit is sought contains federally listed species or designated critical habitat that may be affected by the permit decision. If formal consultation is required, FWS or the National Oceanic and Atmospheric Administration will issue a biological opinion stating whether the permit action is likely to jeopardize the continued existence of the listed species, or adversely modify or destroy its critical habitat.

The Case

In this case, Butte Environmental Council v. U.S. Army Corps of Engineers, the City of Redding sought a Clean Water Act permit to fill wetlands. In 2005, after years of researching potential sites for development of a business park, the city issued a draft Environmental Impact Statement regarding the proposed 678-acre Stillwater Business Park located on wetlands along Stillwater Creek.

In December 2006, the Fish and Wildlife Service issued a biological opinion on the project. The opinion stated that more than half of the project site contained habitat deemed critical for species that inhabit vernal pools, small ponds that form during the winter rainy season.  The project site contained 356.6 acres of critical habitat shared by the vernal pool fairy shrimp (threatened) and the vernal pool tadpole shrimp (endangered). The project would destroy 234.5 acres of this critical habitat. It would also directly affect 0.56 acres and indirectly affect 6.42 acres of the crustaceans' aquatic habitat. The site also contained 500 acres of critical habitat for slender Orcutt grass, 242.2 acres of which would be destroyed.

In calculating the loss of each species, the biological opinion applied a percentage comparison to total nationwide critical habitat.  For the fairy shrimp, the 234.5-acre destruction amounted to only 0.04% of the total existing 597,821 acres of the nationwide inventory of fairy shrimp critical habitat. As to the tadpole shrimp, the 234.5 acres that would be destroyed amounted to 0.1% of the 228,785 acres of total critical habitat nationwide. The 242.2 acres slender Orcutt grass habitat to be destroyed amounted to 0.26% of the plant's total nationwide critical habitat of 94,213 acres. The FWS's conclusion was that "the proposed project would not result in the adverse modification or destruction of critical habitat for those species."

Butte Environmental Council, a nonprofit environmental organization, filed suit against the U.S. Army Corps of Engineers, which issued the Clean Water Act permit, and FWS. The district court granted summary judgment in favor of the federal agencies. Butte Environmental Council then appealed to the Ninth Circuit.

Arguments & Opinions

The council raised four arguments, each of which was rejected by the Ninth Circuit. First, the council argued that FWS applied an improper definition of "adverse modification" that did not account for the recovery needs of the affected species as required under Gifford Pinchot Task Force v. U.S. Fish and Wildlife Service, (9th Cir. 2004) 378 F.3d 1059. The court rejected the council's assertions, noting that the biological opinion expressly stated that it "does not rely on the regulatory definition of ‘destruction or adverse modification'," but instead relies on the statute itself and the Gifford decision to complete the critical habitat analysis.

Second, the council asserted that the finding of "no adverse modification" conflicted with the FWS's finding of acreage to be destroyed as part of the project. In rejecting this argument, the court noted that Gifford did not alter the rule that adverse modification occurs only where there is a "direct or indirect alteration that appreciably diminishes the value of critical habitat" (50 C.F.R. § 402.02.). Judge O'Scannlain further opined that "an area of species critical habitat can be destroyed without appreciably diminishing the value of the species' critical habitat overall." The court concluded that FWS's determination that critical habitat would be destroyed was, therefore, not inconsistent with a finding of "no adverse modification."

Third, opposing the formula applied by FWS, the council argued that the focus on the project's impact to the species' nationwide inventory of critical habitat "mask[ed] the project's localized impact." The court swiftly disposed of this argument, stating that there was nothing in the record to demonstrate that a localized risk was improperly hidden by use the of the large-scale, nationwide comparison and analysis.

In its fourth and final argument, the council faulted the FWS for failing to address the rate of loss of critical habitat for each of the species at issue. There is, however, no obligation in either the Environmental Species Act or its implementing regulations for the FWS to calculate a rate of loss. Therefore, the court concluded that FWS's finding of no adverse modification was neither arbitrary nor capricious, where the FWS applied the proper definition of adverse modification and reasonably concluded that the effects of the proposed project would not appreciably diminish the value of the critical habitat.

The Case:

Butte Environmental Council v. U.S. Army Corps of Engineers, No. 09-15363, 2010 DJDAR 8115. Filed June 1, 2010.

The Lawyers:
For Butte Environmental Council: Donald Mooney, (530) 758-2377.

For the Corps of Engineers: Kurt Kastorf, U.S. Department of Justice, (202) 514-2701.

For the City of Redding: Rick Jarvis, Jarvis, Fay, Doporto & Gibson, (510) 238-1400.