ARTICLES Federal Agency Conservation Obligations and Consultation Under Section 7 of the ESA

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1 12-03 Copyright 2003 Environmental Law Institute, Washington, DC. reprinted with permission from ELR, http.'// ELR NEWS&ANALYSIS 33 ELR ARTICLES Federal Agency Conservation Obligations and Consultation Under Section 7 of the ESA The ESA mandates protection of endangered and threatened species on an individual species and project basis.' A species is only protected by the ESA wben it is listed as endangered or threatened, and its critical habitat is designated. 2 Once a species has been listed, anumber of provisions providing for its protection are triggered. The primary provisions for species conservation are 7(a)(l) conservation obligations and 4(f) recovery plans. I. Section 7(a)(l) Conservation Obligations Section 7 of the ESA imposes several substantive and procedural duties upon all federal agencies. Section 7(a)(l) directs all federal agencies, "in consultation with and with the assistance of the Secretary, [to] utilize their authorities in furtherance of the purposes of [the ESA] by carrying out programs for the conservation of [species listed as endangered or threatened]." 3 Agencies are required to affirmatively act within the scope of their authority for the conservation of listed species; however, the ESA does afford agencies some discretion in determining how conservation programs are to be implemented. 4 Currently, there are not any regulations directly interpreting or implementing 7(a)(l). Joint regulations adopted by the NMFS and the FWS only address 7(a)(l) The authors are attorneys in the Washington, D.C., office of the law firm Holland & Knight LLP and are the primary authors and editors of the Endangered Species Deskbook (Envtl. L. Inst. 2003), from which this Article is extracted. For further information regarding and to order the Endangered Species Deskbook, see CD= See 16 U.S.C. 1532(6), ELR STAT. ESA 3(6) (defining terms).. 2. See W. 1533(a), ELR STAT. ESA 4(a). The Secretary of die Interior and the Secretary of Commerce with the DOI's approval, have the authority to list species as threatened or endangered based on five factors: (1) destruction or threat to the species' habitat; (2) overutilization of the species for commercial, recreational, scientific, or educational purposes; (3) disease of predation; (4) the inadequacy of existing regulatory mechanisms; or (5) other natural or manmade factors affecting the species continued existence. See id. 1533(a)(l), ELR STAT. ESA 4(a)(l). The determination must be based "solely on... the best scientific and commercial data available." Id. 1533(b)(l)(A), ELR STAT. ESA 4(b)(l)(A). 3. Id. 1536(a)(l), ELR STAT. ESA 7(a)(l). 4. Strahan v. Linnon, 967 F. Supp. 581,596 (D. Mass. 1997) (noting that the ESA "does not mandate particular actions be taken by federal agencies to implement section 7(a)(l)"); Hawksbill Sea Turtle v. Federal Emergency Management Agency, 11 F. Supp. 2d 529, 29 ELR (D.V.I. 1998) (quoting Strahan), by Lawrence R. Liebesman and Rafe Petersen in the limited context of adverse impact of listed species resulting from federal action. 5 Thus, the boundaries of 7(a)(l) have been set by litigation 6 and, as such, provide case-specific guidance. Courts have determined that, at a minimum, 7(a)(l) imposes some mandatory duties upon federal agencies. 8 Historically, 7(a)(l) received judicial interpretation that required substantially more in the way of the restoration of these species. 9 More recently, the Ninth Circuit has found that, while 7(a)(l) imposes affirmative conservation duties, some discretion should be allowed to federal agencies in fulfilling these responsibilities. 10 It has been said that 7(a)(l) emerged from a Ninth Circuit decision as "a little something extra" and "in the absence of firm guidance by the biological agencies, there is considerable leeway as to what that something will be." 11 Initially, 7(a)(l) was construed by the courts to impose duties on federal agencies when those agencies were carrying out their primary agency missions. 1 Section 7(a)(l) has been interpreted to authorize an agency to refuse to execute 5. See 50 C.F.R (g)(6). 6. See, e.g., Tennessee Valley Auth.v. Hill, 437 U.S ELR (1978) (discussing the overall conservation mandate of the ESA); Defenders of Wildlife v. Andrus, 428 F. Supp. 167, 7 ELR (D.D.C. 1977) (finding that the regulation did not affirmatively address the FWS' duty to minimize inadvertent killing of listed species); Pyramid Lake Paiute Tribe of Indians v. Department of the Navy, 898 F.2d 1410,20 ELR (9th Cir. 1990) (noting that federal agencies have "affirmative obligations" under the ESA); Connor v. Andrus, 453 F. Supp. 1037,1041 (W.D. Tex. 1978) (finding that the FWS is charged with conserving species to a point to where they may be delisted). 7. J.B. Ruhl, Section 7(a)(l) of the "New" Endangered Species Act: Rediscovering and Redefining the Untapped Power of the Federal Agencies' Duty to Conserve Species, 25 ENVTL. L (1995). 8. See SULLINS, supra note 78, at See.e.g.,SierraClubv.Clark,755F.2d608,15ELR20391 (8thCir. 1985); National Wildlife Fed'n v. Hodel, 839 F.2d 694, 18 ELR (D.C. Cir. 1988); Carson-Truckee Water Conservancy Dist. v. Secretary of the Interior, 748 F.2d 523, 15 ELR (9th Cir. 1984); Connor v. Andrus, 453 F. Supp. 1037, 1041 (W.D. Tex. 1978); Defenders of Wildlife v. Andrus, 428 F. Supp. 167, 7 ELR (D.D.C. 1977). 10. Pyramid Lake Paiute Tribe of Indians v. Department of the Navy, 898 F.2d 1410, 20 ELR (9th Cir. 1990). 11. See Houck, supra note 272, at 327 (defining the phrase "a little something extra" as a New Orleans expression, a "lagniappe," such as a thirteenth donut in a baker's dozen, or receiving beads on Fat Tuesday). 12. See supra note 228.

2 33 ELR ENVIRONMENTAL LAW REPORTER Copyright 2003 Environmental Law Institute, Washington, DC. reprinted with permission from ELR, a contract, require implementation of alternative courses of action that had significant conservation benefits, 14 require an agency to show it minimized harm to endangered species in a manner consistent with its primary obligations, 15 and required an agency to consider 7(a)(l) when carrying out nonconservation activities. 16 The Fifth Circuit may have significantly expanded the reach of 7(a)(l) in Sierra Club v. Glickman. -- In Glickman, the court found that 7(a)(l) imposed an "affirmative duty on each federal agency to conserve each of the species listed." 18 Additionally, the court observed that the U.S. Department of Agriculture (USDA) was required to create or implement conservation programs consistent with 7(a)(l)." The USDA had not taken any measures to fulfill its conservation obligations imposed by 7(a)(l) at the time of the litigation. Two district court cases contemporaneous with the Glickman decision have defined agency obligations in less mandatory terms 21 ; however, the agencies in those cases had taken some steps to conserve species. Thus, the courts were reluctant to reverse agency decisions without a showing that the same alternative method of conservation that would have provided greater conservation benefits should have been adopted by the agency. 22 II. The 7(a)(2) Consultation Process Overview Section 7 consultation is the vehicle that draws federal agencies into the ESA process. Before engaging in any type of activity that may have direct or indirect effects on endangered species or critical habitat, agencies must "consult" with the NMFS or the FWS 23 in order to evaluate the impact of such agency action. 24 This consultation may be "formal" or "informal" in nature. After reviewing the biological assessment (BA) prepared by the agency, the NMFS prepares a biological opinion (BO) that ultimately determines whether the proposed agency action is likely to have an adverse impact on a listed species. If such an impact will occur, the Secretary will then provide written requirements for minimizing the impact on the listed species in the form of an "incidental take" statement. Section 7 requires consulting agencies to utilize the best scientific and commercial data 13. Carson-Truckee Water Conservancy Dist. v. Clark, 741 F.2d 257,14 ELR (9th Cir. 1984). 14. Pyramid Lake, 889 F.2d at 1417, 20 ELR at Defenders of Wildlife v. Andrus, 428 F. Supp. 167, 7 ELR (D.D.C. 1977). 16. Florida Key Deer v. Stickney, 864 F. Supp (S.D. Fla. 1994) F.3d 606, 29 ELR (5th Cir. 1998). 18. Id. at 616, 29 ELR at Id. at 618, 29 ELR at Id. 21. Strahan v. Linnon, 967 F. Supp. 518 (D. Mass. 1997) (holding that 7(a)(l) conservation plans were voluntary measures); Hawskbill Sea Turtle v. Federal Emergency Management Agency, 11 F. Supp. 2d 529, 29 ELR (D.V.I. 1998) (same). 22. Strahan, 967 F. Supp. at 596; Hawskbill Sea Turtle, 11 F. Supp. 2d at 529, 29 ELR at Whether the agency must consult with the NMFS or the FWS depends on the particular species affected. See 50 C.F.R , (for the NMFS); id , (for the FWS) U.S.C. 1536(a)(2), ELR STAT. ESA 7(a)(2). available, and failure to consult properly may result in the proposed activity being enjoined. 26 The critical and often difficult questions under 7 include: (1) what kind of "agency actions" will trigger the consultation requirements; (2) what is the process for interagency consultation; and (3) how are indirect and cumulative effects to be evaluated? These questions have special significance under the Clean Water Act (CWA) 404 program. Many activities involving the discharge of dredged or fill material in waters of the United States and adjacent wetlands trigger ESA consultation because of the activities impact on listed species and their habitat. These activities include, for example, infrastructure projects such as water and sewer lines, dams and impoundments, housing and commercial development, and aggregate mining. The consultation process can be lengthy and complex with extensive negotiations between a project applicant, the U.S. Army Corps of Engineers (the Corps), and the FWS. A. Agency "Action " Consultation under ESA 7(a)(2) is triggered through proposed "agency action." Section 7(a)(2) refers to "each federal agency," which is defined by the Act to include "any department, agency, or instrumentality of the United States." 27 The Act does not apply to state or local actions even though their actions could trigger federal agency action. This is because agency action governed by the ESA is limited to "activities or programs of any kind authorized, funded, or carried out, in whole or in part, by Federal agencies in the United States or upon the high seas." 28 The concept of agency "action" has been given broad application by the courts and FWS regulations that provide a nonexclusive list of examples. These include 29 : (a) actions intended to conserve listed species or their habitat; (b) the promulgation of regulations; (c) the granting of licenses, contracts, leases, easements, rights-of-way, permits, or grants-in-aid; or (d) actions directly or indirectly causing modifications to the land, water, or air. 30 Other examples of activities that have fallen within the expansive definition of "agency action" include the annual de- 25. id. 26. See, e.g., Pacific Rivers Council v. Robertson, 854 F. Supp.,713 (D. Or. 1993) (enjoining the underlying proposed action for agency's failure to initiate required consultation) U.S.C. 1532(7), ELR STAT. ESA 3(7) C.F.R (1990) (emphasis added). 29. See, e.g., Tennessee Valley Auth. v. Hill, 437 U.S. 153,8 ELR (1978) (declaring that not only prospective actions, but all actions contemplated by agencies are subject to ESA scrutiny); Natural Resources Defense Council v. Houston, 146 F.3d 1118,28 ELR (9th Cir. 1997) (renewal of existing contract is "agency action" under the ESA, at least when the agency has some discretion to renegotiate the terms); Conner v. Burford, 848 F.2d 1441, 18 ELR (9th Cir. 1988), cert, denied, 489 U.S (1989) (interpreting agency action broadly to include not only leasing but any and all post-leasing activities). But see, e.g., Marin Audubon Soc'y v. Seidman, 1991 U.S. Dist. LEXIS (N.D. Cal. 1991) (transfer of note, secured by property that was a habitat for endangered species, was not the type of agency action contemplated by the ESA where it would have no direct or indirect effect on the species or its environment) C.F.R

3 12-03 NEWS & ANALYSIS 33 ELR Copyright 2003 Environmental Law Institute, Washington, DC. reprinted with permission from ELR, org, livery of water under existing service contracts, the ere- C. Early Consultation ation of interim management strategies, 32 and even ongoing activities and projects. 33 Despite this broad interpretation, the regulations do limit the definition of "agency action" under the ESA to "actions in which there is discretionary Federal involvement or control." 34 B. "Incremental Step " Consultation The concept of agency action is so broadly defined that even small actions can trigger requirements for agency consultation on the entire project. The regulations attempt to prevent agencies from subverting the ESA by taking a potentially harmful project and breaking it up into a series of small steps or pieces which, when viewed separately, appear environmentally friendly. Many statutes expressly permit agencies to take "incremental steps" toward the completion of certain actions. The ESA regulations, however, instruct the FWS to issue a BO on an incremental step only if an agency submits a request and the incremental step is authorized by statute. 35 The BO will assess the FWS' opinion on the entire action. 36 Once the BO is issued, the agency may proceed with or authorize its incremental action under the following conditions: The BO does not conclude that the incremental step would violate 7(a)(2); The federal agency continues consultation with respect to the entire action and obtains BOs, as required, for each incremental step along the way; The federal agency fulfills its continuing obligation to obtain sufficient data upon which to base the final BO on the entire action; The incremental step does not violate 7(d) of the Act concerning irreversible or irretrievable commitment of resources 37 ; and There is a reasonable likelihood that the entire action will not violate 7(a)(2) O'Neil v. United States, 50 F.3d 677, (9th Or. 1995). 32. Lane County Audubon Soc'y v. Jamison, 958 F.2d 290, 22 ELR (9th Cir. 1992). 33. See, e.g., Klamath Water Users Protective Ass'n v. Patterson, 191 F.3d 1115 (9th Cir. 1999) (holding that agency's retention of managerial discretion over dam facility was action triggering consultation on the continuing operation of the dam) C.F.R (emphasis added); see also Environmental Protection Info. Ctr. v. Simpson Timber Co., 255 F.3d 1073, 31 ELR (9th Cir. 2001) (finding that because the FWS did not retain discretionary control over timber company's incidental take permit for the spotted owl, the agency was not required to reinitiate consultation to consider the permit's effects on other species); Sierra Club v. Babbitt, 65.F.3d 1502, 1509, 25 ELR 21539, (9th Cir. 1995) (concluding that when "the federal agency lacks the discretion to influence fie private action, consultation would be a meaningless exercise") C.FIR. S C). 36. See id. 37. See, e.g., Pacific Rivers Council v. Thomas, 1994 U.S. Dist. LEXIS (D. Or. 1994) (enjoining timber sales and road construction because they constituted per se irreversible and irretrievable commitments of resources). 38. Id.; see also Conner, 848 F.2d at ,18 ELR at (noting that incremental-step consultation does not vitiate the ESA requirement that the Secretary prepare a comprehensive BO on the entire action). The concept of agency action under the ESA may also include the issuance of a permit or license sought by a private applicant. As noted above, consultation is particularly significant under the CWA 404 wetlands permit where the Corps' issuance of both individual and nationwide permit approvals have been deemed agency action. 39 However, it has been held that EPA cannot force a state that has been delegated the CWA permit program under 402 to conduct ESA 7 consultation as a precondition to state issuance of the permit. 40 Section 7(a)(3) states that consultation may be required on "any prospective agency action" relating to a "prospective permit or license" whenever listed species may be present in the area affected by the application. The regulations define "applicant" as any person "who requires formal approval or authorization from a federal agency as a prerequisite to conducting the action." 42 The FWS and the NMFS have adopted a Consultation Handbook for guidance in determining which private applications rise to the level of 43 agency action/' m. EPA-FWS-NMFS Memorandum of Agreement on Consultations In 2001, EPA entered into a memorandum of agreement (MOA) with the FWS and the NMFS in an effort to enhance coordination between the agencies under the CWA and the ESA. 44 According to the agencies, the MOA seeks to enhance the efficiency and effectiveness of consultations between EPA, the FWS, and the NMFS regarding EPA's promulgation of various rules and standards, including the adoption of water quality standards under the CWA. To achieve this goal, the MOA sets out specific EPA actions that require 7 consultation. These cover: Approval of state/tribal NPDES programs; Issuance of individual and general federal NPDES permits; Approval of new or revised state/tribal water quality standards; Promulgation of water quality standards for a state or a tribe; and Promulgation of national aquatic life water quality criteria. 45 The MOA also provides clearer guidance to regional and 39. See Riverside Irrigation Dist. v. Andrews, 758 F.2d 508, 15 ELR (10th Cir. 1985); Fundfor Animals v. Rice, 85 F.3d 535 (11th Cir. 1996). 40. American Forest and Paper Ass'n v. EPA, 137 F.3d 291, 28 ELR (5th Cir. 1998) U.S.C. 1536(a)(3), ELR STAT. ESA 7(a)(3) C.F.R See generally U.S. FWS & NMFS, CONSULTATION HANDBOOK See also, e.g., Environmental Info. Ctr. v. Pacific Lumber Co., 67 F. Supp. 2d 1090 (N.D. Cal. 1999) (finding that lumber company's application for an incidental take permit clearly involved "agency action"). 44. See Memorandum of Agreement Between the Environmental Protection Agency, Fish and Wildlife Service, and National Marine Fisheries. Service Regarding Enhanced Coordination Under the Clean Water Act and Endangered Species Act, 66 Fed. Reg (Feb. 22, 2001). 45. See id. at 11202, ,

4 33 ELR ENVIRONMENTAL LAW REPORTER Copyright 2003 Environmental Law Institute, Washington, DC. reprinted with permission from ELR, field offices and establishes an "elevation process" to resolve various issues that may arise. In addition to promoting ground-level coordination, the MOA seeks to enhance coordination between the agencies at a national level through the establishment of a joint national research plan that prioritizes research on the effects of water pollution on endangered species. It is important to note that the MOA merely provides internal procedural guidance to the agencies. It does not impose any legally binding rules or requirements on the regulated community. IV. Analysis of Effects Once an agency has determined that a particular program or activity rises to the level of "agency action" under the ESA, the next step is evaluating the "effect" of such action. Determining the "effect" of an agency action is important because it dictates the extent of consultation required under 7, i.e., whether or not formal consultation will be undertaken. In this regard, the terms "affect" and "effect" are often used throughout 7. The Consultation Handbook defines "affect" as a verb meaning "to bring about change " e.g., the proposed action is likely to affect critical habitat. 4 The term "effect" is a noun used to discuss "beneficial effects" or "adverse effects." The regulations focus on the "effects of an action" as: (1) direct and indirect effects of an action; and (2) the effects of other activities that are interrelated or interdependent. 47 Such effects are analyzed in relation to the "environmental baseline." 48 The term "may effect" is the appropriate conclusion when the proposed action poses "any effect" on a listed species. 49 "Cumulative effects" refers to those future state or private activities not involving federal agencies that are reasonably certain to occur j/the agency action is permitted to proceed. 50 A. The Environmental Baseline All direct and indirect effects of an agency action, together with the combined effects of all other activities that are interrelated or interdependent with that action, are added to the "environmental baseline." The environmental baseline includes: (1) the past and present impacts of all federal, state, or private actions and other human activities in the relevant action area; (2) the anticipated impacts of all proposed federal projects in the action area that have already undergone formal or early 7 consultation; and (3) the impact of state or private actions which are contemporaneous with the consultation in process. 51 This baseline is intended to form a basic "snapshot" of the status of the species at a particular moment in time before the action is taken. B. Direct and Indirect Effects The "effects" of an action include both the direct and indirect consequences of the action on the species or critical habitat as measured by their addition to the environmental 46. CONSULTATION HANDBOOK, supra note 439, at x C.F.R. 402, Id. 49. CONSULTATION HANDBOOK, supra note 439, at xvi C.F.R Id. baseline. The project's immediate impacts on a species or critical habitat are the "direct effects" of the action. 52 "Indirect effects" are defined as those effects "that are caused by the proposed action and are later in time, but still are reasonably certain to occur." 53 The case law provides some meaningful guidance as to the scope of effects that ought to be considered. 54 One particularly helpful example is the case of Riverside Irrigation District v. Andrews. 55 In Riverside, the Tenth Circuit held that the Corps was obligated to consider the future effects of an increase in water consumption that might result from granting a permit to construct a dam and the impact that consumption may have on the critical habitat of whooping cranes located over 100 miles away from the site. The court held that the Corps could not limit its focus to the localized impacts of the dam. The court explained that the agencies were not permitted to wear "blinders" and ignore the indirect but causally related effects of certain actions. 56 C. Interrelated and Interdependent In addition to direct effects, the regulations require the FWS to consider the activities that are interrelated and interdependent to the proposed action in determining whether the proposed action jeopardizes endangered species or critical habitat. 57 Interrelated actions are defined as those that arise out of and are part of a larger action and depend on the larger action for their justification. 58 Interdependent actions are those that have no independent utility apart from the main action under consideration. 59 The test for interrelatedness or interdependence is "but for" causation: but for the proposed project/action, would these activities still occur? V. The Consultation Process Section 7(a)(2) of the ESA requires each federal agency to consult with either the NMFS or the FWS to ensure that any action authorized, funded, or carried out by the agency is not likely to jeopardize the continued existence of any listed species or result in the destruction or adverse modification of critical habitat (unless an exemption is obtained under subsection (h)). 61 In turn, a permittee may request prospective or "early consultation" if the applicant "has reason to believe that an endangered species or threatened species 52. Id. 53. Id. 54. See, e.g., National Wildlife Fed'n v. Coleman, 529 F.2d 359,6 ELR (5th Cir. 1976) (holding that the "effects" of the agency's highway construction project included the future private development that would be likely to occur around the highway when it was completed) F.2d 508, 15 ELR (10th Cir. 1985). 56. Id, at 512, 15 ELR at C.F.R Id. 59. Id Fed. Reg (1986); see also, e.g., Sierra Club v. Marsh, 816 F.2d 1376, 17 ELR (9th Cir. 1987) (private development of hotel, convention center, and high-rise residential buildings were not interrelated or interdependent to federal highway and flood control project) U.S.C. 1536(a)(2), ELR STAT. ESA 7(a)(2).

5 12-03 NEWS & ANALYSIS 33 ELR Copyright 2003 Environmental^ Law Institute, Washington, DC. reprinted with permission from ELR, may be present" at a proposed project. Hence, 7(a)(2) or 7(a)(3) would require consultation for proposed agency actions that require the issuance of a license or permit to a private applicant ,.. The regulations provide detailed requirements for consultation which may be either "informal" 64 or "formal." 65 The Act also imposes a duty on the agencies to use the best scientific and commercial data available when consulting. Generally speaking, whether or not formal or informal consultation is required is dependent on whether an endangered species may be present in the area affected by the agency action and whether or not it appears that the action may affect the species, based on the initial analysis. 66 A. Informal Consultation "Informal consultation" is defined in the ES A regulations as "an optional process that includes all discussions, correspondence, etc. between the [FWS] and the Federal agency or the designated non-federal representative prior to formal consultation, if required." 67 As a practical matter, most consultations are conducted informally with the appropriate agency. Informal consultation involves telephone calls, meetings, conversations, and letters which precede formal consultation. Generally, informal consultation focuses on whether formal consultation is required or whether concurrence can be reached that there is no adverse affect on a listed species. The Consultation Handbook lists several purposes of informal consultation: To clarify whether listed, proposed, or candidate species or critical habitats may be in the action area. To evaluate the action's potential effect on listed species or critical habitat. To explore ways to modify proposed actions to reduce or remove adverse effects or critical habitat. To determine the need to enter into formal consultation or conference for proposed species or habitat. To explore design or modification of a proposed action which would benefit the species. 6 The regulations discuss informal consultation as an "optional" process that includes all discussions, correspondence, etc. between the FWS and the agency designed to assist the agency in determining whether formal consultation or a conference is required. 6 There are three possible results from an informal consultation. First, the FWS and the agency could determine that the proposed action "may affect" but is not likely to ad- 62. See id. 1536(a)(3), ELR STAT. ESA 7(a)(3); 50 C.F.R (defining "early consultation"). 63. The general purpose of the interagency consultation requirement is to ensure that the federal government (through its numerous agencies) does not undertake actions, such as building a dam or highway, that incidentally jeopardize the existence of endangered or threatened species. Carson-Truckee Water Conservancy Dist. v. Clark, 741 F.2d 257, 14 ELR (9th Cir. 1984). 64. See 50 C.F.R See id See 16 U.S.C. 1536(a)(3), ELR STAT. ESA 7(a)(3) C.F.R CONSULTATION HANDBOOK, supra note 439, at C.F.R versely affect any species. In that case the consultation process would be terminated. 70 Second, the FWS could recommend actions necessary to avoid the likelihood of adverse effects to a listed species, in which case consultation would also be terminated. 71 Third, the consultation could lead the agencies to conclude that a formal consultation is required. Prior to the final determination that formal consultation is required, the agency may recommend that additional studies be made to improve tie database to document the effect on a species. In those cases, a BA is made to develop the best available scientific and commercial data. There is no set timetable for an informal consultation. Requests from the FWS are generally responded to within 30 days, when possible. 72 If a BA is required, it should be completed within 180 days. 73 All memoranda, phone contacts, letters, and records of an informal consultation should be kept as part of the extended record of the consultation. B. The Biological Assessment (BA) As part of an informal consultation, the FWS may request the agency to prepare a BA. Section 7(c) provides that the agency "shall conduct a [BA] for the purpose of identifying any endangered species or threatened species which is likely to be affected by such action." 74 The section further requires the use of the best scientific and commercial data available in rendering the assessment. There is no real set format for a B A and it may be prepared by the action agency, the "designated non-federal representative," 75 or any other person under the supervision of the action agency and in cooperation with the FWS. 76 BA is defined as "the information prepared by or under the direction of the federal agency concerning listed and proposed species and listed and proposed critical habitat that may be present in the action area and the evaluation of potential effects of the action on such species and habitat." 77 The B A shall be completed within 180 days after it is initiated, unless a different time is agreed upon. 78 When an application for a permit or license is involved, the time period for completion of an assessment may be extended by agreement or on a written statement setting forth the estimated length of the proposed extension and the reasons for the extension. 79 Section 7(c) also provides that the assessment may be undertaken as part of a federal agency's compliance with the requirements of 102 of NEPA See id (a). 71. See id (b). 72. CONSULTATION HANDBOOK, supra note 439, at C.F.R (i). A longer period of time may be agreed to by the Secretary and the action agency U.S.C. 1536(c), ELR STAT. ESA 7(c). 75. See 50 C.F.R (defining designated nonfederal representative). The federal agency may designate a nonfederal representative by giving the FWS written notification. The action agency mus t provide guidance and supervision during the preparation of the BA and must review and evaluate it, as the ultimate responsibility for 7 compliance remains with the action agency. See id See id (b). 77. Id Id (1).' 79. See id U.S.C. 4332, ELR STAT. NEPA 102.

6 33 ELR ENVIRONMENTAL LAW REPORTER Copyright 2003 Environmental Law Institute, Washington, DC. reprinted with permission from ELR, At its essence, a BA evaluates the potential effects of the the earlier assessment, plus any supporting data from other action on listed or proposed species and designated or proposed critical habitat Therefore, it must be completed be- Once the BA is completed, the agency must submit it to documents that are pertinent to the consultation. 89 fore any contract for construction is entered into and before the director of the FWS for review. The director will respond construction activities are commenced. 82 in writing within 30 days as to whether or not he concurs First, the preparer of the assessment must make a determination of whether any such species or habitat are present. ate formal consultation simultaneously with submission of with the findings of the BA. 90 The action agency may initi- The regulations require the action agency to make a written the BA. 91 request to the FWS requesting a list of all listed or proposed The BA may be used by the FWS in the following manner: (1) to determine whether to request formal consulta- species and designated or proposed critical habitat which may be present within the action area or notifying the FWS tion; (2) in formulating a BO; or (3) in formulating apreliminary BO. 92 of the species that are being included in the assessment. 83 Within 30 days of receipt of such a request, the FWS will either concur with the action agency's list of species, revise C. Formal Consultation When Is It Triggered? the list that was provided, or provide the action agency with a list of threatened species or habitat that may be within the action area, based on the best available scientific data. 84 In addition to listed and proposed species, the FWS will also provide a list of candidate species that may be present in the action area. 85 Candidate species refers to any species currently being considered by the FWS for listing as endangered or threatened but not yet the subject of a proposed rule. 86 Although candidate species have no legal status and are accorded no protection under the Act, their inclusion in the list will provide the agency with advanced notice of their potential listing. If the FWS determines that there are no listed species or critical habitat present in the action area, the agency is not required to prepare a BA and further consultation is not required. The contents of a B A are left to the discretion of the action agency and will often depend on the nature of the agency action involved. 87 The following is a list of items that may be considered for inclusion: The results of an on-site inspection of the area affected by the action to determine if listed or proposed species are present or occur seasonally. The views of recognized experts on the species at issue. A review of the relevant literature and other information. An analysis of the effects of the action on the species and habitat, including consideration of cumulative effects, and the results of any related studies. An analysis of alternate actions considered by the federal agency for the proposed action. 88 If a proposed action requiring the preparation of a BA is identical, or very similar, to a previous action for which a BA was prepared, the agency may fulfill the BA requirement for the proposed action by incorporating by reference C.F.R See id (b)(2). 83. See id (c). 84. See id (d). 85. See id. 86. See id (b). 87. See Strahan v. Linnon, 967 F. Supp. 581,594 (D. Mass. 1997) (noting that the contents of a BA are discretionary) C.F.R (f)(l)-(5). "Formal consultation" is a process that commences with the federal action agency's written request and concludes with the issuance of a BO. 93 The written request from the action agency must include: (1) a description of the action to be considered; (2) a description of the specific area that may be affected; (3) a description of any listed species or critical habitat that may be affected; (4) a description of the manner in which a species may be affected and an analysis of cumulative effects; (5) relevant reports, including any EIS, EA, or BA; and (6) "any other relevant information on the action, the affected listed species, or critical habitat." 94 However, formal consultation may not be initiated until the BA has been completed and submitted. 95 In determining whether formal consultation is required, the agencies examine the proposed action to determine whether there are listed species or critical habitat within the "action area," whether the proposed action is a "major construction activity," and whether the proposed action may effect a listed species. "Action area" is defined quite broadly as all areas directly or indirectly involved in the action. The regulations require agencies to consult with the FWS to determine if species are likely to be present in the area. If there are species within the "action area," the next step is to determine whether the proposed action is a "major construction activity." The regulations define "major construction activity" as a construction project having an impact on the physical environment or significantly affecting the quality of the human environment that would be subject to NEPA. 97 Finally, the agency must determine whether the action "may effect" a listed species or critical habitat. The Consul- 89. See id (g). The agency must certify that the action involves similar impacts to the same species in thee same geographical area and that no new species or critical habitats have been listed/designated or proposed. In addition, the B A must be supplemented with any relevant changes in information. See id (g)(l)-(3). 90. See id (j). 91. See id. 92. See id (k)(2). 93. Id Id (c)(l)-(6). 95. See id The regulations permit the request to encompass a number of similar actions within a geographical area or a segment of a comprehensive plan. However, "this does not relieve the Federal agency of the requirements for considering the effects of the action as a whole." Id. 96. Id Id.

7 12-03 NEWS & ANALYSIS 33 ELR Copyright 2003 Environmental Law Institute, Washington, DC. reprinted with permission from ELR, tation Handbook explains that the term "may effect" essentially means "any effect." 98 If this initial informal consultation results in a determination that the proposed action will have no effect on a listed species or critical habitat, then the agency or applicant may request a concurrence from the FWS and the consultation is terminated." The FWS' regulations do not provide any specific "bright-line" test as to the standards for determining when formal consultation is required. The Consultation Handbook provides some rather general criteria. The Consultation Handbook defines "not likely to adversely effect" as "when effects... are expected to be discountable or insignificant or completely beneficial." 100 The handbook further defines "insignificant effects" as relating to "the size of the impact" which "should never reach the scale where a take occurs." 101 The handbook also defines "discountable effects" as "those extremely unlikely to occur." 102 Thus, it appears that the application of these Consultation Handbook terms is extremely fact-specific. 103 The courts generally defer to the action agency's determination on consultation, although one court has overturned an informal consultation decision. 104 D. Formal Consultation How Is It Conducted? Section 7 provides a formal procedure for agencies to determine whether their activities are likely to have an adverse impact on threatened species or habitat. When a federal agency determines that a proposed action may effect listed 98. CONSULTATION HANDBOOK, supra note 439, at xvi. 99. See 50 C.F.R (a) CONSULTATION HANDBOOK, supra note 439, at Id Id Both informal and formal consultation satisfy the consultation process required under 7(a)(2). See American Rivers v. National Marine Fisheries Serv., 126 F.3d 1118, 1122 (9th Cir. 1997) (agency must consult formally or informally with the FWS and the NMFS if action "may affect" listed species); Southern Utah Wilderness Alliance v. Smith, 110 F.3d 724,728,27 ELR 21035,21037 (10th Cir. 1997) ("[ ]7(a)(2) does not require formal consultation if the BLM has informally consulted the FWS, the FWS has issued a written concurrence in the action, and that concurrence is not arbitrary and capricious"); Fund for Animals v. Thomas, 127 F.3d 80, 85, 28 ELR 20196, (D.C. Cir. 1997) (citing 50 C.F.R (a)) ("To the extent that there was an ESA consultation obligation, the Forest Service and FWS fulfilled it by engaging in 'informal consultation' in February and March 1995 pursuant to the 'joint regulations' promulgated by FWS and the National Marine Fisheries Service") (footnote omitted) The "determination of possible effects is ultimately the agency's responsibility...." Water Keeper Alliance v. Department of Defense, 271 F.3d 21,25 (1st Cir. 2001) (citing 51 Fed. Reg. at 19949). Consultation with the FWS alone does not satisfy an agency's duty under the ESA. Resources Ltd. v. Robertson, 8 F.3d 1394,24 ELR (9th Cir 1993). The agency must still establish conclusively its compliance with 7(a)(2)'s substantive obligations. See Pyramid Lake Paiute Tribe of Indians v. Department of the Navy, 898 F.2d 1410,20 ELR (9th Cir. 1990). In addition, the action agency may not "selectively withhold" information from the FWS. In one of the few reported decisions, a district court overturned an informal consultation decision in Bensman v. U.S. Forest Serv., 984 F. Supp (W.D. Mo. 1997). Relying on the language of the Consultation Handbook, the court found that the Forest Service had ignored or severely discounted data showing that the endangered Indiana bat would likely use forest area slated for timber sales. The court also found that the FWS had improperly discounted the effect of forest logging activities on the bats hunting and mating activities. Thus, the court found that the Consultation Handbook's standard for informal consul tation (that the impacts were "discountable") had not been met species or critical habitat, a formal consultation is required and a BO must be prepared. The applicable regulations provide, in part, that [ejach Federal agency shall review its actions at the earliest possible time to determine whether any action may affect listed species or critical habitat. If such a determination is made, formal consultation is required.... los Conversely, the statute provides that, when a federal agency determines that the proposed action is not likely to have any adverse effect 106 on listed species or critical habitat, then formal consultation is not required. 107 This determination can be made by way of a B A initiated under an informal consultation, 108 or through a preliminary BO issued under early consultation 109 and confirmed as the finalbo. 110 When conducting a formal consultation, the agency is required to provide the best scientific and commercial data available.! This information may include the results of studies or surveys conducted by the federal agency or another appropriate agency. Applicants also have the opportunity to submit information. Formal consultations, which follows set time lines, does not begin until the BA has been submitted. 113 Section 7 provides that consultations shall conclude within "90 days after its initiation unless extended." 114 When a private applicant is involved, the agencies may extend the deadline by submitting a written statement setting forth (1) the reasons why a longer period is required, (2) the information that is needed to complete the consultation, and (3) the estimated date on which the consultation will be completed.' 15 A consultation involving an applicant cannot be extended more than 60 days, however, without the consent of the applicant. 116 Within 45 days after concluding formal consultation, the FWS must deliver a BO to the agency and any applicant involved. 117 If, during the consultation, the FWS determines that "additional data would provide a better information base from which to formulate a [BO]," the FWS may request an extension of the consultation and request the action agency to provide additional data. 118 If there is mutual agreement to extend the consultation, 119 then the action agency must obtain "to the extent practicable" any data that can be obtained C.F.R See CONSULTATION HANDBOOK, supra note 439, at 3-13 (explaining that any potentially adverse effect that may occur and is not insignificant or discountable will trigger the consultation requirements) C.F.R (k) (use of BA); id (b) See id (k) See id See id (b)(2) See 50 C.F.R (d). This is the best information "available or that can be obtained during the consultation for an adequate review of the effects" of the action. See id See 50 C.F.R (d) See id (c) U.S.C. 1536(b)(l)(A), ELR STAT. ESA 7(b)(l)(A) Id. 1536(b)(l)(B),ELRSTAT.ESA 7(b)(l)(B); see also 50 C.F.R (e) Id.'See also 50 C.F.R (e)(3) See 50 C.F.R (e) See id (f) See id (e).

8 33 ELR ENVIRONMENTAL LAW REPORTER Copyright 2003 Environmental within the scope of the extension. uu It is important to note that the FWS does not take any responsibility for conducting or funding any additional studies. 21 If no request for an extension is made, then the FWS will issue its BO on the basis of the best data available at that time. During formal consultation, the responsibilities of the FWS and the NMFS are as follows: - Review all relevant information provided by the federal agency or that is otherwise available; Evaluate the current status of the listed species or critical habitat; Evaluate the effects of the action and cumulative effects on the listed species or critical habitat; Formulate a BO as to whether the action, taken together with cumulative effects, is likely to jeopardize the continued existence of listed species or result in the destruction or adverse modification of critical habitat; Discuss with the federal agency and any applicant the availability of "reasonable and prudent alternatives" to avoid a take; Formulate discretionary conservation recommendations which will assist the federal agency in reducing or eliminating the impacts that its proposed action may have on listed species or critical habitat; Formulate a statement concerning incidental take, if such take may occur; and Utilize the best scientific and commercial data available The Biological Opinion (BO) The result of a formal consultation is the preparation of a BO. The opinion is the compilation of the best available scientific data on the status of the species and how it would be affected by the proposed action. In addition, a jeopardy BO proposes alternative actions that the agency or applicant could take in order proceed with the project and still comply with the ESA. The pertinent provision of the statute reads as follows: Promptly after conclusion of consultation under paragraph (2) or (3) of subsection (a), the Secretary shall provide to the Federal agency and the applicant, if any, a written statement setting forth the Secretary's opinion, and a summary of the information on which the opinion is based, detailing how the agency action affects the species or its critical habitat. If jeopardy or adverse modification is found, the Secretary shall suggest those reasonable and prudent alternatives which he believes would not violate subsection (a)(2) and can be taken by the Federal agency or applicant in implementing the agency action. 123 The regulations provide that a BO must include the following: 120. See id (1) See id See id (g)(l)-(8); see also CONSULTATION HANDBOOK, supra note 439, at U.S.C. 1536(b)(3)(A), ELR STAT. 7(b)(3)(A). Institute, Washington, DC. reprinted with permission from ELR, A summary of the information on. which the opinion is based; A detailed discussion of the effects of the action on listed species or critical habitat; and The FWS' opinion on whether the action is likely to jeopardize the continued existence of a listed species or result in the destruction or adverse modification of critical habitat (a jeopardy BO); or, the action is not likely to jeopardize die continued existence of a listed species or adversely modify critical habitat (a no jeopardy BO). A "jeopardy" BO shall include reasonable and prudent alternatives, if any exist. 124 The Consultation Handbook sets forth additional requirements for BOs 125 : Description of the Proposed Action. The opinion should set forth the proposed action and list the direct and indirect effects in the action area. Status of the Species/Critical Habitat. The opinion shall present biological information on the impacted species, their life history, population dynamics, habitat, status and distribution, and other factors necessary for its survival including areas designated as critical habitat. Environmental Baseline. The opinion should outline the current effects of all human activity as it affects the species. Effects of the Action. This section of the opinion looks at direct and indirect effects of the proposed action including proximity of the action, distribution, timing, nature of the effects, duration, disturbance, and frequency. Cumulative Effects. The opinion should look at the cumulative effects of the future state, tribal, local, and private actions that are reasonably certain to occur. 2. Best Available Science and Judicial Review The B O must be supported by the best scientific information available. As with all other provisions of the ESA, what constitutes the "best" and "available" science has engendered considerable controversy. Construing the FWS' obligations in preparation of a BO during the 7 consultation process, the Court cautioned that the requirement that the FWS utilize the best scientific data available serves to ensure that the ESA is not implemented haphazardly, on the basis of speculation or surmise. While this no doubt serves to advance the ES A's overall goal of species preservation, it is readily apparent that another objective (if not indeed the primary one) is to avoid needless economic dislocation produced by agency officials zealously but unintelligently pursuing their environmental objectives. 126 Certain courts have held that the focus is on what type of information is "available" and therefore that even "weak" evidence does not render the opinion of the agency arbitrary C.F.R (h) CONSULTATION HANDBOOK, supra note 439, at 4-14 to Bennett v. Spear, 520U.S. 154,169,27ELR 20824,20829 (1997).

9 12-03 NEWS & ANALYSIS 33 ELR CopyrWrt 2003 Environmental Law Institute, Washington, DC. reprinted with permission from ELR, and capricious. Yet, others have held that the FWS must of the ES A perse, so long as the agency's chosen course is a conduct a detailed and "comprehensive" discussion of the reasonable ~--~ i.f- alternative ~u~,. -., measure. i" Yet, v~* *i,» the /->.!... Court has _~*»j noted effect of the proposed action : that "while the [FWS' BO] theoretically serves an 'advisory function,' in reality it has a powerful coercive effect on the action agency." 13 As the Court explained: There must be an analysis of the status of the environmental baseline given the listed impacts, not simply a recitation of the activities of the agencies. The opinion must also include an analysis of the effects of the action on the species when "added to" the environmental baseline in other words, analysis of the total impact on the species. 129 The Court has found that parties affected by the conclusions of the 7 consultation may have standing to sue under the ESA and challenge the validity of the agency's scientific data. Prior to the Court's decision m Bennett v. Spear, 130 the courts routinely concluded that private parties whose interests are impacted by the ultimate decision of the FWS lack standing because they assert "recreational, aesthetic, and commercial interests" that do not fall within the zone of interests sought to be protected by the ESA. 131 Hence, landowners could not challenge whether the "best" scientific data was in fact utilized by the FWS in formulating an opinion. In Bennett, however, the Court held that "the 'best scientific and commercial data' provision is... intended, at least in part, to prevent uneconomic (because erroneous) jeopardy determinations. [A landowners'] claim that they are victims of such a mistake is plainly within the zone of interests that the provision protects." 32 This has lead to a heightened standard of quality and accuracy in the scientific data supporting agency opinions. 133 Agencies and applicants play a significant role in the development of a BO. They supply the critical information and data and have the opportunity to review and submit comments to the FWS on preliminary opinions. BOs are not mandatory directives. Once the opinion is received it is ultimately within the discretion of the agency to decide how to proceed. I34 If an agency chooses not to follow the advice set forth in a BO it will not constitute a violation 127. See Greenpeace Action v. Franklin, 14 F.3d 1324, 23 ELR (9th Cir. 1992) (citing Pyramid Lake Paiute Tribe of Indians v. Department of Navy, 898 F.2d 1410,20 ELR (9th Cir. 1990)) See, e.g., Defenders of Wildlife v. Babbitt, 130 F. Supp 2d 121,31 ELR (D.D.C. 2001) (finding that the FWS utilized an improperly narrow "action area" and ignored many directand indirect affects) Id. at 128, 31 ELR at (citing Greenpeace v. National Marine Fisheries Serv., 80 F. Supp. 2d 1137, 30 ELR (W.D. Wash. 2000)); see also Pacific Coast Fed'n of Fisherman's Ass'n v. National Marine Fisheries Serv., 253 F.3d 1137, 31 ELR (9th Cir. 2001) (finding that the BO was inadequate because it failed to consider and explain cumulative effects and short-term impact of actions) U.S. 154, 27 ELR (1997) In Bennett, two Oregon irrigation districts that receive water from the Klamath Project and the operators of two ranches within those districts challenged a BO that concluded that the long-term operation of the Klamath Project was likely to jeopardize the continued existence of the Lost River and shortnose suckers. "In essence, petitioners claim a competing interest in the water the [BO] declares necessary for the preservation of the suckers." 520 U.S. at 158,27 ELR at Id. at 176, 27 ELR at See Todd Williams Roles, Has the Supreme Court Armed Property Owners in TheirFight Against Environmentalists? Bennett v. Spear and Its Effect on Environmental Litigation, 41 AKIZ. L. REV. 227, (1999) C.F.R (a); Aluminum Co. of Am. v. EPA, 175 F.3d 1156, (9th Cir. 1999). [T]he [BO's] Incidental Take Statement constitutes a permit authorizing the action agency to "take" the endangered or threatened species so long as it respects the [FWS'] "terms and conditions." The action agency is technically free to disregard trie [BO] and proceed with its proposed action, but it does so at its own peril (and that of its employees), for "any person" who knowingly "takes" an endangered or threatened species is subject to substantial civil and criminal penalties, including imprisonment. 137 Thus, for all practicable purposes, the measures suggested by the FWS become nondiscretionary for the action agency and permittee. 138 There are essentially two possible types of BOs: (1) a "jeopardy" opinion; and (2) a "no jeopardy" opinion. 1 9 In the latter, a determination (based upon the best available scientific and commercial data) is made that the proposed agency action is not b'kely to jeopardize the continued existence of listed species or critical habitat. If the BO concludes that the agency action will not result in jeopardy or adverse habitat modification, or if it offers reasonable and prudent alternatives 140 to avoid that consequence, the FWS must provide the agency with a written statement (known as tbe incidental take statement) 141 specifying the "impact of such incidental taking on the species," any "reasonable and prudent measures that the [FWS] considers necessary or appropriate to minimize such impact," and setting forth "the terms and conditions... that must be complied with by the Federal agency... to implement [those measures]." "Jeopardy Opinions" On the other hand, when the FWS concludes that the proposed agency action is likely to jeopardize the continued existence of a listed species or critical habitat, it must issue a "jeopardy BO" which shall include the FWS' opinion on the probably effects of the action. 143 "Jeopardy" is defined as "to engage in an action that reasonably would be expected, directly or indirectly, to reduce appreciably the likelihood of both the survival and recovery of a listed species in the wild by reducing the reproduction, numbers, or distribution of that species." 144 A jeopardy opinion should include a dis See Tribal Village of Akutan v. Hodel, 869 F.2d 1185,1193 (9th Cir. 1988) See Bennett, 520 U.S. at 169, 27 ELR at (internal citation omitted). As the Court quoted from the FWS' briefs in Bennett, "action agencies very rarely choose to engage in conduct that the Service has concluded is likely to jeopardize the continued existence of a listed species." Id Id. (citing 16U.S.C. 1540(a), (b),elrstat.esa 1 l(a), (b)) See id See 50 C.F.R (3) See 16 U.S.C. 1536(b)(3)(A), ELR STAT. ESA 7(b)(3)(A) See 50 C.F.R (i) (discussing content of incidental take statement) See 16 U.S.C. 1536(b)(4), ELR STAT. ESA 7(b)(4) C.F.R (3) Id

10 33 ELR ENVIRONMENTAL LAW REPORTER Copyright 2003 Environmental Law Institute, Washington, DC. reprinted with permission from ELR, cussion of various reasonable and prudent alternative courses of action that the agency could take, if any exist. 145 Jeopardy opinions are relatively rare, owing to the fact that reasonable and prudent alternatives will be adopted to minimize and avoid the impact of the action on the species. 146 If a jeopardy finding has been made and the agency or project proponent nonetheless wishes to go forward with the project as proposed, then an exemption must be sought from the ESA's 7 prohibition of "jeopardy." As discussed below, this is a procedure that is rarely utilized. 4. Reasonable and Prudent Alternatives When a BO concludes that the proposed action is likely to cause jeopardy or adverse modification of critical habitat, the opinion must contain reasonable and prudent alternatives. That term is defined as one that is consistent with the purposes of the proposed action, within the scope of the agency's jurisdiction and authority, economically and technologically feasible, and would avoid harm to listed species or critical habitat. However, the rules specify that such measures "along with the terms and conditions that implement them, cannot alter the basic design, location, scope, duration, or timing of the action and may involve only minor changes." 148 Here again, the final determination on whether to adopt a proposed alternative is up to the agency, but is not without its consequences. The agency is under no obligation to accept the first or even the "best" proposed alternative. 149 Rather, the agency can select any proposed alternative that otherwise meets the requirement of avoiding jeopardy to listed species or critical habitat. 150 As discussed above, however, agencies ignore the FWS' proposal as their peril. 5. Conservation Measures In addition to the reasonable and prudent alternatives, the BO may also include "conservation recommendations" to assist the agency in further avoiding or reducing the impact of the project. 1S Unlike the reasonable and prudent alternatives, such recommendations are unquestionably "discretionary," and are "advisory and are not intended to carry any binding legal force." 152 Conservation recommendations should be consistent with an adopted recovery plan for a listed species. 6. Incidental Take Statements Often a BO that includes reasonable and prudent alterna Id (h)(3) Indeed, some have argued that the FWS uses the jeopardy opinion aggressively in order to leverage greater concessions from an applicant See NATIONAL ASS'N OF HOME BUILDERS, DEVELOPERS GUIDE TO THE ENDANGERED SPECIES ACT 54 (1996) C.RR Id (i)(2) See Southwest Ctr. for Biological Diversity v. U.S. Bureau of Reclamation, 143 F.3d 515, 28 ELR (9th Cir. 1998) See Natural Resources Defense Council v. Corps of Eng'rs, 2001 U.S. Dist. LEXIS (S.D. Ha. 2001) (holding that when action agency has some expertise in the area, its decision to disregard a BO may be given greater degree of deference). 151 See 50 C.F.R ; id (defining conservation measures") Id. tives will still result m some level" of "take" of a listed species. The taking of the listed species would otherwise violate 9 of the ESA, but 7 allows the FWS to issue an "incidental take permit" as part of a BO. 153 An incidental take statement will be issued if the Secretary concludes: (1) the action will not lead to jeopardy or adverse modification of critical habitat or that reasonable and prudent alternatives have been offered; (2) the taking of an endangered species or a threatened species incidental to the agency action will not lead to jeopardy or adverse modification of critical habitat; and (3) if an endangered species or threatened species of a marine mammal is involved, the taking is authorized pursuant to 101(a)(5) of the MMPA. 154 The incidental take statement has four components: (1) specifying the impact of the incidental taking; (2) setting forth the reasonable and prudent measures that will be implemented; (3) in the case of marine mammals, specifying those measures that are necessary to comply with 1371(a)(5) of the Act with regard to such taking; and (4) setting forth the measures necessary to comply with in order to implement the reasonable and prudent measures. 155 The incidental take statement effectively shields the project proponent from liability for take of the species up to the limit specified by the incidental take statement and "no other authorization or permit under the Act is required." 156 Yet, the issuance of the incidental take statement is not the conclusion of the FWS' involvement with the project. The FWS requires the agency or applicant to report the progress of the action and its impact on the species so that the FWS may monitor the impacts of the take. 157 In addition, if the amount or extent of incidental taking is exceeded, the agency must immediately reinitiate consultation. 158 The FWS' authority to condition projects under the 7 process is not unlimited. In Arizona Cattle Growers' Ass'n v. U.S. Fish & Wildlife Service, 159 the Ninth Circuit placed limits on the FWS' ability to issue and attach terms and conditions to incidental take statements. The Bureau of Land Management (BLM) 160 initiated a consultation with the FWS over grazing permits, which led to the FWS issuing two "no jeopardy" BOs and an incidental take statement. The Cattle Growers' Association challenged the incidental take conditions under the theory that the FWS offered no ev U.S.C. 1536(b), ELR STAT. ESA 7(b); 50 C.F.R (i). The Court has described the BO's incidental take statement as a "permit authorizing the action agency to 'take' the endangered or threatened species as long as it respects the [FWS'] 'terms and condin'ons."'bennettv.spear,520u.s. 154,170,27 ELR 20824,20827 (1997) See 16 U.S.C. 1536(b)(4)(A)-(C), ELR STAT. ESA 7(b)(4)(A)- (C); 16 U.S.C. 1371(a)(5), ELR STAT. NMPA 101(a)(5) See id. 1536(b)(4)(C)(i)-(iv), ELR STAT. ESA 7(b)(4)(C)(i)-(iv); 50 C.RR (i)(l) C.F.R (i)(5). The incidental take statement is the equivalent of and replaces the need for obtaining a 10(a) permit. See 16 U.S.C. 1539, ELR STAT. ESA C.F.R (0(2) Id (0(4) F.3d 1229, 32 ELR (9th Cir. 2001) The BLM falls clearly within the definition of "federal agency" under ESA. See supra note 14.

11 12-03 NEWS & ANALYSIS 33 ELR Copyright 2003 Environmental Law Institute, Washington, DC. repn reprinted with permission from ELR, m idence that protected species were actually on the land ibr from the prohibition of jeopardizing a species existence. As which grazing permits wouldbe is sued and that there was no evidence or that the grazing activities would actually result in a taking of any such species. The FWS insisted that it was statutorily required under the ESA to issue incidental take statements in all no jeopardy determinations and, therefore, such evidence was unnecessary. 161 The court rejected the agency's interpretation of the ESA. finding it to be "contrary to clear congressional intent." 16 Citing legislative history, case law, prior agency representations, and the plain language of the ESA, the court held that incidental take statements must be predicated on the finding of an actual take that would result from the proposed activities. The court went on to find that the FWS acted in an arbitrary and capricious manner by issuing take statements imposing conditions of land use permits, when there was either no evidence that the protected species actually existed on the land, or no evidence that a take would occur if the permit was issued. 7. Irreversible/Irretrievable Commitments of Resources Once a consultation has begun, agencies and applicants are prohibited from making any irreversible or irretrievable commitments of resources toward the proposed action, when they have the effect of foreclosing formulation or implementation of any reasonable and prudent alternative measures. 163 This restriction on resource commitment remains in effect until the agency either receives ano jeopardy opinion, or chooses a valid reasonable and prudent alternative, thus indicating that the requirements of 7(a)(2) have been fully satisfied. M The restrictions of 7(d) are actually quite narrow. Two criteria must be satisfied before the resource commitment restrictions take effect: (1) the commitment must be "irreversible or irretrievable"; and (2) the commitment must effectively foreclose the implementation of any reasonable alternative courses of action. There also seems to be some agreement among the courts that committing money to a project will not, by itself, violate 7(d). ] Conferencing When a proposed agency action threatens a species proposed for listing, the agency must enter into "conference" with the FWS. The conference concludes with a "conference report" which contains advisory recommendations to avoid adverse effects on species proposed to be listed. VI. Exemptions From 7 Consultation Jeopardy opinions will lead to a request for an exemption 161. The FWS also argued that requiring such evidence would be inappropriately restrictive, and that the FWS should be permitted to issue take statements whenever there is even a remote possibility that a listed species will be taken F.3d at 1241, 32 ELR at U.S.C. 1536(d), ELR STAT. ESA 7(d) C.F.R ; 51 Fed. Reg , (1986) See, e.g., Bays' Legal Fund v. Brown, 828 F. Supp. 102, 24 ELR (D. Mass. 1993) (finding that sinking over $100 million into project prior to completion of consultation did not violate 7(d) because sufficient flexibility was retained to change the project design if necessary) U.S.C. 1536(a)(4), ELR STAT. ESA 7(a)(4). a result of the Court's decision in Tennessee Valley Authority, 161 Congress created an exemption process in Called the Endangered Species Committee in the Act, the committee is generally referred to as "the God Squad" because it is said to hold life or death power over a particular species. The committee is, in its composition, akin to the president's cabinet. The committee is chaired by the Secretary of the Interior and includes the Secretaries of Agriculture and the U.S. Army, the Chairman of the Council of Economic Advisors; the Administrators of EPA and the National Oceanic Atmospheric Administration, and a presidential appointment to represent each state affected by a particular application. The committee may hold hearings, issue subpoenas, take testimony, and take any action authorized. The committee may also promulgate rules, regulations, and procedures, and may issue orders it deems necessary. A federal agency, state governor, or applicant may apply to the committee for an exemption from the ESA if, the BO following a formal consultation indicates that the proposed agency action would violate the ES A. 169 The application for exemption must be submitted no more than 90 days after completion of consultation, or no more than 90 days after the agency takes final action on the permit or license application. 1 Upon receiving an application, the Secretary of the Interior conducts a threshold review to ensure that applicants had in fact consulted and exhausted all other opportunities to resolve the matter prior to seeking an exemption. 171 If the application is deemed to be sufficient, the committee will hold a hearing on the exemption. 172 The focus of the hearing is as follows: (1) the availability of reasonable and prudent alternatives; (2) the nature and extent of the benefits of the agency action consistent with conserving the species or its critical habitat; (3) whether the action is in the public interest and of regional or national significance; (4) reasonable mitigation measures that should be considered by the committee; and (5) whether the agency and exemption applicant refrained from making irreversible or irretrievable commitments of resources. The committee may grant the exemption if it determines: (1) there are no reasonable and prudent alternatives available; (2) the benefits of the action outweigh the benefits of alternative courses and are consistent with conserving the species or its critical habitat^ and (3) the action is in the public interest and of regional or national importance. 174 The U.S. at 153, 8 ELR at U.S.C. 1536(g), ELR STAT. ESA 7(g) Id. 1536(g)(l), ELR STAT. ESA 7(g)(l) Id Id. 1536(g)(3), ELR STAT. ESA 7(g)(3). Before seeking an exemption, the applicant must satisfy three requirements: (1) the applicant must show that it consulted in "good faith" and gave adequate consideration to any reasonable and prudent alternatives to the proposed action; (2) any BA required by 7(c) was completed; and (3) the applicant has refrained from making irreversible resource commitments. Id Id. 1536(g)(4),ELRSTAT.ESA 7( g )(4).Thehearingmustbeheld within 140 days after making the determination that the applicant has satisfied the necessary criteria, unless the secretary and applicant agree otherwise. Id Id. 1536(g)(5), ELR STAT. ESA 7(g)(5) Id. 1536(h), ELR STAT. ESA 7(h).

12 33 ELR ENVIRONMENTAL LAW REPORTER Copyright 2003 Environmental^ law Institute, Washington, DC. reprinted with permission from.elr, ZO. Following an extensive hearing before an administrative law judge (ALT), the committee granted an exemption for 13 of the 44 proposed timber sales at issue and denied exemptions for the remaining 31 sales. The committee did attach a condition to the exemptions requiring the BLM to consult with the FWS to develop a conservation plan for the northern spotted owl. A petition for review of the committee's decision was promptly filed in the Ninth Circuit. The court ultimately held that the committee was subj ect to the APA and remanded the case for a special evidentiary hearing to determine whether the committee had violated the APA's restrictions on ex parte communications. 179 The case was put finally to rest, however, when the new Secretary of the Interior, Bruce Babbitt, withdrew the exemption application. The ESA does carve out three situations in which the 7 exemption procedures do not apply. First, the president may exempt declared major disaster areas from ESA compliance related to projects to repair or replace public facilities, if he determines that the exemption is necessary to prevent recurrence of the natural disaster and reduce the potential loss of human life. 180 Second, the Endangered Species Committee shall grant an exemption for any agency action if the Secretary of Defense finds that such an exemption is necessary for national security. 181 Finally, the committee cannot even consider an exemption application if the Secretary of State determines that the grant of the exemption would violate an international treaty or other international obligations. 182 committee's decision may be subject to judicial review and "any person" may file apetition for review within 90 days of the decision. 175 The exemption proceeding is a "formal adjudication" under the APA 176 and, therefore, the standard of review is whether the decision is supported by "substantial evidence." 177 The exemption process is rarely used in practice. Only six applications for exemptions have been filed in the 20-year history of the exemption process, and three of those applications were withdrawn. Two leading exemption cases involved the Grayrocks project and the northern spotted owl. The Grayrocks Project. The Grayrocks project involved the construction of a dam on the Laramie River in Wyoming. The Laramie River is a tributary to the Platte River in central Nebraska. In 1978, the FWS designated a section of the Platte River as critical habitat for the whooping crane, a species listed as endangered. Concern that the construction of the Grayrocks Dam would adversely affect the whooping crane and its habitat lead to a lawsuit aimed at putting a halt to the project. The U.S. District Court for the District of Nebraska found that the federal agencies involved in the project had violated, among other laws, 7 of the ESA and enjoined the construction. 178 The parties eventually entered into a settlement after negotiating an agreement to modify the construction plans to reduce potential harm to the whooping cranes. After this agreement was reached, the FWS issued a new BO in which it determined that the modified project would not jeopardize the whooping crane or adversely modify its critical habitat. Meanwhile, an application for exemption was filed under the newly enacted exemption provision in 7 of the ESA. The committee voted unanimously in favor of the exemption for Grayrocks, but made compliance with the settlement an express condition for the exemption. The Northern Spotted Owl. In 1991, the northern spotted owl, a subspecies of the spotted owl that lives in the old growth forests of the Northwest, was listed as endangered. Following the northern spotted owl's listing, the BLM adopted a plan for allowing timber sales in the northern spotted owls forest habitat in Oregon. After being sued for failing to consult the FWS prior to development of the plan, the BLM submitted the plan for the first year sales to the FWS for consultation. The FWS concluded that less than one-half of the proposed sales were likely to jeopardize the northern spotted owl. Rather than abandoning the problematic sales or pursuing reasonable alternatives, the BLM took the unusual step of applying for an exemption. On the same day the BLM announced its decision to seek an exemption, a district court in Oregon issued a decision in the initial suit filed against the BLM, finding that its plan was adopted in violation of the ESA's consultation requirements. Despite the court's ruling, the exemption application was pushed through and certified to the committee. VII. Completion of Consultation and Reinitiation Once the BO and incidental take permit are issued, the consultation process may be completed. The regulations state that "[fjollowing the issuance of a [BO], the Federal agency shall determine whether and in what manner to proceed with the action in light of its 7 obligations and the [FWS' BO]." 183 Presumably, the agency will determine to go forward with the project in conformity with the conditions of the BO. If a jeopardy BO is issued, the regulations state that the agency must notify the FWS of its final decision on the action. 184 If the agency finds the conditions unacceptable, then it can apply for an exemption. 18S The procedures for exemption applications, as discussed above, are found in 50 C.F.R. part 451. Under certain circumstances, the consultation may be reopened. FWS regulations provide that "reinitiation" of 7 consultation is necessary under limited circumstances, "where discretionary Federal involvement or control over the action has been retained or is authorized by law...." I86 The four limited circumstances are the following: (a) If the amount or extent of taking specified in the incidental take statement is exceeded; (b) If new information reveals effects of the action that may affect listed species 175. Id. 1536(n). The petition for review can be filed in (1) the U.S. Court of Appeals for any circuit in which the agency action will occur, or (2) the District of Columbia if the action is taking place outside of any circuit. Id See 5 U.S.C , available in ELR ADMIN. Pxoc. (governing "formal" adjudications) See id. 706(e) Nebraska v. Rural Electrification Admin,, 8 ELR (D. Neb. 1978). The injunction was later stayed pending the outcome of an appeal to the U.S. Court of Appeals for the Eighth Circuit Portland Audubon Soc'y v. Endangered Species Comm., 984 F.2d 1534, 23 ELR (9th Cir. 1993) U.S.C. 1536(p), ELR STAT. ESA 7(p) Id. 1536(j), ELR STAT. ESA?G); 50 C.F.R (d) U.S.C. 1536(i),ELR STAT. ESA 7(i); 50C.F.R (e) C.F.R (a) See id (b) Id (c) Id