In two actions, plaintiffs challenged the United States Fish
and Wildlife Service's (FWS) issuance of incidental take statements (ITSs)
under the Endangered Species Act[1] (ESA)
in connection with cattle grazing permits issued by the Bureau of Land
Management (BLM) and the United States Forest Service (USFS). The Ninth Circuit
affirmed the district court's decision in the first action, setting aside the ITSs
as arbitrary and capricious. The Ninth Circuit affirmed in part and reversed in
part the district court's decision in the second action, holding that all five
of the challenged ITSs were arbitrary and capricious. The Ninth Circuit held
that (1) a finding of incidental take must be made before FWS may issue an ITS;
(2) FWS's issuance of ITSs with land-use conditions was arbitrary and
capricious when FWS failed to provide evidence that the endangered species were
present on the land or that the permits would result in any take; and (3) FWS's
creation of overly vague terms and conditions was arbitrary and capricious.

In the first action, FWS had issued a biological opinion (BiOp) concluding that a rancher's grazing permits on BLM lands were unlikely to jeopardize or modify the critical habitat of twenty species of plants and animals. In connection with the BiOp, FWS issued ITSs for certain species, including the razorback sucker and the cactus ferruginous pygmy-owl. The plaintiffs challenged the statements and their terms and conditions for these two species, and the district court granted the plaintiffs' motion for summary judgment, finding both statements arbitrary and capricious because FWS failed to provide evidence that the species existed on the relevant grazing allotments.[2]

In the second action, FWS issued twenty-two ITSs in connection with grazing permits on USFS public lands. The plaintiffs filed suit objecting to six of these statements for six different allotments: the Cow Flat, East Eagle, Montana, Sears-Club/Chalk Mountain, Sheep Springs, and Wildbunch allotments. The district court found that FWS was arbitrary and capricious in issuing all of the ITSs except the ITS for the Cow Flat Allotment because FWS did not demonstrate that a take of the species involved was reasonably certain to occur. The court granted summary judgment as to those allotments. The court also granted FWS's motion for summary judgment regarding the Cow Flat ITS, holding that the conditions of the ITS were not arbitrary and capricious. FWS appealed the decisions under both actions, except for the decision regarding the Sheep Springs allotment, and the Arizona Cattle Growers' Association appealed the court's decision in the second action regarding the Cow Flat Allotment.

The Ninth Circuit first addressed FWS's claim that the word "taking" should be interpreted more broadly in section 7 of the ESA[3] than in section 9.[4] The court rejected this claim under a Chevron, U.S.A., Inc. v Natural Resources Defense Council, Inc.[5] analysis, holding that Congress had clearly spoken to the issue and that "taking" had the same meaning in both sections. FWS claimed that because section 7 (which requires government agencies to monitor their actions to limit harm to listed species) has a more protective purpose than section 9 (which imposes penalties for "taking" listed species) the term "taking" should have a broader meaning in section 7. Thus, a section 7 take might include possible or likely future harm rather than actual harm. However, the court found that, based upon the structure and legislative history of the relevant provisions, Congress indicated to the contrary. The court indicated that Congress added the ITS[6] to create a "safe harbor provision" whereby a "taking" that occurs incidental to an action already approved under section 7 would not subject the actor to penalties.[7] According to the court, a section 7 definition of "taking" other than the section 9 definition would not require this "safe harbor, provision."[8] The court also pointed out that FWS's broad interpretation of "taking" under section 7 would allow FWS to regulate land use when no "taking" that would violate section 9 had occurred.

The court next addressed FWS's argument that under the ESA, it must issue an ITS whenever it issues a "no jeopardy" BiOp. The Ninth Circuit held that this interpretation was "contrary to clear congressional intent."[9] Under section 7 of the ESA, FWS produces a BiOp after formal consultation to determine whether an agency's action is "likely to jeopardize the continued existence" of a listed species.[10] When FWS finds no jeopardy, an accompanying ITS provides measures necessary to limit the impact of takings that occur from the action.[11]

FWS claimed that the requirement that it provide "a written statement that . . . specifies the impact of such incidental taking on the species"[12] meant that whenever FWS issues a "no jeopardy" opinion, it must provide a statement. The Ninth Circuit relied upon the canon of statutory construction that words must be interpreted in context to find that a statement is required only when FWS first finds that there will be an actual take. The court pointed out that its interpretation was consistent with the ESA's implementing regulations, which indicate that an ITS is provided "if such take may occur."[13] The court also explained that its interpretation was consistent with the legislative intent that the incidental take provision be used as a safe harbor because a safe harbor would not be necessary if no take had occurred. Finally, the court refused to defer to FWS's internal consultation handbook, which also stated that an ITS should be issued regardless of whether a take will occur. The court found that the handbook's guideline was contrary to the plain meaning of the ESA and its regulations.

In rejecting FWS's interpretation of the ITS provisions, the court held that "it is arbitrary and capricious to issue an ITS when the Fish and Wildlife Service has no rational basis to conclude that a take will occur incident to the otherwise lawful activity."[14] The court then examined each ITS to determine whether each was arbitrary and capricious. The court held that the ITS issued for the razorback sucker in connection with the first action was arbitrary and capricious because there was no evidence that the fish was present in the grazing allotment concerned. Within the last few years, no sightings of the fish had been reported. Any harm that would result to the fish because of habitat modification caused by grazing was speculative. The court indicated that FWS should not use ITSs to deal with prospective harm, and that related regulations demonstrated that FWS should reinitiate consultation if new harms are revealed after initial consultation.[15]

The Ninth Circuit found the ITS for the cactus ferruginous pygmy-owl arbitrary and capricious for similar reasons. FWS had not established that the owl existed in the involved allotment. Although FWS argued that new surveys demonstrated the presence of the owls, the court replied that it could not look beyond the administrative record and that FWS could deal with this new evidence by reinitiating consultation.

The court next held the ITSs from Arizona Cattle Growers' second action arbitrary and capricious for the Montana, Sears-Club/Chalk Mountain, East Eagle, and Wildbunch Allotments. The court indicated that the harms detailed in these statements were too speculative or lacked sufficient evidence. In the Montana Allotment, FWS anticipated harm to the Sonora chub even though cattle were excluded from the area that fish actually inhabited. For the Sears-Club/Chalk Mountain Allotment, the Gila topminnow existed only in an adjacent spring; the court stated that the potential for reintroduction or recolonization of the spring on the Sears-Club/Chalk Mountain Allotment was too speculative. Evidence was insufficient to prove that the loach minnow or spikedace existed in the East Eagle Allotment. Finally, regarding the Wildbunch Allotment, the court found any evidence of harm to loach minnow caused by increased sedimentation from grazing to be too general. Again, the loach minnow did not actually use any portion of the allotment where grazing would actually occur.

The court, however, found that the ITS for the Cow Flat Allotment contained adequate evidence of the loach minnow's presence in the area, and the court declined to reject the statements as arbitrary and capricious for failure to show a take. According to the court, "[t]he specificity of the Service's data, as well as the articulated causal connections between the activity and the 'actual killing or injury' of a protected species distinguishe[d]" this statement from the others.[16]

Nevertheless, the court found the Cow Flat Allotment's ITS arbitrary and capricious because it did not adequately indicate the amount of anticipated take or set forth a clear standard indicating when take would exceed that allowed. FWS had determined that incidental take of the loach minnow would be exceeded if ecological conditions did not improve after grazing began. The court explained that although FWS was not required to provide a numerical limit on take, the condition FWS set forth was too vague. In addition FWS failed to discuss adequately how this condition was causally related to takings of the species.

The court overturned the district court's conclusion that the Cow Flat Allotment's ITS was not arbitrary and capricious; thus the Ninth Circuit found all the challenged ITSs arbitrary and capricious.