The Gifford Pinchot Task Force and other environmental organizations (collectively Task Force) petitioned the Ninth Circuit for review of six biological opinions (BiOps) issued by the Fish and Wildlife Service (FWS), which authorized the incidental "take" of threatened Northern spotted owls in several representative timber harvest projects in the Northwest. The court permitted the American Forestry Resource Council (AFRC) to intervene as a defendant. Task Force argued that the jeopardy and critical habitat analyses conducted by FWS violated the Endangered Species Act (ESA).
The Ninth Circuit held that the jeopardy analysis conducted by FWS was permissible and within the agency's discretion. Regarding the critical habitat question, however, the Ninth Circuit held that the analysis was fatally flawed because FWS's definition of "destruction or adverse modification" equated "recovery" with "survival," resulting in a regulation that impermissibly failed to consider the effects of alterations in critical habitat on species recovery. Moreover, the Ninth Circuit held that the availability of suitable alternative late successional reserve (LSR) habitat is not an adequate substitute for designated critical habitat. The Ninth Circuit reversed the judgment of the district court and remanded with instructions to grant summary judgment to Task Force on the critical habitat issue.
In 1990, FWS listed the spotted owl as a threatened species under the ESA. In the mid-1990's, largely in response to litigation over the spotted owl, the federal government adopted the Northwest Forest Plan (NFP). The NFP was intended to provide for stability and recovery of owl populations while continuing to allow timber harvests on federal lands. Since approval of the NFP, roughly 300 BiOps have permitted 1080 incidental takes of spotted owls and the degradation or removal of 82,000 acres of critical habitat. Task Force challenged six representative BiOps. Three of the BiOps were programmatic, covering multiple harvests in multiple years. The other three dealt with specific timber projects. Together, the six BiOps addressed over 21,000 acres of critical habitat and the incidental take of an unspecified number of spotted owls. The number is unspecified because several of the BiOps allow for the take of all owls associated with a project without stating how many owls will in fact be taken. The district court denied temporary restraining orders on these projects and ultimately granted summary judgment in favor of FWS.
The Ninth Circuit reviewed the grant of summary judgment de novo, and subjected the agency's action to "arbitrary and capricious" review under the Administrative Procedure Act. The court clarified that its review would be narrow, determining only whether FWS had made a "clear error of judgment." The court first addressed the jeopardy analysis.
Task Force argued that the analysis conducted by FWS was flawed because it failed to establish an accurate image of the actual risks faced by spotted owls within the reach of the timber harvest projects approved by the BiOps. Specifically, Task Force argued that FWS's failure to count owls, opting instead for a habitat proxy approach, could not ensure accurate owl counts because short-term habitat models-- necessary to establish baseline owl numbers as recommended by the drafters of the NFP-- had not yet been completed. The court noted that habitat proxy approaches were acceptable if they could "reasonably ensure" accurate results. The Ninth Circuit held that because the habitat model developed by FWS "reasonably correlates to the actual population of owls," and because deference is due to FWS's scientific expertise, the model was permissible.
Task Force then argued FWS could not support its jeopardy analysis simply by relying on the NFP. The initial BiOp covering the entire NFP did not authorize any incidental takes, leaving the issue for future consideration. In this case, the BiOps relied primarily on the NFP to support the "no jeopardy" conclusions. Task Force asserted that relying on the NFP to support the "no jeopardy" finding was impermissible because the NFP explicitly left the issue to future BiOps. The court noted that the reliance on the NFP, coupled with a lack of effectiveness monitoring, was "troubling," but nevertheless held that the agency should not be faulted for relying on the NFP because the NFP was based on sound science. Moreover, the BiOps were faithful to the NFP because FWS did site specific analysis. In dicta, the court pointed out that, if a habitat monitoring report due in 2004 was not underway, reliance on the NFP would be insufficient.
Task Force then argued the jeopardy analysis was flawed because it did not discuss current trends in the spotted owl population. Moreover, Task Force argued, the baseline used in the analysis was flawed because it did not consider past incidental takes. In addition, Task Force asserted the BiOps did not sufficiently explain how past changes to the environmental baseline and potential future projects justify the no jeopardy conclusion. The Ninth Circuit rejected these arguments as renewed and substantially identical attacks on the habitat proxy approach and reliance on the NFP.
The Ninth Circuit then addressed the critical habitat analysis. Task Force argued the analysis conducted by FWS was impermissible because it relied on an unlawful regulatory interpretation of the term adverse modification. Under the ESA, before a federal project can commence, the consulting agency must ensure that there will be no destruction or adverse modification of the critical habitat of the threatened or endangered species. FWS defined destruction or adverse modification as an environmental alteration that "appreciably diminishes the value of critical habitat for both the survival and recovery of a listed species." The court noted that under Chevron, no deference can be afforded to an agency if its interpretation is in conflict with express congressional intent. Therefore, the court held--in line with the Fifth and Tenth Circuits--that the FWS regulation was flawed because, under its definition, adverse modification would not occur until habitat modification threatens the survival of a species. Thus the Ninth Circuit held that the FWS regulation directly conflicted with the statutory language requiring the consulting agency to find an adverse modification if there is an appreciable diminishment in the value of the habitat for survival or recovery.
The court next addressed the issue of whether FWS's regulation constituted harmless error. The court noted that agencies are presumed to follow their own regulations unless such a presumption can be rebutted by evidence to the contrary. To meet the burden of harmless error under the Administrative Procedure Act, FWS would have to show that despite its regulation, it nevertheless scrutinized the effects of lost or diminished critical habitat on the recovery of the spotted owl. FWS argued that it implicitly considered recovery of the owl in the challenged BiOps. The court rejected this argument and held that because several of the BiOps failed to even mention the word "recovery," and because none of the BiOps addressed recovery in depth, FWS did not overcome the presumption that it followed its own regulation, and thus failed to consider recovery. The Ninth Circuit concluded FWS's flawed regulatory interpretation was not harmless error and thus the critical habitat analysis was impermissible.
Task Force raised four additional challenges. First, it argued that FWS recognized the projects would have adverse effects on critical habitat, but nevertheless decided that this would not result in adverse modification. The court dismissed this argument because FWS's critical habitat analysis was conducted using an impermissible regulatory definition. Second, Task Force argued that FWS's focus on the landscape scale in the three programmatic BiOps masked site specific impacts. Task Force argued that in this case, six million acres of untouched forest on the landscape scale were compared to twenty thousand treatment acres, leading to the erroneous conclusion that the projects did not pose a significant risk to the species. The Ninth Circuit disagreed and held that FWS did consider local effects. Moreover, the Ninth Circuit held that Task Force merely pointed out the risk of using large scale analysis, not that FWS had failed to address any local effects which would be necessary before the court would overturn the agency's decision as arbitrary and capricious.
Third, Task Force argued that the critical habitat analysis conducted by FWS was flawed because it substituted congressionally mandated critical habitat protections for alternative habitat in LSRs. The court held that although aspects of these regimes were meant to serve the same purpose, "suitable alternative habitat . . . is no substitute for designated critical habitat." The court noted that the plain language of the ESA requires an inquiry into whether or not expressly designated critical habitat will be adversely modified by the project. Allowing LSR habitat to stand in for critical habitat would "impair Congress's unmistakable aim that critical habitat analysis focus on the actual critical habitat." Thus, like the Supreme Court in Tennessee Valley Authority v. Hill, the Ninth Circuit held that suitable alternative habitat could not substitute for designated critical habitat.
Finally, Task Force challenged FWS's "amendments" to the BiOps. The court noted that, as a general rule, such "updates" are prohibited because they would allow agencies to issue post hoc rationalizations to support challenged BiOps. Here, the court stated that either FWS produced new information or FWS produced cumulative evidence amassed to support its litigation position. The court held that if FWS produced new information it should have reinitiated formal consultations, and if the evidence was cumulative, it should have been included in the original BiOp. The court held "[n]either scenario allows for the admission of the new evidence."
In conclusion, the Ninth Circuit held that the jeopardy analysis conducted by FWS was within the agency's discretion. Regarding the critical habitat analysis, however, the Ninth Circuit reversed the judgment of the district court because FWS had used an unlawful definition of "adverse modification" and its substitution of alternative habitat for designated critical habitat was impermissible. The Ninth Circuit directed the district court to enter summary judgment for Task Force on the critical habitat issue.