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Spirit of the Sage Council v. Norton

December 11, 2003


The opinion of the court was delivered by: Emmet G. Sullivan United States District Judge


This action challenges the validity of two administrative regulations promulgated by the Department of the Interior ("DOI"), the U.S. Fish and Wildlife Service ("FWS"), the Department of Commerce ("DOC"), and the National Marine Fisheries Service ("NMFS") (collectively,"the Services"): the so-called"No Surprises Rule," 63 Fed. Reg. 8,859 (Feb. 23, 1998) (codified at 50 C.F.R. §§ 17.22, 17.32, 222.2) and the"Permit Revocation Rule" ("PRR"), 64 Fed. Reg. 32,712, 32,714 (Jun. 17, 1999), (codified at 50 C.F.R. §§ 17.22(b), 17.32(b)).

The first resolution provides regulatory assurances to holders of Incidental Take Permits ("ITPs") issued pursuant to the Endangered Species Act ("ESA"), 16 U.S.C. § 1532 et seq. (2003), that they will not be required to commit funds or resources beyond those contemplated at the time the permit was issued to mitigate the effects of unforeseen circumstances on threatened or endangered species and their habitats.

The second resolution describes the circumstances under which ITPs may be revoked in light of the No Surprises Rule. The Services' promulgation of these regulations is alleged to violate the ESA and the Administrative Procedure Act ("APA"), 5 U.S.C. § 706 (2003). The parties' cross-motions for summary judgment are now pending before the Court.

I. Introduction

Plaintiffs are six organizations, a Native American Tribe, and three individuals, one of whom is the Chief of the Shoshone Gabrielino Nation. They contend that the No Surprises Rule, by limiting the obligations of ITP holders to protect threatened and endangered species, flagrantly violates the letter and purpose of the ESA. Plaintiffs further submit that both the No Surprises Rule and the PRR, which was announced during the pendency of this action and sets forth the standards governing revocation of ITPs issued pursuant to the No Surprises Rule, were promulgated in a manner which impermissibly violates the APA's notice and comment requirements, and therefore should be struck down and remanded as procedurally infirm. Defendants' principal arguments on summary judgment are that plaintiffs lack standing and the claims presented in their Second Amended Complaint are not ripe for review.

The Court finds that plaintiffs have standing to assert their claims, and that, at a minimum, plaintiffs' challenge to the PRR is ripe for review. It further concludes that the public notice and comment procedures followed by the Services when promulgating the PRR were deficient as a matter of law. See 5 U.S.C. § 553. Accordingly, the Court will vacate and remand the PRR to the Services for further consideration consistent with the APA. Moreover, the Court finds that the relationship between the PRR and the No Surprises Rule is such that remand of the former requires remand of the latter without further inquiry into the merits of plaintiffs' substantive challenges.


The procedural history of this case is somewhat tortured. The action was commenced in July of 1998 as a challenge to the"No Surprises Rule," and the Services filed the administrative record for that regulatory action in December of 1998. Several groups representing ITP holders were granted permission to intervene on February 5, 1999.

Plaintiff filed a First Amended Complaint on the same date. Cross-motions for summary judgment were fully briefed, and oral argument was scheduled for July 15, 1999. Approximately one month before the hearing, the government promulgated a second regulation, the"Permit Revocation Rule," setting forth the circumstances under which an ITP issued with No Surprises assurances could be revoked.

Plaintiffs moved to compel supplementation of the administrative record to include materials relevant to the promulgation of the PRR, and suggested that the second rule was hurriedly drafted and promulgated without the public notice and comment required by the APA in an effort to address the issues raised by plaintiffs' Complaint. See Tr. Hr'g 7/15/99 at 6, 18-20, 23. The Court granted plaintiffs' motion to compel and denied the first round of cross-motions for summary judgment without prejudice. Spirit of the Sage v. Babbit, Civ. A. No. 98-1873, September 20, 1999 Order.

Plaintiffs were subsequently granted leave to file a Second Amended Complaint asserting claims relating to the promulgation of the PRR. Considerable litigation regarding the completeness of the PRR administrative record ensued, culminating in the issuance of a Memorandum Opinion and Order compelling the government to produce administrative record documents withheld as privileged. Spirit of the Sage v. Babbit, Civ. A. No. 98-1873, Feb. 15, 2001 mem. op. and order. Once defendants complied with the Court's Order, plaintiffs moved for partial summary judgment as to Count III of their Second Amended Complaint, which alleges that promulgation of the PRR violated the APA and ESA.

Defendants filed a second cross-motion for summary judgment. After numerous supplemental memoranda and notices of additional authority were filed, the Court denied plaintiffs' motion for partial summary judgment as to Count III of the Second Amended Complaint without prejudice, and directed the parties to modify and renew their motions for summary judgment, integrating all relevant authority.

The parties' third cross-motions for summary judgment are now fully briefed.


Plaintiff, Spirit of the Sage Council ("Council"), is a non profit membership organization based in Pasadena, California. Second Am. Compl. ¶3. The Council is a coalition of Native Americans indigenous to California, other Native Americans, community groups, and citizens dedicated to the protection of America's natural and cultural heritage, endangered species, habitats and ecosystems, and indigenous sacred sites. Id. The Council has over 1,000 individual members and thirty organizational members throughout the United States, British Columbia and Mexico. Id.

The Shoshone Gabrielino Nation, a co-founder of the Council, is a state-recognized California Native American Tribe whose ancestral territory is located south of Malibu at Topanga Canyon in Los Angeles, California, continues along the coast to Aliso Creek in Orange County, and covers the area from Catalina Island inland to the San Gabriel and western San Bernadino Mountain ranges. Id. ¶ 12. The Tribe and its members use their ancestral territory for educational, recreational, cultural and religious activities. Id. Many endangered species, including the Coastal California gnatcatcher, Bald Eagle, Peregrine Falcon, Pacific Pocket Mouse, the Southwestern Willow Flycatcher, the Santa Monica Mountains Dudleya, and the Riverside Fairy Shrimp, along with their habitats, including wetlands, riparian woodlands, and coastal sage scrub ecosystems, are of cultural and religious significance to the Tribe. Id. ¶ 13.

Biodiversity Legal Foundation ("BLF") is a Boulder, Colorado, non-profit organization dedicated to the preservation of all native plants and animals, communities of species and naturally functioning ecosystems in the United States. Id. ¶ 6.

Plaintiff, National Endangered Species Network ("NESN"), is a non-profit wildlife conservation organization committed to the protection of endangered species and habitats through educational, administrative, and legal action. Id. ¶ 9.

The Humane Society of the United States ("HSUS"), is a national animal protection agency based in Gaithersburg, Maryland, and counting over 6 million members throughout the nation. Id. ¶ 15. Through public education, litigation, legislative initiatives, research, and investigations, the HSUS seeks to protect wild and domestic animals by opposing activities which destroy wildlife habitat, including that of endangered and threatened species. Id.

The Klamath Forest Alliance ("KFA") is a California non profit public interest organization created to promote sustainable, healthy, and diverse forest ecosystems and economies in California and Southwest Oregon. Id. ¶ 18. KFA's members, volunteers, and Board of Directors include fishermen, fishing guides, and Native Americans who have recreational, occupational, religious and cultural interests in endangered and threatened species and their habitats, including the Northern Spotted Owl, the Coho Salmon, the Klamath Mountain Steelhead, the Bull Trout, the Siskiyou Mountain Salamander, and the Del Norte Salamander. Id. ¶ 19.

The Mountaineers, one of the oldest and largest conservation organizations in Washington state, counting more than 15,000 members, has historically taken a strong interest in issues affecting state and private forest lands. Id. ¶ 21. The organization is particularly concerned with how timber harvesting operations on those lands affect wildlife and other natural resources. Id.

All organizations allege that their members regularly photograph, observe, study and otherwise enjoy endangered and threatened species and their habitats. Id. ¶¶ 4, 7, 10, 16, 21. These species include, among others, the Coastal California Gnatcatcher, Bald Eagle, Red Cockaded Woodpecker, Dehli Sands Flower-Loving Fly, Northern Spotted Owl, Peregrine Falcon, Desert Tortoise, Quino Checkerspot Butterfly, Santa Ana Wooley-Star, Giant Garter Snake, Steelhead Trout, Southwestern Willow Flycatcher, Desert Tortoise, Mojave Ground Squirrel, Stephens' Kangaroo Rat, Golden-cheeked Warbler, Aplomado Falcon, Alutian Canada Goose, Northern Spotted Owl, Yaqui Chub, Coho Salmon, Least Bell's Vireo, San Joaquin Kit Fox, Grizzly Bear, and Gray Wolf. Id. ¶¶ 4, 7, 10, 16, 21.

The Department of the Interior ("DOI") is the federal agency ultimately responsible for implementation of the ESA with respect to terrestrial species. Primary responsibility for ESA enforcement lies with the Fish and Wildlife Service ("FWS"), an agency within DOI. Similarly, the Department of Commerce ("DOC") is ultimately responsible for implementation of the ESA with respect to marine species, and has delegated those responsibilities to the National Marine Fisheries Service ("NMFS"), an agency within the DOC.

The Western Urban Water Coalition ("WUWC"), a group of organizations consisting of the Coalition for Habitat Conservation, the National Association of Home Builders, the County of Kern and the Kern Water Bank Authority, the Foothill/Eastern and San Joaquin Hills Transportation Corridor Agencies, the American Forest and Paper Association, and the Building Industry Legal Defense Foundation (collectively,"WUWC"), and a second group of entities consisting of the City of San Diego ("CSD"), the County of San Diego, the County of Orange, and the Irvine Ranch Water District (collectively"CSD et al ), have been granted leave to intervene as defendants in this action. See Spirit of the Sage v. Babbit, Civ. A. No. 98-1873, Feb. 4, 1999 Order.

IV. Statutory and Regulatory Framework

A. The Endangered Species Act

Congress enacted the ESA, 16 U.S.C. §§ 1531-44,"to provide a means whereby the ecosystems upon which endangered species and threatened species depend may be conserved, [and] to provide a program for the conservation of such endangered species and threatened species." 16 U.S.C. § 1531(b). The ESA has been described by the U.S. Supreme Court as the"most comprehensive legislation for the preservation of endangered species ever enacted by any nation." Babbitt v. Sweet Home Chapter of Communities for a Great Oregon, 515 U.S. 687, 698, 115 S. Ct. 2407 (1995) (" Sweet Home") (quoting Tennessee Valley Authority v. Hill, 437 U.S. 153, 180, 98 S. Ct. 2279 (1978)).

The ESA imposes both substantive and procedural requirements. The Act defines an"endangered" species as one"in danger of extinction throughout all or a significant portion of its range...." 16 U.S.C. § 1532(6). A"threatened" species is one"likely to become an endangered species within the foreseeable future throughout all or a significant portion of its range." 16 U.S.C. § 1532(20).

Section 4 provides that either the Secretary of the Department of the Interior or the Secretary of the Department of Commerce shall determine whether a given species qualifies for designation as endangered or threatened. 16 U.S.C. § 1533(a)(1). Once a species is listed under one of these categories, section 7(a)(2) of the ESA requires each federal agency, in consultation with the Services, to ensure that any action that it authorizes, funds, or implements is not likely to jeopardize the continued existence of any listed species or result in the destruction or adverse modification of designated"critical habitat." 16 U.S.C. 1536(a)(2). The Services' implementing regulations prescribe a detailed consultation process, through which the Services assess the biological impacts of any agency's proposed activity. See 16 U.S.C. § 1536; 50 C.F.R. § 402.

Section 9, with certain statutory exceptions, makes it unlawful for any person to"take" a member of any species listed as endangered or threatened. 16 U.S.C. §§ 1538(a)(1)(B),(G); 50 C.F.R. § 17.31 (extending the"take" prohibition to threatened species). The statute defines"take" as"to harass, harm, pursue, hunt, shoot, wound, kill, trap, capture, or collect, or to attempt to engage in any such conduct." 16 U.S.C. § 1532(19). FWS regulations further define"harm" to include"significant habitat modification or degradation" that"actually kills or injures" wildlife. 50 C.F.R. § 17.3; see Sweet Home, 515 U.S. 687 (upholding regulatory definition of"harm").

B. Incidental Take Permits

In 1982, Congress amended the Endangered Species Act to authorize the Services to permit otherwise prohibited takings of endangered or threatened species, if they are"incidental to, and not the purpose of, the carrying out of an otherwise lawful activity." 16 U.S.C. § 1539(a)(1)(B)."Incidental take permits are available to landowners and developers who agree to mitigate impacts to listed species through a Habitat Conservation Plan ("HCP"), which must satisfy both ESA screening criteria and further requirements in the Services' regulations, including an assessment of environmental impacts." Defs.' Mem. in Support of Cross-Mot. for Summ. J. ("Defs.' Mot.") at 1. When amending the ESA to provide for ITPs, Congress stated that it was acting to"address[] the concerns of private landowners who are faced with having otherwise lawful actions not requiring Federal permits prevented by Section 9 prohibitions against taking." H.R. Rep. No. 935, 97th Cong., 2d Sess. at 29, reprinted in 1982 U.S.C.C.A.N. at 2870.

Under Section 10 of the ESA, an applicant seeking an ITP authorizing it to "take" endangered or threatened species in the course of its activities on private land must prepare a Habitat Conservation Plan ("HCP") specifying:

(i) the impact which will likely result from such taking;

(ii) the steps the applicant will take to minimize and mitigate such impacts;

(iii) any alternative actions to such taking the applicant considered and the reasons why such alternatives are not being utilized; and

(iv) such other measures that the Secretary may require as being necessary or appropriate for purposes of the plan.

16 U.S.C. § 1539(a)(2)(A).

Upon review of the plan, the Services must find that the taking will be incidental; the applicant will, to the maximum extent practicable, minimize and mitigate the impacts of such taking; the applicant will ensure that adequate funding for the plan will be provided; [and] the taking will not appreciably reduce the likelihood of the survival and recovery of the species in the wild.

16 U.S.C. § 1539(a)(2)(B). Before issuing an ITP, the Secretary must also provide"an opportunity for public comment[] with respect to a permit application and the related conservation plan ..." Id. Issuance of a Section 10 permit constitutes federal agency action under Section 7. Defs.' Mot. at 5. Therefore, the Service must conduct an intra-agency consultation under Section 7(a)(2) before issuing an ITP. Id.

In 1985, the FWS adopted regulations implementing Section 10 of the ESA, which stipulate that each ITP applicant must submit a"conservation plan that specifies," inter alia,"[t]he impact that will likely result from such taking," as well as"steps the applicant will take to monitor, minimize, and mitigate such impacts, the funding that will be available to implement such steps, and the procedures to be used to deal with unforeseen circumstances."*fn1 50 C.F.R. § 17.22(b)(1)(iii)(B) (1992). The preamble to the 1985 regulations explained that this provision was"needed" because"circumstances requiring modification of a conservation plan could arise even during the life of a permit with a relatively short term." 50 Fed. Reg. 39,684 (Sept. 30, 1985). Accordingly, the regulations require the Services to include in each HCP specific measures to address any changed circumstances arising during the lifetime of the ITP which may jeopardize the survival and recovery of the threatened or endangered species covered by the plan. 50 C.F.R. §§ 17.22(b)(1)(iii)(B), 17.32(b)(1)(iii)(B). Additionally, ITP holders were required to agree to change the terms of their HCPs if such changes become necessary to conserve the species. Id.

The NMFS promulgated similar regulations in 1990 which also recognized that"circumstances and information may change over time," thus justifying a requirement that ITP applicants' HCPs contain"a procedure by which NOAA, Fisheries and the permit holder will deal with unforeseen circumstances." 55 Fed. Reg. 20,603, 20,605 (May 18, 1990) (codified at 50 C.F.R. 222.2).

C. No Surprises

In an August 11, 1994 public statement, the DOC and DOI announced, without any prior public notice and comment, a"No Surprises" policy which was to go into effect immediately. Administrative Record ("AR") Vol. 1, Docs. 1 & 2. The policy required Services approving HCPs to provide landowners with"assurances" that, once an ITP was approved, even if circumstances subsequently changed in such a way as to render the HCP inadequate to conserve listed species, the Services would not impose additional conservation and mitigation requirements which would increase costs or further restrict the use of natural resources beyond the original plan. Id. The stated purpose of the policy was to"provid[e] regulatory certainty in exchange for conservation commitments." See Habitat Conservation Planning Handbook. Pursuant to the policy, upon an applicant's request, No Surprises"assurances" were incorporated in all HCPs approved by the Services after August of 1994.

On October 31, 1996, environmental groups and individuals, some of whom are plaintiffs in this action, filed an action challenging the"No Surprises" policy on the grounds, inter alia, that it had been promulgated without complying with the APA's notice and comment requirements. Second Am. Compl. ¶ 54; Spirit of the Sage v. Babbitt, Civ. A. No. 96-2503 (D.D.C.). The parties reached a settlement agreement, approved by the Court on March 20, 1997, which required the defendants to solicit and consider public comment before publishing a final decision with respect to No Surprises assurances. Id.

According to plaintiffs, the"vast majority" of the over 800 public comments received opposed the proposed rule on a number of grounds. Id. ¶¶ 55-56; see also A.R. vol. 1, Doc. 9 at 23 ("tally of commenters" indicating that 755 opposed the rule and 38 supported it as drafted). Persons and entities expressing opposition to the Rule included national conservation, animal protection, and environmental organizations, Native American tribes, and conservation biologists. Pls.' Mem. in Supp. Mot. Summ. J. ("Pls.' Mot."), Ex. B at 1-3. Scientists in particular expressed concern that, because ITPs can be approved for many decades, some mechanism for modification of their attendant HCPs in response to inevitable"surprises" such as"new diseases, droughts, storms, floods, and fire" was necessary. Statement on Proposed Private Lands Initiatives from the Meeting of Scientists at Stanford University (April 1997) (hereinafter"Stanford Statement"), quoted in A.R., vol. 5, comm. 683 at 10. Absent means for ongoing modification of HCPs, they concluded that"habitats and species certainly will be lost." Id. The proposed rule further specified that, should unforeseen circumstances arise, the burden of"implementing additional conservation measures would be borne by the Federal government," 62 Fed. Reg. 29,091 (May 29, 1997), leading some comments to emphasize that, given chronic funding shortages which render them unable to fulfill even their basic enforcement responsibilities, the Services are ill-equipped to take on the responsibility of implementing mitigation measures when unforeseen circumstances arise. See, e.g., A.R. vol. 2, comm. 74 at 1.

Notwithstanding the number of comments calling the proposal into question, the Services promulgated a final No Surprises Rule which essentially codified the No Surprises policy. The new rule provides that"no additional land use restrictions or financial compensation will be required of the permit holder with respect to species covered by the permit, even if unforeseen circumstances arise after a permit is issued indicating that additional mitigation is needed for a given species covered by a permit." 63 Fed. Reg. 8859 (Feb. 23, 1998), codified at 50 C.F.R. §§ 17.22, 17.32.

The final No Surprises Rule distinguishes between"changed circumstances" and"unforeseen circumstances," defining"changed circumstances" as those which can"reasonably be anticipated by plan developers and the Service and that can be planned for...." 63 Fed. Reg. 8870; 50 C.F.R. §§ 17.3 and 222.3. Conversely,"unforeseen circumstances" are those which"could not reasonably have been anticipated by plan developers and the Service at the time of the conservation plan's negotiation and development, and that result in a substantial and adverse change in the status of the covered species." Id. Even where, under the current terms of an ITP,"unforeseen circumstances" place a listed species at risk of certain extinction or make recovery of a species impossible, the No Surprises Rule stipulates that the Services will never"require the commitment of additional land, water, or financial compensation or additional restrictions on the use of land water or other natural resources beyond the level otherwise agreed upon for the species covered by the conservation plan without the consent of the permittee." Id.

Additional conservation and mitigation measures can only be required of an ITP holder if they are limited to"modifications within conserved habitat areas, if any, or to the conservation plan's operating conservation program." 50 C.F.R. § 17.22(b)(5)(iii)(C). An entity other than the ITP permit holder may take"additional actions at its own expense to protect or conserve a species included in a conservation plan." 50 C.F.R. § 17.22(b)(6).

The No Surprises Rule also limits what can be required of an ITP holder even if foreseeable"changed circumstances" arise. Essentially, the rule prohibits the Services from"requir[ing] any conservation and mitigation measures in addition to those provided for in the plan," unless the plan specifically authorizes imposition of such additional requirements, even where"additional conservation and mitigation measures are deemed to be necessary" to conserve a species. Id. Moreover, HCPs are not required to authorize additional measures designed to address foreseeable changes in circumstances. Id; see also 63 Fed. Reg. 8,863 ("reasonably foreseeable circumstances, including natural catastrophes that normally occur in the area, should be addressed in the HCP").

Finally, the Services themselves are not required to take any specific remedial actions when, based on"unforeseen circumstances" or foreseeable"changed circumstances" not provided for by an HCP, activities undertaken pursuant to an ITP place a listed species in danger of extinction or significantly impaired recovery. The Services also concede that any action they would take to mitigate the effects of unforeseen or changed circumstances would be"dependent on the availability of appropriated funds." 63 Fed. Reg. at 8,864.

In the first decade following the enactment of Section 10 of the ESA, only 14 ITPs were issued. Defs.' Mot. at 8. According to federal defendants, adoption of"[t]he No Surprises policy resulted in an immediate and dramatic increase in the number of HCP permits" issued. Defs.' Mot. at 8. As of April 17, 2002, 379 ITPs with No Surprises assurances have been issued, covering approximately 30 ...

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