January 01, 2015

“No Effect” Determinations by Action Agencies Under ESA Section 7(a)(2): Avoiding Unnecessary Risks of Error

Paula Feldmeier

The interagency consultation requirement of section 7(a)(2) of the Endangered Species Act (ESA), 16 U.S.C. § 1536(a)(2) (2012), “reveals an explicit congressional decision . . . to give endangered species priority over the ‘primary missions’ of federal agencies.” Tenn. Valley Auth. v. Hill, 437 U.S. 153, 185 (1978). Section 7(a)(2) is the “heart of the ESA” as it imposes substantive and procedural duties on federal agencies to carry out the ESA’s broad aim of protecting endangered and threatened species. Substantively, section 7(a)(2) requires federal agencies to ensure their actions do not jeopardize the continued existence of endangered or threatened species or adversely modify those species’ critical habitats. Procedurally, before engaging in any action that may affect threatened or endangered species, federal agencies must consult with the U.S. Fish and Wildlife Service (FWS) (for land-based species) or the National Marine Fisheries Service (NMFS) (for marine species).

Under regulations implementing section 7’s “interagency cooperation” requirement, each federal agency must review its actions at the earliest possible time to determine whether any proposed action may affect listed species or critical habitat. Agency “action” includes “all 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.” 50 C.F.R. § 402.2 (2014). A proposed action “may affect” a listed species when the action “may pose any effects on listed species or designated critical habitat.” FWS & NMFS, Endangered Species Consultation Handbook, xvi (1998).

In determining whether a proposed action “may affect” a listed species or critical habitat, the first step for the action agency is to inquire of the Service whether any “listed or proposed to be listed species may be present” in the action area. 16 U.S.C. § 1536(c)(1) (2012). If the Service advises that such species may be present in the action area, that is, “all areas to be affected directly or indirectly by the Federal action,” the agency must then “prepare a biological assessment to determine whether such species is likely to be affected by the action.” Id.; 50 C.F.R. § 402.2 (2014). If an agency determines, using the best scientific and commercial data available, that a proposed action “may affect” a listed species or habitat, the agency must formally consult with FWS or NMFS (collectively “the Services”) before engaging in the action.

Alternatively, informal consultation can occur if an action agency determines that the proposed action “is not likely to adversely affect any listed species or critical habitat,” and the Service concurs, at which point, “the consultation process is terminated and no further action is necessary.” 50 C.F.R. §§ 402.13(a), 402.14(b)(1) (2014). If the Service disagrees that the proposed action is not likely to have adverse effects, however, then formal consultation is required. If formal consultation is required, the Service prepares a biological opinion to determine whether the action is likely to jeopardize a listed species or adversely modify its critical habitat and, if so, to identify reasonable and prudent alternatives that will avoid the action’s unfavorable impacts.

Another possible finding the action agency may make is to determine that its proposed action will have no effect on listed species or critical habitat. The “no effect” determination contemplates no consultation with the Services, even informal. It is this finding that, in practice, has resulted in discord between the action agencies and Services, wherein action agencies have often taken the risk in making “no effect” determinations without input from the Services in order to avoid triggering informal or formal consultation. The risk taken is that, “[u]nlike a Biological Opinion, the ‘no effect’ determination cannot release the action agency from liability.” Sierra Forest Legacy v. U.S. Forest Serv., 598 F. Supp. 2d 1058, 1068 (N.D. Cal. 2009) (citing 16 U.S.C. § 1536(b)(4)(C)(iv), (o)(2)).

Although at least one district court in the Ninth Circuit recently found an agency’s request for “technical assistance” from the FWS did not constitute informal consultation, the Services’ Consultation Handbook contemplates otherwise. See Conservation Cong. v. U.S. Forest Serv., 2013 U.S. Dist. LEXIS 127671, *56 (E.D. Cal. 2013) (finding the Forest Service’s request for “technical assistance” on the potential effects of its proposed fire salvage and hazard tree removal project on the northern spotted owl did not amount to informal consultation). The Handbook instructs that “technical assistance” includes an action agency’s inquiry about a species list for listed and/or proposed species in a project area, and that such informational inquiry initiates informal consultation. FWS & NMFS, Endangered Species Consultation Handbook, 3–6 (1998).

Which Agency Ultimately Determines the Need for Section 7 Consultation?

In the preamble to the section 7 implementing regulations, the Services explained that the threshold for formal consultation must be set low enough to allow action agencies to satisfy their duty to “insure” their actions do not jeopardize species or adversely modify critical habitat. 51 Fed. Reg. 19,926, 19,949 (June 3, 1986). The preamble also provides that any possible effect—including an effect of undetermined, adverse, or even of beneficial or benign character—triggers the formal consultation requirement. This relatively low threshold for triggering consultation seems to establish a presumption that an agency’s proposed action will trigger consultation with the Service. Indeed, the Services conceived in their final rulemaking for section 7 that the action agency bears the burden to show that its proposed action will have no likely adverse effects on listed species or critical habitat in order to be excepted from the formal consultation obligation. However, action agencies may avoid the presumption of consultation and the need to demonstrate no likely adverse effects by making “no effect” determinations.

If an action agency determines that its action will have “no effect” on an endangered or threatened species, it need not engage in informal or formal consultation. The Service need not concur in this determination. Even if the Service disagrees with the action agency’s “no effect” determination and repeatedly objects, requests consultation, and issues a nonconcurrence, the ultimate decision regarding consultation rests with the action agency. Thus, the action agency could be wrong about its “no effect” determination, and yet, the Service would not be in violation of section 7(a)(2) because they have no obligation to consult and cannot engage in consultation, even if they believe the “no effect” determination is erroneous.

What if the action agency is wrong about its “no effect” determination? What are the consequences if the “no effect” determination turns out to be erroneous? In the preamble to the final section 7 rule, the Services acknowledged that although they may request consultation on particular agency actions, they lacked the authority to require initiation of consultation. The Services further explained that the requirement to initiate consultation stems from the action agency’s ultimate duty to ensure its actions are not likely to jeopardize listed species or adversely modify critical habitat. Thus, the action agency makes the final decision on whether consultation is required and it also bears the risk of an erroneous decision. If the “no effect” decision turns out to be erroneous and the proposed action results in take of a listed fish or wildlife species, the Consultation Handbook instructs the Services to refer the matter to their respective enforcement and counsel offices. The question then becomes whether the action agency acted “arbitrarily and capriciously” in making a “no effect” determination; that is, whether the agency violated Section 7(a)(2) by not consulting with the appropriate service. See Bennett v. Spear, 520 U.S. 154, 174 (1997) (because the ESA does not supply a separate standard of review, claims under the ESA are reviewed under the Administrative Procedure Act (APA)’s, 5 U.S.C. 706(2)(A), “arbitrary and capricious” standard of review).

Why Would an Agency Avoid Communicating with the Services Before Making a “No Effect” Determination?

Given the low threshold for the “may effect” trigger and the high probability for challenges to “no effect” determinations under both the ESA’s citizen-suit provision and the APA, one would wonder why an action agency would take the risk in making such a determination without any input from the Service. Looking broadly at why tension, rather than cooperation, has become the practical norm between the action agencies and the Services in implementing their respective section 7(a)(2) duties may help answer the question.

Consultation is notorious for being a lengthy process. Although now a decade old, the U.S. Government Accounting Office (GAO) published a comprehensive overview of the consultation process. GAO, GAO-04-93, Endangered Species: More Federal Management Attention Is Needed to Improve the Consultation (2004). In its assessment of available federal data from 1998 through 2003, GAO reported on the completion and timeliness of consultations, the action agencies’ and the Services’ attempts to improve the consultation process, and concerns from federal and nonfederal parties about the process. GAO found that four action agencies—the U.S. Forest Service, the U.S. Army Corps of Engineers, the Bureau of Land Management (BLM), and the Bureau of Reclamation in the states of Washington, Oregon, Idaho, and Montana—completed 1,550 consultations between 2001 and 2003. Of these consultations, the GAO found that about 40 percent exceeded established time frames, in some cases by more than a year.

Besides being notoriously lengthy, consultation is also a complicated and labor-intensive process for both the action agencies and Services. As the GAO report found, both the action agencies and the Services had concerns with increased workloads, particularly due to the number and complexity of consultations. However, that is as far as the agencies agreed upon regarding the consultation process, as the agencies also admitted to sometimes disagreeing about the extent to which consultation is necessary. Despite acknowledging that the consultation process benefited listed species, action agencies revealed they felt pressured by the Services—and by the fear of litigation—to seek consultation, regardless of the likely effects of the activity on listed species, including in situations where they felt consultation was unnecessary. The Services countered this by claiming that the need to consult and the necessary level of documentation are dictated by the ESA, its implementing regulations, the APA, and court decisions interpreting these laws and regulations.

Accordingly, while action agencies and the Services agreed on the general necessity of the consultation process, the GAO found insufficient the “interagency procedures” or the agencies’ process of working together to resolve disagreements about when consultation is needed and how detailed an analysis must be. Ten years later, tension between the action agencies and the Services over the consultation process continues to persist. This is exemplified by the fact that the Services’ regulatory and guidance threshold for what constitutes informal consultation has not since been relaxed (i.e., the 1998 Consultation Handbook) with its deeming of an agency’s inquiry for species lists and technical assistance as initiating informal consultation, still stands. Even if the action agency inadvertently enters into informal consultation, the consulting Service will compel the agency into formal consultation if it does not concur with the agency’s “not likely to adversely affect” determination.

Perhaps to avoid the possibility of triggering formal consultation, an agency might attempt—like the Forest Service did in Karuk Tribe of California v. United States Forest Service, 681 F.3d 1006, 1029 (9th Cir. 2012)—to conduct a type of informal consultation by only consulting with its in-house biologists to formulate specific protective criteria to avoid the likelihood of adverse effects on listed species. In Karuk Tribe of California, however, the Ninth Circuit found this type of “consultation” insufficient, reasoning that Congress made a conscious decision in the ESA to require federal agencies to consult with the expert wildlife agencies, not merely with biologists within their own agencies, about adverse effects that their actions might have on listed species. Had the Forest Service consulted with the federal wildlife agencies and those agencies agreed with the no likely adverse effects determination on Coho salmon habitat, the court noted that consultation would have been sufficient under the ESA. Thus, even if an agency makes the threshold determination that its proposed project “may affect” listed species or habitat and further relies on its qualified in-house biologists to make a “not likely to adversely affect” decision, this level of coordination is not enough.

At least in the Ninth Circuit, as evidenced by Karuk Tribe of California, isolated determinations made by an action agency’s biologists on whether proposed actions are or are not likely to adversely affect listed species or their habitat are insufficient under the ESA. Instead, in making such decisions, an action agency’s experts must coordinate with the Services’ experts in order to satisfy the ESA’s consultation requirement. However, because the Forest Service in Karuk Tribe of California made a “may affect” threshold determination, the court did not reach the issue of whether an agency may rely solely on its in-house experts to make “no effect” determinations. Despite this, because the court considered the agency’s in-house expertise insufficient for purposes of making a determination on the degree to which a proposed action’s effects on listed species or critical habitat are or are not likely to be adverse, this may indicate an agency’s in-house expertise may also not be enough to sustain a threshold “no effect” determination.

Judicial Deference Is Not Always Afforded to Action Agencies’ “No Effect” Determinations Made Without Input from the Services

Judicial review of an action agency’s “no effect” determination under the arbitrary and capricious standard is deferential; however, the agency’s “clear error of judgment” or “irrational conclusion” will not be upheld. W. Watersheds Project v. Kraayenbrink, 632 F.3d 472, 499 (9th Cir. 2011). Nearly a decade of case law from the Ninth Circuit Court of Appeals—where the bulk of existing case law on “no effect” determinations has come from—demonstrates the court’s tendency to defer to action agencies over the Services in “no effect” determination disputes.

For instance, in a 2005 case where the FWS continuously objected to the U.S. Army Corps of Engineers’ determination that two proposed master-planned developments would have “no effect” on the federally listed Arizona cactus ferruginous pygmy-owl, the Ninth Circuit affirmed the district court’s finding that the Corps’ determination was not arbitrary and capricious. Defenders of Wildlife v. Flowers, 414 F.3d 1066, 1068 (9th Cir. 2005). More recently, however, in Western Watersheds Project v. Kraayenbrink, the court held that while an agency may rely on the reasonable opinions of its own qualified experts, where an action agency and the Service experts disagree on a “no effect” decision, the Service will be regarded as having “the more appropriate expertise.” 632 F.3d at 495. There, the court determined that in proposing amendments to grazing regulations, BLM failed to consider relevant expert analysis from FWS or to articulate a rational connection between the facts found and its “no effect” determination. Accordingly, the court found BLM’s “no effect” determination and failure to consult arbitrary and capricious. Although expert advice was considered, the record showed that FWS and even the BLM’s own scientists advised BLM that section 7(a)(2) consultation was necessary. Indeed, the court found “resounding evidence” from agency experts that BLM’s amendments to its grazing regulations “may affect” listed species and their habitat. Id. at 498. Thus, the Western Watersheds decision indicates that the Ninth Circuit is willing to give closer scrutiny to action agencies’ “no effect” determinations that are made without any input from the Services.

Interagency Cooperation in “No Effect” Determinations Without Triggering Informal and/or Formal Consultation

Will other courts begin to more closely scrutinize action agencies’ “no effect” determinations as the Ninth Circuit recently has? Is this the beginning of a trend? While it is too early to tell, a recent case from the U.S. District Court for the District of Columbia seems to follow the Ninth Circuit’s Western Watersheds line of reasoning. In National Parks Conservation Ass’n v. Jewell, No. 09-00115, slip op. at 1 (D.D.C. Feb. 20, 2014), the court found the Office of Surface Mining Reclamation and Enforcement (OSM)’s “no effect” determination concerning its stream buffer zone (SBZ) rule for coal mining activities near and through streams to be arbitrary and capricious. The court reasoned that OSM’s reliance on a 1996 Biological Opinion (BO) to determine that the SBZ rule had no effect on listed species or critical habitat, without consulting with the Service, was arbitrary and capricious because the BO “quite obviously” did not and could not consider the effects the later promulgated rule could have on threatened and endangered species and critical habitats.

Although the Ninth Circuit and the D.C. District Court have recently given closer scrutiny to action agencies’ “no effect” determinations, this does not necessarily establish a trend. However, these recent decisions suggest that an action agency’s absolute discretion in making a “no effect” determination is not assured. Accordingly, action agencies’ requests for input from the Services in making threshold effect determinations can be warranted.

The action agencies’ concerns that seeking any kind of input from the Services in making a threshold effects determination may trigger informal and formal consultation are legitimate. An agency’s simple request for technical assistance from the Services could potentially trigger informal consultation, and once informal consultation is initiated, the requirement for Service concurrence in a “may effect, but not likely to adversely affect” determination in order to avoid formal consultation is also triggered. In turn, this potential for triggering formal consultation seems to chill the possibility for any kind of interagency coordination in making threshold effect determinations and excessively influence an action agency’s “no effect” determination. Although “no effect” determinations have historically been within the action agencies’ exclusive discretion, this exclusivity is less certain in light of closer judicial scrutiny and the potential for greater court deference given to the Services.

Given the possibility of closer judicial scrutiny, action agencies’ coordination with the Services in making threshold effect determinations would be seemingly beneficial. However, the agencies and the Services should agree that any initial coordination and technical assistance exchanged for making better informed threshold effect determinations will not operate to trigger the lengthy, labor-intensive, and costly formal consultation process, as could happen with the informal consultation process. Because the ultimate goal of section 7(a)(2) is interagency cooperation for the protection of listed species—not a battle of experts or a competition between sister executive agencies—the action agencies and Services should strive to cooperate and exchange information early on in threshold effect determinations without the fear of miring into the endless bureaucracy that has plagued both informal and formal consultation.

The potential for greater judicial scrutiny of threshold effect determinations, as well as continuing concerns with budget constraints and staff shortages by both action agencies and the Services, should encourage more meaningful, early, and truly informal interagency cooperation for making threshold effects determinations. This would ensure that threshold effect determinations benefit from the respective expertise of both the consulting service and the action agency, and that these two executive agencies work together to meet Congress’ goal in devising the Section 7 consultation process: interagency coordination. Meanwhile, this open and collaborative process should be established to avoid the potential for triggering the lengthy and costly bureaucratic process into which both informal and formal consultation have devolved. Voluntary collaboration, instead of intentional avoidance and isolated decision-making, should be the goal of both the action agencies and the Services for making the best-informed threshold effect decision possible, while reserving the complex framework of formal consultation for those cases when a proposed agency action clearly will adversely affect or jeopardize a listed species.

Paula Feldmeier

Ms. Feldmeier, an assistant district counsel with the U.S. Army Corps of Engineers, Savannah (Georgia) District, advises the district’s regulatory and civil works divisions. This article does not constitute the opinion of the U.S. Army Corps of Engineers.