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Habitat Mitigation Plans under the ESA and the Law of Entropy; Perhaps It Is Time to Reorganize?

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By Cynthia Chandley

The Endangered Species Act (ESA) has been around since 1973. It certainly has seen its share of amendments (1978, 1982 and 1988) and it has been the subject of more than its share of litigation. As the law has evolved, its principles have been woven into the fabric of our society, our businesses and our communities. In order to strike a balance between the protection of species and their habitat, and the need to allow for reasonable land development and recognize private property rights, local governments and private parties often rely upon the creation of a Habitat Conservation Plan (HCP) designed in accordance with Section 9 and 10(a) of the ESA in order to effectively address endangered species preservation. An HCP allows local governments and private parties to negotiate a conservation plan with the federal government to preserve species and their habitat, while also protecting the ability of local government to control their destiny with regard to land development and future regulation in their own backyard. Local governments are often willing to enter into an HCP with the federal government in order to have the security of predicable regulation that will allow them to continue to provide basic services to their residents, such as roads, power and water with some measure of reliability.

The recent decision of the United States Court of Appeals for the Ninth Circuit in Bear Valley Mutual Water Company v. Sally Jewell calls into question the reliability of an HCP as a method to secure predicable federal regulation and protect the local communities’ interests in land and water resources. This Ninth Circuit decision held (1) that the National Environmental Policy Act (NEPA) does not apply to the designation of critical habitat under the ESA (although the Tenth Circuit has held otherwise) and (2) that the statutory policy directive in the ESA that requires the federal government to cooperate with state and local governments to resolve water resource issues arising under the administration of the ESA does not create an enforceable obligation for the federal government.

In 2004, the United States Fish and Wildlife Service (FWS) entered into the Western Riverside County Multiple Species Conservation Plan (MSHCP) with a number of local parties. The MSHCP provided in part that unless the FWS determined that the MSHCP was not being implemented, lands within the boundary of the MSHCP would not be designated as Critical Habitat.  But in 2010, regardless of the fact that the MSHCP was being implemented, FWS issued a final rule designating more than 9,000 acres as Critical Habitat across three river systems, including lands along the Santa Ana River.  At least 3,000 acres in the 2010 designation had been previously excluded from Critical Habitat pursuant to the terms of the MSHCP.  FWS included these lands knowing that the Santa Ana River provides the essential water supply for approximately five million people.  The Critical Habitat designation includes dams, water diversion facilities, bridges, wastewater treatment plants, flood control structures, residences and facilities for human recreational activities; and recognizes that only a portion of the existing water diversions for the local communities will be accommodated as a result of this designation. Had the NEPA analysis been applied, it would have required FWS to study and consider the economic and other relevant impacts of the designation on the human environment.

The Bear Valley Mutual Water Company, along with other impacted parties, filed a petition for writ of certiorari with the U. S. Supreme Court on September 22, 2015. On October 21, 2015, the Court issued an order extending the time to file a response to the petition to November 25, 2015. This matter will have a significant impact on many lives in southern California.  The very same communities already facing significant water supply challenges as a result of the prolonged drought will now face further water insecurity and perhaps scarcity as a result of the eventual impacts that will follow this Critical Habitat designation.

The law of entropy basically states that things will naturally move from a system of order, to one of disorder. HCPs have provided a creative and orderly process to meet the divergent needs of the many parties involved, but it appears that consistent with the law of entropy we have moved to a phase where disorder has interceded and created an environment of significant uncertainty for the MSHCP parties. Reorganization of the statutes could add a measure of security for parties who already have, or will sometime in the future, enter an HCP under the ESA.