August 20, 2015
U.S.

Court rejects 30 year eagle permit rule on NEPA grounds

By Sara Orr, Jennifer Roy | Latham & Watkins LLP | 8/20/2015 | www.jdsupra.com

On August 11, 2015, the US District Court for the Northern District of California remanded a US Fish & Wildlife Service’s (FWS) 2013 final rule that had extended the maximum duration of eagle take programmatic permits under the Bald and Golden Eagle Protection Act (Eagle Act) from 5 years to 30 years.[i] FWS promulgated the rule (an amendment to the existing eagle permitting program established in 2009) to align the duration of programmatic eagle take permits with the typical lifetime of renewable energy projects, such as wind farms. Bird protection groups then challenged the rule, alleging the FWS did not properly comply with the procedural requirements of the National Environmental Policy Act (NEPA) and the Endangered Species Act. While the district court recognized that “promoting renewable energy projects may well by a ‘worthy goal,” the court held that FWS did not meet its procedural obligations under NEPA and remanded the matter back to the FWS to complete the necessary environmental review. As a result of the Court’s decision, 30-year incidental take permits are no longer available to project developers under the Eagle Act until the FWS completes its environmental review and reissues the rule.

The Eagle Act prohibits a person from taking, possessing, purchasing, bartering, offering to sell, transporting, exporting or importing bald or golden eagles, whether the eagle is alive or dead, or “any part, nest, or egg” of an eagle without a permit.[ii] Under the Eagle Act, take includes to “pursue, shoot, shoot at, poison, wound, kill, capture, collect, molest, or disturb.”[iii] “Disturb” is further defined broadly by regulation, including agitating or bothering a bald or golden eagle “to a degree that causes, or is likely to cause injury to an eagle, a decrease in its productivity, or nest abandonment, by substantially interfering with normal breeding, feeding, or sheltering behavior.”[iv] The federal government can assess both civil and criminal penalties for unauthorized take of bald and golden eagles.[v]

After the removal of the bald eagle from the Endangered Species List, FWS developed the eagle take permitting program in 2009 to establish a voluntary permitting system to allow take of bald and golden eagles in connection with project development and provide project developers with legal protection from enforcement under the Eagle Act (including potentially significant fines). Applicants may obtain permits to remove inactive nests[vi] and for the take of eagles incidental to otherwise lawful activities, including for situations where there is the potential for recurring take in locations that cannot be specifically identified.[vii] Under a final rule issued in 2009 (2009 Final Rule), two types of incidental take permits are available: (1) an applicant may apply for a “standard” incidental take permit for one-time activities (such as construction of a residential development) or (2) a programmatic permit may be obtained for take that is recurring, but not caused solely by indirect effect (such as an operating wind farm). [viii] The 2009 Final Rule authorized the issuance of programmatic permits for up to 5 years at a time, with the potential for permit renewal every 5 years.[ix]

In order to better address the project timelines of renewable energy and other projects that are designed to be in operation for many decades, and in response to requests by the wind industry to promote more permitting certainty for projects seeking financing (which often hinges on permit assurances), FWS published a final rule on December 9, 2013 (2013 Final Rule) amending its existing regulations to extend the maximum term for programmatic take permits from 5 to up to 30 years, subject to a recurring five-year review process throughout the life of the permit.[x]

FWS issued the 2013 Final Rule without preparing an environmental assessment (EA) or environmental impact statement (EIS) to study the environmental impacts of the rulemaking based on its conclusion that the Rule was categorically excluded from NEPA. FWS reasoned that because the rule was “primarily administrative in nature,” and the rule’s “environmental effects are too broad, speculative, or conjectural to lend themselves to meaningful analysis and will later be subjected to the NEPA process, either collectively, or case-by-case,” reliance on a categorical exclusion from NEPA was appropriate. Additionally, FWS determined that no “extraordinary circumstances” existed that precluded reliance on a categorical exclusion.

The American Bird Conservancy challenged the 30-year permit program in federal court on procedural grounds, alleging that FWS violated NEPA by failing to prepare an EIS or EA, and failed to engage in appropriate federal agency consultation under the ESA.[xi] On August 11, 2015, Judge Lucy Koh of the Northern District of California issued a decision rejecting plaintiffs’ ESA claims and granting summary judgment on plaintiffs’ NEPA claims, holding that FWS’ reliance on a categorical exclusion instead of a full NEPA analysis violated NEPA’s procedural requirements.

In its decision, the Court held that an agency’s application of a categorical exclusion is “inappropriate if there is the possibility that an action may have a significant environmental effect.” Citizens for Better Forestry v. U.S. Dep’t of Agric., 481 F.Supp.2d 1059, 1087 (N.D. Cal. 2007). The Court concluded that the 2013 Final Rule is not “primarily administrative in nature” because it would result in substantive changes, including reduced public participation in permitting decisions.[xii] To this end, the Court noted that FWS’ stated purpose in adopting the 2013 Final Rule was to “facilitate the funding, construction, and operation of numerous energy generation projects, including wind power facilities.”[xiii] The Court also determined that FWS’ reliance on the categorical exclusion for environmental effects that are “too broad, speculative, or conjectural to lend themselves to meaningful analysis” was misplaced, observing that FWS failed to explain why the rule’s impacts could not be meaningfully analyzed and that FWS conducted a NEPA review for the 2009 Final Rule.[xiv] Finally, the Court found that extraordinary circumstances existed that precluded the use of a categorical exclusion, including the 2013 Final Rule’s “highly controversial environmental effects” on bald and golden eagles.[xv]

Notably, the Court gave great weight to internal FWS communications in the administrative record that demonstrated disagreement within the agency regarding the environmental effects of the 2013 Final Rule and the appropriate process for its adoption. These communications indicate that, during the rulemaking process, FWS staff were concerned about a NEPA challenge to the 2013 Final Rule, but the agency may have lacked the time or resources to conduct a thorough environmental analysis.[xvi]

While the Court’s decision sets aside the 2013 Final Rule and remands it to FWS for further consideration, the practical implications of the decision for those seeking 30-year programmatic eagle take permits remains to be seen. No 30-year permits have yet been issued under the 2013 Final Rule, though many permit applications are reportedly pending with the FWS.[xvii] FWS may appeal the decision to the U.S. Court of Appeals for the Ninth Circuit and request that the appellate court overturn the district court’s ruling, or it may elect to conduct a new NEPA analysis and re-adopt the rule. Overall, the delay for the wind industry in obtaining longer permits may not be much longer than what would have otherwise occurred, given a 2014 FWS announcement that it would be conducting a full review of the permit program. FWS is expected to issue a new proposed rule in the spring of 2016 to revise other aspects of the eagle take permitting program, and it is possible that FWS will include the 30-year permit term extension in the forthcoming proposed rulemaking. [xviii] For now, however, renewable energy project developers must rely on 5-year programmatic permits and renewals.

Latham & Watkins Environment, Land, and Resources attorneys will be closely tracking developments on the eagle permitting program.

[i] Order Granting in Part and Denying in Part Motions for Summary Judgment of Plaintiffs, Federal Defendants, and Defendant-Intervenor, Debra Shearwater et al. v. Dan Ashe et al., Case No. 14-CV-02830-LHK (N.D. Cal. Aug. 11, 2015) (“Order”).

[xviii] Eagle Permits; Changes in the Regulations Governing Eagle Permitting, 77 Fed. Reg. 22278 (Apr. 13, 2012)