On February 15, 2024, United States District Court Judge Randolph Moss issued a 97-page opinion vacating the United States Environmental Protection Agency’s (“EPA”) decision to delegate the Section 404 permitting program to the State of Florida. Florida assumed the Section 404 program in the final days of the Trump administration. Two other states, Michigan and New Jersey, have previously assumed the Section 404 permitting program.
Judge Moss’s opinion found that the EPA and United States Fish & Wildlife Service (“FWS”) “committed serious error” in their utilization of Section 7 of the Endangered Species Act to provide applicants with incidental take protection from liability under Section 9 of the Endangered Species Act.
Background
Under the Endangered Species Act’s implementing regulations, an ‘action agency’ is required to review its proposed actions to determine whether such actions may affect a listed species or critical habitat. The issuance of a Section 404 ‘dredge and fill’ permit by the U.S. Army Corps of Engineers (“Corps”) is a triggering action. If the agency determines that the proposed action may affect a listed species or critical habitat, then the agency must consult with FWS and/or the National Marine Fisheries Service (“NMFS”) to ensure that the action is not likely to jeopardize the continued existence of any endangered or threatened species. If the agency determines that the action is not likely to jeopardize the continued existence of listed species, the agency must then determine whether action is nonetheless reasonably certain to result in incidental take of listed species. If the agency determines that incidental take is reasonably certain to occur, then the agency issues an incidental take statement, which, among other things, specifies the impact of such incidental take on the species and sets forth terms and conditions that must be complied with by the action agency or applicant, in order to minimize such incidental take. Provided the action agency and applicant comply with the incidental take statement, then they are exempt from liability for taking a listed species when the take occurs.
A state assuming the Section 404 permitting program faces a fundamental problem with securing incidental take protection for its applicants: the state is not a federal agency, so Section 7 consultation is not triggered by an application for a state-issued Section 404 permit. Section 7 is only available when there is a federal ‘action agency.’ Another Section, Section 10, allows an applicant to apply for incidental take protection from FWS and NMFS. However, unlike Section 7, Section 10 does not require FWS and NMFS to act within any specific period of time. This was problematic for Florida because the primary driver behind the assumption of the Section 404 permitting program was that application timeframes for Section 404 permits were exceeding two years.
To address this conundrum, Florida proposed a novel consultation process whereby the EPA would engage in Section 7 consultation with the FWS on the decision to approve Florida’s assumption of the Section 404 program . The FWS would then issue a programmatic biological opinion finding no jeopardy, followed by a programmatic incidental take statement that would protect all future state Section 404 permittees from liability under the Endangered Species Act. This programmatic incidental take statement provided for a technical assistance process, whereby the State of Florida was required to consult with FWS regarding each permit application and whereby FWS was given the opportunity to specify limits on take and other conditions that must be included in the state-issued Section 404 permits. This approach materially differed from the approach taken by Michigan and New Jersey, which addressed incidental take protection by allowing the EPA to federalize projects likely to affect listed species, thus triggering Section 7 consultation on a case-by-case basis.
Holding
Judge Moss found that the Section 7 consultation process was fatally flawed because it failed to comply with the Endangered Species Act’s exacting standards for species-specific analysis of baselines and effects of the proposed action. The EPA argued that such an exacting standard was not appropriate, or even possible, for a programmatic-level consultation and that deferring this analysis to the technical assistance phase was appropriate. Judge Moss found that, having determined that delegation of the Section 404 program to the State was likely to result in incidental take of listed species, the EPA was required to comply with the exacting standards of the ESA in preparing the programmatic biological opinion. Judge Moss found that the programmatic incidental take statement was similarly flawed, pointing to the programmatic incidental take statement’s complete lack of any numerical take limits. Judge Moss found that these violations were unlikely to be corrected with remand and vacated the EPA’s decision to approve Florida’s assumption application.
Status of Section 404 Permitting
In recognition of the fact that only about 10% of projects have the potential to affect listed species, Judge Moss suggested that the EPA and Florida might apply for a stay of his decision. However, he cautioned that any application for a stay must exempt any applications that may affect listed species. Judge Moss’s opinion does not affect permits that have already been issued by the State of Florida.
The Department of Environmental Protection issued the following statement via e-mail on February 22, 2024:
A federal court order was issued just before midnight on Feb. 15, 2024, divesting, at least for now, DEP of its authority to issue State 404 Program permits in Florida. Consequently, all activity under the State 404 Program is paused until further order of the court. DEP is currently evaluating any and all legal options in light of the court’s order. As an initial step to limit the disruption to the State’s 404 Program, DEP will seek a limited stay of the court’s order. Additional information and periodic updates on the status of the Florida’s State 404 Program will be posted on our webpage .
On Monday, February 26, the Florida Department of Environmental Protection moved for entry of a limited stay of Judge Moss’s decision. If granted, the stay would allow the Department to continue processing (during pendency of an appeal of Judge Moss’s decision) State 404 applications for projects that are unlikely to affect listed species. Consistent with Judge Moss’s opinion, the partial stay would not apply to those applications that are likely to affect listed species, which will now be processed by the Corps. The Corps’ Jacksonville District has resumed accepting applications for Section 404 permits in formerly assumed waters. The Corps’ statement on the status of permitting may be viewed on its regulatory webpage .
A partial stay carries a risk of further delay. If Judge Moss’s opinion is upheld (a likely outcome), the stay would be dissolved, and those applicants whose permits are still pending with the State at that time will be forced to start anew with the Corps. Given this risk, applicants should consider whether to take advantage of the stay (if granted). If given the opportunity to choose between applying with the Department or the Corps, an applicant should seriously consider applying to the Corps.
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