Litigating the “butterfly effect”: Proximate Cause, Imminent Harm and Endangered Whooping Cranes

Posted on August 6, 2014 by Molly Cagle

A recent ruling from the Fifth Circuit involving the endangered whooping crane clarifies the level of proof require to show to establish  proximate cause of  “take” under the federal Endangered Species Act (“ESA”). The case also sets important precedent on the level of imminent harm required to obtain injunctive relief in ESA litigation.

The case, The Arkansas Project v. Shaw, involves the last remaining wild flock of whooping cranes in the world. According to plaintiff, The Aransas Project (“TAP”), the Texas Commission on Environmental Quality (“TCEQ”) water permitting program in 2008-09 caused the deaths of twenty-three endangered cranes (of the approximately 300 remaining in the wild) via the following seven-link chain of causation:

1. TCEQ grants water-rights permits.

2. Water-rights holders divert water

3. Low inflows of water into bays increase bay salinities.

4. Increased salinities diminish available foods for cranes.

5. Diminished food supplies cause cranes to search upland for food.

6. Upland movement of cranes causes them stress.

7. Stress weakens flock and causes crane deaths.

Defendant TCEQ and intervenors, including the Guadalupe-Blanco River Authority and Texas Chemical Council, challenged each causation step during a week-long trial in 2011. In March 2013, the federal district court judge issued a 125-page opinion agreeing with TAP’s theory and adopted TAP’s fact findings verbatim. The district court also ordered the TCEQ to immediately apply for an incidental take permit and submit a habitat conservation plan (as if it were that easy). Additionally, the Court enjoined TCEQ from issuing any new water permits in the Guadalupe and San Antonio River Basins, interjecting itself as the watermaster for all new and modified permits in the basins.  TCEQ and intervenors appealed the order to the Fifth Circuit and successfully stayed the district court injunction. After an expedited briefing schedule, oral argument before the Fifth Circuit took place in the summer of 2013.

On June 30, 2014, the Fifth Circuit per curiam reversed the district court.  The court of appeals held that TAP failed to prove TCEQ proximately caused takes of cranes. The Fifth Circuit is one of the first court of appeals to closely examine the issue of proximate cause and ESA liability since Justice O’Connor penned her concurrence on the subject in the 1995 U.S. Supreme Court opinion Babbit v. Sweet Home. Evoking the famous 1920s Palsgraf v. Long Island Railroad case, the Fifth Circuit compared TAP’s claims to the “butterfly effect” (i.e. the idea that a butterfly flapping its wings in China can affect storm systems in New York).

Importantly, the appeals court called into question the district court’s “simplistic” conclusion that a government entity can cause take simply by authorizing an activity that ultimately affects a species. The court noted that prior instances of governmental regulatory liability for take involved actions that “directly killed or injured species or eliminated their habitat.”

Ultimately, the court examined every link of TAP’s chain of causation and concluded that the district court and TAP simply failed to account for the number of contingencies, e.g. drought, affecting each link.  As the court summed up, “only a fortuitous confluence of adverse factors caused the unexpected 2008–2009 die-off found by the district court. This is the essence of unforeseeability.”

For future ESA litigation, the court’s analysis of the standard required to obtain injunctive relief is as important as its detailed treatment of proximate causation. In particular, the court noted that the district court focused almost exclusively on the injury that occurred in 2008-2009 and could not explain how a steadily increasing flock showed that there was a reasonably certain threat of imminent harm to the cranes. The court held: “Injunctive relief for the indefinite future cannot be predicated on the unique events of one year without proof of their likely, imminent replication.” This is important precedent for future district courts examining injunctive relief even when past take liability can be proven.

TAP petitioned the Fifth Circuit for a rehearing en banc on July 28, 2014 questioning whether an appeals court can rule on proximate cause as a matter of law. So this case may not be over. But if the court’s ruling stands, it will provide fruitful discussion to examine for future ESA litigation. 

Full disclosure: ACOEL Fellow Molly Cagle represented lead intervenor Guadalupe-Blanco River Authority in the Fifth Circuit appeal. She does not attest to any lack of bias in this case and is proud of the fact that the cranes are still doing well, despite unprecedented drought in Texas. 

Massachusetts Supreme Court Considers Agency’s Endangered Species Authority

Posted on July 29, 2013 by Stephen Leonard

Bill and Marlene Pepin own 36 acres of land in Hampden, Massachusetts on which they hope to build a retirement home.  Their plans have thus far been frustrated by the designation of their property as Priority Habitat for the Eastern Box Turtle, a Species of Special Concern under the Massachusetts Endangered Species Act, Mass. Gen. Laws C. 131A. The designation was made by the Massachusetts Division of Fisheries and Wildlife, pursuant to its Priority Habitat regulations, 321 Code Mass. Regs. 10.01 et seq., which were promulgated under to the “no take” provision of the Act.

Pursuant to the regulations, the Pepins’ plans must be reviewed by the Division and will be approved only on a showing that they will not result in the “take” of a Species of Special Concern, a showing that may require modifying the project or otherwise taking steps to protect the species.  This is a burden that, in the Division’s view, is not especially onerous and is one that has been met many times by many projects during the two decades that the regulations have been in effect.  This view appears to have the support of at least a portion of the development community in Massachusetts, support that is based on a concern about what the likely alternative would be to regulation under the Priority Habitat regulations.

The Pepins, though, have taken the view that their project in not subject to the Division’s authority.  They have challenged the designation of their property as Priority Habitat; and they have challenged the Division’s authority to adopt the Priority Habitat regulations in the first place.  They lost on both grounds in an administrative proceeding and appealed the result to the Superior Court, where they lost again.

The Pepins appealed the judgment to the Massachusetts Appeals Court, the Commonwealth’s intermediate level appellate court.  And then the case got considerably more interesting.  In the space of a few months, it was transformed from a relatively straightforward (if very important to the Pepins) challenge to an agency determination into one of the most important administrative law and environmental cases in Massachusetts in a number of years.

The case was docketed in the Appeals Court last year; the Pepins, and then the Division of Fisheries and Wildlife, filed their briefs.  Also filing, in support of the Division, were amici curiae Massachusetts Audubon Society, Massachusetts Association of Conservation Commissions and the Conservation Law Foundation.  Among the amici’s arguments in support the of the Division’s authority to promulgate the challenged Priority Habitat regulations was the assertion that it is better for the development community to be regulated under those regulations than pursuant to a different provision of the Act, one that the Pepins assert is the only provision available to the Division to regulate development on private property.  In support of the assertion, amici appended to their brief an October 2011 letter from NAIOP Commercial Real Estate Development Association Massachusetts, an extremely active participant in discussions and lobbying concerning environmental regulation in Massachusetts (NAIOP was formerly the National Association of Industrial and Office Parks.)  NAIOP’s letter opposed legislation that would have codified the position that the Pepins were taking in court (including in Superior Court, at the time the letter was written) – that the Division does not have authority to regulate private activities in lands designated Priority Habitat and can regulate development only pursuant to the much more restrictive Significant Habitat provisions of the Act, which sharply limit development but which require substantial procedural steps before they can be effective with respect to any particular parcel.  “NAIOP strongly believes that this bill would be bad for real estate development. . . .  [T]he Division has developed a more flexible regulatory mechanism through Priority Habitat. . . .  [T]he bill would result in more unpredictability and uncertainty for developers . . ..”  The bill did not pass.

Late last year, before the case could be argued in the Appeals Court, the Massachusetts Supreme Judicial Court (“SJC”), acting sua sponte, moved the case to its own docket.  In February of this year, the SJC announced that it was “soliciting amicus briefs.  This matter . . . raises the question of what procedural protections are required when the division [] designates ‘priority habitat.’”  The Pacific Legal Foundation, of Sacramento, California, then moved for leave to file an amicus brief in support of the Pepins.  (There is a New England Legal Foundation, based in Boston; it has not played a role in the case.)

The Pacific Legal Foundation brief does not address what had been the original issue between the Pepins and the Division – whether their property was correctly designated as Priority Habitat.  Its entire focus is instead on the asserted unlawfulness under Massachusetts law – statutory law, decisional law and constitutional law – of the Priority Habitat regulations. 

Section 4 of MESA creates three categories of protected species:  Endangered; Threatened (at risk of becoming Endangered); and Species of Special Concern (at risk of becoming Threatened).  The statute directs the Division to establish lists of these species and to designate Significant Habitats for Endangered and Threatened Species (but not for Species of Special Concern).  The designation of Significant Habitat involves substantial scientific and administrative work by the Division; and designation results in substantial limits on land use in the areas designated – but the statue also provides significant opportunities for affected landowners to challenge the designation or otherwise to seek to lessen or eliminate its impact on them – including by petitioning the Division Director to purchase their property.

Separately, Section 2 of MESA makes it unlawful to “take” any listed species (i.e., Endangered, Threatened or of Special Concern).  And in Section 4 the statue empowers the Division to “adopt any regulations necessary to implement [its] provisions [].”

The Division has established a “List of Endangered, Threatened and Special Concern Species;” 321 Code Mass. Regs. 10.90; but the Division has not designated any geographical areas as Significant Habitat. The Division has, however, established by regulation the category of Priority Habitat, to be “used for screening Projects and Activities that may result in the Take of State-listed Species [in all three categories] and to provide guidance to Record Owners regarding a Project or Activity . . ..”  321 Code Mass. Regs. 10.12(1).  The regulations permit an owner whose land is in delineated Priority Habitat to request reconsideration of the delineation; they place the burden on the owner to show that the delineation was improper.

Designation of the Pepins’ land as Priority Habitat for the Eastern Box Turtle was pursuant to these regulations.  Their administrative challenge was summarily dismissed because they produced no evidence that the designation was incorrect, and, as is noted above, the Superior Court upheld the dismissal.  The Pepins’ appellate brief addresses this issue, but its importance has diminished considerably.  The SJC took the case, and the Pacific Legal Foundation moved to become involved, because the case presents a vehicle for challenging the Division’s authority to create a species protection program that is not specifically created by the statute.

The Division’s defense on appeal is a familiar one in administrative law: The statute creates a comprehensive scheme to protect species in varying degrees of peril; it vests “all powers hereunder” in the Director of the Division; it prohibits the “take” of any protected species; and it empowers the Division to “adopt any regulations necessary to implement [its] provisions.”  Given the statutory structure and the deference that is accorded administrative determinations, the Division’s decision to adopt the Priority Habitat Regulations in order to administer the no take provision is reasonable and must be sustained.

There is an appealing counterargument:  The Legislature created a mechanism for regulating the use of private property in the interest of species protection.  That mechanism contains significant protections for landowners.  The Division’s creation of a different mechanism, not mentioned anywhere in the statute and having less robust landowner protections, undermines the balance the Legislature struck between protecting species and respecting property rights.

That argument is briefly made explicit in the Pacific Legal Foundation brief, but the bulk of the brief is a thoroughgoing attack on the authority of the Division – and of administrative agencies generally – to adopt regulations that are not expressly contemplated and specifically described in legislation.  To mount this attack, the brief must delve deeply into Massachusetts administrative and constitutional law.  And it does, advancing a narrow reading of what it means for a regulation to be “necessary” to effect the purposes of a statute; questioning the appropriateness of deferring to the Division’s interpretation of the statute in this case; and seeking to distinguish a line of Massachusetts cases that holds that statutory authority to act in a specific manner does not foreclose an agency’s pursuing parallel action under a general grant of authority.  Moreover, the brief argues, the SJC should decide the case in a way that avoids potential constitutional issues – the brief suggests that upholding the regulations could lead to regulatory takings and that the legislative delegation the Division relies on would constitute a violation of the Massachusetts Constitution’s separation of powers requirement – by striking down the regulations.

The Massachusetts Supreme Judicial Court has long been sensitive to environmental concerns, and it has upheld the broad authority of state and local administrative bodies to act to protect the environment.  The court has also been careful to ensure that the rights of Massachusetts citizens are protected, including by insisting on strict adherence to procedural requirements established by the Legislature.  Bill and Marlene Pepin’s case presents an important test of how those interests will be harmonized.  Argument is now set for October 2013 – stay tuned.