Fla. Key Deer v. Paulison, 2008 U.S. App. LEXIS 6850 (11th Cir. Apr. 1, 2008).

Stephanie Showalter

The Eleventh Circuit Court of Appeals recently upheld a district court ruling requiring the Federal Emergency Management Agency (FEMA) to comply with the Endangered Species Act (ESA) in its administration of the National Flood Insurance Program (NFIP) in the Florida Keys. This ruling is the latest blow to FEMA in an 18-year-old litigation battle waged by the National Wildlife Federation, the Florida Wild­ ife Federation, and the Defenders of Wildlife (Wildlife Organizations).

Background
It all started in 1984 when FEMA refused to comply with a consultation request from the U.S. Fish and Wildlife Service (FWS) regarding the Florida Key deer and other listed species in the Florida Keys. The ESA provides for the conservation of endangered species and the conservation of the ecosystems on which they depend. Approximately 1,880 species are listed as either endangered or threatened under the ESA, including the Florida Key deer.

Section 7 of the ESA requires federal agencies to undertake programs for the conservation of endangered and threatened species and prohibits the agencies from authorizing, funding, or carrying out any action that would jeopardize a listed species or destroy or modify its critical habitat.1 Section 7 applies to activities on federal lands, as well as federal approvals of private activities through the issuance of a permit or license. When determining whether an action would jeopardize a listed species, the agency must consult with the FWS.

Formal (written) consultation is required if the agency determines that its action “may affect listed species of critical habitat.”2 Following consultation, the FWS issues a “Biological Opinion” summarizing its findings. If FWS finds that the action will result in jeopardy or adverse modification, it is required to suggest “reasonable and prudent alternatives” which will not violate the ESA.3 Upon such a finding, the action agency has three alternatives: terminate the action, implement the alternatives, or seek an exemption from the Endangered Species Committee.

Jeopardy
The Wildlife Organizations sued FEMA in 1990 to compel consultation citing the agency’s issuance of flood insurance as a cause of overdevelopment that adversely affected the area’s endangered species. FEMA eventually entered into formal consultations with the FWS in 1994 after being ordered to do so by a Florida district court. In 1997, the FWS issued a jeopardy determination and recommended several reasonable and prudent alternatives. Among the alternatives was a recommendation that FEMA provide incentives to communities, such as reduced insurance premiums, for the completion of county-wide habitat conservation plans.

In 1999, FEMA modified its community rating system (CRS) program to provide credits for a habitat conservation plan. Through the CRS FEMA provides discounted insurance premiums to communities that go beyond the minimum land use control criteria. A community can receive up to 15 points for adopting and implementing a plan. A community gets 10 points for development and implementation and an additional 5 points if the plan is approved by the FWS or the National Marine Fisheries Service.

When Monroe County failed to prepare a county-wide habitat plan within four years, FEMA and the FWS were required by the terms of the 1997 document to enter into a second consultation. In 2003, the FWS issued a new biological opinion. The FWS again determined that FEMA’s administration of the NFIP in the Florida Keys was likely to jeopardize listed species. However, the FWS concluded that the reasonable and prudent alternatives it recommended in 1997 were providing adequate protection.

The Wildlife Organizations disagreed and filed motions in district court to challenge the 2003 findings of the FWS and FEMA’s decision to adopt them. In 2005, the district court ruled that neither agency had satisfied its obligations under A7 7 and enjoined FEMA from “providing any insurance for new developments in the suitable habitat of listed species in Monroe County pending further consultation.”4 FEMA and the FWS appealed arguing, among other things, that the ESA does not apply to the NFIP and, even if it does apply, the ESA does not require agencies to develop location-specific programs for conservation of listed species.

Applicability of ESA to NFIP
In 2007, the Supreme Court held that A7 7(a)(2) “covers only discretionary agency actions and does not attach to actions . . . that an agency is required by statute to undertake once certain specified triggering events have occurred.”5 FEMA claimed it does not have enough discretion under the National Flood Insurance Act to trigger A7 7(a)(2).

The Eleventh Circuit disagreed. FEMA is required to provide flood insurance to communities with adequate land use and control measures “which are consistent with the comprehensive criteria for land management and use developed” by FEMA.6 In addition to guiding development away from flood-prone areas and helping to reduce damage, the criteria should be designed to “otherwise improve the long-range land management and use of flood-prone areas.”7 The court concluded that this phrase provides FEMA with broad discretion to develop criteria under which flood insurance may be issued. Further, FEMA’s own actions reveal that it has broad discretion in implementing the CRS. The court was “satisfied that FEMA has discretion to consider endangered and threatened species in its administration of the NFIP.”8

Nor was the court persuaded by FEMA’s arguments that flood insurance was not a “legal cause” of the development in the Florida Keys. Section 7(a)(2) applies to “any action authorized, funded, or carried out” by a federal agency. Agencies must consider the effects of the action as a whole, including direct and indirect effects. “Indirect effects are those that are caused by the proposed action and are later in time, but still are reasonably certain to occur.”9 The court concluded that since FEMA “has the authority to prevent the indirect effects of its issuance of flood insurance by, for example, tailoring the eligibility criteria that it develops to prevent jeopardy to listed species . . . its administration of the NFIP is a relevant cause of jeopardy to listed species.”10

Location-Specific Plans
Although the CRS program and the habitat conservation plan credits are nationally available, the court found no evidence that any community has applied for or received credit for a habitat conservation plan. The district court held that the implementation of a voluntary program with no effect on the Key deer and the other listed species was insufficient to meet FEMA’s obligation to conserve species. The Eleventh Circuit agreed. While federal agencies have discretion in selecting the type of conservation program to implement under the ESA, “they must in fact carry out a program to conserve.”11 Since no community has developed or adopted a habitat conservation plan since the CRS was amended, “the program has had no effect whatsoever . . . and it is therefore not a program to conserve.”12

Conclusion
The Eleventh Circuit upheld the district court’s injunction. FEMA is currently prohibited from issuing flood insurance for new developments in the suitable habitats of the listed species in Monroe County pending further consultation and development of adequate criteria.

Although the Eleventh Circuit’s ruling only applies to the issuance of flood insurance in one Florida county, it could have ripple effects across the country. There are many endangered and threatened species that depend on Gulf Coast habitats, including the Alabama beach mouse and pitcher-plants. Communities eligible for flood insurance should take proactive steps to ward off similar litigation. First, communities should investigate whether there are endangered or threatened species in their areas. If there are, communities should develop habitat conservation plans and apply for credit through the CRS.

Endnotes
1.   16 U.S.C. A7 1536(a).
2.   50 C.F.R. A7 402.14(a).
3.   16 U.S.C. A7 1536(b)(3)(A).
4.   Fla. Key Deer v. Brown, 386 F. Supp. 2d 1281, 1294 (S.D. Fla. 2005).
5.   Nat’l Ass’n of Home Builders v. Defenders of Wildlife, 127 S. Ct. 2518 (2007).
6.   42 U.S.C. A7 4012(c).
7.   Id. A7 4102(c).
8.   Fla. Key Deer v. Paulison, 2008 U.S. App. LEXIS 6850 at *21 (11th Cir. Apr. 1, 2008).
9.   50 C.F.R. A7 402.02.
10. Fla. Key Deer, 2008 U.S. App. LEXIS 6850 at *25.
11. Id. at *34.
12. Id. at *35.