• Despite DOI Policy Reversal on Incidental Takes, Project Developers Still Face Risk of Criminal Liability under MBTA
  • April 4, 2018 | Authors: Susan G. Lafferty; Joshua L. Belcher
  • Law Firms: Eversheds Sutherland (US) LLP - Washington Office; Eversheds Sutherland (US) LLP - Washington Office
  • At the end of 2017, the Department of the Interior (DOI) announced that it will no longer pursue criminal enforcement for “incidental takes” under the Migratory Bird Treaty Act (MBTA). The change in legal interpretation of the MBTA is one of the latest environmental enforcement developments from the Trump Administration, as part of its goal to reduce regulatory burdens on industry, project developers and the public.1 The guidance may significantly reduce the criminal liability risks of infrastructure project stakeholders under the MBTA in the near-term, but the long-term survival of the policy change remains to be seen.

    What is an “incidental take” under the MBTA?

    The MBTA imposes criminal liability on a person, who “at any time, by any means or in any manner” does, or attempts to, take, kill or capture any migratory bird or part, nest or egg of such bird. The statute covers nearly all native birds in the US. The statute of limitations for bringing a charge under the MBTA is five years. Clearly prohibited under the MBTA are intentional takes of protected birds, which would include poaching and hunting without a permit. More contentious, and more important for wind farm operators and energy development generally, is the concept of an “incidental take,” which is a take that results from an activity that was not intended to result in the taking. Put another way, an incidental take includes accidents that result in a taking. It’s a concept that is not included under the MBTA, but is a defined term under the related Endangered Species Act.

    Highlighting the prominent roles of cats and cars in migratory bird deaths, DOI provided examples of incidental takes:

    • According to the US Fish and Wildlife Service, the top “human-caused threats to birds” are:
    • Domestic cats (domestic cats kill an estimated 2.4 billion birds annually)
    • Buildings with glass windows (collisions with windows kill an estimated 303.5 million birds annually)
    • Driving (collisions with vehicles kill an estimated 200 million birds annually)
    • Electrical transmission (collisions with electrical lines kill an estimated 25 million birds annually)
    • Oil and gas production (oil pits kill an estimated 750,000 birds annually)
    • Wind turbines (collision with wind turbines kill an estimated 174,000 birds annually).2

    What’s at stake for project developers, operators and investors?

    A criminal conviction under the MBTA is expensive—politically, financially and legally. MBTA misdemeanor violations are punishable by up to six months in jail or a $15,000 fine per bird, or both. MBTA felony violations can result in two years jail time or a $2,000 fine per bird, or both. High-profile cases include the Deepwater Horizon oil spill, in which BP agreed to a settlement payment of $100 million in connection with MBTA violations, and the Exxon-Valdez spill, in which Exxon Corporation agreed to pay $150 million in connection with MBTA violations. Tied to these hefty fines and risks of jail time, project sponsors face loss of political support and loss of financial support from public and private investors.

    Furthermore, designing projects to minimize incidental takes, and related controversies with DOI and environmental non-profits, can add costly delays and require significant changes to projects in order to secure project approval. By interpreting the MBTA as not prohibiting incidental takes, the Administration has potentially made it much easier for projects that have a high risk of incidental takes to secure federal approval under the National Environmental Policy Act (NEPA).

    Does the MBTA actually prohibit incidental takes?

    It depends.

    The Fifth, Eighth and Ninth Circuits of the US Courts of Appeal have held that the MBTA prohibits intentional takes, but that it does not prohibit incidental takes. The Second and Tenth Circuits have held that the MBTA covers both intentional and incidental takes.

    For decades, DOI has followed the latter approach and included incidental takes as violations under the MBTA. Until now, DOI has tempered its enforcement of incidental takes through exercising prosecutorial discretion. DOI has provided guidelines that developers of major infrastructure projects now follow as common practice in hopes that DOI will exercise its prosecutorial discretion in the event of an incidental take during project development, construction and operation. However, even these guidelines acknowledge that compliance will not shield a developer from potential MBTA criminal liability. Thus, the regulated community has had little certainty of when or under what circumstances otherwise lawful activity could give rise to criminal liability.

    In its new guidance DOI rejects its prior stance, noting that interpreting the MBTA to prohibit incidental takes would “turn every American who owns a cat, drives a car, owns a home” into a potential criminal. Instead of relying on prosecutorial discretion to avoid imposing criminal liability for otherwise economically beneficial and lawful activities, DOI’s guidance embraces the legal position that the MBTA does not prohibit incidental takes. In other words, DOI does not need to exercise prosecutorial discretion because criminal liability does not attach to an incidental take. As a result, project developers need not fear that the unintended collision of a migratory bird with a project will taint the project with criminal liability.

    How might DOI’s new policy be opposed?

    Opposition to DOI’s position is widespread among environmental groups and other stakeholders. More than 500 environmental groups recently signed a letter to Congress asking them to protect the MBTA. Other challenges to both the substance of the guidance and the procedure DOI used to implement its new policy are expected.

    Substantively, DOI’s position is already the topic of a circuit split, as discussed above. The same arguments that won the day in the circuits that support including an incidental take in MBTA liability will likely be brought again, but reframed to argue that the DOI policy is fundamentally a legal position that fails to effect the statute and is thus unlawful. The legal position taken in the past is that the MBTA prohibits a reasonably foreseeable take of a migratory bird, even if the take was unintentional, or that an incidental take is within the scope of the MBTA when a defendant has or should have knowledge that his or her conduct may kill or injure a migratory bird, and the conduct does so.

    Procedurally, opponents could argue that DOI’s position is a binding enforcement policy that constitutes final agency action, and thus is reviewable by a court under the Administrative Procedure Act (APA). Normally, courts do not review exercises of prosecutorial discretion—i.e., the government’s choice of whether to bring charges. But in June 2016, an Arizona federal court invalidated DOI’s McKittrick Policy, a guidance in which DOI explained that criminal liability under the Endangered Species Act (ESA) only attached if a defendant actually knew he or she was harming an endangered species. The court noted that the McKittrick Policy constituted final agency action on an activity that the ESA prohibits and thus it could review the policy under the ESA and the APA. If DOI’s new MBTA policy is seen as parallel to the McKittrick Policy, it may face similar legal vulnerabilities.

    What longer-term impacts should project developers and investors consider under DOI’s new MBTA criminal enforcement policy?

    Even if DOI’s policy change survives any legal challenges before the courts, future administrations could revert to the old policy. Because the new policy is a guidance and not a rulemaking, the agency can change direction at will without going through the often years-long process and evidentiary burdens of changing the course of an existing rule. As noted above, the statute of limitations for an MBTA violation is five years. Therefore project developers should be aware that a future administration could bring an enforcement action for activity that occurs during the tenure of the current administration.

    In short, the possibility of legal challenges and of a future administration’s policy change, combined with a five-year statute of limitations, means energy project developers and others may continue to face uncertainty regarding MBTA enforcement for past activity impacting migratory birds.

    The Eversheds Sutherland Environmental and Project Finance teams will continue to monitor and report on further developments regarding the implications of DOI’s new incidental take policy.

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    1 For more on recent changes in environmental enforcement and regulation, see Eversheds Sutherland Legal Alerts, “Waters of the United States: update on recent developments” (February 14, 2018), “Environmental Protection Agency’s new read on standards for sources of hazardous air pollutants” (February 6, 2018), and “2018 Outlook on the Clean Power Plan” (January 12, 2018).

    2 US DEP’T OF THE INTERIOR, Solicitor’s Opinion M-37050 at 34 (Dec. 22, 2017)