Most people would not associate flood insurance with the protection of endangered species. But over the past decade, the Federal Emergency Management Agency (FEMA) has been the target of multiple lawsuits alleging that the agency has violated the Endangered Species Act by not considering the impacts of its flood insurance program on endangered species and their habitat.

[This topic will be discussed at the Floodplain Management Association conference in San Diego from September 3-6, 2019. Here is a link to the conference registration.]

In the latest round of litigation, a federal court in California has struck down as arbitrary and capricious an analysis by FEMA that its administration of the National Flood Insurance Program (NFIP) was not likely to adversely affect endangered or threatened species or habitat.

Background

FEMA is the federal agency tasked with disaster mitigation, preparedness, response and recovery planning. As part of that mission, FEMA administers the NFIP, which offers flood insurance to homeowners, renters, and business owners if their community participates in the NFIP. Participating communities agree to adopt and enforce ordinances that meet or exceed FEMA requirements to reduce the risk of flooding.

As part of its administration of the NFIP, FEMA publishes flood hazard maps called Flood Insurance Rate Maps, or FIRMs. The purpose of a FIRM is to show the areas in a community that are subject to flood risks. FEMA uses the information provided in FIRMs to determine insurance requirements and rates within each mapped community. Information in FIRMS can also dictate whether a community can allow for development.

The purpose of the Endangered Species Act (ESA) is to ensure that federal agencies and departments use their authorities to protect and conserve endangered and threatened species. Section 7 of the Act requires that federal agencies prevent or modify any projects authorized, funded, or carried out by the agencies that are “likely to jeopardize the continued existence of any endangered species or threatened species, or result in the destruction or adverse modification of critical habitat of such species.”

Prior Legal Challenges to the NFIP

Over the past decade, FEMA has been sued multiple times over the relationship between its administration of the NFIP program and the protection of endangered species under the ESA. Because the NFIP program can dictate whether and where development can occur within a community, conservation groups have argued that FEMA’s NFIP program allows building to occur in areas where it otherwise would not. Since most private insurers will not insure homes in such flood-prone areas, absent the NFIP program building in those areas would otherwise not occur. In one case, for example, a court found evidence demonstrating that NFIP insurance was associated with adverse impacts on endangered Key Deer in Monroe County, Florida. See Florida Key Deer v. Michael D. Brown (S.D. Fla., Case No. 90-10037, September 12, 2005 Order). That court issued an injunction prohibiting FEMA from issuing subsidized flood insurance policies for new construction on many parcels in the Florida Keys.

In 2008, in Puget Sound, Washington, a District Court required that FEMA consult with the National Marine Fisheries Service, whose Biological Opinion concluded that the NFIP was actually pushing salmon and orcas toward extinction. See National Wildlife Federation v. FEMA, 345 F.Supp.2d 1151 (W.D. Wash. 2004). As required by the ESA, the Biological Opinion set forth an alternative approach for FEMA that would not result in jeopardy to those species. In other words, FEMA had to re-write its NFIP program for this community to address ESA concerns. FEMA’s new ordinance includes new requirements that development within the floodplain and riparian buffer area be either prohibited or that its impacts to the stream be completely mitigated. Any development in these sensitive areas should be required to use “low impact development.”

In 2009, environmental plaintiffs sued FEMA in Oregon alleging that FEMA violated Section 7 by not consulting with NMFS regarding potential effects of the NFIP on Oregon salmon and steelhead listed as threatened and endangered under the ESA in Oregon.  See Audubon Society of Portland et. al. v. FEMA (D. Ore., Case. No. 3:09-cv-729-HA). In 2010 the parties settled the case, with FEMA agreeing to consult with NMFS on effects of implementation of the NFIP, mapping of floodplains, and the Community Rating System (CRS) for salmon and steelhead. In 2016 NMFS issued a biological opinion concluding that parts of the NFIP could jeopardize endangered salmon species, and proposing reasonable and prudent alternatives. Since that time FEMA has been working to implement the reasonable and prudent alternatives to ensure that local permits do not authorize activities that contribute to the loss of salmon habitat. Recently FEMA decided to delay implementation until 2021 in light of the difficulty in modifying floodplain permit review standards.

A California Court Recently Rejected FEMA’s Nationwide Approach

After years of consulting with the resources agencies and publishing biological opinions (concluding likely jeopardy) for individual regions/states, FEMA decided on a different approach in 2016 when it published a biological evaluation of the potential effects of NFIP nationwide, triggered by proposed revisions to the NFIP. In that biological evaluation, FEMA concluded that the NFIP would not have any effect on species listed as threatened or endangered under the ESA. Importantly, FEMA excluded from its evaluation any effects of floodplain development on listed species, arguing that FEMA is not involved in state and local government land use decisions regarding development (thus there is no federal agency action).

An environmental advocacy group challenged FEMA’s biological evaluation (Ecological Rights Foundation v. FEMA (N. D. Cal., Case No. 17-cv-02788-JD)), arguing that FEMA arbitrarily and capriciously carved out floodplain development from its evaluation of the effects of NFIP on listed species, with no reasonable basis. The District Court agreed, criticizing FEMA’s contention that it has “no role” in issuing or denying local permits for floodplain development. To the contrary, “[the] Evaluation expressly acknowledged FEMA’s broad and deep role in establishing detailed floodplain management criteria and practices, policing participation in NFIP and access to federal insurance based on community adoption and enforcement of the criteria, adjusting insurance premiums under the CRS in light of compliance, and several other measures that directly affect how floodplains are managed.”

The Court concluded that the biological evaluation’s “no effect” determination was arbitrary and capricious, and set it aside.

Going forward, it looks like FEMA will be forced to address ESA compliance on a state-by-state basis, unless it can develop a nationwide approach that adequately describes its role in floodplain management and tailors NFIP implementation accordingly (a daunting task).

For more discussion on how FEMA is managing its ESA responsibilities in the flood insurance context, consider attending the Floodplain Management Association conference in San Diego from September 3-6.  Here is a link again to the conference registration.

Photo of Andrea P. Clark Andrea P. Clark

Andrea Clark specializes in water rights and flood control, serving as general counsel to a variety of public agencies from local reclamation districts and water districts to regional joint powers authorities.

Public agencies in the water and flood control fields rely on Andrea…

Andrea Clark specializes in water rights and flood control, serving as general counsel to a variety of public agencies from local reclamation districts and water districts to regional joint powers authorities.

Public agencies in the water and flood control fields rely on Andrea for her ability to explain in understandable terms the wide range of issues impacting them, including basic transparency laws (Brown Act and Public Records Act), public bidding and contracting, bond financing, the unique nature of joint powers authorities, and elections. She also regularly counsels clients on water transfers, Proposition 218 compliance, the California Environmental Quality Act, the National Environmental Policy Act, and financing strategies for major capital improvement projects.

With a special expertise in flood control and floodplain management, Andrea is regularly asked to speak on topics ranging from flood insurance to climate change and the future of flood control policy in California. Through her representation of clients in state flood policy and speaking engagements, she has forged strong relationships with key members of the flood control community in California.

Andrea also counsels private clients, including landowners and mutual water companies, on water supply matters, including proceedings before the State Water Resources Control Board, water rights determinations, and contractual disputes with Federal agencies.

Photo of Scott L. Shapiro Scott L. Shapiro

Scott Shapiro is known for his expertise in flood protection improvement projects throughout California’s Central Valley.
He is helping clients with more than a billion dollars in projects in California’s Central Valley and issues involving the Federal Emergency Management Agency (FEMA) and the…

Scott Shapiro is known for his expertise in flood protection improvement projects throughout California’s Central Valley.
He is helping clients with more than a billion dollars in projects in California’s Central Valley and issues involving the Federal Emergency Management Agency (FEMA) and the U.S. Army Corps of Engineers (USACE) throughout the Western United States.

With a special focus on massive flood protection improvement projects, Scott advises clients through regulatory, contractual, financing, and legislative challenges. Acting as general or special counsel, he regularly interacts with senior management at USACE (Headquarters, South Pacific Division, and Sacramento District), the California Department of Water Resources, and the Central Valley Flood Protection Board. He was named to the National Section 408 Task Force and has been invited to give testimony to the National Academies. Scott was instrumental in helping the first regional flood improvement agency that took a basin threatened by flood risk from less than 30-year level of protection to a level of protection approaching 200-year.

Having worked with FEMA on issues of floodplain mapping and levee accreditation for many years, Scott has developed collaborative environments in which he fosters win-win solutions for his clients. He is also currently serving as the lead counsel on a flood insurance rate map (FIRM) appeal and has drafted Federal legislation to modify the National Flood Insurance Program (NFIP) several times.

Scott is known throughout the region for his extensive litigation experience focusing on cases arising from levee failures. He has litigated levee failures resulting from underseepage, failed encroachments, and rodent burrows as well as briefing levee overtopping cases at the appellate level. Scott is one of the few attorneys with experience litigating flood cases on behalf of plaintiffs as well as defendant government entities.