Page 34 - December 1-14, 2021 BDO Denver 303 E. 17th Avenue, Suite 600 Denver, CO 80203 303-830-1120 Accountants and Advisors © 2021 BDO USA, LLP. All rights reserved. What’s Next? Business resilience is being tested daily. At BDO, our team of experienced professionals provides the knowledge and proactive guidance necessary to overcome the evolving challenges construction facing companies of every size. From ever‑changing tax and reporting regulations, unstable surety and banking markets, to labor issues and unrelenting competition, we’re here to help the clients we serve, wherever they do business. L iability for an “incidental take” is now back on the books. The question is: What does that mean? Recently, the U.S. Depart- ment of Interior announced the revocation of the Trump Administration’s “midnight rule” that had limited the scope of the Migratory Bird Treaty Act. Enforced by the Fish and Wildlife Service, the MBTA was enacted in 1918 to prohibit harm to migratory birds. Less than a week later, the DOI pub- lished its Oct. 4, 2021, Advance Notice of Proposed Rulemak- ing seeking public comment on the development of rules that will authorize the incidental taking of migratory birds in certain, limited circumstances. n Why the change? A quick history. The first policy flip hit the runway with the Obama era “midnight rule” that exposed the likes of commercial and residential real estate develop- ers, mining, and oil and gas companies to liability for “inci- dental taking” of migratory birds. That was followed by the Trump era “midnight rule” policy shift largely eliminating developers’ fears of liability for inadvertent, accidental, “inci- dental” takings. And now, the Biden era flip brings back the liability risk for any “inciden- tal” taking of migratory birds. A bit more detail. The Biden DOI’s action revokes the so-called Jan. 7 “midnight Trump rule” that protect- ed compa- nies, landowners and others from the legal consequences of violating the MBTA in the event that their activities were deemed to have unintentional- ly harmed migratory birds. The 2021 Trump rule was based in large part on the DOI’s Dec. 22, 2017, policy memorandum issued by the Principal Deputy Solicitor (Memorandum Opin- ion, M-37050) that limited the reach of the MBTA to inten- tional, unlawful acts of hunt- ing and poaching. The 2017 memo concluded, in part: “The text, history and purpose of the MBTA demonstrate that it is a law limited in relevant part to affirmative and purposeful actions, such as hunting and poaching, that reduce migra- tory birds and their nests and eggs, by killing or capturing, to human control … Interpret- ing the MBTA to criminalize incidental takings raises seri- ous due process concerns and is contrary to the fundamen- tal principle that ambiguity in criminal statutes must be resolved in favor of defen- dants.” The DOI policy memo was a response to the Trump Exec- utive Order 13783 of March 28, 2017, Promoting Energy Independence and Economic Growth. That executive order caused DOI (and other agen- cies) to prepare reports iden- tifying agency-specific actions related to energy development in the U.S. See, e.g., “Final Report: Review of the Depart- ment of the Interior Actions that Potentially Burden Domes- tic Energy” (Oct. 24, 2017). The 2021 Trump era pol- icy shift followed an earlier Obama Administration “mid- night rule” issued on Jan. 10, 2017, which was based on the then-current DOI Solicitor’s determination that the MBTA must be interpreted to cover “incidental take” of migra- tory birds. The Obama rule imposed liability for an “inci- dental take” that could result from construction of virtually any type of development, i.e., residential and commercial developments; construction and operation of hardrock and coal mine tailings and waste water management facilities; construction of solar farms and wind turbines; oil and gas exploration and development facilities; and construction of transmission lines. And now, the Biden era rule- making opening the door, once again, to liability for inciden- tal takings. The DOI’s press release states: “Over the last 50 years, the population of North American birds has declined by an estimated 3 billion birds. Many of the 1,093 spe- cies of birds protected under the MBTA are experiencing population decreases due to increased threats across the continent. Just recently, the Ser- vice released the Birds of Con- servation Concern 2021 report with 269 bird species consid- ered to be in greatest need of conservation attention … With this final and formal revoca- tion of the January 2017 rule, the [Fish and Wildlife] Service returns to implementing the MBTA as prohibiting incidental take and applying enforcement discretion, consistent with judicial precedent and long- standing agency practice prior to 2017.” n Why the concern? Strict liability and criminal penalties – for each bird. The MBTA is a “strict liability” statute. Thus, liability for a “taking” does not require “specific intent or guilty knowledge.” And that liability can result in criminal penalties. The statute makes it illegal to “pursue, hunt, take, capture, kill, attempt to take, capture, or kill, possess … any migra- tory bird … or any part, nest, or egg of any such bird.” 16 U.S.C. §§ 703-712. Violations for misdemeanors can be pun- ished with fines up to $15,000 (for each bird; not just $15,000 in the aggregate for multiple takings resulting from one development activity). Crimi- nal penalties also include pos- sible imprisonment of up to six months. Examples of strict liability enforcement abound. ExxonMobil pled guilty in 2009 for violations in five states over a period of five years that killed 85 birds. The company paid a fine of $600,000 and was required to implement a three- year “compliance plan.” In 2010, BP paid $100 million in fines for kills of over 1 mil- lion birds resulting from the Deepwater Horizon oil spill. PacifiCorp pled guilty in 2015 to killing 38 golden eagles and Law & Accounting John Watson Counsel attorney, Spencer Fane LLP Federal policy flip-flop again throws a wrench into the works Please see Watson, Page 51