Hundreds of thousands of business owners have filed a petition with the U.S. Fish and Wildlife Service to remove a rule they contend reaches far beyond what Congress intended when it wrote the law regarding endangered species.

For decades, the petition asserts, the federal agency has implemented blanket rules protecting members of a species or its habitat that are not necessary and not allowed under the law.

The petition was filed by the Pacific Legal Foundation on behalf of the 325,000 members of the National Federal of Independent Business. The typical member employs 10 people and reports gross sales of about $500,000 a year.

Filed at the start of a process that could lead to a formal legal challenge, the petition says small businesses and ordinary citizens face the threat of enormous potential fines and even jail time for activities "that Congress deemed legal."

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"We are filing this petition to force unelected bureaucrats to follow the law," said Jonathan Wood, a PLF staff attorney. "This illegal regulation imposes onerous regulatory burdens on property owners and small businesses, and ultimately hurts the very species it purports to protect.

"The Fish and Wildlife Service asserts the authority to criminalize any activity that affects any member of hundreds of threatened species across the country, without any express authorization from Congress. The Supreme Court has explained that agencies may not exercise powers of such 'vast economic and political significance' without Congress' clear say-so."

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The petition, filed under the Administrative Procedure Act, seeks repeal of the 40-year-old Section 17.31 of Title 50 of the U.S. Code of Federal Regulations.

PLF said the regulation "criminalizes the take of any threatened species, despite Congress' decision to expressly limit the take prohibition to endangered species, i.e. those facing an immediate risk of extinction."

"For threatened species, Congress decided that take should only be regulated if the service can show that it is 'necessary and advisable' for the conservation of the particular species."

The organization said Congress "sharply limited this authority because it recognized how incredibly burdensome the take regulation could be."

"In the words of Sen. John Tunney, the ESA's floor manager, Congress wanted to 'minimiz[e] the use of the most stringent prohibitions,' which should 'be absolutely enforced only for those species on the brink of extinction.'"

The Senate specifically said: "Once [the service] has listed a species of fish or wildlife as a threatened species, to issue regulations to protect that species. Among other protective measures available, [it] may make any or all of the acts and conduct defined as 'prohibited acts' ... as to 'endangered species' also prohibited acts as to the particular threatened species."

Yet the agency has used for years the blanket restriction concerning endangered species, including protections for species not even listed – or even identified yet.

Wood explained: "The service cannot do what it attempts with the regulation – reverse Congress' judgment. Congress limited the take prohibition to endangered species. Unelected bureaucrats cannot ignore that limit because they disagree with Congress' decision.

"It's not hard to see why Congress would be concerned about these crushing burdens," Wood said. "As the late Justice Antonin Scalia explained in dissent in Babbitt v. Sweet Home Chapter of Communities for a Great Oregon, the take prohibition 'imposes unfairness to the point of financial ruin – not just upon the rich, but upon the simplest farmer who finds his land conscripted to national zoological use.' This is because 'take' is [capriciously] defined to include any activity that has any sort of effect on a single member of a species or its habitat, including a wide range of ordinary activities and responsible land uses. Running afoul of this prohibition can lead to large fines and imprisonment."

The petition notes that small businesses are America's largest private employer and a major source of economic growth.

"However, small business are also most vulnerable to burdensome regulations. Environmental regulations, in particular, can impose severe restrictions on small business operations."

Early laws protected endangered species from government activities, it explains. But the Endangered Species Act expanded the the laws to create preemptive protection and also to create limits for what private interests can do.

Congress specifically rejected the idea of broad and generalized rules, authorizing the agency to set up rules for certain species if "necessary and advisable to provide for the conservation of such species."

"This power, however, is limited to the adoption of species-specific regulations. The service is not authorized to simply reverse Congress' decision to limit the take prohibition to endangered species," the petition explains.

The agency, however, set up rules in the reverse, applying broad and generalized restrictions on all activity, subject only to its own decisions to "relax" the severe burdens in some cases.

The impact, the petition states, have been huge.

"Consider, for instance, the northern spotted owl. This species was listed as threatened in 1990 and take of it was automatically forbidden. … As a consequence, the Pacific Northwest's timber industry was (and is) severely impacted. Timber production has declined markedly. … And employment within the industry has fallen sharply.

"Or consider the piping plover. This species was listed as threatened in 1986. Take of it too was automatically forbidden under the regulation. As a result, coastal property owners have seen the use of their property restricted and coastal economies have been hurt by annual beach closures."

Further, the listing of species has been used as a political football by "anti-development" factions, the petition says.

Karen Harned, executive director of NFIB's Small Business Legal Center, said that over the decades, there has been "a painful price paid in lost liberty and opportunity as a result of this unlawful expansion of the take prohibition."

"Many of the ESA's greatest burdens are a consequence of the illegal regulation. The regulation caused severe cutbacks in timber harvesting in the Pacific Northwest due to the northern spotted owl. It restricts farming in California's Central Valley due to vernal pool fairy shrimp. And it is responsible for annual beach closures in the northeast due to the piping plover."

She added: "Because of this regulation, the service does not acknowledge, much less attempt to justify, these costs. Newly listed threatened species are automatically subject to the regulation, without any showing that prohibiting take is 'necessary and advisable' for their conservation. This, too, contravenes Supreme Court precedent, which holds that agencies cannot impose severe costs through regulation without acknowledging those costs and justifying them."

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