Opinion ID: 4533768
Heading Depth: 3
Heading Rank: 2

Heading: Rare, Endangered, or Threatened Species

Text: 9 Case: 18-14817 Date Filed: 05/13/2020 Page: 10 of 22 The record establishes without genuine dispute that this property is home to abundant species of birds, some rare, to the regionally declining southern fox squirrel, and to a rare plant species, the denseflower knotweed. This is established by the testimony of three experts—two called by Champions and one by the Commissioner—who generally agreed on the underlying facts. The Tax Court explicitly credited the testimony of all three. One expert observed 61 species of birds on the property, including 26 that are listed as a priority by one or more conservation organizations. These included the eastern whip-poor-will, brown-headed nuthatch, red-headed woodpecker, and prothonotary warbler. The expert saw a wood duck with fledglings, suggesting onsite breeding. The Commissioner’s expert saw a wood stork—a federally listed endangered species—though he opined it was just passing through. The parties have analyzed in detail the placement of the various bird species on conservation priority lists compiled by organizations with expertise in this field. Of critical importance here, though, is not precisely which bird ranks precisely where on one or more of these lists, but the more general question whether the presence of these many species, including some of substantial conservation concern, shows that the property is a significant habitat for “rare, endangered, or threatened species.” It plainly does. 10 Case: 18-14817 Date Filed: 05/13/2020 Page: 11 of 22 For what it’s worth, the priority lists were compiled by Partners In Flight (“PIF”), the Atlantic Coast Joint Venture (“ACJV”), the United States North American Conservation Initiative Committee (whose list is denominated and referred to here as the “Watch List”), and the United States Fish and Wildlife Service (whose list is denominated and referred to here as “Birds of Conservation Concern”). The priority designations of the property’s various birds include the following: eastern whip-poor-will (ACJV highest priority level, PIF needing management attention, Watch List yellow, Fish and Wildlife Service Birds of Conservation Concern), brown-headed nuthatch (ACJV high priority, PIF planning and responsibility, Fish and Wildlife Service Birds of Conservation Concern), redheaded woodpecker (ACJV moderate, PIF planning and responsibility, Watch List yellow), prothonotary warbler (ACJV moderate, PIF planning and responsibility, Watch List yellow), eastern wood pe-wee (ACJV moderate, PIF management attention), Carolina chickadee (ACJV moderate, PIF planning and responsibility), eastern kingbird (ACJV moderate, PIF management attention), yellow-billed cuckoo (ACJV moderate, PIF management attention), Acadian flycatcher (ACJV moderate, PIF planning and responsibility), blue grosbeak (ACJV moderate, PIF planning and responsibility), brown thrasher (ACJV moderate, PIF planning and responsibility), indigo bunting (ACJV moderate, PIF planning and responsibility), barn swallow (PIF management attention), belting kingfisher (PIF management 11 Case: 18-14817 Date Filed: 05/13/2020 Page: 12 of 22 attention), northern flicker (PIF management attention), blue-gray gnatcatcher (PIF planning and responsibility), Carolina wren (PIF planning and responsibility), downy woodpecker (PIF planning and responsibility), eastern bluebird (PIF planning and responsibility), pine warbler (PIF planning and responsibility), redbellied woodpecker (PIF planning and responsibility), ruby-throated hummingbird (PIF planning and responsibility), tufted titmouse (PIF planning and responsibility), yellow-throated vireo (PIF planning and responsibility), and eastern Phoebe (PIF planning and responsibility). The Commissioner’s expert takes no issue with the proposition that many birds use the property including some that are worthy of protection. He says, though, that the habitat itself is not relatively natural. For this he focuses on the fairways and greens—they consist of non-native bermuda and bent grass—not the undeveloped portion of the easement, which is, at least for the most part, quite natural. What matters under the Code and regulation is not so much whether all the land is natural, but whether the habitat is natural. Indeed, the regulation says it is not disqualifying that the land has been altered, so long as “the fish, wildlife, or plants continue to exist there in a relatively natural state.” 26 C.F.R. § 1.170A14(d)(3)(i). The Commissioner’s expert noted nothing unnatural about these birds’ existence; they apparently find the habitat quite suitable. 12 Case: 18-14817 Date Filed: 05/13/2020 Page: 13 of 22 Champions also cites the property’s population of southern fox squirrels—a species for which the habitat, including the golf course, is hospitable. The species is not threatened but has suffered declines caused by diminishing habitat, due in part to forest-management practices. The Commissioner discounts the importance of the species, noting that Georgia has a six-month season in which hunters may take up to 12 squirrels per day. But that is not dispositive of the question whether providing the squirrels a habitat is a conservation purpose. That Georgia chooses not to protect the species hardly seems a reason to deny whatever protection is available under federal law. Protecting fox squirrels would not alone be sufficient to establish a conservation purpose, but they add to the weight on Champions’ side of the scale. Finally, while the golf course itself is comprised primarily of non-native grasses, the remainder of the easement property is natural and includes a rare species of plant, the denseflower knotweed. The Commissioner has offered no theory under which protecting the denseflower knotweed is not an appropriate conservation purpose. It is true, as the Commissioner notes, that the knotweed exists on only a limited proportion of the easement—perhaps 7%, with the capacity to occupy up to 17%. But the knotweed that exists, whatever its proportion, is worthy of protection. Full coverage of a species is not required and might even cut the other way; one 13 Case: 18-14817 Date Filed: 05/13/2020 Page: 14 of 22 might reasonably doubt that land consisting entirely of knotweed would provide a relatively natural habitat or would support the many bird species present on this land. The Commissioner also says part of the golf course drains toward the bottomland where the knotweed is located and that the knotweed thus may suffer harm from the chemicals used on the course. Perhaps so. But the easement explicitly requires Champions to follow the best environmental practices prevailing in the golf industry—an obligation the Trust is entitled to enforce. Moreover, the relevant question is not so much whether chemicals from the course may harm the knotweed, but whether the easement improves the chance that the knotweed will be preserved. The answer is yes for two reasons: first, because the obligation to use best environmental practices would not exist without the easement; and second, because unrestrained development of the land where the knotweed is located would pose a greater risk than the golf course. Despite the abundant bird species, including many of conservation concern, the declining southern fox squirrels, and the rare denseflower knotweed, the Tax Court said Champions had not established the required conservation purpose. To reach this result, the court considered, or at least discussed in its opinion, only birds seen by both Champions experts—ignoring any bird seen by only one Champions expert, even if the bird was also seen by the Commissioner’s expert. 14 Case: 18-14817 Date Filed: 05/13/2020 Page: 15 of 22 The court did this despite explicitly crediting the testimony of both Champions experts. The court offered no explanation for this approach, and we can conceive of none. The court also ignored a bird that was heard but not seen. The court did not explain how a bird could be heard if not present on or at least near the property. The Tax Court’s implicit finding that the only birds on the property were those seen by both Champions experts is clearly erroneous. More importantly, the Tax Court’s conclusion that Champions did not contribute this easement “for the protection of a relatively natural habitat of fish, wildlife, or plants, or similar ecosystem”—a conclusion based in part on the clearly erroneous finding of fact— is wrong as a matter of law. Were it not for the presence of a golf course on part of this property, the assertion that contributing an easement over property with this array of species does not qualify as a conservation purpose would be a nonstarter.