A federal appeals court has upheld a 2½-year injunction blocking new construction in the Florida Keys from receiving federal flood insurance in places where rare creatures such as the Key deer roam.

The decision, issued Tuesday by the 11th Circuit Court of Appeals in Atlanta, covers at least several hundred acres of privately owned land in the Keys, but the legal implications could affect property and federally protected species in other states.

A three-judge panel affirmed an injunction issued in September 2005 by U.S. District Court Judge K. Michael Moore in Miami, who echoed environmental groups in calling the national flood insurance program a threat to endangered species.

'SUITABLE HABITAT'

The ruling doesn't amount to a blanket ban on flood insurance in the Keys.

But it orders the Federal Emergency Management Agency to stop issuing flood policies in "suitable habitat" for threatened or endangered plants or wildlife until it consults with the U.S. Fish and Wildlife Service and develops criteria for assessing development impacts on eight such species in Monroe County.

John Kostyack, who represented three environmental groups that brought the lawsuit said the court rejected arguments by the Bush administration that FEMA was legally bound to provide flood coverage and had no authority to exclude selected areas of Monroe County.

"FEMA was saying we don't even have to talk to Fish and Wildlife about our program, to even think about endangered species, " said Kostyack, executive director of the National Wildlife Federation.

"If the appellate court had bought that line of argument, it would have excused not only FEMA from complying with the Endangered Species Act but many other federal agencies."

The Washington, D.C.-based National Association of Home Builders, which had filed a friend-of-the-court brief, blasted the ruling as overly broad, saying it could drive up building costs, and, in the worst cases, leave property owners unable to obtain local building permits and mortgages or to sell or develop land.

'NEVER INTENDED'

"What world are we living in where the court is saying that endangered species concerns trump all other kinds of legislation?" said Duane Desiderio, the association's vice president of legal affairs. "Congress never intended development to stop because of endangered species."

Kostyack said the intention wasn't to stop development but to end what environmentalists call a federal subsidy that encourages construction in areas critical to the survival of federally protected species.

FEMA has previously said the injunction would not affect existing flood policies in Monroe, which numbered more than 33,700 in 2005.

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