On August 15, 2000, the U.S. District Court for the Eastern District of California issued a landmark ruling, in the case National Wildlife Federation v. Babbitt (NWF v. Babbitt),¹ interpreting key provisions of the Endangered Species Act (ESA) and the National Environmental Policy Act (NEPA). This ruling provides important new direction to local governments, developers, federal wildlife agencies, and others seeking to design habitat conservation plans (HCPs). In striking down the Natomas Basin HCP and incidental take permit (ITP), the court signaled that HCPs purporting to conserve imperiled species that cross jurisdictional boundaries must confront the challenges of planning at the regional scale honestly and must provide guaranteed funding to achieve conservation objectives. This far-sighted ruling may stimulate the regional planning that is so desperately needed to achieve the interrelated goals of countering sprawl, promoting smart growth, and conserving imperiled wildlife.