A large squirrel made a series of slow leaps past the gated entrance to a farm field in Maryland's Queen Anne's County, where Ned Gerber was parked.  "There goes one now!" he said. "You can see where it would be pretty easy for a dog to catch that thing."

The animal, Gerber said, was a Delmarva fox squirrel, an endangered species found only in four Eastern Shore counties.

Gerber, a wildlife biologist with Chesapeake Wildlife Heritage and the president of the Queen Anne's Conservation Society, said he believes that when the gated dirt farm road is paved and the field filled with houses, the slow-moving squirrels in the surrounding woods will become pet food if they aren't squashed under the wheels of cars.

State and federal biologists have mixed views about that assessment. And the project's developer, Mareen Waterman, says Gerber's objection has more to do with the fact that he lives on the farm next door to the proposed development than it does with the squirrel.

"Frankly, we think we have a NIMBY argument," Waterman said. "We have a project that takes good care of the environment. Exceptional care."

Nonetheless, Gerber and a national environmental group, Defenders of Wildlife, earlier this year, filed suit against the U.S. Fish & Wildlife Service, claiming it has failed to protect endangered squirrels on Waterman's property along Winchester Creek just north of Route 50.

In May, the USF&WS, citing further evaluation, reversed itself and determined the project would likely put the animals at risk - a conclusion that Waterman said could spur legal action on his part.

However the case plays out, it is the first suit filed in the region involving the Endangered Species Act - often considered the nation's most powerful environmental law, especially when it comes to regulating private land.

Many worry that it won't be the last: The region has dozens of plants, insects, birds and animals listed under the act, and development is booming, creating the potential for habitat loss - the number one threat to endangered species.

Only last fall, the bog turtle - a fast declining species that lives in rapidly developing parts of northern Maryland and southeastern Pennsylvania - was added to the list. 

Other new listings could be on the way.

This summer, the USF&WS and the National Marine Fisheries Service must decide whether to move forward with listing the Atlantic sturgeon, as has been requested by a Colorado-based environmental group. The sturgeon spawns in sensitive coastal areas which could require additional protection if listed. The environmental group has said it will sue if the sturgeon is not added.

Dozens of other species in the region are considered likely additions to the federal list in coming years by wildlife biologists.

The Delmarva fox squirrel suit vividly illustrates that endangered species issues are not limited to distant conflicts over how vast forests are managed. And cases here can be every bit as contentious.

"We are going to be in court a long time on many, many properties until the [USF&WS] starts to do something," promised Gerber, who believes at least three other properties slated for development in rapidly growing Queen Anne's County have fox squirrels.

For his part, Waterman recently filed court papers to intervene in the case to protect his interests. "We're fully expecting we're going to the Supreme Court over it," Waterman said. "I don't think it will be resolved short of that unless Defenders stops writing the checks."

The Delmarva fox squirrel is a larger, heavier and slower relative of the more familiar gray squirrel.

Once found throughout the native hardwood and pine forests of the Delmarva Peninsula, southeastern Pennsylvania and southern New Jersey, the squirrel today is found naturally in less than 10 percent of its historic range. Populations have also been experimentally translocated in Pennsylvania, Delaware and Virginia.

The species was listed as endangered in 1967. Population studies are lacking to show whether the squirrel is any better or worse off today than it was then.

Glenn Therres, supervisor of the Maryland Department of Natural Resources' wildlife diversity program, said there are more areas known to have Delmarva fox squirrels today than there were several years ago, though it's unclear whether the species range has expanded or whether those populations have just gone unnoticed in the past.

"Its population has not contracted any further than when it was listed," he said. "In fact, they've expanded."

John Wolflin, supervisor of the USF&WS Chesapeake Bay Field Office could not comment directly on the case because of the suit, but agreed that the squirrel is not near the point-of-no-return.

Gerber and Defenders' argument is bolstered by Vagn Flyger, an emeritus professor of wildlife biology with the University of Maryland who has studied the squirrel for more than 50 years. In an affidavit, Flyger contended the squirrel is "even more critically endangered today than when it was originally listed in 1967.

"The primary cause, he said, is continuing loss of habitat from forestry and construction. "Ongoing development, including the intensive development in many sections of Maryland's Eastern Shore, is reducing the amount of suitable habitat available for the [Delmarva fox squirrel] and leading to other adverse impacts to the subspecies," Flyger said.

The suit was filed after the state and the USF&WS signed off on Waterman's plans for a 16-home development on 59 acres. Several acres are wetlands and therefore unusable. A tidal creek borders much of the land, and there is a forest buffer ranging from 50 to 150 feet wide along much of the creek and around the property.

Plans call for removing only about 5 percent of the trees, and maintaining several tracts of open space. Instead of having individual piers into the creek, Waterman has proposed a single community pier.

Wildlife agencies, reviewing the plan last year, found little in the plans to criticize, although DNR encouraged more reforestation on open spaces, and the USF&WS wanted a deed restriction that permanently protects existing forests areas.

Waterman said he is willing to improve habitat by planting additional trees. But, he said, the size of the tree-planting budget could hinge on he cost of the suit. "We could probably fund a mini-refuge for the Delmarva fox squirrel with the money we've been forced to expend needlessly," he said.

The crux of the case hinges on whether the development will result in the "take" - intentional or accidental killing or harassment - of a species protected under the Endangered Species Act.

No one disputes there are fox squirrels on the property, and Gerber and Defenders say it is inconceivable that houses abutting the woods, along with a new subdivision road, will not result in any of the animals being harmed by cars or pets.

Flyger agreed, saying the project - unless redesigned - "will clearly reduce the suitability of this habitat for the [Delmarva fox squirrel], will definitely result in a reduction in the number of [Delmarva fox squirrels] on the site, and, in all likelihood will result in injury or death of individual squirrels."

Therres, whose office reviewed the project because it required approval from the state Critical Area Commission, said he couldn't rule out that a squirrel could be killed. "It may happen, but it won't happen to the point that it reduces the population," Therres said. "It's unfortunate for the individual, obviously, but not to the population."

Therefore, under state law, he said, the project would not result in a "take" of an animal.  But the federal law interprets "taking" as affecting an individual animal.

If there is likely to be a loss of any animal, the USF&WS can issue an "incidental take" permit to the landowner and allow the project to go ahead. But to issue such a permit, there first has to be a habitat conservation plan on the property.

Such plans must be developed by the landowner, be approved by the USF&WS, and outline specific measures that will be taken to protect habitat for a species. The plans may cover an individual development, a county, or a whole region. The goal is to ensure that the overall plan is in place to conserve habitat without shutting down development.

In this case, the USF&WS decided last fall that a plan was not needed. Instead, it issued what is called a "no-take" letter - a finding that the project is unlikely to harm any fox squirrels.

In late March, Defenders and Gerber filed suit.

"The project as proposed, in our opinion, is in fact going to result in the take of fox squirrels," said Mike Senatore, a Defenders attorney who specializes in endangered species issues. Senatore said he was "bewildered" by the agency's decision.

The USF&WS has been pushing habitat plans as a way to avoid so-called "train wrecks" that pit logging or development against environmental groups, but none have yet been developed in this region.

Nor does Waterman want his property to be used for the first plan. Waterman said it would take at least a year to develop such a plan, with more months for review. Because it would be the region's first plan - and therefore set a precedent - he said it would be a lightning rod for public comment. And ultimately, he said, it would probably end up back in court.

"We'd be right back to where we started, so far as my project goes," he said. "I would be fully supportive, including financially supportive, of developing one for Queen Anne's County, and have all the new projects comply with it. But to throw it into the middle of projects that have gone on for five, six, seven years, I don't think is equitable."

Senatore agreed that a habitat conservation plan should be developed on a county, or regional basis, but that could take years. Until then, he said, plans should be developed for individual sites with squirrels. Otherwise, he said, habitat could be lost piecemeal to the point where the entire protection burden falls onto a handful of remaining landowners.

"We're not trying to shut down development on the Eastern Shore, and in fact we're not even advocating that this project not go forward," Senatore said. "We're just advocating that there needs to be more consideration of the habitat needs of the fox squirrel taken into account when development  activities move forward. And the habitat conservation plan process is one way to see that is done."

In May, the USF&WS, seemed to agree. A subsequent evaluation by the service resulted in it advising Waterman that there was a liklihood of a "take" occuring as a result of the roads, and suggested that development of a habitat conservation plan on his part would be advisable.

Waterman said the turnabout was "driven by politics, not science."

"For them to all of a sudden say, six months after the fact, that they didn't know what they were talking about when they wrote that [no take] letter, that's a little bit strange," he said. "We think it's totally arbitrary to do a flip-flop like that."

The stakes in the case are high. Defenders wants to see the USF&WS take a more aggressive posture in dealing with landowners in the region when it comes to protecting endangered species.

"Since most of the fox squirrel habitat is on private lands," Senatore said, "there needs to be some process put in place for conserving the species on private lands, and there is a problem with its habitat essentially being chewed up by development."

But Waterman worries that Defenders actually wants to expand what is considered fox squirrel habitat beyond forests.

According to Flyger, the squirrel is erroneously considered a forest species and is actually a "parkland species" which uses the land "interface" that includes forests and adjacent areas as feeding sites.

Citing that concern, Gerber and Defenders have advocated that homes on the property, be clustered away from the woods, with land next to the trees either farmed or maintained as a meadow-like buffer. While the fox squirrel may be the species most threatened by the loss of this habitat, so are other species, such as the bobwhite quail, which is on the decline. Such a strip would also give the squirrels a chance to run for cover if a neighborhood dog charged at them.

A buffer requirement would also vastly increase the amount of land considered habitat for the squirrel, Waterman said. "That would be a far-reaching change which could potentially affect every field on the Eastern Shore," he said.

Others biologists question the importance of agricultural land to the squirrels, since they apparently thrived before the area was colonized. And at that time, they note, the woods were filled with other squirrel predators that have since vanished, such as bobcats.

But, Senatore said, the fact the squirrel has remained on the endangered species list for more than three decades is a sign that "something needs to be done. And there certainly have not been sufficient efforts to save the species up until now."

Whether that will change because of the legal action remains to be seen. USF&WS biologists say the litigation will certainly cause them to direct more attention toward the squirrel.

It also appears likely to direct more attention to the courts. Waterman, who said he has already invested about $750,000 in the project, said he would "aggressively defend his position and oppose a site-specific habitat conservation plan, which he said would likely be challenged in court by opponents of his project, anyway.

"If we're going to fight over it, we might as well fight over it at this point," he said. "Hopefully, we'll ultimately get an opportunity to let a court decide.