On January 11, 2018, the Federal Energy Regulatory Commission (FERC) denied Constitution Pipeline Company, LLC’s Petition for a Declaratory Order that New York had waived its ability to act under section 401 of the Clean Water Act (CWA) by failing to grant or deny Constitution’s application for a section 401 certification within a “reasonable period of time.” See In re Constitution Pipeline Co., LLC, 162 FERC ¶ 61,014 (Jan. 11, 2018). The decision is another in a sequence of decisions from FERC and the federal courts of appeals concerning the time period for States to act under section 401.
CWA section 401 requires, as a prerequisite for federal permits for projects that may result in a discharge into navigable waters, that affected States certify that any such discharge will comply with the CWA. States can waive this requirement, and if they do not act within “a reasonable period of time (which shall not exceed one year) after receipt” of the request for the certification, waiver is automatic.
In June 2017, the D.C. Circuit held that, with respect to natural gas pipeline projects, FERC must determine, in the first instance, whether a State has waived due to inactivity. Millennium Pipeline Co., LLC v. Seggos, 860 F.3d 696, 700-01 (2017). The Courts of Appeals do not have jurisdiction to address the question until FERC decides whether waiver has occurred. Id. Later that year, FERC held that a State’s one-year clock begins to run from the date the State first receives the request. See In re Millennium Pipeline Company, L.L.C., 160 FERC ¶ 61,065 (2017). In so ruling, FERC rejected the approach taken by the U.S. Army Corps of Engineers, which starts the reasonable-time clock from the date the Corps concludes that a “valid” request has been received. See 33 C.F.R. § 325.2(b)(1)(ii). FERC’s decision is currently on appeal to the Second Circuit.
Constitution Pipeline initially applied for a 401 certification from NYSDEC in August 2013. Constitution withdrew and re-submitted the application twice—first in May 2014 and again on April 27, 2015. On April 22, 2016, NYSDEC denied Constitution’s application. Constitution sought review of the denial in the Second Circuit and argued, among other things, that NYSDEC had waived by not acting within a reasonable time. The Second Circuit, like the D.C. Circuit in Millennium Pipeline, concluded that it lacked jurisdiction to consider Constitution’s waiver argument.
Constitution then petitioned FERC for an order that NYSDEC had waived, either because the most recent re-submittal did not re-start the clock, because it was purely ministerial, or because the more than 11 months NYSDEC used to process the resubmitted application was more than a “reasonable period of time.” FERC denied the petition and articulated two noteworthy principles about waiver.
First, FERC interpreted its decisions to hold that one year is the reasonable period of time for States to process 401 applications. It would not impose a lesser period on a case-by-case basis.
Second, FERC held that it would not assess the intent behind a re-submitted application. Although FERC voiced concern about the practice in some States of requiring withdrawal and resubmission as a way to create more time for the State to act, it decided that evaluating re-submissions on a case-by-case basis would be too cumbersome. Instead, FERC opted for a bright-line rule that treats all re-submitted applications for 401 certifications as re-starting the one-year clock.