Judicial/ Administrative Decisions

On March 21, 2019, the Federal Energy Regulatory Commission (Commission or FERC) held its monthly open meeting. Highlights of the meeting included the following:

“According to FERC, it is now commonplace for states to use Section 401 to hold federal licensing hostage.”

These are the words the DC Circuit used in Hoopa Valley Tribe v. Federal Energy Regulatory Commission, No. 14-1271, p. 10 (D.C. Cir., Jan. 25, 2019), to describe the state of play on § 401 certifications affecting hydroelectric facility licensing or re-licensing applications. CWA § 401(a)(1) requires, as a prerequisite for federal permits for activities that may result in a discharge into the navigable waters, that affected states certify that any such discharge will comply with applicable, enumerated provisions of the Clean Water Act. But, if a state fails or refuses to act on a request for certification within “a reasonable period of time (which shall not exceed one year) after receipt of such request,” the statute deems the certification requirements waived.
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On Friday, a court ruling provided some clarity regarding the Clean Water Act (CWA) § 401 water quality certification process. As forecasted in our November 1, 2018 blog post (below), the US Court of Appeals for the DC Circuit has ruled that a state waives its CWA § 401 authority when, pursuant to a written agreement, an applicant repeatedly withdraws and resubmits its request for water quality certification in order to restart the one-year waiver clock. Hoopa Valley Tribe v. FERC, No. 14-1271 (D.C. Cir. Jan. 25, 2019). According to the Court’s opinion, this sort of arrangement serves to circumvent the Federal Energy Regulatory Commission’s (FERC) “congressionally granted authority over the licensing, conditioning, and developing of [the] project,” and “if allowed, the withdrawal-and-resubmission scheme could be used to indefinitely delay federal licensing proceedings and undermine FERC’s jurisdiction to regulate such matters.”
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Last week, the US District Courts for the Eleventh and Sixth Circuits joined a growing chorus of other circuits holding that a Natural Gas Act (NGA) condemnor can obtain immediate, pre-trial possession of condemned land through a preliminary injunction (PI) remedy so long as it demonstrates its substantive power of eminent domain as a FERC certificate holder under NGA § 7(h).[1] The Sixth Circuit’s ruling also rejected arguments that export-related aspects of a domestic pipeline project somehow negated a pipeline company’s public interest showing, required for obtaining a PI granting immediate possession. In addition, the two rulings address several commonly-arising procedural issues in a manner favorable to pipeline companies seeking immediate possession in NGA condemnations.
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In recent litigation involving the development of interstate natural gas pipelines, one of the key issues has been whether the state has waived its authority under Clean Water Act section 401 by exceeding the one-year time period. In a separate case involving a series of hydroelectric facilities, the waiver period was again directly at issue. On October 1, at oral argument before the D.C. Circuit, the parties addressed whether California and Oregon had waived their water quality certification authority by having the applicant withdraw and resubmit its request for certification over a number of years. Notably, the judges seemed to agree that FERC could make a waiver determination before the end of the one-year time limit and that withdrawing and resubmitting an application may not always restart the clock.
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The US Court of Appeals for the Third Circuit recently issued two decisions concerning the relationship between the Natural Gas Act (NGA) exclusive jurisdiction provision at 15 U.S.C. § 717r(d)(1) and the administrative review process for state-issued environmental permits for interstate natural gas pipeline projects. These decisions are briefly described as follows:

  • In Delaware Riverkeeper et al. v. Sec PA Dept. Env. Protection, et al. (Sept. 4, 2018), the court held that only “final” state agency actions are reviewable under the NGA’s exclusive jurisdiction provision. The court determined, however, that the state-issued water quality certification at issue was reviewable “final” action even though it was subject to further administrative review because, under the relevant state law, the certification had legal effect as issued and was the final action of the agency that issued it.
  • In Township of Bordentown, New Jersey et al. v. FERC et al. (Sept. 5, 2018), the court held that state administrative review of environmental permits issued for natural gas pipeline projects is not preempted by the NGA’s exclusive review provision, as the NGA only eliminates state court review of interstate pipeline-related state agency orders.


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As we highlighted in our March 2, 2018, post, the US District Court for the Middle District of Louisiana ordered the $750 million Bayou Bridge pipeline to halt construction within the Atchafalaya Basin when it concluded that the US Army Corps of Engineers’ environmental analysis likely violated the National Environmental Policy Act (NEPA) and the Clean Water Act (CWA) due to the following deficiencies:

  • The Corps did not provide sufficient explanation for how the proposed off-site mitigation would compensate for the loss of wetlands impacted by construction; and
  • The Corps failed to sufficiently consider and address historical impacts to wetlands from past pipeline projects in the cumulative effects analysis.


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On July 10, 2018, a panel of the United States Court of Appeals for the DC Circuit rejected an environmental group’s claim that FERC’s funding mechanism results in unconstitutional bias in favor of the pipeline industry. The court also rebuffed a due process attack on the Commission’s use of “tolling orders” to avoid automatic denial of rehearing requests after 30 days. The decision is noteworthy as it represents the latest rejection of similar constitutional challenges to FERC’s operations and practices that pipeline opponents have been raising with increasing frequency. The ruling also highlights the difficulty of bypassing the Natural Gas Act’s administrative rehearing and judicial review process through novel broadside attacks on the Commission’s general practices and procedures.

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In a decision issued on April 12, 2018, a Fourth Circuit panel held (2-1) that (1) even though a pipeline leak has been repaired and remediation is ongoing under the supervision of the state environmental agency, environmental groups have standing to sue the pipeline owner, and (2) plaintiffs’ allegation that groundwater continues to carry discharged pollutants to jurisdictional waters through a “direct hydrological connection” supports liability under the Clean Water Act.
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On March 12, 2018, the United States Court of Appeals for the Second Circuit affirmed a Federal Energy Regulatory Commission (FERC) order finding that delays by the New York Department of Environmental Conservation (NYDEC) in reviewing Millennium Pipeline Company’s application for water quality certification constituted waiver of NYDEC’s authority under the Clean Water Act (CWA). As we detailed in an earlier blog post, FERC found that NYDEC’s delay exceeded the one-year statutory period established by CWA Section 401. The Millennium case is just one of several interstate natural gas pipeline projects that have faced delays associated with the CWA Section 401 permitting process. (See, e.g., Atlantic Bridge Project, Atlantic Sunrise Project, Constitution Pipeline, Northern Access Project, PennEast Pipeline, and Spire STL Pipeline.) The Court’s decision resolves the nearly three-year permitting process for the Millennium Valley Lateral Pipeline and clarifies for other projects (and state agencies reviewing those projects) that the one-year waiver period begins when the state agency receives the initial request for certification.
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