Judicial/ Administrative Decisions

Since the Administration denied a Presidential (border crossing) Permit to the Keystone XL Project in 2015, a number of regional, state or local objections to new pipeline construction projects have emerged around the U.S. Most of the protests have continued themes relied on by opposition to Keystone, including the claim that fossil fuels should remain in the ground in order to limit the impacts of climate change.
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The Third Circuit held in a highly anticipated recent decision that state actions on water quality-related permits for interstate natural gas pipeline projects are reviewable only in the federal Circuit Courts of Appeals, in accordance with the Natural Gas Act (NGA).
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Recent developments in cases brought by Constitution Pipeline Company to challenge New York’s denial of certain water quality authorizations highlight tensions between federal and state oversight of interstate natural gas pipeline construction projects, and the accompanying potential for costly and protracted delays.
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The question of whether Presidential Permit authority is constitutional and/or subject to judicial review has been and continues to be an unsettled issue.  A little more than a month after the State Department’s November 2015 denial of TransCanada’s application for a Presidential Permit to construct its Keystone XL pipeline project, the United States District Court for the District of Minnesota ruled in White Earth Nation et al. v. Kerry et al. that State Department Presidential Permitting decisions are Presidential in nature and are therefore not subject to judicial review.  Approximately one month later, in January 2016, TransCanada filed two separate actions to challenge the Obama administration’s rejection of its application for a Presidential Permit for the Keystone XL pipeline.  The first action was filed in federal district court in Texas to challenge the denial of the Keystone Presidential Permit, and the second is a Notice of Intent to submit a claim to arbitration under Chapter 11 of the North American Free Trade Agreement (NAFTA).

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Environmental groups often seek to delay or stop pipeline projects by filing legal challenges under various state and federal environmental and/or energy laws. Recent court decisions have illustrated the difficult nature of such challenges, and in particular the difficulty environmental groups have in making a threshold showing of the legal basis for their challenge. An offshoot of the well-established principle that a litigant cannot raise someone else’s rights in court, the legal doctrine of ‘standing’ requires a litigant to demonstrate its interest in an actual case or controversy as a preliminary requirement for a case to be heard and decided in a court of law. In addition, a litigant citing a particular statute as the basis for a lawsuit must establish that it has an interest at stake that is within the ‘zone of interests’ protected by that statute.

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The United States Court of Appeals for the Ninth Circuit has affirmed dismissal of a lawsuit brought in 2012 by the City and County of San Francisco (San Francisco) to challenge PHMSA’s oversight of State enforcement of pipeline safety standards before and after the San Bruno pipeline incident in 2010.
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Nationwide permitting for linear projects, relied upon by pipeline operators for construction and maintenance projects, recently survived a challenge from environmental groups. On December 30, 2013, the U.S. District Court for the Western District of Oklahoma ruled against the Sierra Club and other environmental groups in their challenge to the U.S. Army Corps of Engineers’ (Corps) use of Nationwide Permit 12 (NWP 12) for linear utility line projects.
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The City of San Francisco is currently appealing the Northern District of California’s dismissal of its claims brought under the citizen suit provision of the Pipeline Safety Act (PSA), including a claim that the Pipeline and Hazardous Materials Safety Administration (PHMSA) is required to ensure that pipeline safety standards are enforced by certified States and should limit the disbursement of federal funds accordingly.
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