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June 13, 2015
  Sierra Club v. Bostik - 10th Circuit
Case Name: Sierra Club v. Bostik

Headline: Tenth Circuit Holds Government Not in Violation of National Environmental Policy Act (NEPA) and the Clean Water Act.

Area of Law: Environmental, Government, Water

Issue Presented:
(1) Did the U.S. Army Corps of Engineers violate NEPA by issuing Nationwide Permit 12 without considering the risk of oil spills and the cumulative environmental impacts of pipelines; (2) Does Nationwide Permit 12 violate the Clean Water Act; (3) Is a cumulative effects analysis required to verify compliance with Nationwide Permit 12?

Brief Summary:
The U.S. Army Corps of Engineers issued Nationwide Permit 12, which allows anyone to construct utility lines in U.S. waters provided the activity does not result in the loss of greater than ½ acre of [U.S. waters] for each single and complete project. TransCanada Corporation proposed to rely on the nationwide permit to build an oil pipeline, the Gulf Coast Pipeline 2, which would run approximately 485 miles and cross over 2,000 waterways. The Corps issued letters verifying that Nationwide Permit 12 would cover the proposed construction. Shortly thereafter, TransCanada began constructing the pipeline, which has since been completed and is currently transporting oil. Three environmental groups challenged the validity of the nationwide permit and verification letters. The district court rejected these challenges and entered judgment for the defendants. The Tenth Circuit majority concluded that in issuing Nationwide Permit 12 the Corps did not violate NEPA or the Clean Water Act, and the agency did not issue the verification letters in violation of NEPA or the nationwide permit.

Extended Summary:
In August 2012, construction began on the Gulf Coast Pipeline 2, a part of TransCanada Corporation's Keystone XL Pipeline. The Gulf Coast Pipeline Project is an approximate 485-mile (780-kilometre), 36-inch crude oil pipeline beginning in Cushing, Okla., and extending south to Nederland, Texas, to serve the Gulf Coast marketplace. TransCanada Corporation proposed to rely on Nationwide Permit 12 to build this pipeline.
The U.S. Army Corps of Engineers has the authority to issue nationwide permits under Section 404(e) of the Clean Water Act. Exercising this permitting authority, the Corps issued Nationwide Permit 12, which allows anyone to construct utility lines in U.S. waters "provided the activity does not result in the loss of greater than ½ acre of [U.S. waters] for each single and complete project." Reissuance of Nationwide Permits, 77 Fed. Reg. 10,184, 10,271 (Feb. 21, 2012). The Corps issued letters verifying that Nationwide Permit 12 would cover the proposed construction. Shortly thereafter, TransCanada began constructing the pipeline, which has since been completed and is currently transporting oil.
The Plaintiffs, Sierra Club, Inc., Clean Energy Future Oklahoma, and East Texas Sub Regional Planning Commission challenged the validity of the nationwide permit and verification letters. The environmental groups argued that the Corps violated NEPA by issuing the nationwide permit without considering the risk of oil spills and the cumulative environmental impacts of the pipelines. The majority began by highlighting the three claims by the Plaintiffs and the standard of review. Under the Administrative Procedure Act (APA), 5 U.S.C. §§ 701-706 (2012): "[T]he agency need only demonstrate that it considered relevant factors and alternatives . . . and that the choice it made was reasonable based on that consideration." Mt. Evans Co. v. Madigan, 14 F.3d 1444, 1453 (10th Cir. 1994).
The majority next examined the Plaintiffs' challenge to the district court's disposition of the NEPA claims. The majority concluded that the Plaintiffs waived their claims involving failure to address oil spills and cumulative impacts, and the Corps was not required to conduct an environmental analysis when verifying compliance with the nationwide permit.
NEPA requires an agency to take a "hard look" at the environmental impacts of proposed actions. Robertson v. Methow Valley Citizens Council, 490 U.S. 332, 350 (1989). If the venture involves a "major Federal action" that would "significantly affect the quality of the human environment," the agency must prepare a detailed environmental impact statement. 42 U.S.C. § 4332(2) (C) (2012). But if the future effects are unclear, the agency can prepare an environmental assessment instead of a more detailed environmental impact statement. Dep't of Transp. v. Pub. Citizen, 541 U.S. 752, 757 (2004). If the environmental assessment shows that the impact would be insignificant, the agency need not provide any further environmental report. Id. at 757-58. The Corps prepared an environmental assessment of activities permitted under Nationwide Permit 12, which was challenged by the Plaintiffs. They contend that the Corps unlawfully failed to consider: (1) the risk of oil spills associated with pipelines and d (2) the cumulative impacts of pipelines. The majority concluded that these challenges are waived based on Pub. Citizen, 541 U.S. at 764-65, in which the court articulated that parties challenging an agency's compliance with NEPA must ordinarily raise relevant objections during the public comment period.
Under Pub. Citizen, two exceptions exist. First, commenters need not point out an environmental assessment's flaw if it is "obvious." Second, a commenter does not waive an issue if it is otherwise brought to the agency's attention. Plaintiffs conceded that no commenter raised the oil spill issue. Nonetheless, the Plaintiffs contend that the issue is not waived because (1) the risk of oil spills is obvious, and (2) the Corps knew about the risk of oil spills when issuing the nationwide permit. The majority rejected both of these contentions. In addressing the "obviousness" exception, the majority held that the Plaintiffs needed to have shown that the omission of any discussion of oil-spill risks entailed an obvious flaw in the environmental assessment. The majority points out that the Plaintiffs must show that the assessment for the construction, maintenance and repair of utility lines contained an obvious flaw, not that the agency failed to discuss impacts of an obvious risk associated with certain activity. The fact that pipelines create a risk of spillage does not mean that the alleged deficiency in the Corps' environmental assessment for the construction, maintenance, and repair of utility lines would have been obvious.
Plaintiffs also argued that the Corps violated NEPA by failing to consider the cumulative impacts of oil pipelines. Because the Plaintiffs failed to raise this issue during the comment period, the majority found this issue waived as well.
Plaintiffs also argued the Corps should have prepared a NEPA analysis for the entire Gulf Coast Pipeline before issuing the verification letters. The majority disagreed, as the verifications do not constitute "major Federal action" warranting NEPA review, and the agency was not required to assess impacts of the entire pipeline.
In issuing the verifications, the Corps simply confirmed that TransCanada's activities would fall within the terms of Nationwide Permit 12. There would have been little reason for the Corps to conduct a new NEPA analysis at that point.
The majority then examined Plaintiffs claim that Nationwide Permit 12 violates section 404(e) of the Clean Water Act, which authorizes the Corps to issue nationwide permits when dredge-and-fill activities would result in minimal adverse environmental effects. 33 U.S.C. § 1344(e) (1) (2012). Plaintiffs contended that Nationwide Permit 12 violates § 404(e) by (1) authorizing linear projects with substantial environmental impacts and (2) deferring part of the minimal-impacts determination to project- level personnel. The Court disagreed and rejected these contentions based on the fact that the Plaintiffs did not show that the permit authorizes linear projects with more-than-minimal impacts, and the Corps has permissibly interpreted the statute to allow partial deferral of its minimal-impacts analysis.
Finally, Plaintiffs argued that the Corps violated the terms of its own permit by failing to document analysis of cumulative impacts in the verification letters or administrative record. The majority disagreed, stating that though district engineers must analyze cumulative impacts, the engineers need not include a written analysis of cumulative impacts within the verification letters. Though this analysis is absent in the letters, it appears in the record. Thus, the majority concluded that the Corps' issuance of the verification letters was not arbitrary or capricious.
The Court concluded that district engineers considered cumulative impacts of the proposed crossings. The Court points to three facts in particular: (1) District engineers prepared verification memoranda that describe the Corps' analysis of pipeline impacts, impose special conditions to ensure minimal impacts, and conclude that the pipeline (with proposed mitigation) would "result in no more than minimal individual and cumulative adverse environmental effects . . . ."; (2) The verification letters state that district engineers analyzed "all proposed crossings" of the pipeline "relative to the definition of single and complete project for linear projects"; and (3) Corps officials from separate districts communicated about the pipeline's verification to ensure that officials had necessary information and had fully considered the pipeline's collective impact. Based on the combination of these three facts, the Court concluded that the agency analyzed the cumulative impacts of the proposed crossings and held that the Corps' issuance of the verification letters was not arbitrary or capricious.
Judge McHugh issued a concurring opinion agreeing with the approach the majority took in analyzing and resolving the claims. However, he articulated a differing opinion on the Corps' compliance with its obligations under NEPA. The concurrence would impose a broader scope of analysis of what constitutes a major Federal action under NEPA, and a narrower scope under the Clean Water Act. The concurrence suggests that the Corps' NEPA obligations extend beyond the narrow scope of dredge and fill.
Judge Baldock also issued a concurring opinion agreeing with the Court's clear and concise opinion, but asserted that the Court should have found this case to be prudentially moot. "A case is prudentially moot if circumstances have changed since the beginning of litigation that forestall any occasion for meaningful relief." Citizen Ctr. v. Gessler, 770 F.3d 900, 909 (10th Cir. 2014). Here, the pipeline has been complete and operational for years. All the waters have been filled or rerouted and nearly all associated mitigation is complete. The concurrence points to this scenario as appropriate for prudential mootness. The concurrence acknowledged that prudential mootness is a matter of discretion and that reasonable minds can certainly differ on what is prudent here.

Panel: Bacharach, Baldock, McHugh

Date of Issued Opinion: May 29, 2015

Docket Number: No. 14-6099

Full Opinion: https://www.ca10.uscourts.gov/opinions/14/14-6099.pdf

Decided: Affirmed the decision of the trial court, entering judgment for the defendants.

Case Alert Author: Daniel T. Cornish

Counsel:

Douglas P. Hayes, Sierra Club, Boulder, Colorado (Eric E. Huber, Sierra Club, Boulder, Colorado, with him on the briefs), for Appellants.

David C. Shilton, U.S. Department of Justice, Washington, D.C. (Sam Hirsch, Acting Assistant Attorney General, Michele Walter, Maureen E. Rudolph, and Ty Bair, U.S. Department of Justice, Washington, D.C.; and Ann P. Navaro, Assistant Chief Counsel and Milton S. Boyd, Assistant Counsel, U.S. Army Corps of Engineers, with him on the brief), for Appellees.

Peter R. Steenland, Sidley Austin LLP, Washington, D.C. (Lauren C. Freeman, Lisa E. Jones, Sidley Austin LLP, Washington, D.C.; and Deidre G. Duncan, Andrew J. Turner, and Karma B. Brown, Hunton & Williams LLP, Washington, D.C., with him on the brief), for Intervenors-Appellees.

Author of Opinion: Hon. Robert E. Bacharach

Case Alert Circuit Supervisor: Barbara Bergman

    Posted By: Dawinder Sidhu @ 06/13/2015 12:46 AM     10th Circuit  

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