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Media Alerts - Delaware Riverkeeper Network v. Secretary Pennsylvania Department of Environmental Protection - Third Circuit
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August 12, 2016
  Delaware Riverkeeper Network v. Secretary Pennsylvania Department of Environmental Protection - Third Circuit
Headline: Third Circuit rejects challenges to the expansion of the Transcontinental Pipeline

Area of Law: Environmental

Issue(s) Presented: Were the permits for the expansion of the Transcontinental Pipeline issued by state agencies appropriate?

Brief Summary:

The Court denied challenges by environmental groups to the Federal Energy Regulatory Commission's (FERC) approval of expansion of the transcontinental gas pipeline operated by Transco. The expansion involved construction of four new pipeline "loops" and the upgrade of turbines at four compressor stations in Pennsylvania and New Jersey. FERC completed an Environmental Assessment of the project and issued a Certificate of Public Convenience and Necessity. The certificate was conditioned on Transco's receipt of "all applicable authorizations under federal law" enumerated in the Environmental Assessment, some of which were to be obtained from New Jersey and some from Pennsylvania. The Pennsylvania and New Jersey Departments of Environmental Protection (PADEP and NJDEP) reviewed the expansion proposal for potential water quality impacts, and both issued the permits required by FERC's Environmental Assessment. Environmental groups challenged the underlying state agency decisions. The Court concluded that NJDEP and PADEP did not act arbitrarily or capriciously in issuing the permits and thus denied the petitions.

Extended Summary:

Transcontinental Gas Pipe Line Company, LLC (Transco), operates the Transcontinental pipeline, a 10,000-mile pipeline that extends from South Texas to New York City. Transco requested federal approval for the expansion of the Leidy Line, which connects gas wells in Central Pennsylvania with the main pipeline. The project consisted of the construction of four new pipeline "loops" and the upgrade of turbines at four compressor stations in New Jersey and Pennsylvania. Loops are sections of pipe connected to the main pipeline system that reduce the loss of gas pressure and increase the flow efficiency of the system. Compressor stations serve a similar function, using turbines to increase the pressure and rate of flow at given points along the pipeline's route. Transco proposed installing approximately thirty miles of loops. FERC completed the requisite Environmental Assessment in August 2014, and issued the certificate of public convenience and necessity. The certificate was conditioned on Transco's receipt of "all applicable authorizations under federal law" enumerated in the Environmental assessment, some of which were to be obtained from New Jersey and some from Pennsylvania.

Under the Clean Water Act, the Pennsylvania and New Jersey Departments of Environmental Protection (PADEP and NJDEP) reviewed the expansion proposal for potential water quality impacts. Both agencies issued the necessary permits. The New Jersey portion of the project is substantially complete. Several environmental groups challenged the state permits. The petitions were consolidated for review.

The Court first rejected PADEP and NJDEP's challenge that the Court lacked subject matter jurisdiction to review the petitions. The Riverkeeper and the Foundation, in petitioning the court for review, invoked Section 19(d) of the Natural Gas Act that confers original jurisdiction on Courts of Appeals over certain state and federal permitting actions for interstate natural gas pipelines. Both PADEP and NJDEP contested whether that provision applied, as they alleged that they did not act "pursuant to Federal law' in issuing Water Quality Certifications, permits, and Letters of Interpretation to Transco. The Court found that that although the Clean Water Act makes clear that states have the right to promulgate water quality standards as they see fit, the issuance of Water Quality Certification is not purely a matter of state law. Specifically, a Water Quality Certification confirms compliance with sections of the Clean Water Act, therefore it cannot exist without federal law. The Court also found that each of the permits issued by NJDEP were rooted in NJDEP's exercise of authority that it assumed pursuant to Sections 401 and 404 of the Clean Water Act.

The Court also dismissed NJDEP and Transco's argument that the petition for review was moot because construction was complete and Transco had been conducting mitigation and restoration. Thus, any procedural remedy would be ineffectual. Holding that the central question in a mootness analysis is "whether changes in circumstances that prevailed at the beginning of the litigation have forestalled any occasion for meaningful relief, the Court concluded that the case was not moot, as NJDEP may monitor mitigation outcomes following completion of mitigation. Therefore, possible effectual relief remained because future environmental analysis might lead NJDEP to require additional mitigation from Transco.

The Court also rejected PADEP and NJDEP's assertions that the petitions were barred by the sovereign immunity provided by the Eleventh Amendment. The Court held that New Jersey and Pennsylvania's voluntary participation in the regulatory schemes of the Natural Gas Act and the Clean Water Act constituted a waiver of sovereign immunity, given the clear language in those statutes subjecting their actions to federal review. A state may waive its immunity by engaging in conduct that demonstrates the state's consent to suit in federal court. The Court concluded that Section 19(d) of the Natural Gas Act grants the Courts of Appeals jurisdiction to review "state agency action" and the language is unambiguous. New Jersey and Pennsylvania's participation in the regulatory scheme of the Clean Water Act with respect to interstate natural gas facilities, pursuant to Section 19(d), constituted a waiver of their immunity from suits brought under the Natural Gas Act. In effect, Section 19(d) of the Natural Gas Act created a small carve out from sovereign immunity. Under this limited carve out, federal judicial review is proper over those state actions regarding interstate natural gas facilities pursuant to the Clean Water Act and the Clean Air Act.

The Court ultimately held that the petitions lacked merit. The Court reviewed the state agencies' interpretation of federal law and reviewed under the arbitrary and capricious standard state actions take pursuant to federal law. Agency action is arbitrary and capricious when the agency fails to examine the relevant data and articulate a satisfactory explanation for its action including a rational connection between facts found and the choice made. The Court concluded that NJDEP did not act arbitrarily or capriciously with respect to three errors alleged by the Foundation: NJDEP deprived the Foundation of sufficient opportunity to comment, NJDEP issued the Freshwater Wetlands Individual Permits based on unsupported conclusions, and NJDEP erred in determining that Transco met the requirements for the Flood Hazard Area Individual Permits and hardship exceptions for those permits. The Court also concluded that that PADEP did not act arbitrarily or capriciously in regards to the two challenges raised by the Riverkeeper: PADEP failed to review an environmental assessment prepared by Transco before issuing the Water Quality Certification, as required by state regulations; and the material that PADEP did review were substantially insufficient. The Court determined that the Riverkeeper had failed to demonstrate prejudice from the alleged errors.

The full opinion can be found at http://www2.ca3.uscourts.gov/opinarch/152122p.pdf

Panel: Greenaway, Jr., Scirica, and Roth, Circuit Judges

Argument Date: October 29, 2015

Date of Issued Opinion: August 8, 2016

Docket Number: No. 15-2122; 15-2158

Decided: Denied

Case Alert Author: Cynthia C. Pereira

Counsel: Aaron J. Stemplewicz (Argued) Counsel for Petitioners Delaware Riverkeeper Network and Maya Van Rossum; Katherine V. Dresdner, Aaron Kleinbaum, Susan J. Kraham Edward Lloyd (Argued), Counsel for Petitioners New Jersey Conservation Foundation Stony Brook Millstone Watershed Association and Friends of Princeton Open Space; Joseph S. Cigan, III (Argued), Kimberly Hummel Childe, Margaret O. Murphy, Curtis C. Sullivan, Counsel for Respondents Secretary Pennsylvania Department of Environmental Protection and Pennsylvania Department of Environmental Protection; Pamela S. Goodwin, Patrick F. Nugent, John F. Stoviak (Argued), Elizabeth U. Witmer, Counsel for Intervenor Respondent Transcontinental Gas Pipe Line Corp.; Mark A. Collier, John E. Doyle, Timothy P. Malone, Lewin J. Weyl (Argued), Counsel for Respondent New Jersey Department of Environmental Protection; Michael K. Rutter, Heather N. Oehlmann, Christine A. Roy (Argued), Richard G. Scott, Counsel for Respondent Transcontinental Gas Pipe Line Corp

Author of Opinion: Circuit Judge Roth

Circuit: Third Circuit

Case Alert Circuit Supervisor: Prof. Susan L. DeJarnatt

    Posted By: Susan DeJarnatt @ 08/12/2016 01:35 PM     3rd Circuit  

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