Millennium Pipeline Company v. Basil Seggos ( 2017 )

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued March 3, 2017 Decided June 23, 2017
No. 16-1415
MILLENNIUM PIPELINE COMPANY, L.L.C.,
PETITIONER
v.
BASIL SEGGOS AND NEW YORK STATE DEPARTMENT OF
ENVIRONMENTAL CONSERVATION,
RESPONDENTS
CPV VALLEY, LLC,
INTERVENOR
On Petition for Review from the
New York State Department of Environmental Conservation
Catherine E. Stetson argued the cause for petitioner. With
her on the briefs was Sean Marotta.
Elizabeth W. Whittle was on the brief for intervenor CPV
Valley, LLC in support of petitioner.
Brian M. Lusignan, Assistant Attorney General, Office of
the Attorney General for the State of New York, argued the
cause for respondents. With him on the brief were Eric T.
Schneidermann, Attorney General, Barbara D. Underwood,
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Solicitor General, Frederick A. Brodie, Assistant Solicitor
General, and Lisa M. Burianek, Deputy Bureau Chief.
Before: TATEL, SRINIVASAN, and WILKINS, Circuit
Judges.
Opinion for the Court filed by Circuit Judge SRINIVASAN.
SRINIVASAN, Circuit Judge: Millennium Pipeline
Company, L.L.C., would like to extend its existing natural gas
pipeline in Orange County, New York. Before it can break
ground, however, it must gain the approval of the Federal
Energy Regulatory Commission (FERC). Millennium must
also comply with environmental regulations like the Clean
Water Act, which requires it to show that its pipeline will meet
all applicable water-quality requirements. 33 U.S.C.
§ 1341(a)(1).
As part of that permitting process, Millennium submitted
an application for a water-quality certificate to the New York
State Department of Environmental Conservation. More than
a year has passed, but the Department has taken no formal
action on Millennium’s application. Millennium now asks us
to compel the Department to act on the application.
We dismiss Millennium’s petition for review. Even if the
Department has unlawfully delayed acting on Millennium’s
application, its inaction would operate as a waiver, enabling
Millennium to bypass the Department and proceed to obtain
approval from FERC. The Department’s delay, then, causes
Millennium no cognizable injury. Millennium therefore lacks
standing to proceed with its petition.
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I.
A.
For any company desiring to construct a natural gas
pipeline, all roads lead to FERC. The Natural Gas Act of 1938
vests the agency with “exclusive jurisdiction” over the
interstate transportation of natural gas. Schneidewind v. ANR
Pipeline Co., 485 U.S. 293, 300-01 (1988). No company or
person may construct a natural gas pipeline without first
obtaining “a certificate of public convenience and necessity”
from the agency. 15 U.S.C. § 717f(c).
Before FERC can issue a certificate of public convenience,
the agency must ensure that the proposed pipeline complies
with all applicable federal, state, and local regulations. See 15
U.S.C. § 717b(d); 18 C.F.R. § 4.38. The Clean Water Act, the
statute at issue in this case, is one such regulatory regime. See
33 U.S.C. § 1341(a)(1); 15 U.S.C. § 717b(d)(3). Because
Millennium’s proposed pipeline would traverse several
streams in southern New York, the Clean Water Act requires
the State to certify that any discharge from the pipeline will
comply with the Act’s water-quality requirements. 33 U.S.C.
§ 1341(a)(1). FERC cannot sign off on the construction until
New York either grants a water-quality certificate or waives the
Act’s requirements. See id.
To prevent state agencies from indefinitely delaying
issuance of a federal permit, Congress gave States only one
year to act on a “request for certification” under the Clean
Water Act. Alcoa Power Generating Inc. v. FERC, 643 F.3d
963, 972 (D.C. Cir. 2011) (quoting 33 U.S.C. § 1341(a)(1)).
That deadline is established by section 401 of the Act, which
requires a State to grant or deny the certificate “within a
reasonable period of time (which shall not exceed one year)
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after receipt of [a] request.” Id. If the State fails to act within
that period, the Act’s “certification requirements” are deemed
“waived,” such that the pipeline no longer needs a water-
quality certificate to begin construction. Id.
B.
On November 9, 2016, FERC issued a provisional
certificate of public convenience for Millennium’s proposed
project, a 7.8-mile extension of its existing natural gas pipeline.
The Commission, however, conditioned its approval on proof
of Millennium’s receipt of “all authorizations required under
federal law,” including the Clean Water Act. Millennium
Pipeline Co., 157 FERC ¶ 61,096, 2016 WL 6662548, at *35
(2016). To that end, Millennium must present FERC with
documentation of the applicable permits or evidence of waiver
thereof. Id.
Millennium had previously applied for a water-quality
certificate from the New York State Department of
Environmental Conservation. The Department received
Millennium’s request on November 23, 2015, and responded
by sending Millennium a notice of incomplete application.
Over the next year, the Department sent Millennium several
requests for supplemental information. Millennium has
complied with the Department’s requests each time. In
November 2016, the Department wrote a letter indicating that
Millennium had “fully responded” to its requests, but it would
“continue its review of the Application, as supplemented, to
determine if a valid request for a [water-quality certificate] has
been submitted.” N.Y. State Dep’t of Envtl. Conservation,
Letter on Application for Section 401 Water Quality
Certification, Freshwater Wetlands and Protection of Waters
Permit (Nov. 18, 2016). The Department stated that it had “at
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a minimum, until August 30, 2017 to either approve or deny
the Application.” Id.
Frustrated by the agency’s delay, Millennium brought a
petition for review in this Court under section 19(d)(2) of the
Natural Gas Act. That provision gives us “original and
exclusive jurisdiction” to review “an alleged failure to act by a
. . . State administrative agency acting pursuant to Federal law
to issue, condition, or deny any permit required under Federal
law.” 15 U.S.C. § 717r(d)(2). If we find that an agency has
delayed unlawfully, the Act requires us to remand the
proceeding to the agency and “set a reasonable schedule and
deadline for the agency to act on remand.” Id. § 717r(d)(3).
Millennium argues that the Department failed to act within
the Clean Water Act’s one-year statutory window, and
therefore asks us to compel the Department either to grant its
application or to take action within a specified schedule. The
Department counters that it need only act within one year of
receiving a complete or valid application, and it alleges
Millennium has repeatedly failed to meet that requirement.
II.
Before reaching the merits of Millennium’s claim, we first
examine Millennium’s standing to sue. Article III of the
Constitution limits our jurisdiction to “Cases” and
“Controversies.” U.S. Const. art. III, § 2, cl. 1. To satisfy the
case-and-controversy requirement, a petitioner must allege (i)
that it suffered an injury in fact; (ii) that a causal connection
exists between the injury and challenged conduct; and (iii) that
it is likely, as opposed to speculative, that the injury will be
redressed by a favorable decision. Lujan v. Defs. of Wildlife,
504 U.S. 555, 560-61 (1992).
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Millennium fails at the first prong. It asks us to hold that
the Department violated the Clean Water Act’s statutory
deadline. Even if that were so, Millennium would suffer no
cognizable injury from the violation. We therefore dismiss
Millennium’s petition for want of standing.
A.
All agree that the Clean Water Act gave the Department a
“reasonable period of time (which shall not exceed one year)”
to act on Millennium’s application. 33 U.S.C. § 1341(a)(1).
Millennium thus does not purport to have suffered any injury
from the Department’s inaction within that period. Millennium
instead challenges the Department’s continued, allegedly
unlawful delay, which it claims will prevent it from
constructing its pipeline.
Even if the Department has unlawfully delayed, however,
it can no longer prevent the construction of Millennium’s
pipeline. Millennium ultimately needs one permit to begin
construction on its pipeline: the certificate of public
convenience from FERC. Typically, the Clean Water Act
poses a hurdle to obtaining that certificate. The Act forbids any
federal agency from granting a license or permit until the
“certification required by [the Act] has been obtained or has
been waived.” 33 U.S.C. § 1341(a)(1) (emphasis added). That
provision also makes clear that waiver occurs after one year of
agency inaction. Id.
Once the Clean Water Act’s requirements have been
waived, the Act falls out of the equation. Id. As a result, if the
Department has delayed for more than a year—as Millennium
alleges—the delay cannot injure Millennium. Instead, the
delay triggers the Act’s waiver provision, and Millennium then
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can present evidence of waiver directly to FERC to obtain the
agency’s go-ahead to begin construction.
We have previously dismissed a petition for review for
lack of standing when faced with highly similar allegations of
state inaction. See Weaver’s Cove Energy, LLC v. R.I. Dep’t
of Envtl. Mgmt., 524 F.3d 1330, 1332 (D.C. Cir. 2008). That
case, like this one, involved a petition for review under section
19(d)(2) of the Natural Gas Act. The petitioner, a natural gas
company, claimed that two state agencies had failed to process
its applications within the Clean Water Act’s one-year
deadline. Id. Although the state agencies had acted by the time
the petitioner sought judicial review (one had provisionally
denied the certificate, while another had granted it), the
petitioner asked for a declaration that the agencies had waived
any right to deny its applications. Id.
The petitioner in Weaver’s Cove, as here, asserted its
standing was “self-evident” because it was the object of
delayed agency action. See id. at 1333. But we held that
“[e]ven a final adverse decision would not support” the
petitioner’s standing. Id. Instead, the petitioner’s theory
ultimately was that “it benefited from the agencies’ inaction”:
by delaying, the agencies had forfeited their opportunity to
deny the water-quality certificate. Id. If the petitioner was
correct, we explained, the agencies could not block the
pipeline’s construction even if they went on to deny the permit
outright, because any decision “would be too late in coming
and therefore null and void.” Id.
The same is true here. If the Clean Water Act’s
requirements are waived, there is nothing left for the
Department—and therefore for this Court—to do. Under the
Natural Gas Act, if a reviewing court finds that an agency has
unlawfully delayed, the court “shall remand the proceeding to
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the agency to take appropriate action consistent with the order
of the Court” and “shall set a reasonable schedule and deadline
for the agency to act on remand.” 15 U.S.C. § 717r(d)(3).
Millennium contends that we should require the Department to
grant its application, or, at minimum, should set a deadline for
the Department’s decision. But to what effect? If we were to
determine the Department exceeded the Clean Water Act’s
deadline, we necessarily would conclude the Clean Water
Act’s requirements have been waived. At that point, the
Department’s decision to grant or deny would have no legal
significance.
So what can Millennium do in the face of the Department’s
continued inaction? Millennium can go directly to FERC and
present evidence of the Department’s waiver. To be sure,
FERC could ultimately decline to find waiver. But in that
event, FERC—not the Department—would be blocking the
construction. See Weaver’s Cove, 524 F.3d at 1333.
Millennium could immediately appeal any adverse FERC
decision on the waiver question to this Court under section
19(b) of the Natural Gas Act, which affords judicial review to
parties aggrieved by FERC’s orders. See Alcoa, 643 F.3d at
968; 15 U.S.C. § 717r(b). And insofar as Millennium has
concerns that FERC might itself delay action, the present
petition under section 19(d)(2) could not support our review in
any event: that provision targets state agencies, and thus can
provide no basis to force FERC’s hand.
Millennium suggests that the Department might stand as
an independent barrier to construction even if FERC issues a
final certificate of public convenience. Millennium cites a
letter in which the Department “reminds” the company that,
“regardless of any action by FERC, . . . no construction
activities may commence” unless the Department issues a
water-quality certificate. See N.Y. State Dep’t of Envtl.
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Conservation, Letter on Application for Section 401 Water
Quality Certification, Freshwater Wetlands and Protection of
Waters Permit (Nov. 18, 2016). That letter, however, does not
purport to say that the Department would retain independent
authority to stop construction even if FERC were to issue a
certificate of public convenience. As the Department
acknowledged at oral argument, if FERC issues a certificate of
public convenience, Millennium would have all the authority it
needs to begin construction. See Oral Arg. Tr. 19:10-18; see
also 15 U.S.C. § 717b(e). And if the Department were to
disagree with FERC’s decision, the Department’s recourse
would be to seek review in this Court pursuant to section 19(b).
See 15 U.S.C. § 717r(b). Otherwise, the Department could no
longer block Millennium’s construction.
B.
In 2005, Congress amended section 19(d) of the Natural
Gas Act to allow this Court to compel action from foot-
dragging agencies. See Energy Policy Act of 2005, Pub. L.
109-58, 119 Stat. 594, 690 (2005). Millennium, joined by
intervenor CPV Valley, argues that our interpretation would
render Congress’s amendments toothless. We disagree. As
amended, section 19(d)’s judicial review provisions have full
force when, unlike with the Clean Water Act, there is no built-
in remedy for state inaction already in place.
The Clean Water Act’s certification requirements, as
explained, automatically expire after one year of agency delay.
33 U.S.C. § 1341(a)(1). Not all federal and state regulations
include that type of waiver provision, however. In those
circumstances, Congress recognized that state agencies could
effectively block the construction of natural gas pipelines by
indefinitely delaying action on permit applications. Congress
amended the Natural Gas Act to ensure that “sheer inactivity
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by the State” could not frustrate “the Federal application”
process. See H.R. Rep. 91-940, at 55 (1970) (Conf. Rep.), as
reprinted in 1970 U.S.C.C.A.N. 2712, 2741.
Our decision today has no effect on situations in which a
State’s “sheer inactivity” could actually frustrate the federal
permitting process. Consider our decision in Dominion
Transmission, Inc. v. Summers, 723 F.3d 238, 243 (D.C. Cir.
2013). There, we reviewed a petition brought under section
19(d)(2) for a state agency’s alleged failure to act on a Clean
Air Act permit. Id. at 242. Less than a month after receiving
the request, the state agency informed the applicant “it would
not be able to process the application.” Id. There was no
argument in Dominion Transmission that the state agency’s
inaction operated as a waiver under the Clean Air Act, as the
Act’s 18-month deadline for agency action had yet to run. See
42 U.S.C. § 7661b(c). We held that the agency had failed to
justify its refusal to act on the application, and, pursuant to
section 19(d)(3), we remanded to the agency with instructions
to complete the permitting process within a reasonable
timeframe. Id. at 245.
Likewise, a state agency’s failure to comply with
applicable FERC deadlines could trigger judicial review under
section 19(d)(2). In its 2005 amendments to the Natural Gas
Act, Congress authorized FERC to set a schedule for all federal
permits. 119 Stat. at 689. Pursuant to that authority, FERC
generally requires States to act within 90 days of the
Commission’s issuance of its own environmental report
“unless a schedule is otherwise established by Federal law.” 18
C.F.R. § 157.22. The Natural Gas Act requires state agencies
to “comply with the deadlines established by the Commission,”
15 U.S.C. § 717n(b)(2), and if a state agency exceeds FERC’s
deadline, the applicant could pursue remedies under section
19(d), id. § 717n(c)(2). Because FERC’s schedules do not
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include a waiver provision, we could remand to any delaying
agency with instructions to act on the application. See id.
§ 717r(d)(3).
Along those lines, Millennium initially suggested in this
case that the Department, in addition to exceeding the Clean
Water Act’s statutory deadline, also failed to comply with
FERC’s schedule (which required state agencies to act by
August 7, 2016). Millennium did not reiterate that argument in
its reply brief, however. And at oral argument, Millennium
indicated that the Department’s failure to meet FERC’s
deadline, rather than presenting a freestanding basis for relief,
simply bore on whether the agency had acted within a
“reasonable time” under the Clean Water Act’s waiver
provision. Oral Arg. Tr. 13:12-16. To the extent Millennium’s
argument folds into its Clean Water Act claim in that fashion,
Millennium lacks standing for the reasons discussed above.
And even if Millennium sought to make a separate argument
about FERC’s schedule, it would lose on the merits. FERC’s
regulations specify that its deadlines under the Natural Gas Act
apply “unless a schedule is otherwise established by Federal
law.” 18 C.F.R. § 157.22 (emphasis added). The Clean Water
Act, a federal law, establishes just such a statutory schedule. In
fact, FERC anticipated that agencies acting pursuant to the
Clean Water Act would not be bound by its deadlines. See
Regulations Implementing the Energy Policy Act of 2005, 71
Fed. Reg. 62,912, 62,915 n.18 (Oct. 27, 2006). The Clean
Water Act thus provides the only applicable deadline for our
purposes.
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* * * * *
For the foregoing reasons, the petition for review is
dismissed.
So ordered.