Turlock Irrigation District v. FERC ( 2022 )

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued April 11, 2022 Decided June 17, 2022
No. 21-1120
TURLOCK IRRIGATION DISTRICT AND MODESTO IRRIGATION
DISTRICT,
PETITIONERS
v.
FEDERAL ENERGY REGULATORY COMMISSION,
RESPONDENTS
AMERICAN WHITEWATER, ET AL.,
INTERVENORS
Consolidated with 20-1121
On Petitions for Review of Orders
of the Federal Energy Regulatory Commission
Misha Tseytlin argued the cause for petitioners. With him
on the briefs were Charles R. Sensiba, Morgan M. Gerard, and
Kevin M. LeRoy.
Michael A. Swiger was on the brief for Hydropower amici
curiae in support of petitioners.
Jared B. Fish, Attorney, Federal Energy Regulatory
2
Commission, argued the cause for respondent. With him on the
brief were Matthew R. Christiansen, General Counsel, and
Robert H. Solomon, Solicitor.
Eric M. Katz, Supervising Deputy Attorney General, Office
of the Attorney General for the State of California, argued the
cause for intervenor California State Water Resource Control
Board in support of respondent. With him on the brief were Rob
Bonta, Attorney General, Robert W. Byrne, Senior Assistant
Attorney General, and Jennifer Kalnins Temple and Adam L.
Levitan, Deputy Attorneys General.
Julie Gantenbein, Lena H. Hughes, Joseph Palmore, and
Andrew McAleer Hawley were on the brief for Intervenors
Tuolumne River Trust, et al. in support of respondent.
Robert W. Ferguson, Attorney General, Office of the
Attorney General for the State of Washington, Kelly T. Wood
and Gabrielle Gurian, Assistant Attorneys General, Philip J.
Weiser, Attorney General, Office of the Attorney General for the
State of Colorado, Carrie Noteboom, First Assistant Attorney
General, William Tong, Attorney General, Office of the
Attorney General for the State of Connecticut, Jill Lacedonia,
Assistant Attorney General, Karl A. Racine, Attorney General,
Office of the Attorney General for the District of Columbia,
Caroline Van Zile, Acting Solicitor General, Kwame Raoul,
Attorney General, Office of the Attorney General for the State
of Illinois, Aaron M. Frey, Attorney General, Office of the
Attorney General for the State of Maine, Brian Frosh, Attorney
General, Office of the Attorney General for the State of
Maryland, Adam D. Snyder, Assistant Attorney General, Keith
Ellison, Attorney General, Office of the Attorney General for
the State of Minnesota, Peter N. Surdo, Special Assistant
Attorney General, Matthew J. Platkin, Acting Attorney General,
Office of the Attorney General for the State of New Jersey, Lisa
3
J. Morelli, Deputy Attorney General, Hector Balderas, Attorney
General, Office of the Attorney General for the State of New
Mexico, William Grantham, Assistant Attorney General, Letitia
James, Attorney General, Office of the Attorney General for the
State of New York, Barbara D. Underwood, Solicitor General,
Brian Lusignan, Assistant Attorney General, Joshua S. Stein,
Attorney General, Office of the Attorney General for the State
of North Carolina, Asher P. Spiller, Assistant Attorney General,
Ellen F. Rosenblum, Attorney General, Office of the Attorney
General for the State of Oregon, Paul Garrahan,
Attorney-in-Charge, Thomas J. Donovan, Jr., Attorney General,
Office of the Attorney General for the State of Vermont, Laura
B. Murphy, Assistant Attorney General, Maura Healey, Attorney
General, Office of the Attorney General for the State of
Massachusetts, Matthew Ireland, Assistant Attorney General,
Turner H. Smith, Assistant Attorney General and Deputy Chief,
Josh Shapiro, Attorney General, Office of the Attorney General
for the Commonwealth of Pennsylvania, Aimee D. Thomson,
Deputy Attorney General, Jason Miyares, Attorney General,
Office of the Attorney General for the Commonwealth of
Virginia, were on the brief for amici curiae States of
Washington, et al. in support of respondents.
Before: WILKINS and WALKER, Circuit Judges, and
RANDOLPH, Senior Circuit Judge.
Opinion for the Court filed by Senior Circuit Judge
RANDOLPH.
RANDOLPH, Senior Circuit Judge: An applicant for a federal
license to operate a hydroelectric facility must seek a State
certification that the facility’s discharges will comply with the
water quality standards specified in federal law. 33 U.S.C.
§ 1341(a)(1). The State may grant the applicant’s request
outright, or it may grant the request subject to conditions
4
relating to water quality, or it may deny the request, or it may
fail to act. If the State agency denies certification, no federal
license, or at least no federal long-term license, may issue. See
id. § 1341(d).
This case presents questions about the directive in section
401 of the Clean Water Act that if “the State . . . fails or refuses
to act on a request for certification” within one year from
receiving the request, the State “shall” be deemed to have
waived its authority to grant or deny water quality certification.
Id. § 1341(a)(1).
The Federal Energy Regulatory Commission decides
whether to license private, municipal and State hydroelectric
projects subject to federal jurisdiction. See 16 U.S.C. §§ 797(e),
817(1).1 This case arose from a combined licensing and re-
licensing proceeding for two hydroelectric facilities in
California. The administrative record is as follows.
Both of the hydroelectric facilities – the Don Pedro Project
and the La Grange Project – are on the Tuolumne River in
central California. The Turlock and Modesto Irrigation Districts
own the facilities. FERC’s predecessor agency granted a fifty-
year license to operate the Don Pedro Project. The license
expired in 2016. The other, quite smaller project – La Grange
– has operated since the 1890’s but in 2012 FERC decided that
La Grange was subject to federal licensing authority. We
1
FERC has licensing authority over only non-federal
hydroelectric projects. Federally-owned hydroelectric projects, which
generate about half of all hydroelectric power in the United States,
“are managed primarily by the U.S. Department of the Interior’s
Bureau of Reclamation [] and the U.S. Army Corps of Engineers . . ..”
KELSI BRACMORT ET AL., CONG. RSCH. SERV., R42579,
HYDROPOWER: FEDERAL AND NONFEDERAL INVESTMENT 2, 6 (2015).
5
upheld FERC’s decision in Turlock Irrigation District v. FERC,
786 F.3d 18 (D.C. Cir. 2015).
In 2017, the Districts filed with FERC a new license
application for the La Grange Project and an amended
relicensing application for the Don Pedro Project.
On January 26, 2018, the Districts filed certification
requests for both projects with the California State Water
Resources Control Board. On January 24, 2019 – 363 days later
– the California Board denied the requests “without prejudice.”
The California Board gave two reasons. The first: “FERC has
not yet completed its National Environmental Policy Act
(NEPA) environmental analysis for the Projects.” J.A. 820. The
second: “the Districts, as lead agencies for the Projects, have not
begun the CEQA [California Environmental Quality Act]
process. Without completion of the CEQA process, the State
Water Board cannot issue a certification.” Id. The Board added
that its denial was not a “judgment on the technical merits.” Id.On April 22, 2019, the Districts sent the Board
“substantively unchanged” certification requests for the Projects.
Turlock Irrigation Dist. & Modesto Irrigation Dist., 174 FERC
¶ 61,042, at P. 8 (2021) (“Declaratory Order”). On April 20,
2020 – 364 days later – the Board again denied the requests
“without prejudice.” The Board gave the same explanation as
it had before.2
2
The California Board’s full reasoning was the following:
The Districts are the lead agencies for the Project for
purposes of CEQA compliance, but they have not
begun the CEQA process. As a responsible agency,
the State Water Board relies on the environmental
document prepared by the lead agency, but makes its
6
The Districts sent a third certification request for both
projects to the California Board in July 2020. In October of that
year, while these requests were pending, the Districts filed a
petition with FERC seeking a declaratory order that the
California Board had waived section 401(a)(1)’s State
certification requirement. One month later, the Districts
informed the California Board that they were withdrawing their
certification applications. Despite the Districts’ withdrawal of
these requests, in January 2021 the California Board granted
certification for both Projects.3 Although the Districts had still
not completed the CEQA process for the Projects, California law
had changed to allow the California Board to grant certification
prior to the completion of that process. Declaratory Order, at
P. 11 & n.25; see Cal. Water Code § 13160(b)(2) (2020).
The Districts object to the conditions – some forty-five –
that the California Board imposed in granting their requests for
own determination as to whether and with what
conditions to grant the certification, taking into
consideration the information provided in the lead
agency’s document. (Pub. Resources Code,
§§ 21080.1, subd. (a), 21002.1, subd. (d).) The State
Water Board may not issue a certification until the
requirements for compliance with CEQA are met.
Additionally, the Federal Energy Regulatory
Commission has not yet completed its National
Environmental Policy Act environmental process for
the Project.
J.A. 1159.
3
The Districts are challenging the Board’s action in California
State court. See Petitioners Br. iii; California Board Intervenor Br. 19;
Turlock Irrigation Dist. v. State Water Res. Control Bd., No. CV63819
(Cal. Super. Ct., Tuolumne County, filed May 11, 2021).
7
certification. If the California Board did not waive its
certification authority under section 401(a)(1), those conditions
would be mandatory. See 33 U.S.C. § 1341(d). On the other
hand, if the California Board had waived its section 401(a)(1)
authority, the conditions would become only
“recommendations” for FERC to consider in developing the
terms and conditions of the Districts’ federal licenses under
Federal Power Act § 10(a), 16 U.S.C. § 803(a). FED. ENERGY
REGUL. COMM’N, OFF. OF ENERGY PROJECTS, DIV. OF
HYDROPOWER LICENSING, PREPARING ENVIRONMENTAL
DOCUMENTS: GUIDELINES FOR APPLICANTS, CONTRACTORS,
AND STAFF 10 (2008).
FERC denied the Districts’ petition for a declaratory order.
Declaratory Order, at PP. 1, 20–35. The Districts petitioned for
rehearing which FERC denied. Turlock Irrigation Dist. &
Modesto Irrigation Dist., 175 FERC ¶ 61,144, at PP. 11–21
(2021) (“Rehearing Order”).4 FERC reasoned that the
California Board, “by denying the applications without
prejudice, indeed acted on [] them . . ..” Declaratory Order, at
P. 28. FERC relied on section 401’s “plain language,” which
requires that a State “act” on a certification request within one
year. Id. at P. 33; Rehearing Order, at P. 11. FERC
distinguished the California Board’s denials without prejudice
from Hoopa Valley Tribe v. FERC, 913 F.3d 1099 (D.C. Cir.
2019), which FERC said involved “a coordinated withdrawal
and resubmittal scheme” that allowed the State agencies to not
act and still avoid waiver. Rehearing Order, at PP. 16. Because
section 401 requires only action within a year to avoid waiver,
FERC also rejected the Districts’ argument that the California
Board’s denials were “invalid” as a matter of federal law
because they were “on non-substantive grounds” and not “on the
4
Commissioner James P. Danly dissented from the denial of
rehearing.
8
technical merits of the certification requests.” Declaratory
Order, at PP. 30–32; see Rehearing Order, at P. 11.
We agree with FERC that the California Board did not
waive its certification authority under section 401(a)(1) and that
FERC’s ruling is not contrary to Hoopa Valley. The Fourth
Circuit accurately described Hoopa Valley as a case in which
“the state agencies and the license applicant entered into a
written agreement that obligated the state agencies, year after
year, to take no action at all on the applicant’s § 401
certification request.” N.C. Dep’t of Env’t Quality v. FERC, 3
F.4th 655, 669 (4th Cir. 2021).
Those circumstances are not present in this case. Each time
the California Board denied certification, the Board “act[ed]”
within the meaning of section 401(a)(1). See N.Y. State Dep’t
of Env’t Conservation v. FERC, 884 F.3d 450, 456 (2d Cir.
2018); N.Y. State Dep’t of Env’t Conservation v. FERC, 991
F.3d 439, 450 n.11 (2d Cir. 2021). And when the Board granted
the third application subject to conditions, it “act[ed]” once
more. Contrast this with Hoopa Valley. The action
contemplated in section 401(a)(1) is action by the State agency.
Yet the response of the State agencies to the certification
requests in Hoopa Valley was not action, but inaction.5 By
5
That was also the situation in Placer County Water Agency, 167
FERC ¶ 61,056 (2019), on reh’g, 169 FERC ¶ 61,046 (2019), as
FERC pointed out in its Declaratory Order, at P. 24, and in its
Rehearing Order, at P. 18, in this case. In Placer County, e-mails
showed that the state agency “elicit[ed] a withdrawal and
resubmission” of the certification application shortly before the
one-year deadline. Declaratory Order, at P. 24.
And “inaction” also described how FERC dealt with a different
deadline in a different statute. See Allegheny Def. Project v. FERC,
964 F.3d 1, 13 (D.C. Cir. 2020) (en banc). There, FERC granted
9
agreement, the applicant filed and then withdrew its certification
request before the one-year period expired, a ritual repeated for
more than ten years. Hoopa Valley, 913 F.3d at 1101–02, 1104.6
There was no such agreement between the Districts and the
California Board. The court’s opinion in Hoopa Valley stressed
that the applicant’s “water quality certification request has been
complete and ready for review for more than a decade.” Id. at
1105. Here, the Districts’ requests were not complete and they
were not ready for review, which is why the California Board
denied them. The Board’s denials were “without prejudice,”7
rehearing solely “for the purpose of affording additional time to
consider the merits of a rehearing request.” Rehearing Order, at P. 11.
The denials in this case occurred for a different reason, namely that the
California Board lacked information that it needed to grant
certification. This included the completion of the CEQA process,
which the Districts had not even begun.
6
The evidence in Hoopa Valley tended to show that the applicant
did not want an immediate license that would have required
decommissioning some of the project’s dams in line with current
federal environmental standards. See PacifiCorp, 147 FERC ¶ 61,216,
at PP. 3–5, 11 n.11, 17 (2014). The applicant may have been using
this delay tactic in the hope of obtaining federal funding before being
required to decommission the dams. See id. at PP. 5, 12–13 & n.13.
And the applicant had an incentive to delay: while awaiting
relicensing, FERC must issue annual licenses that allow for the
continued operation of hydroelectric projects under the terms of the
existing, expired license. See 16 U.S.C. § 808(a)(1). The applicant’s
expired license was issued in 1954 and presumably included far fewer
environmental conditions than are required under current federal law.
PacifiCorp, at P. 11 & n.11.
7
In context, the words “without prejudice” signified that the
Districts could apply again, and that the Board’s decision did not have
preclusive effect. This would have been evident from the Board’s
reasoning even without the quoted words, which is doubtless why the
10
but those rulings still had the legal effect under section 401 of
precluding FERC from issuing licenses to the Districts during
the period preceding the Board’s grant of the certifications. See
33 U.S.C. § 1341(d).
The Districts’ answer to these points is that if we uphold
FERC’s ruling, State agencies could extend the time for decision
indefinitely by denying one certification request after another
without prejudice, thus nullifying section 401’s one-year limit.
The Districts’ argument takes the familiar form of the slippery
slope. But as with any slippery slope argument, its power to
persuade is a function of the plausibility of its predictions.
In response to the Districts’ argument in the administrative
proceedings FERC stated: “It may be that the courts will find
repeated denials without prejudice, particularly those that do not
rest on any substantive conclusions, to be the equivalent of the
withdrawal-and-resubmittal scheme.” Declaratory Order, at P.
33.8 FERC continued: “Given, however, that the state in this
case appears to have satisfied the statutory mandate for action,
we are not prepared to conclude based on the record before us
that the state has waived its section 401 authority.” Id.It is also important to recognize that slippery slope
arguments often can be turned against themselves. Potentially,
for each slippery slope there is an opposing slope. “As in all
arguments from consequences, drawing attention to the
Districts’ counsel stated at oral argument that “nothing” in their case
depended on “the words without prejudice.” Oral Arg. 7:22–23.
8
Whether the Districts’ hypothetical is plausible may depend on
whether the State agency, in issuing denials, is complying with State
law, which in turn may depend on the State agency’s reasons for
denying the applications.
11
[supposed] bad outcomes of one course of action is not enough;
one has to show that the alternative courses of action don’t have
just as bad (or even worse) consequences themselves.” David
Enoch, Once You Start Using Slippery Slope Arguments, You’re
on a Very Slippery Slope, 21 OXFORD J. LEGAL STUD. 629, 636
(2001).
Counsel for FERC put the opposing slope this way. What
the Districts propose could lead to “gamesmanship.”
Respondent Br. 35. Applicants could file certification requests
lacking sufficient documentation. “That would leave the State
in an untenable position.” Id. Given the Districts’ contention
“that a within-one-year denial must be ‘on the merits’ to avoid
waiver . . . the State would be stuck with the Hobson’s choice of
either granting certification [without necessary information] or
waiving its power to” decide. Id.In deciding not to adopt the Districts’ proposed
interpretation of section 401(a)(1) FERC thus made what can
only be regarded as a quite rational judgment. The Districts’
remaining arguments do not merit discussion and have been
denied for the reasons given by FERC.
The petitions for judicial review are denied.