Berkshire Environmental Action Team, Inc. v. Tennessee Gas Pipeline Co.

United States Court of Appeals
For the First Circuit
No. 16-2100
BERKSHIRE ENVIRONMENTAL ACTION TEAM, INC.; JEAN ATWATER-
WILLIAMS; RONALD M. BERNARD; CATHY KRISTOFFERSON; CHERYL D.
ROSE; IRVINE SOBELMAN; PAULA L. TERRASI; SUSAN K. THEBERGE;
ROSEMARY WESSEL; KATHRYN R. EISEMAN; ARIEL S. ELAN; ELLIOT
FRATKIN; MARTHA A. NATHAN; KENNETH HARTLAGE; RONALD R. COLER;
JANE WINN; HEATHER MORRICAL,
Petitioners,
v.
TENNESSEE GAS PIPELINE COMPANY, LLC; MASSACHUSETTS DEPARTMENT OF
ENVIRONMENTAL PROTECTION,
Respondents.
PETITION FOR REVIEW OF AN ORDER OF
THE MASSACHUSETTS DEPARTMENT OF ENVIRONMENTAL PROTECTION
Before
Kayatta, Circuit Judge,
Souter, Associate Justice,*
and Selya, Circuit Judge.
Richard A. Kanoff, with whom Susan E. Stenger, Saqib Hossain,
and Burns & Levinson LLP were on brief, for petitioners.
Matthew Ireland, Assistant Attorney General, Environmental
Protection Division, with whom Seth Schofield, Assistant Attorney
General and Senior Appellate Counsel, Energy and Environment
Bureau, Office of the Attorney General of Massachusetts, Maura
Healey, Attorney General of Massachusetts, and Turner Smith,
* Hon. David H. Souter, Associate Justice (Ret.) of the
Supreme Court of the United States, sitting by designation.
Assistant Attorney General, Environmental Protection Division,
were on brief, for Massachusetts Department of Environmental
Protection.
James L. Messenger, with whom Brian J. Wall, Gordon Rees
Scully Mansukhani, LLP, J. Curtis Moffatt, and Mosby G. Perrow
were on brief, for Tennessee Gas Pipeline Company, LLC.
March 15, 2017
KAYATTA, Circuit Judge. In this unusual petition for
review arising out of a state administrative proceeding, the
petitioners themselves argue that we lack jurisdiction to hear
their complaints about what has transpired to date before the state
agency. Because the agency itself has not yet finally acted on
the matter that is before it as is required to invoke our
jurisdiction under 15 U.S.C. § 717r(d)(1), we agree and dismiss
the petition.
I. Background
The Natural Gas Act ("NGA") requires a natural gas
company to obtain from the Federal Energy Regulatory Commission
("FERC") a certificate of public convenience and necessity before
it may construct new natural gas transportation facilities or
expand existing ones. 15 U.S.C. § 717f(c)(1)(A). FERC is
responsible for coordinating all federal authorizations applicable
to the process. Id. § 717n(b)(1). The NGA also expressly
preserves the rights of states under the Coastal Zone Management
Act of 1972, 16 U.S.C. §§ 1451–1466; the Clean Air Act, 42 U.S.C.
§§ 7401–7671q; and the Clean Water Act ("CWA"), 33 U.S.C. §§ 1251–
1388. See 15 U.S.C. § 717b(d). Under the CWA, any applicant for
a federal license to construct or operate facilities that may
result in discharge into navigable waters must "provide the
licensing or permitting agency"--here, FERC--"a certification from
the State in which the discharge originates or will originate."
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33 U.S.C. § 1341(a)(1). The state, in turn, must evaluate the
proposed project's compliance with certain provisions of the CWA
and set forth limitations and monitoring requirements "necessary
to assure that any applicant for a Federal license or permit will
comply" with the CWA "and with any other appropriate requirement
of State law set forth in such certification." Id. § 1341(d). A
condition imposed under the state's certification "shall become a
condition on any Federal license or permit subject to the
provisions of this section." Id.
On July 31, 2014, Tennessee Gas Pipeline Company, LLC
("Tennessee Gas") applied to FERC for a certificate of public
convenience and necessity, which FERC eventually issued in
March 2016 subject to, among other things, filing of proof that
Tennessee Gas has received "all applicable authorizations required
under federal law (or evidence of waiver thereof)." In pursuit of
one such authorization (or waiver thereof), Tennessee Gas
submitted an application to the Massachusetts Department of
Environmental Protection ("MassDEP") for water quality
certification on June 30, 2015. On June 29, 2016, after almost a
full year during which interested citizens and environmental
organizations (including Petitioners) participated in a
nontestimonial notice-and-comment process, Tennessee Gas received
conditional certification for its proposed project in a letter
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from the Western Regional Office of MassDEP signed by Wetlands
Program Chief David Cameron.
The letter contained over forty conditions to the
project's approval, including a condition--"Condition 15"--
forbidding Tennessee Gas from conducting any "work subject to this
Certification, including the cutting of trees," until "the
expiration of the Appeal Period set forth below and any appeal
proceedings that may result from an appeal." The conditional
certification also described the appeal process, explaining that
"[c]ertain persons shall have a right to request an adjudicatory
hearing concerning certifications by the Department," including
"[a]ny person aggrieved by this certification who has submitted
written comments during the public comment period." In accordance
with Massachusetts regulations on the subject, the conditional
certification provided that any person who wished to appeal was
required to submit a Notice of Claim for Adjudicatory Hearing
within twenty-one days of the certification's issuance.
Petitioners took advantage of this provision, filing a
Notice of Claim for Adjudicatory Hearing on July 20, 2016. In
response, Tennessee Gas opposed Petitioners' request for a hearing
and sought a stay of further administrative proceedings, claiming
that once the agency had issued a conditional water quality
certification, the state's involvement in the process was at an
end, with any further review to be pursued through a petition to
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this court. Petitioners disagreed, as did MassDEP, which denied
Tennessee Gas's request for a stay and moved forward, scheduling
a final decision to be issued by April 3, 2017. In early August
2016, Tennessee Gas filed suit in the District of Massachusetts
seeking to bar MassDEP from engaging in further review.
Petitioners, in turn, hedged their bets. They filed the petition
now before us in order to preserve some review of the June 29
conditional water quality certification in the event that
Tennessee Gas was correct. At the same time, they asked us to
reject their petition on the grounds that Tennessee Gas is not
correct; that is to say, they claim that our review is premature
until MassDEP completes its adjudicatory process.
II. Discussion
A.
We begin with the language of the statute that grants us
the jurisdiction putatively invoked by this petition. We have
exclusive jurisdiction "over any civil action for the review of an
order or action of a . . . State administrative agency acting
pursuant to Federal law [in ruling on an application, as pertinent
here, for a water quality certification under 33 U.S.C.
§ 1341(a)(1)]." 15 U.S.C. § 717r(d)(1). In a literal sense, state
agencies repeatedly take "action" in connection with applications
for water quality certifications. They docket applications,
review them, and express opinions about them. We see no reason,
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though, to think that Congress wanted us to exercise immediate
review over such preliminary and numerous steps that state agencies
may take in processing an application before they actually act in
the more relevant and consequential sense of granting or denying
it.
Pushing back on this common sense conclusion, Tennessee
Gas points to the fact that § 717r(d)(1) employs the term "action,"
bereft of the modifier "final." This contrasts with, for example,
the text employed in the Administrative Procedure Act ("APA"), 5
U.S.C. § 704 ("Agency action made reviewable by statute and final
agency action for which there is no other adequate remedy in a
court are subject to judicial review."), and with the text of 15
U.S.C. § 717r(b), which permits judicial review of FERC orders
only after FERC's denial of an application for rehearing.
Therefore, reasons Tennessee Gas, we should infer that, by
authorizing our review of state agency action, Congress did not
limit such review to final agency action.
Such a negative inference might have interpretative
force in dealing with some other subject matter. See generally,
e.g., Barnhart v. Sigmon Coal Co., 534 U.S. 439, 452 (2002)
(articulating the rule of statutory construction that courts
should typically infer that Congress intends differences in
statutory language to effect differences in statutory
application). Here, though, the subject matter is judicial review
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of agency action, which review Congress creates in the context of
a long-standing and well-settled "strong presumption . . . that
judicial review will be available only when agency action becomes
final." Bell v. New Jersey, 461 U.S. 773, 778 (1973) (citing FPC
v. Metro. Edison Co., 304 U.S. 375, 383-85 (1938)). To say that
silence on the subject implies no requirement of finality would be
to recognize this "strong presumption" only when it is of little
benefit.
It is also unclear that Congress's reference to FERC's
internal review process in § 717r(b), coupled with the lack of a
similar reference in § 717r(d)(1) to the internal review processes
of state agencies, even raises the inference that Tennessee Gas
claims. Rather, there is a more plausible explanation for
Congress's decision to write the statute this way: unlike the
FERC procedures described in § 717r(b), which are the same for any
applicant proposing a project in any state or states, the state
procedures giving rise to orders reviewable under § 717r(d)(1) may
(and undoubtedly do) vary widely from jurisdiction to
jurisdiction. Thus, whereas it is reasonable to interpret a
reference to FERC's rehearing process as a signal that final agency
action is required under § 717r(b), it does not make sense to draw
the negative inference that the lack of a reference in § 717r(d)(1)
to the variegated internal review mechanisms deployed by state
agencies sends the opposite signal. Simply put, the text of
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§ 717r(d)(1), on its own or read alongside § 717r(b), does not
rebut the strong presumption that judicial review is available
only following final agency action.
Further reinforcement for the strong presumption
restricting review until an agency has taken final action resides
in Congress's numerous efforts to prevent states from unreasonably
delaying the performance of their reserved roles in connection
with natural gas projects. In connection with any permit required
by federal law, § 717r(d)(2) authorizes the United States Court of
Appeals for the District of Columbia to issue injunctive relief
when a state agency "fail[s] to act" on such a permit in accordance
with a schedule established by FERC. Where the permit is a water
quality certification required by 33 U.S.C. § 1341(a)(1), a state
waives its right in connection with a FERC application if it "fails
or refuses to act on a request for certification, within a
reasonable period of time (which shall not exceed one year) after
receipt of such request.” Id. The very fact that Congress has
granted us the unusual ability to review directly (and on an
expedited basis, 15 U.S.C. § 712r(d)(5)) action by a state agency
can itself be seen as further evidence that Congress sought to
reduce the potential for the use of delay to block natural gas
projects. Certainly nothing in the legislative history of
§ 717r(d)(1) belies that perception. See Islander E. Pipeline Co.
v. Conn. Dep't of Envtl. Prot., 482 F.3d 79, 85 (2d Cir. 2006)
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("[A]pplicants . . . were encountering difficulty proceeding with
natural gas projects that depended on obtaining state agency
permits." (citing Regional Energy Reliability and Security: DOE
Authorization to Energize the Cross Sound Cable: Hearing Before
the H. Subcomm. on Energy & Air Quality, 108th Cong. 8 (2004)
(statement of Rep. Barton), and Natural Gas Symposium: Symposium
Before the S. Comm. on Energy & Nat. Res., 109th Cong. 41 (2005)
(statement of Mark Robinson, Director, Office of Energy Projects,
FERC))). A Congress that placed so much emphasis upon avoiding
delay in the adjudication of requests for certification of this
type would not likely have intended to authorize the delay that
interlocutory reviews of every state agency action, final or not,
would inevitably engender.
Tennessee Gas contends that finding a final agency
action requirement in § 717r(d)(1) nevertheless puts us at odds
with the Second Circuit's decision in Islander East. In that
decision, the court did not dismiss the case sua sponte for lack
of subject matter jurisdiction even though, Tennessee Gas says,
the state agency had not taken final action. Therefore, Tennessee
Gas reasons, the Second Circuit must have construed § 717r(d)(1)
to confer subject matter jurisdiction to review non-final agency
action. See Tenn. Gas Pipeline Co. v. Del. Riverkeeper Network,
921 F. Supp. 2d 381, 392–93 (M.D. Pa. 2013) (articulating this
argument). We think it a stretch, however, to draw so sweeping an
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inference from a court's rendering of a decision on the merits
where the question of subject matter jurisdiction was not squarely
before or even addressed by the court. The Second Circuit in
Islander East evidenced no awareness that it might be reviewing an
incomplete state agency action, as opposed to a completed state
agency action for which state court review was not yet exhausted.
See Islander East, 482 F.3d at 88 n.7. We therefore find little
if any persuasive force in Tennessee Gas's reliance on that
decision.
Tennessee Gas also appears to argue that reading
§ 717r(d)(1) to permit judicial review of only a state agency's
"final action" would be tantamount to imposing an exhaustion of
administrative remedies requirement where one is not provided by
the statute. In that vein, the company urges us to adopt the
reasoning of other courts that have found exhaustion of
administrative remedies unnecessary to trigger the exclusive and
original jurisdiction of a United States Circuit Court of Appeals
under § 717r(d)(1). See, e.g., AES Sparrows Point LNG, LLC v.
Wilson, 589 F.3d 721, 727 (4th Cir. 2009); Islander East, 482 F.3d
at 88 n.7; Del. Riverkeeper, 921 F. Supp. 2d at 391–92.
We disagree with Tennessee Gas's premise. Finding that
a statute requires final agency action is different from finding
that it requires exhaustion. "[T]he judicial doctrine of
exhaustion of administrative remedies is conceptually distinct
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from the doctrine of finality": whereas exhaustion "refers to
administrative and judicial procedures by which an injured party
may seek review of an adverse decision and obtain a remedy if the
decision is found to be unlawful or otherwise inappropriate,"
finality "is concerned with whether the initial decisionmaker has
arrived at a definitive position on the issue that inflicts an
actual, concrete injury." Darby v. Cisneros, 509 U.S. 137, 144
(1993) (second and third quotations quoting Williamson Cty. Reg'l
Planning Comm'n v. Hamilton Bank of Johnson City, 473 U.S. 172,
193 (1985)). Each of the courts Tennessee Gas asks us to join was
tasked with determining whether § 717r(d)(1) barred either a
second, separate state agency or a state court from reviewing a
state agency's final decision granting, conditioning, or denying
a water quality certification. We, by contrast, are faced with
the question whether a single agency must render a final decision
before a United States Circuit Court of Appeals may take
jurisdiction to analyze whether the decision was sound.
We therefore conclude that there is ample reason to stick
to the strong presumption restricting our review to final agency
action of a type that is customarily subject to judicial review.
B.
The foregoing brings us to Tennessee Gas's alternative,
and principal, argument: that the June 29, 2016, letter from
MassDEP constituted final agency action granting its application,
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albeit with conditions. Under this view, the continuing proceeding
at MassDEP is in the nature of the type of appellate review that
falls within the exclusive province of this court.
An agency action is "final" only where it "represents
the culmination of the agency's decisionmaking process and
conclusively determines the rights and obligations of the parties
with respect to the matters at issue." Rhode Island v. EPA, 378
F.3d 19, 23 (1st Cir. 2004); cf. Bennett v. Spear, 520 U.S. 154,
177–78 (1997) (holding that "final agency action" under the APA,
5 U.S.C. § 704, must be "the 'consummation' of the agency's
decisionmaking process," "must not be of a merely tentative or
interlocutory nature," and "must be one by which 'rights or
obligations have been determined,' or from which 'legal
consequences will flow'" (first quoting Chi. & S. Air Lines, Inc.
v. Waterman S.S. Corp., 333 U.S. 103, 113 (1948); and then quoting
Port of Bos. Marine Terminal Ass'n v. Rederiaktiebolaget
Transatlantic, 400 U.S. 62, 71 (1970))).
In form, there is something to Tennessee Gas's argument
that the June 29 letter constituted final agency action. The
MassDEP officials did issue a formal document that states "the
Department grants a Water Quality Certification . . . subject to
the following conditions . . . necessary to maintain water quality,
to minimize impact . . . and to ensure compliance with appropriate
state law." The regulations (and the certification itself) refer
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to the adjudicatory hearing following an application for water
quality certification as an "appeal." See, e.g., 310 Mass. Code
Regs. § 1.01(1)(c) ("Adjudicatory Appeal or Appeal means the
portion of an adjudicatory proceeding initiated by filing a notice
of claim with the Department and concluded by a final decision.");
314 Mass. Code Regs. § 9.09(1)(e) (referring to "the appeal period"
and final decisions following "an appeal"); id. § 9.10 (describing,
in a provision entitled "Appeals," the process of filing a notice
of claim and engaging in an adjudicatory hearing). Where no
adjudicatory hearing is sought and the certification is not further
challenged in court, a water quality certification has the force
and effect of law. See id. § 9.11 ("Failure to comply with . . .
a 401 Water Quality Certification . . . shall be enforced [under
regulatory provisions concerning administrative penalties].").
And the regulations neither refer to water quality certifications
as "preliminary" or "proposed" nor require certifications or
denials to include those words.
The substance of the Massachusetts regulatory regime,
however, shows the contrary: an initial letter granting a water
quality certification subject to Condition 15, either before the
twenty-one day window to request a hearing has lapsed or after a
timely notice of claim is filed, is not a final agency action.
Three aspects of the water quality certification that MassDEP
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issued in this case and the regulatory regime that gave rise to it
lead us to this conclusion.
First, Massachusetts law makes clear that Tennessee
Gas's application seeking a determination of its rights in the
form of a water quality certification initiated a single, unitary
proceeding, an essential part of which is the opportunity (of which
petitioners have availed themselves) to have an adjudicatory
hearing. Under Massachusetts law, "a proceeding before an agency
in which the legal rights, duties or privileges of specifically
named persons are required by constitutional right or by any
provision of the General Laws to be determined after opportunity
for an agency hearing" is an "[a]djudicatory proceeding." Mass.
Gen. Laws ch. 30A, § 1(1). MassDEP regulations, in turn, provide
that an adjudicatory proceeding "means a proceeding under
[chapter 0A] that may culminate in an adjudicatory hearing and the
Commissioner's issuance of a final decision." 310 Mass. Code Regs.
§ 1.01(c). Those same regulations also define such a hearing as
one in which "parties may present evidence on issues of fact, and
argument on issues of law and fact prior to the Commissioner's
issuance of a final decision." Id. No party disputes that, in
the present context, such a presentation of evidence and arguments
occurs after the issuance of a conditional certification, not
before.
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Second, the review to be provided in the adjudicatory
hearing is a review of Tennessee Gas's application, rather than a
review of a prior agency decision. MassDEP accords no deference
to the preliminary findings included in the certification, see
Conservation Comm'n of Falmouth v. Pacheco, 733 N.E.2d 127, 130
(Mass. App. Ct. 2000), and the regulations expressly provide that
the agency may even consider "new substantive issues arising from
material changes to the scope or impact of the activity and not
apparent at the time of public notice" from persons who did not
participate in the notice-and-comment process, 314 Mass. Code
Regs. § 9.10(1). When a notice of claim is timely filed following
the issuance of a water quality certification, the agency's review
of the proposed project continues more or less as though no
decision has been rendered at all.
Third, the manner in which Massachusetts has chosen to
structure its internal agency decision-making strikes us as hardly
unusual or contrived. It allows for unopposed actions to proceed
to finality without the time and expense of full-blown adjudicatory
proceedings, while preserving the parties' rights to such
proceedings when sought. With the taking of evidence and de novo
consideration, it bears the hallmarks of decision-making by expert
administrative agencies rather than those of judicial review. Its
chief drawback, as demonstrated here, is its duration. Congress,
though, has addressed the matter of delay directly, see 15 U.S.C.
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§ 717r(d)(2); 33 U.S.C. § 1341(a)(1),1 and by divesting states of
their customary review of state agency orders and opinions in this
field, see 15 U.S.C. § 717r(d)(1). We see no indication that
Congress otherwise intended to dictate how (as opposed to how
quickly) MassDEP conducts its internal decision-making before
finally acting. See 33 U.S.C. § 1251(b) ("It is the policy of the
Congress to recognize, preserve, and protect the primary
responsibilities and rights of States to prevent, reduce, and
eliminate pollution, [and] to plan the development and use
(including restoration, preservation, and enhancement) of land and
water resources . . . ."); United States v. Cooper, 482 F.3d 658,
667 (4th Cir. 2007) ("In the CWA, Congress expressed its respect
for states' role through a scheme of cooperative federalism that
enables states to 'implement . . . permit programs' like [the one
at issue here.]"); S. Ohio Coal Co. v. Office of Surface Mining,
Reclamation & Enf't, Dep't of Interior, 20 F.3d 1418, 1427 (6th
Cir. 1994) ("[T]he CWA sets up a system of 'cooperative
1
Our consideration of the jurisdictional issue posed by this
case leaves us with no occasion to consider whether, because
MassDEP did not finally act on Tennessee Gas's application within
one year, the requirement that Tennessee Gas obtain a water quality
certification from the Commonwealth of Massachusetts has been
waived. See 33 U.S.C. § 1341(a)(1). Nor have we considered the
potential relevance of 15 U.S.C. § 717r(d)(2) (granting the D.C.
Circuit "original and exclusive jurisdiction over any civil action
for the review" of a state agency's "alleged failure to act . . .
to issue, condition, or deny any permit required under Federal
law" for a facility subject to NGA § 717f).
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federalism,' in which states may choose to be primarily responsible
for running federally-approved programs."); cf. Dominion
Transmission, Inc. v. Summers, 723 F.3d 238, 240 (D.C. Cir. 2013)
(noting that the NGA "expressly does not preempt" certain
environmental protection laws like the Clean Air Act that
contemplate a robust role for states).
III. Conclusion
There is, as yet, no order or action of MassDEP in
connection with Tennessee Gas's application for a water quality
certification that we may review under 15 U.S.C. § 717r(d)(1). We
therefore dismiss the petition for review for lack of subject
matter jurisdiction. Each party shall bear its own costs.
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