Gravel2Gavel Construction & Real Estate Law Blog
The U.S. Court of Appeals for the DC Circuit decided the case of Allegheny Defense Project, et al. v. Federal Energy Regulatory Commission on August 2, 2019. In a Per Curiam opinion, the court denied petitions challenging the Commission’s orders permitting the Transcontinental Gas Pipe Line Company’s expansion of an existing natural gas pipeline which extends from northern Pennsylvania across the Carolinas into Alabama. The expansion is called the “Atlantic Sunrise Project.” In February 2017, FERC approved the expansion, and denied various petitions, filed by environmental organizations and affected landowners, who then challenged the decision in the DC Circuit. However, the court concluded, on the basis of the administrative record, that these challenges “cannot surmount the deferential standards of agency review and binding DC Circuit precedent.” Under the law, the Commission must consider whether the projected pipeline project meets a market need, and whether the public benefits outweigh the harms. If both criteria are satisfied, FERC will, as in this instance, issue a certificate authorizing the pipeline’s construction, and that certificate also empowers the certificate holder to exercise eminent domain authority under to the Natural Gas Act when necessary. It was the latter consequence of the FERC’s determinations that caused several Pennsylvania landowners to file their objections with the Commission and seek to stay construction.
According to the court, FERC issued a separate order in September 2017 authorizing construction of the project, and then denied all petitions for rehearing several months after construction had commenced. On appeal to the DC Circuit, the petitioners argued that the Commission’s orders violated the requirements of the National Environmental Policy Act (NEPA); failed to substantiate “market need,” and denied them due process by allowing construction to begin before the Certificate Order could be reviewed by the courts. The Court reviewed the administrative record and concluded that FERC had carefully considered the petitioners’ NEPA arguments; there was evidence in the record of a “market need”; and that the petitioners had failed to demonstrate that their due process rights had been violated. With respect to the due process issue, the court noted that their arguments were largely based on the impact of Pennsylvania’s state Environmental Rights Amendment, but similar arguments had failed in the past, and this precedent is binding on the court. One of the panel members, Judge Millett, filed a concurring opinion noting that circuit precedent “ties my hands” in that the landowners should have their day in court. Moreover, she described the FERC’s review procedures as being “Kafkaesque,” and their tolling orders policy have created a “bureaucratic purgatory that only Dante could love.” Judge Millett strongly suggests that a second look at some of these issues, either by the Commission or by the court, is overdue.