Offshore Wind Projects at Risk Despite Wins in First Circuit

Litigation is making offshore wind energy projects vulnerable to death by delay despite favorable rulings by the First Circuit, which rejected challenges to the Vineyard Wind project from nearby residents.

Vineyard Wind, the first operational commercial-scale offshore wind project in the US, is fending off four lawsuits alleging the federal government improperly approved it. It has already clinched two victories at the US Court of Appeals for the First Circuit, with judges signaling at oral argument in July that more wins were on the way.

Locals brought lawsuits against Vineyard Wind, located 15 miles south of Martha’s Vineyard, over concerns about its impact on whales. While the cases resulted in relatively straightforward opinions, other challenges to approval of offshore wind energy projects on the East Coast and elsewhere are unlikely to be fast-tracked, leaving them similarly at risk of prolonged legal fights.

“Delay is a victory,” said Jeffrey Porter, chair of the environmental law practice at Mintz. “Over the four years or so that these challenges have been going on, material costs went up, interest rates went up, and the economic viability of some of these projects decreased,” Porter said.

Offshore wind has had mixed success in other courts. The DC Circuit already rejected a bid to delay construction of the Revolution Wind LLC project off the coast of Rhode Island, and Danish wind farm developer Ørsted settled with New Jersey in May for $125 million over a canceled project.

Attorney Roger Marzulla, who represents a coalition of fishing associations in a case against the US Department of the Interior, said, “Either this case or one of the other cases I think inevitably is going to get to the Supreme Court.”

‘Death By a Thousand Cuts’

The four challenges accuse several environmental agencies of violating the Administrative Procedure Act, which governs how courts should review agency determinations. Courts are instructed to give government agencies deference when their decisions are challenged, and plaintiffs must meet a high bar to show that an agency action should be vacated.

Challenges from a local fishermen’s association and a fish processing business have yet to be ruled on.

The plaintiffs argue the government didn’t properly consider the environmental impact Vineyard Wind could have before issuing the permit. They claim the turbines will harm marine life, as well as the livelihoods of fishermen. The project has faced recent scrutiny after a broken turbine blade fell into the ocean in July, sending fiberglass debris onto Nantucket, Mass., beaches.

Plaintiffs have been challenging offshore wind for years, inspired by a strategy that ended up successfully tanking Cape Wind, which would have been the nation’s first commercial offshore wind project. In the meantime, the federal government has shored up its processes.

“Because there are so many challenges that are filed against these projects,” agencies “have learned to create very careful records,” said Ella Foley Gannon, an environmental law partner at Morgan, Lewis & Bockius LLP. “The agencies now know we’ve got to not just cross our T’s and dot our I’s, but double cross and double dot.”

The decisions by the First Circuit, which already has a reputation for being highly deferential to federal agency actions, show how courts are “reluctant to delve into these very highly scientific, engineering-based studies that agencies still are the experts on,” said Peter Knight, a partner and environmental lawyer at Robinson & Cole LLP.

That doesn’t stop plaintiffs from continuing to try to strike down projects, in what Foley Gannon called “death by a thousand cuts.”

The continued complaints have a more existential impact, Porter said. “We’ve got a limited amount of time to get our act together” and transition to renewable energy, “and we’re not going to get where we need to get in the time that’s available if anyone can bring a NIMBY lawsuit and tie up a critically important energy project for five or six years just because they can,” Porter said, referencing “not in my back yard” protesters.

Loper Bright

The type of deference courts owe agencies in these cases isn’t considered to be at odds with the US Supreme Court’s June decision in Loper Bright Enterprises v. Raimondo, though First Circuit judges still asked about it during oral arguments in some of the offshore wind cases.

Marzulla initially filed his case in the US District Court for the District of Columbia, because he said the DC Circuit is “most accustomed to dealing with decisions and actions by government agencies and determining their legality.” The case was transferred to Massachusetts at the government’s request.

The offshore wind cases don’t hinge on the agencies’ interpretation of a statute or a regulation, but instead on whether the agencies sufficiently considered the impacts of the environmental projects, Porter said.

Environmental agencies have also “seen that the end of Chevron may have been on the horizon” for the last few years, so “their rulemaking has relied less on anticipating court deference,” Knight said.

“Clearly the trend is going to be away from agency deference in general. But at least today on these highly technical scientific-based determinations that agencies are making when it comes to offshore wind, I would not expect to see that courts are going to suddenly stop deferring to agency determinations,” Knight said.