Time to Overturn Precedent on FERC Orders, Landowners Tell Court

Federal judges should seize an opportunity to reverse a “fundamentally flawed” precedent that keeps pipeline opponents out of court until it’s too late to halt a project, lawyers for landowners and environmentalists said in new court filings.

“The United States Constitution and federal common law guarantee property owners a meaningful opportunity to be heard in opposition to a faulty public use determination before their property can be permanently taken,” the Jan. 10 brief says, referring to a stretch of the Atlantic Sunrise natural gas pipeline in Pennsylvania.

The filing is the opening salvo in a high-stakes case set for argument in March before the full slate of active judges for the U.S. Court of Appeals for the District of Columbia Circuit. Energy and administrative law experts say the outcome could have broad implications across the natural gas and power sectors.

The case centers on how the Federal Energy Regulatory Commission fields challenges to its gas pipeline approvals, a process one D.C. Circuit judge deemed “Kafkaesque.”

If landowners, environmentalists, or others want to challenge a FERC permit, they must first file a petition with the commission and wait for it to be resolved before pursuing a lawsuit. The Natural Gas Act gives FERC 30 days to take action on a challenge, but the agency routinely issues “tolling orders,” which indefinitely extend the deadline for resolving the petition.

FERC litigants have long criticized tolling orders as unfair and unconstitutional. Challengers often can’t get to court to challenge a project before construction has begun—or sometimes finished.

Background

The landowners and environmental groups involved in the D.C. Circuit case have spent years opposing the Atlantic Sunrise pipeline, which cuts through Pennsylvania and connects to a broader East Coast infrastructure network. The project is a conduit of a Transcontinental Gas Pipe Line Co. LLC, a wholly owned subsidiary of the Williams Companies Inc., and is now in service.

A three-judge panel in 2019 ultimately rejected their challenges, including arguments against tolling orders, citing D.C. Circuit precedent that blesses the administrative tools. But Judge Patricia A. Millett wrote that FERC’s “Kafkaesque” practice of issuing tolling orders left landowners in “seemingly endless administrative limbo.”

The challengers asked the full D.C. Circuit to take a closer look at the issue, and the court in December made the rare move of granting the request. Oral arguments are set for March 31.

Arguments

The new brief takes aim at both FERC’s use of tolling orders and its rationale for approving the Atlantic Sunrise project.

White and Williams LLP attorney Siobhan Cole, who represents Pennsylvania landowners in the case, argues in the filing that the orders violate her clients’ constitutional due process rights, denying them a meaningful opportunity to challenge government action.

The brief acknowledges previous D.C. Circuit rulings that uphold FERC’s practice, but notes that the full court has authority to overturn precedent that “poses a direct obstacle to the realization of important objectives embodied in other laws.”

The challengers also return to the root of the case, arguing that the commission erred when it determined that the pipeline was “necessary for the public convenience"—the standard for FERC approvals under the Natural Gas Act.

Lawyers for Appalachian Mountain Advocates and the Sierra Club, who represent environmentalists in the case, also signed on to the brief. The Sierra Club has received funding from Bloomberg Philanthropies, the charitable organization founded by Michael Bloomberg. Bloomberg Environment is operated by entities controlled by Michael Bloomberg.

FERC, Transco, and other energy companies that supply the pipeline or have contracts for its gas have until Feb. 10 to respond to the new brief.

The case is Allegheny Defense Project v. FERC, D.C. Cir. en banc, No. 17-1098, brief filed 1/10/20.