On April 15, 2020, in response to a challenge by environmental groups connected with opposition to the Keystone XL pipeline, a federal trial court in Montana issued a decision that may affect pipeline and electric transmission projects across the United States. Many of these "utility line" projects utilize the U.S. Army Corps of Engineers' Nationwide Permit ("NWP") 12 as a basis for streamlined authorization of dredge and fill activities governed by Clean Water Act ("CWA") section 404, 33 U.S.C. § 1344. In Northern Plains Resource Council v. U.S. Army Corps of Engineers,1 the U.S. District Court in Montana invalidated the current iteration of NWP 12 based on the Corps' failure to consult with the Fish and Wildlife Service and the National Marine Fisheries Service regarding the permit's potential environmental impact as required by Endangered Species Act section 7(a)(2), 16 U.S.C. § 1536(a)(2), for any action that "may affect" listed endangered species or their critical habitat. As part of that decision, the court vacated NWP 12 pending completion of the required consultation process and enjoined the Corps from authorizing any dredge or fill activities under NWP 12 in the interim.
Unsurprisingly, the Corps has requested that the district court stay its ruling pending appeal or at least restrict the effect of the ruling to the Keystone XL pipeline alone, and has also indicated it will seek relief from the Ninth Circuit by May 12 if the district court does not grant that request. However, at least for now the Corps' regional offices are not processing pre-construction notices seeking coverage under NWP 12. Pending the resolution of this issue, a key question is: does the district court's original decision truly impact permits nationwide? The short answer is a qualified no.
Despite its name, Nationwide Permit 12 is not utilized by all states across the country. For a start, two states - Michigan and New Jersey - have fully assumed administration of CWA section 404, taking over for the Corps within their borders, and therefore their permitting is unaffected by the validity of NWP 12. Additionally, states can also seek piecemeal authority over certain areas of section 404 permitting through a "programmatic general permit," and the Corps itself may authorize dredge and fill activities in a specific geographic area through a "regional general permit." As relevant examples, Pennsylvania and Maryland have programmatic general permits governing some utility line projects, while the Corps' Chicago, Tulsa, and Jacksonville districts have regional permits addressing utility line activities. Where those permitting regimes are applicable, the Montana court's invalidation of Nationwide Permit 12 will not prevent a project from being authorized under different general permits.
For those jurisdictions where NWP 12 has been the primary mechanism for permitting pipelines and transmission lines under CWA section 404, the decision in Northern Plains Resource Council v. U.S. Army Corps of Engineers will be more problematic pending further developments on appeal. Open questions remain as to whether developers of utility lines in those areas may be able to rely on other still-valid permits such as Nationwide Permit 39 (which tangentially includes utility line projects that are "attendant features" of commercial and industrial developments); whether the "self-certification" option under NWP 12 for projects with smaller impacts will still be available or expose project developers to regulatory risk; or whether the Corps may seek to revert to the prior 2012 version of NWP 12, for which it did perform a programmatic ESA consultation.
Additionally, there are two key takeaways to watch closely on appeal with respect to implications for linear infrastructure from the Court's decision, which have potentially broader implications:
- The Court's finding that the impacts included, among other things, conversion of jurisdictional waters of the United States ("WOTUS") to upland, sedimentation, pollution, wetland degradation, and habitat fragmentation that result in effects to listed species and their habitat, relied in part on evidence outside of the administrative record. In support of this relatively novel approach, the Court noted that the ESA's citizen suit provision allows the court to consider evidence outside the administrative record.
- The Court stated that project-level review was required, and potential harm to species and destruction of habitat is something which must be viewed cumulatively and not on a piecemeal basis.
As to the first item, private parties attempting to permit linear infrastructure expend millions of dollars developing a defensible administrative record. And that is critical as the administrative record forms the basis for the agency's decision and the arbitrary and capricious standard of the APA is applied relative to said administrative record. Historically, there have been grounds to introduce evidence on an appeal outside of the administrative record, but those grounds have been relatively narrow, generally allowing for supplementation on appeal if the party seeking to invalidate a permit was denied explicitly or impliedly a fair opportunity to introduce said evidence into the administrative record. In this case, the Court gave minimal analysis and seemingly broadened its discretion to unilaterally consider evidence outside of the administrative record. As a practical matter, private parties should still ensure they have a comprehensive and thorough administrative record, and that stakeholders or potential adversaries are given full and fair opportunities to contribute to the same. Doing so preserves the ability to argue on appeal that the Court's application of the arbitrary and capricious standard should be limited to said administrative record.
As to the second item, the purpose of a NWP is to consider impacts to each WOTUS. The Court added a burden by indicating that the applicability of NWP 12 must consider impacts to each WOTUS individually and cumulatively. This has significant implications to linear projects which traverse, and thus potentially impact, several and variable types of WOTUS. So a transmission line may cross perennial, seasonal, and ephemeral streams that are arguably WOTUS, and under the Court's logic the cumulative impacts to these three different types of WOTUS must be considered in conjunction with NWP 12. That is a complicated and potentially technically infeasible exercise with respect to evaluating whether NWP 12 is the appropriate vehicle. That said, the Trump Administration is still pursuing a new, narrower definition of WOTUS. A new, clearer, and narrower definition of WOTUS would help rein in the scope of the CWA and thus in turn lessen the burden of having to cumulatively consider impacts under an NWP. In the interim, developers considering utilizing an NWP should work with their legal counsel and technical experts to characterize cumulative impacts such that an NWP can still be utilized. There are few options here to utilize given the ambiguity in the Court's order and that its holding itself will be appealed and thus called into doubt in the short term.
Circumstances will undoubtedly change as the Montana litigation moves forward and the Corps settles on a response. In the meantime, developers of pipelines and transmission lines should keep in mind that the decision in Northern Plains Resource Council v. U.S. Army Corps of Engineers adds uncertainty, but is not the only factor to consider in pursuing permitting under the Clean Water Act. It's worth considering possible alternative permitting options, and staying up to date on the status of NWP 12 as the Montana litigation proceeds to an appeal and the Corps settles on an interim course of action.
Update: On May 11, 2020, the Montana District Court amended its previous order to narrow the vacatur of NWP 12 to apply only to construction of "new oil and gas pipelines," while allowing NWP 12 authorization to continue for "non-pipeline construction activities and routine maintenance, inspection, and repair activities on existing NWP 12 projects." Accordingly, utility line activities such as electric transmission lines or broadband and fiber optic cables will be able to rely on NWP 12 going forward, while the status of pipelines transporting substances other than gas or oil is somewhat unclear. Since the Court denied the request for a stay of its ruling pending appeal, the next big move will be by the Ninth Circuit as the parties move on to that venue.
Footnote
1. Dkt. No. 19-cv-00044, Order (D. Mont. Apr. 15, 2020).
Originally published 1 May 2020
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