In a decision handed down today, the United States Court of Appeals for the Second Circuit rejected a challenge by Constitution Pipeline Company, LLC (“Constitution”) to the denial of the Clean Water Act § 401 Water Quality Certification issued by the New York State Department of Environmental Conservation (“NYSDEC”) on April 22, 2016. A link to the Decision is set forth below. The Second Circuit determined that exclusive jurisdiction regarding the timeliness of the NYSDEC denial lies with the United States Court of Appeals for the District of Columbia. On the merits, the Second Circuit concluded that the NYSDEC’s decision to reject issuance of a § 401 Water Quality Certification was within its statutory authority and that the NYSDEC decision was not arbitrary and capricious. The Decision from the Second Circuit is a major setback for this project.
The review by the Second Circuit of the merits of the NYSDEC’s denial is most significant. After chronicling the numerous information requests put forth by the NYSDEC to Constitution relative to the need to examine trenchless crossing techniques in streams and waterbodies and the failure of Constitution to respond to those requests in a meaningful way, the Court rejected all challenges on the merits. In so doing, the Second Circuit noted the following:
“Here, the record amply shows, inter alia, that Constitution persistently refused to provide information as to possible alternative routes for its proposed pipeline or site by site information as to the feasibility of trenchless crossing methods for streams less than 30 feet wide – i.e., for the vast majority of the 251 New York waterbodies to be crossed by its pipeline – and that it provided geotechnical data for only two of the water bodies.”
The Second Circuit also observed that, through the § 401 Certification requirement, “Congress intended that the states would retain the power to block, for environmental reasons, local water projects that might win federal approval.” Further, as found by the Court, the applicant’s claim that it has provided sufficient information to the state regulator – premised on “industry preferences” or so-called industry standards – does not “circumscribe environmental relevance” and, therefore, will not render arbitrary and capricious the state regulator’s denial based on lack of sufficient information.
The patent lesson from this decision is that, absent a change in federal law, developers of major pipeline projects need to work closely with state regulators to reach agreement regarding each waterbody crossing and memorialize those agreements in the administrative record.
The West Firm represented the last major interstate pipeline project to be certificated and receive a §401 Water Quality Certification in New York State by reaching agreement concerning all stream and waterbody crossings with all involved State and Federal agencies and memorializing those agreements as part of the administrative record.
Read the decision here.
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