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Administrative – Gas pipeline stayed over permitting concern

Where parties challenging construction of a natural gas pipeline are likely to succeed on their argument that authority was lacking to modify a nationwide permit issued by the Army Corps of Engineers in 2017, the construction was stayed.

Background

Petitioners challenge decisions of two different Army Corps districts: the Huntington, West Virginia District and the Norfolk District. Mountain Valley Pipeline LLC, or MVP, asked both districts to verify that, pursuant to the Clean Water Act, or CWA, MVP’s proposed discharge of dredged and/or fill material into waters of the United States in furtherance of construction of a natural gas pipeline in those districts could be governed by the Army Corps’ 2017 nationwide permit, or NWP 12. By operating under the more general NWP 12, MVP would not have to undertake the more arduous and time-consuming individual CWA permitting process tailored to specific projects.

On Sept. 25, 2020, the Huntington district issued a verification, determining that the pipeline project met the criteria for operation under the NWP 12. On the same day, the Norfolk district did the same, issuing a reinstatement of its prior verification allowing MVP to use NWP 12 in that district. Petitioners then filed petitions for agency review of those decisions, and filed the instant motions to stay.

Likelihood of success

Petitioners first claim the Huntington district’s verification is unlawful because the Army Corps violated the Endangered Species Act when it reissued NWP 12 in January 2017; thus, ostensibly because the verification relies on NWP 12, it must necessarily be arbitrary, capricious and not in accordance with law. Second, they claim the verification impermissibly relies on and incorporates modifications to NWP 12 that were made in contravention of applicable law.

Petitioners are not likely to succeed on the merits of the former argument. “Because district courts have general federal question jurisdiction under 28 U.S.C. § 1331, the normal default rule is that persons seeking review of agency action go first to district court rather than to a court of appeals.” Crucially, petitioners do not contend that they cannot pursue a challenge to NWP 12 in the district court.

This court cannot decide whether the Huntington district impermissibly relied on NWP 12 in issuing the verification without first reaching petitioners’ challenges to the findings and conclusions underlying NWP 12. This type of challenge is properly reviewable in the district court.

However, petitioners are likely to succeed on the merits of the latter argument. The Huntington district’s verification was likely issued in contravention of applicable law because the Army Corps impermissibly incorporated into NWP 12 a modified permit condition from the West Virginia Department of Environmental Protection. And because the verification was likely issued in contravention of law, the Norfolk district’s reinstatement (which necessarily depends on the validity of the verification) is likely defective as well.

Remaining stay factors

The balance of the stay factors—whether petitioners will be irreparably injured absent a stay; whether issuance of the stay will substantially injure the other parties interested in the proceeding and where the public interest lies—weighs in favor of granting the motions for stay.

Absent a stay, MVP intends to begin crossing the streams and rivers at issue. MVP submits that it “has spent billions to complete the vast majority of project tasks, including the installation of pipe along nearly 260 miles” and delay until spring 2021 would cost MVP around $140 million in unrecoverable costs.

But “environmental injury, by its nature, can seldom be adequately remedied by money damages and is often permanent or at least of long duration, i.e., irreparable.” And “the dredging … that may occur while the Court decides the case cannot be undone and, if the end result is that the Corps should not have issued [the permit], irreparable harm will have occurred in the meantime.” In addition, while the Army Corps and MVP both contend natural gas projects serve the public interest, the Natural Gas Act yields to the CWA. Therefore, the balance of the four stay factors weigh in favor of petitioners.

Petitioners’ motions for stay granted.

Sierra Club v. United States Army Corps of Engineers (Lawyers Weekly No. 001-134-20, 23 pp.) (Per curiam) Case Nos. 20-2039 and 20-2042. Dec. 1, 2020. From the U.S. Army Corps of Engineers. Derek Owen Teaney for Petitioners. Kevin William McArdle for Respondents. George Peter Sibley III for Intervenor.


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