The Second Circuit Court of Appeals has ruled on the Constitution Pipeline, kicking Williams in the gut on part of it and kicking part of it down the road.
A three-judge panel of the Second Circuit Court of Appeals in New York City composed of Carter, G.W. Bush and Obama appointees has issued a very disappointing decision in the Constitution Pipeline case. It ruled against the Constitution Pipeline on the matter of whether the New York DEC acted arbitrarily in denying water quality certification while saying it had no authority to decide the critical question; whether DEC took too long. A read of the opinion (available here with my highlighting of important points) is an exercise in appreciating everything that’s wrong with New York, the courts and the pipeline industry.
Here’s the quick summary of what happened (emphasis added):
Respondents denied the application on the ground that petitioner had not complied with requests for relevant information. Petitioner contends (1) that respondents exceeded the statutory time limitations for the State’s review of the application and that they must therefore be ordered to notify the United States Army Corps of Engineers (“USACE”) that the State waives its right to issue or deny § 401 certification, thereby allowing USACE to issue a permit to petitioner under § 404 of the Clean Water Act, see 33 U.S.C. § 1344(a); and (2) alternatively, that respondents’ decision should be vacated on the ground that the denial of the application was arbitrary, capricious, and ultra vires, and that respondents should be ordered to grant the requested § 401 certification. To the extent that petitioner challenges the timeliness of respondents’ decision, we conclude that we lack jurisdiction over that challenge. As to the merits, we conclude that respondents’ actions were within their statutory authority and that the decision was not arbitrary or capricious.
DEC, in other words, had authority to deny the permit, but whether it took too long to do so is still up for grabs. Things are still in limbo; a very unsatisfying result for those of us trying so hard to get this project approved since 2012 in the face of New York State political corruption. Despite this, the Constitution Pipeline owns much of the blame for naively cooperating in good faith with DEC and allowing this situation to develop. Here’s the sordid background in two separate but related paragraphs from pages 10 and 19 of the opinion:
In December 2014, NYSDEC issued a notice that Constitution’s application was complete; but on December 31, it asked Constitution for more information about stream crossings. In January-March 2015, Constitution submitted more information to NYSDEC, and on April 27, 2015, at NYSDEC’s request, Constitution withdrew and resubmitted its § 401 application. (Constitution had also withdrawn and resubmitted its § 401 application at NYSDEC’s request in May 2014.)
Constitution argues that NYSDEC did not issue its Decision until 32 months after Constitution submitted its initial application, 16 months after NYSDEC issued notice that that initial application was complete, 15 months after the deadline imposed by FERC, nearly a year (“359 days”) after Constitution’s 2015 withdrawal-and-resubmission of its application–and eight months after Constitution claims it was advised by NYSDEC that NYSDEC “had everything it needed to issue a Section 401 Certification.”
Several questions arise. First, what possible right did DEC have to keep asking for information subsequent to the determination the application was complete in December, 2014? Why didn’t the court address this? How is it possible DEC was entitled to keep demanding more information when it already had a complete application? And, didn’t the Constitution Pipeline demonstrate its good faith by supplying the requested additional information that went beyond the demands of a full application? The answer is obvious but the court avoided it assiduously, simply dispensing with the critical timing issue by simply saying “not our job.”
The Constitution Pipeline created the circumstances that allowed for this by voluntarily going along with a DEC withdrawal and resubmission request. The second major question, therefore, is simply this; what was the company possibly thinking? Governor Corruptocrat had already stabbed the industry in the back with shameless demagoguery and demonstrated he was captive to the NRDC gang. Their man, Joe Martens, was running DEC for him and it had quite obviously been transformed into a totally political entity at the whim of the Governor’s Office. Playing along was a strategy destined for failure at the hands of accomplished corruptocrats.
The reason the company played along, of course, is the same one to which most applicants for governmental approvals ultimately succumb. They want approvals. The threat of possible denials without cooperation is enough reason to play along with what everyone knows is a delay game. Except, that in this case DEC had already granted a full application decision and Constitution Pipeline threw it away in good faith negotiations with very bad people. The proper approach, the only approach in New York, was to play hardball as Millennium has done; challenging DEC on timing the moment the one-year deadline for action had passed, not extending the deadline free of charge.
Now, because of that incredibly naive decision, Constitution Pipeline has been handed a decision affirming DEC has the right to deny water quality certification but without addressing the critical timing issue. Yet, the timing is the issue. Everyone knows exactly what’s going on here; DEC has now played similar games with two other pipelines. It is not DEC itself doing the deciding, though. Rather, that is being done by Andrew Cuomo on behalf of the NRDC gang.
Whether Cuomo wants FERC to make the decision on that issue or is sincere in his catering to the gang is something we’ll never know, but it appears the next move is one of three things; (1) an appeal of the decision, (2) a new filing with the D.C. Circuit or (3) a request to FERC to take matters into its own hands by deciding DEC took too long (which would probably be challenged at the D.C. Circuit). Bear in mind in this regard what the D.C. Circuit has already said in the Millennium case where that company wisely chose to play hardball from the outset (emphasis added):
To prevent state agencies from indefinitely delaying issuance of a federal permit, Congress gave States only one year to act on a “request for certification” under the Clean Water Act. Alcoa Power Generating Inc. v. FERC, 643 F.3d 963, 972 (D.C. Cir. 2011) (quoting 33 U.S.C. § 1341(a)(1)). That deadline is established by section 401 of the Act, which requires a State to grant or deny the certificate “within a reasonable period of time (which shall not exceed one year) after receipt of [a] request.” Id. If the State fails to act within that period, the Act’s “certification requirements” are deemed “waived,” such that the pipeline no longer needs a water quality certificate to begin construction.
That last line is what it’s all about and the decision released yesterday by the Second Circuit kicked it down the road to the same court that uttered it. Let’s hope they remember.