Algonquin Gas Transmission, LLC v. Weymouth

Decision Date19 March 2019
Docket NumberNo. 18-1686,18-1686
Citation919 F.3d 54
Parties ALGONQUIN GAS TRANSMISSION, LLC, Plaintiff, Appellee, v. WEYMOUTH, MASSACHUSETTS; Weymouth Conservation Commission, Defendants, Appellants.
CourtU.S. Court of Appeals — First Circuit

Rebekah Lacey, Cambridge, MA, with whom J. Raymond Miyares, Bryan F. Bertram, Miyares & Harrington, LLP, Wellesley, MA, and Joseph Callanan, Town Solicitor, Town of Weymouth, were on brief, for appellants.

Jeremy C. Marwell, with whom Michael B. Wigmore, Joshua S. Johnson, Vinson & Elkins LLP, Washington, DC, James T. Finnigan, and Rich May, P.C., Boston, MA, were on brief, for appellees.

Before Kayatta, Circuit Judge, Souter, Associate Justice,* and Selya, Circuit Judge.

KAYATTA, Circuit Judge.

Algonquin Gas Transmission, LLC ("Algonquin") seeks to build a natural gas compressor station in Weymouth, Massachusetts as one component of Algonquin's larger effort to improve its natural-gas delivery infrastructure in the northeastern United States. Algonquin has received a certificate of public convenience and necessity ("CPCN") from the Federal Energy Regulatory Commission ("FERC"), but that certificate is conditioned upon the receipt of a consistency determination from the Commonwealth of Massachusetts pursuant to the Coastal Zone Management Act ("CZMA"). To complete its CZMA review, Massachusetts requires Algonquin to furnish a permit from the Massachusetts Department of Environmental Protection ("MassDEP"). But MassDEP will not issue such a permit until the Town of Weymouth approves the project under its local ordinance or a court finds that ordinance preempted as applied to the project.

After unsuccessfully seeking Weymouth's approval to begin construction, Algonquin repaired to the U.S. District Court for the District of Massachusetts, from which it obtained a ruling that Weymouth’s ordinance, as applied to the project, is indeed preempted. Weymouth now appeals that ruling. For the following reasons, we affirm.

I.

We briefly survey the regulatory topography, the pertinent facts, and the procedural history in this case.

A.

The federal Natural Gas Act ("NGA") governs the transportation and sale of natural gas in interstate commerce and the importation and exportation of natural gas in foreign commerce. See 15 U.S.C. § 717(b). The NGA requires a prospective developer to obtain a CPCN from FERC prior to constructing a jurisdictional natural gas pipeline or ancillary facility. Id. § 717f(e). FERC must issue a CPCN if the applicant demonstrates that it "is able and willing ... to conform to the provisions of [the Act] ... and regulations of [FERC]" and the proposed construction is "required by the present or future public convenience and necessity." Id. In issuing a CPCN, FERC also has the authority to impose "reasonable terms and conditions as the public convenience and necessity may require." Id.

The other federal statute relevant to this appeal, the CZMA, provides grants of money to states that adopt federally approved coastal-management programs. See generally 16 U.S.C. § 1455. Among other requirements, a coastal-management program must define the "permissible land uses and water uses" and promulgate "[b]road guidelines on priorities of uses" within the state's coastal zones. Id. § 1455(d)(2). The CZMA limits FERC's certificate-granting authority in at least one important way: It prohibits FERC from granting a permit to conduct an activity that will affect "any land or water use or natural resource of the coastal zone" until the state concurs with an applicant's determination that the proposed activity "complies with the enforceable policies of the state's approved [coastal-management program]." Id. § 1456(c)(3)(A). The Massachusetts Office of Coastal Zone Management ("Massachusetts OCZM") administers the Commonwealth's CZMA program.

Two local laws also bear on this dispute. The Massachusetts Wetlands Protection Act ("Massachusetts WPA") provides performance standards for construction activities in wetlands areas. See Mass. Gen. Laws ch. 131, § 40.1 The Act "sets forth minimum standards only, ‘leaving local communities free to adopt more stringent controls.’ " Lovequist v. Conservation Comm'n of Dennis, 379 Mass. 7, 393 N.E.2d 858, 863 (1979) (quoting Golden v. Selectmen of Falmouth, 358 Mass. 519, 265 N.E.2d 573, 577 (1970) ). It also requires a developer to file a notice of intention with and obtain an order of conditions from the municipality in which the construction is to be located prior to commencing construction. Mass. Gen. Laws ch. 131, § 40. Finally, the Weymouth Wetlands Protection Ordinance ("Weymouth WPO") generally requires a developer to obtain a permit from the Weymouth Conservation Commission before construction can begin in a wetlands area. Weymouth, Mass., Code § 7-301(b). The Weymouth WPO gives the Conservation Commission the authority to impose permit conditions or deny an application in its entirety if it finds the project will not meet Conservation Commission performance standards or regulations. Id. § 7-301(k).

B.

Algonquin is a natural-gas transmission company that is headquartered in Houston, Texas. In response to rising demand for natural gas, Algonquin's proposed "Atlantic Bridge Project" aims to increase the delivery capacity of its existing natural-gas transmission system in the northeastern United States. Algonquin seeks to construct a new compressor station—an appurtenance that is placed alongside a gas pipeline to maintain pressure and gas-flow rates—in Weymouth, Massachusetts as part of this project. The proposed site is located within and adjacent to a wetlands area. It is also situated in a coastal zone subject to Massachusetts' coastal-management program.

In October 2015, Algonquin applied to FERC for a CPCN to construct and operate the Atlantic Bridge Project. FERC completed an environmental assessment of the proposed project pursuant to the National Environmental Policy Act ("NEPA"), see generally 42 U.S.C. § 4332(C) ; 40 C.F.R. § 1501.4, in which it found that the proposal would have no significant environmental impact. Subsequently, on January 25, 2017, FERC issued Algonquin the CPCN. See Algonquin Gas Transmission, LLC Mars. & Ne. Pipeline, LLC (Algonquin ), 158 FERC ¶ 61,061, 2017 WL 383829, at *1 (Jan. 25, 2017). Significant to this appeal, FERC's CPCN requires that Algonquin obtain a "determination of consistency with the [CZMA]" from Massachusetts OCZM "[p]rior to construction of the Weymouth Compressor Station." Id. at *64.

By the time Algonquin received the CPCN from FERC, it had already applied for several Commonwealth authorizations needed to obtain a determination of consistency from Massachusetts OCZM. Pursuant to the Massachusetts WPA and the Weymouth WPO, Algonquin sought authorization from the Weymouth Conservation Commission to begin construction. The Conservation Commission denied Algonquin's WPA and WPO permit applications. It found that Algonquin had not sufficiently addressed hurricane and explosion risks associated with the project. It also concluded that a Weymouth WPO permit could not be adequately conditioned to sufficiently mitigate the air, water, aesthetic, and recreational impairments that would result from construction and operation of the facility.

MassDEP has ultimate authority over Algonquin's WPA application, so Algonquin appealed Weymouth's WPA denial to MassDEP, seeking a superseding order of conditions. In a series of rulings and orders, MassDEP agreed with Algonquin and reversed the Massachusetts WPA permit denial. But Weymouth administratively appealed that reversal, pursuant to 310 Mass. Code Regs. § 10.05(7)(j)(2), and MassDEP stayed the adjudication of Weymouth's appeal (and thus the finalization of the WPA authorization) until a court determines whether federal law preempts Weymouth's denial of the project under the Weymouth WPO. Massachusetts OCZM has yet to issue a consistency determination for the proposed project and maintains that it cannot do so until Algonquin proffers all relevant Commonwealth authorizations, including a final Massachusetts WPA permit.2

To summarize: FERC has concluded its proceedings and has issued Algonquin a permit that is conditioned on receipt of a CZMA consistency determination from Massachusetts OCZM; Massachusetts OCZM will not issue its determination until MassDEP conclusively rules in favor of Algonquin on Weymouth's challenge to the Massachusetts WPA approval; and MassDEP will not dispose of that challenge until a court (or FERC) resolves Algonquin's preemption challenge to the application of Weymouth's ordinance to the compressor station.

Thus matters stood on May 4, 2017, when Algonquin commenced this action in federal district court against the Town of Weymouth and the Weymouth Conservation Commission (collectively "Weymouth"), seeking a declaratory judgment that the construction and operation of the Weymouth Compressor Station is not subject to the Weymouth WPO and enjoining enforcement of the permit denial because the ordinance, as it applies to the compressor station, is preempted under federal law. The district court entered summary judgment for Algonquin, relying on both field preemption and conflict preemption grounds in doing so. Algonquin Gas Transmission, LLC v. Weymouth Conservation Comm'n, No. 17-10788-DJC, 2017 WL 6757544, at *5–7 (D. Mass. Dec. 29, 2017). Weymouth's appeal followed.

II.

Weymouth advances two reasons why we should reverse the district court's entry of summary judgment for Algonquin. First, it argues that the district court erred in not finding this action to be time-barred. Second, as to the merits, Weymouth argues that application of its ordinance to the proposed compressor station is not foreclosed by federal law under theories of conflict and field preemption. We consider each argument in turn.

A.

When a federal statute creates a cause of action for damages or other legal relief but provides no applicable statute of limitations, "we generally ‘borrow’ the...

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