Keating v. F.E.R.C., 90-1080

• Decision Date: 08 March 1991
• Docket Number: No. 90-1080,90-1080
• Citation: 927 F.2d 616
• Parties: , 21 Envtl. L. Rep. 20,692 Joseph M. KEATING, Petitioner, v. FEDERAL ENERGY REGULATORY COMMISSION, Respondent, State of California, ex rel. California State Water Resources Control Board, Intervenor.
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 616

927 F.2d 616

288 U.S.App.D.C. 344, 21 Envtl. L. Rep. 20,692

Joseph M. KEATING, Petitioner, v. FEDERAL ENERGY REGULATORY COMMISSION, Respondent State of California, ex rel. California State Water Resources Control Board, Intervenor.

No. 90-1080.

United States Court of Appeals District of Columbia Circuit.

Argued Jan. 31, 1991.

Decided March 8, 1991.

On Denial of Intervenor's Petition for

Rehearing May 10, 1991.

On Petition for Review of Orders of the Federal Energy Regulatory Commission.

Robin L. Rivett, with whom Ronald A. Zumbrun, Sacramento, Cal., was on the brief, for petitioner.

Joel M. Cockrell, Atty., F.E.R.C., with whom William S. Scherman, General Counsel, and Jerome M. Feit, Sol., F.E.R.C., Washington, D.C., were on the brief, for respondent.

Roderick E. Walston, Supervising Deputy Atty. Gen., San Francisco, Cal., was on the brief, for intervenor. Clifford T. Lee, San Francisco, Cal., also entered an appearance, for intervenor.

Before MIKVA, Chief Judge, EDWARDS and THOMAS, Circuit Judges.

Opinion for the Court filed by Circuit Judge HARRY T. EDWARDS.

HARRY T. EDWARDS, Circuit Judge:

The petitioner in this case, Joseph M. Keating, challenges a decision by the Federal Energy Regulatory Commission ("FERC") dismissing his application for a license to construct and operate a hydroelectric power plant. In rejecting the petitioner's license application, FERC ruled that Keating did not have the necessary state certification covering water quality standards for the project as required by the Clean Water Act. See 33 U.S.C. Sec. 1341(a)(1) (1988). ¹

Keating contends that he obtained the requisite certification from the State of California in the course of procuring an earlier permit with respect to the same project from the Army Corps of Engineers ("the Corps"); the state, however, claims to have revoked that earlier certification. Keating now argues that, under the express terms of 33 U.S.C. Sec. 1341(a)(3) (1988), ² California's purported revocation is invalid as a matter of federal law and that FERC is bound by the Clean Water Act to recognize the continuing validity of the state's earlier certification. In reply, FERC insists that it is powerless to apply the standards of section 1341(a)(3) and that Keating's only recourse for contesting the validity of California's asserted revocation is in the California state courts.

We can find no merit in FERC's position; we therefore grant the petition for review. We agree that section 1341(a)(3) of the Clean Water Act expressly controls the validity of California's attempted withdrawal of its prior certification. Because this provision requires an application of federal law, in connection with a matter that is within the clear compass of FERC's jurisdiction, we hold that FERC is obligated to apply the controlling federal law in considering Keating's present request for a license. Accordingly, we remand the case to the agency with instructions to reinstate Keating's application and to consider whether California's attempted revocation is valid.

I. BACKGROUND

Joseph Keating desires to build a small hydroelectric power plant, called the Tungstar project, on the Morgan and Upper Pine Creeks in Inyo County, California. Under section 4(e) of the Federal Power Act, Keating is required to obtain a license from FERC authorizing construction and operation of the proposed facility. See 16 U.S.C. Sec. 797(e) (1988). Because construction of the plant would require the placement of dredged or fill material into the creeks, Keating was also required, by section 404 of the Clean Water Act, 33 U.S.C. Sec. 1344 (1988), to obtain a dredge-and-fill permit from the Army Corps of Engineers.

The licensing authority of both FERC and the Corps, however, is contingent upon compliance with a provision of the Clean Water Act, section 401(a)(1), which requires prior state environmental approval of proposed water projects. See 33 U.S.C. Sec. 1341(a)(1) (1988), reprinted at note 1 supra.

Both a section 4(e) (FERC) license and a section 404 (Corps) permit fall within the terms of "a Federal license or permit" subject to the state certification requirement under section 401. See 33 C.F.R. Secs. 325.1(d)(4), 330.9(a), 336.1(a)(1), (b)(8) (1990) (Corps section 404 permit must be supported by section 401 state certification); 18 C.F.R. Sec. 4.38(a) & (c)(2) (1990) (applicant for FERC license under section 4(e) must produce proof of section 401 certification or waiver); City of Fredericksburg, Va. v. FERC, 876 F.2d 1109, 1111 (4th Cir.1989) (section 4(e) license applicant must obtain state certification under section 401). Without such state certification, neither the FERC license nor the Corps permit may be issued. See 33 U.S.C. Sec. 1341(a)(1) (1988) ("No [federal] license or permit shall be granted until the certification required by this section has been obtained or has been waived....").

On June 23, 1986, Keating filed a request for state certification of his proposed Tungstar project with the Lahontan Regional Water Quality Control Board ("the Regional Board"), a division of the California State Water Resources Control Board. Three months later, on September 30, 1986, he submitted an application to FERC for a section 4(e) license.

While his applications before FERC and the California Regional Board were pending, Keating also sought a dredge-and-fill permit from the Army Corps of Engineers under section 404. The Corps authorizes dredge-and-fill operations in one of two ways: either with a permit that extends only to a given project, based upon a site-specific review of the particular activities proposed there; or, for certain classes of activities that "will cause only minimal adverse environmental effects," with a general permit, customarily known as a "nationwide permit." See 33 U.S.C. Sec. 1344(e)(1) (1988); 33 C.F.R. Part 330 (1990). See generally United States v. Marathon Dev. Corp., 867 F.2d 96 (1st Cir.1989). A nationwide permit authorizes any party to engage in the sort of activity described in the permit without the need to seek prior project-specific authorization. See id. at 98-99; Riverside Irr. Dist. v. Andrews, 758 F.2d 508, 511 (10th Cir.1985); Orleans Audubon Soc'y v. Lee, 742 F.2d 901, 909-10 (5th Cir.1984); see also 33 C.F.R. Sec. 320.1(c) (1990) ("If an activity is covered by a general permit, an application for a ... [Corps] permit does not have to be made. In such cases, a person must only comply with the conditions contained in the general permit to satisfy requirements of law for a ... [Corps] permit.").

Regardless of which route is followed, however, the Corps cannot issue a permit under section 404 without first obtaining state certification pursuant to section 401 from the state in which the activity is to take place. See 33 C.F.R. Secs. 330.9(a), 336.1(b)(8) (1990); Marathon Development, 867 F.2d at 100 ("[T]he state certification requirement of section 401 applies to section 404(e) nationwide permits in the same way that it applies to any other section 404 permit."); Friends of the Earth v. United States Navy, 841 F.2d 927, 929-30 (9th Cir.1988). At about the same time that Keating was seeking a site-specific state certification for his Tungstar project, the Corps sought state certification in connection with 26 nationwide permits covering a range of modest construction, navigational and similar activities. See 33 C.F.R. Sec. 330.5 (1990) (listing nationwide permits). On October 31, 1986, the California State Water Resources Control Board ("the State Board")--the parent agency of the Regional Board then considering Keating's project--granted a blanket state certification authorizing the activities set out in all 26 Corps nationwide permits. See State Water Resources Control Board, 1986 Amended Decision (Oct. 31, 1986), reprinted in Appendix ("App.") Tab 3. The State Board's certification included a number of conditions concerning particular regions in the state, none of which were relevant to Keating's project, and claimed to reserve "discretionary authority to revoke certification, or set additional conditions of certification, for such permits on a case-by-case basis." Id. Based on this certification, the Corps issued final permits on January 12, 1987.

Keating's Tungstar project is covered by the last of the general permits issued by the Corps. On October 11, 1987, Keating wrote to the Los Angeles District of the Corps, seeking confirmation that his proposed Tungstar project fell within the scope of the nationwide permit. On November 18, 1987, the Corps replied, agreeing that Keating's project was authorized by the Corps' Nationwide Permit No. 26. See Letter from Clifford Rader, U.S. Army Corps of Engineers, to Joseph Keating (Nov. 18, 1987) (citing 33 C.F.R. Sec. 330.5(a)(26) (Nationwide Permit No. 26)), reprinted in App. Tab 7. "As long as you comply with the nationwide permit conditions," the Corps letter stated, "an individual permit is not required." Id. (citation omitted).

Although it is undisputed that Keating had a Corps section 404 permit for his project, and that this permit was granted with the requisite state certification, he nonetheless ran into difficulties in connection with his application for a section 4(e) license from FERC. Under section 401(a)(3) of the Clean Water Act, absent other valid objections, FERC was obliged to accept the certification underlying the Corps permit as satisfying the state certification requirement with respect to Keating's section 4(e) license application. See 33 U.S.C. Sec. 1341(a)(3) (1988). However, on April 30, 1987, the California Regional Board, which had continued to review Keating's application for certification specific to the Tungstar site, denied Keating's request without prejudice because Keating allegedly had failed to submit all environmental documentation required by state law. See Letter from James L. Easton, Exec. Dir., State Water Resources Control Board, to Joseph M....