Millennium Pipeline Co., L.P. v. Gutierrez

• Decision Date: 31 March 2006
• Docket Number: Civil Action No. 04-233(RCL).
• Citation: 424 F.Supp.2d 168
• Parties: MILLENNIUM PIPELINE CO., L.P., Plaintiff, v. Carlos M. GUTIERREZ, Secretary of Commerce, et al., Defendants, and New York State Department of State, et al., Intervenor-Defendants.
• Court: U.S. District Court — District of Columbia

424 F.Supp.2d 168

MILLENNIUM PIPELINE CO., L.P., Plaintiff, v. Carlos M. GUTIERREZ, Secretary of Commerce, et al., Defendants, and New York State Department of State, et al., Intervenor-Defendants.

Civil Action No. 04-233(RCL).

United States District Court, District of Columbia.

March 31, 2006.

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Frederic George Berner, Jr., Kristin Graham Koehler, Sidley Austin Brown & Wood LLP, Washington, DC, for Plaintiff.

John H. Martin, U.S. Department of Justice, Denver, CO, David A. Munro, New York Office of the Attorney General, Albany, NY, Lynn L. Bergeson, Bergeson & Campbell, Washington, DC, Daniel Riesel, Sive, Paget & Riesel, P.C., John Hogrogian, New York City Law Department, New York, NY, for Defendants.

Ashley Charles Parrish, Kirkland & Ellis LLP, Washington, DC, for Intervenor-Defendants.

MEMORANDUM OPINION

LAMBERTH, District Judge.

This matter comes before the Court on the plaintiffs motion [30] for summary judgment, intervenor-defendant New York State Department's cross-motion [39] for summary judgment, intervenor-defendant Village of Croton—On—Hudson, Briarcliff Manor, and Town of Cortlandt's cross-motion [40, 44] for summary judgment and defendant the Secretary of Commerce's cross-motion [45] for summary judgment. Upon consideration of these motions, the oppositions thereto, the reply briefs, the applicable law, and the entire record herein, the Court concludes that plaintiff's motion will be denied and all cross-motions for summary judgment will be granted.

BACKGROUND

Millennium, a partnership of several North American energy companies, proposes to construct and operate a natural gas pipeline that would stretch approximately 420 miles (the "Project"), from a point along the United States-Canada border in Lake Erie to a terminus outside New York City. The Project will transport U.S. and Canadian natural gas to markets in the eastern United States, including New York. Millennium states that the pipeline's capacity would be 700,000 decatherms per day. (Pl.'s Mot. 2.)

The construction and operation of the Millennium Project must be approved by the Federal Energy Regulatory Commission ("FERC") under the Natural Gas Act, 15 U.S.C. §§ 717 et seq (2005). (Id.) On December 22, 1997, Millennium filed an application for a certificate of public convenience and necessity authorizing the construction and operation of the Millennium Project under the Natural Gas Act, 15 U.S.C. § 717f(c), and for other necessary FERC authorizations. (Pl.'s Mot 2.)

In preparation of an Environmental Impact Statement ("EIS") for the Millennium Project under the National Environmental Policy Act ("NEPA"), 42 U.S.C. §§ 4332 et seq. (1975), the FERC proceeded to conduct a review of the Project's environmental impact and issued a Draft Environmental Impact Statement ("DEIS") in April of 1999. (Id. at 2-3.) Intervenor-Defendant New York State Department of State ("NYSDOS" or "New York") and other interested parties submitted comments on the FERC's DEIS. (Id.) Ultimately, the FERC issued an order approving the construction and operation of the Millennium Project. (Id.)

Villages of Croton-on-Hudson, Briarcliff and Cortlandt, and other intervenors thereafter requested a rehearing of the FERC's order approving the Millennium Project. On September 19, 2002, the FERC denied those request's for rehearing. Croton-on-Hudson, Briarcliff, Cortlandt, and others subsequently sought review of the FERC's orders regarding the Millennium Project by the United States Court of Appeals for the District of Columbia Circuit. On March 16, 2004, the Court of Appeals issued an order holding those proceedings in abeyance pending the outcome of this Court's review. (Pl.'s Mot. at 5.)

In addition to the FERC proceedings, proceedings regarding the Project were also held before the NYSDOS under the Coastal Zone Management Act ("CZMA"), 16 U.S.C. §§ 1451, et seq. (2004). Because Millennium's pipeline route includes a proposed segment across the Hudson River within New York's coastal zone, that portion of the Millennium Project was subject to review by New York under Section 307(c)(3)(A) of the CZMA. 16 U.S.C. § 1456(c)(3)(A). Under the CZMA, New York and other states with federally-approved coastal management programs may review any project requiring a federal license or permit if the project would affect any land or water use or natural resource of the state's coastal zone.

Section 307(c)(3)(A) of the CZMA also states that if a state fails to act within six months after receiving an applicant's certification, the state's concurrence with the certification shall be conclusively presumed. 16 U.S.C. § 1456(c)(3)(A). Millennium submitted to New York on November 20, 1998 a certification that the Millennium Project complied with New York's coastal zone management program. On January 28, 1999, New York notified Millennium that its consistency application did not contain the materials necessary for New York's review of the consistency certification and that Millennium's failure to provide the necessary information might lead New York to object thereto. (Secy.'s Opp'n 11.) During the period between February, 1999 and March, 2001, Millennium provided additional information in support of its consistency application. (Id.) New York also advised Millennium that the State's CZMA review of the project began on March 12, 2001, upon receipt of the Supplemental Draft Environmental Impact Statement (SDEIS). (Id. at 12.) On September 10, 2001, Millennium sent an e-mail to New York setting out draft language for an extension of the six-month review deadline. The e-mail proposed that New York "will use its best efforts to determine consistency ... promptly (within 30 to 60 days) following issuance of the Final Environmental Impact Statement for the project." (Id.) In a letter to New York dated September 12, 2001, Millennium confirmed that the parties "pursuant to 15 C.F.R. 930.60(a)(3), mutually agreed to extend the time for [the State] to render a decision ..." (Id.) Millennium's letter also specified that New York would "determine consistency ... after issuance of the [FE IS] ...." and asked New York to respond indicating its assent to the extension of time. (Id. at 13.) On October 5, 2001, New York received a copy of the Final Environmental Impact Statement ("FEIS") and recommenced the review of Millennium's project. (Id.)

On or about November 27, 2001, New York became aware, from information received from the U.S. Army Corps of Engineers, that Millennium might conduct blasting in a portion of the Hudson River. (Id.) On December 14, 2001, New York wrote to Millennium advising that the State "ha[d] not completed its review" because of project changes involving underwater blasting in the Hudson River, and accordingly had not, and would not, complete its CZMA review in the 30 to 60 days following New York's receipt of the final FEIS it had previously estimated. (Secy.'s Opp'n 13.) On March 14, 2002, Millennium wrote to New York providing information concerning the blasting issues. (Id. at 14.) On April 23, 2002, Millennium provided New York a site specific blasting plan and impact assessment for the pipeline's proposed Hudson River crossing and requested that New York complete its review and conclude that the project is consistent with New York's coastal management program. (Id.)

On May 9, 2002, New York objected to the Millennium Project, finding that the Project was not consistent with New York's coastal management program. New York asserted that alternative pipeline routes across the Hudson River and across the Catskill Aqueduct were reasonable and available.

Millennium filed a timely consistency appeal with the Secretary of Commerce ("Secretary") seeking an override of the State's objection pursuant to 16 U.S.C. § 1456(c)(3)(A) and 15 C.F.R. Part 930, Subpart H. On June 7, 2002, Millennium filed a notice of appeal of New York's objection with the Secretary and requested the Secretary to override the objection on both procedural and substantive grounds. On December 15, 2003, the Secretary upheld New York's objection to the project. In sustaining New York's objection, the Secretary first determined that it was raised in a timely manner and that Millennium had failed to satisfy either of the statutory standards for overriding New York's objection to the Project. On February 15, 2004, Millenium filed this complaint. These motions followed.

LEGAL STANDARD

As Millennium notes, this Court has jurisdiction under the Administrative Procedure Act ("APA"), and the parties agree that review of the Secretary's decision must be conducted on the administrative record and reviewed under the standards for judicial review. 5 U.S.C. § 706. Under this standard, a court may set the action aside only if the Service's decision was arbitrary and capricious, an abuse of discretion, or otherwise not in accordance with the law. See Citizens to Preserve Overton Park v. Volpe, 401 U.S. 402, 413-14, 91 S.Ct. 814, 28 L.Ed.2d 136 (1971); C & W Fish Co. v. Fox, 931 F.2d 1556, 1562-1565 (D.C.Cir.1991). In making this inquiry, the Court asks whether the agency considered the relevant factors and whether or not it made a clear error of judgment. "At a minimum, the agency must have considered relevant data and articulated an explanation establishing a rational connection between the facts found and the choice made. The scope of review under the arbitrary and capricious standard is narrow and a court is not to substitute its judgment for that of the agency." Wyo. Outdoor Council v. Bosworth, 284 F.Supp.2d 81, 89 (D.D.C.2003). Rather, the agency action under review is entitled to a presumption of regularity. See Envtl. Def. Fund, Inc. v. Costle, 657 F.2d 275, 283 (D.C.Cir.1981). Under the arbitrary and capricious standard, the burden of proof is on the party challenging the decision. See Cleary, Gottlieb, Steen & Hamilton v. Dep't of Health & Human...