Optimus Steel, LLC v. U.S. Army Corps of Eng'rs, CIVIL ACTION NO. 1:20-CV-00374

• Court: United States District Courts. 5th Circuit. United States District Court of Eastern District Texas
• Writing for the Court: Michael J. Truncale, United States District Judge
• Citation: 492 F.Supp.3d 701
• Docket Number: CIVIL ACTION NO. 1:20-CV-00374
• Decision Date: 04 October 2020
• Parties: OPTIMUS STEEL, LLC, Plaintiff, v. U.S. ARMY CORPS OF ENGINEERS, Todd T. Semonite, Lieutenant General (in His Official Capacity as Chief of Engineers and Commanding General of the US Army of Engineers; Timothy R. Vail, Colonel (in His Official Capacity as US Army Corps of Engineers Galveston District Commander; and Jefferson Southern Star Pipeline, LLC, Defendants.

492 F.Supp.3d 701

OPTIMUS STEEL, LLC, Plaintiff,
v.
U.S. ARMY CORPS OF ENGINEERS, Todd T. Semonite, Lieutenant General (in His Official Capacity as Chief of Engineers and Commanding General of the US Army of Engineers; Timothy R. Vail, Colonel (in His Official Capacity as US Army Corps of Engineers Galveston District Commander; and Jefferson Southern Star Pipeline, LLC, Defendants.

CIVIL ACTION NO. 1:20-CV-00374

United States District Court, E.D. Texas, Beaumont Division.

Signed October 4, 2020

492 F.Supp.3d 709

James Robert Ray, III, Munsch Hardt Kopf & Harr, PC, Austin, TX, Claire Elizabeth Carroll, Frederick W. Addison, III, Munsch Hardt Kopf & Harr, PC, Dallas, TX, Michael R. Ramsey, Ramsey Law Firm, Terry Wesley Wood, Terry W. Wood, P.C., Beaumont, TX, for Plaintiff.

Eric Allen Grant, Hicks Thomas LLP, Sacramento, CA, James Garland Gillingham, Robert Austin Wells, United States Attorney's Office, Tyler, TX, Mark L. Walters, U.S. Department of Justice, Environment & Natural Resources, Washington, DC, for Defendants U.S. Army Corps of Engineers, Todd T. Semonite, Timothy R. Vail.

Christopher Vasil Popov, Vinson & Elkins LLP, Austin, TX, Brandon Michael Tuck, Matthew Charles Hoffman, Vinson & Elkins, Thomas Alan Zabel, Thomas A. Zabel, Houston, TX, Jeremy Charles Marwell, Vinson & Elkins LLP, Washington, DC, for Defendant Jefferson Southern Star Pipeline, LLC.

ORDER DENYING PRELIMINARY INJUNCTION

Michael J. Truncale, United States District Judge

Before this Court is Plaintiff Optimus Steel, LLC's Amended Application for Preliminary Injunction. [Dkt. 31]. Defendants United States Army Corps of Engineers (the "Corps") and several officials¹ at the Corps (collectively, the "Federal Defendants") filed a response in opposition. [Dkt. 44]. Defendant Jefferson Southern Star Pipeline, LLC ("JSSP") filed a separate response in opposition. [Dkt. 47]. Plaintiff filed a reply. [Dkt. 49]. The Court held a preliminary injunction hearing on September 23–24, 2020. [Dkts. 63, 65]. Having considered the Parties’ briefing, the arguments presented at the Hearing, the record, and the relevant law, the Court denies Plaintiff's motion [Dkt. 31] for preliminary injunction.

I. BACKGROUND

This case concerns the construction of JSSP's Southern Star Pipeline (the "Pipeline"), a 14.2-mile long gas pipeline that will run from Beaumont, Texas to Port Neches, Texas. [Dkt. 30, pp. 4–5]. Plaintiff seeks declaratory and injunctive relief to stop the construction of the Pipeline, alleging the Corps authorized the Pipeline to be constructed in violation of the Clean Water Act, 33 U.S.C. § 1344(e) ("CWA"); the Endangered Species Act, 16 U.S.C. § 1531, et. seq. ("ESA"); the National Environmental Policy Act, 42 U.S.C. § 4321, et. seq. ("NEPA"); and the Administrative Procedure Act, 5 U.S.C. §§ 701 – 06 ("APA"). [See generally Dkt. 30].

Accordingly, this case involves the interplay between several statutory and regulatory schemes. The Court will discuss them below, before turning to the actions undertaken by Federal Defendants and JSSP.

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A. Controlling Statutory and Regulatory Schemes

i. Clean Water Act

The CWA prohibits the discharge of any "pollutant," including dredged or fill material, into the navigable waters of the United States without a permit. See 33 U.S.C. § 1311(a), (e). The Corps oversees the permitting process and, to that end, regulates the discharge of any pollutant into jurisdictional waters, including wetlands. Id. § 1362(7); 33 C.F.R. § 328.3(a), (b).

Under Section 404 of the CWA, the Corps may issue permits in one of two ways: (1) it issues individual permits that are tailored to specific projects, or (2) it promulgates general permits and later "verifies" that specific projects of a generally approved category of activity—such as utility lines—qualify thereunder. See 33 U.S.C. § 1344(a), (e). Individual permits are issued on a case-by-case basis and require resource and time-intensive procedures. See id. § 1344(a). By contrast, general permits streamline the permitting process and regulate "with little, if any, delay or paperwork certain activities having minimal impacts." Id. § 1344(e) ; 33 C.F.R. § 330.1(b). In 1977, Congress amended the CWA to include general permits for this express purpose. H.R. Rep. No. 95-830, at 38, 98, 100 (1977) (Conf. Rep.), reprinted in 1977 U.S.C.C.A.N. 4424.

General permits may be authorized "for any category of activities involving discharges of dredged or fill material if the [Corps] determines that the activities in such category are similar in nature, will cause only minimal adverse environmental effects when performed separately, and will have only minimal cumulative adverse effect on the environment." 33 U.S.C. § 1344(e)(1). General permits must also comply with the CWA Section 404(b)(1) Guidelines promulgated by the U.S. Environmental Protection Agency. 40 C.F.R. § 230.7(b). General permits last up to five years, at which point they must be reissued or left to expire. 33 U.S.C. § 1344(e)(2).

For a specific project to qualify under a general permit, a Corps District Engineer must conclude that it complies with the general permit's conditions, will cause no more than minimal adverse effects on the environment, and will serve the public interest. Id. §§ 330.1(e)(2), 330.6(a)(3)(i). If a District Engineer finds the project does not qualify for a general permit, the project must proceed under an individual permit. 33 C.F.R. § 330.6(a)(2), (d) ; see Sierra Club v. U.S. Army Corps of Eng'rs , 803 F.3d 31, 39 (D.C. Cir. 2015).

In some instances, general permits require prospective permittees to submit a pre-construction notification ("PCN") before beginning the regulated activity. 82 Fed. Reg. 1860, 1861 (Jan. 6, 2017). A PCN enables the District Engineers to make case-specific determinations of general permit eligibility and, when necessary, attach additional, project-specific conditions at the verification stage. Id. ; 33 C.F.R. §§ 330.1(e)(2), 330.6(a)(3)(i). For linear projects like pipelines, the PCN must address all water crossings affected by the project, including the crossings that triggered the PCN as well as the other separate and distant crossings that did not themselves require a PCN. 82 Fed. Reg. at 1986. The District Engineer evaluates the proposed activity and determines whether the water crossings individually and cumulatively satisfy the general permit's terms and conditions. Id. at 2004–05.

ii. Endangered Species Act

Section 7(a)(2) of the ESA requires federal agencies, such as the Corps, to insure that any action it authorizes, funds, or carries out "is not likely to jeopardize the

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continued existence of any listed species or threatened species or result in the destruction or adverse modification of designated critical habitat." 16 U.S.C. § 1536(a)(2) ; see Tennessee Valley Auth. v. Hill , 437 U.S. 153, 174–75, 98 S.Ct. 2279, 57 L.Ed.2d 117 (1978). If the agency determines that its action "may affect" endangered species or critical habitat, it must pursue either informal or formal consultation with the appropriate wildlife agency—in this case, the U.S. Fish and Wildlife Services (the "Services"). 50 C.F.R §§ 402.13, 402.14(b)(1) ; 16 U.S.C. § 1536(a)(2). However, no such consultation is required if the Corps determines that a proposed action is not likely to adversely affect any listed species or critical habitat. 50 C.F.R. § 402.14(b)(1). Federal agencies must review their actions "at the earliest possible time." Id. § 402.14(a).

iii. National Environmental Policy Act

The NEPA is a procedural statute that requires the Corps to assess the likely environmental impacts of its actions before authorizing or issuing permits under the CWA. Sierra Club , 803 F.3d at 36 (citing Dep't of Transp. v. Pub. Citizen , 541 U.S. 752, 756–57, 124 S.Ct. 2204, 159 L.Ed.2d 60 (2004) ); Vt. Yankee Nuclear Power Corp. v. Nat. Res. Def. Council, Inc. , 435 U.S. 519, 558, 98 S.Ct. 1197, 55 L.Ed.2d 460 (1978) (describing NEPA as "essentially procedural"). NEPA prescribes a process whereby federal agencies must take a "hard look" at their proposed actions in advance of deciding whether and how to proceed. Robertson v. Methow Valley Citizens Council , 490 U.S. 332, 350, 109 S.Ct. 1835, 104 L.Ed.2d 351 (1989).

Specifically, under NEPA, the Corps must produce an Environmental Impact Statement ("EIS") for any proposed "major federal action" that will "significantly affect" the quality of human environment. 42 U.S.C. § 4332(C) ; 40 C.F.R. § 1508.11. However, an EIS is not required when the agency conducts an Environmental Assessment ("EA") and issues a Finding of No Significant Impact ("FONSI"). 42 U.S.C. § 4332(C) ; 40 C.F.R. § 1508.9. The FONSI includes or summarizes the EA and explains why the agency believes its purported action will not have a significant effect on the environment. 40 C.F.R. §§ 1501.4(e), 1508.13.

B. The Corps’ Reissuance of NWP-12 in 2017

Nationwide permits are a type of general permit that authorize activities on a nationwide basis. 33 C.F.R. § 330.2(b). The Corps has promulgated a...