Del. Riverkeeper Network v. Fed. Energy Regulatory Comm'n, 17-5084

CourtUnited States Courts of Appeals. United States Court of Appeals (District of Columbia)
Citation895 F.3d 102
Docket NumberNo. 17-5084,17-5084
Parties DELAWARE RIVERKEEPER NETWORK and Maya Van Rossum, Appellants, v. FEDERAL ENERGY REGULATORY COMMISSION, et al., Appellees.
Decision Date10 July 2018

Jordan Yeager argued the cause for appellants. With him on the briefs was Aaron Stemplewicz.

Christopher D. Ahlers was on the brief for amicus curiae Clean Air Council supporting plaintiff-appellants and supporting reversal of the decision below.

Ross R. Fulton, Attorney, Federal Energy Regulatory Commission, argued the cause for appellees. With him on the brief were James P. Danly, General Counsel, and Robert H. Solomon, Solicitor.

Jeremy C. Marwell argued the cause for intervenor-appellee PennEast Pipeline Company, LLC. With him on the brief were Michael B. Wigmore, Matthew X. Etchemendy, Frank H. Markle, and James D. Seegers.

Melissa N. Patterson, Attorney, U.S. Department of Justice, argued the cause for amicus curiae United States of America. With her on the brief were Chad A. Readler, Acting Assistant Attorney General, Jessie K. Liu, U.S. Attorney, and Scott R. McIntosh, Attorney.

Erika Maley and William R. Levi were on the brief for amici curiae Interstate Natural Gas Association of America supporting appellees.

Before: Griffith and Katsas, Circuit Judges, and Edwards, Senior Circuit Judge.

Opinion for the Court filed by Circuit Judge Katsas.

This appeal presents broad due-process challenges to how the Federal Energy Regulatory Commission conducts business. By statute, FERC is required to recover its costs from regulated industries. The appellants contend that this improperly incentivizes the Commission to approve new natural-gas pipelines, in order to ensure itself future funding sources. The appellants also challenge FERC’s use of tolling orders to meet its statutory deadlines for acting on applications for rehearing.

I

The Natural Gas Act requires companies to obtain a "certificate of public convenience and necessity" before constructing facilities to transport natural gas in interstate commerce. 15 U.S.C. § 717f(c)(1)(A). FERC must issue a certificate to a qualified applicant if the proposed project is "required by the present or future public convenience and necessity," subject to any reasonable terms and conditions imposed by the Commission. Id. § 717f(e).

FERC, a Commission within the Department of Energy, receives annual appropriations fixed by Congress. 42 U.S.C. § 7171(j). However, the Omnibus Budget Reconciliation Act of 1986 ("Budget Act") requires FERC to "assess and collect" from the various industries that it regulates, including the natural-gas industry, "fees and annual charges in any fiscal year in amounts equal to all of the costs incurred by the Commission in that fiscal year." Id. § 7178(a)(1). These receipts must be "credited to the general fund of the Treasury." Id. § 7178(f).

A party "aggrieved by an order issued by the Commission in a proceeding under" the Natural Gas Act may seek rehearing. 15 U.S.C. § 717r(a). "Unless the Commission acts upon the application for rehearing within thirty days after it is filed, such application may be deemed to have been denied." Id. The aggrieved party then may seek judicial review, in the court of appeals, "within sixty days after the order of the Commission upon the application for rehearing." Id. § 717r(b).

In 2015, intervenor PennEast Pipeline Co. sought a certificate to build a 114-mile natural-gas pipeline running through Pennsylvania and New Jersey. Appellants Delaware Riverkeeper Network and its director Maya van Rossum (collectively "Riverkeeper") intervened to oppose the project.

In 2016, while FERC was still reviewing the proposal, Riverkeeper filed a complaint seeking declaratory relief against the Commission and its members. The complaint alleges that FERC’s funding structure creates structural bias, in violation of the Due Process Clause of the Fifth Amendment, by incentivizing the Commission to approve new pipelines in order to secure additional sources for its future funding. The complaint also challenges the Commission’s use of tolling orders to satisfy its 30-day deadline for acting on rehearing applications. Those tolling orders grant rehearing for the limited purpose of giving the Commission more time to consider pending applications. In the meantime, the complaint alleges, FERC routinely allows construction to proceed on approved projects. According to Riverkeeper, this frustrates judicial review, again in violation of the Due Process Clause.

After PennEast intervened as a defendant in the district court, the Commission and PennEast moved to dismiss the complaint. They argued that Riverkeeper had not identified any liberty or property interest protected by the Due Process Clause and that, in any event, FERC provides all the process that is due. The district court agreed with both points and dismissed the complaint for failure to state a claim. Del. Riverkeeper Network v. FERC , 243 F.Supp.3d 141 (D.D.C. 2017). This appeal followed.

II

Cases involving the Commission typically come to us as petitions for review of final agency orders, not as appeals from the district court. We therefore begin by explaining why this case is properly before us.

In NO Gas Pipeline v. FERC , 756 F.3d 764 (D.C. Cir. 2014), this Court held that the judicial-review provision in the Natural Gas Act does not apply to the kind of structural-bias claim at issue here. We reasoned that such a claim "does not target any aspect of FERC’s actual decision" in any individual proceeding under the Natural Gas Act, but instead "centers wholly on" the Budget Act. Id. at 769. Therefore, we concluded, such a claim may be brought only in district court. See id. We emphasized the "narrowness of our jurisdictional holding," and we distinguished structural-bias claims from claims that a specific FERC decision "was tainted by actual bias or some other improper motivation." Id.

Under NO Gas Pipeline , Riverkeeper properly filed this case in the district court. Its principal claim targets the Budget Act’s funding mechanism rather than any individual decision to award a certificate of public necessity. Therefore, the Natural Gas Act does not channel judicial review directly to the courts of appeals, and so the district court retained its federal-question jurisdiction under 28 U.S.C. § 1331.

We also conclude that Riverkeeper established Article III standing. Although FERC does not renew its standing objections on appeal, Article III standing is an element of subject-matter jurisdiction, so we must consider that issue regardless. See Steel Co. v. Citizens for a Better Env’t , 523 U.S. 83, 94–95, 118 S.Ct. 1003, 140 L.Ed.2d 210 (1998). As the district court explained, several named members of the Delaware Riverkeeper Network—including Ms. van Rossum—filed declarations alleging aesthetic, recreational, and property injuries that they would likely suffer if a specific, identified natural-gas pipeline were approved by FERC and built. See 243 F.Supp.3d at 150–51. At this stage of the case, these unchallenged declarations suffice to establish the individual standing of Ms. van Rossum and the representational standing of the Network. See , e.g. , Summers v. Earth Island Inst. , 555 U.S. 488, 494, 129 S.Ct. 1142, 173 L.Ed.2d 1 (2009) ; Nat’l Ass’n of Home Builders v. EPA , 667 F.3d 6, 12 (D.C. Cir. 2011).

Finally, we conclude that Riverkeeper has a viable cause of action. The Supreme Court has recognized an implied action for prospective relief against allegedly unconstitutional actions by federal officials, which FERC does not dispute extends to it. See , e.g. , Armstrong v. Exceptional Child Ctr., Inc. , ––– U.S. ––––, 135 S.Ct. 1378, 1384, 191 L.Ed.2d 471 (2015) ; Free Enter. Fund v. Pub. Co. Accounting Oversight Bd. , 561 U.S. 477, 491 n.2, 130 S.Ct. 3138, 177 L.Ed.2d 706 (2010). Moreover, Congress has waived federal sovereign immunity for claims seeking "relief other than money damages." See 5 U.S.C. § 702 ; Trudeau v. FTC , 456 F.3d 178, 187 (D.C. Cir. 2006).

III

The Due Process Clause of the Fifth Amendment forbids the federal government from depriving a person of "life, liberty, or property, without due process of law." To determine whether Riverkeeper has stated a valid due-process claim, "[w]e first ask whether there exists a liberty or property interest of which a person has been deprived." Swarthout v. Cooke , 562 U.S. 216, 219, 131 S.Ct. 859, 178 L.Ed.2d 732 (2011) (per curiam). If so, "we ask whether the procedures followed ... were constitutionally sufficient." Id. We review de novo the district court’s dismissal for failure to state a claim, and we accept the complaint’s well-pleaded factual allegations as true. Ralls Corp. v. Comm. on Foreign Inv. in the U.S. , 758 F.3d 296, 314 (D.C. Cir. 2014).

A

Riverkeeper seeks to ground its due-process claim in environmental interests and in real-property interests created under Pennsylvania law. We examine each in turn.

In 1971, the Pennsylvania Environmental Rights Amendment inserted into the state constitution certain protections for the environment. The Amendment states:

The people have a right to clean air, pure water, and to the preservation of the natural, scenic, historic and esthetic values of the environment. Pennsylvania’s public natural resources are the common property of all the people, including generations yet to come. As trustee of these resources, the Commonwealth shall conserve and maintain them for the benefit of all the people.

Pa. Const. art. I, § 27. Riverkeeper contends that this right to clean air, pure water, and preservation of the environment creates a protected liberty or property interest as a matter of federal due process. It further contends that this right constrains FERC in its administration of federal law. The district court rejected these contentions, as do we.

To begin, the Environmental Rights Amendment creates no federally protected liberty interest. The...

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