New York State Department of E v. Federal Energy Regulatory Comm
OPINION, denying petition for review, by JAC, DAL, SLC, FILED. [17-3770]
Case 17-3770, Document 204-1, 03/12/2018, 2254067, Page1 of 12
In re N.Y. State Dep’t of Envtl. Conserv. v. FERC
United States Court of Appeals
For the Second Circuit
AUGUST TERM 2017
NEW YORK STATE DEPARTMENT OF ENVIRONMENTAL CONSERVATION,
SARAH E. BURNS, AMANDA KING, MELODY BRUNN, BRUNN LIVING
TRUST, PRAMILLA MALICK, CHAIR OF PROTECT ORANGE COUNTY,
PROTECT ORANGE COUNTY, (POC), AN ASSOCIATION,
FEDERAL ENERGY REGULATORY COMMISSION,
MILLENNIUM PIPELINE COMPANY, L.L.C. and CPV VALLEY, L.L.C.,
Petition for Review from the Federal Energy Regulatory
Nos. CP16‐17‐000, CP16‐17‐003.
ARGUED: JANUARY 24, 2018
DECIDED: MARCH 12, 2018
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Before: CABRANES, LIVINGSTON, and CARNEY, Circuit Judges.
Petitioner New York State Department of Environmental
Conservation requests that we vacate two orders of the Federal
Energy Regulatory Commission. Together, these orders authorized
Intervenor‐Respondent Millennium Pipeline Company, L.L.C. to
construct a natural gas pipeline in Orange County, New York, and
determined that the Department had waived its authority to provide
a water quality certification for the pipeline project under Section 401
of the Clean Water Act.
We DENY the petition for review.
FREDERICK A. BRODIE, Assistant Solicitor General
(Barbara D. Underwood, Solicitor General;
Andrew D. Bing, Deputy Solicitor General Lisa M.
Burianek, Deputy Bureau Chief; and Brian
Lusignan, Assistant Attorney General, on the brief),
for Eric T. Schneiderman, Attorney General, State
of New York, Albany, NY, for Petitioner.
ROBERT H. SOLOMON, Solicitor (James P. Danly,
General Counsel; Holly E. Cafer, Senior Attorney;
and Ross Fulton, Attorney, on the brief), Federal
Energy Regulatory Commission, Washington, DC,
CAROLYN ELEFANT (Sarah A. Burns, New York
University School of Law, New York NY; and
David Wallace, David Wallace Law Offices,
Case 17-3770, Document 204-1, 03/12/2018, 2254067, Page3 of 12
Montague, NJ, on the brief), Law Offices of Carolyn
Elefant, PLLC, Washington, DC, for Intervenors
Sarah E. Burns, Amanda King, Melody Brunn,
Brunn Living Trust, Pramilla Malick, Chair of
Protect Orange County, Protect Orange County,
(POC) an association.
CATHERINE E. STETSON (Sean Marotta, Hogan
Lovells US LLP, Washington, DC; and Paul
Korman, Michael R. Pincus, and A. Gregory Junge,
Van Ness Feldman LLP, on the brief), Hogan
Lovells US LLP, Washington, DC, for Intervenors
Millennium Pipeline Company, L.L.C.
Elizabeth W. Whittle, Nixon Peabody LLP,
Washington, DC, for Intervenors CPV Valley, L.L.C.
JOSÉ A. CABRANES, Circuit Judge:
The questions presented are: (1) whether the Federal Energy
Regulatory Commission (“FERC”) correctly determined that
petitioner New York State Department of Environmental
Conservation (“the Department”) waived its authority to review the
request of Intervenor Millennium Pipeline Company, L.L.C.
(“Millennium”) for a water quality certification under Section 401 of
the Clean Water Act by failing to act on that request within one year;
and (2) whether FERC has jurisdiction to regulate the pipeline at
issue, and, if so, whether FERC appropriately accepted and reviewed
the application pursuant to its exclusive jurisdiction over interstate
natural gas transportation under the Natural Gas Act.
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The Department challenges two FERC orders. These orders
effectively authorized Millennium to construct a natural gas pipeline
to serve a power plant run by Intervenor CPV Valley, L.L.C. (“CPV”)
absent the water quality certification otherwise required to be
procured from the Department under Section 401 of the Clean Water
Act, 33 U.S.C. § 1341. In the orders under review, FERC determined
that the Department waived its certification authority for the pipeline
by failing to respond within one year of receiving Millennium’s
request for water quality certification, as required by statute.
Additionally, the Protect Orange County Intervenors (“the Landover
Intervenors”) challenge FERC’s jurisdiction over the pipeline at issue.
We conclude that the Department waived its authority to
review Millennium’s request for a water quality certification under
the Clean Water Act by failing to act on that request within one year.
We also conclude that FERC does have jurisdiction over the pipeline.
Accordingly, we DENY the petition for review.
The Valley Energy Center, owned by CPV, is an electric power
generation facility under construction in the Town of Wawayanda, in
Orange County, New York.1 CPV contracted with Millennium to
build the pipeline as a means of connecting the plant to Millennium’s
existing interstate natural gas pipeline, which runs through Orange
On November 13, 2015, Millennium filed an application with
FERC, pursuant to section 7(c) of the Natural Gas Act, 15 U.S.C. §
717f(c), requesting certificate authorization to construct and operate
7.8 miles of sixteen‐inch‐diameter lateral pipeline and related
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facilities.3 The Natural Gas Act requires applicants to obtain “any
permits, special use authorizations, certifications, opinions, or other
approvals as may be required under Federal law.”4 Since the pipeline
would cross several streams of water in southern New York,
Millennium was also required to apply to New York’s Department for
a water quality certification under the Clean Water Act to confirm that
the proposed pipeline project (“Project”) would comply with the Act,
state water quality standards, and other requirements of state law.5
Section 401 of the Clean Water Act provides that “[i]f the State .
. . fails or refuses to act on a request for certification, within a
reasonable period of time (which shall not exceed one year) after
receipt of such request, the certification requirements . . . shall be
waived with respect to such Federal application.”6
On forms dated November 18, 2015, Millennium submitted an
application for a water quality certification to the Department.7 The
Department received the application on November 23, 2015.8 On
December 7, 2015, the Department notified Millennium that it
deemed the application incomplete, pending FERC’s environmental
assessment.9 FERC issued its assessment on May 9, 2016.10 On June 17,
2016, the Department issued a second notification that it considered
Millennium’s application incomplete, requesting further information
regarding the Project’s potential environmental impact.11 In August
15 U.S.C. §§ 717n(a)(1), (2).
33 U.S.C. § 1341(a)(1).
Id. at 128.
Id. at 217.
Id. at 401.
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2016, Millennium submitted responses conveying additional
information to the Department.12
On November 9, 2016, FERC issued a certificate under section
7(c) of the Natural Gas Act approving the Project (“Certificate
Order”).13 The Certificate Order did not authorize Millennium to
begin construction immediately, instead listing various conditions
that the company would need to satisfy before starting work.14 After
FERC issued the Certificate Order, Millennium requested expedited
review of its application for a water quality certification.15 In response,
the Department acknowledged that Millennium had fully responded
to the second notice of incomplete application and stated that it would
continue its review.16 It contended that it had, “at a minimum, until
August 30, 2017,” to either approve or deny the application.17
Eager to begin construction, Millennium petitioned the United
States Court of Appeals for the District of Columbia Circuit to compel
the Department to act on its application for water quality certification,
on the basis that the Department failed to act on Millennium’s
application for a water quality certification within the one‐year time
limit mandated by Section 401 of the Clean Water Act.18 On June 23,
2017, that court dismissed Millennium’s petition for lack of standing,
holding that Millennium could seek a remedy for the delay only from
Accordingly, on July 21, 2017, Millennium requested that FERC
determine that the Department had waived its authority under the
Id. at 407, 441, 472.
Id. at 538; see generally Millennium Pipeline Co., 157 FERC ¶ 61096 (Nov. 9, 2016).
J.A. at 590-95.
Id. at 597.
Id. at 618.
See Millennium Pipeline Co. v. Seggos, 860 F.3d 696 (D.C. Cir. 2017).
Id. at 701.
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Clean Water Act, and thus permit Millennium to proceed with
construction.20 While that request was pending, on August 30, 2017—
nearly two years after Millennium’s initial submission to the
Department—the Department denied Millennium’s application.21 It
determined that FERC’s environmental assessment had failed to
evaluate the downstream greenhouse gas emissions from the Project.
The Department therefore considered the environmental assessment
incomplete and rejected the water quality certification request.22
Millennium petitioned this Court for review of the Department’s
On September 15, 2017, following the Department’s decision,
FERC found that the Department’s delay constituted a waiver of the
Department’s authority under the Clean Water Act (“Waiver
Order”).24 It held that under the plain language of Section 401—which
states that the window for review opens upon “receipt of such
request”—the relevant date for assessing waiver is the day the agency
receives an application, in this case, November 23, 2015.25
The Department, and, separately, the Landowner Intervenors
sought rehearing of the Waiver Order.26 FERC denied rehearing on
Id. at 736-37.
That case has been held in abeyance pending the outcome of the instant appeal. See Millennium
Pipeline Co. v. N.Y. State Dep’t of Envtl. Conserv., No. 17-3465 (2d Cir., filed Oct. 26, 2017).
Millennium Pipeline Co., 160 FERC ¶ 61,065 (Sept. 15, 2017); J.A. 753.
J.A. 763. On October 27, 2017, following entry of the Waiver Order, FERC issued a “Notice to
Proceed with Construction” authorizing Millennium to begin construction without receiving a
Section 401 certification from the Department. J.A. 783. To prevent Millennium from
commencing construction until FERC acted on the Department’s motion for rehearing, on October
30, 2017, the Department brought an emergency petition for a writ of prohibition to this Court. See
In re N.Y. State Dep’t of Envtl. Conserv. v. Millennium Pipeline Co., No. 17-3503 (2d Cir. Oct. 30,
2017). We issued an administrative stay regarding the Notice to Proceed. We dissolved that stay
after FERC issued the Waiver Rehearing Order.
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November 15, 2017 (“Waiver Rehearing Order”).27 Two days after
FERC’s denial of rehearing, the Department filed this petition for
review of the Waiver Order and the Waiver Rehearing Order.28 On
appeal, the Landowner Intervenors claim that FERC lacks jurisdiction
under the Natural Gas Act to regulate the pipeline.
Standard of Review
Two issues are presented by this proceeding: (1) whether
FERC correctly interpreted Section 401 of the Clean Water Act when
it held that the Department waived its right to act on Millennium’s
application; and (2) whether FERC appropriately accepted and
reviewed the application as subject to its exclusive jurisdiction under
the Natural Gas Act.
We review FERC’s interpretation of the Clean Water Act, a
statute that it does not administer, de novo.29 The Department
contends that we should grant Chevron deference to a state agency’s
interpretation of a federal statute. It claims that since Section 401
contemplates a joint federal‐state program in which the Department
is responsible for determining whether a proposal complies with the
Clean Water Act, we should afford deference to its interpretation.30
Millennium Pipeline Co., 161 FERC ¶ 61,186 (Nov. 15, 2017); J.A. 793.
As part of its petition, the Department filed an emergency motion for stay of construction
pending review of the Waiver Orders. On December 7, 2017, following briefing and oral
argument, this Court denied the Department’s emergency motion for a stay, dismissed the
Department’s earlier petition (No. 17-3503) as moot, and dissolved the administrative stay it had
previously issued. The Landowner Intervenors subsequently requested a similar stay in this case
and in the separate appeal of FERC’s Certificate Orders (17-3966). We denied those requests on
December 15, 2017. N.Y. Dep’t of Envtl. Conserv., No. 17-3770 (2d Cir. Dec. 15, 2017); Protect
Orange Cty. v. FERC, No. 17-3966 (2d Cir. Dec. 15, 2017).
Constitution Pipeline Co. v. N.Y. State Dep’t of Envtl. Conserv., 868 F.3d 87, 100 (2d Cir.
Pet’r’s Br. 26-27.
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The Department argues that we have afforded Chevron deference to
a state agency’s interpretation of a federal statute in the case of
Medicaid, another joint federal‐state program.31
Our precedents, however, foreclose extending such deference.
A state agency’s interpretation of a federal statute does not receive
deference unless the federal agency charged with administering that
statute has expressly approved the state’s interpretation and
implementation.32 Although the Department has a role in
determining compliance with Section 401 of the Clean Water Act,
the federal agency charged with administering the Clean Water Act
(the Environmental Protection Agency) is not involved in reviewing
or approving the Department’s interpretation of the waiver period.33
We therefore construe Section 401 de novo, according no
deference to the interpretations of FERC or the Department.
Regarding the Landowner Intervenors’ challenge to FERC’s
authority over the Project, we must first determine whether the
Intervenors have standing before addressing whether the Natural
Gas Act provides FERC with jurisdiction.
B. Whether the Department Waived Its Authority Under the
Clean Water Act
The Department contends that the review process under
Section 401 begins only once it, a state agency, deems an application
“complete.” FERC, on the other hand, argues that the one‐year
See Perry v. Dowling, 95 F.3d 231, 236 (2d Cir. 1996).
See id. (“When the federal-statute interpretation is that of a state agency and ‘no federal agency
is involved,’ deference is not appropriate.” (quoting Turner v. Perales, 869 F.2d 140, 141 (2d Cir.
1989)); see also Constitution Pipeline, 868 F.3d at 100 (reviewing de novo interpretation of same
See Alabama Rivers All. v. F.E.R.C., 325 F.3d 290, 296–97 (D.C. Cir. 2003) (noting federal
Environmental Protection Agency is charged with administering Clean Water Act).
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review period commences when the Department receives a request
for water quality certification. We agree with FERC.
The plain language of Section 401 outlines a bright‐line rule
regarding the beginning of review: the timeline for a state’s action
regarding a request for certification “shall not exceed one year” after
“receipt of such request.”34 It does not specify that this time limit
applies only for “complete” applications. If the statute required
“complete” applications, states could blur this bright‐line rule into a
subjective standard, dictating that applications are “complete” only
when state agencies decide that they have all the information they
need. The state agencies could thus theoretically request
supplemental information indefinitely.
The Department warns that requiring state agencies to act on
a request within one year will force it to render premature decisions.
Among other harms, the Department notes, such a requirement may
undermine public notice and comment, impede a state from
working with the applicant to refile in accordance with its
requirements, and prompt applicants to flood the courts with
These concerns are misplaced. If a state deems an application
incomplete, it can simply deny the application without prejudice—
which would constitute “acting” on the request under the language
of Section 401. It could also request that the applicant withdraw and
resubmit the application.35 Such a denial does not preclude a state
from assisting applicants with revising their submissions.36 Nor does
Constitution Pipeline, 868 F.3d at 94 (noting that an applicant for a Section 401 certification had
withdrawn its application and resubmitted at the Department’s request—thereby restarting the
one-year review period).
In fact, Millennium met with the Department on August 10, 2015, before submitting its
application, to “avail itself of [the Department’s] pre-application process,” which included the
Department providing comments on Millennium’s plans. Crouse Decl. Ex. G at 2, Dkt. 7.
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it harm the process of public notice and comment, which would
simply begin once a state decided that it did not need to deny an
application for incompleteness. And what the Department calls
“premature” denials of applications are not likely to prompt a
deluge of litigation. The Department itself notes that this litigation
incentive already exists; applicants can argue before FERC that their
applications are complete under New York regulations.37
Accordingly, we conclude that the Department waived its
authority under Section 401 and that FERC properly issued a waiver
order permitting Millennium to proceed with construction without a
water quality certification.
C. FERC’s Jurisdiction over the Project
The petitioner (the Department) in this instance did not raise
the issue of whether FERC has jurisdiction over Millennium’s
application regarding the Project. Generally, “intervenors may only
argue issues that have been raised by the principal parties; they
simply lack standing to expand the scope of the case to matters not
addressed by petitioners in their request for review.”38 Nonetheless,
courts may exercise discretion to entertain a new argument raised by
an intervenor.39 We choose to do so here.
The Natural Gas Act provides that FERC has plenary
authority over the transportation of natural gas in interstate
commerce.40 Natural “gas crossing a state line at any stage of its
movement to the ultimate consumer is in interstate commerce
Reply Br. Pet. 23.
Petro Star Inc. v. FERC, 835 F.3d 97, 110 (D.C. Cir. 2016) (brackets omitted) (quoting Nat’l
Ass’n of Regulatory Util. Comm’rs v. ICC, 41 F.3d 721, 729 (D.C. Cir. 1994)).
See New York v. Atl. States Marine Fisheries Comm’n, 609 F.3d 524, 529 n.4 (2d Cir. 2010).
15 U.S.C. § 717(b).
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during the entire journey.”41 If a pipeline is an integrated part of an
interstate system, FERC has jurisdiction over it even if that pipeline
is a “lateral” line off a company’s mainline and that lateral line is
solely located in one state, and the transporting gas never leaves that
The pipeline at issue here will transport gas that is in
interstate commerce as part of an integrated system. Millennium’s
mainline system is linked to interstate pipelines that run both in and
out of the state of New York.43 Although the pipeline at issue here is
located entirely within New York and will deliver gas only to the
Valley Energy Center, it will receive out‐of‐state gas from the
Millennium mainline.44 FERC therefore has jurisdiction.
For the foregoing reasons, we DENY the petition for review.
Mich. Consol. Gas Co. v. Panhandle E. Pipe Line Co., 887 F.2d 1295, 1299 (6th Cir. 1989)
(quoting Maryland v. Louisiana, 451 U.S. 725, 755 (1981)).
See Okla. Nat. Gas Co. v. FERC, 28 F.3d 1281, 1287 (D.C. Cir. 1994).
J.A. 544, 546.
Id. at 544.
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