DELAWARE RIVERKEEPER NETWORK et al v. COLLIER et al
Filing
51
OPINION filed. Signed by Judge Anne E. Thompson on 8/20/2012. (mmh)
NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
DELAWARE RIVERKEEPER NETWORK,
et al.,
Plaintiffs,
Civ. No. 11-423
v.
OPINION
DELAWARE RIVER BASIN COMMISSION,
et al.,
Defendants.
THOMPSON, U.S.D.J.
This matter has come before the Court by way of a Motion to Dismiss for Lack of
Subject Matter Jurisdiction Pursuant to Federal Rule of Civil Procedure 12(b)(1) filed by
Defendants Hess Corporation (“Hess”) and Newfield Appalachia PA, LLC (“Newfield”) [docket
# 31], and joined by Delaware River Basin Commission (DRBC or “the Commission”)
(collectively, “Defendants”) [33]. Plaintiffs, Delaware Riverkeeper Network, the Delaware
Riverkeeper, and Damascus Citizens for Sustainability, Inc. (collectively, “Plaintiffs”) jointly
oppose this motion [35]. The Court has reached a determination after considering the
submissions of the parties and without oral arguments pursuant to Federal Rule of Civil
Procedure 78(b). For the following reasons, Defendants’ Motion will be granted, and Plaintiffs’
Amended Complaint will be dismissed for lack of subject matter jurisdiction.
I.
BACKGROUND1
This dispute arises out of administrative actions taken by the DRBC regarding certain
wells used for natural gas exploration.
1
The background information supplied in this Opinion is taken almost verbatim from the Court’s previous Opinion
of August 29, 2011, which in turn relied on Plaintiffs’ Original Complaint and matters of public record. See (Op. of
Aug. 29, 2011, at 2–6).
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The DRBC is a federal-interstate compact agency that was created pursuant to the 1961
Delaware River Basin Compact (“Compact”), see Pub. L. 87-328, 75 Stat. 588 (1961); see also
Compact, available at http://www.state.nj.us/drbc/regs/compa.pdf. The Compact was enacted by
concurrent legislation in the United States Congress and in individual states including New York,
New Jersey, Pennsylvania, and Delaware, in order to coordinate the management of water resources
among private enterprise and federal, state, and local governments.
The DRBC implements the Compact’s directives through the Administrative Manual: Rules
of Practice and Procedure (“RPP”), see 18 C.F.R. §§ 401.81–90; see also RPP, available at
http://www.state.nj.us/drbc/regs/rules.pdf. Substantively, the Compact prohibits any project having a
“substantial effect” on the Delaware River Basin’s water resources unless the Commission grants
prior approval. (Compact § 3.8). Under the RPP, certain classes of projects are deemed not to have a
“substantial effect” and therefore do not require review by the Commission except as directed by the
Executive Director. (RPP § 2.3.5A). However, a federal or state agency may refer otherwiseexcluded projects to the Commission if the agency determines that the project may have a substantial
effect on the Basin’s water resources. (Id. § 2.3.5C). A party may request a hearing to review a
decision made by the Commission or Executive Director within thirty days of the decision. (Id. §
2.6.1C). The Commission will grant a hearing if it determines that an adequate record regarding the
decision is unavailable, the case involves a Director determination requiring further action by the
Commission, or a hearing is necessary or desirable. (Id. § 2.6.2A). Hearings are conducted by one
or more Commission members, by the Executive Director, or by a Hearing Officer designated by the
Chairman. (Id. § 2.6.3A). Any determination by the Commission is ultimately subject to
judicial review, as long as the appeal is filed within forty-five days of final Commission action.
(Id. § 2.6.10).
The present dispute principally concerns the DRBC’s actions with respect to natural gas
development in the Delaware River Basin. Natural gas in shale formations is extracted through a
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process known as hydraulic fracturing (“hydrofracking”), whereby vertical wells are bored
thousands of feet deep and millions of gallons of water mixed with chemical agents are injected
into the well at high pressure to fracture the rock and release the natural gas. This process also
involves horizontal drilling to maximize the shale layer. According to Plaintiffs’ Amended
Complaint, hydrofracking—whether for exploration or production—negatively affects water
quality, causes toxic pollution, erosion, and various other environmental harms and humanhealth risks. The Delaware River has been designated Special Protection Waters (“SPW”) and is
therefore protected by anti-degradation regulations requiring maintenance of the existing water
quality with “no measurable change” except towards natural conditions.
On May 19, 2009, Executive Director Carol Collier issued a “Determination of the
Executive Director Concerning Natural Gas Extraction Activities in Shale Formations Within the
Drainage Area of Special Protection Waters” (“EDD”), stating that natural gas extraction project
sponsors may not hydrofrack shale formations within the SPW drainage area without prior
approval from the Commission. However, the EDD further stated that wells “intended solely for
exploratory purposes are not covered by this Determination.” On June 14, 2010, Collier issued a
Supplemental Determination (“SEDD”), withdrawing the EDD’s exclusion of exploratory wells.
The SEDD, however, carved out an exemption for exploratory well projects that had already
received Pennsylvania Department of Environmental Protection (“PADEP”) permits and that
were invested in based upon reliance on the May 2009 EDD. Newfield is a sponsor of five of
these exempted exploratory well projects. Collier’s rationale for the exemption was that, in addition
to the sponsors’ investment-backed expectations, these wells were subject to state regulation and
would “require Commission approval before they can be fractured or otherwise modified for natural
gas production.” On July 23, Collier issued an Amendment to the Supplemental Determination
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(“ASEDD”), extending the grandfathering exemption to two additional wells sponsored by Hess that
would be receiving PADEP permits.
Various interested parties, including the Plaintiffs, submitted hearing requests, which the
DRBC consolidated and assigned to a Hearing Officer—the Honorable Edward N. Cahn, former
Chief Judge of the Eastern District of Pennsylvania and presently Of Counsel at Blank Rome, LLP.
At a September 2 meeting convening the interested parties, Judge Cahn entered a scheduling order
governing production of expert reports and exhibits and scheduled the hearing for December 13,
2010. Judge Cahn further instructed the Plaintiffs that their request for a DRBC order to halt
construction of the grandfathered exploratory wells would need to be raised before the full
Commission. Plaintiffs accordingly submitted to the DRBC a letter request, which the DRBC denied
at its September 15, 2010 meeting. The drilling parties subsequently completed the drilling process
of these grandfathered exploratory wells and thereafter asserted that the completion of these wells
rendered the scheduled hearing moot. On December 8, 2010, the Commissioners adopted a
Resolution (“the Resolution”) dismissing Plaintiffs’ hearing requests as moot, withdrawing the
hearing referral to the Hearing Officer, and terminating the “Exploratory Well Hearing.” The
Commissioner’s Resolution further required Newfield and Hess to file applications with the
Commission for approval of the five wells in question within “thirty (30) days following the
Commission’s adoption of natural gas regulations or as directed by the Executive Director or
Commission.” Draft natural gas regulations were issued the next day, but they have yet to be
finalized. Neither the Executive Director nor the Commission has directed Newfield or Hess to
file applications at this point.
In its pending Motion to Dismiss, Defendants argue that this Court does not have subject
matter jurisdiction over the pending suit because Plaintiffs’ Amended Complaint is not yet ripe
for adjudication. They argue that because the Resolution requires that Hess and Newfield file
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approval applications with the Commission to see whether they should be granted a permit, and
because the Commission has not yet made a determination as to these applications, there has not
been a final administrative action.
In opposition, Plaintiffs argue that they are not challenging the Resolution but rather the
SEDD and ASEDD. To the extent that Plaintiffs are challenging the Resolution, they contend
that they are doing so only as to the Resolution’s dismissal of Plaintiffs’ hearing requests as
moot, the Resolution’s withdrawing of the hearing referral, and the Resolution’s termination of
the Exploratory Well Hearing. More specifically, Plaintiffs argue that Counts One and Two of
the Amended Complaint seek to challenge only the Commissioner’s decision in the SEDD and
ASEDD that the grandfathered wells should be exempt from the pre-approval process.
According to Defendants, however, even if Plaintiffs are only challenging the SEDD and
ASEDD, these claims are moot because the exploratory wells have already been completed.
In Defendants’ view of this case, the Resolution served only to shift the procedural
framework for certain well approvals. As Defendants put it: “in the original situation, the five
exploratory wells at issue could be drilled . . . without DRBC pre-approval (or any other DRBC
approval), but there was going to be a hearing on this approach. Now, the five wells at issue
could be (and were) drilled in the Basin without DRBC pre-approval, but Newfield and Hess are
required to apply for after-the-fact (i.e., post-construction) approvals.” (Defs.’ Reply Br. at 5).
Therefore, Defendants argue that at this procedural posture Plaintiffs cannot challenge the
exclusion of the wells from the pre-approval process because pre-approval is now impossible due
to the fact that drilling is complete. Furthermore, Defendants additionally contend that Plaintiffs
cannot yet challenge whether the Hess and Newfield should be granted permits retroactively (i.e.,
post-construction) because the DRBC has not yet made a determination on this issue. The Court
5
agrees with the Defendants’ position, and accordingly the Court will dismiss Plaintiffs’
Amended Complaint.
II.
RIPENESS
This Court has an independent duty to determine its own subject matter jurisdiction when
it is “fairly in doubt.” Ashcroft v. Iqbal, 556 U.S. 662, 671 (2009) (citing Arbaugh v. Y & H
Corp., 546 U.S. 500, 514 (2006)); see also Peachlum v. City of York, 333 F.3d 429, 433 (3d Cir.
2003) (citations omitted). Ripeness, one of several justiciability doctrines, “determines ‘whether
a party has brought an action prematurely, and counsels abstention until such time as a dispute is
sufficiently concrete to satisfy the constitutional and prudential requirements of the doctrine.’”
Pittsburgh Mack Sales & Serv., Inc. v. Int’l Union of Operating Eng’rs, 580 F.3d 185, 190 (3d
Cir. 2009) (quoting Peachlum, 333 F.3d at 433). “A claim is not ripe for adjudication if it rests
on some contingent future event.” Porter-Bey v. Bledsoe, No. 11-1322, 2012 U.S. App. LEXIS
84, at *5 (3d Cir. Jan. 4, 2012) (citing Texas v. United States, 523 U.S. 296, 300 (1998)).
However, “[r]ipeness is a matter of degree whose threshold is notoriously hard to pinpoint.” NE
Hub Partners, L.P. v. CNG Transmission Corp., 239 F.3d 333, 341 (3d Cir. 2001).
“Where a dispute arises under circumstances that permit administrative review . . . final
administrative determination is favored under the ripeness doctrine.” Peachlum, 333 F.3d at
434. This “prevents the courts, ‘through avoidance of premature adjudication, from entangling
themselves in abstract disagreements’ over administrative problems, and enable[s] the agency to
proceed without judicial interruption until an administrative determination has been formalized.”
Id. (quoting Abbott Labs. v. Gardner, 387 U.S. 136, 149 (1967)). Moreover, “[i]n postenforcement circumstances, there may be little need to hasten administrative resolution because
the claim is already in the process of being resolved.” Id. at 436.
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The doctrine of ripeness “is best seen in a twofold aspect, requiring us to evaluate both
the fitness of the issues for judicial decision and the hardship to the parties of withholding court
consideration.” Abbott Labs., 387 U.S. at 149. Determining whether a question is fit for judicial
review requires the Court to consider “whether the agency action is final; whether the issue
presented for decision is one of law which requires no additional factual development; and
whether further administrative action is needed to clarify the agency’s position . . . .” Felmeister
v. Office of Attorney Ethics, 856 F.2d 529, 535–36 (3d Cir. 1988) (internal quotation marks
omitted) (quoting Action Alliance of Senior Citizens of Greater Phila. v. Heckler, 789 F.2d 931,
940 (D.C. Cir. 1986)).
III.
ANALYSIS
By its own terms, the Resolution at issue in this case is not a final administrative action
capable of judicial review. In particular, the Resolution provides in pertinent part:
Newfield and Hess shall file applications with the Commission for approval of the
five natural gas wells spudded to date. Such applications shall be filed on the
earlier of thirty (30) days following the Commission’s adoption of natural gas
regulations or as directed by the Executive Director or Commission. Nothing in
this Resolution shall limit the authority of the Executive Director or Commission
to take appropriate action to address past or future actions, if any, that may pose a
risk to water resourced of the Basin whether through any approvals issued in
response to the applications or otherwise.
(Am. Compl. ¶ 92 (quoting the Resolution)). Thus, the Resolution itself pre-supposes that
further administrative action will be taken—i.e., approval or disapproval of Newfield and Hess’s
applications.
An agency action that “itself is a determination only that adjudicatory proceedings will
commence” within that administrative body, “is different in kind and legal effect from the
burdens attending what heretofore has been considered to be final agency action.” FTC v. Std.
Oil Co., 449 U.S. 232, 241–42 (1980) (citations omitted). At this point it is not clear that the
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DRBC will grant the applications that Newfield and Hess will be required to submit in the near
future. Even assuming that DRBC improperly excluded the disputed wells from the pre-approval
process, the DRBC will be presented with a new opportunity to determine whether these wells
should ever have been drilled in the first place by either granting or denying Hess and Newfield’s
post-construction applications. In such a situation, “[j]udicial intervention into the agency
process denies the agency an opportunity to correct its own mistakes and to apply its expertise.”
Id. at 242 (Weinberger v. Salfi, 422 U.S. 749, 765 (1975)). Thus, intervention here may “lead[]
to piecemeal review which at the least is inefficient and[,] upon completion of the agency
process[,] might prove to have been unnecessary” as well. Id. (citing McGee v. United States,
402 U.S. 479, 484 (1971); McKart v. United States, 395 U.S. 185, 195 (1969)).
Defendants attempt to analogize this situation to cases involving “after-the-fact”
discharge permits authorized under the Clean Water Act. After-the-fact discharge permits
authorize discharge of dredge or fill materials into waters retroactively after the discharge has
already taken place. See 33 C.F.R. 326.3(e). In one illustrative case, a plaintiff submitted an
after-the-fact permit application to the U.S. Army Corps of Engineers, but while this application
was pending, the plaintiff also brought suit against the Corps’ assertion of jurisdiction over his
property. See Route 26 Land Dev. Assoc. v. United States, 753 F. Supp. 532, 534 (D. Del. 1990),
aff’d, 961 F.2d 1568 (3d Cir. 1992). The court refused to exercise jurisdiction over the plaintiff’s
case, however, because it was not yet ripe for adjudication since final agency action had not yet
occurred. See id. at 540; see also Howell v. Army Corps of Eng’rs, 794 F. Supp. 1072 (D.N.M.
1992). Although the Court does not believe that these cases are completely analogous, the Court
nevertheless finds the reasoning on which they are premised persuasive.
In order to avoid the fact that the Resolution is not a final administrative action, Plaintiffs
contend that they are not directly challenging the Resolution but rather the SEDD and the
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ASEDD. This argument, however, is unavailing. The only relevant legal effect of the SEDD
and the ASEDD at issue in this case was that they both excluded from pre-approval review the
grandfathered exploratory wells at issue. In order to have standing to bring a claim, the alleged
injury must be capable of being redressed by a favorable decision. See Lujan v. Defenders of
Wildlife, 504 U.S. 555, 560–61 (1992). It would obviously be impossible for this Court to
mandate a pre-approval permitting procedure for a well that has already been sited and drilled.
Therefore, to the extent Plaintiffs seek this as a remedy, they do not have standing to assert such
a claim.
Plaintiffs next argue that even if the Court can no longer mandate a review process prior
to the start of a now-completed project, the Court could nevertheless grant declaratory relief.
This argument, however, also fails. “Declaratory judgment is inappropriate solely to adjudicate
past conduct.” Corliss v. O’Brien, 200 F. App’x 80, 84 (3d Cir. 2006) (citing Gruntal & Co.,
Inc. v. Steinberg, 837 F. Supp. 85, 89 (D.N.J. 1993)). This is because such a decision would
amount to a prohibited advisory opinion. See id.
On the other hand, Plaintiffs also seek to have the exploratory wells fully removed by
way of an injunctive order. But, this claim is not yet ripe. The harm allegedly caused by the
exclusion of the challenged exploratory wells from the pre-approval permitting process is that
the wells themselves were actually sited and drilled. This alleged harm, however, presupposes
that these wells would not have been drilled had Hess and Newfield gone through with preapproval permitting. But, as explained above, this issue is not yet ripe because the application
process—even though it is now occurring post-construction—has not yet been completed. If the
DRBC later determines that it is appropriate to reject Newfield and/or Hess’s applications, the
particular well would have to, for all practical purposes, be removed. Thus, this suit may
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ultimately prove unnecessary and judicial restraint therefore counsels against exercising
jurisdiction at this time.
IV.
CONCLUSION
For all of the reasons discussed above, Defendants’ Motion to Dismiss will be granted
and Plaintiffs’ Amended Complaint will be dismissed. An appropriate Order will follow.
/s/ Anne E. Thompson
ANNE E. THOMPSON, U.S.D.J.
Date: August 20, 2012
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