Millennium Pipeline Company, LLC v. Seggos et al
Filing
29
MEMORANDUM-DECISION AND ORDER granting 18 Motion for Preliminary Injunction; denying 24 Motion to Dismiss for Lack of Subject Matter Jurisdiction: The Court hereby ORDERS that Defendants' motion to dismiss (Dkt. No. 24) is DENIED; and the Court further ORDERS that Plaintiff's motion for a preliminary injunction (Dkt. No. 18) is GRANTED as set forth herein, and Defendants are preliminarily enjoined from enforcing the stream disturbance permit and the freshwater wetlands permit a gainst Millennium in order to prevent Millennium from beginning construction on the Pipeline Project; and the Court further ORDERS that the Clerk of the Court serve a copy of this Memorandum-Decision and Order on all parties in accordance with the Local Rules. Signed by U.S. District Judge Mae A. D'Agostino on 12/13/2017. (ban)
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF NEW YORK
____________________________________________
MILLENNIUM PIPELINE COMPANY, L.L.C.,
Plaintiff,
vs.
1:17-CV-1197
(MAD/CFH)
BASIL SEGGOS, in his official capacity as
Commissioner of the New York State Department
of Environmental Conservation, NEW YORK
STATE DEPARTMENT OF ENVIRONMENTAL
CONSERVATION,
Defendants.
____________________________________________
APPEARANCES:
OF COUNSEL:
GREENBERG TRAURIG, LLP
54 State Street
6th Floor
Albany, New York 12207
Attorneys for Plaintiff
ROBERT M. ROSENTHAL, ESQ.
HOGAN, LOVELLS LAW FIRM
555 Thirteenth Street, N.W.
Columbia Square
Washington, DC 20004-1109
Attorneys for Plaintiff
CATHERINE E. STETSON, ESQ.
SEAN M. MAROTTA, ESQ.
SUSAN M. COOK, ESQ.
NEW YORK STATE ATTORNEY GENERAL
The Capitol
Albany, New York 12224
Attorneys for Defendants
BRIAN M. LUSIGNAN, AAG
Mae A. D'Agostino, U.S. District Judge:
MEMORANDUM-DECISION AND ORDER
I. INTRODUCTION
On October 27, 2017, Plaintiff Millennium Pipeline Company, LLC ("Millennium"), filed
the complaint in this action seeking declaratory and injunctive relief against Defendants New
York State Department of Environmental Conservation ("NYSDEC") and Basil Seggos, the
Commissioner of the NYSDEC. See Dkt. No. 1. This case arises out of a dispute between
Millennium and the NYSDEC over state and federal permitting and certification related to the
construction of a natural gas pipeline in Orange County, New York. See id. at ¶ 29. On
November 15, 2017, Millennium filed a motion for a preliminary injunction. See Dkt. No. 18.
Defendants opposed Millennium's motion and filed a cross-motion to dismiss. See Dkt. No. 24.
For the following reasons, Millennium's motion is granted and Defendants' motion is denied.
II. BACKGROUND
A.
Statutory Background
The Natural Gas Act ("NGA") of 1938 "provides comprehensive federal regulation for the
transportation or sale of natural gas in interstate commerce." Island E. Pipeline Co., LLC v.
McCarthy, 482 F.3d 79, 84 (2d Cir. 2006). The NGA provides the Federal Energy Regulatory
Commission ("FERC") with the authority to regulate natural gas companies. See id. Any natural
gas company that seeks to engage in the construction, extension, or acquisition of facilities to
transport or sell natural gas in interstate commerce must apply to the FERC for a Certificate of
Public Convenience and Necessity. See 15 U.S.C. § 717f(c)(1)(A). "The FERC is required to
issue such a certificate if it finds the company 'is able and willing' to comply with the federal
regulatory scheme and the proposed project 'is or will be required by the present or future public
convenience and necessity . . . .'" Island E. Pipeline, 482 F.3d at 84 (quoting 15 U.S.C.
§ 717f(e)). The FERC may, however, attach "to the issuance of the certificate . . . such
reasonable terms and conditions as the public convenience and necessity may require." 15 U.S.C.
§ 717f(e).
2
The NGA generally preempts state permitting and licensing requirements, see Island E.
Pipeline Co., LLC v. McCarthy, 525 F.3d 141, 143 (2d Cir. 2008), but the statute expressly carves
out the rights of states in administering three federal regulatory statutes, one of which is the Clean
Water Act ("CWA"), see 15 U.S.C. § 717b(d)(3). Under Section 401 of the CWA ("Section
401"), any applicant seeking a federal permit for an activity that "may result in any discharge into
the navigable waters" must obtain "a certification from the State in which the discharge originates
or will originate . . . that any such discharge will comply with the applicable provisions" of the
CWA. 33 U.S.C. § 1341(a)(1). No applicable federal license or permit will be granted unless the
certification required by Section 401 has been obtained, or the reviewing body waives the
requirement by failing to act on an application for certification within one year. See id.; see also
Keating v. FERC, 927 F.2d 616, 622 (D.C. Cir. 1991) ("Through [the Section 401 certification]
requirement, Congress intended that the states would retain the power to block, for environmental
reasons, local water projects that might otherwise win federal approval").
In reviewing applications for Section 401 certification, states may apply their own EPAapproved state water quality standards. The CWA "preserves the states' authority to determine
issues of a planned project's effect on water quality" by allowing "states to develop their own
water quality standards and submit them to the EPA for approval." Constitution Pipeline Co.,
LLC v. N.Y. State Dep't of Envtl. Conservation, 868 F.3d 87, 100-01 (2d Cir. 2017). In New
York, NYSDEC may "conduct its own review of [a pipeline's] likely effects on New York
waterbodies and whether those effects would comply with the State's water quality standards."
Id. at 101. Based on that review, NYSDEC may decide whether to grant or deny an application
for certification under Section 401 of the CWA. See id.
B.
Factual Background
3
Millennium is a natural gas transportation company that owns and operates an interstate
natural gas pipeline system extending across southern New York. See Dkt. No. 1 at ¶ 9. Several
years ago, Millennium was contracted to build a 7.8-mile pipeline (the "Pipeline Project")
connecting its interstate system with an electric power generation facility (the "Valley Energy
Center") that is currently under construction in Orange County, New York. See id. at ¶¶ 28-29.
The Valley Energy Center, which is being built by CPV Valley, LLC ("CPV"), is expected to
generate enough electricity to power more than 650,000 homes, while reducing New York
electricity costs by more than $400 million per year and reducing greenhouse gas emissions by
nearly a half-million tons per year. See id. at ¶¶ 28-29.
In November 2015, Millennium submitted an application to the FERC for a Certificate of
Public Convenience and Necessity, which was required in order to begin construction of the
Pipeline Project. See Dkt. No. 18-3. Later that month, Millennium submitted a Joint Application
to NYSDEC for certification under Section 401 of the CWA, as well as two permits under New
York State Environmental Conservation Law ("ECL"): a stream disturbance permit and a
freshwater wetlands permit. See Dkt. No. 18-4. In December 2015 and June 2016, NYSDEC
sent notices to Millennium requesting additional information related to its Joint Application. See
Dkt. No. 1 at ¶¶ 34, 38. In November 2016, the FERC provisionally granted Millennium's
application for a Certificate of Public Convenience and Necessity so long as certain conditions
were met, including approval of the Section 401 certification by NYSDEC. See Dkt. No. 18-7 at
56. The FERC conditions did not require that Millennium receive stream disturbance or
freshwater wetlands permits from NYSDEC. See id. at 53-58.
After receiving FERC's provisional approval for the Pipeline Project, Millennium wrote to
NYSDEC requesting a decision on its Joint Application. See Dkt. No. 1 at ¶ 43. According to
4
Millennium, NYSDEC had one year to make a decision on the Joint Application from the time it
was first submitted in November 2015. See id. at ¶ 44. But NYSDEC argued that it had one year
from the date that Millennium's Joint Application was fully submitted—according to NYSDEC, it
was not fully submitted until August 2016, when Millennium responded to NYSDEC's final
request for additional information. See Dkt. No. 24-1 at 8. Millennium disagreed and petitioned
the Court of Appeals for the D.C. Circuit seeking a declaration either requiring NYSDEC to
render a decision or stating that NYSDEC had waived its right to make a decision. See id. at ¶ 44.
The D.C. Circuit dismissed the petition, stating that Millennium should first have sought a
declaration from the FERC, and that any adverse FERC decision could then be appealed to the
D.C. Circuit. See Millennium Pipeline Co., L.L.C. v. Seggos, 860 F.3d 696, 701 (D.C. Cir. 2017).
In July 2017, Millennium followed the D.C. Circuit's suggestion and asked the FERC to declare
that the NYSDEC had waived its section 401 authority because it failed to render a decision on
Millennium's Joint Application within one year. See Dkt. No. 1 at ¶ 45.
In August 2017, the NYSDEC denied Millennium's Joint Application for the Section 401
certificate, as well as the stream disturbance and freshwater wetlands permits. See Dkt. No. 1810. NYSDEC also sent the FERC a motion to reopen the review of Millennium's application for a
Certificate of Public Convenience and Necessity. See Dkt. No. 19-9. FERC did not reopen the
application; instead, on September 17, 2017, FERC issued an order declaring NYSDEC waived
its authority to deny Millennium's Section 401 certification by failing to render a decision within
one year. See Dkt. No. 1 at ¶ 45. In response, NYSDEC petitioned the Second Circuit for a writ
of prohibition, arguing that it did not waive its Section 401 authority. See In re N.Y. State Dep't
of Envtl. Conservation, No. 17-3503 (2d Cir.). Meanwhile, Millennium petitioned the Second
Circuit to review NYSDEC's denial of the Section 401 certification. See Millennium Pipeline
5
Co., L.L.C. v. N.Y. State Dep't of Envtl. Conserv.,No. 17-3465 (2d Cir.). Both of those petitions
are currently pending before the Second Circuit.
On October 27, 2017, the FERC issued a Notice to Proceed with Construction, which
authorized Millennium to begin construction on the Pipeline Project without a Section 401
certificate from NYSDEC. See Dkt. No. 18-17. After FERC refused to stay the Notice to
Proceed, NYSDEC petitioned the Second Circuit for an emergency stay. See In re N.Y. State
Dep't of Envtl. Conservation, No. 17-3503 (2d Cir.). On November 2, 2017, the Second Circuit
granted an administrative stay pending consideration of the petition. See id., Dkt. No. 35 (2d Cir.
Nov. 2, 2017). On December 7, 2017, after expedited briefing and oral argument, the Second
Circuit denied NYSDEC's request for an emergency stay and dissolved the administrative stay
preventing Millennium from beginning construction of the Pipeline Project. See id., Dkt. No. 95
(2d Cir. Dec. 7, 2017). Which brings us to the proceedings before this Court.
On October 27, 2017, Millennium filed the complaint in this action, which seeks to
prevent NYSDEC from enforcing state law in an attempt to prevent the construction of the
Pipeline Project. Essentially, Millennium brought this case in the Northern District to ensure that
there would be no additional obstacle to construction of the Pipeline Project if and when the
Second Circuit lifted the stay. In particular, Millennium seeks an injunction from the Court
preventing NYSDEC from using the stream disturbance and freshwater wetlands permits
—which, along with the Section 401 certification, were a part of the Joint Application that was
denied by NYSDEC—to prevent Millennium from proceeding with construction. According to
Millennium, it is critical that construction proceeds immediately. A certain portion of
construction and tree clearing must be complete by December 31, 2017, in order to avoid
jeopardizing a bald eagles nest. See Dkt. No. 18-1 at 10. If construction is not completed by
6
December 31, 2017, Millennium may have to delay construction until November 2018, which
would prevent Millennium from delivering gas to the Valley Energy Center until late 2018 or
early 2019. See id. Additional tree clearing must be completed by March 31, 2018. See Dkt. No.
18-21 at ¶ 3.
On November 15, 2017, Millennium filed a motion for a preliminary injunction. See Dkt.
No. 18. Millennium seeks a preliminary injunction "enjoining the Defendants from enforcing any
state permitting requirements in a manner that would delay or interfere with construction or
operation of the Valley Lateral Project Pipeline approved by the Federal Energy Regulatory
Commission." See id. Defendants oppose the motion and filed a cross-motion to dismiss.
Defendants argue that the complaint should be dismissed for lack of subject matter jurisdiction.
Alternatively, Defendants argue that even if Millennium has standing, it has failed to meet the
heightened standard necessary to establish the need for a preliminary injunction in this case.
III. LEGAL STANDARD
A.
Subject Matter Jurisdiction
When a party moves to dismiss a claim pursuant to Federal Rule of Civil Procedure
12(b)(1), "the movant is deemed to be challenging the factual basis for the court's subject matter
jurisdiction." Cedars-Sinai Med. Ctr. v. Watkins, 11 F.3d 1573, 1583 (Fed. Cir. 1993) (citations
omitted). For purposes of such a motion, "the allegations in the complaint are not controlling, and
only uncontroverted factual allegations are accepted as true . . . ." Id. (internal citations omitted).
Both parties are permitted to use affidavits and other pleading materials to support and oppose the
motion to dismiss for lack of subject matter jurisdiction. See Makarova v. United States, 201 F.3d
110, 113 (2d Cir. 2000) (citation omitted). "Furthermore, 'jurisdiction must be shown
affirmatively, and that showing is not made by drawing from the pleadings inferences favorable to
7
the party asserting it.'" Gunst v. Seaga, No. 05-CV-2626, 2007 WL 1032265, *2 (S.D.N.Y. Mar.
30, 2007) (quoting Shipping Fin. Servs. Corp. v. Drakos, 140 F.3d 129, 131 (2d Cir. 1998)); see
also State Empls. Bargaining Agent Coal. v. Rowland, 494 F.3d 71, 77 n.4 (2d Cir. 2007)
(holding that, in a motion to dismiss for lack of subject matter jurisdiction, a court "may resolve
disputed factual issues by reference to evidence outside the pleadings, including affidavits").
B.
Motion for a Preliminary Injunction
A preliminary injunction "is an extraordinary and drastic remedy, one that should not be
granted unless the movant, by a clear showing, carries the burden of persuasion." Moore v.
Consol. Edison Co. of N.Y., Inc., 409 F.3d 506, 510 (2d Cir. 2005) (quoting Mazurek v.
Armstrong, 520 U.S. 968, 972 (1997)). "A plaintiff seeking a preliminary injunction must
establish that (1) he is likely to succeed on the merits, (2) he is likely to suffer irreparable harm in
the absence of preliminary relief, (3) the balance of equities tips in his favor, and (4) an injunction
is in the public interest." Stagg P.C. v. U.S. Dep't of State, 673 Fed. Appx. 93, 95 (2d Cir. 2016).
IV. DISCUSSION
A.
Subject Matter Jurisdiction
Defendants make two separate arguments for why the Court lacks subject matter
jurisdiction in this case. First, Defendants assert that Millennium's claims fall within the
exclusive jurisdiction of the Second Circuit. See Dkt. No. 24-1 at 12-14. Second, Defendants
argue that Millennium has failed to establish that it will sustain an injury in fact sufficient to
confer standing to sue. See id. at 14-17.
1. Exclusive Jurisdiction
Under the Natural Gas Act, "[t]he United States Court of Appeals for the circuit in which
a facility . . . is proposed to be constructed, expanded, or operated shall have original and
8
exclusive jurisdiction over any civil action for the review of an order of a Federal agency . . . or
State administrative agency acting pursuant to Federal law to issue, condition, or deny any permit,
license, concurrence, or approval . . . required under Federal law . . . ." 15 U.S.C. § 717r(d)(1).
Furthermore, "[e]xclusive means exclusive, and the Natural Gas Act nowhere permits an
aggrieved party otherwise to pursue collateral review of a FERC certificate in state court or in
federal district court." Am. Energy Corp. v. Rockies Exp. Pipeline LLC, 622 F3d 602, 605 (6th
Cir. 2010). The question is whether Millennium is seeking review of a "State administrative
agency acting pursuant to Federal law" in this case. The Court finds that it is not.
The Second Circuit has exclusive jurisdiction to review NYSDEC's rejection of
Millennium's application for Section 401 certification because it was an action "pursuant to
federal law"—collateral review of that action is not available in this Court. But this case does not
challenge NYSDEC's denial of the Section 401 certification; Millennium has filed a separate
petition in the Second Circuit challenging that denial. See Millennium Pipeline Co., L.L.C. v.
N.Y. State Dep't of Envtl. Conservation, No. 17-3465 (2d Cir.). Here, Millennium challenges
NYSDEC's authority to independently stop construction of the Pipeline Project through denial of
state permits, particularly the stream disturbance and freshwater wetlands permits.
Defendants argue that the state permits are "associated" with the Section 401 certification
and thus fall under the Second Circuit's exclusive jurisdiction. See Dkt. No. 24-1 at 13.
However, denials of the state permits are not "actions pursuant to federal law" that would trigger
the Second Circuit's exclusive jurisdiction under the NGA. With a few clear exceptions,1 the
1
The NGA, at 15 U.S.C. § 717b(d), states these exceptions clearly:
Except as specifically provided in this chapter, nothing in this
chapter affects the rights of States under–
(1) the Coastal Zone Management Act of 1972 (16 U.S.C.
1451 et seq.);
9
NGA generally preempts state laws. See Constitution Pipeline Co., 868 F.3d at 100. One of
these exceptions is a state's authority under the CWA to deny Section 401 certification because of
a potential project's failure to comply with that state's environmental laws. See 33 U.S.C.
§ 1341(a)(1) ("No license or permit shall be granted if [Section 401] certification has been denied
by the State . . . ."). States may deny Section 401 certification based on state environmental
standards that have been approved by the EPA. See Constitution Pipeline Co., 868 F.3d at 10001. Therefore, Section 401 certification provides a mechanism for states to enforce their
environmental standards when evaluating potential natural gas pipelines, but states are preempted
from independently enforcing those standards through the denial of state permits. Therefore,
NYSDEC's rejection of the Section 401 certification was "an action pursuant to federal law"; its
rejection of the stream disturbance and freshwater wetlands permits was not.
Defendants also argue that even if its review of the stream disturbance and freshwater
wetlands permits would not normally be an action pursuant to federal law, it was transformed into
an action pursuant to federal law by instructions from the FERC. See Dkt. No. 24-1 at 13-14.
When FERC issued its environmental assessment of the Pipeline Project, it concluded that the
project "would not constitute a major federal action significantly affecting the quality of the
human environment." Dkt. No. 18-6 at 125. According to NYSDEC, that conclusion was
contingent on Millennium complying with applicable state permits. See Dkt. No. 24-1 at 6.
Thus, Defendants argue, the denial of those permits was transformed into an action pursuant to
federal law. But while Defendants cite to examples of state permits being referenced in the
FERC's environmental assessment, Defendants do not cite any portion of the environmental
(2) the Clean Air Act (42 U.S.C. 7401 et seq.); or
(3) the Federal Water Pollution Control Act (33 U.S.C. 1251
et seq.).
10
assessment stating that Millennium would be required to obtain state permits. See id.
Additionally, the FERC's provisional Certificate of Public Convenience and Necessity—the
approval that is required before construction may begin—does not state that Millennium would be
required to obtain state permits. In an appendix, the FERC noted that its approval was contingent
on Millennium meeting a series of environmental conditions. See Dkt. No. 18-7 at 53. It is
clearly stated that Millennium would be required to show "that it has received all authorizations
required under federal law," but the state permits do not appear in the list of environmental
conditions. See id. at 56.
Because the denial of the stream disturbance and freshwater wetlands permits was not an
action pursuant to federal law, this case does not fall within the exclusive jurisdiction of the
Second Circuit. Millennium's claims in this case fall instead within this Court's jurisdiction.
Indeed, claims that state laws are preemped by the NGA are frequently brought in federal district
courts. See, e.g., Islander E. Pipeline Co., LLC v. Blumenthal, 478 F. Supp. 2d 289, 295 (D.
Conn. 2007); AES Sparrows Point LNG, LLC v. Smith, 470 F. Supp. 2d 586, 600 (D. Md. 2007).
2. Millennium's Injury
Unless a plaintiff has Article III standing, a court lacks subject matter jurisdiction to hear
their claim. See Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992). To establish Article
III standing, a plaintiff bears the burden of establishing three "irreducible constitutional
minimum" elements. See id. "The plaintiff must have (1) suffered an injury in fact, (2) that is
fairly traceable to the challenged conduct of the defendant, and (3) that is likely to be redressed
by a favorable judicial decision." Spokeo, Inc. v. Robins, 136 S. Ct. 1540, 1547 (2016).
In this case, only one of the three standing elements is in question: whether Millennium
has suffered an injury in fact. To establish an "injury in fact," a plaintiff must show that he or she
11
suffered "an invasion of a legally protected interest which is (a) concrete and particularized, and
(b) 'actual or imminent, not "conjectural" or "hypothetical."'" Lujan, 504 U.S. at 560 (quoting
Whitmore v. Arkansas, 495 U.S. 149, 155 (1990)). To be "particularized," an injury must affect
the plaintiff "in a personal and individual way," and to be "concrete" an injury "must be 'de facto';
that is, it must actually exist." Spokeo, 136 S. Ct. at 1548. As for the "actual or imminent"
requirement, a plaintiff must allege a non-speculative injury. See Lujan, 504 U.S. at 583-84. An
allegation of future injury may establish standing only "if the threatened injury is 'certainly
impending,' or there is a '"substantial risk" that the harm will occur.'" Susan B. Anthony List v.
Driehaus, 134 S. Ct. 2334, 2341 (2014) (quoting Clapper v. Amnesty International USA, 568 U.S.
398, 414 n.5 (2013)).
Here, Defendants argue that Millennium fails to establish an injury in fact because the
injury it asserts is merely speculative. See Dkt. No. 24-1 at 14. Although NYSDEC denied the
state permits, Defendants argue that Millennium has not suffered an injury in fact because
NYSDEC has not yet determined whether the state permits stand as an independent impediment
to construction of the Pipeline Project. See id. at 15.
In support of their position, Defendants point to Constitution Pipeline Co., LLC, v. N.Y.
State Department of Environmental Conservation, No. 16-CV-568 (N.D.N.Y. Mar. 16, 2017),
which deals with facts very similar to the present matter. In Constitution Pipeline, the plaintiff
was a pipeline company seeking to build a 100-mile natural gas pipeline in New York State. See
id. at 1. As in this case, the plaintiff in Constitution Pipeline submitted a joint application to
NYSDEC for Section 401 certification and state freshwater wetlands and stream disturbance
permits. See id. at 6. After the plaintiff received a Certificate of Public Convenience and
Necessity from the FERC, NYSDEC issued a letter denying Section 401 certification but did not
12
render a decision on the state permits, which they left pending. See id. at 8. The plaintiff filed a
petition in the Second Circuit challenging the denial of the Section 401 certification, and filed a
complaint in the Northern District seeking a declaratory judgment that it was not required to
obtain the state permits from NYSDEC. See id. at 8-9. The defendants moved to dismiss the
complaint for lack of subject matter jurisdiction, arguing that the plaintiff had not suffered an
injury in fact. See id. at 13.
In a well-reasoned decision, Judge Mordue granted the motion to dismiss for lack of
standing. See id. at 15. The court found that there was no injury in fact because the NYSDEC
had already denied the Section 401 certification and that denial prevented the plaintiff from
moving forward with construction, regardless of the status of the state permits. See id. at 14.
Moreover, the permits had not yet been denied. See id. Therefore, the court found that the
plaintiff's "complaint [did] not allege an actual or imminent injury, but rather a 'purely
hypothetical case in which the projected harm may ultimately fail to occur.'" See id. at 14
(quoting Baur v. Veneman, 352 F.3d 625, 632 (2d Cir. 2003)). Judge Mordue did note that, under
different circumstances, standing could exist: "If, as a result of NYSDEC's denial, refusal to act,
or delay in acting on the [state] permit applications, Constitution is denied permission to begin
construction . . . Constitution would almost certainly have standing to seek appropriate relief."
See id.
There are critical differences between Constitution Pipeline and this case. First, unlike the
plaintiff in Constitution Pipeline, the denial of Millennium's Section 401 certification was
overturned by FERC. Now that the Second Circuit has dissolved the administrative stay and
denied NYSDEC's motion for an emergency stay, the denied state permits are the only
impediment to construction of the Pipeline Project. Second, the state permits were actually
13
denied in this case, whereas in Constitution Pipeline they were still pending. New York State
Environmental Conservation Law is clear that the denial of stream disturbance or freshwater
wetlands permits acts as a bar to construction. See N.Y.E.C.L. § 15-0501 ("Except as provided
[herein], no person or public corporation shall change, modify or disturb the course, channel or
bed of any stream . . . without a permit issued pursuant to subdivision 3 of this section"); id. § 240701 ("After issuance of the official freshwater wetlands map of the state . . . any person desiring
to conduct on freshwater wetlands as so designated thereon any of the regulated activities set
forth in subdivision two of this section must obtain a permit as provided in this title"). Therefore,
NYSDEC's denial of those permits means that Millennium is barred from beginning construction
of the Pipeline Project under state law.
NYSDEC argues that Millennium's injury is still speculative because NYSDEC has not
yet taken a position on whether it will enforce the denial of the state law permits and prohibit
construction of the Pipeline Project. Under the Declaratory Judgment Act, there is an "actual
controversy" ripe for review where "there is a substantial controversy, between parties having
adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a
declaratory judgment." Lake Carriers' Ass'n v. MacMullan, 406 U.S. 498, 506 (1972). In the
context of a pre-enforcement challenge to the constitutionality of a statute, "a justiciable
controversy does not exist where compliance with (challenged) statutes is uncoerced by the risk
of their enforcement.'" Id. (quoting Poe v. Ullman, 367 U.S. 497, 508 (1961)). In other words,
courts must look to whether a plaintiff's "decision to challenge the obligations and prohibitions
contained" in a statute is "truly motivated by a well-founded fear that refusal to comply would
lead to prosecution." National Rifle Ass'n of Am. v. Magaw, 132 F.3d 272, 288 (6th Cir. 1997).
14
Where a plaintiff reasonably fears immediate hardship imposed by a statute, a challenge is
ripe for judicial review. See id. "That the statute has not been enforced and that there is no
certainty that it will be does not establish the lack of a case or controversy." KVUE, Inc. v.
Moore, 709 F.2d 922, 930 (5th Cir. 1983). "'Where the enforcement of a regulatory statute would
cause plaintiff to sustain a direct injury, the action may be properly maintained, whether or not
the public officer has "threatened" suit; the presence of the statute is threat enough,' at least where
the challenged statute is not moribund." United Food & Commercial Workers Int'l Union AFLCIO, CLC v. IBP, Inc., 857 F.2d 422, 428 (8th Cir. 1988) (quoting 6A Moore's Federal Practice,
¶ 57.18[2] at 57-189 (2d ed. 1987)); see also Gray v. City of Valley Park, Mo., 567 F.3d 976, 98586 (8th Cir. 2009) ("Where a plaintiff alleges an intention to engage in a course of conduct that is
clearly proscribed by statute, courts have found standing to challenge the statute, even absent a
specific threat of enforcement").
Here, the Court finds that there is an actual controversy that is ripe for review because
Millennium has a well-founded fear that NYSDEC will enforce the denial of the stream
disturbance or freshwater wetlands permits. This is not an instance of potentially moribund laws
that are merely on the books and only hypothetically might be enforced against Millennium;
NYSDEC has already denied the permits, appearing to signal that it is enforcing those laws.
Further, in the letter denying the Joint Application for the state permits and Section 401
certification, NYSDEC explicitly instructed Millennium that NYSDEC was prohibiting
construction. See Dkt. No. 18-10 at 2. It is not clear from the text of the letter whether NYSDEC
intended for the ban on construction to remain in place if the Section 401 certification was
granted or waived but the state permits were denied. See id. However, Millennium's fear of
15
enforcement is well-founded, and the permit denials impose an immediate hardship on
Millennium.
While the Court finds that Millennium has standing with respect to the stream disturbance
and freshwater wetlands permits, the relief that Millennium seeks in its complaint and motion for
a preliminary injunction is much broader. In the complaint, Millennium asks for "[p]reliminary
and permanent injunctive relief enjoining Defendants from enforcing any state permitting
requirements in a manner that would delay or interfere with construction or operation of the
[Pipeline Project]." See Dkt. No. 1 at ¶ 69. Similarly, in the proposed preliminary injunction,
Millennium seeks to enjoin "Defendants from enforcing any state permitting requirements in a
manner that would delay or interfere with construction or operation of the [Pipeline Project]."
See Dkt. No. 18 at 1.
Millennium's proposed language is too broad. Millennium does not have standing with
respect to "any state permitting requirement" that would interfere with construction of the
Pipeline Project; Millennium has standing only with respect to the permits that were denied.
Therefore, Plaintiff may only proceed in challenging the specific permits that were denied in this
case: the stream disturbance and freshwater wetlands permits.
B.
Preliminary Injunction
1. Irreparable Harm
"A showing of irreparable harm is 'the single most important prerequisite for the issuance
of a preliminary injunction.'" Faiveley Transp. Malmo AB v. Wabtec Corp., 559 F.3d 110, 118 (2d
Cir. 2009) (quoting Rodriguez v. DeBuono, 175 F.3d 227, 234 (2d Cir. 1999)). "To satisfy the
irreparable harm requirement, [a plaintiff] must demonstrate that absent a preliminary injunction
[it] will suffer 'an injury that is neither remote nor speculative, but actual and imminent,' and one
16
that cannot be remedied if a court waits until the end of trial to resolve the harm." Grand River
Enter. Six Nations, Ltd. v. Pryor, 481 F.3d 60, 66 (2d Cir. 2007) (quoting Freedom Holdings, Inc.
v. Spitzer, 408 F.3d 112, 114 (2d Cir. 2005)). "In order for harm to irreparable, money damages
must be unavailable or at least inadequate." Stagliano v. Herkimer Central Sch. Dist., 151 F.
Supp. 3d 264, 273 (N.D.N.Y. 2015).
Millennium asserts that it will suffer irreparable harm in the absence of a preliminary
injunction because the window for construction of the Pipeline Project is rapidly closing due to a
variety of environmental issues. See Dkt. No. 18-1 at 21. First, there is a bald eagle nest that was
discovered in the vicinity of the Pipeline Project, and Millennium must complete all construction
activities within 660 feet of the nest by December 31, 2017, due to United States Fish and
Wildlife Service ("USFWS") restrictions relating to bald eagle nesting season. See Dkt. No. 1821 at ¶ 4. Millennium estimates that the work in that area will take approximately three weeks to
complete. See id. at ¶ 5. Second, if Millennium is unable to complete the work before December
31, 2017, it may be subject to tree-clearing restrictions related to certain bat species and migratory
birds, which restrict tree clearing between April 1 and October 31. See id. at ¶ 7. If Millennium
is not permitted to immediately begin construction, the portion of construction within the bald
eagle nest buffer could be delayed until November 2018. See id. Such a delay might prevent
Millennium from providing natural gas to the Valley Energy Center until early 2019. See id.
at ¶ 8.
A delay of that length would have significant consequences for Millennium and for CPV,
the owner of the Valley Energy Center. For CPV, the delay would be particularly costly; CPV
estimates that the total cost of a construction delay until November 2018 would be over $78
million. See Dkt. No. 18-22 at ¶ 22. Moreover, if the Valley Energy Center cannot receive and
17
operate on natural gas by August 15, 2018, CPV will be in default and may be subject to
bankruptcy filings. See id. at ¶ 23. As for Millennium, if the work near the bald eagle nest is not
complete by December 31, 2017, Millennium will have to apply for an "incidental take" permit
from USFWS to allow construction during bald eagle breeding season, which is January 1
through October 31. See Dkt. No. 18-21 at ¶ 7. The permitting process—which may take up to
six months and is not guaranteed to yield a permit—and the resulting delay in construction will
impose a financial burden on Millennium. See Dkt. No. 25 at 14.2 Such a delay will also put the
future of the entire project at risk, including the Pipeline Project. See Dkt. No. 18-1 at 21.
Additionally, Millennium faces significant reputational harm and potential loss of future business
if its failure to build the Pipeline Project costs CPV over $78 million and pushes CPV into
default.
First, Defendants argue that Millennium's showing of irreparable harm should be held to a
heightened standard because of the nature of the injunction. See Dkt. No. 24-1 at 17-18. The
Second Circuit has found a heightened standard appropriate where: "(i) an injunction is
'mandatory,' or (ii) the injunction 'will provide the movant with substantially all the relief sought
and that relief cannot be undone even if the defendant prevails at a trial on the merits.'" N.Y. ex
rel. Schneiderman v. Actavis PLC, 787 F.3d 638, 650 (2d Cir. 2015). Under the heightened
standard, a movant must make a "strong showing" of irreparable harm. See id. The injunctive
relief that Millennium seeks is not mandatory. See Belile v. Doe No. 1, No. 10-CV-6501, 2012
WL 3562032, *1 (W.D.N.Y. Aug. 16, 2012) ("A mandatory injunction . . . is said to alter the
"In order for harm to be irreparable, money damages must be unavailable or at least
inadequate." Stagliano v. Herkimer Cent. Sch. Dist., 151 F. Supp. 3d 264, 273 (N.D.N.Y. 2015).
In this case, monetary harm may be considered irreparable because Millennium is
barred by the Eleventh Amendment from recovering money damages. See Entergy Nuclear Vt.
Yankee, LLC v. Shumlin, 733 F.3d 393, 423 (2d Cir. 2013); accord United States v. State of N.Y.,
708 F.2d 92, 93 (2d Cir. 1983).
2
18
status quo by commanding some positive act"). A preliminary injunction would, however,
provide Millennium with substantially all of the relief it seeks in this case and it is possible that
the relief likely could not be undone—construction is scheduled to last six months, which may be
less time than it would take to reach a decision on the merits in this case. See Dkt. No. 24-2 at ¶
27. Therefore, the Court will hold Millennium to the heightened standard.
Second, Defendants argue that because CPV is not a party to this case, the Court should
not consider any injury to CPV at the irreparable harm stage of the preliminary injunction
analysis. See Dkt. No. 24-1 at 20. As Defendants point out, "in the usual case, a pure injury to
third parties should be reserved for the public-interest prong of the preliminary injunction
standard." See id. (quoting Arriva Med. LLC v. U.S. Dep't of Health and Human Servs., 239 F.
Supp. 3d 266, 283 (D.D.C. 2017)). In this case, however, the Court finds that the potential harm
to CPV is relevant to the irreparable harm analysis. Here, the fate of CPV is closely tied to the
fate of Millennium; a delay that pushes CPV into bankruptcy could imperil the entire project and
thus impact Millennium. Additionally, the Second Circuit has held that "loss of reputation, good
will, and business opportunities" can constitute irreparable harm. Register.com, Inc.v. Verio, Inc.,
356 F.3d 393, 404 (2d Cir. 2004). CPV has invested nearly $900 million in the Valley Energy
Center, see Dkt. 18-22 at ¶ 17; if Millennium's failure to build a 7.8-mile pipeline on schedule
undermines the entire operation, Millennium is sure to suffer a loss of reputation, good will, and
business opportunities. Therefore, the Court finds that Millennium has met its burden of
establishing that it will suffer irreparable harm absent a preliminary injunction.
2. Likelihood of Success on the Merits3
Because the Court is applying a heightened standard to Millennium's motion for a
preliminary injunction, Millennium must show a "'clear' or 'substantial' likelihood of success on
the merits." N.Y. ex rel. Schneiderman, 787 F.3d at 650.
3
19
"The Supremacy Clause of the United States Constitution 'invalidates state laws that
interfere with, or are contrary to federal law.'" Boniaa v. Semple, No. 15-CV-1614, 2016 WL
4582038, *5 (D. Conn. Sept. 1, 2016) (quoting U.S. Const. art VI, cl. 2). In general, there are
three different types of preemption:
(1) express preemption, where Congress has expressly preempted
local law; (2) field preemption, "where Congress has legislated so
comprehensively that federal law occupies an entire field of regulation and leaves no room for
state law"; and (3) conflict preemption, where local law conflicts with federal law such that it is
impossible for a party to comply with both or the local law is an obstacle to the achievement of
federal objectives.
N.Y. SMSA Ltd. P'ship v. Town of Clarkstown, 612 F.3d 97, 104 (2d Cir. 2010) (quoting
Wachovia Bank, N.A. v. Burke, 414 F.3d 305, 313 (2d Cir. 2005)). Field preemption occurs
when, "in the absence of explicit statutory language . . . Congress intended the Federal
Government to occupy [a field] exclusively." English v. Gen. Elec. Co., 496 U.S. 72, 79 (1990).
"Such an intent may be inferred from a 'scheme of federal regulation . . . so pervasive as to make
reasonable the inference that Congress left no room for the States to supplement it.'" See id.
(alteration in original) (quoting Rice v. Santa Fe Elevator Corp., 331 U.S. 218, 230 (1947)).
"The NGA long has been recognized as a 'comprehensive scheme of federal regulation of
'all wholesales of natural gas in interstate commerce.'" Schneidewind v. ANR Pipeline Co., 485
U.S. 293, 300 (1988) (quoting N. Natural Gas Co. v. State Corp. Comm'n of Kansas, 372 U.S. 84,
91 (1963)). "The NGA confers upon FERC exclusive jurisdiction over the transportation and sale
of natural gas in interstate commerce for resale." See id. at 300-01; see also Island E. Pipeline,
482 F.3d at 90 ("Congress wholly preempted and completely federalized the area of natural gas
regulation by enacting [the NGA]").
Millennium argues that the freshwater wetlands and stream disturbance permits at issue in
this case are subject to field preemption. See Dkt. No. 18-1 at 13. The Second Circuit has made
20
clear that state environmental regulations of FERC-approved projects are preempted by the NGA.
See National Fuel Gas Supply Corp. v. Public Service Commission of the State of N.Y., 894 F.2d
571 (2d Cir. 1990) ("Because FERC has authority to consider environmental issues, states may
not engage in concurrent site-specific environmental review"). That is the essence of
Millennium's argument in this case: New York state permitting requirements for a FERCapproved project are preempted by the NGA. Moreover, Defendants do not seriously contest
Millennium's likelihood of success on the merits, dedicating just one short paragraph of their
memorandum of law to the issue. See Dkt. No. 24-1 at 2. Therefore, Millennium has
demonstrated a strong likelihood of success on the merits.
3. Balance of the Hardships and Public Interest
Before issuing a preliminary injunction, "a court must consider the balance of hardships
between the plaintiff and defendant and issue the injunction only if the balance of hardships tips
in the plaintiff's favor." Salinger, 607 F.3d at 80. Additionally, "the court must ensure that the
'public interest would not be disserved' by the issuance of a preliminary injunction." Salinger,
607 F.3d at 80 (quoting eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388, 391 (2006)). In this
case, the public interest would not be disserved by a preliminary injunction, and the balance of
hardships tips in Millennium's favor.
As discussed above, Millennium has established that both Millennium and CPV face
significant harm if construction does not proceed immediately. CPV could lose over $70 million
and go into default if the Pipeline Project is substantially delayed, and Millennium stands to
suffer both financial harm and significant reputational harm if the Pipeline Project is not
completed on schedule and CPV goes into default. Defendants, on the other hand, have a lesser
interest in preventing construction. First, a state is "in no way harmed by issuance of a
21
preliminary injunction which prevents the state from enforcing restrictions likely to be found
unconstitutional." Giovani Carandola, Ltd. v. Bason, 303 F.3d 507, 521 (4th Cir. 2002). Second,
Defendants argue that construction will cause significant environmental harm—including
seventeen water bodies, twenty-five wetlands, and various trees and shrubs—and that permanent
environmental damage outweighs temporary economic damage. See Dkt. No. 24-1 at 23 (citing
League of Wilderness Defenders/Blue Mountains Biodiversity Project v. Connaughton, 752 F.3d
755, 767 (9th Cir. 2014)). But the proposed pipeline is just 7.8 miles long and Defendants have
not shown that it would cause sufficient environmental damage to outweigh the harm that would
be caused by a delay in construction. Additionally, FERC has outline specific environmental
conditions that Millennium must comply with in order to begin construction on the Pipeline
Project, and FERC has found that the project "would not constitute a major federal action
significantly affecting the quality of the human environment" if Millennium abides by those
conditions. See Dkt. No. 18-7 at 53-58.
Finally, the public interest would not be disserved by granting an injunction. If
construction of the Pipeline Project is delayed until November 2018, the operation of the Valley
Energy Center will also be delayed, which will come at a significant cost to the public. By
displacing the older sources of power generation that are currently available, the Valley Energy
Center is projected to save ratepayers an estimated $730 million per year and decrease CO2
emissions in the region by approximately a half-million tons per year. See Dkt. No. 18-22 at ¶¶
24-25.4 In addition to their environmental concerns, Defendants argue that it would not serve the
public interest to allow Millennium to proceed with construction before Defendants' arguments
The Court notes that the projected $730 million annual savings asserted in the motion for
a preliminary injunction appears to be different from the approximately $400 million in annual
savings alleged in the complaint. Compare Dkt. No. 1 at ¶ 28, with Dkt. No. 18-22 at ¶ 24.
4
22
regarding Section 401 certification are heard before a court. See Dkt. No. 24-1 at 22. But all of
the contested issues relating to the Section 401 certification are before the Second Circuit, not this
Court. The Second Circuit has already considered the question whether construction should be
allowed to proceed while issues relating to the Section 401 certification are being litigated, and
the Second Circuit denied NYSDEC's motion for an emergency stay of construction.
V. CONCLUSION
After carefully reviewing the entire record in this matter, the parties' submissions and the
applicable law, and for the above-stated reasons, the Court hereby
ORDERS that Defendants' motion to dismiss (Dkt. No. 24) is DENIED; and the Court
further
ORDERS that Plaintiff's motion for a preliminary injunction (Dkt. No. 18) is GRANTED
as set forth herein, and Defendants are preliminarily enjoined from enforcing the stream
disturbance permit and the freshwater wetlands permit against Millennium in order to prevent
Millennium from beginning construction on the Pipeline Project; and the Court further
ORDERS that the Clerk of the Court serve a copy of this Memorandum-Decision and
Order on all parties in accordance with the Local Rules.
IT IS SO ORDERED.
Dated: December 13, 2017
Albany, New York
23
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?