In February MDN told you about an important decision by the DC Circuit Court of Appeals that has the potential to override New York State and allow both the Constitution Pipeline and Northern Access Pipeline projects to get built (see Recent Fed Court Decision Gives NY Pipes Hope for Bypassing Cuomo). The Hoopa Valley Tribe v. FERC decision is still causing shock waves–especially among Big Green groups. We have some analysis below of that decision and how states like NY may now behave in light of the decision.

The Hoopa Valley Tribe v. FERC case deals with the recommissioing and decommissioning of a series of hydroelectric dams in Oregon and California. The court decided that Oregon and Cali, by using the technique of pressuring those seeking a “401” application (authority delegated to states under the federal Clean Water Act) to withdraw and resubmit the application, lengthening the time to consider the application to more than one year, is a waiver of the state’s rights to review the application and rule based on the merits of the application.

In essence, the court ruled if a state takes more than one year to review a “stream/river crossing” permit, which is the time the federal statute gives them, they have automatically waived their right to block a project. One year means one year–365 days. In the Hoopa case, it was about a hydroelectric dam project. However, lawyers reviewing the case say the same principle applies to pipelines as well.

What happened with he Constitution Pipeline in applying for a 401 certificate in NY is exactly what happened out West in the Hoopa case. With Constitution, the state asked Williams to withdraw and resubmit the application. And then, just before the end of the second year, the state Dept. of Environment Conservation, under orders from Gov. Andrew Cuomo, rejected the project. Williams now has legal precedent to ask the court to overrule NY and allow the project to proceed.

So what might NY and other states do now? States argue that sometimes big, important projects just take longer than one year to review and “get right.” The technique they use to ensure the project is done right is to ask the applicant to withdraw the application, make necessary changes, and then resubmit. If that avenue is no longer available, one lawyer analyzing the case (below) says states may just refuse 401 applications right away. Shut them down. Nuclear option. Our question is, can they do that? And could not FERC simply override them anyway?

The problem here is that states like NY are gaming the system–using it in bad faith, with no intention of ever approving a project. And they delay it for years in the meantime, to prevent early lawsuits challenging their decisions to block projects. So the states have brought this on themselves.

A lawyer with Davis Wright Tremaine LLP analyzes the Hoopa decision and muses on what may happen next, how states may respond in the future to new 401 requests:

The Water Report

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Note: The Richard Glick who wrote the article above is not the same Richard Glick who is a FERC Commissioner.