Third Circuit defends challenge to its authority to rule in pipeline expansion project

By Kristin Danley-Greiner | Aug 19, 2016

PHILADELPHIA – The U.S. Court of Appeals for the Third Circuit recently released an opinion shooting down several challenges filed against environmental permits and authorizations that were granted by environmental regulatory agencies in Pennsylvania and New Jersey, but the court had to defend why it was ruling on the cases in the first place.

The two states issued permits and authorizations for the expansion of a natural gas pipeline by Transcontinental Gas Pipe Line Company that runs from south Texas to New York. The expansion in Pennsylvania and New Jersey required approval from the Federal Energy Regulatory Commission (FERC) in addition to the state permits and authorizations. 

While FERC has the exclusive authority to authorize the construction and operation of an interstate natural gas pipeline, it does examine potential environmental issues that could arise and works with the impacted states to determine this.

According to the Third Circuit, the appropriate New Jersey and Pennsylvania agencies reviewed Transcontinental’s proposal for potential water quality impacts and proceeded with issuing permits for construction. However, several local environmental organizations in the Third Circuit challenged those state authorizations and permits.

In the cases Delaware Riverkeeper Network, et al., v. Secretary, Pennsylvania Department of Environmental Protection and New Jersey Conservation Foundation, et al, v. New Jersey Department of Environmental Protection, et al., it first had to be determined whether the Third Circuit could even review the merits of the challenges, because some claimed it was without jurisdiction. 

The Third Circuit ruled that it indeed had the authority through the Natural Gas Act and the states were acting pursuant to federal law by issuing state permits. The states argued that issuing permits did not waive their sovereign immunity, but the Third Circuit ruled that their voluntary participation actually constituted a waiver of their sovereign immunity.  

Anthony Cavender, senior counsel with Pillsbury Winthrop Shaw Pittman LLP, told Legal Newsline that this situation has been very interesting to follow.

“The states asked why the federal court was reviewing the permits, questioning their authority, because they are independent sovereigns in an independent system of government, so why would the Court of Appeals be looking over their shoulder?” Cavendar said. “The court replied, ‘That’s what Congress has decided.’”  

Once that issue had been resolved, the Third Circuit then concluded that neither state agency acted arbitrarily or capriciously in issuing the permits and authorizations to the project.

“Under the Natural Gas Act, according to the court, even though the states have separate permitting authority, it’s all subject to the overall jurisdiction. That’s why they thought they had the power to review the state permits,” Cavendar said. 

“But under the 11th Amendment under the Constitution, you can’t sue the state.”

In another case that emerged in a southern state, Cavendar said, the Federal Communications Commission (FCC) claimed it had power over the state Legislature and could make internet access available to everyone, but an appellate court there said the FCC actually didn’t have the authority over the state.

“The balance between the state and federal governments is very delicate and the courts are always making sure there are appropriate balances,” he said. “It makes for very interesting cases. It’s something they’ve been coping with for 200 years.”

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Organizations in this Story

New Jersey Department of Environmental Protection Pennsylvania Department of Environmental Protection Pillsbury Winthrop Shaw Pittman LLP U.S. Court of Appeals for the Third Circuit U.S. Federal Energy Regulatory Commission

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