On December 5, 2019, the United States Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) granted a petition for rehearing en banc of an opinion it issued on August 2, 2019 (“August 2019 Opinion”) upholding FERC’s decision to conditionally approve the application of Transcontinental Gas Pipeline Company (“Transco”) to construct and operate the Atlantic Sunrise Project. Petitioners challenge FERC’s use of tolling orders, which allow FERC to delay rehearing after granting a pipeline certificate, as impermissible under the Natural Gas Act and the Due Process Clause of the Fifth Amendment. Specifically, Petitioners argue that FERC’s use of tolling orders in pipeline certificate proceedings unlawfully require challengers to wait for the rehearing order to issue before obtaining judicial review, while the pipeline can proceed with eminent domain proceedings and pipeline construction following the issuance of FERC’s certificate order.
Under the Natural Gas Act, a natural gas company may acquire private property by eminent domain to construct natural gas pipelines once it has obtained a certificate of public convenience and necessity from FERC. A party wishing to challenge the issuance of any such certificate must request rehearing from FERC, and until FERC disposes of that request, the agency action is not final for purposes of judicial review. The Natural Gas Act also requires FERC to act upon an application for rehearing within thirty days, or the request for rehearing is deemed denied by operation of law (see April 3, 2017 edition of the WER). FERC routinely issues tolling orders to signal its intent to address the requests for rehearing on the merits. The D.C. Circuit has long held that the Natural Gas Act permits FERC’s practice of issuing tolling orders because FERC “acts upon the application” within the statutory timeframe.
Petitioners argue that FERC’s use of tolling orders violates the Due Process Clause of the Fifth Amendment to the U.S. Constitution and is contrary to the Natural Gas Act. Petitioners point to arguments from the concurring opinion of Judge Millet in the D.C. Circuit’s August 2019 Opinion affirming FERC’s order approving the Transco Atlantic Sunrise Project. Judge Millet notably called FERC’s use of tolling orders “Kafkaesque” and stated that, under the court’s precedent permitting the use of tolling orders, FERC can keep landowners in “administrative limbo” while pipelines seize their property in eminent domain proceedings and construct their pipeline projects. In her concurring opinion, Judge Millet acknowledged this precedent, but suggested the court revisit the issue, pointing out that the previous cases dealt with disputes over money, not private property that could be destroyed during FERC’s rehearing process. The August 2019 Opinion has been vacated and oral arguments are scheduled for March 31, 2020.
A copy of the order is available here.