On February 10, 2020, FERC filed its Rehearing En Banc Brief (“Brief”) regarding opposition to FERC’s authorization of the construction of Transcontinental Gas Pipe Line Company, LLC’s (“Transco”) proposed Atlantic Sunrise Project (“Project”)—an interstate pipeline designed to supply enough natural gas to meet the daily needs of more than 7 million American homes. The United States Court of Appeals for the District of Columbia (“D.C. Circuit”) issued an opinion on August 2, 2019, upholding FERC’s decision to conditionally approve the Project. However, on September 16, 2019, Hilltop Hollow Limited Partnership, Hilltop Hollow Limited Partnership, LLC, and Stephen D. Hoffman (“Petitioners”) petitioned the court for rehearing of the court’s opinion en banc. The Petitioner’s main challenge was FERC’s usage of tolling orders, which allows FERC to delay rehearing after granting a pipeline certificate, as impermissible under the Natural Gas Act (“NGA”) and the Due Process Clause of the Fifth Amendment. The court granted that petition and vacated the underlying judgment in a December 5, 2019 order (see December 11, 2019 WER).
As background, a unanimous D.C. Circuit panel initially upheld FERC’s decision to approve the Project, finding that FERC properly conducted its analysis under the National Environmental Policy Act and properly found that there is a market need for the Project under the NGA. The panel also rejected the due process claims. In a concurring opinion, however, Judge Millett took issue with FERC’s issuance of “tolling orders,” which grant rehearing for the purpose of further consideration on the merits. Judge Millett questioned whether such orders are consistent with the NGA, which provides that, “[u]nless the Commission acts upon the application for rehearing within thirty days,” it may be “deemed to have been denied.” Judge Millett also questioned whether authorizing pipeline construction to commence while agency rehearing is pending comports with due process.
In its Brief, FERC argues that its practice of issuing tolling orders is consistent with the language of the NGA, and notes that every circuit that has considered this issue has found that the term “acts upon” is not restricted to action on the merits. Moreover, FERC asserts that permitting the Commission’s certificate orders to remain in effect during rehearing and judicial review is consistent with Congress’s directive in the NGA. FERC further contends that the use of tolling orders does not pose any constitutional problems, as Petitioners claim, because there is no right to pre-deprivation appellate review before property may be taken via eminent domain. FERC adds that Petitioners were afforded meaningful opportunity to be heard in the proceedings before the Commission. FERC notes, for example, that its public-convenience-and-necessity determination for the certificate was preceded by three years of analysis and was consistent with the D.C. Circuit’s precedent, which, according to FERC, allows for little risk of an erroneous deprivation.
While FERC defends its practice of issuing tolling orders as consistent with the NGA and the requirements of due process, it acknowledges the fairness concerns identified by Judge Millett in her concurring opinion, i.e., that protracted administrative delay hinders regulatory certainty and postpones judicial review. In that regard, FERC explains that it has taken steps to improve its rehearing process by committing and reorganizing its legal resources to expedite decisions on the merits of requests for rehearing that implicate landowner rights, with the aim of issuing merits orders within thirty days.
En Banc Oral Argument is scheduled for March 31, 2020. Click here to read the full brief.