On January 25, 2019, the U.S. Court of Appeals for the District of Columbia unanimously ruled in Hoopa Valley Tribe v. FERC that California and Oregon waived their Section 401 authority under the Clean Water Act in the relicensing of a hydroelectric project along the Klamath River.
My thoughts on this decision:
Judge David Sentelle’s decision does not address the clock start issue: “We… need not determine how different a request must be to constitute a ‘new request’ such that it restarts the one-year clock.” Rather, the decision only dealt with “the set of facts in which a licensee entered a written agreement with the reviewing states to delay water quality certification through a withdrawal-and-resubmission process.” However, the court noted that “the PacifiCorps’ water quality certification request has been complete and ready for review for more than a decade” suggesting that the one-year clock had long passed.
The Court did address the States delaying conduct in the context of Congress intent under Section 401. The Court noted that “by shelving water quality certifications, California and Oregon usurp FERC’s control over whether and when a federal license will issue. Thus if allowed, the withdrawal-and-resubmission scheme could be used to indefinitely delay federal licensing proceedings and undermine FERC’s jurisdiction to regulate such matters” citing the Section 401 legislative history (“Congress intended Section 401 to curb a state’s dalliance or unreasonably delay”).
In doing so, the court held that there “there is no legal basis for recognition of an exception for an individual request made pursuant to a coordinated withdrawal-and-resubmission scheme.” The Court also essentially found that such a coordinated scheme violated the public interest in timely WQC decisions, contravening Congress intent under Section 401.
Interestingly, the Court distinguished the Second Circuit’s Constitution and Millennium Pipeline decisions whereby “in light of various practical difficulties, a state could ‘request that an applicant withdraw and resubmit the application.’” The Court said that such language was dicta and not central to those holdings but seemed to bless options to “rebut a state’s fears that a one year review period could result in an incomplete application and premature decisions… (also identifying denial without prejudice as another alternative….”).
Assessment
The Hoopa Valley decision sends a strong message that a State may not develop a scheme with a third party to violate the one-year mandate for a 401 action on a complete application.
However, the court recognized that a State has flexibility to ensure that the applicant has provided sufficient information to make a decision and can allow for withdrawal and resubmission or denial without prejudice to “restart the one year clock.”
Following the Second Circuit’s decision, FERC rejected Constitution’s claim that NYDEC had waived its authority under Section 401 by failing to act within a reasonable time, noting that FERC, not NYDEC, was the appropriate agency to determine “reasonable period of time not to exceed one year” and that NYDEC was free to deny the request within one year if DEC fails to provide timely and adequate information.”
Thus, while Hoopa Valley sent a strong message that a state may not “manipulate” the 401 process to delay action indefinitely, as in the Constitution Pipeline case, States still retain options to ensure that they can make fully informed water quality certification decisions.
Larry Liebesman, Esq. Senior Advisor
A nationally recognized environmental lawyer with more than 40 years of experience, including 11 years at the U.S. Justice Department, Larry specializes in federal Clean Water and Endangered Species Acts and the National Environmental Policy Act (NEPA).
The views expressed here are those of the author and do not necessarily reflect the views of Dawson & Associates.