2 F.4th 953
D.C. Cir.2021Background
- FERC granted a Section 7(c) certificate to Spire STL to build a ~65‑mile natural gas pipeline serving the St. Louis area; the project was not designed to serve new load (regional demand projected to remain flat).
- An open season produced no third‑party precedent agreements; Spire STL then privately contracted with its affiliate, Spire Missouri, for 87.5% of capacity.
- Protestors (including EDF and Enable MRT) argued the affiliate precedent agreement was insufficient evidence of market need and raised concerns about self‑dealing, cost impacts on captive ratepayers, and competitive harms.
- FERC relied principally on the single affiliated precedent agreement, declined to ‘‘look behind’’ the shipper’s business decision or require a market study, and concluded benefits outweighed adverse effects; rehearing was denied.
- The D.C. Circuit held Steck lacked standing, found EDF had associational standing, concluded FERC acted arbitrarily and capriciously by failing to scrutinize the affiliated precedent agreement and by conducting an inadequate benefits/adverse‑impact balancing, vacated the Certificate and Rehearing Orders, and remanded.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing (Steck) | Steck asserted NEPA/esthetic and construction‑period harms from nearby meter station and construction noise | FERC/respondents argued injuries were not concrete, traceable, or redressable | Steck lacks Article III standing; petition dismissed |
| Standing (EDF) | EDF asserted associational standing based on members whose land was taken or subject to eminent domain and ongoing harms | Respondents did not successfully refute associational standing | EDF has associational standing; petition proceeds |
| Timeliness of EDF's petition | EDF filed within 60 days of FERC’s rehearing order; tolling order didn’t defer filing period | Spire argued Allegheny makes the earlier tolling order a deemed denial that rendered EDF’s filing untimely | Petition timely; court follows prior precedent allowing review after final rehearing order and considers Allegheny context |
| Merits: Reliance on affiliated precedent agreement & interest‑balancing | EDF argued a single, post‑open‑season affiliate precedent agreement in a flat‑demand market required heightened scrutiny, market study, and careful balancing of harms/benefits; record showed plausible self‑dealing | FERC argued precedent agreements are important evidence of need and it need not ‘‘look behind’’ shippers’ business decisions; broad discretion in balancing | Court held FERC’s reliance solely on the affiliated agreement and its cursory balancing were arbitrary and capricious; vacatur and remand required |
Key Cases Cited
- Minisink Residents for Env't Pres. & Safety v. FERC, 762 F.3d 97 (D.C. Cir. 2014) (precedent agreements are important evidence of demand)
- Myersville Citizens for a Rural Cmty., Inc. v. FERC, 783 F.3d 1301 (D.C. Cir. 2015) (Commission must evaluate market need and potential subsidies to existing customers)
- City of Oberlin v. FERC, 937 F.3d 599 (D.C. Cir. 2019) (FERC may credit affiliate precedent agreements where no evidence of self‑dealing and applicant bears risk for unsubscribed capacity)
- Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29 (1983) (arbitrary and capricious standard for agency action)
- Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016) (requirements for Article III injury‑in‑fact)
- Sierra Club v. FERC, 827 F.3d 59 (D.C. Cir. 2016) (NEPA procedural‑injury causation chain and relaxed redressability rules)
- Gunpowder Riverkeeper v. FERC, 807 F.3d 267 (D.C. Cir. 2015) (eminent domain authorization creates injury‑in‑fact for landowners)
- Allied‑Signal, Inc. v. Nuclear Regul. Comm’n, 988 F.2d 146 (D.C. Cir. 1993) (factors for determining whether to vacate or remand without vacatur)
- Allina Health Servs. v. Sebelius, 746 F.3d 1102 (D.C. Cir. 2014) (vacatur is the normal remedy for unsustainable agency action)