45 F.4th 867
5th Cir.2022Background
- FERC issued a NGA certificate allowing Midship to build and operate a 200‑mile natural gas pipeline across private Oklahoma land; certificate required environmental restoration.
- Midship completed construction and began restoration; Sandy Creek Farms reported unresolved ponding, contour, and debris issues and preferred monetary compensation rather than continued remediation by Midship.
- FERC found Midship and Sandy Creek at an impasse and directed an ALJ to determine (1) the methods and scope of remaining restoration and (2) the "reasonable cost" to complete those activities; FERC acknowledged it could not itself award damages.
- Midship petitioned for rehearing arguing FERC lacks statutory authority to determine remediation costs; FERC denied rehearing and Midship sought review in the Fifth Circuit and a stay.
- The Fifth Circuit granted a stay as to the cost‑determination directive, expedited the appeal, and left the remainder of the FERC order and ALJ proceedings in place.
Issues
| Issue | Midship's Argument | FERC's Argument | Held |
|---|---|---|---|
| Ripeness to review FERC order appointing an ALJ | Order is final and causes immediate injury because an ALJ determination of "reasonable cost" will have concrete effect | Order merely initiates proceedings and is not final; later FERC/ALJ decisions could remedy any error | Court: ripe — order is definitive and has substantial, immediate effect warranting review |
| Deference (Chevron/Skidmore) | N/A (challenge is statutory; deference not dispositive) | FERC's interpretation of NGA to permit cost findings is entitled to Chevron or at least Skidmore deference | Court: no Chevron — order is ad hoc; no Skidmore deference because FERC offered only conclusory, unpersuasive reasoning |
| Statutory authority to determine "reasonable cost" of restoration (dispositive) | NGA does not grant FERC power to set or order remediation costs; FERC may enforce outcomes but not fix costs | Determining costs is "necessary or appropriate" to evaluate compliance and remediation needs under NGA §§ 717m/717o | Court: vacates that portion — NGA does not authorize FERC (or an ALJ at its direction) to determine reasonable remediation costs |
| Jurisdiction to consider other constitutional/state‑law claims | Midship also argued FERC cannot order compensation and that such orders raise Seventh Amendment/state law issues | FERC contested merits but argued some claims are not properly before the court | Court: lacks jurisdiction to decide Midship’s second and third arguments because they were not raised on rehearing before FERC; thus the court did not reach them |
Key Cases Cited
- Food & Drug Admin. v. Brown & Williamson Tobacco Corp., 529 U.S. 120 (agency actions must be grounded in congressional authority)
- Chevron U.S.A. v. Natural Resources Defense Council, 467 U.S. 837 (framework for judicial deference to agency statutory interpretations)
- United States v. Mead Corp., 533 U.S. 218 (deference depends on whether interpretation carries force of law)
- Skidmore v. Swift & Co., 323 U.S. 134 (non‑binding agency interpretations get weight based on persuasiveness)
- West Virginia v. EPA, 142 S. Ct. 2587 (agencies have only powers given by Congress)
- Gulfport Energy Corp. v. FERC, 41 F.4th 667 (ripeness/aggrievement standard under NGA)
- Energy Transfer Partners, L.P. v. FERC, 567 F.3d 134 (orders initiating proceedings may be non‑ripe in some contexts)
- Atlanta Gas Light Co. v. Federal Power Comm’n, 476 F.2d 142 (interim orders reviewability under NGA precedent)