Twp. of Bordentown v. Fed. Energy Regulatory Comm'n
903 F.3d 234
3rd Cir.2018Background
- Transcontinental (Transco) sought and FERC granted a conditional certificate under the Natural Gas Act (NGA) for the Garden State Expansion Project to increase interstate pipeline capacity serving NJNG; issuance was conditioned on obtaining applicable state permits (including CWA §401 certification).
- NJDEP granted Freshwater Wetlands and dewatering permits; petitioners (Bordentown, Chesterfield, PPA) requested adjudicatory hearings under New Jersey law within the 30‑day window; NJDEP denied the hearing requests solely on its view that the NGA preempted such state administrative review.
- Petitioners challenged FERC’s certificate (asserting CWA and NEPA violations, inadequate notice, Green Acres concerns, and lack of demonstrated need) and NJDEP’s denial of hearings; petitions were consolidated for review in the Third Circuit.
- FERC issued an Environmental Assessment finding no significant environmental impact (EA) subject to mitigation; it segmented review of the Project from PennEast and declined to federalize environmental review of the intrastate SRL.
- The Third Circuit upheld FERC on the federal claims but held NJDEP erred as a matter of law in concluding the NGA preempted New Jersey’s intra-agency adjudicatory-hearing process; remanded to NJDEP to reconsider hearing requests.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether FERC violated CWA §401 by issuing a certificate before state §401 certification | FERC’s certificate authorized activities leading to discharge (e.g., condemnation and project commencement) and thus §401 clearance was required first | FERC issued a conditional certificate that did not authorize discharge‑creating construction until state permits obtained; conditional issuance complies with CWA | Held for FERC: conditional certificate lawful because it did not itself authorize discharge‑creating activity prior to §401 approval |
| Whether FERC improperly segmented the Project from PennEast under NEPA (connected action analysis) | Project lacks independent utility because its capacity was contracted to serve gas expected from PennEast and SRL; must be considered together | Project and PennEast have independent utility (different shippers, contracts, and fungible gas pooling); contractual obligations show Project stands on its own | Held for FERC: segmentation reasonable; PennEast not a connected action |
| Whether FERC erred on NEPA cumulative impacts (SRL) and potable-well impacts | FERC failed to analyze cumulative impacts of the SRL and did not adequately evaluate/mitigate effects on nearby private wells (did not identify number/location prior to certificate) | FERC reasonably limited geographic area of influence, considered SRL cumulatively where appropriate, imposed enforceable mitigation/monitoring conditions for wells; impacts were minor/temporary | Held for FERC: cumulative analysis adequate; well impacts adequately considered and mitigated via conditions and monitoring |
| Whether NJDEP permissibly denied adjudicatory hearings as preempted by NGA §717r(d)(1) | NJDEP: NGA vests exclusive, original jurisdiction in federal courts over review of state agency actions made pursuant to federal law, so state adjudicatory process is preempted | Petitioners: §717r(d)(1) covers civil actions in courts of law (judicial review), not intra‑agency adjudicatory proceedings; states retain internal administrative review | Held for petitioners re NJDEP: NGA does not preempt state administrative hearings; NJDEP’s denial based on misreading of federal law was unreasonable — remand for reconsideration |
Key Cases Cited
- Del. Riverkeeper Network v. Sec’y of Pa. Dep’t of Envtl. Prot., 870 F.3d 171 (3d Cir. 2017) (discusses interplay of NGA and CWA and states’ role)
- Del. Riverkeeper Network v. Sec’y Pa. Dep’t of Envtl. Prot., 833 F.3d 360 (3d Cir. 2016) (prior Third Circuit exposition of NGA/CWA interaction)
- Del. Riverkeeper Network v. FERC, 857 F.3d 388 (D.C. Cir. 2017) (upholding conditional certification practice re §401 timing)
- Sierra Club v. FERC, 867 F.3d 1357 (D.C. Cir. 2017) (NEPA hard-look / informational standards)
- Myersville Citizens for a Rural Cmty., Inc. v. FERC, 783 F.3d 1301 (D.C. Cir. 2015) (need/market‑support and contract evidence for certificates)
- Nat’l Comm. for the New River v. FERC, 373 F.3d 1323 (D.C. Cir. 2004) (four‑factor test for federalization of non‑jurisdictional facilities)
- Kleppe v. Sierra Club, 427 U.S. 390 (U.S. 1976) (NEPA requires agency to take a ‘hard look' but courts defer to agency expertise)