### UNITED STATES DISTRICT COURT FORTHEDISTRICT OF COLUMBIA

NATURAL RESOURCES DEFENSE COUNCIL, INC., etaI., 

### Plaintiffs,


### v. UNITED STATES DEPARTMENT OF STATE, etal.,l 

### Defendants, and 

### TRANSCANADA KEYSTONE PIPELINE, LP, Defendant-Intervenor. 

# rt- ) ) ) ) ) 

### ) Civil Case No. 08-1363 (RJL) ) ) ) ) ) ) ) ) ) ) ) )



### MEMORANDUM OPINION**(September~,** 2009) [#25 and 26] The Natural Resources Defense Council and certain local affiliates (collectively, "NRDC") bringthis action seeking declaratory and injunctive reliefagainst the United States Department ofState and various officers acting in their official capacity

I Amongthe original named defendants in this suitwere Condoleezza Rice, then Secretary ofState, and Reuben Jeffrey, III, Under Secretary ofState for Economic, Energy, and Agricultural Affairs. Pursuant to Federal Rule ofCivil Procedure 

### 2S(d), ifa public officer named as a party to an action in her official capacity ceases to hold office, the court will automatically substitute that officer's successor. Accordingly, the Court substitutes Hillary Clinton for CondoleezzaRice and Robert Hormats for Reuben Jeffrey.(collectively, "State Department") on the ground that the State Departmentviolated the National Environmental Policy Act ("NEPA"), 42 U.S.C. §§ 4321-4370f, by issuing a presidential "permit" to defendant-intervenor TransCanada Keystone Pipeline, LP ("Keystone") for a cross-border oil pipeline between the United States and Canadabased

on an inadequate assessment ofthe environmental impacts? The State Department and Keystone (collectively, "defendants") move to dismiss the action for lack of jurisdiction under Rule 12(b)(1), or for failure to state a claim underRule 12(b)(6), because no cause ofaction exists under NEPA or any other federal statute to challenge the State Department's actions in this case. For the following reasons, the Court agrees with the defendants and therefore GRANTS theirrespective Motions to Dismiss. 

### BACKGROUND Executive Order 13,337 delegates to the State Departmentthe President's authority to issue permits for the construction ofan oil pipeline across the border ofthe United States ifit finds that issuance ofthe permit to the applicant "would serve the national interest." Exec. OrderNo. 13,337, §l(g), 69 Fed. Reg. 25,299 (Apr. 30, 2004). Before issuing the permit, the State Departmentmust consult with various departments and agencies specified in the Order. Id. §1(b)(ii). Ifany ofthose departments or agencies disagrees with the State Department's proposed decision, then the State Department must

2 "Permit" as used here is not a standardized form issued pursuant to a formalized regulatoryprocess. Rather, it is the written imprimatur ofthe President issued through the State Department authorizing the applicant to proceed with the cross-borderproject. 2referthepermit application to the President "forconsideration and a final decision." Id. § 1(i). Otherwise, the State Department makes the final decision. Overthree years ago, Keystone filed an application with the State Department for

a presidential permit to build an oil pipeline across the United States-Canadian border. (Amend. Compo [#21] at ,-r 41). As part ofits review process, the State Department released a draft Environmental Impact Statement ("EIS") and then a final EIS. (Id. at,-r,-r 48, 51). Not long after issuing the final EIS, the State Departmentreleased a Record of Decision ("ROD") announcing its intent to issue a presidential permit for the pipeline projectbased on its determination that the permitwould serve the national interest. (Id. at ,-r 58). Thepermit issued shortly thereafter. (Id. at,-r 59). The NRDC broughtthis action against the State Department, which Keystone joined as an intervenor-defendant, on the ground that the State Departmentviolated NEPAby issuing the presidentialpermitto Keystone based on a deficient EIS. (Id. at,-r 71). NEPA directs that "all agencies ofthe Federal Government shall

... include in every recommendation or report on proposals for legislation and other majorFederal actions significantly affecting the quality ofthe human environment, a detailed statement" on environmental impacts. 42 U.S.C. §4332(2)(C). The NRDC claimsthatthe State Department's final EIS did not comply with NEPA and its implementing regulations for

numerous reasons, the details ofwhich are not relevant now. (Amend. Compo [#21] at,-r,-r 65-71). As a result, the NRDC seeks a declaration that the State Department's failure to

3prepare an adequate EIS violated NEPA and that the State Department's decision to issue the presidential permitbased on thatEIS violatedthe Administrative Procedure Act ("APA"). (Jd. at 19). The NRDC also seeks an injunction directing the State Department to revoke the permit and to require that Keystone remove the portion ofthe pipeline subjectto the permit and that it cease any further construction or activity until the State Department complies with NEPA and the APA. (Jd.). ANALYSIS Defendants move to dismiss the NRDC's Amended Complaint on the ground that

no legal basis exists to challenge State Department decisions on behalfofthe Presidentto issue presidential permits underExecutive Order 13,337. Defendants assert that the NRDC cannotpointto any statutory authority that creates a cause ofaction by which this Court may reviewthe State Department's conduct in this case. Defendants further argue that a private right ofaction is expressly foreclosed by the Executive Order itself. See Exec. OrderNo. 13,337, §6, 69 Fed. Reg. at 25,299. Although defendants couch their motion primarily as ajurisdictional challenge under Rule 12(b)(1), the more appropriate procedural vehicle is Rule 12(b)(6). The NRDC claims a violation ofNEPA and the APA, both ofwhichraise a federal question covered by 28 U.S.C. § 1331.3 The crux ofdefendants' various arguments is not whether

3This statute confers on federal district courts original subject matterjurisdiction over "civil actions arising underthe Constitution, laws, ortreaties ofthe United States." 4the NRDC has presented federal claims, but whetherthose claims are enforceable against the State Departmentwhen it is acting on behalfofthe Presidentpursuantto Executive Order 13,337.4 Whether there is a cause ofaction is not ajurisdictional question; rather, "the court must assumejurisdictionbefore deciding whether a cause ofaction exists." John Doe v. Metro. Police Dep 't ofD.C., 445 F.3d 460,466 (D.C. Cir. 2006); see also ReliableAutomaticSprinkler Co., Inc. v. ConsumerProd. Safety Comm 'n, 324 F3d 726, 731 (D.C. Cir. 2003) (stating that, where there is no cause ofaction underthe APA, dismissal is properly invoked underRule 12(b)(6), not under Rule 12(b)(1)).

4 The State Department raises only one trulyjurisdictional issue. Itcontends that the NRDC lacks Article III standingbecause its claims are not redressable. This argument, however, is unavailing. The redressability requirement is satisfied ifthe plaintiffcan show that it is "likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision." Lujan v. Defenders ofWildlife, 504 U.S. 555, 561 (1992) (internal quotation marks omitted). The alleged injury in this case is aprocedural one-the State Department's failure to comply with NEPA before issuing a presidential permit. A party that has been accorded a procedural right to protect a concrete interest "can assertthat right without meeting all the normal standards for redressability and immediacy." Id. at 573 n.7. Courts have routinely upheld standing in NEPA lawsuits, knowing that a favorable decision may not ultimately change the outcome. Lemon v. Geren, 514 F.3d 1312,1315 (D.C. Cir. 2008). "The idea behind NEPA is that ifthe agency's eyes are open to the environmental consequences ofits actions and ifit considers options that entail less environmental damage, it may be persuaded to alter what it proposed." Id. The State Department argues that this case is different because the President, not the agency, is the ultimate decision-maker and can revoke the Executive Order and issue apermitregardless ofwhat this Court decides. The State Department's argument goes too far. Such an argument would defeat standing in virtually any administrative case because agencies always act pursuantto delegated authority, whether from Congress or from the President, that can be subsequently withdrawn. That an agency's delegated authority can be revoked is too speculative to defeat standing on redressability grounds. 5Accordingly, the Courtwill treat defendant's motion as one for dismissal under Rule 12(b)(6) for failure to state a claim. In doing so, the Court accepts the NRDC's factual allegations as true and draws all reasonable inferences in the NRDC's favor. Browningv. Clinton, 292 F.3d 235,242 (D.C. Cir. 2002). Dismissal is proper ifthe NRDC is unable to prove any set offacts in support ofa claim that would entitle it to relief. Id. The NRDC argues, as it must, that it is entitled to reliefunderthe APA. 

### It is wellestablished that NEPA does not create aprivate right ofaction. Pub. Citizen v. 

## us. Trade Representative, 5F.3d 549, 551 (D.C. Cir. 1993). Nor does Executive Order 13,337 affirmatively create a cause ofaction to enforce its terms. Indeed, it does the opposite by expressly foreswearing that it creates any "right, benefit, ortrust responsibility, substantive orprocedural, enforceable at law or in equity." Exec. Order No. 13,337, §6, 69 Fed. Reg. at 25,299. As a result, to enforce NEPA in this case, the NRDC must rely on the general provisions ofthe APA, which provide forjudicial review in cases where aparty suffers "legal wrong because ofagency action" or is "adversely affected or aggrieved by agency action within the meaning ofarelevant statute." 5 U.S.C. §702. Agency action is not reviewable, however, unless it is final, id. § 704, and agency action is not final unless it satisfies two conditions: "First, the action must mark the 'consummation' ofthe agency's decisionmakingprocess-itmust not be ofa merely tentative or interlocutory nature. And second, the action must be one by which 'rights or obligations have been determined,' or from which 'legal consequences will flow.'"

6Bennettv. Spear, 520 U.S. 154, 177-78 (1997) (internal citation omitted). Given these provisions, the NRDC's argument is rather straightforward. The NRDC and its members contend that they are aggrieved by the State Department's decisionto issue apresidential permitto Keystone based on an EIS that does not comply with NEPA. This agency action is final because it took effect in accordance with the Executive Orderwithout further review by the President. No party alleges that the State Departmentreferred, or was required to refer, Keystone's application to the President for a final decision under subsection l(i) ofthe Executive Order. The NRDC's argument thus rises or falls on the existence ofan APA cause of action in this particular case. Defendants argue that agency action pursuant to a delegation ofthe President's inherent constitutional authority over foreign affairs is tantamount to an action by the Presidenthimself. I agree. The State Department, here, is not acting pursuantto any congressional delegation ofpower, nor is it even acting pursuant to an Executive Orderthat was promulgated to carry out aparticular congressional mandate. 5 To the contrary, the State Department is acting solely on behalf ofthe President, and in doing so, it is exercisingpurely presidential prerogatives.

5 According to the plainterms ofExecutive Order 13,337, the President issued the Orderby "the authority vested in me as Presidentby the Constitution and the laws ofthe United States ofAmerica, including section 301 oftitle 3, United States Code." Exec. Order No. 13,337,69Fed. Reg. 25,299. The only statute that the Orderreferences is 3 U.S.C. § 301, which merely authorizes the President to delegate to agencies or executive branch officials the performance of"any function which is vested in the President by law." Such delegations are "revocable at any time by the President in whole or in part." Id. 7Defendants have amply documented the long history ofPresidents exercisingtheir inherent foreign affairs powerto issue cross-borderpermits, even in the absence ofany congressional authorization. (See State Dept. Mot. to Dismiss [#26-2] at 11-13; Keystone Mot. to Dismiss [#25] at 2-4). Because the President is not an "agency" for purposes of the APA, presidential action is not subject tojudicial review under that statute. Franklin

v. Massachusetts, 505 U.S. 788, 800-01 (1992); Dalton v. Specter, 511 U.S. 462, 470 (1994). Bythe same token, because the State Department is acting for the President in issuing presidential permits pursuantto Executive Order 13,337, it too cannotbe subject tojudicial review under the APA. The NRDC contends, not surprisingly, that agency action is not presidential action unless there is some requirement that the President review the agency action before it takes legal effect. The NRDC argues thatthis result follows from Bennettv. Spear, which held an agency action to be final by distinguishingFranklin andDalton on the ground thatthe challenged agency actions in those cases "werepurely advisory and in no way affected the legal rights ofthe relevant actors" without final action by the President. 520 U.S. at 178. Thus, in this case, because the President made the unwitting choice of delegating his inherent authority to issue cross-borderpermits, which would otherwise be unreviewable, to the State Department without reserving in all cases the right to make the final decision, State Department decisions to grant or deny presidential permits that are not reviewed by the President are now reviewable underthe APA. I disagree.

8The NRDC errs by conflatingthe question ofwhether a particular action is final with the question ofwhether aparticular action is presidential. Tothe extent that it has immediate legal effect, issuance ofa presidential permit, to be sure, is a final action, but that does not end the inquiry. The question that remains, and the question that this Court must now answer, is whether issuance ofapresidential permit by the State Department pursuantto an executive order, which is derived from the President's inherent constitutional power and not from any congressional command, is apresidential action immune fromjudicial review underthe APA. Bennett sheds no light on this question, and Franklin andDalton do so only indirectly. Franklin involved a statute, 13 U.S.c. § 141(b), that directed the Secretary of Commerce to issue areport to the President tabulating the apportionment results from the decennial census. 505 U.S. at 792. Another statute, 2 U.S.c. 

### §2a(a), required the President to transmit the apportionmentresults to Congress. Id. The Supreme Courtheld that the Secretary's report to the President was not a final agency action because it carried "no direct consequences" and served "more like a tentative recommendation than a final and binding determination." Id. at 798. Central to this conclusion was the Supreme Court's determination that the Presidentperformed more than a ministerial task in transmitting the final apportionmentresults to Congress. The Court noted that nothing in the statutory scheme "curtail[ed] the President's authority to direct the Secretary in making policyjudgments" orrequired the President "to adhere to the policy decisions reflected in the Secretary's report." Id. at 799. Given the President's central role in the 9process, the Supreme Court concluded that it could reviewthe APA claims at issue only "ifthe President, not the Secretary ofCommerce, is an 'agency' within the meaning ofthe [APA]." Id. at 800. "Out ofrespect for the separation ofpowers and the unique constitutionalposition ofthe President,"the Court held thatthe President's actions are not subject to the APA'srequirements. Id. 800-01. The Court instead "wouldrequire an express statementby Congress before assuming it intended the President's performance ofhis statutory duties to be reviewed for abuse ofdiscretion." Id. at 801. The Supreme Court similarly held in Dalton that the report ofthe Defense Base Closure and Realignment Commission was not a final agency action under the APA because the Presidentretained final authority to reject or approve the report. 511 U.S. at 469-70. The Court emphasized "the importance of[the President's] role in the base closure process." Id. at 470. Specifically, the Court noted that "[w]ithoutthe President's approval, no bases are closed" and that the relevant statute "does not by its terms circumscribe the President's discretion to approve or disapprove the Commission's report." Id. Even though the President's discretion was curtailed in the sense that he could only reject or acceptthe Commission's recommendations, the Court concluded nonetheless that the determinative fact was that "the President, not the Commission, takes the final action." Id. (internal quotation marks and alterations omitted). Franklin and Dalton, ofcourse, are not directly analogous to this case. No agency action had any legal effect in either case until the President affirmatively acted. Nevertheless, the reasoning ofboth cases is instructive. The Supreme Court distinguished 10reviewable agency action from unreviewable presidential action by the nature ofthe President's authority over agency decisions, notby whether orhowthe President exercised that authority. Unlike ministerial or ceremonial authority, the President's exercise ofsignificant discretionary authority over agency decisions constitutes presidential action, which is shielded fromjudicial review underthe APA out ofconcern for the separation ofpowers. Whetherthe President carries out the final action himself and the manner in which he does so are considerations that certainlybearon whether the President's duties are ministerial or discretionary, but there is no reason to think thatthese considerations alone are determinative. See Franklin, 505 U.S. at 800 (''That the final act is that ofthe President is important to the integrity ofthe process and bolsters our conclusion that his duties are not merely ceremonial or ministerial."). NeitherFranklin

norDalton require, as the NRDC suggests, that the President actually make the final decision before an action is deemed to bepresidential and thus unreviewable. The determinative consideration is whether "the President's authority to direct the [agency] in making policyjudgments" is curtailed in any way or whether the President is "required to adhere to the policy decisions" ofthe agency. See id. at 799. In this case, the President has complete, unfettered discretion overthe permitting process. No statute curtails the President's authority to direct whether the State Department, or any other department for that matter, issues a presidential permit. Nor does any statute bin? the President to any State Department decision granting or denying

a permit. The State Department acts solely at the behest ofthe President and in 11accordance with the President's guidance as set forth in Executive Order 13,337. The NRDC makes much ofthe fact that the Executive Order "does not contemplate the President's involvement in the permitting process," except in those cases when apermit application is referred directly to the President for a final decision because ofinteragency disagreement. (NRDC Op. [#36] at 10). Thatthe President chose to retain ultimate authority to settle any interagency dispute signals his beliefthat the issuance of presidential permits is ultimately apresidential action. The Executive Order's division of responsibilities is merely a device for managing the President's decision-making process. Simply stated, the State Department stands in the President's shoes by exercising the President's inherent discretionarypowerunderthe Constitution to issue cross-border permits. No permit can issue without, at the very least, the President's acquiescence, and the President's acquiescence is itselfan exercise ofdiscretion that constitutes unreviewable presidential action. Therefore, to challenge the issuance ofapresidential permit, whether by the Presidenthimselfor by the State Department as the President's delegee, is to challenge apresidential act, which is not reviewable under the APA. See Tulare County v. Bush, 185 F. Supp. 2d 18,29 (D.D.C. 2001), aff'd, 306 F.3d 1138 (D.C. Cir. 2002) (dismissing aNEPA claim "because NEPA requires agency action, and the action in question is an extension ofthe President's action"); see also Jensen v. Nat'l Marine Fisheries Serv., 512 F.2d 1189, 1191 (9th Cir. 1975) ("Forthe purposes ofthis appeal the Secretary's actions are those ofthe President, and therefore by the terms ofthe APA the approval ofthe regulation at issue here is not reviewable."). 12To expose pennitting decisions, which are unreviewable ifexercisedby the Presidenthimself, tojudicial review underthe APAjustbecause the President assigned this powerto a subordinate agency would run afoul ofthe separation ofpowers concerns that underlie the Supreme Court's decisions in Franklin andDalton. Indeed, the separation ofpowers interests at stake in this case are even greaterbecause the President and his delegee here are acting pursuant to the President's inherent foreign affairs power, not pursuant to any enabling statute. See Mountain States LegalFound. v. Bush, 306 F.3d 1l32, 1136 (D.C. Cir. 2002) (notingthatjudicial review overpresidential decisions that

are subject to discernible statutory limitations "does not implicate separation ofpowers

concerns to the same degree" asjudicial review where the President's discretion is not limited). Unlike Franklin andDalton, as well as other cases cited by the NRDC, there is

no statutory framework in which Congress delimited certain roles for the President and the agency. CI, e.g., Pub. Citizen, 5F.3d at 551 (noting how the Trade Acts involve the President at the final stage ofthe process for submitting a trade agreement to Congress). Nor is this case like those in which courts have allowed APA review ofactions pursuant to an executive orderthat was itselfgoverned by statute and did not precludejudicial review. CI, e.g., City of Carmel-By-The-Sea v. 

# u.s. Dep'fof Transp. , 123 F.3d 1142, 1166 (9th Cir. 1997) (stating that the Ninth Circuithas recognized "thatunder certain circumstances, Executive Orders, with specific statutory foundation, are treated as agency action and reviewed underthe Administrative Procedure Act" ifthey "donot preclude judicial review" and "there is 'lawto apply"'). 13Here, there is no statute that curtails or otherwise governs the President's discretion to issue presidential permits. 6 Not even the EIS requirement ofNEPA applies to the President. See Tulare County, 185 F. Supp. 2d at 28 (stating that the President is not subject to NEPA's impact statementrequirement because "the President is not a federal agency for the purposes ofNEPA"). The President acts solely by his own constitutional authority. Judicial review ofpermitting decisions that the President has delegated to the State Departmentwould impose an unconstitutional burden on his power to delegate that the APA does not require, let alone contemplate. To treat those decisions

as agency action "would suggestthe absurd notion that all presidential actions must be carried out by the Presidenthim or herselfin orderto receive the deference Congress has chosen to give to presidential action." 

### Id. at 28-29. Worse yet, the NRDC's position, if the Court were to accept it, would create an asymmetry between presidential permits that

are reviewed by the Presidentbecause ofinteragency disagreement and those that are issued solely by the State Department. This outcome would surely frustrate the President's discretion to enacthis preferred decision-making process. Thus, 

### "[0Jut of respect for the separation ofpowers and the unique constitutional position ofthe President," it is proper in this case to forego APA review ofpermitting decisions under Executive Order 13,337, whetherby the President orby the State Department acting on

6 In this respect, this case is unlike Corus GroupPLCv. Int'l Trade Comm 'n, a casethe NRDC cited, which applied Bennett instead ofFranklin and Dalton because the President did "nothave complete discretion underthe [relevant enabling] statute." 352 F.3d 1351,1359 (Fed. Cir. 2003). 14his behalf, absent "an express statementby Congress"that such review is intended.7 

### Franklin, 505 U.S. at 800-01. Simply stated, an act need not be carried out by the President personally to constitutepresidential action exempt fromjudicial review underthe APA. Where, as here, the President (as opposed to Congress) delegates his inherent constitutional authority to a subordinate agency and that authority is not limited or otherwise governed

7 Generally,judicial review ofagency action is presumed and cannot be withheld "absent some clear and convincing evidence oflegislative intention to preclude review." 

### Japan WhalingAss 'n v. 

### Am. Cetacean Soc

## y, 478 U.S. 221, 230 n.4 (1986). This presumption is reversed, however, when interests arising from the separation ofpowers are at stake. 

### See Franklin, 505 U.S. at 801 ("As the APA does not expressly allow review ofthe President's actions, we must presume that his actions are not subject to its requirements."). In any event, there is good reason to think that Congress intended to exempt fromjudicial reviewpresidential discretion ofthe kind at issue here, whether exercised by the Presidenthimselfor by his delegee, because the APA is inapplicable where "agency action is committed to agency discretion by law." 5 U.S.C. § 701(a)(2); 

### see Jensen, 512 F.2d at 1191 ("Since presidential action in the field offoreign affairs is committed to presidential discretion by law, it follows that the APA does not apply to the action ofthe Secretary in approvingthe regulation here challenged." (internal citations omitted)). Given that the authority to issue presidential permits flows from the President's inherent power over foreign affairs and is not governed or limited by any statute, there is little doubtthat permitting decisions are committed to the President's (and hence his delegee's) discretion. The Court is mindful, ofcourse, that presidential action is not beyond the reach ofalljudicial oversight. Actions ofthe President and his agents are still subject to non-statutoryjudicial review to determine the constitutionality ofthose actions, 

### see Franklin, 505 U.S. at 801, orto determine whether those actions are 

### ultra vires, see Chamber a/Commerce a/the

# u.s. v. 

### Reich, 74 F.3d 1322, 1328 (D.C. Cir. 1996). In this case, however, the crux ofthe NRDC's claim is that the State Department, acting on the President's behalf, abused its discretion by issuing a presidentialpermit based on a deficient EIS. 

### (See Amend. Compo [#21] at**~** 64, 71). This type ofchallenge to presidential action does not warrant non-statutoryjudicial review. Where, as here, a specific decision is entrusted to the President and there are no discernible statutory limitations on the President's exercise ofthat authority, "judicial review ofan abuse of discretion claim is not available." 

### Chamber a/Commerce, 74 F.3d at 1331. 15by statute, the agency's exercise ofthat discretionary authority on behalfofthe President is tantamount to presidential action and cannot be reviewed for abuse ofdiscretion under the APA. The President's authorityto issue permits for cross-borderpipelines is completely discretionary and is not subject to any statutory limitation, includingNEPA's impact statementrequirement. Accordingly, the decision to issue apermit, whether made by the President himselforthe State Department as the President's delegee, is a presidential action not reviewable for abuse ofdiscretion. Absent a right tojudicial review, the NRDC cannot state a claim. Accordingly, defendants' respective Motions to Dismiss are GRANTED, and an Order consistenttherewith is hereby attached.



# ,

United States DistrictJudge

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