PREC E DENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

______________ ___________

No. 1 5

- 2122

____________ _____________

DELAWARE RIVERKEEPER NETWORK; MAYA VAN ROSSUM, the Delaware Riverkeeper,

Petitioners

v.

SECRETARY PENNSYLVANIA DEPARTMENT OF ENVIRONMENTAL PROTECTION; PENNSYLVANIA

DEPARTME NT OF ENVIRONMENTAL PROTECTION,

Respondents

TRANS CONTINENTAL GAS PIPE LINE CORP,

Intervenor Respondent2 ______________ ___________

No. 15

- 215 8

___________ _____________ _

NEW JERSEY CONSERVATION FOUNDATION;

STONY BROOK MILLSTONE WATERSHED ASSOCIATION; FRIENDS OF PRINCETON

OPEN SPACE,

Petitioners

v.

NEW JERSEY DEPARTMENT OF ENVIRONMENTAL PROTECTION; TRANSCONTINENTAL GAS

PIPE LINE CORP

,

Respondents

On Petition for Review of an Order of the Federal Energy Regulatory Commission (Agency No s

. FERC CP13

- 551

- 00; EA40

- 013 & EA45

- 002 ) (Agency Nos. 0000

- 13

- 0012.1FHA140001

, 0000

- 13

- 0012.1FWW140001, 0000

- 13

- 0012.2FHA14 0001

& 0000

- 13

- 0012.2FWW140001)

Argued o n October 29 , 2015

Before: GREENAWAY, JR., SCIRICA

and ROTH

, Circuit J udges (Opinion filed : August 8, 2016 )3 Aaron J. Stemplewicz , Esquire (Argued) Delaware Riverkeeper Network

925 Canal Street

Suite 3701 Bristol, PA 19007

Counsel for Petitioners Delaware

Riverkeeper Network and Maya Van Rossum

Katherine V. Dresdner, Esquire 299 Pennington

- Titusville Road Pennington, NJ 08534

Aaron Kleinbaum, Esquire

Eastern Environmental Law Center

744 Bro ad Street

Suite 1525 Newark, NJ 07102

Susan J. Kraham, Esquire Edward Lloyd, Esquire (Argued) Columbia University School of Law

435 West 116th Street New York, NY 10027

Counsel for Petitioners New J ersey Conservation Foundation Stony Brook M illstone Watershed

Association and Friends of Princeton Open Space4 Joseph S. Cig a n, III, Esquire (Argued) Commonwealth of Pennsylvania Department of Environmental Protection 2 Public Square

Wilkes

- Barre, PA 18701

Kimberly Hummel Childe, Esqu ire Office of Attorney General of Pennsylvania Department of Environmental Resources

P.O. Box 8464 Harrisburg, PA 17105

Margaret O. Murphy, Esquire Pennsylvania Department of Environmental Protection

400 Market Street

P.O. Box 8469 Harrisburg, PA 17105

C urtis C. Sullivan, Esquire Department of Environmental Protection

909 Elmerton Avenue Harrisburg, PA 17110

Counsel f or Respondents Secretary Pennsylvania D epartment o f

Environmental Protection and Pennsylvania Department of

E nvironmental Protection

Pamela S. Goodwin, Esquire Patrick F. Nugent, Esquire5 John F. Stoviak, Esquire (Argued) Saul Ewing

1500 Market Street Centre Square West, 38h Floor Philadelphia, PA 19102

Elizabeth U. Witmer, Esquire Saul Ewing

1200 Liber t y Ridge Drive

Sui te 200 Wayne, PA 19087

Counsel for Intervenor Respondent

Transcontinental Gas Pipe Line Corp

Mark A. Collier, Esquire John E. Doyle, Esquire Timothy P. Malone, Esquire Lewin J. Weyl, Esquire (Argued) Office of the Attorney General of New Jersey Department of Law & Public Safety Richard J. Hughes Justice Complex

25 Market Street

P.O. Box 093 Trenton, NJ 08625

Counsel for Respondent New Jersey

Department of Environmental Protection

Michael K. Rutter, Esquire

Heather N. Oehlmann, Esquire6 Christine A. Roy, Esquire (Argued) Richard G. Scott, Esquire Watson, Stevens, Rutter & Roy 3 Paragon Way

Suite 300 Freehold, NJ 07728

Counsel for Respondent

Transcontinental Gas Pipe Line Corp

_______________

O P I N I O N

_______________

RO TH

, Circuit Judge :

In this appeal, we are called upon to review water quality

- related permitting actions by New Jersey and Pennsylvania for a project by Transcontinental Gas Pipe Line Company, LLC (Transco)

, which operates the Transcontinental pipeline, a 10,000

- mile pipeline that extends

from S outh Texas to New York City . T ransco sought federal approval to expand a portion of the pipeline

, called the Leidy Line, which connects gas wells in C entral Pennsylvania with

the main pipe line. Pursuant to the C l ean Water Act , t he Pennsylvania and New Jersey Departments of Environmental Protection (PADEP and NJDEP, respectively) reviewed Transco’s proposal for potential water quality impact s and issued permits for construction

. The New Jersey

Conservation Foundat ion, Stony Brook

- Millstone Watershed Association, and Friends of Princeton Open Space7 (collectively, the Foundation) petitioned this Court for review

of NJDEP’s decision to issue these permits . In a separate petition to this Court, the Delaware Riverkeepe r Network and Maya van Rossum ( collectively, the Riverkeeper) challenged
PADEP’s issuance of a Water Quality Certification required

under Section 401 of the C lean Water Act

. T he petitions

were consolidated for review

.

For the reasons that follow, we co nclude this Court has jurisdiction t o hear these petitions

, and NJDEP and PADEP did not act arbitrarily or capriciously in issuing the permits. Therefore, we will deny the petitions.

I. Statutory Background

Under t he Natural Gas Act of 1938

, 1 the Fed eral Energy Regulatory Commission (FERC) has exclusive authority to regulate sales and transportation of natural gas in

interstate commerce. Section 7 of the Natural Gas Act grants FERC the power to authorize the construction and operation

of interstate t ransportation facilities. 2 Specifically, no company or person may construct or extend any facilities for the transportation in interstate commerce of natural gas without obtaining a “ certificate of public convenience and necessity” from FERC. 3 FERC deter mines whether a project serves “public convenience and necessity” by reviewing a number of factors, such as the project’s impact on competition for the transportation of natural gas

, the possibility of overbuilding or subsidization by existing

1 15 U.S.C. §§ 717

- 717z.

2 Id

. § 717f.

3 Id.8 customers

, a voidance of unnecessary disruptions to the

environment

, the applicant’s responsibility for unsubscribed capacity

, and the avoidance of unnecessary exercise of

eminent domain. 4 The issuance of a “certificate of public convenience and necessity” is conditio ned on receipt of state and other federal authorizations required for the proposed project

. 5

Other federal authorizations may be required because

i nterstate sales and transmission of natural gas are further regulated through federal environmental laws

, including the National Environmental Policy Act (NEPA) 6 and the Clean

Water Act

. 7 To compl y with NEPA, before issuing a certificate of public convenience or necessity, FERC must
examine the potential environmental impact of a proposed pipeline project an d issue an Environmental Assessment or , if

necessary, an Environmental Impact Statement. 8

4 Transcontinental Gas Pipeline Co., LLC , 149 FERC ¶ 61,258, 62,676 (2014); see Certification of New Interstate Natural Gas Pipeline Facilities, 88 FERC ¶ 61,227 (1999) ; 90 FERC ¶ 61,128 and 92 FERC ¶ 61,094 (2000) (clarifying policy)

. 5 See Islander East Pipeline Co., Algonquin Gas

Transmission Co. , 102 FERC ¶ 61,054 (2003) (“T he Commission routinely issues certificates for natural gas pipeline projects subject to the federal permitting requirements of the . . . [ Clean Water Act ].”).

6 42 U.S.C. §§ 4321

- 4370h.

7 33 U.S.C. §§ 1251

- 138 8

. 8 42 U.S.C. § 4332; see 15 U.S.C. §§ 717b

- 1(a), 717n(b)(1); 40 C.F.R. §§ 1501.1

- .8 (implementing NEPA regulations) ; 189 Although the Natural Gas Act preempts state

environmental regulation of interstate natural gas facilities,

the Natural Gas Act allows states to participate in

en vironmental regulation of these facilities under three

federal statutes: the Clean Air Act, the Coastal Zone Management Act, and the Clean Water Act

. 9 As relevant here, t he Clean Water Act regulates through a combination of

state and federal mechanisms : the U.S. Environmental Protection Agency (EPA) limits the discharge of pollutants into water bodies, 10 and states establish water quality

standards , subject to EPA approval, that must at a minimum comply with EPA’s limits

. 11

Th is combination of state an d federal mechanisms is apparent when a proposed activity involves discharge of dredged or fill material into the navigable waters of the United States and thus triggers the permitting requirements of

Section 404 of the C lean Water Act

. 12 Section 404 permi ts typically are issued by t he U.S. Army Corps of Engineers; however, a state may assume the authority to administer these permit s

. Whether or not the state assumes this authority, a

Section 404 permit may be issued only if the state where the discharge w ill occur issues a Water Quality Certification

, governed by Section 401 of the Clean Water Act. 13 A Water

C.F.R. §§ 38 0.1

- .16 (implementing NEPA regulations for FERC actions)

. 9 15 U.S.C. § 717b(d).

10 See 33 U.S.C. § 1311.

11 See id . § 1313.

12 Id . § 1344.

13 Id . § 1341.10 Quality Certification confirms that a given facility will comply with federal discharge limitations and state water quality standards. 14 Unlike the Se ction 404 permit, the Water Quality Certification is by default a state permit, and the

issuance and r eview of a Water Quality Certification is typically left to the states

. 15

New Jersey has assumed authority to issue Section 404 permits and delegated ad ministration of the permitting program to NJDEP, which exercises this authority pursuant to the New Jersey Freshwater Wetlands Protection Act. 16
Therefore, for activities that result in disch arge of dredged or

fill material into New Jersey water s, NJDEP re views applications for Water Quality Certifications and Section 404 permits. In contrast , Pennsylvania has not assumed Section 404 permitting authority. For activities affecting Pennsylvania waters

, Section 404 permits are issued by the U.S. Army Corps o f Engineers, and Water Quality Certifications are issued by PADEP.

II

. Administrative Background

14 Id . § 1341(a)(1), (d).

15 See, e.g.

, Lake Erie All. for Prot. of Coastal Corridor v. U.S. Army Corps of Eng’rs , 526 F. Supp. 1063, 107 4 (W.D. Pa. 1981) aff’d , 707 F.2d 1392 (3d Cir. 1983); Roosevelt Campobello Int’l Park Comm’n v. U.S. EPA , 684 F.2d 1041, 1056 (1st Cir. 1982).

16 N.J. Stat. Ann. § 13:9B

- 1

- 30; 33 N.J. Reg. 3045(a); N.J. Admin. Code § 7:7A

- 2.1( c); Memorandum of Agreement between the New Jersey Department of Environmental Protection and Energy and the United States Environmental Protection Agency (1993).11 In September 2013, Transco submitted an application

to FERC for a certificate of p ublic convenience and necessity

for t he Leidy Southeast Expansion Projec t . The Project consists of two major types of improvements to existing natural gas pipelines: the construction of four new pipeline

“ loops ” and the upgrade of turbines at four compressor stations. “Loops” are sections of pipe connected to the main pipel ine system t hat reduce the loss of gas pressure and increase the flow efficiency of the system. Compressor stations serve a similar function, using gas

- and electric

powered turbines to increase the pressure and rate of flow at given points along the pipe line’s route. In its application,

Transco proposed installing

, within or parallel to existing Transco pipeline s, a pproximately thirty miles of loops

. The Skillman Loop and the Pleasant Run Loop, totaling 13.23 miles, would be located in New Jersey ; the F ranklin Loop and Dorrance Loop , totaling 16.74 miles, would be located in Pennsylvania.

FERC completed the requisite E nvironmental

A ssessment in August 2014, and issued the certificate of public convenience and necessity on December 18, 2014.

The certi ficate was conditioned on, inter alia , Transco’s receipt of “all applicable authorizations under federal law” 17

enumerated in the E nvironmental A ssessment, some of which were to be obtained from New Jersey and some from Pennsylvania

.

A

. New Jersey

17 Transcontinental Gas Pipe Line Co., LLC , 149 FERC ¶ 61,258, 62,687 (2014).12 FE RC required Transco to obtain the following

authorizations for each loop from NJDEP : a Freshwater

Wetlands Individual Permit , a Flood Hazard Area Individual Permit, a Water Quality Certification , and a L etter of Interpretation

. Transco first obtained Let ter s of Interpretation , in which NJDEP sets forth the boundaries of

freshwater wetlands and state

- regulated transition areas. 18

Transco then applied for the remaining permits . I n December 2014, NJDEP deemed th ose applications “ administratively complete, ” a status that triggered a public notice and
comment process. Two months later, NJDEP held a public hearing in Princeton, New Jersey. In light of comments from NJDEP staff and the public, Transco submitt ed revised plans

. A few days later, NJDEP asked Tr ansco to address additional

comments, and Transco provided responses.

In April , NJDEP issued

, for each loop

, a Freshwate r Wetlands Individual Permit, a Flood Hazard Area Individual Permit, and a Water Quality Certification

. In addition,

NJDEP released Staff Summary Reports

, which set forth the findings and analysis underlying its permitting decisions. Transco began construction on May 6, 2015. Two days later,

t he Foundation petition ed this Court for review of NJDEP’s decision to issue the permits

.

Later in May , while the Foundation’s petition was pending , Transco submitted a request to NJDEP for a minor

modification to the Freshwater Wetlands Individual Permit for the Skillman Loop

, to change the excavation method for a wetland in Princeton, New J ersey. NJDEP approved the request on June 4, 2015 , which the Foundation challenged in

18 N.J. A dmin. Co de § 7:7A

- 3.1 (2008)

.13 its opening brief. Later in June

, the Foundation filed an emergency motion for a stay of construction. A week later

,

we denied the motion. At this time, the New Jerse y portion of the p roject is substantially complete

. 19

B

. Pennsylvania

FERC required Transco to obtain from PADEP a Water Quality Certification and a Water Obstruction and

Encroachment Permit. The latter, issued under Chapter 105 of PADEP’s regulati ons, are referred to as “Chapter 105

Permits.” FERC further required Transco to obtain a Section 404 permit from the U.S. Army Corps of Engineers. Each certificate or permit covered both loops in Pennsylvania.

Transco applied to PADEP for the Water Qu ality

Certification in June 2014. In t he following month, PADEP published notice in the Pennsylvania Bulletin that it intended

to issue a Water Quality Certification so long as Transco

obtain ed certain other state permits, including a Chapter 105

P ermit. I n April 2015, PADEP issued a Water Quality

Certification for the p roject

. Shortly thereafter, t he Riverkeeper filed a petition in this C ourt specifically challenging the Water Quality Certification. Three months later, PADEP issued a Chapter 105 permit

. A fter receiving

all of its required permits , Transco sought permission from

FERC to proceed with construction. FERC granted this

19 Transco submitted the Declaration of John B. Todd, who serves as project manager; Todd indicated that construction along both Skillman and Pleasant Run Loops is between 93 to 100% complete in regulated and non

- regulated areas.14 request in July 2015

, during the pendency of the instant

matter

.

I I I. Threshold Challenges

At the outset, we consider c hallenges by NJDEP and

PADEP regarding this Court’s jurisdiction, the justiciability of the petitions, and whether sovereign immunity shields state

agency actions

. Specifically, NJDEP and PADEP allege that

we lack subject matter jurisdiction to review the petitions and

that , even if we had jurisdiction , the petitions are barred by the Eleventh Amendment. NJDEP further argues that because construction in New Jersey is substantially complete,

the petition is moot.

A. S ubject Matter Jurisdiction

The Rive rkeeper and the Foundation , in p etitioning

this Court for review

, invok e a provision of the Natural Gas

Act that confers original jurisdiction on Courts of Appeals over certain state and federal permitting actions for interstate natural gas pipeline s . Bot h PADEP and NJDEP contest whether that provision applies

. Our jurisdiction ultimately depends on whether PADEP and NJDEP acted “pursuant to Federal law” in issuing permits to Transco.

We begin with the statute. In 2005, Congress amended

the Natural Gas Act to subject certain state and federal permitting decisions for interstate natural ga s pipeline projects to review by the federal Courts of Appeals. 20

20 Energy Policy Act of 2005, Pub. L. No. 109

- 58, Sec. 313, 119 Stat. 594, 689

- 90.15 Specifically, under Section 19(d) of the Natural Gas Act, the Courts of Appeals have jurisdiction to r eview actions undertaken (1) by a State adminis trative agency ; (2) pursuant

to f ederal law ; (3) to issue, condition, or deny a permit, license, concurrence, or approval ; (4) required for an interstate natural gas facility permitted under the Natural Gas

Ac t ; (5) that is located in the jurisdiction of the circuit Court

of review. 21 The parties do not dispute that all elements are
met except whether NJDEP and PADEP acted “pursuant to Federal law” in issuing Water Quality Certification s, permits,

and Letters o f Interpretation

.

NJDEP and PADEP contend that their decision s to
issue Water Quality Certification s are not covered by the provision that grants jurisdiction to this Court and

, consequently, we lack jurisdiction to hear th e s e petition s

. NJDEP further c ontests our jurisdiction to review those

authorizations that “exclusively involv[e] issues of State

law

, ” including the Flood Hazard Area Individual P ermits

, the Letters of Interpretation

, and those portions of the

Freshwater Wetlands Individual P ermit s th at address state

regulated issues such as transition areas or state t hreatened

and endangered species

. For the following reasons, w e hold that we have jurisdiction over these petitions

.

B

. Jurisdiction over Water Quality

Certifications

1. Permi ts Issued by PADEP

21 15 U.S.C. § 717r(d)(1) (2005). This amended section is also referred to as “Section 19(d)” based on where it appears

in the Natural Gas Act.16 P ADEP argues that this Court does not have jurisdiction over Water Quality Certification s because our jurisdiction under the Natural Gas Act extends only to state agency action taken pursuant to f ederal law, whereas a Water Quality Cert ification is required by federal law

. This argument does not pass muster. Although the C lean Water

Act makes clear that states have the right to promulgate water quality standards as they see fit , subject to EPA oversight, the

issuance of a Water Quality Certification is not purely a matter of state law

. 22 A state issues a Water Quality

Certification for an interstate natural gas facility to certif y compliance with state water quality standards , promulgated under federal supervision, as well as with feder ally

established Clean Water Act requirements

. 23 Specifically, a Water Quality Certification c onfirm s compliance with

S ections 301, 306, and 307 of the Clean Water Act , all of

which involve federal standards. 24 Thus, a Water Quality

Certification is not me rely required by federal law: it cannot

exist without federal law

, and is an integral element in the regulatory scheme established by the Clean Water Act . To say otherwise would be to ignore the EPA’s supervisory role

in the setting of state water qualit y standards, the fact that Water Quality Certifications must verify compliance with

federal standards, and the role of the f ederal government in regulating water quality as envisioned by drafters of the Clean

Water Act

. 25

22 See 33 U.S.C. § 1251(b).

23 Id. § 1341(a)(1).

24 Id. §§ 1311, 1316, & 1317.

25 See i d. § 1251(a) (presenting the Clean Water Act ’s goals as a matter of “national policy”).17 T he conclusion that a Water Quali ty Certification is issued pursuant to f

ederal law is bolstered by the Natural Gas Act’s provisions that allow states to regulate or subject state

action to federal judicial review. T he Natural Gas Act
preempts state environmental regulat ion of interstat e natural gas facilities, except for state action taken under those statutes specifically mentioned in the Act: the Coastal Zone Management Act, the Clean Air Act, and the Clean Water

Act

. 26 In other words , t he only state action over interstate natural ga s pipeline facilities that could be taken pursuant to

f ederal law is state action taken under th ose statutes. In another provision

, Section 19(d)

, the Natural Gas Act grant s jurisdiction to the Courts of Appeals to review state agency action taken pursuan t to federal law except for the Coastal Zone Management Act. 27 Applying the statutory construction

ca non, the express mention of one thing excludes all others

, the express exception of the Coastal Zone Management Act from review by the Court of Appeals ind icates that Congress

intended state actions taken pursuant to the two non

- ex cepted

statutes , the Clean Water Act and the Clean Air Act, to be subject to review by the Courts of Appeals. This interpretation is supported by the legislative history of the bi ll amending Section 19(d) , which indicates that the purpose of the provision i s to streamline the review of state decisions taken under federally

- delegated authority. 28 Thus

, a state

26 15 U.S.C. § 717b(d).

27 Id. § 717r(d)(1).

28 See Islander East Pipeline Co. v. Conn. Dep’t Envt’l Prot.

, 482 F.3d 7 9, 85 (2d Cir. 2006) (discussing the legislative history of the judicial review provision); see also The Energy Policy Act of 2005: Hearing Before the H. Subcomm. on Energy and Air Quality of the Comm. on Energy and18 acti on taken pursuant to the Clean Water Act or Clean Air Act is subject to review exclusively in the Courts of Appeals.

To bar this Court’s review of PADEP’s action s in permitting an interstate natural gas facility pursuant to the Natural Gas

Act and the Clean Water Act would frustrate the purpose of Congress’s grant of juris diction and render superfluous the explicit exception from federal judicial review of the Coastal Zone Management Act

.

2

. Permits Issued by NJDEP

NJDEP argues we have no jurisdiction over the

Freshwater Wetlands Individual Permits or the Water Quali ty
Certificat ion s , and even if we had jurisdiction over those two

authorizations

, we cannot reach issues regarding aspects of

the Freshwater Wetlands Individual Permits that concern transition areas and threatened and endangered species

, the

Letters of Int erpretation

, or the Flood Hazard A rea Individual

P ermits

. We consider each authorization in turn, and

conclude that each is roo ted in NJDEP ’s exercise of authority that it assumed pursuant to Section s 401 and 404 of the Clean

Water Act.

Commerce , 109th Cong. 420 (2005) (statem ent of Donald F. Santa, Jr., President, Interstate Natural Gas Association of America) (observing that “[a]lthough state regulatory action [is] preempted” by the Natural Gas Act, “state action pursuant to federally delegated authority” is not, and prior to passage of the Natural Gas Act’s amendments, review of state permitting decisions could “frustrate pipeline projects already found by FERC to meet the public convenience and necessity.” (internal quotation marks omitted)).19 First, with res pect to NJDEP ’s argument that we lack jurisdiction over the Freshwater Wetlands Individual Permits

and the Water Quality Certifications

, New Jersey’s Freshwater Wetlands Protection Act provides for the state’s administration of Section 404 permits, and its implementing regulations make clear a permit issued under the Act, called

the F reshwater W etlands Individual P ermit

, “ constitutes ” the Water Quality Certification

. 29 Given that the Natural Gas Act provides this Court with jurisdiction to review state
auth orizations issued pursuant to the C lean W ater A ct

, this Court has jurisdiction over the F reshwater W etlands

Individual P ermit s and the Water Quality Certification s

.

Next, NJDEP argues that those portions of the

Freshwater Wetlands Individual Permit tha t address state threatened and endangered species are governed by state law

rather than the Clean Water Act , and thus are not subject to

our review. A Freshwater Wetlands Individual Permit may be issued only if the regulated activity “[ w ] ill not destroy, jeopardize [

, ] or adversely modify a present or documented habitat for threatened or endangered species

. . . . ” 30 In issuing the permits, NJDEP imposed conditions on the proposed activity for the protection of state thr eatened and endangered species. Give n that the Freshwater Wetlands Individual Permit constitutes both the Section 404 permit and the Water Quality Certification, and that, u nder Section 401

of the Clean Water Act

, “any other appropriate requirement of state law set forth in [the] certificati on” will be treated as a condition on the federal permit affected by the certification

—

29 N.J. Admin. Code § 7:7A

- 2.1(d)

. 30 Id. § 7:7A

- 7.2(b)(3).20 in this case, the Section 404 permit 31

— t he conditions that protect threatened and endangered species are part of the

Freshwater Wetlands Individual Permit

, and we have ju risdiction to review these conditions

.

Under similar reasoning, we have jurisdiction over the

Flood Hazard Are a Individual P ermits . The Freshwater

Wetlands Protection Act requires compl iance with the Flood

Hazard Act. 32 Accordingly, Tran sco applied for and obtained

Flood Hazard Area Individual Permit s , which enumerate
conditions on activities in flood hazard areas to protect water quality. T

he Flood Hazard Area Individual Permit is , in effect, a set of conditions on the Freshwa ter Wetlands

Individual P ermit. Given that we have jurisdiction over the Freshwater Wetlands Individual Permit, we have jurisdiction

over the Flood Hazard Area Individual Permit as conditions

set forth in the Water Quality C ertification

.

Likewise, t he Letters of Interpretatio n are part and parcel of the Freshwater Wetlands Individual Permits , and thus subject to this Court’s review

. New Jersey regulation s require an applicant for a Freshwater Wetlands Individual

Permit to submit the Letter of Interpretation as part of the

app lication package if a Letter has been issued, or “[i]f the applicant applies for [ a Freshwater Wetlands Individual

Permit ] without first obtaining [a Letter of Interpretation] , the permit application must include all information that would be necessary for the Department to issue [a Letter of Interpretation] for the site . . . . The Department will then

31 33 U.S.C. § 1341(d).

32 N.J. Admin. Code § 7:7A

- 2.1; see, e.g. , i d. §§ 7:7A

4.3 (b)(8), (9)

, 7.2 (b)(10)

.21 review the submitted wetland delineation as part of the permit review process.” 33 In other words, a Freshwater Wetlands

Individual Permit application must include either an issued Letter of Interpretation or all the materials required for NJDEP to issue such a Letter. Therefore, the Letter s of Interpretation are integral to the Freshwater Wetlands Individual Permit application and t he review process of the permit, and thus subject to our review.

B. Mootness

We next consider NJDEP and Transco’s argument that

t he petition for review is moot because construction is complete and Transco has been conducting mitigation and

restoration

. Thus, any procedural remedy would be

ineffectual. The Foundation argues the petition is not moot

because we can provide relief in the form of additional analysis of environmental impact and measures to address

those effects.

Mootness raises both constitutional and prudent ial

concerns. 34 Under Article III, “ [i] t is a basic principle

. . . that a justiciable case or controversy must remain extant at all stages of review . . . .” 35 Prudentially

, a court may decline to exercise discretion to grant declaratory and injunctive re lief if

33 I d

. § 7:7A

- 3.1(h).

34 Marcavage v. Nat’l Park Serv. , 666 F.3d 856, 862 n.1 (3d Cir. 2012) (citing Int’l Bhd. of Boilermake rs v. Kelly , 815 F.2d 912, 915 (3d Cir. 1987)).

35 Decker v. Nw. Envtl. Def. Ctr. , 133 S. Ct. 1326, 1335 (2013) (quoting United States v. Juvenile Male

, 564 U.S. 932,

936 (2011)).22 a controversy is “so attenuated” that considerations of prudence and comity counsel withholding relief. 36 T he central question in a mootness analysis is “ whether changes in circumstances that prevailed at the beginning of the litigation

have forest alled any occasion for meaningful relief. ” 37 A case

becomes moot “ only when it is impossible for a court to grant any effectual relief whatever to the prevailing party.” 38 When a court can fashion “some form of meaningful relief” or “impose at least one of the remedies enumerated by the appellant,” even if it only partially redresses the grievances of the prevailing party, the case is not moot. 39 T he Foundation challenges NJDEP’s conclusions regarding the proposed pipeline’s environmental impact and the amo unt of mitigation required

.

This case is not moot because NJDEP may monitor mitigation outcomes following completion of mitigation. Specifically, pursuant to New Jersey regulation and as set

forth in the Freshwater Wetlands Individual Permits and the Flood Hazard Area Individual Permits, Transco must submit annual reports to NJDEP for three years after completing mitigation, and NJDEP may monitor the progress of remedial actions. If mitigation has not met the requirements in the

36 Int’l Bhd. of Boilermakers , 815 F.2d at 915

- 16 n.3.

37 Jersey Cent. Power & Light Co. v. New Jersey , 772 F.2d 35, 39 (3d Cir. 1985) (citing Mills v. Green , 159 U.S. 651, 653 (1985)).

38 Decker , 133 S. Ct. at 1335 (quoting Knox v. Serv. Emps

. Int’l , 132 S. Ct. 2277, 2287 (2012)).

39 In re Cont’l Airlines , 9 1 F.3d 553, 558 (3d Cir. 1996) ; Isidor Paiewonsky Assocs. v. Sharp Props., Inc. , 998 F.2d 145, 152 (3d Cir. 1993).23 regulations, NJDEP may direct Transco to perform additional mitigation or other remedial action. 40 Therefore, t here remains possible effectual relief because further environmental analysis might lead NJDEP to require additional mitigation from Transco

. Thus, we conclude that

t his petition is not moot

. 41

C. Sovereign Immunity

NJDEP and P ADEP contend that any challenge brought under Section 19(d) is barred by the Eleventh Amendment. With respect to the Water Quality Certification s and Section 404 permits

, NJDEP and PADEP a rgue that their

mere participation in the C lean W ater A ct permitting process does not waive their sovereign immunity provided by the

Eleventh Amendment. NJDEP further argues that when it assumed authority to administer Section 404, it explicitly

40 N.J. Admin. Code § 7.7A

- 15:16(c)

- (f); see N.J. Admin. Code § 7:13

- 10.2(u)(5); N.J. JA 18

- 19, 35

- 37 (“The permittee

shall monitor forested and/or shrub scrub wetland mitigation projects for 5 full growing seasons and emergent wetland or State open water mitigation projects for 3 full growing seasons beginning the year after the mitigation project has been completed . . . The permittee shall monitor the riparian projec t for at least 3 years beginning the year after the riparian zone compensation project has been completed.”) (Freshwater Wetlands Individual Permits and Flood Hazard Area Individual Permits, Pleasant Run Loop and Skillman Loop).

41 See Sierra Club v. U.S. Army Corps of Eng’rs

, 803 F.3d 31,

43 (D.C. Cir. 2015) (citing Church of Scientology of Cal. v.

U.S. , 506 U.S. 9, 12

- 13 (1992))

.24 reserved its sovereign immunity for Section 404 actions through a Memorandum of Agreement with the EPA

. Therefore, according to NJDEP

, sovereign immunity bars this

Court from reviewing the Freshwater Wetlands Individual

Permit s , F lood Hazard Are a Individual P ermit s
, and Letters

of I nterpretation

. These arguments are unavailing. As discussed below, we hold that New Jersey and Pennsylvania’s voluntary participation in the regulatory schemes of the

Natural Gas Act and the Clean Water Act constitutes a waiver

of sove reign immunity, given the clear language in those statutes subjecting their actions to federal review

.

1

. Overview

The Eleventh Amendment of the United States

Constitution states that federal courts may not hear “any suit in law or equity, commenced o r prosecuted against one of the United States by Citizens of another State . . . .” 42 C ourts have interpreted the amendment as applying to suits against states by their own citizens as well

, 43 and have extended the immunity to state agencies

. 44 The immunit y from suit is not absolute; Congress has limited power to abrogate the states’ immunity. 45

A state may waive its immunity by engaging in
conduct that demonstrates the state’s consent to suit in federal

42 U.S. Const. Amend. XI.

43 See Hans v. Louisiana , 134 U.S. 1 (1890).

44 See Pennhurst State Sch. & Hosp. v. Halderman , 465 U.S. 89, 100 (1984).

45 See Seminole Tribe of Fla. v. Florida , 517 U.S. 44 (1996).25 court. 46 A state may consent to suit in federal c ourt by accepting a gift or gratuity from Congress when waiver of sovereign immunity is a condition of acceptance. 47 When Congress makes a gift to a state that Congress is not obligat ed

to make and which the state cannot claim as a matter of right

, Congres s may attach conditions to this gift, including a waiver of sovereign immunity. 48 These “gifts” need not only be monetary awards; a congressional grant of regulatory authority that a state may not otherwise possess is also a gift

. We addressed th e theory of “gratuity waiver” as applied to a grant of regulatory authority in MCI Telecommunications Corporation v. Bell Atlantic Pennsylvania , where Pennsylvania’s Public Utility Commission argued that a section of the Telecommunications Act of 1996, 49 which provi d es for federal court review of state

- approved interconnection agreements, violated the agency’s Eleventh Amendment immunity. 50 We held that Congress had made

46 See Atascadero State Hosp. v. Scanlon , 473 U.S. 234, 241 (1985); Clark v. Barnard , 108 U.S. 436, 447 (1883).

47 See College Sav. Bank v. Fla. Prepaid Postsecondary Educ. Expense Bd. , 527 U.S. 666, 686

- 87 (1999) (holding that while states may not constructively waive immunity to Lanham Act claims based on term in Trademark Remedy Clarification Act, waiver may be a proper condition on authority granted by Congress that the state wou ld not otherwise have).

48 Id. ; see Petty v. Tenn.

- M o. Bridge Comm’n , 359 U.S. 275 (1959); see also South Dakota v. Dole , 483 U.S. 203, 206 (1987) (holding that Congress may attach conditions to the receipt of federal funds).

49 Pub. L. No. 104

- 104, 110 S tat. 56 (codified in scattered sections of 47 U.S.C.).

50 271 F.3d 491 (3d Cir. 2001).26 federal judicial review a necessary condition of state participation in regulat ion of telecommuni cations

. A state’s participation in the regulatory scheme constituted acceptance
of the gift, and, thus, a waiver of Eleventh Amendment immunity. 51 Nevertheless, m ere acquiescence is insufficient to abrogate sovereign immunity. A state’s gratuity waiver must be knowing and voluntary. 52 In other words, Congress

must make its intention to condition acceptance of a gratuity on the waiver of Eleventh Amendment immunity “unmistakably clear.” 53

2

. Sovereign Immunity and Section 19(d)

Here, the application of the gratuity waiver doctrine is

consistent with precedent of our sister c ourt s and supported by the language of Section 19(d) of the Natural Gas Act

. I n Islander East Pipeline Company v. Connecticut Department of Environmental Protection

, 54 the Second C ircuit recogniz ed

that the Natural Gas Act strips states of any authority to regulate a particular field

— in this case, interstate natural gas

transmission facilities

— save certain “ rights of the states” granted under those three enumerated statutes, one of which

is the C lean W ater A ct. 55 Consistent with this doctrine, a state participat es in C lean W ater A ct regulation of interstate natural gas facilities by congressional permission, rather than

51 MCI , 271 F.3d at 510.

52 College Sav. Bank , 527 U.S. at 675 (citing Beers v.

Arkansas

, 61 U.S. 527, 529 (1857 )).

53 MCI , 271 F.3d at 506.

54 482 F.3d 79 (2d Cir. 2006).

55 Islander , 482 F.3d at 90.27 through inherent state authority. 56 A state may refuse th e grant of authority: under the Clean Water Act, a state’s non

participation in water quality regulation return s authority to
the EPA. A state also may decline to exercise its authority to issue an applicant a Water Quality Certification, and in so doing waive the requirement for a Water Quality

Certification , and the proposed activity proceeds without a Water Quali ty Certification

. 57 In the context of a n interstate natural gas facility, a state’s refusal to issue a Water Quality

Certification would waive the ne ed for the facility to obtain a Certification in order to satisfy conditions of FERC’s

c ertificate of p ublic c onvenience and n ecessity. In effect, such a refusal would return the state’s delegated authority to

enforce Section 401 of the Clean Water Act to FERC with respect to the project. 58 Therefore, state participation in the regulatory schemes of the Clean Water Act and under the

framework of the Natural Gas Act constitutes a gratuity

waiver.

We agree with the Islander court that the principle of

gr atuity waiver appl ies to the regulatory scheme established by the Natural Gas Act

. Section 19(d) grants the Courts of Appeals jurisdiction to review “state agency action .” This language is unambiguous. New Jersey and Pennsylvania’s participation in the regulatory scheme of the C lean W ater A ct with respect to interstate natural gas facilities

, pursuant to the

56 Id.

57 33 U.S.C. § 1341(a)(1).

58 See 15 U.S.C. § 717b(d) (providing that the NGA does not affect the rights of states under the Clean Water Act); id. § 717f(e) (allowing FERC to att ach reasonable conditions to a certificate of pu blic convenience and n ecessity).28 Natural Gas Act and after the amendment of Section 19(d)

, constitutes a waiver of their immunity from suits brought

under the Natural Gas Act

. In e ffect, Section 19(d) creates a small carve out from sovereign immunity

. Under this limited carve out, federal judicial review is proper over those state

actions regarding interstate natural gas facilities pursuant to

the Clean Water Act and the Clean Air Act

.

For the se reasons, we have jurisdiction over the petitions. We therefore turn to the merits of these petitions.

IV

. Merits Challenges

A. Standard of Review

The standard of review of state action pursuant to the

C lean W ater A ct for a n interst ate natural gas facility is a matter of first impression for this Court

. Consistent with our precedent in MCI , which dealt with a similar regulatory

arrangement, we review de novo state agency interpretation of

federal law

, and review under the arbitrary and capricious

standard state action taken pursuant to federal law

. 59 Agency action is arbitrary and capricious when the agency fails to “examine the relevant data and articulate a satisfactory explanation for its action including a rational connection

bet ween the facts found and the choice made.” 60 When we review an agency action under this standard

, the

Administrative Procedure Act (APA) directs us to take

59 MCI , 271 F.3d at 516; see Islander , 482 F.3d at 93

- 94.

60 Motor Vehicle Mfrs. Ass’n of the U.S., Inc. v. State Farm

Mut. Auto. Ins. Co. , 463 U.S. 29, 43 (1983) (internal quotation marks omitted).29 account of “ the rule of prejudicial error

. ” 61 I n other words, we apply a “harmless error” analysis t o any administrative

action we review ; 62 m istakes that have no bearing on the

substantive decision of an agency do not prejudice a party. 63

The party challenging the agency determination bears the burden of demonstrating prejudice. 64 Where an agency errs in fact finding , we remand only if the agency relied on the

erroneous finding in its decision

. 65

B. New Jersey

The Foundation alleges four general problems with
NJDEP’s issuance of the F reshwater Wetlands Individual

Permits

, the F lood Hazard Are a Indiv idual P ermits , the W ater Quality Certifications , and the L etters of Interpretation : (1)

NJDEP depriv ed the Foundation of sufficient opportunity to

comment

, (2) NJDEP issued the Freshwater Wetlands

Individual Permit s based on unsupported conclusions

, (3)

N JDEP err ed in determining that Transco met the requirements for the Flood Hazard Area Individual P ermits and hardship exceptions for those permits

, and (4) NJDEP

misconstrued regulation in grant ing a minor modification for

the F reshwater Wetlands Individua l P ermit of the Skillman

61 5 U.S.C. § 706.

62 Shin seki v. Sanders , 556 U.S. 396, 406 (2009) (comparing a similarly worded provision applying to appeals of Veterans Affairs claims decisions).

63 See Mass. Trs. of E. Gas & Fuel Assocs. v. United States

, 377 U.S. 235, 248 (1964).

64 Sanders , 556 U.S. at 409.

65 See Communist Party of U.S. v. Subversive Activities

Control Bd. , 367 U.S. 1, 67 (1961).30 Loop. We address each in turn and conclude that NJDEP did

not act arbitrarily or capriciously with respect to the first three alleged errors. We hold that the fourth challenge is not properly before this Court.

1. Opportunit y for Public Comment

State regulations require NJDEP, after de termin ing an application to be administratively complete, to publish a

notice of the a pplication in the DEP Bulletin, make the application avai lable at its offices in Trenton, and, in some

circ umstances, hold a public hearing. 66 The public may comment on the application within 30 days of the notice. 67 The Department “shall consider all written public comments submitted within this time” and “may, in its discretion,

consider comments submitted a f ter this date[,] ” although state regulations do not define “consider.” 68 The Foundation alleges that NJDEP committed two errors that deprived the

Found a tion of the opportunity to comment on Transco’s application . First, the Foundation argues that NJDEP

pr ematurely determined that Transco’s application was “administratively complete,” a designation that triggers the public notice and comment process, even though Transco had

failed to include a required element of the application

. Second, the Foundation arg ues that NJDEP failed to provide proper notice to the public of Transco’s application because

NJDEP’s initial notice of Transco’s application in the DEP

bulletin cited only Hunterdon County as the project location

66 N.J. Admin. Code § § 7:7A

- 12.1, .3 , &

. 4.

67 Id . § 7:7A

- 12.3(d).

68 Id

. ; see In re Freshwater Wetlands Gen. Permits , 860 A.2d 450, 461

- 462 (N.J. Super. Ct. App. Div . 2004).31 and omitted three other affected counties

— Somerset, Princeton, and Mercer.

Although the Foundation argues that it was deprived of an opportunity to comment on the revisions because Transco

submitted the revised analysis after the close of the public comment period

, the Foundation reviewed the revised analysis and submitted additional written comments from its

members and two drilling experts and had a face

- to

- face

me e t ing with NJDEP to express its continued concern with the proposal. The record shows that NJDEP asked Transco to respond to the concerns raised

. A party challenging the sufficiency of the public comment process bears the burden of showing it was prejudiced by the lack of opportunity to

comment. 69 The fact that NJDEP ultimately did not adopt the

Foundation ’ s view does not mean tha t the Foundation lacked

the opportunity to put forth that view. 70

Similarly

, petitioners were not harm ed by the omission

of three counties from the initial notice because Princeton Ridge Coalition and Stony Brook

- Millstone Watershed

Association

— both loc ated in the initially omitted counties

—

were aware of the proposal well before the offending initial

n otice was published

. A s early as 2013

, both had met with NJDEP and Transco regarding the proposed project and provided written comments

. Therefore, t he F oundation has

69 Am. Radio Relay League, Inc. v. FCC , 524 F.3d 227, 237 (D.C. Cir. 2008)

. 70 Friends of the Atglen

- Susquehanna Trail, Inc. v. Surface Transp. Bd. , 252 F.3d 246, 265 (3d Cir. 2001) ( noting the agency was required to consider the comments but was “ not required to follow the comments”).32 failed to demonstrate that it was deprived of the opportunity

to comment

. For that reason, NJDEP’s actions were not arbitrary or capricious.

2. Agency Analysis on Environmental Impact of Proposal

New Jersey regulations require NJDEP to analyze the environmental impact of the proposed activity, such as the activity’s potential effect on water quality, the aquatic ecosystem, and threatened and endangered animals. The

Foundation alleges NJDEP acted in an arbitrary and capricious m anner because NJDEP (1) failed to adequate ly analy ze alternatives to the proposed activity that would be less environmentally

- adverse or result in the minimum feasible impairment of the aquatic ecosystem

, (2) defin ed the project purpose in such a narrow ma nner as to exclude potential alternatives to the proposed activity

, (3) improperly

concluded that the propos ed activity in connection with the Skillman Loop will not harm threatened or endangered species or their habitats

, and (4) improper ly determin ed tha t the proposal is in the public interest.

a. Consideration of Alternatives

New Jersey regulations require NJDEP to issue a

Freshwater W etlands Individual P ermit only if certain prerequisites are met. As relevant to this petition, New Jersey regula tion requires NJDEP to consider practicable

alternatives to the proposed activity that “would have a less adverse impact on the aquatic ecosystem or would not involve a freshwater wetland or State open water” and “would not have other significant adv erse e nvironmental consequences . .33 . .” 71 Where Transco rejected alternatives on the basis of constraints such as inadequate zoning, infrastructure, or parcel size , NJDEP must consider whether Transco made

reasonable att empts to remove or accommodate t h ose

cons traints. 72 In addition, when a regulated activity would take place in wetlands or waters deemed of “ exceptional

resource value ” or related to trout production, NJDEP must

consider whether there is a compelling public need for the activity and whether denia l of the permit would impose extraordinary hardship on the applicant. 73

The Foundation claims that NJDEP insufficiently

considered alternatives , including those that would have

result ed in the minimum feasible environmental alteration or impairment of t he aquatic ecosystem. T he Foundation also alleges that NJDEP failed to rebut the presumption that the proposed activity has a practicable alternative

— such as in size, scope, configuration, density, or design

— that would avoid impact or have a lesser impact , a required analysis because the project is a “non

- water dependent activity

. ” 74

The record shows NJDEP considered potential alternatives, such as replacing the existing p ipeline with a larger one rather than constructing a new loop , increasing operati ng pressure within the existing loop, and building

various alternative routes. NJDEP weighed the options

, adopted some

, and rejected others as impractical. Specifically, NJDEP required Transco to r educe the size of

the construction workspace in regulated areas
, substitut e less

71 N.J. Admin. Code § 7:7A

- 7.2(b)

. 72 Id

. § 7:7A

- 7.4 (c).

73 Id . § 7:7A

- 7.5.

74 Id

. § 7:7A

- 7.4

.34 environmentally

- adverse crossing techniques for six

wetland s
, and us e specific drilling methods at three locations to reduce impact s . NJDEP provided explanation for those alternatives not adopted . F or example, the use of horizonta l direct drilling and direct pipe drilling at certain locations

would be more costly and carried the risk of equipment failure, damage to the pipe, and inadvertent release of drilling fluid into the soil. Similarly, alternative routes were impracticable b ecause they might interfere with an existing

water line or cause greater land or wetland disturbance.

Additionally, NJDEP considered whether the proposed activity would affect wetlands or waters categorized as

“ exceptional resource value ” or related to trout production.

NJDEP noted that wetlands in the Pleasant Run Loop were neither of exceptional resource value nor trout

- producing, and that, although certain wetlands in the Skillman Loop were of exceptional resource value, compelling public need for t he project outweighed the impac t on wetlands and waters

.

NJDEP not only considered but also acted upon alternatives, in direct contrast to the Foundation’s allegations.

A doption of alternatives reduced open water and wetland disturbance by 38 percen t for the Pleasant Run Loop and 48

percent for the Skillman Loop , according to an NJDEP analysis . For the Skillman Loop, NJDEP consideration of

alternatives led to the selection of the shortest proposed route

, of which 86 percent is collocated within Tran sco’s existing pipeline right

- of

- way. NJDEP also required those portions

not co l located to be constructed with a specific drilling technique to reduce wetland disturbance. Therefore

, NJDEP’ s actions were not arbitrary or capricious

.35 b. Definition of Project Purpose

Next , the Foundation charges NJDEP d efine d the project purpose in such way as to preclude alternatives, by including a durational limitation as part of the purpose. The

limitation render ed impracticable those construction methods

that ar e less environmentally

- adverse but more time

consuming

. 75 The Foundation’s challenge relies on language regarding project purpose in New Jersey regulations on practicable alternatives. Regulations define “p racticable
alternative” as “other choices availab le and capable of being carried out after taking into consideration cost, existing technology, and logistics in light of overall project purposes

.

. . . ” 76 However, n either New Jersey regulation s nor case law

define s the term “project purpose

. ” For the p resent project,

NJDEP state d that the project purpose wa s “to construct the pipeline and . . . to begin service through the proposed pipeline by

. . . December 31, 2015.” 77 A “short construction window” for the project was recommended by the U.S. Army Corp s of Engineers to reduce disturbance to waterbodies , and

FERC discussed temporal limitations on construction in its order granting the certificate of public convenience and necessity

. 78 Given this concern, NJDEP considered the

75 Pet. Br. 46

. 76 N. J. Admin. Code § 7:7A

- 1.4 (emphasis added)

. 77 See N.J. JA 1302 (NJDEP Staff Summ ary Report, Pleasant

Run L oop ).

78 E.g.

, Transcontinental Gas Pipe Line Co. LLC , 149 FERC ¶ 61,258 , 62,686 (2014) (“ Back Brook

. . . will be crossed within a 48 hour period . . . which will maintain water flow during construction and avoid in

- stream construction impacts.”)

.36 duration of disturbance of wa ter bodies in choosing a drilling method, in addition to other factors, such as the number of

trees that would need to be cl eared to provide space for

work sites. Therefore, NJDEP’s incorporation of a temporal term into the project purpose was not arbitrar y and capricious.

c. Conclusion s Regarding Threatened or Endangered Species in the Skillman Loop

The Foundation alleges that NJDEP ignored reports by the Princeton Ridge Coalition that the project would

adverse ly affect the R ed

- shouldered H awk and B arred O wl

and that it failed to impose conditions in the Freshwater Wetlands Individual Permit for the Skillman Loop to address these impacts. A F

reshwater Wetlands Individual P ermit may be issued only if NJDEP determines that the regulated activity “[ w ] ill not destroy, jeopardize [

, ] or adversely modify a present or documented habitat for threatened or endangered species; and shall not jeopardize the continued existence of a local population of a threatened or endangered species

. . . . ” 79

NJDEP stated i n its Staff Summary Reports , “[t]he project right

- of

- way is documented and suitable habitat for . . . Barred Owl, Red

- shouldered Hawk, Wood Turtle, Indiana Bat, and Northern Long

- eared Bat.” 80 In the Freshwater

Wetlands Individual Permit for the Skillman L oop, NJDEP imposed conditions to protect most of the enumerated species

bu t not the B a rred O wl or Red

- shouldered H awk. Nevertheless, NJDEP stated in its Staff Summary Report that “[p]rovided the conditions of the permits are followed . . . no

79 N.J. Admin. Code § 7:7A

- 7.2(b)(3)

. 80 N.J. JA 1426 (Freshwater Wetland s Individual Permit

, Skillman Loop ).37 adverse impa cts are anticipated upon threatened/endangered species.” To explain why it did not impose conditions to protect the species

, NJDEP filed with this Court affidavits

from a staff member who explained her review of Transco’s applicat ion and the Foundation’s reports , and her

consideration of factors such as limited sightings of the

spec ies, small sizes of the wetland s, and fragmentation of

habit at because of open areas and neighboring homes. Based on these considerations, NJDEP determined it would not impose conditions on the permit regarding the B arred O wl or

R ed

- shouldered H awk. T he Foundation argu es that NJDEP’s

submission constitute s an attempt to suppl ement the

administrative record after the fact. The administrative record is supposed to reflect the in formation available to the decision maker at the time the challenged decisions were made, as well as the rationale for why the agency acted as it did , but “since the bare record may not disclose the factors that were considered or the [agency’s] constructi on of the evidence,” it is sometimes appropriate to look to further explanation from agency officials to ascertain this rationale

. 81 Here, t he

affidavits explain staff review conducted prior to issuance of the permit

. T

herefore, the submissions do not con stitute post
hoc rationalization of agency action. T he Foundation has not
demonstrate d that NJDEP failed to consider potential adverse impact s in issuing the Freshwater Wetlands Individual Permit for the Skillman Loop.

d. Public Interest Analysis

81 Citizens to Preserve Overton Pa rk v. Volpe , 401 U.S. 402, 420 (1971) ( abrogated on other grounds by Califano v.

Sanders , 430 U.S. 99 (1977) ; see Motor Ve hicle Mfrs. Ass ’ n , 463 U.S. at 50.38 To issue a F

reshwater W etlands Individual P ermit,

NJDEP must determine the proposal is “in the public interest”

on the basis of seven factors

. 82 The Foundation argues

NJDEP failed to consider five of the seven factors:

[1] The public interest in preservati on of natural resources and the interest of the property owners in reasonable economic development

. .

. ;

[2] The extent and permanence of the beneficial or detrimental effects which the proposed regulated activity may have on the public and private uses f or which the property is suited;

[3] The quality and resource value classification pursuant to N.J.A.C. 7:7A

- 2.5 of the wetland which may be affected and the amount of freshwater wetlands to be disturbed;

[4] The economic value, both public and private, of the proposed regulated activity to the general area; and

[5] The functions and values provided by the freshwater wetlands and probable individual and cumulative impacts of the regulated activity on public health and fish and wildlife

. . . . 83

NJDEP did n ot fail to consider the se factors

. Regarding the first factor, the record shows consideration of

82 N.J. Admin. Code § 7:7A

- 7.2(b)(12).

83 Id

.39 impact on landowners, surrounding communities, and the

environment

. F or example, NJDEP sought to minimize any

adverse economic impact by requiring the us e of existing rights

- of

- way and areas adjacent and the installation and modification of compressors within existing compressor

station facilities. As for the second factor, NJDEP considered the extent of any detrimental effects and required Transco to impleme nt best management practices during construction

and restoration to limit disturbance to the immediate construction and restoration period and avoid permanent
detrimental effects

.

Likewise, regarding the third factor, NJDEP reviewed

submissions

, inspec ted sites to verify wetland and water boundary lines, and made wetlands resource value

classifications as set forth in the L etters of Interpretation

. In determining whether the proposal is in the public interest

, NJDEP considered that wetlands in the Plea sant Run Loop were not of exceptional resource value, and that certain wetlands in the Skillman Loop were of exceptional resource

value. Similarly, with respect to the proposed activity’s public and private economic value, NJDEP found that the

p roject wou ld provide public and private economic value by expanding Transco’s pipeline system capacity and serving

end

- users . Finally, the record shows NJDEP considered the functions and values provided by the freshwater wetlands and probable impact of the activity on publ ic health and fish and

wildlife. NJDEP examined the wetlands’ fishery resources, resource value classification, and its role as habitat for endangered and threatened species. The Department also

considered the scale and duration of disturbance of the wetlands, and whether the proposed activity would discharge toxic effluent or degrade ground or surface water.40 The record rebuts the Foundation’s charge that NJDEP

reached its public interest determination without considering the appropriate facto rs

. We therefore hold that NJDEP did not act arbitrarily or capriciously in issuing the Freshwater

Wetlands Individual Permits.

3. F lood Hazard Area Individual Permits

The Foundation claims that NJDEP erred by (1) impermissibly issu ing the Flood Ha zard Area Individual

P ermit for the Skillman Loop because the Flood Hazard Area Control Act also prohibits the issuance of permits for

activities that would adverse ly a ffect s tate threatened or endangered species and their habitats ; and (2) improperly

dete rmining that Transco met the requirements of a hardship exception for the permits.

Regarding the first allegation, the Flood Hazard Area Control Act, similar to the Freshwater Wetlands Protection Act, require s NJDEP to determine that any proposed activi ty will not adversely affect threatened or endangered species or

their habitat s before issuing a Flood Hazard Area Individual

P ermit

. 84 T

he Foundation alleges that NJDEP failed to

consider the expert report s , which concluded that the clearing

of forest can opy over riparian zones for construction would increase fragmentation of mature forest and thus damag e t he

habitat of the R ed

- Shouldered Hawk and the Barred Owl

. The record shows that NJDEP considered the expert report s because

, after the Foundation subm i tted its expert report s
, in a March 11, 2015, letter, NJDEP directed Transco to address

84 N.J. Admin. Code § 7:13

- 10.6(d).41 the Department’s concern of “significant adverse impacts ” o n habitat areas of threatened or endangered species and to

c onsider alternative construction methods. In a M arch 17, 2015, letter, Transco addressed NJDEP ’s concern by develop ing “ a unique construction approach” that allowed

Transco to cut “ 25 feet off of a typical 75 foot [worksite] corridor through environmentally sensitive areas” so that

fewer trees would be removed and the impact of construction on the forest would be “half of what is typically required.”

T hat NJDEP directed Transco to revise its application and address the Department’s co ncerns demonstrate s NJDEP

considered potential adverse environmental i mpact on
habitats

. T

herefore

, the grant of a Flood Hazard Area

Individual P ermit for the Skillman Loop was not arbitrary or capricious.

As to the second allegation, t he Foundation argues that

NJDEP incorrectly determined that Transco met the requireme nts of a hardship exception for the Flood Hazard

Area Individual P ermit s . Transco had requested hardship exceptions in its applications because the Skillman Loop would affect 13.2 acres of riparian zone vegetation, and Pleasant Run Loop 7.54 acres, both e xceeding regulatory

limits. 85 A hardship exception requires the applicant to

demonstrate:

(1) D ue to an extraordinary situation of the applicant or site condition, compliance with this chapter would result in exceptional and/or

undue hardship for the app licant ; (2) T he

85 N.J. Admin. Code § 7:13

- 10.2, Table C, Maximum Allowable Disturbance to Riparian Vegetation.42 proposed activities will not adversely affect the use of contiguous or nearby property; (3) T he proposed activities will not pose a threat to the environment or to public health, safety, or welfare; and (4) T

he hardship was not created

thro ugh the action or inaction of the applicant or its agents. 86

In addition, one or more of the following requirements must

be met:

1. The Department determines that there is no feasible and prudent alternative to the proposed project, including not pursuing the project, which would avoid or substantially reduce the anticipated adverse effects of the project, and that granting the hardship exception would not compromise the reasonable requirements of public health, safety and welfare, or the environment;

2. T he Department determines that the cost of compliance with the requirements of this chapter is unreasonably high in relation to the

environmental benefits that would be achieved by compliance; and/or

3. The Department and applicant agree to one or

more alte rnative requirements that, in the judgment of the Department, provide equal or

86 Id . § 7:13

- 9.8(b).43 better protection to public health, safety and

welfare and the environment. 87

Further, because the proposed construction would cross regulated waters, NJDEP must find that the co nstruction of an open trench through the riparian zone is necessary to install

the pipe line. 88

NJDEP’s grant of hardship exceptions was not arbitrary or capricious

. Although neither New Jersey regulation s nor case law define s the term “ hardship ” as used

here

, state regulations indicate that the nature of the hardship may be economic, related to impact from flood s , or otherwise subject to NJDEP’s determination. 89 NJDEP determin ed that

Transco addr essed all the requirements, namely, that (1) there

was not a feasible and prudent alte rnative; (2) the method of construction was necessary for safety; (3) granting the exception would not compromise reasonable requirements of public health, safety and welfare, or the environment ; and (4) requiring compliance woul d impose a hardship on Transco,

which Transco did not create through action or inaction. Given these determinations, we hold that the Department did not act arbitrarily or capriciously in granting the hardship exceptions to the Flood Hazard Area Individua l Permits.

4. Grant of Minor Modification to the

Freshwater Wetlands Individual Permit for the Skillman Loop

87 Id . § 7:13

- 9.8(a), 10. 2(s).

88 Id . § 7:13

- 10.2(k)(1)(i).

89 See id . § 7:13

- 9.8.44 T he Foundation challenges NJDEP’s grant of a minor

modification for Transco’s F reshwater W etlands Individual

P ermit for the Skillman Loo p as contrary to New Jersey regulation. After h ard rock and boulders under wetlands in

the Princeton Ridge damaged drilling equipment , Transco sought a minor modification to the permit to use a different drilling method than the method NJDEP had originall y permitted

. By regulation, a modification of the F reshwater

W etlands Individual P ermit is “ minor ” if it involves

[a] change in materials, construction techniques, or the minor relocation of an activity on a site, if the change is required by another per mitting

agency . However, this change is not a minor modification if the change would result in additional wetland, State open water or transition area impacts over those of the original permit or waiver. 90

In granting the minor modification, NJDEP conclude d FERC was the requisite “permitting agency” that required the change, because in approving the particular route of the Skillman Loop, FERC implicitly required the change in drilling technique to maintain the route. NJDEP also

concluded the change in dril ling method would not result in

additional disturbance

.

This challenge is not properly before us

. At the time of the filing of the petition, the challenged agency action must

90 Id

. § 7:7A

- 14.3(c)(4) (emphasis added).45 be ripe for review. 91 T he Foundation petitioned for review on May 8, 2015, b ut the minor modification was not applied for

until May 29, 2015, and granted on June 4, 2015.

Based on the foregoing, we hold NJDEP did not depriv e the Foundation of sufficient opportunity to comment and did not act arbitrarily or capriciously in issu ing permits

and other authorizations . We further hold the challenge of the

minor modification for the Freshwater Wetlands Individual

P ermit of the Skillman Loop is not properly before this Court.

C

. Pennsylvania

The Riverkeeper raises two challenges t o PADEP’s issuance of a Water Quality Certification : (1) PADEP failed

to review an environmental assessment prepared by Transco

before issu ing the W ater Q uality C ertification

, as required by state regulation s ; and (2) the materials that PADEP did

review w ere substantively insufficient. The Riverkeeper has

not demonstrat ed prejudice from these alleged errors

.

91 See TeleSTAR, Inc. v. FCC

, 888 F.2d 132, 133 (D.C. Cir. 1989) (agency action that was not final at the time of filing of petition may only be reviewed upo n the filing of another petition); W. Union Tel . Co. v. FCC , 773 F.2d 375, 378 (D.C. Cir. 1985) (court lacked jurisdiction over a challenge to a

now

- final agency action that was filed before action became final); Pennzoil Co. v. FERC , 645 F.2d 394, 398 (5t h Cir. 1981) (requirement that an agency’s action be ripe for judicial review before merits of any review petition will be addressed is one which applies to action of other agencies as well as that

of FERC ).46 1. Sequence of Agency Action

The Riverkeeper ’s first challenge involves whether PADEP was required to engage in an environmental review prior to issuing a Water Quality Certification , or whether PADEP may, as it did here, postpone environmental review until after a Water Quality Certification has been issued

. Although PADEP has not published any procedures for issuing Water Quality Certifications , applicants for the Chapter 105 permits who are required to obtain Water Quality

Certifications must “

prepare and submit” an environmental

assessment for PADEP’s review

. 92 The Riverkeeper infers

from this re quirement that PADEP must review an

environmenta l assessment prepared as part of an application

for a Water Quality Certification before issuing a

Certification. Based on this inference, and because PADEP did not do so, the Riverkeeper alleges that PADEP erred by failing to review an environmental asse ssment prior to issuing a Water Quality Certification to Transco. PADEP argues that for complex projects that require a large number of state and federal permits to ensure compliance with state water quality

standards

— such as interstate natural gas pipeli nes

— th is sequence is not mandatory and would cause un necessary delay if strictly followed

. 93

92 25 Pa. Code § 105.15(b) (2011)

. 93 See Clean Water Act Section 401 State Water Quality Certification: A Water Quality Protection Tool for States and

Tribes , EPA Office of Wetlands, Oceans and Watersheds, 25 (April 2010) (stating that states are not required to implement Water Quality Certification pr ocedures).47 The Riverkeeper has failed to demonstrate that it suffered harm from the sequence of PADEP’s permitting

actions

. According to FERC’s certificate, Transco could not begin construction until it obtained all applicable authorizations required under federal law. One of these federal authorizations, the Water Quality Certification

, was conditioned on the issuance of, inter alia , a Chapter 105

P ermit. Prior to issui ng a Chapter 105 Permit, PADEP was required to review an environmental assessment prepared by

Transco. Thus, construction could not begin until after PADEP had reviewed an environmental assessment, regardless of whether this review occurred before the Wat er Quality Certification was issued. Because environmental review was required before construction could begin, the Riverkeeper was not harmed by the timing of the required review, and PADEP did not act arbitrarily or capriciously

.

The Riverkeeper all ege s that as a result of PADEP’s

failure to review the environmental assessment prior to issuing the Water Quality Certification

, FERC prematurely

authorize d tree fellin g activities. According to t he Riverkeeper , in delaying review of the environmental

as sessment, PADEP postponed substantive determinations

until after the issuance of the W ater Q uality C ertification

, which allowed trees to be felled in contravention of Pennsylvania water quality standards

. The record does not support the Riverkeeper’s view of the timeline of events

. In

fact

, FERC authorized tree fellin g several weeks before

PADEP issued the Water Quality Certification. Therefore, the Water Quality Certification could not have led to tree

fell ing because such fell ing was approved without a

Certification.48 Moreover, the Riverkeeper is incorrect in assuming

that tree

- fell ing is implicated by PADEP’s substantive water quality determinations : t he Army Corps of Engineers stated

that the tree

- fell ing activity for which Transco sought

authoriz ation would not trigger the need for permits under the

Clean Water Act. FERC designated the tree

- fell ing activity as “pre

- construction activity,” while FERC’s certificate requires a Water Quality Certification only for “construction activity.” This sugge sts that FERC allows tree

- fell ing activity

to be authorized without Transco obtaining any Clean Water Act permits . Th us
, there is no nexus between the tree fell ing activity and the Water Quality Certification , and the Riverkeeper’s challenge fails.

2. Sufficiency of Factfinding

The Riverkeeper alleges that PADEP relied on an incomplete environmental assessment from Transco and failed to correct the assessment’s deficiencies prior to issuing

the Water Quality Certification

. PADEP and Transco counter

t hat the majority of the Riverkeeper’s arguments relate not to

the issuance of the Water Quality Certification , but t he issuance of the Chapter 105 P ermit. We find this argument unavailing. Because the Chapter 105 P ermit was a condition

of the Water Quali ty Certification

, it is inextricably

intertwined with the Water Quality Certification

. 94
Nevertheless, because the Riverkeeper does not challenge the Chapter 105 P ermit specifically and argues only that the Water Quality Certification itself was improperly issued , we

94 See Tenn. Gas Pipeline Co. LLC. v. Delaware Riverkeeper

Network , 921 F. Supp. 2d 381, 387

- 88 (M.D. PA

. 2013)

.49 will address the Riverkeeper’s challenges only as they pertain

to the issuance of the Water Quality Certification

.

The Riverkeeper alleges two problems with PADEP’s

environmental review : (1) PADEP relied on incorrect

wetlands classification s without gather ing data necessary to

correct these classifications ; and ( 2 ) construction activity was improperly authorized because the faulty wetlands

classifications led PADEP to ignore construction impacts on exceptional value wetlands . We will consid er these arguments in turn.

a

. Wetlands Classifications

Under Pennsylvania regulations, c lassifying a wetland

as “ exceptional value ” 95 triggers a number of regulatory protections, including a more stringent permitting process that

disallows construct ion whe re construction will have an “adverse impact” on these wetlands. 96 The Riverkeeper

contends that Transco improperly classif ied wetlands in the application it submitted to PADEP for a Water Quality

Certification

, because Transco (1) us ed incorrect

95 “Exceptional value” wetlands are those that serve as habitat for a threatened or endangered species, or are hydrologically

connecte d to, or lie within one half mile of, such a wetland; are located in or along the floodplain of a wild trout stream or a national wild or scenic river, or such a tributary; are located along an existing drinking water supply; or are located in an

area desi gnated as a “natural” or “wild” area within a state forest or park or a designated federal wilderness or natural

landmark. 25 Pa

. Code § 105.17(1).

96 See id . § 105.18a(a).50 cl assification terms , and (2) mis categorized wetlands that are

of “exceptional value ” as belonging to a lesser protected
category

. As evidence, t he Riverkeeper cites to a table in an environmental assessment prepared by Transco that identified

affected Penn sylvania wetlands and their state classifications.

This table identifies wetlands as “ordinary,” “intermediate,” “exceptional,” and “other.” As the Riverkeeper correctly points out, these terms are not used by PADEP

, which

classifies wetlands either as “ exceptional value” or “other.” 97 The Riverkeeper argues that Transco’s incorrect

classifications frustrated PADEP’s ability to determine the

correct classification for the affected wetlands and adhere to state water quality standards. In addition, the Riv erkeeper alleges that at least eleven wetlands affected are “exceptional value” wetlands but were marked as “ordinary” or “intermediate” in Transco’s table. According to the Riverkeeper, PADEP’s failure to address these problems is

evidence that it has ac ted arbitrarily and capriciously. 98

To prevail in its petition, the Riverkeeper must show not only that an error was made but that the error in question prejudiced the Riverkeeper in some way

. 99 In this instance,

the Riverkeeper can only claim to have suf fered prejudice
from Transco’s classifications if PADEP actually relied on

those classifications ; otherwise, the error, if any, was

harmless

. The prejudice the Riverkeeper alleges is simple:

PADEP would not have issued the Water Quality

97 Id. § 105.17.

98 See Pa. Trout v. Dep’t Envt’l Prot. , 863 A.2d 93, 98 (Pa. 2004) ( discussing requirements for wetlands classifications).

99 See supra Section IV.A.51 Certification if Transco had properly classified wetlands in its

environmental assessment

.

The Riverkeeper’s argument falls short

. PADEP is not required to review a project’s effect on wetlands prior to issuing a Water Quality Certification. In this case, a review

was required before PADEP could issue the Chapter 105

P ermit, and Transco had to obtain the Chapter 105 P ermit as a condition of the Water Quality Certification. 100 Thus, while Transco may have submitted miscategorized information for the Water Quality Certifi cation, that submission was of no consequence since a full review of the appropriate wetland categories was conducted before the Chapter 105 P ermit was

issued

. PADEP had ample time and opportunity to request that Transco remedy any shortcoming in analysis during these review processes, and the Riverkeeper also had the opportunity to submit its comments on the Chapter 1 05

P ermit as well as other state permits not at issue

. No

addition al review was required before PADEP could issue the Water Quality Certifi cation . T here is nothing in the record to indicate that PADEP relied on Transco’s miscategorized submission in issuing the Certification. Therefore, w e hold that any error in Transco’s initial classification of wetlands did not prejudice the Riverkeeper. Because the Riverkeeper has not demonstrated that PADEP relied on these classifications, we need not address the Riverkeeper’s argument that PADEP failed to collect and

100 See 25 Pa. Code § 105.14(b)(13) (requiring determination of impact on wetlands for Chapter 105 permits); cf. id

. § 92a.21(d)(3) (allowing PADEP to require an applicant for a n NPDES permit to provide information on a project’s wetlands impact).52 analyze the necessary data to make appropriate wetlands classifications following t heir receipt of Transco’s

environmental assessment.

b

. Authorization of Construction Activity

T he Riverkeeper also allege s that PADEP erred in authorizing construction activity that violates state water quality standards. This challenge is broader t han the Riverkeeper’s challenge regarding FERC’s authorization of

tree

- fell ing: rather than arguing that a sequencing error resulted in some particular activity, the Riverkeeper here alleges that any construction that would follow the issuance

of a Water Quality Certification violates Pennsylvania water quality standards. The Riverkeeper contends that this is true

because any construction impact on an exceptional value
wetland is “adverse.” According to the Riverkeeper, because

construction could not beg in without the issuance of the Water Quality Certification

, and construction would adversely affect what the Riverkeeper alleges are exceptional value wetlands, PADEP’s decision to issue a Water Quality

Certification authorized construction activity that v iolated Pennsylvania water quality standards. However, PADEP

itself has no power to “authorize” construction of interstate natural gas facilities because the only government entity that

may do so is FERC. 101 While FERC would not allow

construction to occur without a Water Quality Certification, the Certification is only relevant because it is required by FERC’s certificate of public convenience and necessity. The

N atural Gas Act grants FERC exclusive authority to authorize

101 See Schneidewind v. ANR Pipeline Co. , 485 U.S. 293, 302

- 04 (citing 15 U.S.C. § 717f(c)).53 construction by issuing a c ertifi cate of p ublic c onvenience

and n ecessity, as FERC did here. 102 Any interested party may file a petition with FERC for a hearing on the issuance of a certificate , and we note that the Riverkeeper did participate in such a hearing

. 103 In contrast, P ADEP’s role in the permitting

process is to certify that any construction that occurs is in

accordance with Pennsylvania water quality standards.

PADEP did so here by requiring Transco to obtain various state permits and submit to the review processes associated

wit h these permits.

Because the Riverkeeper has not shown that it was prejudiced by PADEP’s permitting actions , we see no reason to disturb PADEP’s decision to issue the Water Quality

Certification.

VI. Conclusion

For the foregoing reasons, we conclud e NJDEP and PADEP did not act arbitrarily or capriciously in issuing permits and related authorizations to Transco. We decline to

address the challenge of NJDEP’s grant of a minor

modification to the Freshwater Wetlands Individual Permit of

the Skillman L oop. Accordingly, we will deny the petitions.

102 15 U.S.C. § 717f(c).

103 See 15 U.S.C. § 717n(e); 18 C.F.R. § 156.10.