2001 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

1-29-2001

NE Hub Partners LP v. CNG Transmission

Precedential or Non-Precedential:

Docket 00-3387

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Recommended Citation

"NE Hub Partners LP v. CNG Transmission" (2001). 2001 Decisions. Paper 14.

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Filed January 29, 2001 

UNITED STATES COURT OF APPEALS 

FOR THE THIRD CIRCUIT 

No. 00-3387 

NE HUB PARTNERS, L.P., 

 Appellant 

v. 

CNG TRANSMISSION CORPORATION; PENN FUEL GAS, 

INC.; JAMES M. SEIF; GEORGE J. MILLER; MICHELLE 

A. COLEMAN; THOMAS W. RENWAND; BERNARD A. 

LABUSKES, JR. 

On Appeal from the United States District Court 

for the Middle District of Pennsylvania 

(D.C. Civ. No. 99-00082) 

District Judge: Honorable Yvette Kane 

Argued October 6, 2000 

BEFORE: NYGAARD, GREENBERG, and COWEN, 

Circuit Judges 

(Filed: January 29, 2001) 

 Walter A. Bunt, Jr. (argued) 

 Daniel P. Trocchio 

 Kirkpatrick & Lockhart 

 535 Smithfield Street 

 Henry W. Oliver Building 

 Pittsburgh, PA 15222 
 Andrew H. Cline 

 Kirkpatrick & Lockhart 

 240 North Third Street 

 Harrisburg, PA 17101 

 Attorneys for Appellant 

 Stanley R. Geary (argued) 

 Buchanan Ingersoll 

 301 Grant Street 

 One Oxford Centre, 20th Floor 

 Pittsburgh, PA 15219-1410 

 Attorney for Appellee 

 CNG Transmission Corporation 

 Karol L. Newman (argued) 

 Hogan & Hartson 

 555 13th Street, N.W. 

 Washington, DC 02004-1109 

 Attorney for Appellee 

 Penn Fuel Gas, Inc. 

 D. Michael Fisher 

 Attorney General 

 J. Bart DeLone (argued) 

 Deputy Attorney General 

 Calvin R. Koons 

 Senior Deputy Attorney General 

 John G. Knorr 

 Office of the Attorney General of 

 Pennsylvania, 15th Floor 

 Strawberry Square 

 Harrisburg, PA 17120 

 Attorney for Appellees 

 George J. Miller, Michelle Coleman, 

 Thomas W. Renwand, and 

 Bernard A Labuskes, Jr. 

 2 
OPINION OF THE COURT 

GREENBERG, Circuit Judge. 

After detailed examination of numerous technical, safety, 

and environmental issues, the Federal Ener gy Regulatory 

Commission ("FERC") issued a certificate of public 

convenience and necessity for plaintiff-appellant NE Hub 

Partners, L.P.'s ("NE Hub") natural gas storage facility (the 

"Facility") in Tioga County, Pennsylvania. The 

Commonwealth of Pennsylvania may seek to revisit those 

issues in consolidated administrative appeals in its own 

permitting process in a costly pr oceeding that will delay NE 

Hub's construction of the Facility. Consequently, NE Hub 

brought a district court action seeking an injunction 

against the state appellate proceedings in an attempt to bar 

aspects of them on federal preemption gr ounds. The district 

court, however, rejected the claim without reaching its 

merits, principally on the jurisdictional gr ound that it was 

not ripe for decision before the state pr ocess concluded. See 

NE Hub Partners, L.P., No. 1: CA-99-0082 (M.D. Pa. Apr. 7, 

2000) ("NE Hub"). We disagr ee with the district court on the 

ripeness issue and accordingly will reverse its order 

dismissing the action and will remand the case for further 

proceedings. 

I. BACKGROUND 

A. Factual History1 

Since 1995 NE Hub has been seeking a plethora of 

federal and state permits to construct the Facility. The 

construction is a substantial undertaking requiring NE Hub 

to drill through the Oriskany sand formation which 

contains competing storage facilities owned by Penn Fuel 

Gas, Inc. ("Penn Fuel") and CNG Transmission Corp. 

("CNGT").2 Not surprisingly Penn Fuel and CNGT have

_________________________________________________________________ 

1. We take the facts we recite mainly from the complaint which, for 

purposes of this appeal, should be taken as true and afforded all 

favorable inferences. See Standar d of Review, Part III, infra. 

2. CNGT now is called Dominion Transmission, Inc. and Penn Fuel now 

is called PPL Gas Utilities Corporation. As a matter of convenience we 

nevertheless continue to refer to them as CNGT and Penn Fuel. 

 3 
opposed NE Hub every step of the way before both FERC 

and the Pennsylvania agencies exercising jurisdiction over 

the construction. 

Because the Facility will store natural gas for use in 

interstate commerce it is subject to FERC's jurisdiction and 

thus its construction requires a certificate of public 

convenience and necessity (the "Certificate") pursuant to 

section 7(c) of the Natural Gas Act, 15 U.S.C. SS 717 et seq. 

("NGA"). NE Hub applied for the Certificate in November 

1995, but Penn Fuel and CNGT intervened and r equested 

FERC to reject NE Hub's application on a variety of

technical, safety and environmental grounds, including a 

claim that the construction and use of the Facility

threatened to damage their own facilities. 

FERC reviewed the entire range of technical, safety, and 

environmental issues relating to the Facility, and, at the 

instance of Penn Fuel and CNGT, convened a technical 

conference on the application in September 1996 at which 

they raised the following 23 issues relating to the technical, 

safety, and environmental soundness of the Facility: 

 (1) Whether NE Hub's Drilling and Construction 

 Program, utilizing a large diameter drill bit, would 

 result in massive mud loss to the Oriskany sand 

 formation; 

 (2) Whether circulation materials would s atisfactorily 

 mitigate the mud loss into the surrounding 

 geological strata; 

 (3) Whether test drilling perfor med on well TW-501 

 indicated that the Drilling and Construction

 Program would lead to massive fluid loss to the 

 Oriskany sand formation; 

 (4) Whether NE Hub's Drilling and Construction 

 Program had sufficient documentation r elating to 

 rates of penetration that could reasonably be 

 expected from the use of large diameter (28") 

 drilling bits to penetrate the Oriskany sand

 formation; 

 (5) Whether NE Hub's Drilling and Construction 

 Program had properly taken into account fracture 

 permeability of the Oriskany sand formation;

 4 
 (6) Whether NE Hub's Drilling and Construction 

 Program had accounted for the pressur e 

 fluctuations it might encounter during drilling 

 operations due to existing gas storage facilities; 

 (7) Whether NE Hub's Drilling and Construction 

 Program would result in cement invasion to the 

 Oriskany sand formation; 

 (8) Whether mud loss and cement invasion cause d 

 by NE Hub's Drilling and Construction Program 

 would result in irremediable damage to the 

 deliverability of gas from the CNGT/Penn Fuel 

 Storage; 

 (9) Whether NE Hub's Drilling and Construction 

 Program would lead to increased risk of gas leaks 

 and catastrophic blowouts; 

 (10) Whether the use of large quantities of loss 

 circulation materials in NE Hub's Drilling and 

 Construction Program would cause a `cake' to

 form across the Oriskany sand for mation and

 reduce the likelihood of achieving an adequate 

 cement bond between the wall of the well and the 

 casing string; 

 (11) Whether NE Hub's Drilling and Construction 

 Program would achieve the turbulent flow 

 required to remove loss circulation material from 

 the Oriskany sand formation and permit the 

 development of an adequate cement bond; 

 (12) Whether NE Hub's Drilling and Construction 

 Program required or contained sufficient 

 contingencies in the event an adequate cement 

 bond was not achieved; 

 (13) Whether NE Hub's Drilling and Construction 

 Program included procedures for the use of a

 cement bond log tool to evaluate the integrity of 

 the cement bond between the well and casing 

 string; 

 (14) Whether NE Hub's Drilling and Construction 

 Program would lead to fracturing of the casing 

 shoe; 

 5 
 (15) Whether NE Hub's Drilling and Construction 

 Program would lead to overpressuring of shallow 

 formations; 

 (16) Whether NE Hub's Drilling and Construction 

 Program would increase the likelihood of gas loss 

 or gas migration for the CNGT/Penn Fuel 

 Storage; 

 (17) Whether NE Hub's Drilling and Construction 

 Program would result in salt caver n subsidence; 

 (18) Whether NE Hub's Drilling and Construction 

 Program relied on proper resear ch and data 

 regarding the tensile and compressive strengths 

 for salt; 

 (19) Whether NE Hub's Drilling and Construction 

 Program relied on proper mechanical integrity 

 testing of the salt caverns; 

 (20) Whether NE Hub had failed to consider alter nate 

 sites for cavern development; 

 (21) Whether the Sandia National Laboratories r eport 

 used in development of the Drilling and 

 Construction Program adequately addressed 

 cavern operating pressures, caver n creep and 

 subsidence, and rock mechanics; 

 (22) Whether the geologic conditions at locations 

 targeted by NE Hub's Drilling and Construction 

 Program were adequate for cavern development; 

 and 

 (23) Whether NE Hub should be requir ed to obtain 

 insurance and/or indemnities that would be 

 available to compensate CNGT and/or Penn Fuel 

 for potential losses arising from the construction 

 or operation of the Facility. 

App. at 20-22. 

For the next year and a half FERC, in consultation with 

NE Hub, Penn Fuel, and CNGT and with the assistance of 

an outside consulting firm, exhaustively r eviewed NE Hub's 

proposal for the Facility, taking Penn Fuel's and CNGT's 

 6 
objections into account. In connection with this r eview NE 

Hub, Penn Fuel, and CNGT led what NE Hub has 

characterized as "a parade of experts and technical

consultants before F.E.R.C." See app. at 24. FERC also 

made an Environmental Impact Assessment of the Facility 

pursuant to the National Environmental Policy Act, treating 

at least seven issues: 

 (1) Requirements for NE Hub to create more than the 

 two salt caverns approved by the Certificate; 

 (2) Locations of structures and facilities necessary for 

 the Facility, including right-of-ways and the 

 freshwater intake structure; 

 (3) Whether the Facility could be constructed and 

 operated with insignificant effects on bodies of 

 water, including rivers and streams; 

 (4) Whether NE Hub's erosion and sedimentation 

 plans were sufficient to minimize impacts on soil 

 and bodies of water; 

 (5) Whether NE Hub's air pollution control plans were 

 sufficient to minimize air quality impacts, 

 including impacts from fugitive dust; 

 (6) Whether NE Hub's water quality management and 

 N.P.D.E.S. stormwater discharge plans were 

 sufficient to minimize impacts on water quality; 

 and 

 (7) Whether NE Hub's land use and reclamation plans 

 were adequate. 

See app. at 23. We call these seven issues along with the 23 

issues enumerated above the "30 Issues". In addition, 

FERC considered competitive and market issues. 

On April 20, 1998, FERC issued the Certificate in a 93- 

page order. See app. at 39 et seq. The order stated that 

FERC had exercised its jurisdiction over the Facility and 

found that it could be constructed and operated safely. See 

app. at 24. The order, however, imposed various conditions 

on the construction and operation of the Facility, and 

stated that "NE Hub must comply with the State of 

Pennsylvania's drilling regulations," app. at 101, and that 

 7 
"[r]egulation of underground storage safety is at the state 

level." App. at 66. It also stated: 

 Any state or local permits issued with r espect to the 

 jurisdictional facilities authorized herein must be 

 consistent with the conditions of this certificate. The 

 Commission encourages cooperation between interstate 

 pipelines and local authorities. However, this does not 

 mean that state and local agencies, through 

 application of state or local laws, may prohibit or 

 unreasonably delay the construction or operation of 

 facilities[3] by this Commission.4 

App. at 109. 

Even before FERC issued its order NE Hub had applied 

to the Pennsylvania Department of Environmental 

Protection ("Pa.D.E.P.") for the r equisite state permits and 

thus it was proceeding on parallel regulatory paths. See 

app. at 25. While Pa.D.E.P. had monitor ed the FERC

proceedings, it chose not to seek to intervene in them as it 

could have under 15 U.S.C. S 717n(a) and 18 C.F.R. 

S 385.214(a)(2). See app. at 25. Penn Fuel and CNGT raised 

each of the 30 Issues in repeated appearances before 

Pa.D.E.P. but nevertheless on July 17, 1997, Pa.D.E.P. 

issued the permits NE Hub sought. See app. at 25-26. 

Over the next year Penn Fuel and CNGT filed thr ee 

appeals protesting issuance of the state per mits with the 

Environmental Hearing Board for the Commonwealth of

Pennsylvania ("E.H.B."), which is authorized to hear such 

appeals. All the individual defendant-appellees r emaining in 

this action, i.e., all defendants except Penn Fuel and CNGT, 

are administrative law judges on the E.H.B., to whom we 

will refer collectively as E.H.B. In the appeals to E.H.B., 

which have since been consolidated, see app. at 26, Penn 

_________________________________________________________________ 

3. Presumably "authorized" or a wor d of similar meaning should appear 

here. 

4. The district court interpreted this language to mean that the 

Certificate "was conditioned on NE Hub's obtaining any and all 

necessary state or local permits requir ed to carry out the drilling and 

construction program." See NE Hub, slip op. at 5. The parties agree that 

this interpretation is correct. 

 8 
Fuel and CNGT again raised each issue they had advanced 

before FERC, including the 30 Issues, and pr esented 

testimony and documentation they had presented to FERC. 

See app. at 27. E.H.B. has not decided the appeals but the 

Pa.D.E.P. permits are valid pending its decision. See app. at 

1021. 

B. Procedural History 

On January 15, 1999, NE Hub filed a complaint in the 

district court against Penn Fuel, CNGT, E.H.B. and James 

M. Seif, the Secretary of Pa.D.E.P., asking for a declaratory 

judgment that the NGA preempted the Pa.D.E.P . and E.H.B. 

review process. NE Hub also requested an order enjoining 

the E.H.B. proceedings and "such other r elief as this Court 

deems just and proper." See app. at 32. However, NE Hub 

in the district court and in this court pared the scope of its 

requested relief down to the 30 Issues, and renounced any 

claim that the Certificate completely bars state r egulation of 

the Facility in areas outside the 30 Issues. 5 The complaint 

also sought a declaratory judgment and injunctive r elief 

barring Penn Fuel and CNGT from relitigating the 30 Issues 

before Pa.D.E.P. and E.H.B. because in NE Hub's view this 

relitigation would amount to an appeal of the FERC order, 

which they could prosecute only pursuant to 15 U.S.C. 

S 717r(a). See app. at 32-33. 

Secretary Seif settled with NE Hub on June 30, 1999, 

stipulating that Pa.D.E.P. lacked authority to regulate the 

Facility with respect to the 30 Issues, and thus the district 

court dismissed him as a party on July 2, 1999. See NE 

Hub, slip op. at 9; app. at 842-59. All other defendants, i.e., 

_________________________________________________________________ 

5. See, e.g., NE Hub's Resp. in Opp'n to CNG Transmission Corp.'s Mot. 

to Dismiss at app. at 490 ("[T]he Complaint does not seek a declaration 

that NE Hub is not required to comply to any extent with state 

environmental or safety requirements.. . . NE Hub instead seeks a 

declaration that state authorities may not r egulate or adjudicate the 

technical, safety or environmental issues that have already been decided 

by the federal agency with jurisdiction over such issues." (Emphasis 

added.)); NE Hub's Br. in Opp'n to the E.H.B. Defendants' Mot. to 

Dismiss at app. at 748; id. at 750-51; NE Hub's Br. in Opp'n to James 

M. Seif 's Mot. to Dismiss at app. at 731; id. at 734; NE Hub Appellant's 

Br. at 20 n.7. 

 9 
the appellees here, moved to dismiss the complaint under 

Fed. R. Civ. P. 12(b)(1) on a variety of gr ounds, including 

ripeness, the Eleventh Amendment, abstention, and the 

Anti-Injunction Act. The parties agreed to stay the E.H.B. 

proceedings pending the outcome of this case. See NE Hub, 

slip op. at 8. 

The district court, in a Memorandum and Order dated

April 7, 2000, granted the appellees' motions and dismissed 

NE Hub's complaint without prejudice. See id. at 21. The 

court parsed NE Hub's claim against E.H.B. into two

theories of preemption: one claiming pr eemption only 

insofar as the state process conflicted with the Certificate, 

the other claiming a right to be completely fr ee from any 

state regulation. The court dismissed the action with 

respect to the conflict theory for lack of ripeness because 

E.H.B. had not yet taken an action that could inter fere with 

the federal regulations and the court believed that the 

requirement that NE Hub go through the state review

process was not in itself a cognizable har m in the conflict 

preemption context. See id. at 15-18. The court dismissed 

the action with respect to the total exemption from

regulation theory on the grounds that NE Hub's 

contentions challenged the terms of the Certificate

requiring the obtaining of state permits and thus should 

have been presented to FERC for rehearing under 15 U.S.C. 

S 717r(a), which precludes judicial r eview of FERC orders 

prior to rehearing by FERC. See NE Hub, slip op. at 18-19. 

The court then found that its jurisdiction with r espect to 

NE Hub's claims against Penn Fuel and CNGT depended on 

its jurisdiction over the claims against E.H.B., and, as the 

latter was lacking, so was the former. See id. at 19-20. 

Accordingly, it dismissed the action in its entirety. 

NE Hub then timely filed this appeal contending that the 

district court erred in dismissing its pr eemption claim for 

lack of ripeness. See NE Hub's Br. at 3. NE Hub further 

contends that it is not challenging FERC's or der and thus 

it argues that the district court erred in holding that this 

action is barred because it has not sought r ehearing of the 

FERC order. 

 10 
II. JURISDICTION 

We have jurisdiction over this appeal of afinal judgment 

of the district court pursuant to 28 U.S.C. S 1291.6 The 

district court had federal question jurisdiction under 28 

U.S.C. SS 1331 and 1337, because the case ar ose under the 

Supremacy Clause in Article VI of the United States

Constitution, and the NGA. 

III. STANDARD OF REVIEW 

Our review of a dismissal for lack of ripeness is plenary. 

See Philadelphia Fed'n of Teachers v. Ridge, 150 F.3d 319, 

321 (3d Cir. 1998); see also Gould Elecs. v. United States, 

220 F.3d 169, 176 (3d Cir. 2000). Mor eover, when, as here, 

defendants move to dismiss a complaint under Rule 

12(b)(1) for failure to allege subject matter jurisdiction we 

treat the allegations of the complaint as true and afford the 

plaintiff the favorable inferences to be drawn from the 

complaint.7 See Mortensen v. First Fed. Sav. & Loan Ass'n, 

549 F.2d 884, 891 (3d Cir. 1977); see also Fed. R. Civ. P. 

8(f). 

IV. ANALYSIS 

A. Ripeness 

The Supreme Court stated the purpose and ef fect of the 

ripeness doctrine in the context of interfering with an 

administrative process in Abbott Labs v. Gardner, 387 U.S. 

136, 148-49, 87 S.Ct. 1507, 1515 (1967): 

 [T]o prevent the courts, through avoidance of 

_________________________________________________________________ 

6. We are not deprived of jurisdiction by reason of the dismissal having 

been without prejudice. See Black Horse Lane Assoc., L.P. v. Dow Chem. 

Corp., 228 F.3d 275, 282-87 (3d Cir . 2000). 

7. A challenge to a complaint for failure to allege subject matter 

jurisdiction is known as a "facial" challenge, and must not be confused 

with a "factual" challenge contending that the court in fact lacks subject 

matter jurisdiction, no matter what the complaint alleges, as factual 

challenges are subject to different standards. See Mortensen v. First Fed. 

Sav. & Loan Ass'n, 549 F.2d 884, 891 (3d Cir. 1977); 5A Wright & Miller, 

Federal Practice & Procedure S 1350, at 212-18 (West 1990). 

 11 
 premature adjudication, from entangling themselves in 

 abstract disagreements over administrative policies, 

 and also to protect the agencies from judicial 

 interference until an administrative decision has been 

 formalized and its effects felt in a concrete way by the 

 challenging parties. 

In some circumstances the ripeness requir ement is drawn 

from Article III limitations on judicial power and in others 

from prudential limitations. See Suitum v. Tahoe Regional 

Planning Agency, 520 U.S. 725, 733 n.7, 117 S.Ct 1659, 

1664 n.7 (1997); see also Ridge, 150 F .3d at 323 n.3 

(noting ambiguity over whether ripeness is a prudential 

limitation on federal jurisdiction or is requir ed by the caseor-controversy requirement of Article III of United States 

Constitution); Travelers Ins. Co. v. Obusek, 72 F.3d 1148, 

1154 (3d Cir. 1995) (same); Armstr ong World Indus., Inc. v. 

Adams, 961 F.2d 405, 411 n.12 (3d Cir . 1992) (same). 

Ripeness is a matter of degree whose thr eshold is 

notoriously hard to pinpoint. See, e.g., Maryland Cas. Co. v. 

Pacific Coal & Oil Co., 312 U.S. 270, 273, 61 S.Ct. 510, 512 

(1941) ("The difference between an abstract question and a 

`controversy' contemplated by the Declaratory Judgment 

Act is necessarily one of degree, and it would be difficult, if 

it would be possible, to fashion a precise test. . . ."); 

McCahill v. Borough of Fox Chapel, 438 F .2d 213, 215 (3d 

Cir. 1971) ("The considerations, while catholic, are not 

concrete."); Step-Saver Data Sys., Inc. v. Wyse Tech., 912 

F.2d 643, 646 (3d Cir. 1990) ("it is difficult to define the 

contours of the ripeness doctrine with precision") (footnote 

omitted)). 

The Supreme Court in Abbott Labs laid out two 

fundamental considerations for determination of a ripeness 

question: (1) "the fitness of the issues for judicial decision," 

and (2) "the hardship to the parties of withholding court 

consideration."8 387 U.S. at 149, 87 S.Ct. at 1515. In the 

_________________________________________________________________ 

8. Factors relevant to the "fitness" consideration include, but are not 

limited to, whether the issue is purely legal (as against factual), the 

degree to which the challenged action is final, whether the claim involves 

uncertain and contingent events that may not occur as anticipated or at 

all, the extent to which further factual development would aid decision, 

and whether the parties to the action are sufficiently adverse. The 

"hardship" consideration focuses on whether a plaintiff faces a direct 

and immediate dilemma, such that lack of review will put it to costly 

choices. See Ridge, 150 F.3d at 323. 

 12 
context of declaratory judgments, we generally analyze 

ripeness under the threefold rubric of Step-Saver, 912 F.2d 

at 647, as did the district court here: first, the adversity of 

the parties' interests; second, the probable conclusiveness 

of a judgment; third, the practical utility to the parties of 

rendering a judgment.9 See Pic-A-State Pa, Inc. v. Reno, 76 

F.3d 1294, 1298 (3d Cir. 1996). 

1. Adversity 

NE Hub claims that the state permit pr ocess with respect 

to the 30 Issues is preempted but that E.H.B. nevertheless 

will continue with that process unless enjoined. In these 

circumstances, NE Hub's and E.H.B.'s inter ests hardly 

could be more adverse. 

Nevertheless, the district court held NE Hub's inter ests 

insufficiently adverse to E.H.B.'s because: 

 In order to demonstrate that its claims ar e ripe, NE 

_________________________________________________________________ 

9. The Step-Saver rubric is a distillation of the factors most relevant to 

the Abbott Labs considerations. See Ridge, 150 F.3d at 323 n.4. 

Adversity and conclusiveness apparently ar e subsumed under the 

"fitness" prong of the Abbott Labs test, while utility is relevant both 

to 

"fitness" and "hardship." Our cases have fit the factors relevant in the 

Abbott Labs framework into the Step-Saver headings, as follows: 

ADVERSITY: 

- Whether the claim involves uncertain and contingent events, or 

presents a real and substantial threat of harm. See, e.g.,Presbytery of 

N.J. v. Florio, 40 F.3d 1454, 1466 (3d Cir. 1994). 

CONCLUSIVENESS: 

- Whether issues are purely legal (as against factual). 

- Whether further factual development would be useful. 

See, e.g., id. at 1468; T ravelers Ins. Co., 72 F.3d at 1155. 

UTILITY: 

- Hardship to the parties of withholding decision. 

- Whether the claim involves uncertain and contingent events. 

See, e.g., Travelers Ins. Co. , 72 F.3d at 1155-56.
Of course, there may be other factors consider ed in a ripeness analysis. 

 13 
 Hub must show that the probability of the EHB 

 Defendants acting adversely to NE Hub is real and 

 substantial . . . . [T]he Environmental Hearing Board 

 Defendants have not, as yet, taken any action or 

 issued any decision potentially conflicting with the 7(c) 

 certificate. Further, it is entirely possible that the 

 Environmental Hearing Board will uphold the issuance 

 of the permits by [Pa.D.E.P.] and will never issue any 

 decision conflicting with the federal regulatory scheme. 

See NE Hub, slip op. at 15-16.10 This analysis, which 

focuses on the possible ultimate result of the state 

regulatory process, does not take into account the case law 

that preemption may operate to spare a party from that 

very process. In fact, the process itself may give rise to 

adversity so that an action challenging the pr ocess is ripe 

even before the process concludes. Thus, in Freehold 

Cogeneration Associates, L.P. v. Boar d of Regulatory 

Commissioners, 44 F.3d 1178 (3d Cir . 1995), we held that 

a preemption challenge to ongoing proceedings before the 

New Jersey Board of Regulatory Commissioners invading 

FERC's domain was ripe even though "the plaintif f did not 

challenge the ultimate substantive decision, but rather its 

authority to conduct proceedings": 

 [T]he issue here is ripe for adjudication. The 

 proceedings before the [state agency] have been 

 ongoing for nearly one year. The inter est that Freehold 

 seeks to vindicate in this proceeding is the right to be 

 free from `state laws . . . respecting the rates . . . of 

 electric utilities' and from the expense, delay, and 

 uncertainty inherent in the administration of such 

 laws. If, as Freehold insists, the ongoing[state agency] 

_________________________________________________________________ 

10. The district court also said NE Hub's claim was "based on the 

`possibility' that state regulatory officials might enter an order that 

would 

interfere with the regulatory scheme. Pl. Mem. Supp. Prelim. Inj. at 19. 

That `possibility' constitutes a contingency only, and is insufficient to 

constitute adversity of interests." See NE Hub, slip op. at 16. That 

statement mischaracterizes NE Hub's position which was that the 

process itself, at least as it related to the 30 Issues, interfered with 

the 

regulatory scheme. See, e.g. NE Hub's Br. in Opp'n to the E.H.B. 

Defendants' Mot. to Dismiss at app. at 749-51; NE Hub's Br. in Opp'n to 

James M. Seif 's Mot. to Dismiss at app. at 731, 734. 

 14 
 proceedings constitute state regulation of utility rates 

 and the burdens on Freehold occasioned by those 

 proceedings are the kinds of burdens which Congress 

 intended [certain facilities] to be spar ed, Congress' 

 mandate would be frustrated if Freehold's right to 

 judicial review were postponed. Ther e is a concrete 

 dispute that has already worked a sever e hardship 

 upon Freehold, and a determination of the legal issue 

 of preemption need not await any further developments 

 . . . . 

Id. at 1189. 

In Sayles Hydro Associates v. Maughan, 985 F.2d 451, 

453-54, 456 (9th Cir. 1993), a Califor nia state water board 

withheld a hydroelectric plant permit because the applicant 

did not supply certain reports and studies. The court held 

that a claim that the Federal Power Act preempted the 

ongoing state permitting process by occupying the field of 

power projects regulation was ripe, explaining as follows: 

 The hardship is the process itself. Pr ocess costs 

 money. If a federal licensee must spend years 

 attempting to satisfy an elaborate, shifting array of 

 state procedural requirements, then he must borrow a 

 fortune to pay lawyers, economists, accountants, 

 archaeologists, historians, engineers, r ecreational 

 consultants, biologists, and others, with no r evenue, no 

 near-term prospect of revenue, and no certainty that 

 there ever will be revenue. Meanwhile, politics, laws, 

 interest rates, construction costs, and costs of 

 alternatives change. Undue process may impose cost 

 and uncertainty sufficient to thwart the federal 

 determination that a power project should proceed. 

Id. at 454. Similarly the court in Middle South Energy, Inc. 

v. Arkansas Public Service Commission, 772 F .2d 404 (8th 

Cir. 1985), found ripe a claim based on pr eemption and the 

Commerce Clause against ongoing Arkansas state agency 

proceedings determining whether to void certain interstate 

power purchase contracts claimed to be within FERC's sole 

jurisdiction. The plaintiff successfully 

 challenge[d] not the state's ultimate substantive 

 decision but its authority even to conduct the 

 15 
 contemplated proceeding. It can hardly be doubted that 

 a controversy sufficiently concrete for judicial review 

 exists when the proceeding sought to be enjoined is 

 already in progress. 

Id. at 410-11. 

Courts have found insufficient adversity for ripeness 

where the chance of the defendant acting against plaintiff 

is but a "contingency." See, e.g. , Presbytery of N.J. v. Florio, 

40 F.3d 1454, 1464-68, 1470 (3d Cir. 1994) (insufficient 

adversity where state said it would not enfor ce challenged 

law against plaintiff); Armstrong World Indus., 961 F.2d at 

413-14 (insufficient adversity between state and plaintiffs 

challenging validity of takeover law, because takeover of 

plaintiffs was "contingency which may not occur," in which 

case they would not suffer from law). Her e, however, there 

is little doubt that E.H.B. will continue with the permit 

review process, and that the process itself is the alleged 

harm. 

We recognize that E.H.B. in its pr oceedings has not yet 

taken a position on whether it will reconsider the 30 Issues, 

and if so in what depth. Thus, arguably its interest is not 

substantively adverse to that of NE Hub. See Step-Saver, 

912 F.2d at 648. Nevertheless, inasmuch as the process 

creates the adversity and E.H.B. has not disclaimed a right 

to reexamine the issues we hold that its inter est is adverse 

to that of NE Hub. See Supplemental letter brief of E.H.B. 

at 4, Sept. 13, 2000 ("Because of the structur e and nature 

of its adjudicatory function, it is not possible for the EHB 

to determine what issues will be brought to its attention by 

CNGT and Penn Fuels in their challenge to NE Hub's 

permits."). At oral argument befor e us E.H.B. adhered to 

that position. 

2. Conclusiveness 

Conclusiveness is a short-hand term for whether a 

declaratory judgment definitively would decide the parties' 

rights. See Step-Saver, 912 F.2d at 648. It also addresses 

the extent to which further factual development of the case 

would facilitate decision, so as to avoid issuing advisory 

opinions, or whether the question presented is 

predominantly legal. See Travelers Ins. Co., 72 F.3d at 

 16 
1155. In this case, a declaratory judgment would establish 

that E.H.B. may or may not review and base its permit 

decision on a consideration of the 30 Issues, a conclusive 

result. 

Furthermore, additional factual development is 

unnecessary. We need not await the result of the E.H.B. 

process to ascertain whether a judgment will be conclusive 

because NE Hub's contention is that the process itself is 

preempted as to the 30 Issues regar dless of what the 

outcome of a proceeding before the E.H.B. would be as to 

those issues. Moreover, a determination of whether there is 

preemption primarily raises a legal issue, a circumstance 

which facilitates entry of a declaratory judgment. See 

Pacific Gas & Elec. Co. v. State Energy Res. Conservation & 

Dev. Comm'n, 461 U.S. 190, 201, 103 S.Ct. 1713, 1720-21 

(1983) ("The question of pre-emption is pr edominantly legal, 

and although it would be useful to have the benefit of [the 

state's interpretation and application of its r egulations], 

resolution of the pre-emption issue need not await that 

development."); Travelers Ins. Co., 72 F.3d at 1155

(preemption is predominantly legal question conducive to 

declaratory judgment); Freehold Cogeneration Assocs., 44 

F.3d at 1188 (judgment would be conclusive because, inter 

alia, factual developments at ongoing state pr oceedings 

would not add to construction of allegedly pr eemptive 

federal statute); cf. Abbott Labs, 387 U.S. at 149, 87 S.Ct. 

at 1515 (issue ripe for decision because, inter alia, it is "a 

purely legal one"). 

The district court held that a judgment would be 

inconclusive because 

 without knowing whether Commonwealth will 

 ultimately deny project authority and on what ground, 

 it is impossible to determine whether its r equirements 

 burden or delay the NE Hub Project to such an extent 

 so as to be preempted by the 7(c) certificate. 

See NE Hub, slip op. at 16. Again, this statement overlooks 

that the state regulatory process itself can be the

preempted burden. See discussion, infra, in part IV B of 

Freehold Cogeneration Assocs., Sayles Hydro Assocs., and 

Middle South; see also National Fuel Gas Supply Corp. v. 

 17 
Public Service Comm'n, 894 F.2d 571, 578 (2d Cir. 1990) 

(finding state regulations of gas lines pr eempted for 

inconsistency with FERC permits because "[e]ven if a [gas] 

transporter were successful before the[state commission], 

the practical effect would be to under mine the F.E.R.C. 

approval by imposing the costs and delays inher ent in 

litigation that must be undertaken without any guidelines 

as to the limits on the exercise of state authority"); cf. 

Pacific Gas & Elec. Co., 461 U.S. at 201-02, 103 S.Ct. at 

1721 (preemption claim against moratorium on new 

nuclear power plants ripe because "to requir e the industry 

to proceed without knowing whether the moratorium is 

valid would impose a palpable and considerable har dship 

on the utilities, and may ultimately work har m on the 

citizens of California"). 

3. Practical Utility 

Practical utility goes to "whether the parties' plans of 

actions are likely to be affected by a declaratory judgment," 

Step-Saver, 912 F.2d at 649 n.9, and considers the 

hardship to the parties of withholding judgment. See 

Freehold Cogeneration Assocs., 44 F .3d at 1189 (discussing 

hardship to preemption plaintiff of delay under utility prong 

of Step-Saver). A declaratory judgment "must be of some 

practical help to the parties. The Declaratory Judgments 

Act was enacted to clarify legal relationships so that 

plaintiffs (and possibly defendants) could make responsible 

decisions about the future." Travelers Ins. Co., 72 F.3d at 

1155 (quotation and citation omitted). 

A holding that the state proceedings ar e preempted

obviously would be useful to NE Hub, which would be

spared the hardships associated with the E.H.B. 

proceedings. NE Hub alleges that it is being put to

considerable delay and expense by these proceedings in 

connection with the issues already dealt with by FERC.11 

See, e.g., app. at 981-82. As we stated above, the 

_________________________________________________________________ 

11. This contention is undisputed, and is corr oborated by the statement 

of counsel for Penn Fuel at oral argument before the district court about 

the expenditures of his own client: "W e spent certainly in the seven 

figures, I would imagine, in litigating these permits before the E.H.B." 

See app. at 957. 

 18 
requirement to go through a bur densome process can

constitute hardship for purposes of ripeness. See, e.g., 

Freehold Cogeneration Assocs., 44 F .3d at 1188-89; Sayles 

Hydro Assocs., 985 F.2d at 453-56; National Fuel Gas, 894 

F.2d at 578-79; Middle South Ener gy, 772 F.2d at 410-411. 

Resolving the preemption question now also will eliminate 

the possibility that E.H.B. may overturn the Pa.D.E.P. 

permits on allegedly preempted gr ounds. Cf. Pacific Gas & 

Elec., 461 U.S. at 201-02, 103 S.Ct. at 1720-21 

(uncertainty entailed by existence of state pr ocedures part 

of harm cognizable in assessing ripeness of pr eemption 

claim); Sayles Hydro Assocs., 985 F .2d at 454 (same); but 

see Ridge, 150 F.3d at 323-26 (uncertainty as to way new 

procedures for determining pension levels would be applied 

insufficient hardship to ripen due pr ocess claim).

The district court found that there was not a hardship 

because (1) the E.H.B. proceedings would not necessarily 

result in meaningless rehashing of issues, (2) additional 

process cannot constitute ripeness hardship, and (3) no 

state regulation presently stands in NE Hub's way. See NE 

Hub, slip op. at 17-18. 

The first proposition is correct but beside the point: there 

may be some issues that E.H.B. can consider outside of the 

30 Issues. Indeed, NE Hub asks that the proceedings before 

the E.H.B. be preempted only to the extent of precluding 

review of the 30 Issues. Thus, NE Hub does not suggest 

that federal preemption precludes E.H.B. from considering 

other issues.12 If the state pr ocess is preempted with 

respect to the 30 Issues, then undergoing the E.H.B. 

process with respect to those issues is a hardship 

cognizable for preemption purposes, and thus for 

determining ripeness of NE Hub's preemption claims.

For the second proposition, the district court quoted two 

cases: 

 [T]he Court has not considered . . . litigation cost- 

 saving sufficient by itself to justify review in a case that 

 would otherwise be unripe. The ripeness doctrine 

_________________________________________________________________ 

12. We understand that NE Hub expects that review of any other issues 

will be less burdensome than a review of the 30 Issues. 

 19 
 reflects a judgment that the disadvantages of a 

 premature review that may prove too abstract or 

 unnecessary ordinarily outweigh the additional costs of 

 --even repetitive--post-implementation litigation. 

Ohio Forestry Ass'n, Inc. v. Sierra Club , 118 S.Ct. 1665, 

1671 (1998). 

 [T]he burden of participating in further administrative 

 and judicial proceedings . . . do[es] not constitute 

 sufficient hardship for the purposes of ripeness. 

Florida Power & Light Co. v. EPA, 145 F.3d 1414, 1421 

(D.C. Cir. 1998). See NE Hub, slip op. at 17. But neither 

case involved a claim of preemption. When such a claim 

has been advanced, the need to participate in a state 

regulatory process in conflict with federal policy has been 

recognized as a hardship. See, e.g., Freehold Cogeneration 

Assocs., 44 F.3d at 1188-89; Sayles Hydro Assocs., 985 

F.2d at 453-56; National Fuel Gas, 894 F.2d at 578-79; 

Middle South Energy, 772 F.2d at 410-11; cf. First Iowa 

Hydro-Electric Coop. v. Federal Power Comm'n , 328 U.S 

152, 66 S.Ct. 906 (1946) (hydroelectric plant project subject 

to jurisdiction of Federal Power Commission (FERC's

predecessor) need not obtain permit fr om Iowa, despite law 

apparently conditioning federal license on compliance with 

state laws). Thus, while the district court's quotations are 

accurate they are not controlling pr ecedent in the

circumstances here. 

Moreover, the extra litigation or administrative burden at 

issue in the cases quoted by the district court was

apparently the burden of filing the same lawsuit later, not 

of undergoing an expensive and time-consuming state

process. The cases quoted by the district court involved 

challenges to a Plan issued by the United States For est 

Service and a rule allegedly issued by the Envir onmental 

Protection Agency, respectively. See Sierra Club, 118 S.Ct. 

at 1668; Florida Power & Light, 145 F .3d at 1416. In both 

cases, how and even whether the Plan and rule would be 

applied was unclear; in Florida Power & Light , the court 

held the EPA had not even issued a rule. See Florida Power 

& Light, 145 F.3d at 1418-19. In Sierra Club, the Court 

stated that requiring a challenger to a rule to engage in 

 20 
post-implementation litigation over the rule does not 

constitute sufficient hardship to ripen "a case that would 

otherwise be unripe." Sierra Club, 118 S.Ct. at 1671. 

Clearly, that holding is hardly controlling when the 

plaintiff 's challenge is to the conduct of an administrative 

process that imposes an ongoing burden. 

The district court's third proposition also misses the 

point that process can constitute hardship. While it is true 

that the Pa.D.E.P. permits are valid pending the E.H.B. 

outcome, it is not a regulation but the r egulatory process 

that afflicts NE Hub. If the process is pr eempted it is quite 

immaterial that the effectiveness of the per mits challenged 

has not been stayed. Moreover, if NE Hub goes forward 

construction of the Facility while the E.H.B. pr oceedings 

are pending it may find itself in a difficult situation if Penn 

Fuel and CNGT are successful before E.H.B. 

B. State regulatory process is susceptible of preemption 

by conflict or by field occupation. 

E.H.B. contends that the cases holding a state r egulatory 

process preempted have involved only field occupation 

preemption, and should be so confined and thus 

preemption principles are not applicable here as, in 

E.H.B.'s view, the NGA and FERC have not occupied the 

field. See E.H.B.'s br. at 17-23. The district court agreed 

that this case does not involve field occupation. We, 

however, strongly doubt that the district court was correct 

in this conclusion. See Schneidewind v. ANR Pipeline Co., 

485 U.S. 293, 295 n.1., 300-05, 108 S.Ct. 1145, 1148 n.1, 

1150-53 (1988); Sayles Hydro Assocs., 985 F.2d at 453; 

Pennsylvania Med. Soc'y v. Marconis, 942 F .2d 842, 847 (3d 

Cir. 1991); Public Utils. Comm'n v. FERC , 900 F.3d 269, 274 

(D.C. Cir. 1990). Nevertheless, we need not characterize 

definitively the type of preemption implicated here to 

determine ripeness, which is the only issue before us. To 

the extent the district court already tacitly has decided 

what type of preemption is involved, on r emand, if it 

reaches the issue, it should reconsider its decision.13 

_________________________________________________________________ 

13. The correct result here with r espect to preemption may be that we 

are dealing with a hybrid situation in which basically there is field 

 21 
We realize that there would be a r easonable basis for a 

holding that process preemption should be applicable only 

when field preemption is implicated. The foundation for the 

holding would be that unless it is very clear that any result 

of a state permitting process either will be invalid or 

redundant a court should not stop the state fr om 

considering issues that in the absence of pr eemption would 

be within state jurisdiction and instead should trust in the 

judgment of the state officials not to inter fere unduly with 

a federal program. 

_________________________________________________________________ 

occupation but FERC, by requiring NE Hub to comply with state drilling 

regulations and indicating that regulation of underground storage safety 

is at the state level but providing that state and local authorities 

should 

not prohibit or unreasonably delay the construction or operation of the 

Facility, effectively has converted the case into a conflict preemption 

matter. In this regard we point out that even within an occupied field 

federal regulations may tolerate or authorize some exercises of state 

authority. See First Iowa, 328 U.S. at 167, 66 S.Ct. at 913; cf. National 

Fuel Gas, 894 F.2d at 579 (noting that though field of interstate gas 

facility regulation was occupied, FERC could choose to require licensees 

to obtain state permits). 

It is unclear why Judge Nygaard perceives himself as disagreeing with 

us on this point, for he believes (a) that field preemption applies here, 

but also (b) "FERC properly exercised its congressionally delegated 

authority by requiring compliance with state permitting procedures," 

dissent at 28, and (c) he acknowledges the Certificate's requirement that 

the results of those permitting pr ocedures "must be consistent with the 

conditions [thereof]." Thus, FERC has entire control over the occupied 

field (field occupation), but has allowed the state a regulatory role that 

it may exercise only insofar as it does not conflict with FERC's decisions 

(conflict preemption), which is precisely the hybrid sort of preemption by 

which the dissent purports to be "especially tr oubl[ed]." Id. at 28. 

Judge Nygaard also assigns to us a position that we nowhere take, 

namely, that the E.H.B. appeals conflict with federal law only because 

they "conflict with congressional intent to legislate exclusively." 

Dissent 

at 34 (emphasis in original). Quite the contrary, we recognize the 

possibility that Congress delegated authority to FERC, and that FERC, in 

turn has delegated some regulatory authority to the state, which the 

state may exercise only insofar as it does not conflict with the decisions 

already made by FERC. Thus, federal rules would not be exclusive 

because they would not be the only ones the NE Hub must obey, but 

some state regulations might still conflict with the federal regulations. 

 22 
Nevertheless, the process preemption cases do not 

confine themselves to the field occupation context, nor 

would such a limitation be wise. Even where afield has not 

been occupied to the exclusion of state regulation, certain 

state regulatory acts clearly would conflict with federal law, 

and it is as logical to preempt state pr ocess concerning 

such matters as state actions in occupied fields. 14 Indeed, 

even if this is a conflict preemption case, it would be quite 

remarkable to hold that there cannot be pr ocess 

preemption here inasmuch as Secretary Seif on behalf of 

Pa.D.E.P. in settling the case recognized that, to the extent 

that FERC exercised jurisdiction, Pa.D.E.P . "[d]oes not have 

jurisdiction to consider and cannot conduct final 

appealable decisionmaking." App. at 855. This r ecognition 

broadly extended to "all construction activities related to 

the [Facility], including the drilling and construction of the 

brining facilities and the technical, safety, and 

environmental issues which were raised before and 

considered by FERC." App. at 846. While this stipulation 

may not be binding on the appellees, inasmuch as the state 

administrator himself recognizes the pr eemptive effect of 

the NGA and FERC's exercise of jurisdiction, we have good 

reason to recognize that conflict pr eemption principles 

might bar E.H.B. from upholding Penn Fuel's and CNGT's 

appeal on the 30 Issues. 

We also point out that, as the Supreme Court recently 

has emphasized, the different categories of preemption are 

not 

_________________________________________________________________ 

14. Again, it is unclear why Judge Nygaar d perceives himself as 

disagreeing with us on this point for he "can possibly envision conflict 

preemption barring an on-going legal pr oceeding . . . in which the 

outcome sought by the party opposing preemption is almost certain to 

conflict with federal law." Dissent at 35. That is exactly what we hold. 

He 

then says that that is not the case here, because the E.H.B. might 

"impose additional requirements on NE Hub that do not conflict with the 

7(c) certificate." Id. That is unquestionably true but irrelevant because 

NE Hub does not seek preemption of the entir e state process, only of the 

process with respect to the 30 Issues. W e do not decide whether the 

outcome of the E.H.B. proceedings with r espect to the 30 Issues would 

clearly so conflict. That is for the district court to decide on remand. 

 23 
 rigidly distinct. Indeed, field pre-emption may be 

 understood as a species of conflict pre-emption: A state 

 law that falls within a pre-empted field conflicts with 

 Congress' intent (either express or plainly implied) to 

 exclude state regulation. 

English v. General Elec. Co., 496 U.S. 72, 79 n.5, 110 S.Ct. 

2270, 2275 n.5 (1990); see also Crosby v. National Foreign 

Trade Council, 120 S.Ct. 2288, 2294 n.6 (2000); Gade, 505 

U.S. at 98, 104 n.2, 112 S.Ct. at 2383, 2386 n.2 (1992) 

(plurality opinion) ("Our ultimate task in any pre-emption 

case is to determine whether state regulation is consistent 

with the structure and purpose of the statute as a whole." 

(Emphasis added.)); Sayles Hydro Assocs. , 985 F.2d at 456 

("The dichotomy between the two types of pr eemption 

[conflict and field] is not so sharp in practical terms as the 

legal categorization makes it appear . . . ."). 

A comparison of the standards for identifying these two 

types of preemption15 shows the reason for the blurring.16 

Conflict preemption exists where state law stands as an 

obstacle to the accomplishment and execution of the full 

purposes and objectives of Congress. See e.g., Hines v. 

Davidowitz, 312 U.S. 52, 67, 61 S.Ct. 399, 404 (1941). An 

occupied field is one in which the federal r egulatory scheme 

is "so pervasive as to make reasonable the inference that 

Congress left no room for the States to supplement it." Rice 

v. Santa Fe Elevator Corp., 331 U.S. 218, 230, 67 S.Ct. 

1146, 1152 (1947). That inference is reasonable where any 

state regulation of the "occupied" subject matter would 

interfere with the purposes and objectives of the federal 

plan: a very similar standard to that for conflict 

preemption. See, e.g., Ray v. Atlantic Richfield Co., 435 U.S. 

151, 168, 98 S.Ct. 988, 999 (1978) (finding field preemption 

of vessel regulations because "a state law in this area . . . 

would frustrate the Congressional desir e . . ."). 

_________________________________________________________________ 

15. We are not concerned here with express preemption which is another 

type of preemption. 

16. Contrary to the dissent's suggestion, at 31, by no means do we 

obliterate the distinction between the types of pr eemption, and we 

recognize the continuing existence of each. W e simply note that an 

instance of preemption need not necessarily be pigeonholed into one 

category or another for purposes of analyzing ripeness. 

 24 
We therefore hold that state r egulatory process may be 

preempted by conflict with federal law,17 as well as by field 

occupation. Moreover, we reiterate that we are quite unable 

to understand why, regardless of the type of preemption 

asserted, that a claim that a state administrative process is 

preempted necessarily cannot be ripe when the alleged 

preemption is of the process itself rather than the possible 

outcome of the process. We also note that it would be 

entirely logical in an appropriate case to hold that the 

process is not preempted but to hold later that the result of 

the process is preempted. 

Furthermore, if it is evident that the r esult of a process 

must lead to conflict preemption, it would defy logic to hold 

that the process itself cannot be preempted and that a 

complaint seeking that result would not raise a ripe issue. 

Thus, in view of the substantial showing her e that E.H.B. 

by upholding Penn Fuel's and CNGT's position on the 30 

Issues might well reach a result that would be preempted, 

the process preemption claim is ripe. Of course, we hasten 

to add that we do not state a conclusion on whether the 

process actually is preempted here for, as even NE Hub 

recognizes, the district court should make that decision on 

the remand. See Presbytery of N.J. , 40 F.3d at 1470.18 

C. The need for FERC rehearing 

Finally we reject the district court's and appellees' view 

that NE Hub by bringing this action was circumventing 

_________________________________________________________________ 

17. Federal law includes federal regulations, which have no less 

preemptive effect than federal statutes. See e.g., Capital Cities Cable, 

Inc. 

v. Crisp, 467 U.S. 691, 699, 104 S.Ct. 2694, 2700 (1984). 

18. Our opinion should not be overread. W e are not holding that any 

claim of process preemption necessarily is ripe so that the court should 

consider the preemption claim before the process is completed. It well 

may be that in a particular case when conflict pr eemption is implicated 

the court may conclude that it reasonably can be anticipated that the 

process will yield a result that is not pr eempted. But in this case we 

have an unusual situation in which the state administrator has 

stipulated the agency's jurisdiction effectively has been preempted, a 

result which, though not binding on the appellees, if accepted would 

mean that a successful administrative appeal would lead to a preempted 

outcome. 

 25 
FERC's rehearing process. In the first place, the district 

court reached that conclusion on the err oneous theory that 

NE Hub was contending "that Pennsylvania lacks authority 

to subject the NE Hub Project to any regulation 

whatsoever." NE Hub, slip op. at 18. In fact, NE Hub does 

not challenge FERC's requirement that it obtain state 

permits and cooperate with state and local agencies. 

Indeed, it has done these things. It simply contends that 

the E.H.B. state proceedings are pr eempted but only to the 

extent that they involve the 30 Issues consider ed by FERC. 

We see nothing in the Certificate or the NGA that precludes 

NE Hub's preemption argument and it ther efore follows that 

in making that argument NE Hub is not challenging the 

terms of the Certificate. Furthermor e, we do not believe 

that a requirement that a party obtain applicable state 

permits and cooperate with state and local agencies in any 

way determines the scope of what issues a state 

administrative agency may consider on an appeal fr om the 

issuance of the permits.19 

V. CONCLUSION 

For the foregoing reasons we will r everse the order of 

April 7, 2000, dismissing this action and will r emand the 

case to the district court to reinstate this action. On the 

remand the district court should consider the preemption 

argument on the merits unless it upholds another defense 

to this action. 

_________________________________________________________________ 

19. The dissent characterizes NE Hub's claim as a challenge to the terms 

of the Certificate because the E.H.B. proceeding is one "that FERC 

implicitly sanctioned." Dissent at 40. But the dissent does not explain 

where in the Certificate FERC "implicitly sanctioned" a state proceeding 

insofar as it deals with measures already disposed of by FERC. 

Judge Nygaard states that he and we "disagr ee over who should 

determine whether the state actions at issue were `consistent' with 

FERC's certificate. The Majority believes that FERC delegated that 

authority to the federal courts. I believe that FERC maintained its 

discretion." Dissent 32 n.5. Federal agencies do not "delegate" authority 

to decide federal constitutional and legal questions to courts; as noted 

above, at 37, federal court jurisdiction over such matters comes from 

Congress. We are aware of no authority granting FERC a right of first 

refusal to decide such questions, nor does Judge Nygaard proffer any. 

 26 
NYGAARD, Circuit Judge, dissenting : 

I would affirm the District Court's disposition of N.E. 

Hub's field preemption claim. Therefor e, I dissent. Central 

to the Majority's holding is its assertion that"we need not 

characterize definitively the type of preemption implicated 

here." Majority at 21. I believe that characterizing N.E. 

Hub's claim is the first and most important issue in this 

case. By failing to resolve it, the Majority ignores binding 

Supreme Court precedent and unnecessarily complicates a 

well-settled area of law. Especially tr oubling are its 

proposal of a new class of "hybrid" pr eemption, and its 

reference to a mysterious "process" preemption. 

Congress intended to occupy the field of law at issue. 

Therefore, the disputed appeals ar e subject to federal field 

preemption. Nonetheless, I would affir m the District Court's 

decision, because FERC properly exercised its 

congressionally delegated authority by r equiring compliance 

with state permitting procedures. More importantly, even if 

FERC overstepped its bounds, the proper course for N.E. 

Hub would have been to challenge FERC directly under the 

guidelines established by federal statute. Because N.E. Hub 

failed to do so, I agree with the District Court that we lack 

jurisdiction to consider the current claim. 

I. 

A brief review of the law of preemption is instructive. 

Assuming it has the constitutional power to legislate in a 

given area, Congress can preempt state law whenever it 

intends federal law to control. See Fr eehold Cogeneration 

Assocs., L.P. v. Board of Regulatory Comm'rs of State of New 

Jersey, 44 F.3d 1178, 1190 (3d Cir . 1995) ("[T]he 

application of the preemption doctrine r equires a 

determination of congressional intent in enacting a federal 

law."). The key inquiry is congressional intent, which can 

either be explicit or implied. When it is implied, intent can 

take one of two forms. First, "[i]f Congress evidences an 

intent to occupy a given field, any state law falling within 

that field is preempted." Silkwood v. Kerr-McGee Corp., 464 

U.S. 238, 248, 104 S.Ct. 615, 621 (1984). Congr essional 

intent to occupy a field can be inferred fr om: 

 27 
 a `scheme of federal regulation so pervasive as to make 

 reasonable the inference that Congr ess left no room to 

 supplement it,' `because the Act of Congr ess may touch 

 a field in which the federal interest is so dominant that 

 the federal system will be assumed to preclude 

 enforcement of state laws on the same subject,' or 

 because `the object sought to be obtained by the federal 

 law and the character of obligations imposed by it may 

 reveal the same purpose.' 

Pacific Gas & Elec. Co. v. State Energy Res. Conservation & 

Dev. Comm'n, 461 U.S. 190, 204, 103 S.Ct. 1713, 1722 

(1983). Second, if Congress has not occupied an entire 

field, "state law is still preempted to the extent it actually 

conflicts with federal law, that is, when it is impossible to 

comply with both state and federal law." Id. 

In sum, there are three circumstances under which 

federal law preempts state law: (1) when Congr ess, through 

explicit statutory language, defines an ar ea in which federal 

law controls, (2) when Congress implicitly indicates an 

intent to occupy a given field to the exclusion of state law, 

and (3) when federal law actually conflicts with state law. 

See Cipollone v. Liggett Group, Inc., 505 U.S. 504, 516, 112 

S.Ct. 2608, 2617 (1992); Buzzard v. Roadrunner Trucking, 

Inc., 966 F.2d 777, 780 (3d Cir. 1992). We have consistently 

analyzed preemption claims according to this framework. 

See Abdullah v. American Airlines, 181 F .3d 363, 367 (3d 

Cir. 1999). 

II. 

Next, I turn to N.E. Hub's specific claim. In Schneidewind 

v. ANR Pipeline Co., the Supreme Court held that Congress 

intended to occupy the field at issue.1 See 485 U.S. 293, 

308, 108 S.Ct. 1145, 1155 (1988) ("[T]he control of rates 

and facilities of natural gas companies . . . ar e precisely the 

things over which FERC has comprehensive authority."). 

The Court noted that it "is now well settled[that] Congress 

_________________________________________________________________ 

1. Because Congress failed to describe explicitly the extent to which the 

NGA preempts state regulation of natural gas facilities, the first of the 

aforementioned circumstances (expr ess preemption) does not apply. 

 28 
occupied the field of matters relating to wholesale sales and 

transportation of natural gas in interstate commer ce." Id. at 

305, 108 S.Ct. at 1153. An overwhelming amount of 

authority supports this assertion.2 Even in Maritimes & 

Northeast Pipeline, L.L.C., No. CP97-238-001, 1997 WL 

812154, at *8 (F.E.R.C. Nov. 4, 1997), the case most heavily 

relied upon by CNGT and Penn Fuel, FERC noted that "the 

NGA preempts State and local agencies fr om regulating the 

construction and operation of interstate pipeline facilities." 

It is simply beyond peradventure that Congr ess intended 

the NGA to occupy the field of law at issue. 

Both the Majority and the District Court disagr ee and 

hold that field preemption does not apply. The District 

Court expressly rejected field pr eemption, but nonetheless 

addressed and rejected the claim on its merits. The

Majority purports to avoid categorizing the claim, but still 

implicitly endorses conflict preemption. I believe that field 

preemption does apply, but I agree with the District Court 

that the claim fails on its merits. This is an important 

question. If field preemption applies but FERC validly 

exercised its authority, we should affir m the District 

Court's decision and not remand the case. Fundamentally, 

the resolution of this question -- whetherfield preemption 

applies -- controls whether this case is r emanded or 

affirmed. I therefore review the opinions of the Majority and 

District Court in turn. 

_________________________________________________________________ 

2. See e.g., Interstate Natural Gas Co. v. Federal Power Comm'n, 331 U.S. 

682, 690, 67 S.Ct. 1482, 1487 (1947) ("As was stated in the House 

Committee Report, the `basic purpose' of Congr ess in passing the Natural 

Gas Act was "to occupy this field in which the Supreme Court has held 

that the States may not act."); Pennsylvania Medical Soc'y v. Marconis, 

942 F.2d 842, 847 (3d Cir. 1991) ("The field of matters relating to 

wholesale sales and transport of natural gas in interstate commerce 

[has] been occupied by federal legislation."); Public Utils. Comm'n of 

State 

of California v. FERC, 900 F.2d 269, 274 (D.C. Cir. 1990) ("Cases are 

legion affirming the exclusive character of FERC jurisdiction where it 

applies . . . under the NGA."); Algonquin LNG v. Loqa, 79 F.Supp.2d 49, 

51 (D.R.I. 2000) ("Congress clearly has manifested an intent to occupy 

the field."). 

 29 
A. 

The Majority at first seems to agree with me that field 

preemption should apply. It states that "[t]he district court 

[held] that this case does not involve field occupation. We, 

however, strongly doubt that the district court was correct." 

Majority at 21 (emphasis added). The Majority fails to apply 

field preemption, however, and instead holds that "we need 

not characterize definitively the type of pr eemption 

implicated here to determine ripeness." Majority at 21. In 

spite of this, I believe that the Majority tacitly does 

characterize N.E. Hub's claim. It rejects field preemption 

and endorses conflict preemption, even though its 

reasoning assumes that Congress has occupied the field. 

The District Court's decision requires us to categorize the 

claim in this case, because it addressed N.E. Hub's two 

preemption "theories" and reached different outcomes for 

each. The court held that conflict preemption was not ripe, 

but rejected field preemption on separate grounds.3 The 

Majority states that ripeness "is the only issue before us." 

Majority at 21. The District Court discussed ripeness only 

in connection to conflict preemption. Ther efore, the 

Majority's opinion, to the extent that it exclusively focuses 

on ripeness, holds that only conflict preemption is at issue. 

Furthermore, because courts need only address conflict 

preemption in the absence of field pr eemption, see

Silkwood, 464 U.S. at 248, 104 S.Ct. at 621 ("If Congress 

has not entirely displaced state regulation over the matter 

in question, state law is still preempted to the extent it 

actually conflicts with federal law."), the Majority's focus on 

ripeness tacitly rejects field preemption. If field preemption 

applied, there would be no reason to analyze the ripeness 

of the conflict preemption claim.4 In fact, the Majority 

_________________________________________________________________ 

3. The District Court explicitly addressed the field preemption claim, "NE 

Hub's alternative theory, that Pennsylvania lacks authority to subject the 

NE Hub Project to any regulation whatsoever." MemOp. at 18. The court 

characterized the claim as a direct "challenge to the express provisions 

of [FERC's] 7(c) certificate," and found that it lacked jurisdiction 

because 

N.E. Hub should have appealed directly to FERC. MemOp. at 18. 

4. The Majority argues that we need not categorize the preemption claim 

in order to analyze its ripeness. However , the District Court only found 

ripeness lacking in the conflict preemption claim; therefore, we need not 

address ripeness unless the claim is one of conflict preemption. 

 30 
explicitly holds that N.E. Hub never raised a field

preemption claim. See Majority at 26. Thus, even though it 

"strongly doubt[s] that the district court was correct [to 

reject field preemption]," Majority at 21, the Majority rejects 

it as well. 

Instead, the Majority suggests that we have a "hybrid 

situation" in which "there is field occupation but FERC . . . 

has converted the case into a conflict preemption matter." 

Majority at 21-22 n.13. I disagree with this characterization 

for two reasons. First, neither law nor logic suggests the 

existence of such a thing, and second, for r easons I explain 

more fully in Section II.B., supra, FERC does not have the 

authority to abdicate its congressionally delegated authority.5 

In addition, I fail to see how this "hybrid" differs practically 

from pure conflict preemption considering that FERC "has 

converted the case into a conflict pr eemption matter." 

Majority at 21-22 n.13 (emphasis added). If a "hybrid" 

preemption claim carries with it a differ ent standard, the 

Majority does not describe what it might be. For these 

reasons, I believe that the Majority, in spite of its language 

to the contrary, tacitly did categorize N.E. Hub's claim as 

conflict preemption, and the District Court must apply that 

doctrine upon remand. 

The Majority offers two additional arguments to support 

its position: (1) field and conflict preemption overlap and 

are difficult to distinguish, and (2) the existence of a legal 

process can form the basis of a field or conflict preemption 

_________________________________________________________________ 

 5. The Majority believes that FERC delegated its occupation of the 

 field, at least in part, to the states. Ther efore, any "conflicts" 

that 

 arose could form the basis of a conflict preemption claim in 

federal 

 court. The important difference between us is that I believe FERC 

 continued to maintain its ultimate authority. Because it continued 

 to occupy the field, it maintained its discr etion to interpret the 

 terms of its 7(c) certificate. If an alleged"conflict" arose, it 

was up 

 to FERC to determine if the certificate had been violated. Our 

review 

 of such a decision would be the same as our r eview of any other 

 action by an administrative agency in an occupiedfield. In sum, the 

 Majority and I disagree over who should deter mine whether the 

 state actions at issue were "consistent" with FERC's certificate. 

The 

 Majority believes that FERC delegated that authority to the federal 

 courts. I believe that FERC maintained its discr etion. 

 31 
claim. See Majority at 24-25. When r eviewed carefully, 

neither support the Majority's holding; in fact, both 

ironically assume that Congress has pr eempted the field. 

First, the Majority argues that it need not characterize 

N.E. Hub's claim, because field and conflict pr eemption are 

not "rigidly distinct," see English v. General Elec. Co., 496 

U.S. 72, 79 n.5, 110 S.Ct. 2270, 2275 n.5 (1990), 6

implying, based upon its definitions, that field and conflict 

preemption are indistinguishable. T echnically, all forms of 

federal preemption can be described as (and meet the 

definition of) conflict preemption,7 for the simple reason 

that preemption only occurs when a state action conflicts 

with congressional intent.8 In spite of its extremely broad 

definition, however, conflict preemption does not refer to the 

entire range of all federal preemption. Instead, courts use 

the term quite narrowly -- it applies when a state 

regulation conflicts with federal law in a non-occupied field.9 

See Silkwood, 464 U.S. at 248, 104 S.Ct. at 621 ("If 

Congress has not entirely displaced state regulation over 

the matter in question, state law is still pr eempted to the 

extent it actually conflicts with federal law."). 

_________________________________________________________________ 

6. The Supreme Court footnote from which the Majority derives its 

argument nonetheless explicitly upheld the thr ee categories of 

preemption. See English, 496 U.S. at 79 n.5, 110 S.Ct. at 2275 n.5 

("[B]ecause we previously have adverted to the three-category framework, 

we invoke and apply it here."). 

7. According to its broad definition, conflict preemption applies whenever 

a state regulation "actually conflicts with federal law, that is, when it 

is 

impossible to comply with both state and federal law, or where the state 

law stands as an obstacle to the accomplishment of the full purposes 

and objectives of Congress." See Silkwood, 464 U.S. at 248, 104 S.Ct. at 

621 (citations omitted); see also e.g., English, 496 U.S. at 79, 110 S.Ct. 

at 2275 (citations omitted). 

8. Courts have identified, and labeled, thr ee forms of federal preemption 

(express, field, and conflict preemption) that vary according to their 

scope. According to the Supreme Court,"[f]requently, the preemptive 

`label' we choose will carry with it substantive implications for the 

scope 

of preemption." Gade v. National Solid W aste Mgmt. Ass'n, 505 U.S. 88, 

104 n.2, 112 S.Ct. 2374, 2386 n.2 (1992). 

9. Conflict preemption in an occupiedfield would be unnecessary and 

duplicative, because all state regulation is barred by field preemption. 

 32 
The Majority fails to make this distinction. It compares 

the definitions of conflict and field preemption and argues 

that field preemption is simply a presumption of conflict 

preemption over an entire area of law.10 Because all three 

categories of federal preemption technically fall within the 

definition of conflict preemption, any state regulation (or 

judicial proceeding, as in this case) subject to field 

preemption would also be barred under the technical

definition of conflict preemption. See English, 496 U.S. at 

79, 110 S.Ct. at 2275 (defining conflict pr eemption, in part, 

to apply when "state law `stands as an obstacle to the 

accomplishment and execution of the full purposes and 

objectives of Congress' "). 

However -- and this is the critical point -- in this case, 

the only reason that the challenged state actions (the 

appeals) satisfy the definition of conflict pr eemption is 

because Congress has preempted thefield. The Majority 

never asserts that the appeals at issue make it"impossible 

to comply with both state and federal law," but merely that 

they frustrate congressional intent to legislate exclusively in 

this area. In other words, as the Majority phrases it, 

conflict preemption holds because the state proceedings 

"interfere with the purposes and objectives of the federal 

plan." Majority at 24. The "federal plan," I suppose, refers 

to Congress' intent to occupy the field at issue. Thus, the 

Majority's argument, when closely scrutinized, goes

something like this: (1) Congress preempted the field, and 

(2) the appeals at issue constitute state action within that 

field; therefore, (3) the appeals conflict with congressional 

intent to legislate exclusively. The Majority's r easoning 

implicitly recognizes that Congress intended to occupy the 

field at issue. As such, I would affix the pr oper "label" to 

N.E. Hub's preemption claim. When a state law"conflicts" 

with "the purposes and objectives" of Congr ess to occupy a 

given field, courts label it field, notconflict, preemption.11 

_________________________________________________________________ 

10. See e.g., English, 496 U.S. at 79 n.5, 110 S.Ct. at 2275 n.5 ("[F]ield 

preemption may be understood as a species of conflict preemption: A 

state law that falls within a preempted field conflicts with Congress' 

intent (either express or plainly implied) to exclude state regulation."). 

11. In a footnote, the Majority claims that "by no means do we mean to 

obliterate the distinction between the types of pr eemption, and we 

 33 
The Majority's second argument further underscores its 

implicit recognition that Congress has pr eempted the field.12 

The Majority argues that it need not classify the claim at 

issue, because either field or conflict pr eemption can bar a 

legal process such as the appeals in this case.13 See 

Majority at 23 ("[T]he process pr eemption cases do not 

confine themselves to the field occupation context."). The 

Majority cites no case in which any court has held that 

conflict preemption bars an unfinished legal process with 

an indeterminate outcome. I too was unable tofind such a 

case.14 

The only scenario in which I can possibly envision 

conflict preemption barring an on-going legal proceeding is 

one in which the outcome sought by the party opposing 

preemption is certain to conflict with federal law. In other 

words, for conflict preemption to apply, the relief sought by 

CNGT and Penn Fuel would have to conflict totally with 

FERC's 7(c) certificate. This is not the case. It is entirely 

possible that the Environmental Hearing Boar d could, as a 

result of the appeals at issue, impose additional 

_________________________________________________________________ 

recognize the continuing existence of each." Majority at 24 n.16. 

However, if we need not classify the pr eemption claim in this case, in 

spite of Supreme Court precedent explicitly holding that Congress has 

occupied the field, I fail to see how the distinction retains any force. 

12. For the remainder of this dissent, I r efer to conflict preemption in 

the 

manner that courts apply it (in a non-occupied field) rather than 

according to its sweeping definition, which encompasses all forms of 

federal preemption. 

13. I assume that when the Majority uses the ter m "process preemption," 

it is referring to a federal preemption claim based upon an ongoing legal 

process. Unlike conflict or field preemption, "process preemption" is not 

a term of art; in fact, a Westlaw search revealed that no federal court 

has 

ever used the term. 

14. The Majority relies upon two unsupported assertions: (1) its own 

belief that "certain regulatory acts clearly would conflict with federal 

law, 

and it is as logical to preempt state pr ocess concerning such matters as 

state actions in occupied fields," and (2) a statement by the 

administrator of the Pennsylvania Department of Environmental 

Protection that the agency lacked jurisdiction to "conduct final 

appealability decisionmaking" in this matter . Majority at 23. 

 34 
requirements on N.E. Hub that would not conflict with the 

7(c) certificate.15 

In sum, the Majority purports to avoid categorizing N.E. 

Hub's claim. In reality, however, it r ejects field preemption 

and requires the District Court to apply conflict preemption 

upon remand, even though its reasoning assumes that

Congress has occupied the field. Accor ding to the Supreme 

Court, conflict preemption should be applied only if 

"Congress has not entirely displaced state regulation over 

the matter in question" explicitly or thr ough implied field 

preemption. Silkwood, 464 U.S. at 248, 104 S.Ct. at 621. In 

this case, the overwhelming weight of Supreme Court

precedent indicates that Congress intended the NGA to 

occupy the field at issue. As a result, I disagree with the 

Majority's approach and would instead applyfield 

preemption. 

B. 

The District Court addressed the classification issue 

explicitly. It held that field preemption does not apply, 

because FERC had affirmatively limited its own jurisdiction. 

It noted that "[a]lthough the Natural Gas Act might be read 

to completely preempt any state regulation of the transport, 

storage and sale of natural gas in interstate commer ce, 

FERC has interpreted its jurisdiction under the Natural Gas 

Act to allow for some state regulation." MemOp. at 13. In 

effect, the District Court held that FERC r efused to occupy 

the given field and instead partially delegated its

_________________________________________________________________ 

15. The Majority states that conflict pr eemption bars "the process with 

respect to the 30 Issues," because its outcome is "almost certain to 

conflict with federal law." Majority at 23 n.14. In practice, I seriously 

doubt that a court could effectively isolate state proceedings likely to 

lead to conflicting outcomes from those that could possibly lead to 

"additional requirements . . . that donot conflict with the 7(c) 

certificate." 

Majority at 23 n.14. Forcing courts to do so would in effect require them 

to predict the outcomes of unfinished legal proceedings in separate 

jurisdictions. I suspect that this difficulty explains why courts have 

widely refused to apply conflict preemption to bar an ongoing state 

process, and have instead relied uponfield preemption when it is 

appropriate. 

 35 
responsibilities to the states. The Majority seems to endorse 

this conclusion hesitantly in a footnote, ter ming this case a 

"hybrid" situation. See Majority at 21 n.13. 

The District Court's analysis, and the Majority's r eference 

to it, is flawed. Admittedly, Chevron v. NRDC, 467 U.S. 837, 

842-43, 104 S.Ct. 2778, 2781-82 (1984), often r equires 

courts to defer to an agency's statutory interpr etation, and 

we have held that Chevron defer ence extends to an agency's 

interpretation of its own jurisdiction. See Puerto Rico Mar. 

Shipping Auth. v. Valley Freight Sys., Inc., 856 F.2d 546, 

552 (3d Cir. 1988) ("This rule of defer ence is fully applicable 

to an agency's interpretation of its own jurisdiction."). 

However, courts need only defer to an agency when the 

intent of Congress is unclear. See Chevron, 467 U.S. at 842- 

43, 104 S.Ct. at 2781-82 ("If the intent of Congr ess is clear, 

that is the end of the matter.").16 Here, as previously 

discussed, the intent of Congress to occupy the entire field 

is, and has been for decades, clearly established by the 

Supreme Court. As a result, FERC could not limit its 

jurisdiction in the face of contrary, clear congr essional 

intent. See id. at 843 n.9, 104 S.Ct. at 2781 n.9 ("The 

judiciary is the final authority on issues of statutory 

construction and must reject administrative constructions 

which are contrary to clear congressional intent."). 

Furthermore, based upon my reading of Maritimes, FERC 

did not intend to restrict its jurisdiction. See 1997 WL 

812154, at *8. Quite the contrary - it exer cised its wideranging jurisdiction in order to requir e that natural gas 

companies comply with state regulations as a condition to 

granting a 7(c) certificate. After reaffir ming the NGA's 

preemption of state and local regulation, FERC stated that 

"as a matter of policy, . . . the Commission has imposed 

upon applicants a requirement that they cooperate with 

_________________________________________________________________ 

16. See also Neal v. United States, 516 U.S. 284, 295, 116 S.Ct. 763, 769 

(1996) ("Absent . . . compelling evidence bearing on Congress' original 

intent, our system demands that we adhere to our prior interpretations 

of statutes."); Maislin Indus., U.S., Inc. v. Primary Steel, Inc., 497 

U.S. 

116, 131, 110 S.Ct. 2759, 2768 (1990) ("Once we have determined a 

statute's clear meaning, we adhere to that determination under the 

doctrine of stare decisis, and we judge an agency's later interpretation 

of 

the statute against our prior determination of the statute's meaning."). 

 36 
State and local authorities." Id. (emphasis added). FERC did 

not limit its own jurisdiction, but rather used its authority 

to implement a policy objective. If it had, in fact, abdicated 

its jurisdiction, it would have been unable to impose state 

regulations upon anyone. 

It is undisputed by both the Majority and the District 

Court that Congress intended federal law to occupy the 

entire field at issue. Because neither FERC nor this Court 

have the discretion to contravene clear congr essional 

intent, field preemption should apply. The ripeness of N.E. 

Hub's conflict preemption claim is ther efore irrelevant. 

III. 

Finally, I address the merits of N.E. Hub'sfield 

preemption claim. First of all, it is clearly ripe. We require 

that a claim satisfy three elements in or der to be ripe for 

decision: "adversity of the interests of the parties, 

conclusiveness of the judicial judgment and the practical 

help, or utility, of that judgment." Step-Saver Data Systems, 

Inc. v. WYSE Technology, 912 F.2d 643, 647 (3d Cir. 1990). 

All three are satisfied. The state pr oceedings themselves 

constitute an injury establishing adversity of inter est. See 

Sayles Hydro Assocs. v. Maughan, 985 F .2d 451, 454 (9th 

Cir. 1993) (holding that in the field preemption context, 

"[t]he hardship is the process itself.").17 A decree indicating 

that FERC's 7(c) certificate preempted all state regulation of 

N.E. Hub's project would be "conclusive" under any 

definition of the term, see Step-Saver , 912 F.2d at 648, and 

it would be "useful," because it would allow N.E. Hub to 

proceed with its project. See id. 

_________________________________________________________________ 

17. See also Freehold, 44 F.3d at 1189 (holding that a field preemption 

claim was ripe because "the plaintiff did not challenge the state's 

ultimate substantive decision, but rather its authority to conduct 

proceedings."); Middle South Ener gy, Inc. v. Arkansas Pub. Serv. Comm'n, 

772 F.2d 404, 410-11 (8th Cir. 1985) (claim ripe where the plaintiff 

"challenges not the state's ultimate substantive decision but its 

authority 

to even conduct the contemplated proceeding. It can hardly be doubted 

that a controversy sufficiently concr ete for judicial review exists when 

the proceeding sought to be enjoined is alr eady in progress."). 

 37 
Apparently, the District Court agreed that if field

preemption applied, N.E. Hub's claim was ripe. After a 

lengthy and unnecessary discussion of the ripeness of the 

conflict preemption claim, it moved immediately to the 

merits of the field preemption claim (without discussing its 

ripeness). The court held that the claim failed on its merits: 

 NE Hub's alternative theory, that Pennsylvania lacks 

 authority to subject NE Hub Project to any r egulation 

 whatsoever, must also fail on jurisdictional grounds. 

 Such an attack constitutes a challenge to the expr ess 

 provisions of the 7(c) certificate issued by FERC to NE 

 Hub, which clearly contemplate and even direct NE 

 Hub's compliance with state regulation. As pointed out 

 by Defendants CNGT and Penn Fuel in their motions to 

 dismiss, the Court lacks jurisdiction over such a 

 challenge to the 7(c) certificate, as NE Hub failed to 

 apply to FERC for a rehearing of its April 29, 1998 

 Order issuing the 7(c) certificate. 

MemOp. at 18-19 (citations omitted). I agree with the 

Court's reasoning and outcome, but it would be helpful to 

elaborate further. FERC's 7(c) certificate required

compliance with state and local regulations. Specifically, it 

stated that: 

 Any state or local permits issued with r espect to the 

 jurisdictional facilities authorized herein must be 

 consistent with the conditions of this certificate. The 

 Commission encourages cooperation between interstate 

 pipelines and local authorities. However, this does not 

 mean that state and local agencies, through 

 application of state or local laws, may prohibit or 

 unreasonably delay the construction or operation of 

 facilities by this Commission. 

J.A. at 109. The District Court interpreted this language to 

require that N.E. Hub obtain "any and all necessary state 

or local permits required to carry out the drilling and 

construction program." MemOp. at 5. In addition, the 7(c) 

certificate also contained a number of mor e specific 

provisions that required compliance with individual state 

regulations. See MemOp. at 14-15. 

 38 
FERC's discretion in granting a 7(c) certificate is farreaching. Section 717f(e) of the NGA pr ovides that, "[t]he 

Commission shall have the power to attach to the issuance 

of the certificate and to the exercise of the rights granted 

thereunder such reasonable terms and conditions as the 

public convenience and necessity may requir e." 15 U.S.C. 

S 717f(e). Under this authority, FERC r equired compliance 

with state and local regulations as long as they did not 

"prohibit or unreasonably delay the construction or

operation of [the] facilities." J.A. at 109. FERC did not 

abdicate its jurisdiction; it exercised it. 

This interpretation is consistent with FERC's discussion 

of state regulations in Maritimes, 1997 WL 812154, at *8. 

In that case, FERC described its "requir ement" that 

applicants cooperate with state and local authorities as 

being something it had "imposed" as "a matter of policy." Id. 

A plain reading suggests that FERC was simply exercising 

its wide jurisdiction over the field, requiring applicants to 

comply with state and local regulations that impose

additional, non-conflicting measures. W ere an actual 

conflict to arise, FERC noted that its decisions would 

control. 

FERC could have required, subsequent to its S 717f(e) 

authority, that applicants comply with conditions identical 

to those found in state regulations. It is unclear why, and 

indeed N.E. Hub has failed to argue that, r equiring 

compliance with state regulations that impose potentially 

non-conflicting conditions would be outside FERC's 

authority. Even if it were, as the District Court held, N.E. 

Hub's proper course would have been to challenge the 

validity of FERC's 7(c) certificate by seeking a r ehearing 

within thirty days of its issuance. See 15 U.S.C. S 717r(a). 

It failed to do so. N.E. Hub cannot now collaterally attack 

FERC's authority under S 717f(e) by challenging a state 

appellate process that FERC implicitly sanctioned. See City 

of Tacoma v. Taxpayers of Tacoma, 357 U.S. 320, 335-36, 

78 S.Ct. 1209, 1218-19 (1958); Williams Natural Gas Co. v. 

City of Oklahoma City, 890 F.2d 255, 262 (10th Cir. 1989) 

("[A] challenger may not collaterally attack the validity of a 

prior FERC order in a subsequent proceeding . . . whether 

the collateral action is brought in state court or federal 

court."). 

 39 
IV. 

I would affirm the District Court's decision based upon 

its disposition of the one legitimate claim at issue - N.E. 

Hub's argument that the state proceedings at issue are field 

preempted by FERC's 7(c) certificate. Field preemption does 

apply, but FERC exercised its wide-ranging authority to 

require compliance with state regulations. Because N.E. 

Hub failed to challenge FERC's authority dir ectly, it cannot 

now challenge the 7(c) certificate in this Court. The District 

Court properly held that it lacked jurisdiction over the 

claims at issue, and as a result, N.E. Hub's claims were 

properly dismissed. 

A True Copy: 

Teste: 

 Clerk of the United States Court of Appeals 

 for the Third Circuit 

 40