Opinion ID: 3011771
Heading Depth: 3
Heading Rank: 3

Heading: Practical Utility

Text: 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 costsaving 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