Court Opinion

ID: 4153108
Source: CourtListenerOpinion
Date Created: 2017-03-15 21:00:24.931081+00
Date Added: 2024-06-11T09:08:11.462281
License: Public Domain

United States Court of Appeals
                     For the First Circuit

No. 16-2100

     BERKSHIRE ENVIRONMENTAL ACTION TEAM, INC.; JEAN ATWATER-
   WILLIAMS; RONALD M. BERNARD; CATHY KRISTOFFERSON; CHERYL D.
   ROSE; IRVINE SOBELMAN; PAULA L. TERRASI; SUSAN K. THEBERGE;
    ROSEMARY WESSEL; KATHRYN R. EISEMAN; ARIEL S. ELAN; ELLIOT
  FRATKIN; MARTHA A. NATHAN; KENNETH HARTLAGE; RONALD R. COLER;
                   JANE WINN; HEATHER MORRICAL,

                          Petitioners,

                               v.

TENNESSEE GAS PIPELINE COMPANY, LLC; MASSACHUSETTS DEPARTMENT OF
                    ENVIRONMENTAL PROTECTION,

                          Respondents.

               PETITION FOR REVIEW OF AN ORDER OF
    THE MASSACHUSETTS DEPARTMENT OF ENVIRONMENTAL PROTECTION

                             Before

                     Kayatta, Circuit Judge,
                   Souter, Associate Justice,*
                    and Selya, Circuit Judge.

     Richard A. Kanoff, with whom Susan E. Stenger, Saqib Hossain,
and Burns & Levinson LLP were on brief, for petitioners.
     Matthew Ireland, Assistant Attorney General, Environmental
Protection Division, with whom Seth Schofield, Assistant Attorney
General and Senior Appellate Counsel, Energy and Environment
Bureau, Office of the Attorney General of Massachusetts, Maura
Healey, Attorney General of Massachusetts, and Turner Smith,

     * Hon. David H. Souter, Associate Justice (Ret.) of the
Supreme Court of the United States, sitting by designation.
Assistant Attorney General, Environmental Protection Division,
were on brief, for Massachusetts Department of Environmental
Protection.
     James L. Messenger, with whom Brian J. Wall, Gordon Rees
Scully Mansukhani, LLP, J. Curtis Moffatt, and Mosby G. Perrow
were on brief, for Tennessee Gas Pipeline Company, LLC.

                        March 15, 2017
               KAYATTA, Circuit Judge.           In this unusual petition for

review arising out of a state administrative proceeding, the

petitioners themselves argue that we lack jurisdiction to hear

their complaints about what has transpired to date before the state

agency.     Because the agency itself has not yet finally acted on

the   matter     that   is   before    it   as    is    required      to   invoke    our

jurisdiction under 15 U.S.C. § 717r(d)(1), we agree and dismiss

the petition.

                                I.     Background

               The Natural Gas Act ("NGA") requires a natural gas

company to obtain from the Federal Energy Regulatory Commission

("FERC") a certificate of public convenience and necessity before

it may construct new natural gas transportation facilities or

expand    existing      ones.   15     U.S.C.     §    717f(c)(1)(A).         FERC    is

responsible for coordinating all federal authorizations applicable

to the process.           Id. § 717n(b)(1).             The NGA also expressly

preserves the rights of states under the Coastal Zone Management

Act of 1972, 16 U.S.C. §§ 1451–1466; the Clean Air Act, 42 U.S.C.

§§ 7401–7671q; and the Clean Water Act ("CWA"), 33 U.S.C. §§ 1251–

1388.     See 15 U.S.C. § 717b(d).          Under the CWA, any applicant for

a federal license to construct or operate facilities that may

result    in    discharge    into     navigable       waters   must    "provide      the

licensing or permitting agency"--here, FERC--"a certification from

the State in which the discharge originates or will originate."

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33 U.S.C. § 1341(a)(1).               The state, in turn, must evaluate the

proposed project's compliance with certain provisions of the CWA

and set forth limitations and monitoring requirements "necessary

to assure that any applicant for a Federal license or permit will

comply" with the CWA "and with any other appropriate requirement

of State law set forth in such certification."                      Id. § 1341(d).      A

condition imposed under the state's certification "shall become a

condition     on    any     Federal     license      or    permit     subject    to    the

provisions of this section."                Id.

              On July 31, 2014, Tennessee Gas Pipeline Company, LLC

("Tennessee Gas") applied to FERC for a certificate of public

convenience        and    necessity,        which   FERC     eventually       issued    in

March 2016 subject to, among other things, filing of proof that

Tennessee Gas has received "all applicable authorizations required

under federal law (or evidence of waiver thereof)."                       In pursuit of

one    such    authorization          (or    waiver       thereof),      Tennessee     Gas

submitted     an    application        to    the    Massachusetts        Department    of

Environmental            Protection     ("MassDEP")          for      water      quality

certification on June 30, 2015.               On June 29, 2016, after almost a

full   year    during       which   interested        citizens     and    environmental

organizations            (including     Petitioners)          participated        in     a

nontestimonial notice-and-comment process, Tennessee Gas received

conditional certification for its proposed project in a letter

                                            - 4 -
from the Western Regional Office of MassDEP signed by Wetlands

Program Chief David Cameron.

            The   letter   contained    over     forty    conditions     to    the

project's    approval,     including    a    condition--"Condition          15"--

forbidding Tennessee Gas from conducting any "work subject to this

Certification,     including   the     cutting    of     trees,"    until     "the

expiration of the Appeal Period set forth below and any appeal

proceedings that may result from an appeal."                 The conditional

certification also described the appeal process, explaining that

"[c]ertain persons shall have a right to request an adjudicatory

hearing concerning certifications by the Department," including

"[a]ny person aggrieved by this certification who has submitted

written comments during the public comment period."                In accordance

with Massachusetts regulations on the subject, the conditional

certification provided that any person who wished to appeal was

required to submit a Notice of Claim for Adjudicatory Hearing

within twenty-one days of the certification's issuance.

            Petitioners took advantage of this provision, filing a

Notice of Claim for Adjudicatory Hearing on July 20, 2016.                     In

response, Tennessee Gas opposed Petitioners' request for a hearing

and sought a stay of further administrative proceedings, claiming

that once the agency had issued a conditional water quality

certification, the state's involvement in the process was at an

end, with any further review to be pursued through a petition to

                                     - 5 -
this court.      Petitioners disagreed, as did MassDEP, which denied

Tennessee Gas's request for a stay and moved forward, scheduling

a final decision to be issued by April 3, 2017.                 In early August

2016, Tennessee Gas filed suit in the District of Massachusetts

seeking    to     bar     MassDEP    from     engaging   in    further      review.

Petitioners, in turn, hedged their bets.             They filed the petition

now before us in order to preserve some review of the June 29

conditional      water     quality    certification      in    the    event    that

Tennessee Gas was correct.            At the same time, they asked us to

reject their petition on the grounds that Tennessee Gas is not

correct; that is to say, they claim that our review is premature

until MassDEP completes its adjudicatory process.

                                II.     Discussion

                                         A.

              We begin with the language of the statute that grants us

the jurisdiction putatively invoked by this petition.                       We have

exclusive jurisdiction "over any civil action for the review of an

order or action of a . . . State administrative agency acting

pursuant to Federal law [in ruling on an application, as pertinent

here,     for    a   water    quality       certification     under    33     U.S.C.

§ 1341(a)(1)]." 15 U.S.C. § 717r(d)(1). In a literal sense, state

agencies repeatedly take "action" in connection with applications

for   water     quality    certifications.        They   docket      applications,

review them, and express opinions about them.                 We see no reason,

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though, to think that Congress wanted us to exercise immediate

review over such preliminary and numerous steps that state agencies

may take in processing an application before they actually act in

the more relevant and consequential sense of granting or denying

it.

             Pushing back on this common sense conclusion, Tennessee

Gas points to the fact that § 717r(d)(1) employs the term "action,"

bereft of the modifier "final."            This contrasts with, for example,

the text employed in the Administrative Procedure Act ("APA"), 5

U.S.C. § 704 ("Agency action made reviewable by statute and final

agency action for which there is no other adequate remedy in a

court are subject to judicial review."), and with the text of 15

U.S.C. § 717r(b), which permits judicial review of FERC orders

only   after    FERC's    denial      of    an    application     for     rehearing.

Therefore,     reasons    Tennessee        Gas,   we    should    infer    that,   by

authorizing our review of state agency action, Congress did not

limit such review to final agency action.

             Such a negative inference might have interpretative

force in dealing with some other subject matter.                   See generally,

e.g., Barnhart v. Sigmon Coal Co., 534 U.S. 439, 452 (2002)

(articulating    the     rule    of   statutory        construction     that   courts

should   typically     infer     that      Congress     intends   differences      in

statutory      language     to        effect      differences      in      statutory

application).    Here, though, the subject matter is judicial review

                                        - 7 -
of agency action, which review Congress creates in the context of

a long-standing and well-settled "strong presumption . . . that

judicial review will be available only when agency action becomes

final."    Bell v. New Jersey, 461 U.S. 773, 778 (1973) (citing FPC

v. Metro. Edison Co., 304 U.S. 375, 383-85 (1938)).            To say that

silence on the subject implies no requirement of finality would be

to recognize this "strong presumption" only when it is of little

benefit.

            It is also unclear that Congress's reference to FERC's

internal review process in § 717r(b), coupled with the lack of a

similar reference in § 717r(d)(1) to the internal review processes

of state agencies, even raises the inference that Tennessee Gas

claims.     Rather,   there   is   a   more   plausible   explanation    for

Congress's decision to write the statute this way:              unlike the

FERC procedures described in § 717r(b), which are the same for any

applicant proposing a project in any state or states, the state

procedures giving rise to orders reviewable under § 717r(d)(1) may

(and   undoubtedly     do)    vary     widely    from     jurisdiction    to

jurisdiction.     Thus, whereas it is reasonable to interpret a

reference to FERC's rehearing process as a signal that final agency

action is required under § 717r(b), it does not make sense to draw

the negative inference that the lack of a reference in § 717r(d)(1)

to the variegated internal review mechanisms deployed by state

agencies sends the opposite signal.             Simply put, the text of

                                   - 8 -
§ 717r(d)(1), on its own or read alongside § 717r(b), does not

rebut the strong presumption that judicial review is available

only following final agency action.

            Further       reinforcement        for     the   strong   presumption

restricting review until an agency has taken final action resides

in Congress's numerous efforts to prevent states from unreasonably

delaying the performance of their reserved roles in connection

with natural gas projects.          In connection with any permit required

by federal law, § 717r(d)(2) authorizes the United States Court of

Appeals for the District of Columbia to issue injunctive relief

when a state agency "fail[s] to act" on such a permit in accordance

with a schedule established by FERC.                 Where the permit is a water

quality certification required by 33 U.S.C. § 1341(a)(1), a state

waives its right in connection with a FERC application if it "fails

or   refuses   to   act    on   a   request     for    certification,   within   a

reasonable period of time (which shall not exceed one year) after

receipt of such request.”           Id.   The very fact that Congress has

granted us the unusual ability to review directly (and on an

expedited basis, 15 U.S.C. § 712r(d)(5)) action by a state agency

can itself be seen as further evidence that Congress sought to

reduce the potential for the use of delay to block natural gas

projects.      Certainly        nothing   in    the     legislative   history    of

§ 717r(d)(1) belies that perception.             See Islander E. Pipeline Co.

v. Conn. Dep't of Envtl. Prot., 482 F.3d 79, 85 (2d Cir. 2006)

                                      - 9 -
("[A]pplicants . . . were encountering difficulty proceeding with

natural gas projects that depended on obtaining state agency

permits." (citing Regional Energy Reliability and Security:                 DOE

Authorization to Energize the Cross Sound Cable:               Hearing Before

the H. Subcomm. on Energy & Air Quality, 108th Cong. 8 (2004)

(statement of Rep. Barton), and Natural Gas Symposium:              Symposium

Before the S. Comm. on Energy & Nat. Res., 109th Cong. 41 (2005)

(statement of Mark Robinson, Director, Office of Energy Projects,

FERC))).     A Congress that placed so much emphasis upon avoiding

delay in the adjudication of requests for certification of this

type would not likely have intended to authorize the delay that

interlocutory reviews of every state agency action, final or not,

would inevitably engender.

             Tennessee   Gas   contends   that   finding   a    final    agency

action requirement in § 717r(d)(1) nevertheless puts us at odds

with the Second Circuit's decision in Islander East.                    In that

decision, the court did not dismiss the case sua sponte for lack

of subject matter jurisdiction even though, Tennessee Gas says,

the state agency had not taken final action.         Therefore, Tennessee

Gas reasons, the Second Circuit must have construed § 717r(d)(1)

to confer subject matter jurisdiction to review non-final agency

action.    See Tenn. Gas Pipeline Co. v. Del. Riverkeeper Network,

921 F. Supp. 2d 381, 392–93 (M.D. Pa. 2013) (articulating this

argument).    We think it a stretch, however, to draw so sweeping an

                                   - 10 -
inference from a court's rendering of a decision on the merits

where the question of subject matter jurisdiction was not squarely

before or even addressed by the court.               The Second Circuit in

Islander East evidenced no awareness that it might be reviewing an

incomplete state agency action, as opposed to a completed state

agency action for which state court review was not yet exhausted.

See Islander East, 482 F.3d at 88 n.7.            We therefore find little

if any persuasive force in Tennessee Gas's reliance on that

decision.

            Tennessee     Gas   also    appears    to    argue    that   reading

§ 717r(d)(1) to permit judicial review of only a state agency's

"final action" would be tantamount to imposing an exhaustion of

administrative remedies requirement where one is not provided by

the statute.      In that vein, the company urges us to adopt the

reasoning    of   other    courts      that   have      found    exhaustion   of

administrative remedies unnecessary to trigger the exclusive and

original jurisdiction of a United States Circuit Court of Appeals

under § 717r(d)(1).        See, e.g., AES Sparrows Point LNG, LLC v.

Wilson, 589 F.3d 721, 727 (4th Cir. 2009); Islander East, 482 F.3d

at 88 n.7; Del. Riverkeeper, 921 F. Supp. 2d at 391–92.

            We disagree with Tennessee Gas's premise.              Finding that

a statute requires final agency action is different from finding

that   it   requires    exhaustion.       "[T]he     judicial      doctrine   of

exhaustion of administrative remedies is conceptually distinct

                                    - 11 -
from the doctrine of finality":           whereas exhaustion "refers to

administrative and judicial procedures by which an injured party

may seek review of an adverse decision and obtain a remedy if the

decision is found to be unlawful or otherwise inappropriate,"

finality "is concerned with whether the initial decisionmaker has

arrived at a definitive position on the issue that inflicts an

actual, concrete injury."       Darby v. Cisneros, 509 U.S. 137, 144

(1993) (second and third quotations quoting Williamson Cty. Reg'l

Planning Comm'n v. Hamilton Bank of Johnson City, 473 U.S. 172,

193 (1985)).    Each of the courts Tennessee Gas asks us to join was

tasked with determining whether § 717r(d)(1) barred either a

second, separate state agency or a state court from reviewing a

state agency's final decision granting, conditioning, or denying

a water quality certification.       We, by contrast, are faced with

the question whether a single agency must render a final decision

before   a    United   States   Circuit    Court   of   Appeals   may   take

jurisdiction to analyze whether the decision was sound.

             We therefore conclude that there is ample reason to stick

to the strong presumption restricting our review to final agency

action of a type that is customarily subject to judicial review.

                                    B.

             The foregoing brings us to Tennessee Gas's alternative,

and principal, argument:        that the June 29, 2016, letter from

MassDEP constituted final agency action granting its application,

                                  - 12 -
albeit with conditions. Under this view, the continuing proceeding

at MassDEP is in the nature of the type of appellate review that

falls within the exclusive province of this court.

             An agency action is "final" only where it "represents

the    culmination     of   the    agency's    decisionmaking        process   and

conclusively determines the rights and obligations of the parties

with respect to the matters at issue."                Rhode Island v. EPA, 378

F.3d 19, 23 (1st Cir. 2004); cf. Bennett v. Spear, 520 U.S. 154,

177–78 (1997) (holding that "final agency action" under the APA,

5 U.S.C. § 704, must be "the 'consummation' of the agency's

decisionmaking process," "must not be of a merely tentative or

interlocutory nature," and "must be one by which 'rights or

obligations     have    been       determined,'       or     from   which   'legal

consequences will flow'" (first quoting Chi. & S. Air Lines, Inc.

v. Waterman S.S. Corp., 333 U.S. 103, 113 (1948); and then quoting

Port    of   Bos.    Marine       Terminal    Ass'n     v.    Rederiaktiebolaget

Transatlantic, 400 U.S. 62, 71 (1970))).

             In form, there is something to Tennessee Gas's argument

that the June 29 letter constituted final agency action.                       The

MassDEP officials did issue a formal document that states "the

Department grants a Water Quality Certification . . . subject to

the following conditions . . . necessary to maintain water quality,

to minimize impact . . . and to ensure compliance with appropriate

state law."    The regulations (and the certification itself) refer

                                      - 13 -
to the adjudicatory hearing following an application for water

quality certification as an "appeal."           See, e.g., 310 Mass. Code

Regs. § 1.01(1)(c) ("Adjudicatory Appeal or Appeal means the

portion of an adjudicatory proceeding initiated by filing a notice

of claim with the Department and concluded by a final decision.");

314 Mass. Code Regs. § 9.09(1)(e) (referring to "the appeal period"

and final decisions following "an appeal"); id. § 9.10 (describing,

in a provision entitled "Appeals," the process of filing a notice

of claim and engaging in an adjudicatory hearing).                Where no

adjudicatory hearing is sought and the certification is not further

challenged in court, a water quality certification has the force

and effect of law.    See id. § 9.11 ("Failure to comply with . . .

a 401 Water Quality Certification . . . shall be enforced [under

regulatory    provisions    concerning    administrative    penalties].").

And the regulations neither refer to water quality certifications

as   "preliminary"   or    "proposed"    nor   require   certifications   or

denials to include those words.

             The substance of the Massachusetts regulatory regime,

however, shows the contrary:       an initial letter granting a water

quality certification subject to Condition 15, either before the

twenty-one day window to request a hearing has lapsed or after a

timely notice of claim is filed, is not a final agency action.

Three aspects of the water quality certification that MassDEP

                                  - 14 -
issued in this case and the regulatory regime that gave rise to it

lead us to this conclusion.

            First, Massachusetts law makes clear that Tennessee

Gas's application seeking a determination of its rights in the

form of a water quality certification initiated a single, unitary

proceeding, an essential part of which is the opportunity (of which

petitioners    have   availed   themselves)    to   have    an   adjudicatory

hearing.    Under Massachusetts law, "a proceeding before an agency

in which the legal rights, duties or privileges of specifically

named persons are required by constitutional right or by any

provision of the General Laws to be determined after opportunity

for an agency hearing" is an "[a]djudicatory proceeding."               Mass.

Gen. Laws ch. 30A, § 1(1).      MassDEP regulations, in turn, provide

that   an    adjudicatory   proceeding     "means    a     proceeding   under

[chapter 0A] that may culminate in an adjudicatory hearing and the

Commissioner's issuance of a final decision." 310 Mass. Code Regs.

§ 1.01(c).    Those same regulations also define such a hearing as

one in which "parties may present evidence on issues of fact, and

argument on issues of law and fact prior to the Commissioner's

issuance of a final decision."       Id.      No party disputes that, in

the present context, such a presentation of evidence and arguments

occurs after the issuance of a conditional certification, not

before.

                                  - 15 -
          Second, the review to be provided in the adjudicatory

hearing is a review of Tennessee Gas's application, rather than a

review of a prior agency decision.         MassDEP accords no deference

to the preliminary findings included in the certification, see

Conservation Comm'n of Falmouth v. Pacheco, 733 N.E.2d 127, 130

(Mass. App. Ct. 2000), and the regulations expressly provide that

the agency may even consider "new substantive issues arising from

material changes to the scope or impact of the activity and not

apparent at the time of public notice" from persons who did not

participate in the notice-and-comment process, 314 Mass. Code

Regs. § 9.10(1).   When a notice of claim is timely filed following

the issuance of a water quality certification, the agency's review

of the proposed project continues more or less as though no

decision has been rendered at all.

          Third, the manner in which Massachusetts has chosen to

structure its internal agency decision-making strikes us as hardly

unusual or contrived.    It allows for unopposed actions to proceed

to finality without the time and expense of full-blown adjudicatory

proceedings,   while    preserving   the    parties'   rights   to   such

proceedings when sought.    With the taking of evidence and de novo

consideration, it bears the hallmarks of decision-making by expert

administrative agencies rather than those of judicial review.        Its

chief drawback, as demonstrated here, is its duration.          Congress,

though, has addressed the matter of delay directly, see 15 U.S.C.

                                - 16 -
§ 717r(d)(2); 33 U.S.C. § 1341(a)(1),1 and by divesting states of

their customary review of state agency orders and opinions in this

field, see 15 U.S.C. § 717r(d)(1).                We see no indication that

Congress otherwise intended to dictate how (as opposed to how

quickly) MassDEP conducts its internal decision-making before

finally acting.        See 33 U.S.C. § 1251(b) ("It is the policy of the

Congress       to    recognize,     preserve,     and       protect   the   primary

responsibilities and rights of States to prevent, reduce, and

eliminate      pollution,     [and]   to   plan       the   development     and   use

(including restoration, preservation, and enhancement) of land and

water resources . . . ."); United States v. Cooper, 482 F.3d 658,

667 (4th Cir. 2007) ("In the CWA, Congress expressed its respect

for states' role through a scheme of cooperative federalism that

enables states to 'implement . . . permit programs' like [the one

at issue here.]"); S. Ohio Coal Co. v. Office of Surface Mining,

Reclamation & Enf't, Dep't of Interior, 20 F.3d 1418, 1427 (6th

Cir.       1994)    ("[T]he   CWA   sets   up     a    system    of   'cooperative

       1
       Our consideration of the jurisdictional issue posed by this
case leaves us with no occasion to consider whether, because
MassDEP did not finally act on Tennessee Gas's application within
one year, the requirement that Tennessee Gas obtain a water quality
certification from the Commonwealth of Massachusetts has been
waived. See 33 U.S.C. § 1341(a)(1). Nor have we considered the
potential relevance of 15 U.S.C. § 717r(d)(2) (granting the D.C.
Circuit "original and exclusive jurisdiction over any civil action
for the review" of a state agency's "alleged failure to act . . .
to issue, condition, or deny any permit required under Federal
law" for a facility subject to NGA § 717f).

                                      - 17 -
federalism,' in which states may choose to be primarily responsible

for   running    federally-approved          programs.");     cf.     Dominion

Transmission, Inc. v. Summers, 723 F.3d 238, 240 (D.C. Cir. 2013)

(noting   that   the   NGA    "expressly      does   not   preempt"   certain

environmental    protection    laws    like    the   Clean   Air    Act   that

contemplate a robust role for states).

                             III.   Conclusion

           There is, as yet, no order or action of MassDEP in

connection with Tennessee Gas's application for a water quality

certification that we may review under 15 U.S.C. § 717r(d)(1).             We

therefore dismiss the petition for review for lack of subject

matter jurisdiction.    Each party shall bear its own costs.

                                    - 18 -