United States Court of Appeals, District of Columbia Circuit
March 22, 2018
from the United States District Court for the District of
Columbia (No. 1:16-cv-00416)
Yeager argued the cause for appellants. With him on the
briefs was Aaron Stemplewicz.
Christopher D. Ahlers was on the brief for amicus curiae
Clean Air Council supporting plaintiff-appellants and
supporting reversal of the decision below.
R. Fulton, Attorney, Federal Energy Regulatory Commission,
argued the cause for appellees. With him on the brief were
James P. Danly, General Counsel, and Robert H. Solomon,
C. Marwell argued the cause for intervenor-appellee PennEast
Pipeline Company, LLC. With him on the brief were Michael B.
Wigmore, Matthew X. Etchemendy, Frank H. Markle, and James D.
Melissa N. Patterson, Attorney, U.S. Department of Justice,
argued the cause for amicus curiae United States of America.
With her on the brief were Chad A. Readler, Acting Assistant
Attorney General, Jessie K. Liu, U.S. Attorney, and Scott R.
Maley and William R. Levi were on the brief for amici curiae
Interstate Natural Gas Association of America supporting
Before: Griffith and Katsas, Circuit Judges, and Edwards,
Senior Circuit Judge.
Katsas, Circuit Judge.
appeal presents broad due-process challenges to how the
Federal Energy Regulatory Commission conducts business. By
statute, FERC is required to recover its costs from regulated
industries. The appellants contend that this improperly
incentivizes the Commission to approve new natural-gas
pipelines, in order to ensure itself future funding sources.
The appellants also challenge FERC's use of tolling
orders to meet its statutory deadlines for acting on
applications for rehearing.
Natural Gas Act requires companies to obtain a
"certificate of public convenience and necessity"
before constructing facilities to transport natural gas in
interstate commerce. 15 U.S.C. § 717f(c)(1)(A). FERC
must issue a certificate to a qualified applicant if the
proposed project is "required by the present or future
public convenience and necessity," subject to any
reasonable terms and conditions imposed by the Commission.
Id. § 717f(e).
Commission within the Department of Energy, receives annual
appropriations fixed by Congress. 42 U.S.C. § 7171(j).
However, the Omnibus Budget Reconciliation Act of 1986
("Budget Act") requires FERC to "assess and
collect" from the various industries that it regulates,
including the natural-gas industry, "fees and annual
charges in any fiscal year in amounts equal to all of the
costs incurred by the Commission in that fiscal year."
Id. § 7178(a)(1). These receipts must be
"credited to the general fund of the Treasury."
Id. § 7178(f).
"aggrieved by an order issued by the Commission in a
proceeding under" the Natural Gas Act may seek
rehearing. 15 U.S.C. § 717r(a). "Unless the
Commission acts upon the application for rehearing within
thirty days after it is filed, such application may be deemed
to have been denied." Id. The aggrieved party
then may seek judicial review, in the court of appeals,
"within sixty days after the order of the Commission
upon the application for rehearing." Id. §
2015, intervenor PennEast Pipeline Co. sought a certificate
to build a 114-mile natural-gas pipeline running through
Pennsylvania and New Jersey. Appellants Delaware Riverkeeper
Network and its director Maya van Rossum (collectively
"Riverkeeper") intervened to oppose the project.
2016, while FERC was still reviewing the proposal,
Riverkeeper filed a complaint seeking declaratory relief
against the Commission and its members. The complaint alleges
that FERC's funding structure creates structural bias, in
violation of the Due Process Clause of the Fifth Amendment,
by incentivizing the Commission to approve new pipelines in
order to secure additional sources for its future funding.
The complaint also challenges the Commission's use of
tolling orders to satisfy its 30-day deadline for acting on
rehearing applications. Those tolling orders grant rehearing
for the limited purpose of giving the Commission more time to
consider pending applications. In the meantime, the complaint
alleges, FERC routinely allows construction to proceed on
approved projects. According to Riverkeeper, this frustrates
judicial review, again in violation of the Due Process
PennEast intervened as a defendant in the district court, the
Commission and PennEast moved to dismiss the complaint. They
argued that Riverkeeper had not identified any liberty or
property interest protected by the Due Process Clause and
that, in any event, FERC provides all the process that is
due. The district court agreed with both points and dismissed
the complaint for failure ...