July 7, 2014

D.C. Circuit Rejects Petitions Challenging Proposed NY-NJ Gas Pipeline

Holland & Knight Regulatory Litigation Blog
Jessica L. Farmer

The D.C. Circuit Court of Appeals recently dismissed petitions brought by the City of Jersey City, NJ, and various environmental organizations challenging the Federal Energy Regulatory Commission's ("FERC") order granting a certificate to build a natural gas pipeline connecting New York and New Jersey. 

In May of 2012, FERC entered an order granting a certificate of public convenience and necessity for the construction of a natural gas pipeline connecting New York and New Jersey. The City of Jersey City and a coalition of environmentalist groups filed separate petitions for review on differing grounds. 

Three environmentalist groups, NO Gas Pipeline, Sierra Club, and Food & Water Watch filed two petitions for review of the order, alleging that FERC did not comply with the National Environmental Policy Act in the proceedings and grant of the certificate. The environmental groups sought to proceed under associational standing. The Court noted that associational standing requires that the member or members must have suffered an "injury in fact"—that is, “an invasion of a legally protected interest which is (a) concrete and particularized ... and (b) actual or imminent, not conjectural or hypothetical." The petitioners alleged that they would be injured by the higher radon levels once the gas begins to flow through the pipeline. However, the Court considered this to be only a "conjectural or hypothetical" injury rather than a "concrete injury that has either transpired or is imminent" which is required to satisfy constitutional standing.

The City of Jersey City filed a separate petition for review, alleging that FERC could not constitutionally conduct the proceedings and grant the order because its financial structure created "possible temptation" to be biased in favor of pipeline companies. Jersey City also argued that FERC exercised actual bias in violation of "either Due Process or the APA."  The City argued that Court had jurisdiction over its claims pursuant to the Natural Gas Act, which provides that those "aggrieved by an order issued by the Commission [in a proceeding under this chapter] may obtain a review of such order." However, the Court noted that the claims did not fall within the jurisdictional grounds of the Natural Gas Act, the City did not demonstrate how it has been injured, and did not challenge any part of FERC's actual order.

The Court noted that the City's dispute was not with FERC's order, but was with the funding by assessments which is part of the Budget Act, over which the DC Circuit does not have original jurisdiction. The Court also dismissed the City's alleged constitutional claim of actual bias as being untimely, because it failed to establish that it raised the issues before FERC's initial order.

In light of these findings, the Court ultimately dismissed the petitions because "[n]one of the petitions brings the order for review within the jurisdiction of this court. The environmental petitioners lack standing, and the petition of Jersey City raises questions not preserved in the administrative proceedings."

NO Gas Pipeline v. FERC, No. 12-1470 (D.C. Cir. July 1, 2014)

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