The U.S. Court of Appeals for the Fourth Circuit has reversed the Federal Energy Regulatory Commission’s (FERC) issuance of a hydroelectric license on the basis that the North Carolina Department of Environmental Quality (NCDEQ) had not waived its statutory authority for issuing a water quality certification for the project, notwithstanding that the initial request for certification was submitted more than two years previously and the Clean Water Act provides that a state must act on a certification request within one year. North Carolina Department of Environmental Quality v. FERC (4th Cir. July 2, 2021). This decision is the latest in an inconsistent judicial history regarding whether a state agency can effectively extend the one-year period for action by repeatedly requesting more information from the applicant or processing re-submitted identical applications.
In this case, the license applicant originally filed a request for certification pursuant to Section 401 of the Clean Water Act in March 2017. Section 401 provides that a state waives its certification authority if it “fails or refuses to act on an application within a reasonable period of time (which shall not exceed one year).” 33 U.S.C. § 1341. From 2017 to 2019, the applicant and NCDEQ exchanged numerous communications regarding the status of the request and the need to submit additional information. To prevent the one-year waiver period from taking effect, the applicant withdrew and re-submitted its request twice with the acquiescence of and guidance from NCDEQ. In issuing the license on September 20, 2019, FERC determined that NCDEQ had waived its certification authority by not acting on the initial request within one year, and declined to include conditions imposed by the state agency. FERC held that to allow state agencies to delay action by asking for more information “could encourage the states to ask applicants to provide additional data in order to give themselves more time to process certification requests, in contravention of Congress’ intent.” In so ruling, FERC relied on Hoopa Valley Tribe v. FERC, 913 F.3d 1099 (DC Cir. 2019) for the proposition that an agreement between an applicant and a state agency to repeatedly withdraw and re-submit an application over several years amounts to a waiver of the state’s certification authority.
The Fourth Circuit distinguished Hoopa Valley by finding that the NCDEQ was not a party to a deliberate, coordinated scheme pursuant to a written agreement between the state and the applicant to evade the one-year statutory requirement for state action. The Court found that the lack of a written agreement and the applicant’s voluntary withdrawals and re-submissions did not implicate NCDEQ in deliberately extending the one-year period. It therefore vacated FERC’s license order with instructions for FERC to re-issue the license with NCDEQ’s conditions included. In our view, the Court’s distinction of Hoopa Valley exemplifies strained reasoning to justify imposing its particular interpretation on a set of facts, and serves as a cautionary note that the Clean Water Act may be interpreted and applied differently across various regions of the country.
For further information, please contact: Peter Kissel, Sean Neal, Lisa Gast, Lauren Perkins, Sylwia Dakowicz, or Ellen Hill.
