Turlock Irrigation District v. FERC

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued April 11, 2022 Decided June 17, 2022

No. 21-1120

TURLOCK IRRIGATION DISTRICT AND MODESTO IRRIGATION

DISTRICT,

PETITIONERS

v.

FEDERAL ENERGY REGULATORY COMMISSION,

RESPONDENTS

AMERICAN WHITEWATER, ET AL.,

INTERVENORS

Consolidated with 20-1121

On Petitions for Review of Orders

of the Federal Energy Regulatory Commission

Misha Tseytlin argued the cause for petitioners. With him

on the briefs were Charles R. Sensiba, Morgan M. Gerard, and

Kevin M. LeRoy.

Michael A. Swiger was on the brief for Hydropower amici

curiae in support of petitioners.

Jared B. Fish, Attorney, Federal Energy Regulatory

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Commission, argued the cause for respondent. With him on the

brief were Matthew R. Christiansen, General Counsel, and

Robert H. Solomon, Solicitor.

Eric M. Katz, Supervising Deputy Attorney General, Office

of the Attorney General for the State of California, argued the

cause for intervenor California State Water Resource Control

Board in support of respondent. With him on the brief were Rob

Bonta, Attorney General, Robert W. Byrne, Senior Assistant

Attorney General, and Jennifer Kalnins Temple and Adam L.

Levitan, Deputy Attorneys General.

Julie Gantenbein, Lena H. Hughes, Joseph Palmore, and

Andrew McAleer Hawley were on the brief for Intervenors

Tuolumne River Trust, et al. in support of respondent.

Robert W. Ferguson, Attorney General, Office of the

Attorney General for the State of Washington, Kelly T. Wood

and Gabrielle Gurian, Assistant Attorneys General, Philip J.

Weiser, Attorney General, Office of the Attorney General for the

State of Colorado, Carrie Noteboom, First Assistant Attorney

General, William Tong, Attorney General, Office of the

Attorney General for the State of Connecticut, Jill Lacedonia,

Assistant Attorney General, Karl A. Racine, Attorney General,

Office of the Attorney General for the District of Columbia,

Caroline Van Zile, Acting Solicitor General, Kwame Raoul,

Attorney General, Office of the Attorney General for the State

of Illinois, Aaron M. Frey, Attorney General, Office of the

Attorney General for the State of Maine, Brian Frosh, Attorney

General, Office of the Attorney General for the State of

Maryland, Adam D. Snyder, Assistant Attorney General, Keith

Ellison, Attorney General, Office of the Attorney General for

the State of Minnesota, Peter N. Surdo, Special Assistant

Attorney General, Matthew J. Platkin, Acting Attorney General,

Office of the Attorney General for the State of New Jersey, Lisa

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J. Morelli, Deputy Attorney General, Hector Balderas, Attorney

General, Office of the Attorney General for the State of New

Mexico, William Grantham, Assistant Attorney General, Letitia

James, Attorney General, Office of the Attorney General for the

State of New York, Barbara D. Underwood, Solicitor General,

Brian Lusignan, Assistant Attorney General, Joshua S. Stein,

Attorney General, Office of the Attorney General for the State

of North Carolina, Asher P. Spiller, Assistant Attorney General,

Ellen F. Rosenblum, Attorney General, Office of the Attorney

General for the State of Oregon, Paul Garrahan,

Attorney-in-Charge, Thomas J. Donovan, Jr., Attorney General,

Office of the Attorney General for the State of Vermont, Laura

B. Murphy, Assistant Attorney General, Maura Healey, Attorney

General, Office of the Attorney General for the State of

Massachusetts, Matthew Ireland, Assistant Attorney General,

Turner H. Smith, Assistant Attorney General and Deputy Chief,

Josh Shapiro, Attorney General, Office of the Attorney General

for the Commonwealth of Pennsylvania, Aimee D. Thomson,

Deputy Attorney General, Jason Miyares, Attorney General,

Office of the Attorney General for the Commonwealth of

Virginia, were on the brief for amici curiae States of

Washington, et al. in support of respondents.

Before: WILKINS and WALKER, Circuit Judges, and

RANDOLPH, Senior Circuit Judge.

Opinion for the Court filed by Senior Circuit Judge

RANDOLPH.

RANDOLPH, Senior Circuit Judge: An applicant for a federal

license to operate a hydroelectric facility must seek a State

certification that the facility’s discharges will comply with the

water quality standards specified in federal law. 33 U.S.C.

§ 1341(a)(1). The State may grant the applicant’s request

outright, or it may grant the request subject to conditions

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relating to water quality, or it may deny the request, or it may

fail to act. If the State agency denies certification, no federal

license, or at least no federal long-term license, may issue. See

id. § 1341(d).

This case presents questions about the directive in section

401 of the Clean Water Act that if “the State . . . fails or refuses

to act on a request for certification” within one year from

receiving the request, the State “shall” be deemed to have

waived its authority to grant or deny water quality certification.

Id. § 1341(a)(1).

The Federal Energy Regulatory Commission decides

whether to license private, municipal and State hydroelectric

projects subject to federal jurisdiction. See 16 U.S.C. §§ 797(e),

817(1).1 This case arose from a combined licensing and re-

licensing proceeding for two hydroelectric facilities in

California. The administrative record is as follows.

Both of the hydroelectric facilities – the Don Pedro Project

and the La Grange Project – are on the Tuolumne River in

central California. The Turlock and Modesto Irrigation Districts

own the facilities. FERC’s predecessor agency granted a fifty-

year license to operate the Don Pedro Project. The license

expired in 2016. The other, quite smaller project – La Grange

– has operated since the 1890’s but in 2012 FERC decided that

La Grange was subject to federal licensing authority. We

1

FERC has licensing authority over only non-federal

hydroelectric projects. Federally-owned hydroelectric projects, which

generate about half of all hydroelectric power in the United States,

“are managed primarily by the U.S. Department of the Interior’s

Bureau of Reclamation [] and the U.S. Army Corps of Engineers . . ..”

KELSI BRACMORT ET AL., CONG. RSCH. SERV., R42579,

HYDROPOWER: FEDERAL AND NONFEDERAL INVESTMENT 2, 6 (2015).

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upheld FERC’s decision in Turlock Irrigation District v. FERC,

786 F.3d 18 (D.C. Cir. 2015).

In 2017, the Districts filed with FERC a new license

application for the La Grange Project and an amended

relicensing application for the Don Pedro Project.

On January 26, 2018, the Districts filed certification

requests for both projects with the California State Water

Resources Control Board. On January 24, 2019 – 363 days later

– the California Board denied the requests “without prejudice.”

The California Board gave two reasons. The first: “FERC has

not yet completed its National Environmental Policy Act

(NEPA) environmental analysis for the Projects.” J.A. 820. The

second: “the Districts, as lead agencies for the Projects, have not

begun the CEQA [California Environmental Quality Act]

process. Without completion of the CEQA process, the State

Water Board cannot issue a certification.” Id. The Board added

that its denial was not a “judgment on the technical merits.” Id.

On April 22, 2019, the Districts sent the Board

“substantively unchanged” certification requests for the Projects.

Turlock Irrigation Dist. & Modesto Irrigation Dist., 174 FERC

¶ 61,042, at P. 8 (2021) (“Declaratory Order”). On April 20,

2020 – 364 days later – the Board again denied the requests

“without prejudice.” The Board gave the same explanation as

it had before.2

2

The California Board’s full reasoning was the following:

The Districts are the lead agencies for the Project for

purposes of CEQA compliance, but they have not

begun the CEQA process. As a responsible agency,

the State Water Board relies on the environmental

document prepared by the lead agency, but makes its

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The Districts sent a third certification request for both

projects to the California Board in July 2020. In October of that

year, while these requests were pending, the Districts filed a

petition with FERC seeking a declaratory order that the

California Board had waived section 401(a)(1)’s State

certification requirement. One month later, the Districts

informed the California Board that they were withdrawing their

certification applications. Despite the Districts’ withdrawal of

these requests, in January 2021 the California Board granted

certification for both Projects.3 Although the Districts had still

not completed the CEQA process for the Projects, California law

had changed to allow the California Board to grant certification

prior to the completion of that process. Declaratory Order, at

P. 11 & n.25; see Cal. Water Code § 13160(b)(2) (2020).

The Districts object to the conditions – some forty-five –

that the California Board imposed in granting their requests for

own determination as to whether and with what

conditions to grant the certification, taking into

consideration the information provided in the lead

agency’s document. (Pub. Resources Code,

§§ 21080.1, subd. (a), 21002.1, subd. (d).) The State

Water Board may not issue a certification until the

requirements for compliance with CEQA are met.

Additionally, the Federal Energy Regulatory

Commission has not yet completed its National

Environmental Policy Act environmental process for

the Project.

J.A. 1159.

3

The Districts are challenging the Board’s action in California

State court. See Petitioners Br. iii; California Board Intervenor Br. 19;

Turlock Irrigation Dist. v. State Water Res. Control Bd., No. CV63819

(Cal. Super. Ct., Tuolumne County, filed May 11, 2021).

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certification. If the California Board did not waive its

certification authority under section 401(a)(1), those conditions

would be mandatory. See 33 U.S.C. § 1341(d). On the other

hand, if the California Board had waived its section 401(a)(1)

authority, the conditions would become only

“recommendations” for FERC to consider in developing the

terms and conditions of the Districts’ federal licenses under

Federal Power Act § 10(a), 16 U.S.C. § 803(a). FED. ENERGY

REGUL. COMM’N, OFF. OF ENERGY PROJECTS, DIV. OF

HYDROPOWER LICENSING, PREPARING ENVIRONMENTAL

DOCUMENTS: GUIDELINES FOR APPLICANTS, CONTRACTORS,

AND STAFF 10 (2008).

FERC denied the Districts’ petition for a declaratory order.

Declaratory Order, at PP. 1, 20–35. The Districts petitioned for

rehearing which FERC denied. Turlock Irrigation Dist. &

Modesto Irrigation Dist., 175 FERC ¶ 61,144, at PP. 11–21

(2021) (“Rehearing Order”).4 FERC reasoned that the

California Board, “by denying the applications without

prejudice, indeed acted on [] them . . ..” Declaratory Order, at

P. 28. FERC relied on section 401’s “plain language,” which

requires that a State “act” on a certification request within one

year. Id. at P. 33; Rehearing Order, at P. 11. FERC

distinguished the California Board’s denials without prejudice

from Hoopa Valley Tribe v. FERC, 913 F.3d 1099 (D.C. Cir.

2019), which FERC said involved “a coordinated withdrawal

and resubmittal scheme” that allowed the State agencies to not

act and still avoid waiver. Rehearing Order, at PP. 16. Because

section 401 requires only action within a year to avoid waiver,

FERC also rejected the Districts’ argument that the California

Board’s denials were “invalid” as a matter of federal law

because they were “on non-substantive grounds” and not “on the

4

Commissioner James P. Danly dissented from the denial of

rehearing.

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technical merits of the certification requests.” Declaratory

Order, at PP. 30–32; see Rehearing Order, at P. 11.

We agree with FERC that the California Board did not

waive its certification authority under section 401(a)(1) and that

FERC’s ruling is not contrary to Hoopa Valley. The Fourth

Circuit accurately described Hoopa Valley as a case in which

“the state agencies and the license applicant entered into a

written agreement that obligated the state agencies, year after

year, to take no action at all on the applicant’s § 401

certification request.” N.C. Dep’t of Env’t Quality v. FERC, 3

F.4th 655, 669 (4th Cir. 2021).

Those circumstances are not present in this case. Each time

the California Board denied certification, the Board “act[ed]”

within the meaning of section 401(a)(1). See N.Y. State Dep’t

of Env’t Conservation v. FERC, 884 F.3d 450, 456 (2d Cir.

2018); N.Y. State Dep’t of Env’t Conservation v. FERC, 991

F.3d 439, 450 n.11 (2d Cir. 2021). And when the Board granted

the third application subject to conditions, it “act[ed]” once

more. Contrast this with Hoopa Valley. The action

contemplated in section 401(a)(1) is action by the State agency.

Yet the response of the State agencies to the certification

requests in Hoopa Valley was not action, but inaction.5 By

5

That was also the situation in Placer County Water Agency, 167

FERC ¶ 61,056 (2019), on reh’g, 169 FERC ¶ 61,046 (2019), as

FERC pointed out in its Declaratory Order, at P. 24, and in its

Rehearing Order, at P. 18, in this case. In Placer County, e-mails

showed that the state agency “elicit[ed] a withdrawal and

resubmission” of the certification application shortly before the

one-year deadline. Declaratory Order, at P. 24.

And “inaction” also described how FERC dealt with a different

deadline in a different statute. See Allegheny Def. Project v. FERC,

964 F.3d 1, 13 (D.C. Cir. 2020) (en banc). There, FERC granted

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agreement, the applicant filed and then withdrew its certification

request before the one-year period expired, a ritual repeated for

more than ten years. Hoopa Valley, 913 F.3d at 1101–02, 1104.6

There was no such agreement between the Districts and the

California Board. The court’s opinion in Hoopa Valley stressed

that the applicant’s “water quality certification request has been

complete and ready for review for more than a decade.” Id. at

1105. Here, the Districts’ requests were not complete and they

were not ready for review, which is why the California Board

denied them. The Board’s denials were “without prejudice,”7

rehearing solely “for the purpose of affording additional time to

consider the merits of a rehearing request.” Rehearing Order, at P. 11.

The denials in this case occurred for a different reason, namely that the

California Board lacked information that it needed to grant

certification. This included the completion of the CEQA process,

which the Districts had not even begun.

6

The evidence in Hoopa Valley tended to show that the applicant

did not want an immediate license that would have required

decommissioning some of the project’s dams in line with current

federal environmental standards. See PacifiCorp, 147 FERC ¶ 61,216,

at PP. 3–5, 11 n.11, 17 (2014). The applicant may have been using

this delay tactic in the hope of obtaining federal funding before being

required to decommission the dams. See id. at PP. 5, 12–13 & n.13.

And the applicant had an incentive to delay: while awaiting

relicensing, FERC must issue annual licenses that allow for the

continued operation of hydroelectric projects under the terms of the

existing, expired license. See 16 U.S.C. § 808(a)(1). The applicant’s

expired license was issued in 1954 and presumably included far fewer

environmental conditions than are required under current federal law.

PacifiCorp, at P. 11 & n.11.

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In context, the words “without prejudice” signified that the

Districts could apply again, and that the Board’s decision did not have

preclusive effect. This would have been evident from the Board’s

reasoning even without the quoted words, which is doubtless why the

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but those rulings still had the legal effect under section 401 of

precluding FERC from issuing licenses to the Districts during

the period preceding the Board’s grant of the certifications. See

33 U.S.C. § 1341(d).

The Districts’ answer to these points is that if we uphold

FERC’s ruling, State agencies could extend the time for decision

indefinitely by denying one certification request after another

without prejudice, thus nullifying section 401’s one-year limit.

The Districts’ argument takes the familiar form of the slippery

slope. But as with any slippery slope argument, its power to

persuade is a function of the plausibility of its predictions.

In response to the Districts’ argument in the administrative

proceedings FERC stated: “It may be that the courts will find

repeated denials without prejudice, particularly those that do not

rest on any substantive conclusions, to be the equivalent of the

withdrawal-and-resubmittal scheme.” Declaratory Order, at P.

33.8 FERC continued: “Given, however, that the state in this

case appears to have satisfied the statutory mandate for action,

we are not prepared to conclude based on the record before us

that the state has waived its section 401 authority.” Id.

It is also important to recognize that slippery slope

arguments often can be turned against themselves. Potentially,

for each slippery slope there is an opposing slope. “As in all

arguments from consequences, drawing attention to the

Districts’ counsel stated at oral argument that “nothing” in their case

depended on “the words without prejudice.” Oral Arg. 7:22–23.

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Whether the Districts’ hypothetical is plausible may depend on

whether the State agency, in issuing denials, is complying with State

law, which in turn may depend on the State agency’s reasons for

denying the applications.

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[supposed] bad outcomes of one course of action is not enough;

one has to show that the alternative courses of action don’t have

just as bad (or even worse) consequences themselves.” David

Enoch, Once You Start Using Slippery Slope Arguments, You’re

on a Very Slippery Slope, 21 OXFORD J. LEGAL STUD. 629, 636

(2001).

Counsel for FERC put the opposing slope this way. What

the Districts propose could lead to “gamesmanship.”

Respondent Br. 35. Applicants could file certification requests

lacking sufficient documentation. “That would leave the State

in an untenable position.” Id. Given the Districts’ contention

“that a within-one-year denial must be ‘on the merits’ to avoid

waiver . . . the State would be stuck with the Hobson’s choice of

either granting certification [without necessary information] or

waiving its power to” decide. Id.

In deciding not to adopt the Districts’ proposed

interpretation of section 401(a)(1) FERC thus made what can

only be regarded as a quite rational judgment. The Districts’

remaining arguments do not merit discussion and have been

denied for the reasons given by FERC.

The petitions for judicial review are denied.