Amicus Curiae Brief — California Trout, et al., Petitioners v. Hoopa Valley Tribe, et al.

No. 19-257

IN THE

SUPREME COURT OF THE UNITED STATES

CALIFORNIA TROUT, et al.,

Petitioners,

V.

HOOPA VALLEY TRIBE, ef al.,

Respondents.

On Petition for a Writ of Certiorari to the United

States Court of Appeals for the District of Columbia

Circuit

BRIEF FOR THE STATES OF OREGON,

CALIFORNIA, CONNECTICUT, DELAWARE, HAWAII,

IDAHO, ILLINOIS, INDIANA, MAINE,

MASSACHUSETTS, MICHIGAN, MINNESOTA,

MISSISSIPPI, NEW JERSEY, NEW MEXICO, NORTH

CAROLINA, RHODE ISLAND, SOUTH DAKOTA, UTAH,

WASHINGTON, AND WISCONSIN AS

AMICI CURIAE IN SUPPORT OF PETITIONERS

ELLEN F. ROSENBLUM

Attorney General of Oregon

BENJAMIN GUTMAN*

Solicitor General

DENISE FJORDBECK

Attorney-in-Charge

Civil/Administrative Appeals

1162 Court Street

Salem, Oregon 97301-4096

Phone: (503) 378-4402

benjamin.gutman@doj.state.or.us

*Counsel of Record

(Additional counsel listed on signature page)

QUESTION PRESENTED

Under Section 401 of the Clean Water Act, 33

U.S.C. § 1841(a)(1), applicants for federal licenses or

permits must secure state water quality certification

before the relevant federal agency can approve the

application. That certification requirement “shall be

waived’ if a State “fails or refuses to act on a request

for certification, within a reasonable period of time

(which shall not exceed one year).” Id.

The question presented is: Does a State waive its

Section 401 certification authority if an applicant

withdraws a certification request before the one-year

period ends and subsequently resubmits one?

TABLE OF CONTENTS

Page

QUESTION PRESENTED 1.00... eee cccceeeeeeeeneees 1

INTEREST OF THE AMICI STATES .......00 ee. 1

INTRODUCTION 0.0... ccccecccenecceeeeaeccaeeeeeseeeees 1

ARGUMENT uu... ccccccccceecceneceeeeeeeceeeeeeseeeeeeeeeens O

A. The court of appeals’ decision thwarts the Clean

Water Act’s protection of state regulation of

Water Pollution. 2.0.0.0... cec ccc ceceeceececceseessceseeseeees D

B. The court of appeals’ decision misconstrues the

plain text of Section 401.........c cee cec cece ee eens 11

C. The court of appeals’ decision threatens significant environmental harm from unintentional waiver of state authority. ..............cc eee. 14

1. The court of appeals’ decision threatens the

KHGA. 0... cec cece eecscceeceeccceeeceuceescescesseeesesees 15

2. FERC has adopted an exceptionally broad view

of the court of appeals’ decision that puts

waterways across the nation at risk. ............. 16

3. Other federal agencies are also adopting broad

views of waiver that could result in irreparable

harm to state WateLs. ...........cccccceeceeceeceeceeeeeeees 20

CONCLUSION... ececccceteecceceeeeeeneeeeeneeeeeeas 22

11

TABLE OF AUTHORITIES

CASES

Alcoa Power Generating Inc. v. FERC,

643 F.3d 963 (D.C. Cir. 2011) oo. cece 7,8

American Rivers, Inc. v. FERC,

129 F.3d 99 (2d Cir. 1997) wo eeececccsccceeeseeeenees 13

Hardt v. Reliance Standard Life Ins.,

560 U.S. 242 (2010) wo. ccceescesccceccceesssssssseeesees 12

Hoopa Valley Tribe v. FERC,

629 F.3d 209 (D.C. Cir. 2010) oo... cceeeeeeenees 2

King v. Burwell,

1385 8. Ct. 2480 (2015)... ccceeeeccssscceeeesseseees 12

PUD No. 1 of Jefferson County v. Washington Dept. of

Ecology,

511 U.S. 700 (1994) wees ccceesesseeeeeeens 5, 13

S.D. Warren Co. v. Maine Bd. of Envtl. Prot.,

547 U.S. 870 (2006) ou. ccceeeesetsecceessseeeeees 2,6, 7

CONSTITUTIONAL AND STATUTORY

PROVISIONS

33 U.S.C. § 125 Leccccccccccsssscsscsscsssecesuecssesssuesssesesuessseessseessees 5

33 U.S.C. § 1251p) ceccecscccsescsseecssecssecssessssesssesesessuessseeessees 5

33 U.S.C. § 131 Leccccccscscsseecsscssuesssecssuccssesssseessesesueesseessseessees 6

33 U.S.C. § LSLLD)(A)(C) cecseccsescsseecssecssessssessseesssessseesssees 6

33 U.S.C. § 131 Qeeccccccccccsescsssssseesssecssuecssesssuesssesssuessseessseessees 6

111

33 U.S.C. § 1313 vccccccssccsssssesssessesssesssesssessesssecsesssesssesseessessves 6

33 U.S.C. § 1818(C)(Q2)(A) woe cceccccccsssecccesssesscesstseees 6

383 U.S.C. § L816. ccccccccccesssceceessssescessssseseeseeaes 6

Fs i Oto OES i's Bt nr 6

33 U.S.C. § L841 cccceccccccsssseeccessssescessstseseessaes 8

33 U.S.C. § 1841 (a)(A) oc ccccccceeeeeeeeeeeeens passim

35 U.S.C. § 866 woe icecccccccsscccccesssseccessssseceesssseseesesees 12

RULES

18 C.FLR. § 16.18 wee ccccsscccccesssseccessssecesssseeeeeens 2

OTHER AUTHORITIES

116 Cong. Rec. 8984 (1970)... eeeeeeeeesssesssesseseeeeeeeens 7

155 FERC 4 61,271 (June 16, 2016)... ee. 4

Barrish & Sorenson Hydroelectric Co., Inc.,

68 FERC 4 62,161 (Aug. 12, 1994)... 9

Cent. Vt. Pub. Serv. Co.,

113 FERC § 61,167 (Nov. 17, 2005)... ee 9

Clean Water Act Section 401 Guidance For Federal

Agencies, States and Authorized Tribes 3

(June 7, 2019), available at

https://www.epa.gov/sites/production/files/2019-

06/documents/cwa_section_401_guidance.pdf........ 20

Constitution Pipeline Co., LLC,

162 FERC § 61,014 Jan. 11, 2018) we. 9,16

1V

Constitution Pipeline Co., LLC,

168 FERC 4 61,129 (August 28, 2019)... 16,17

Brief for Respondent Federal Energy Regulatory

Commission,

2014 WL 10741231, at 19 (November 24, 2014).....8

In the Matter of Water Quality Certification for the

Placer County Water Agency, Middle for American

River Hydroelectric Project

(April 17, 2019), available at

https://(www.waterboards.ca.gov/waterrights/water_

issues/programs/water_quality_cert/docs/mfar2079/

20 (605 0X6 6 ce 19

Mountain Rhythm Resources,

90 FERC § 61,088 (Jan. 30, 2000)... 8

National Fuel Gas Supply Corporation Empire

Pipeline, Inc.,

167 FERC § 61,007 (Apr. 2, 2019)... 17

Placer County Water Agency,

167 FERC § 61,056 (Apr. 18, 2019)... 18

INTEREST OF THE AMICI STATES

This case has substantial implications for the interest of Oregon, California, and other States in state

water quality certification for complex federally hcensed projects. The decision of the court of appeals in

this case, and actions taken by federal regulatory

agencies to implement that decision, have resulted

and will continue to result in States being deemed to

have unwittingly waived their authority to certify

that certain projects requiring federal licenses and

permits comply with state water quality requirements. As a result, complex federal projects are likely

to be approved without state certification even though

they are inconsistent with those requirements,

threatening significant environmental harm and deerading the quality of water needed for human

health, fisheries, irrigation, and other uses.!

INTRODUCTION

The Clean Water Act recognizes and maintains

States’ historical responsibility for protecting water

quality within their jurisdictions. One of the ways in

which it does so is through the state certification process set forth in Section 401. Under that provision, as

a precondition to federal approval of any permit or

license “which may result in a discharge into the navigable waters,” the applicant must first secure state

certification that the project in question “will comply

with” state water quality requirements. 33 U.S.C.

1 Counsel of record for all parties received timely notice of intent

to file this brief under Rule 37.2(a).

§ 13841(a)(1). This state certification is “essential in

the scheme to preserve state authority to address the

broad range of pollution.” S.D. Warren Co. v. Maine

Bd. of Enutl. Prot., 547 U.S. 370, 386 (2006).

This case arises from lengthy and complex negotiations involving multiple parties—including federal

agencies, the States of Oregon and California, Native

American tribes, farmers, ranchers, conservation

sroups, fisherman, and a private company called

PacifiCorp—regarding the Klamath Hydroelectric

Project, a series of dams along the Klamath River in

southern Oregon and northern California. See generally Pet. App. 4a-7a. PacifiCorp’s license for operating

the Project expired in 2006. Because the dams are

more than 50 years old and are “not in compliance

with modern environmental standards,” id. at 5a, and

because of the dams’ significant adverse effect on

salmon and other fish species in the river, the possible relicensing of the dam was controversial in the resion.

In 2006, PacifiCorp sought Section 401 certification from Oregon and California for the dam relicensing. Id. at lla. Under FERC’s standard rules, Pacifi-

Corp was automatically issued annual licenses while

its relicense application was pending, 18 C.F.R. §

16.18, and FERC retained the authority to impose

additional interim protections for the benefit of fish.

Hoopa Valley Tribe v. FERC, 629 F.3d 209, 211 (D.C.

Cir. 2010). Shortly thereafter, PacifiCorp entered nesotiations with both States and other stakeholders to

resolve the various issues pertaining to the possible

decommissioning or relicensing of the dams. While

those negotiations were ongoing, rather than have its

pending applications for state water quality certification denied by Oregon and California, PacifiCorp

withdrew the certification requests and resubmitted

substantially similar applications. Pet. App. 24a.

PacifiCorp ultimately opted to seek to decommission

most of the dams rather than relicense them. Id. at

oa.

In 2010, the parties entered into the Klamath Hydroelectric Settlement Agreement (KHSA), which envisioned that the dams would be decommissioned by

2020 and imposed interim environmental requirements on their continued operation until then. Pet.

App. 5a. The agreement provided that PacifiCorp

“shall withdraw and re-file its applications for Section

401 certifications as necessary to avoid the certifications being deemed waived under the CWA” while the

parties continued to work toward decommissioning.

Id. at 6a. That process continued, though it was complicated by Congress’s failure to adopt implementing

legislation that the parties anticipated would be

forthcoming. Id.

Meanwhile, in 2012, the Hoopa Valley Tribe—

which was not a party to the KHSA—sought a declaration from FERC that PacifiCorp had failed to diligsently prosecute its relicensing application because

Oregon and California had waived their Section 401

certification authority by failing to act on PacifiCorp’s

applications within one year. Pet. App. 7a; see 33

U.S.C. § 1841(a)(1). FERC denied that petition, con-

sistent with its longstanding view that an applicant’s

withdrawal of a state certification request before a

year has elapsed precludes state waiver. See Pet.

App. 7a. The tribe sought review in the U.S. Court of

Appeals for the D.C. Circuit. Id. All other interested

parties, including FERC and PacifiCorp, filed briefs

in support of FERC.

The court of appeals nonetheless vacated FERC’s

order, holding that a State waives its certification authority “when, pursuant to an agreement between the

state and applicant, an applicant repeatedly withdraws-and-resubmits its request for water quality

certification over a period of time greater than one

year.” Pet. App. 10a. The court described the withdrawal-and-resubmission procedure utilized here as a

“scheme” to “circumvent FERC’s regulatory authority

of whether and when to issue a federal license.” Jd.?

That holding, and the court's reasoning, is a

source of serious concern for States. It threatens to

cause significant harm to water quality across the

country. The Act assigns States central responsibility

for protecting water quality within their borders, but

under the decision below, States may very well be

deemed to have unwittingly waived their authority to

certify whether numerous large-scale projects comply

with state water quality requirements. Those projects

2 In 2016, FERC placed PacifiCorp’s relicensing application in

abeyance while it processes PacifiCorp’s alternative applications

intended to result in dam decommissioning. 155 FERC 4 61,271

(June 16, 2016). PacifiCorp’s relicensing application remains in

abeyance at FERC today.

would be exempted from vital state water quality requirements for decades, until their next federal relicensing, or permanently if no relicensing is required.

That is especially troubling because the court of appeals’ holding is at odds with the text of Section 401

and contradicts FERC’s own longstanding interpretation. Nothing in the Act prevents an applicant from

withdrawing a request for State water quality certification and resubmitting a similar, or even identical,

request. This Court’s review is warranted.

ARGUMENT

A. The court of appeals’ decision thwarts the

Clean Water Act’s’ protection of state

regulation of water pollution.

The Clean Water Act, 33 U.S.C. § 1251 et seqg., isa

comprehensive statute designed to “restore and maintain the chemical, physical, and biological integrity of

the Nation’s waters.” Id. §1251(a). To accomplish that

goal, the Act assigns “distinct roles for the Federal

and State Governments.” PUD No. 1 of Jefferson

County v. Washington Dept. of Ecology, 511 U.S. 700,

704 (1994). That structure gives states, not the federal government, primary responsibility for regulating

water quality. “It is the policy of the Congress to recognize, preserve, and protect the primary responsvbtlities and rights of States to prevent, reduce, and eliminate pollution” in the Nation’s waters. 33 U.S.C. §

1251(b) (emphasis added); see also PUD No. 1 of Jefferson County, 511 U.S. at 707.

State regulation of water quality under the Act is

comprehensive. Among other things, States are required to establish, subject to approval by the EPA,

water quality standards for in-state waters. 33 U.S.C.

§ 13811(b)(1)(C); td. § 18138. These standards must protect public health and welfare, and must include a

statewide anti-degradation policy. Id. § 138138(c)(2)(A);

see also id. § 13138(d)(4)(B).

Section 401 1s a key part of that overall statutory

structure. As this Court has explained, “[s]tate certifications under §401 are essential in the scheme to

preserve state authority to address the broad range of

pollution.” S.D. Warren Co., 547 U.S. at 386. Section

401 requires “[a]ny applicant for a Federal license or

permit” that “may result in any discharge into

the navigable waters’ to obtain state certification

“that any such discharge will comply with the applicable provisions of sections 1311, 1312, 1313, 1316,

and 1317 of this title.” 33 U.S.C. § 1341(a)(1).? “No

license or permit shall be granted if certification has

been denied by the State.” Id. State certification must

also “set forth any effluent limitations and other lim1-

tations, and monitoring requirements necessary to

assure’ that the project complies with water quality

requirements “and with any other appropriate requirement of State law.” Id. § 1341(d).

> The provisions include a state’s effluent limitations, 33 U.S.C.

§ 1311, 1312; water quality standards and implementation

plans, id. § 1313; national standards of performance, id. § 1316;

and toxic and pretreatment standards, itd. § 1317. Collectively,

these provisions form the backbone of a state’s water quality

programs.

Congress enacted Section 401 because it recognized that federal permits and licenses might otherwise operate to deprive states of their ability to regulate water pollution. As a result of the state certification requirement, however, “[n]Jo polluter will be able

to hide behind a Federal license or permit as an excuse for a violation of water quality standards.” S.D.

Warren, 547 U.S. at 386 (quoting 116 Cong. Rec. 8984

(1970) (Sen. Muskie)). Because States are the “prime

bulwark in the effort to abate water pollution,” Section 401 reserves to them “the power to block, for environmental reasons, local water projects that might

otherwise win federal approval.” Alcoa Power Generating Inc. v. FERC, 6438 F.3d 968, 971 (D.C. Cir.

2011).

Section 401 provides that a state may waive this

certification authority 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.” 33 U.S.C. § 1341(a)(1). The court of

appeals in this case held that this waiver may occur

even if an applicant withdraws its application before

one year has passed and resubmits it. For the reasons

discussed in the petition and below, that conclusion is

incorrect as a matter of pure statutory interpretation.

See Pet. 29-31; infra 11-14. But it is especially problematic when viewed against the backdrop of the

structure of the Clean Water Act and its division of

authority between the Federal Government and the

States. See Pet. 23-26.

The court of appeals worried that “if allowed, the

withdrawal-and-resubmission scheme” could be used

to “usurp FERC’s control over whether and when a

federal license will issue.” Pet. App. 13a. That concern 1s misplaced because, under the Act, States have

the authority to preclude federal licensing by simply

denying certification altogether. See 33 U.S.C. § 1841

(“No license or permit shall be granted if certification

has been denied by the State.”); Alcoa, 643 F.3d at

971. A State cannot be said to “usurp” power that

Congress has expressly granted it. Indeed, even

FERC itself did not express that concern, and did not

argue that the States had waived their certification

authority. Instead, FERC argued that “consistent

with prior decisions of this Court and the Commission’s prior decisions,” California and Oregon did not

fail to act on Pacificorp’s application within one year.

Brief for Respondent Federal Energy Regulatory

Commission, 2014 WL 10741231, at 19 (Nov. 24,

2014). Moreover, as Hoopa Valley Tribe advocated,

FERC retains the authority to find that an applicant

has not diligently pursued a licensing application and

deny it on that basis. L.g., Mountain Rhythm Resources, 90 FERC {§ 61,088 (Jan. 30, 2000).

Instead, the one-year time limit set forth in Section 401 was directed at a different concern: that a

State might otherwise “indefinitely delay[] a federal

licensing proceeding by failing to issue a timely water

quality certification.” Alcoa, 643 F.3d at 972. But that

is emphatically not what happened in this case, nor 1s

it generally why applicants and States sometimes utilize the withdraw-and-resubmit procedure.

Most requests for water quality certification by

States can be, and are, approved or denied well within the one-year timeframe set forth in Section 401.

Occasionally, however, because of the size or complexity of the project, and because the federal licensing

process itself may take several years, an applicant is

unable to submit a complete request for certification

at the outset. FERC has long recognized this reality

and has condoned the practice of withdrawal and resubmission as an alternative to a State’s outright denial of certification. Barrish & Sorenson Hydroelectric

Co., Inc., 68 FERC 4 62,161, 64,258 (Aug. 12, 1994);

Cent. Vt. Pub. Serv. Co., 113 FERC 4 61,167, 61,653

419 (Nov. 17, 2005); Constitution Pipeline Co., LLC,

162 FERC {§ 61,014 § 23 (Jan. 11, 2018) (We reiterate that once an application is withdrawn, no matter

how formulaic or perfunctory the process of withdrawal and resubmission is, the refiling of an application restarts the one-year waiver period under section

401(a)(1).”). In these cases, withdrawal and resubmission allows for the efficient use of both public and private resources, by deferring the development of cond1-

tions and criteria for federal projects until the extent

of the projects and their full environmental impacts,

including impacts on water quality, are known. The

result is that projects that are approved include all of

the necessary provisions, including water quality

conditions, included in the federal license or permit.

The project at issue in this case is a good example

of how a project may evolve substantially over the

course of the federal licensing process, making it impossible at the outset to assess the impacts of the pro-

10

ject in its final form. The Klamath Hydroelectric Project is a federally licensed project consisting of seven

hydroelectric developments and one non-generating

dam on the Klamath River in southern Oregon and

northern California. Pet. App. 22a. Because the dams

are decades old, produce relatively little power, would

not likely be of economic benefit under modern facilities and operational requirements, and are the source

of significant environmental concern, the parties encaged in a lengthy negotiation that ultimately produced the KHSA, an agreement to decommission rather than relicense the dams. Pet. App. 4a-7a; supra

2-3. It made little sense to commit applicant and

agency time and resources toward submitting and reviewing a water quality certification for an action

that would likely not occur. Withdrawing and resubmitting the application thus served the public interest by avoiding expending resources on an application

for relicensing the existing facilities even as the parties worked toward developing a different proposal for

the states to review.

Applicants choose to withdraw and resubmit applications because they view it as being in their best

interest. If the applicant believes a state agency is

willfully delaying a project, the applicant always retains the option of not withdrawing its certification

request and challenging any denial in court. But that

rarely, if ever, occurs. Instead, applicants often prefer

withdrawing a request to having it denied, which may

delay and jeopardize funding for projects. Withdrawal

allows the applicant to continue working with the

state certification agency toward a certification with

11

mutually agreeable conditions. FERC’s longstanding

approval of the withdraw-and-resubmit procedure effectively acknowledged as much. In contrast, the D.C.

Circuit's holding in this case, if allowed to stand, will

force States to prematurely deny applications for

complex projects in order to avoid being deemed to

have waived their Section 401 certification authority.

B. The court of appeals’ decision misconstrues

the plain text of Section 401.

This Court should also grant the petition because

the court of appeals’ interpretation of the Clean Water Act is incorrect as a matter of pure statutory interpretation. As noted above, the waiver provision of

the Act was intended to prevent states from exercising a pocket veto over a project through sheer inactivity. It was not intended to, and does not, prevent a

multilateral agreement involving the Federal government, States, Tribes, and other interested parties

of the type that was involved in this case. See Pet. 29-

31.

Under Section 401, a state waives its certification

authority only if it “fails or refuses to act on a request

for certification, within a reasonable time period

(which shall not exceed one year) after receipt of such

request.” 33 U.S.C. § 1841(a)(1). Nothing in that lansuage suggests that a state is required to act on a request for certification that 1s no longer pending because it has been withdrawn. The far more compelling interpretation is that a withdrawn certification

request—like other types of withdrawn requests for

sovernment approvals—‘shall have no effect after the

12

date of withdrawal, and shall be considered as not

having been made.” 35 U.S.C. § 366 (describing withdrawn international patent application). Nor is it reasonable to ascribe to States a project applicant’s decision to withdraw a certification request in order to

avoid having the request denied. It is the action of the

applicant—the very party that the time limitation is

intended to protect—that results in a delay of water

quality certification, not a failure or refusal by the

state agency.

Nothing in the text of the statute prohibits an applicant from submitting and then withdrawing its request for certification before the one-year period for

making a decision expires. See, e.g., Hardt v. Reliance

Standard Life Ins., 560 U.S. 242, 251 (2010) (court

“must enforce plain and unambiguous statutory lansuage according to its terms’). Nor does anything in

the text of the statute support the court of appeals’

interpretation that resubmissions are “not new requests” unless they differ substantially from previous,

withdrawn requests for certification. Under the plain

text of Section 401, the period for state review commences upon “receipt of such request” (which refers

back to the statutory language “a request for certification’). 83 U.S.C. § 1841(a)(1) (emphasis added); see

also King v. Burwell, 1385 8. Ct. 2480, 2489 (2015)

(noting that “such” refers to “the same” object previously described). Section 401 does not speak in terms

of “any request’ or “any identical request,” nor does it

call for a judgment regarding how similar a withdrawn application is to a new application for the

same project. There is simply no textual support for

13

the court of appeals’ holding that submittal of a sim1-

lar or even identical request is not “a request for certification” that triggers a new one-year certification

period for states to act.

Instead of following the statutory text, the court of

appeals incorrectly engaged in what appears to be a

policy-driven interpretation of Section 401 based on

its mistaken view of how Section 401 operates. See

supra 8-10. This Court has already rejected a similar

nontextual interpretation of Section 401. In PUD No.

1 of Jefferson County, 511 U.S. at 721, a state’s authority under section 401 to regulate flow from a hydroelectric dam was challenged. The Court rejected

the argument that it “should limit the State’s authority” under Section 401 “because FERC has comprehensive authority to license hydroelectric projects.”

Id. The Court refused to “read implied limitations”

into the States’ 401 certification authority in order to

protect FERC’s comprehensive power over hydropower licensing. Id. at 723; see also American Rivers, Inc.

v. FERC, 129 F.3d 99, 111 (2d Cir. 1997) (rejecting

argument that FERC should have authority to review

and reject a State’s conditions of water quality certification in order to avoid incursion on FERC’s authority over hydropower). The court of appeals here similarly erred by inappropriately reading words into Section 401 that Congress did not include, to further a

policy not articulated in the Clean Water Act.

14

C. The court of appeals’ decision threatens significant environmental harm from unintentional waiver of state authority.

The court of appeals’ incorrect interpretation of

Section 401 threatens to have far-reaching, adverse

effects for States, both in the context of this case and

more broadly. States have reasonably relied on

FERC’s decades-old practice of acknowledging that

the withdrawal and resubmittal of an application

starts a new clock for the states to act on Section 401

certification application in other matters. The court of

appeals’ abrupt reinterpretation of Section 401 has

led applicants in many more cases to request that

FERC declare that a state has waived its water quallity certification authority, with the result that federal

projects that are licensed far into the future will not

have water quality provisions included as a condition

of licensure. FERC and other federal agencies are also interpreting the opinion to deem any withdrawal

and resubmission of an application for state water

quality certification as a waiver of state authority,

even—or perhaps especially—in permitting matters

that were pending before the opinion issued. All of

those determinations undermine comity between the

state and federal governments and diminish state authority in a fashion that was never contemplated by

Congress in adopting Section 401. Such an important

question should be decided by this Court.

15

1. The court of appeals’ decision threatens

the KHSA.

As an initial matter, the decision below has injected significant uncertainty into the future of the

KHSA, a painstakingly negotiated agreement regarding the future of the Klamath River, which is an important regional resource. Supra 2-3. In reliance on

FERC’s longstanding interpretation, the KHSA required that PacifiCorp follow the then-accepted practice of withdrawing and resubmittal of a Section 401

application to preserve the States’ authority to act

should the decommissioning plan under negotiation

not come to fruition. While the court of appeals

viewed that as a “scheme” to “circumvent FERC’s

regulatory authority of whether and when to issue a

federal license” (which, again, overlooks States’ underlying discretion to simply deny certifications), Pet.

App. 10a, it was a contract term agreed to by the

United States Departments of the Interior and Commerce, id. at 23a.4 The possibility that Oregon and

California will have waived their water quality certifications has upended expectations and left the KHSA

parties unsure how to proceed. The question whether

the KHSA waived state authority over water quality

warrants this Court’s review on its own.

4 Notably, the agency responsible for issuing Section 401 certifications in California was not a party to the KHSA, D.C. Cir. J.A.

409-18, and so was not a party to the PacifiCorp’s contractual

agreement to withdraw and resubmit its section 401 application.

16

2. FERC has adopted an exceptionally broad

view of the court of appeals’ decision that

puts waterways across the nation at risk.

The importance of the question presented runs

even deeper given how federal agencies have interpreted the court of appeals’ decision. Since it was issued, FERC has relied on the decision to hold that

states have waived their certification authority in a

number of cases that go well beyond the facts of this

case, where there was a written contract between

States and an applicant that explicitly abated all

state permitting reviews. In so doing, FERC has removed the states from the permitting process of many

projects pending at the time of court of appeals’ decision.

One example of FERC’s broad interpretation of

the court of appeals’ opinion is Constitution Pipeline

Co., LLC, 168 FERC § 61,129 (Aug. 28, 2019), for a

125-mile natural gas pipeline project in Pennsylvania

and New York. There, FERC reversed its own decision finding that New York had not waived its certification authority when the applicant for the federal

permit repeatedly withdrew and resubmitted the application. In January 2018, the commission denied a

request for a declaration that waiver had occurred,

based on its “longstanding interpretation that ‘once

an application for a Section 401 water quality certification 1s withdrawn, no matter how formulaic or perfunctory the process of withdrawal and resubmission

is, the refiling of an application restarts the one-year

waiver period under Section 401(a)(1).” Id. 4§] 22-28.

17

On voluntary remand from the circuit court for the

purpose of reconsideration in light of the decision in

this case, FERC adopted an inflexible rule of waiver:

The plain language of Section 401 establishes a bright-line rule regarding the

beginning of review: the timeline for a

state's action regarding a request for

certification “shall not exceed one year”

after “receipt of such request.” The fact

that a state 1s reviewing additional information does not toll the one-year

waiver deadline. Clearly a state that

acted one year and a day after it received an application would have waived

certification. Likewise, a single withdrawal and resubmission could amount

to waiver.

Id. { 37.

In another case, National Fuel Gas Supply Corporation Empire Pipeline, Inc., 167 FERC § 61,007 (Apr.

2, 2019), involving a 99-mile natural gas pipeline in

Pennsylvania and New York, FERC interpreted the

court of appeals’ decision as precluding applicants

from agreeing to extend a State’s deadline to allow

the applicant to complete the certification request.

There, the applicant submitted a request for water

quality certification on March 2, 2016, but the applicant agreed with New York that it would be deemed

submitted on April 8, 2016, allowing the state until

April 7, 2017 to act. On the latter date, the state denied the request for certification, and the applicant

18

sought a declaration that the state had waived its authority over water quality. FERC decided that New

York had waived its authority, and the state sought

rehearing. The commission held that, notwithstanding the applicant’s agreement, the lack of a state decision by March 2, 2017 “constituted a failure and refusal to act as contemplated by section 401,” equating

the state’s action to “dalliance or unreasonable delay”

of the type Congress sought to prevent. Id. 4§[ 11-12.

A final example is Placer County Water Agency,

167 FERC 4 61,056 (Apr. 18, 2019), a project to relicense for 30 or 50 years a combined 235 megawatt

hydroelectric facility on the Middle Fork of the American River in California. In that proceeding, the applicant petitioned the commission to declare that California had waived its certification authority. The applicant had withdrawn its request for water quality

certification each year before a decision had been

made in seven successive years. On each occasion, the

applicant then resubmitted its request. FERC held

that the court of appeals’ opinion “appears applicable

to all similarly-situated cases,” including all cases in

which withdrawal and resubmission was used. Id.

{| 14. FERC so held even though it was the applicant

that withdrew and resubmitted the applications, and

it was the applicant that now sought to show that its

actions resulted in the state waiving its authority.

The state had not entered into any kind of agreement

or scheme to delay certification indefinitely, and had

19

in fact issued certification the day before FERC issued its decision.®

The effect of FERC’s action in these and other cases is to establish a bright-line rule: in FERC’s view,

withdrawal and resubmission is never, under any circumstances, a permissible outcome of a request for

state water quality certification. The States are now

faced with a bleak choice: (1) issue a water quality certification based on whatever limited information may

be submitted by an applicant (and face legal challenges by opponents of the federal project, or by applicants who contend that any issuance and/or cond1-

tions of certification lack evidentiary support); (11) deny requests for certification with the possibility of

imperiling worthy projects (and face legal challenges

by applicants challenging the denial); or (411) take no

action and allow major federal projects to proceed

with no state oversight. And for projects for which a

request for certification has been withdrawn, a State

is not given even that bleak choice—FERC deems

State certification waived, even if the State has issued or denied certification on a resubmitted request

before FERC makes a decision on licensure. Section

401 of the Clean Water Act was not intended to require such results.

> State of California, State Water Resources Control Board, In

the Matter of Water Quality Certification for the Placer County

Water Agency, Middle for American River Hydroelectric Project

(Apr. 17, 2019), available at https:/(www.waterboards.ca.gov/

waterrights/water_issues/programs/water_quality_cert/docs/

mfar2079/waqce.pdf

20

3. Other federal agencies are also adopting

broad views of waiver that could result in

irreparable harm to state waters.

In the wake of the court of appeals’ decision, other

agencies have followed FERC’s lead in establishing

an inflexible rule that has the effect of eliminating

the role of the states in water quality permitting for

federal projects.

For example, the lead federal agency for the Clean

Water Act, the Environmental Protection Agency

(EPA), has issued guidance and proposed draft rules

that will limit state participation in setting water

quality limits for federally permitted projects. The

suldance reverses EKPA’s previous view that only a

“complete application” triggers a state’s one-year

deadline and, citing the court of appeals’ decision in

this case, asserts that “the timeline does not pause or

stop for any reason.” EPA, Clean Water Act Section

401 Guidance For Federal Agencies, States and Authorized Tribes 3 (June 7, 2019). The proposed regulations similarly would codify the broadest possible

reading of the court of appeals’ decision: “[T]he EPA

proposes to conclude that a certifying authority must

act on a section 401 certification within a reasonable

period of time which shall not exceed one year and

that there is no tolling provision to stop the clock at

any time.” 84 Fed. Reg. 44,080, 40,099 (2019) (emphasis added). EPA’s proposed rules thus would abrogate

° Available at https://www.epa.gov/sites/production/files/2019-

06/documents/cwa_section_401_guidance.pdf

21

established agency practices and court interpretations that have developed over the nearly 50 years

since Section 401 was adopted.

Thus, EPA and federal permitting agencies are

using the decision below as a legal justification to

fundamentally change the way in which decisions on

complex federal projects are made. A state could

simply deny a certification request whenever an application is incomplete and the applicant cannot

promptly remedy the problem, thereby ensuring that

the federal project could not go forward absent years

of litigation. But that is hardly a satisfactory solution

for anyone. Before the court of appeals’ decision in

this case, the State could instead work with the applicant and other stakeholders to ensure that it had

the necessary information to determine appropriate

conditions of approval. Such a process 1s not contrary

to the intent of Congress or the text of Section 401.

But that option has been removed, leaving the States

with the choice of denying certification and defending

the resulting litigation; issuing certification with conditions likely to be challenged by project opponents as

inadequate or by project applicants as speculative; or

waiving certification. That is not the robust role for

the States that the Clean Water Act requires.

22

CONCLUSION

The petition for certiorari should be granted.

Respectfully submitted,

ELLEN F’. ROSENBLUM

Attorney General of Oregon

BENJAMIN GUTMAN

Solicitor General

Counsel of Record

DENISE FJORDBECK

Assistant Attorney-in-Charge

Civil/Admtinistrative Appeals

1162 Court Street

Salem, Oregon 97301-4096

Phone: (508) 378-4402

benjamin.gutman@doj.state.or.us

September 27, 2019

(Counsel listing continues on next page)

XAVIER BECERRA

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