Opposition Brief — Islander East East Pipeline Pipeline Co., LLC v. McCarthy (No. 08-367)

senator OCT 23 2008

FFICE THE CLERK

In The

Supreme Court of the Anited States

°

ISLANDER EAST PIPELINE COMPANY, L.L.C.,

Petitioner,

V.

GINA MCCARTHY, COMMISSIONER OF THE

STATE OF CONNECTICUT DEPARTMENT

OF ENVIRONMENTAL PROTECTION, and

STATE OF CONNECTICUT DEPARTMENT

OF ENVIRONMENTAL PROTECTION,

Respondents.

°

On Petition For Writ Of Certiorari

To The United States Court Of Appeals

For The Second Circuit

°

BRIEF IN OPPOSITION TO

PETITION FOR WRIT OF CERTIORARI

°

RICHARD BLUMENTHAL

Attorney General of Connecticut

KIMBERLY P. MASSICOTTE

*DAVID H. WRINN

Assistant Attorneys General

OFFICE OF THE ATTORNEY GENERAL

55 Elm Street, P.O. Box 120

Hartford, CT 06141-0120

Tel. (860) 808-5250

*Counsel of Record

COCKLE LAW BRIEF PRINTING CO. (800) 225-6964

OR CALL COLLECT (402) 342-2831

i

STATEMENT OF

QUESTION PRESENTED FOR REVIEW

Whether the agency’s administrative decision is

supported by the record?

il

TABLE OF CONTENTS

Page

STATEMENT OF QUESTION PRESENTED

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STATEMENT OF THE CASE..................2........ 00 1

a i aeernmnnition 1

REASONS FOR DENYING THE WRIT.............. 2

THE PETITION PRESENTS ONLY A

ROUTINE RECORD APPEAL OF A STATE

ADMINISTRATIVE AGENCY DECISION ...... 3

PETITIONER’S CLAIM, RAISED FOR THE

FIRST TIME ON APPEAL, THAT BECAUSE

FERC HAS “EXCLUSIVE JURISDICTION”

OVER INTERSTATE GAS _ PIPELINES,

STATE AGENCIES CANNOT DENY A

PERMIT FOR A PIPELINE FERC HAS

APPROVED, IS NOT PROPERLY BEFORE

THIS COURT AND IS BASELESS .................. 5

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iii

TABLE OF AUTHORITIES

Page

CASES

Islander East Pipeline Co., LLC v. State of

Connecticut Department of Environmental

Protection, 482 F.3d 79 (2d Cir. 2006)

a 2,3,8

Islander East Pipeline Co., LLC v. Gina

McCarthy, Commissioner of Connecticut

Department of Environmental Protection

and State of Connecticut Department of

Environmental Protection, 525 F.3d 141 (2d

Cir. 2008) (slander East I)...............:.02...:000+ passim

PUD No. 1 of Jefferson County and City of

Tacoma v. Washington Dep't of Ecology, 511

U.S. 700, 114 S.Ct. 1900 (1994)..................ccccccsees 8,9

United States v. Marathon Dev. Corp., 867 F.2d

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STATUTES

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iv

TABLE OF AUTHORITIES - Continued

42 U.S.C. § 1451

42 U.S.C. § 4331

CCE EEE TEER EEE EEE EEE EET TEETH EHH HTT TTS ETT ee

COCR EEE EEE EEE EEE EEE THESE EET ESHER HERE EEE

1

STATEMENT OF THE CASE

This case involves a routine record appeal of a

state administrative agency determination under

Section 401 of the Clean Water Act (CWA), 33 U.S.C.

§ 1341. The question of whether a determination by

the Federal Energy Regulatory Commission (FERC)

to issue a certificate of public convenience and

necessity to a natural gas pipeline company divests a

state of jurisdiction to review the water quality

impacts of the project under the Clean Water Act was

not presented to or considered by the court below.

The Court of Appeals for the Second Circuit

properly stated the law and applied it correctly to the

facts presented. There is no reason, compelling or

otherwise, to grant this petition.

¢

BACKGROUND

The facts are accurately summarized in the

decision of the Court of Appeals below.

In June, 2001, Islander East applied to FERC for

a certificate of public convenience and necessity for a

natural gas pipeline from Connecticut to Long Island,

New York. On September 19, 2002, after completion

of an environmental impact statement in accordance

with the requirements of the National Environmental

Policy Act (NEPA), 42 U.S.C. § 4331 et seg., in which

FERC staff concluded that another route was an

environmentally preferable alternative, FERC issued

the certificate for the less-desirable alignment. After

2

rehearing, FERC affirmed its decision on January 17,

2003.

On February 13, 2002, as required by Section 401

of the CWA, Islander East sought a permit from the

Connecticut Department of Environmental! Protection

(CTDEP) certifying that any discharges from the

project and its construction were consistent with the

state’s water quality standards (WQS). The state

denied this application on February 5, 2004.

Islander East petitioned for review, and, on

October 5, 2006, the Court of Appeals remanded the

matter to CTDEP for further consideration. Jslander

East Pipeline Co., LLC v. State of Connecticut

Department of Environmental Protection, 482 F.3d 79

(2d Cir. 2006) Uslander East I). On December 19,

2006, CTDEP issued a second, 81 page denial.

Islander East again petitioned for review. On

May 2, 2008, the Court of Appeals denied this

petition, concluding that “the CTDEP supports its

second denial with reasoned explanations tied to

record evidence.” Jslander East Pipeline Co., LLC

v. Gina McCarthy, Commissioner of Connecticut

Department of Environmental Protection and State of

Connecticut Department of Environmental Protection,

525 F.3d 141, 142 (2d Cir. 2008) Uslander East II).

4

REASONS FOR DENYING THE WRIT

Petitioner is seeking this Court’s review of the

decision of the Court of Appeals on a routine record

ung

3

appeal of a state administrative agency decision.

Petitioner’s claim to this Court that FERC approval

under the National Gas Act (“NGA”), 15 U.S.C. § 717

et seq., restricts or limits state review under the

Clean Water Act was never presented or considered

below. Further, this Court has made clear that a

FERC certificate does not deprive a state of authority

to act under the CWA.

THE PETITION PRESENTS ONLY A

ROUTINE RECORD APPEAL OF A STATE

ADMINISTRATIVE AGENCY DECISION

In the Court of Appeals, both parties agreed, and

the court correctly held, that the applicable standard

of review of the agency’s decision was that of the

Administrative Procedure Act—“whether the CTDEP’s

determination that the project would violate Connecticut’s

water quality standards is ‘arbitrary, capricious, an

abuse of discretion, or otherwise not in accordance

with law.’ 5 U.S.C. § 706(2)(A).” Islander East IT, 525

F.3d at 150; Islander East I, 482 F.3d at 94.

After a thorough and detailed review of the

administrative record, the court concluded as follows:

Record evidence supports the CTDEP’s

finding that various techniques to be

employed by Islander East in installing the

proposed pipeline would violate state water

quality standards by _ eliminating a

significant area of nearshore waters from

their existing and designated use of

shellfishing. On such a record, we cannot

4

conclude that the CTDEP’s decision to deny

Islander East a certificate of compliance was

“arbitrary, capricious, an abuse of discretion,

or otherwise not in accordance with law. 5

U.S.C. § 706(2)(A).”

Islander East I], 525 F.3d at 164; see also id. at 153

(“[Wjaters in the pipeline corridor are an existing and

designated habitat for shellfish and that shellfishing

is an existing and designated use of these waters.”)

In its extensive review and discussion of the

detailed factual administrative record and lengthy

CTDEP ruling, the court concluded that each of the

following separate and distinct factual findings of the

CTDEP—each challenged by Islander East—was

supported by the record and supported CTDEP’s

determination to deny the certification. Installation of

the pipeline would result in the loss of commercial

shellfish harvesting in the waters in the nearshore

pipeline corridor because:

a) Damage from “anchor strikes” and

“cable sweeps” “between mileposts 12 and 20

was sufficient to support the CTDEP’s

finding of a significant loss of existing and

designated shellfishing use. Jd. at 155;

b) “{AJn anchor corridor scarred by

anchor strikes and cable sweeps would be

lost in its entirety to shellfishing.” Id.;

c) “(T}he technological and

methodological advances that distinguish the

Islander East pipeline proposal from [an

earlier pipeline}would not sufficiently reduce

5

the risk of damage caused by anchor strikes

and cable sweep to avoid the loss of the

existing and designated shellfishing use of a

significant area.” Jd. at 157;

d) The proposed use of “engineered

backfill” by Islander East to refill a dredged

area would not protect certain shellfish

species that had lived in that area. Jd. at

158-160.

The Court of Appeals’ review of the entire factual

record and its determination that the record provided

reasonable support for the CTDEP’s determination to

deny the requested certification constitutes almost

the entirety of the Second Circuit’s decision. A court’s

detailed factual review of an agency’s administrative

determination and the factual basis of that

determination is not an appropriate matter for a

grant of certiorari.

PETITIONER’S CLAIM, RAISED FOR THE

FIRST TIME ON APPEAL, THAT BECAUSE

FERC HAS “EXCLUSIVE JURISDICTION”

OVER INTERSTATE GAS PIPELINES, STATE

AGENCIES CANNOT DENY A PERMIT FOR A

PIPELINE FERC HAS APPROVED, IS NOT

PROPERLY BEFORE THIS COURT AND IS

BASELESS

In neither appeal did Petitioner raise and argue

the issue it asks this Court to review: the claim that

because FERC has “exclusive jurisdiction” over

interstate gas pipelines, a state agency cannot deny a

6

permit for a pipeline that FERC has approved. The

only issues raised by the Petitioner to the Court of

Appeals were: “l|wjhether the 2006 Denial is

inconsistent with Federal law because the project is

consistent with Connecticut’s federally approved

water quality standards (“WQS”) and the CTDEP’s

application of its WQS in the 2006 Denial was

arbitrary and capricious,” and “(w)Jhether CTDEP’s

2006 Denial is inconsistent with federal law because

it is the product of bias and predetermination.” Brief

of Petitioner to the United States Court of Appeals for

the Second Circuit, Islander East Pipeline Company,

L.L.C. v. Gina McCarthy, pp. 2-3 (Islander East II).

After two appeals, the Petitioner now claims for

the first time that FERC has “exclusive jurisdiction”

over interstate gas pipelines such that the state

agencies cannot properly deny a permit under the

CWA for a pipeline FERC has approved. This

assertion is baseless.

Section 401 of the CWA plainly requires projects,

such as Islander East’s, to meet both the terms of

relevant siting laws like the NGA and the more

stringent environmental terms of the CWA. Congress

has delegated the process of certifying compliance

with water quality standards to the states entirely.

Section 401 explicitly states that “[a]ny applicant for

a Federal license or permit to conduct any activity...

which may result in any discharge in to the navigable

waters, shall provide . . . a certification from the State

in which” the activity occurs. 33 U.S.C. § 1341(a). The

entire premise of Section 401 is that primary

7

responsibility for water quality certification lies with

the states. The CWA states unequivocally that “it is

the policy of the Congress to recognize, preserve, and

protect the primary responsibilities and rights of

States to prevent, reduce, and eliminate pollution, to

plan the development and use ... of land and water

resources, and to consult with the Administrator in

the exercise of his authority under this chapter.” 33

U.S.C. § 1251(b).

In the CWA, Congress explicitly directed that,

“No license or permit shall be granted if certification

has been denied by the State....” 33 U.S.C.

§ 1341(a). The authority outlined in Section 401 is

completely consonant with Congress’ clear

affirmation of traditional state control over state

waters as set forth in Section 510 of the Clean Water

Act. “(Njothing in this chapter shall ... (2) be

construed as impairing or in any manner affecting

any right or jurisdiction of the States with respect to

the waters .. . of such States.” 33 U.S.C. § 1370. “The

ability of states to enforce their own more stringent

water quality standards by denying certification for a

nationwide permit is consistent with the legislative

purpose and history of the Clean Water Act ... The

legislative history of section 401 of the Act

(“Certification”) confirms that Congress intended to

give the states veto power over the grant of federal

permit authority for activities potentially affecting a

state’s water quality.” United States v. Marathon Dev.

8

Corp., 867 F.2d 96, ¥9 (Ist Cir. 1989). Congress has

never overridden these provisions of the CWA.

Section 303 of the CWA directs the states to

adopt water quality standards that “shall consist of

the designated uses of the navigable waters involved

and the water quality criteria for those waters based

upon such uses.” See 33 U.S.C. § 1313(c)2)(A). Such

standards shall take into consideration the “use and

value of navigable waters for public water supplies,

propagation of fish and _ wildlife, recreational

purposes, and ... their use and value for navigation.”

Id. As the Court of Appeals pointed out, “[t]he Clean

Water Act specifically protects “existing” and

“designated” uses of navigable waters,” citing PUD

No. 1 of Jefferson County and City of Tacoma v.

Washington Dep't of Ecology, 511 U.S. 700, 704-05,

114 S.Ct. 1900 (1994). Islander East II, 545 F.3d at 144.

As the Court of Appeals noted, the FERC’s NGA

jurisdiction over natural gas company projects is

subject to compliance not only with NEPA, but also

with the CWA and the Coastal Zone Management

Act (CZMA), 42 U.S.C. § 1451 et seg., which are

state-administered under federal law. The Court of

Appeals in /slander East I even quoted the FERC’s

own acknowledgement of this exception to the broad

preemptive sweep of the NGA in the latter’s Islander

East certification decision: “|w]Jhile state and local

permits are preempted under the NGA, state

authorizations required under federal law are not.”

Islander East 1, 482 F.3d at 84; Pet. App. at 317a; see

also Islander East I], 525 F.3d at 143 (citing same).

9

Further, this Court has already addressed this

issue in a case involving the interplay between the

CWA and the NGA, noting that “(Section] 401 of the

Act requires States to provide a water quality

certification before a federal license or permit can be

issued....” PUD No. 1, 511 U.S. at 707 (Emphasis

added). It is clear, therefore, that FERC cannot

simply override the requirements of the CWA by

issuing a certificate. FERC itself conceded the legal

point that Islander East “is required to fulfill all

Federal permitting and certification requirements

before it can commence construction, including CZMA

and CWA requirements.... This is consistent with

the court’s ruling in PUD.” Pet. App. at 320a.

Petitioner cites no conflicting opinions or

decisions on this question of whether a FERC

approval of a pipeline under the NGA preempts state

review under the Clean Water Act. As this claim was

not raised below, does not implicate a question on

which the lower courts are in disagreement, and, in

fact, has already been decided by this court, it does

not present an issue upon which review should be

granted.

10

CONCLUSION

For all of the reasons set forth herein, Islander

East’s petition for a writ of certiorari should be

denied.

Respectfully submitted,

Respondents

Gina McCarthy

Commissioner, State of

Connecticut Department of

Environmental Protection and

State of Connecticut Department

of Environmental Protection

RICHARD BLUMENTHAL

Attorney General of Connecticut

KIMBERLY P. MASSICOTTE

*DAVID H. WRINN

Assistant Attorneys General

55 Elm Street

P.O. Box 120

Hartford, CT 06141-0120

Tel. No. (860) 808-5250

*Counsel of Record

Dated: October 23, 2008.