# Reply Brief — Edison Electric Institute v. Piedmont Environmental Council (No. 09-343)

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URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386017_1016%3A4

## Record

- **Collection:** Supreme Court brief
- **Document type:** Reply Brief
- **Published:** January 1, 2009

## Text

Suprem
r

e Court, Us.

DEC 2 3 2009

OFFICE OF THE CLERK

No. 09-343

IN THE
Supreme Court of the United States

EDISON ELECTRIC [NSTITUTE; AMERICAN PUBLIC POWER
ASSOCIATION; NATIONAL RURAL ELECTRIC COOPERATIVE
ASSOCIATION; AMERICAN WIND ENERGY ASSOCIATION;
ALLEGHENY POWER; TRANS-ALLEGHENY INTERSTATE
LINE CO.; AND SAN DIEGO GAS & ELECTRIC CoO.,

Petitioners,

Vv.

PIFDMONT ENVIRONMENTAL COUNCLL, ET AL.,
Respondents,

On Petition for a Writ of Certiorari
to the United States Court of Appeals
for the Fourth Circuit

REPLY BRIEF FOR PETITIONERS

Brian R. Gish Jeffrey L. Fisher

DAVIS WRIGHT TREMAINE Counsel of Record

LLP DAVIS WRIGHT TREMAINE LLP
1919 Pennsylvania Avenue, 1201 Third Avenue,

NW, Suite 200 Suite 2200

Washington, DC 20006 Seattle, WA 98101

(202) 973-4200 (206) 622-3150

(Additional counsel listed on inside cover)

LEGAL PRINTERS 1 LC, Washington DC e 202-747-2400 e legalpnnters.com

Edward H. Comer Richard Meyer
Vice President and General Senior Regulatory Counsel

Counsel NATIONAL RURAL
Henri D. Bartholomot ELECTRIC COOPERATIVE
Director, Regulatory Legal ASSOC.
Issues 4301 Wilson Blvd.
EDISON ELECTRIC Arlington, VA 22203
INSTITUTE
701 Pennsylvania Ave., NW __ E. Gregory Barnes
Washington, DC 20004 Attorney

SAN DIEGO GAS &
Susan N. Kelly ELECTRIC COMPANY
Vice President of Policy 101 Ash Street
Analysis and General San Diego, CA 92101
Counsel
AMERICAN PUBLIC POWER Gene Grace
ASSOCIATION Senior Counsel
1875 Connecticut Ave., NW AMERICAN WIND ENERGY
Suite 1200 ASSOCIATION
Washington, DC 20009 1501 M St. NW, Suite 1000

Washington, DC 20005
Alden L. Atkins
VINSON & ELKINS, LLP
The Willard Office Building
1455 Pennsylvania Ave., NW
Suite 600
Washington, DC 20004
Counsel for Allegheny
Power and Trans-Allegheny
Interstate Line Company

TABLE OF CONTENTS

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REPLY BRIEF FOR PETITIONERS. .......................:. l
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TABLE OF AUTHORITIES

FEDERAL CASES

Atlantic City Elec. Co. v. FERC,
BAD Fe BO 0. Ce. BO vin riveivvertnascsaxievsonnovess 8

Castro v. U.S.,
Oy UE FI vs canned cc docsoaehexchenvecushanscs 11

Chevron U.S.A. v. Nat. Resources Det.
Council,
BET Oe Ae ceed Bee 2

Clean Air Implementation Project v. EPA,
150 F.3d 1200 (D.C. Cir. 1998)...........:0..csccecceseees 11

Coeur Alaska, Inc. v. Southeast Alaska Cons.
Coun.,
De Oe Ee, i ais os ces conecssivvasacicesssscaseeea 2

Entergy Corp. v. Riverkeeper, Inc.,
Re Ee Oe, ee Ge rekcinciiecsseavaraacdcssicachacvisicees 2

Global Crossing Telecom., Inc. v. Metrophones
Tclecom., Inc.,
TE EB Me PO vaaknscen cats vccivacdeasscneeseonveseususiersees 2

GTE South, Inc. v. Morrison,
100 F.3d T3EB COG Cie, LODO) soo vceiincccccccccccoencsscsevsss 8

Kansas v. Marsh,
BG ED, Be Re sven cin ins decrees 11

il

Lawrence v. Chater,
Ne Ny IEE ocx scccteneeacanvanteosanceacknavencens 12

Nat! Cable & Telecom. Ass'n v. Brand X
Internet Servs.,

SN re Pe ox viccn yc desc siieseernénonsnancensvovciavaseis 10
New York v. FERC,

BO Fe eS cn. cca ccusnigvsceiicacecaaearens 2, 10-11
Pactitic Gas & Elec. Co. v. FERC.

633 F.3d G20 W.C. Civ. BOOB)........ccecccccsosecscecscees 10
Penn-Central Merger and N&W Inclusion

Cases, 389 U.S. 486 (19GB) .............0..ccccccescecccesccees s
Powerex Corp. v. Reliant Energy Servs.,

By UB, 21 TB CI iivincdnccesscacvececccncccsccscccescversccess 11
Summers v. Karth Island Inst.,

Re Bs Gi Fe ima skcsccoaccaceccsccssectescsssccns 11,12
US West Comm., Inc. v. Hamilton,

BSE FB LORD CG Civ. BIE voce cccsiacscckcccsesssaseccess: 8
FEDERAL STATUTES
16 U.S.C. § 8624p (“EPAct” § 246).............0...c000s. passim

re cease deces ds ci ciaepracnsisaawanesnerteacesteiad 7

REPLY BRIEF FOR PETITIONERS

Respondents attempt to downplay the
significance of this case and argue that the Fourth
Circuit correctly held that Section 216 of EPAct 2005
does not grant FERC backstop siting authority over
state denials of applications to construct electric
transmission facilities. But the Solicitor General’s
brief, along with the amicus briefs from the FERC
Commissioners who served from 1993-2009 and the
Chamber of Commerce, confirm that the scope of
FERC’s backstop authority is, indeed, “important” to
national energy policy and even implicates “national-
security concerns.” SG Br. 13-14; see also Former
FERC Comm’rs Br. 6-18; Chamber Br. 5-11. Those
bnefs also make clear that the Fourth Circuit’s
interpretation of the statute is erroneous.

That leaves as the only potential justification
for denying review the Solicitor General’s suggestion
that this Court should forego review for prudential
reasons. But none of the Solicitor General's
arguments in this respect justifies allowing the
Fourth Circuit's decision to stand. It is very
difficult, if not impossible, to imagine this Court
having another opportunity to address this issue.
And any infirmity in the Fourth Circuit's exercise of
jurisdiction simply provides additional reason for
this Court’s intervention. It does not counsel
allowing such an important and harmful decision to
stand.

2

1. Respondents dispute the importance of this
case on two grounds. Neither is persuasive.

First, respondents contend that “this case does
not present an important question of Federal law”
because it involves a “straightforward application of
Chevron U.S.A. v. Nat. Resources Def Council, 467
U.S. 837 (1984).”. BIO 12. But this argument
misapprehends the reason why review is necessary.
The point of the petition is not to seek an elaboration
in Chevron jurisprudence. Rather, the petition asks
this Court to resolve the meaning of Section 216 of
EPAct 2005. And this Court regularly grants review
of these kinds of statutory interpretation questions,
even when their resolution does not promise to
establish any new canon of statutory construction or
to revise the Chevron framework. See, e.g., New
York v. FERC, 535 U.S. 1, 16 (2002) (certiorari
granted “[blecause of the importance” of the FERC
rulemaking at issue); see generally Coeur Alaska,
Inc. v. Southeast Alaska Cons. Coun., 129 S. Ct.
2458 (2009) (applying Chevron analysis to Clean
Water Act issue); Entergy Corp. v. Riverkeeper, Inc.,
129 S. Ct. 1498 (2009) (same); Global Crossing
Telecom., Inc. v. Metrophones Telecom., Inc., 550
U.S. 45 (2007) (same respecting Communications Act
issue).

Second, respondents assert that transmission
siting is not very important because economics and
market structure play a larger role in_ the
development of transmission infrastructure. BIO 26-
27. But as the Solicitor General and the amuci
explain, “difficulty in siting new _ transmission
facilities — and, in particular, difficulty in obtaining

3

state regulatory approval for such siting - ss a
significant factor contributing to inadequate
investment in transmission infrastructure.” SG Br.
12 (emphasis added); see also Former FERC
Comm’rs Br. 10-18; Chamber Br. 9-10.

Contrary to respondent's suggestion (BIO 25-26
& n.7), state denials are just as much of an obstacle
in this respect as are delays and unreasonable
conditions. As the Solicitor General explains, the
Fourth Circuit’s decision allows “any State, simply
by denying a permit to site or construct transmission
facilities, to dcrail the multi-state transmission
projects necessary to assure reliability in national
interest corridors, regardless of how important those
projects may be to the national interest in relieving
congestion on the interstate grid.” SG Br. 12. That
is why the National Energy Policy proposal that led
to EPAct 2005 specifically targeted “state reyections
of transmission projects as a causal factor in
transmission constraints.” Former FERC Comm'rs
Br. at 20 (citing examples). Excluding state denials
from FERC’s backstop authority would create a
gaping loophole — allowing states to evade EPAct
2005's goal of preventing state commissions from
thwarting national transmission siting interests.

Respondents say that this loophole will merely
incentivize industry to work closely and
cooperatively with state authorities. BIO 29. But
that is exactly the system Congress decided was
broken and needed to be changed, because state
authorities all too often consider only local interests.
Former FERC Comm’rs Br. 17, 20. The states, no
doubt, have a preference for the “status quo ante.”

4

Id. at 27. But they cannot reasonably challenge
Congress's decision that it was important to change
the status quo.!

2. Respondents’ attempt to defend the Fourth
Circuit’s decision is unconvincing. As the Solicitor
General explains, FERC’s interpretation of Section
216 “represents the most natural reading of the
statutory text, best harmonizes all of the provisions
of the statute, and most effectively promotes the
congressional purpose.” SG Br. 7.

a. Text. Echoing the Fourth Circuit’s majority,
respondents argue that the word “withheld” in the
statutory phrase “withheld approval” is a
“continuous” term, while a “denial” is
“instantaneous.” BIO 13, 20. Not so. The act of
“withholding” can be based on a particular event, as
when one speaks of consent being “unreasonably
withheld.” Chamber Br. 13. In any event,
respondents have no answer for the fact that the
word “withheld” precedes “approval,” not a word
such as “action” or “decision.” Denying an
application is unquestionably a form of withholding
approval. “[DJenial is the opposite of approval.” SG
Br. 8.

| Respondents also suggest at the end of their filing that it 1s
not necessary to address the question presented now because
energy policy is generally “in flux” and Congress is considering
new legislation concerning “renewable energy facihties” BIO
29 But given the importance of energy to our modern
economy, Congress will probably always be considering energy
legislation of one form or another That realty provides no
reason to deny review concerning legislation that has actually
been enacted

5

b. Statutory structure and purpose.
Respondents’ more generalized arguments fare no
better. Respondents first argue that there is no
reason that Congress would have been concerned
with state denials, because such decisions are
reviewable in state courts. BIO 10. The Fourth
Circuit did not rely on this rationale, and for good
reason; it ignores the fact that state commissions’
denials that thwart federal interests are often
consistent with state law and thus cannot be
disturbed on appeal in state courts. See National
Energy Policy Dev. Group, National Energy Policy,
at 7-7 (2001) (“Some state siting laws require that
the benefits of a proposed transmission facility
accrue to the individual state, resulting in the
rejection of transmission proposals that benefit an
entire region, rather than a single state.”); Former
FERC Comm'rs Br. 17 n.15 (citing examples of this
phenomenon).

Respondents also suggest that allowing FERC
to override state denials of permits would upset a
carefully calibrated federal/state balance. BIO 4:5,
15-16. But contrary to respondents’ suggestions,
FERC’s rule does not prevent states from playing a
significant role in siting decisions in National
Interest Corridors. States retain the power to
consider applications in the first instance and to
enforce state requirements that do not conflict with
national energy policy. See Pet. 18. Even with
respect to assessing federal considerations, the mere
fact that one decision-making body's work is
reviewable by another hardly renders the first body's
work “futile.” Pet. App. 20a. A federal district

6

courts work is not futile simply because it is
reviewable in a federal court of appeals.

c. Statutory history. Respondents argue that
early drafts of the legislation that became EPAct
2005, which separated the concept of “withholding”
approval from “delaying” approval, support reading
the two terms to mean the same thing. BIO 3-4.
But just the opposite is true; this history shows that
Congress always understood the term “withheld” to
mean more than merely delaying issuance of a
decision. See Former FERC Comm’rs Br. 21-26.
Congress's decision to drop the “delaying” phrase
from the final legislation shows that it understood
the “withholding approval” phrase to cover both
denials and delays.

d. Chevron analysis. Finally, respondents
attack petitioners’ deference argument in two ways.
First, they protest that “[a]Jn appellate court dissent
does not create statutory ‘ambiguity’ entitling an
agency to judicial deference.” BIO 21. That may be
truc, but no one is making that argument here.
Instead, petitioners are merely making the common:
sense observation that when federal judges construe
statutory language in diametrically opposite ways,
that is a data point suggesting the statute at issue is
ambiguous. Pet. 20: see also Chamber Br. 13-14.
The cases petitioners cite speak for themselves in
this regard,

Second, respondents assert that Chevron
deference is appropriate only when the agency at
issue brought its expertise to bear in the order at
issue. BIO 23-24. Again, this may be true, but it

7

does not help respondents. FERC clearly brought its
expertise to bear when it decided how far its
backstop siting authority needed to extend to be able
to break logjams at the state level that thwart
national energy policy.

3. The Solicitor General suggests that even
though the Fourth Circuit's decision misconstrues a
vital component of our national energy policy — and
thus “could have serious consequences” — this
Court’s review “is not warranted at this time” for two
prudential reasons. SG Br. 12, 14. Neither
purported reason withstands scrutiny.

a. The Solicitor General first suggests that this
Court will have other opportunities to examine
whether FERC’s backstop authority covers state
denials of permit applications. According to the
Solicitor General, “lilf a party seeking to build a
transmission facility in a national interest corridor
outside the Fourth Circuit were to seek a permit
from FERC after having been denied a permit by a
State,” FERC would be free to agree or disagree with
the Fourth Circuit's decision, and review from that
decision would be possible in a federal court of
appeals. SG Br. 15.

This is a puzzling suggestion on several levels.
As an initial matter, this case represents a
consolidated action under 28 U.S.C. § 2112 of
petitions for review from the Second, Fourth, and
D.C. Circuits. See Pet. 8-9. The whole point of such
consolidated actions is “centralizing . . . judicial
review and avoiding conflicts which might obtain if
the parties could go to any court that had venue.”

8

Penn-Central Merger and N&W Inclusion Cases, 389
U.S. 486, 544 (1968) (Douglas, J., dissenting in part).
Thus, courts have held that a circuit that hears a
consolidated challenge to an agency rule is the “sole
forum for addressing challenges to the validity of the
frulel.” G7E South, Inc. v. Morrison, 199 F.3d 733,
743 (4th Cir. 1999); accord US West Comm., Inc. v.
Hamilton, 224 F.3d 1049, 1054 (9th Cir. 2000).

Even apart from the nature of consolidated
challenges to agency orders, petitioners are at a loss
to understand how FERC could disregard the Fourth
Circuit’s decision even in a case arising outside that
jurisdiction. FERC was a party in the Fourth
Circuit and thus is seemingly bound by the Fourth
Circuit’s decision invalidating FERC’s construction
of Section 216. For example, in Atlantic City Elec.
Co. v. FERC, 329 F.3d 856 (D.C. Cir. 2003), FERC
decided to continue enforcing an order that the D.C.
Circuit had held conflicted with a federal statute.
The D.C. Circuit had little patience for FERC's
explanation that it “still believed it was correct the
first time,” stating: “If FERC thinks we are wrong,
then like any other litigant, it may petition for
certiorari to the Supreme Court of the United States.
Absent such a petition and the issuance of certiorazi,
in an order by the Supreme Court, FERC is bound by
our decision.” Jd. at 859. The Solicitor General
provides no reason to think that the same reasoning
does not hold here. See Pet. 22.

To the extent the Solicitor General is
suggesting that a utility company could generate a
new case by seeking review in a different federal
court of appeals from a future FERC order refusing

9

to exercise backstop siting authority respecting a
state denial of a permit, there are at least two
difficulties with that suggestion. First, the Solicitor
General ignores the enormous amount of resources a
utility company must invest to prepare, present, and
pursue a permit application. See Pet. 21. If the
Fourth Circuit’s decision is left in place, it is highly
unlikely that any utility company will be willing to
pursue to FERC and the courts an application
denied by a state commission, based simply on the
hope that after spending millions of additional
dollars and enduring additional years’ of
administrative procedures and litigation, a different
court of appeals will disagree with the Fourth
Circuit and send the matter back to FERC for still
further proceedings. It would be infinitely better —
not to mention infinitely more consistent with EPAct
2005’s purpose of spurring prompt development in
National Interest Corridors — to definitively resolve
proper interpretation of the Act here and now,
without triggering years of substantial doubt as to
the rights of developers and states.

Second, even if a utility company initiated a
new case that resulted in a state denial and
ultimately challenged in another federal court of
appeals FERC’s refusal to consider exercising
backstop siting authority over the denial, the legal
question this case presents might not be cleanly
presented in that federal court of appeals as it is
here. As a general rule, “[a] court’s prior judicial
construction of a statute trumps an agency
construction otherwise entitled to Chevron deference

if the prior court decision holds that its
construction follows from the unambiguous terms of

10

the statute and thus leaves no room for agency
discretion.” Nat Cable & Telecom. Ass'n v. Brand
X Internet Servs., 545 U.S. 967, 983 (2005). The
Fourth Circuit held here that Section 216 leaves no
room for FERC to exercise backstop siting authority
over state denials. So in a future case in another
court of appeals, it is questionable whether FERC
would still be able to claim Chevron deference for its
contrary interpretation of Section 216 - an
interpretation which, by hypotheses, it would not
even have applied when the case was before it.

At the same time, once such a future case was
appealed to federal court, parties seeking to dispute
FERC’s original interpretation of Section 216 and
who did not participate as parties in this case (which
would include any state besides New York and
Minnesota) could be foreclosed from challenging that
interpretation on the ground that such a challenge is
untimely. See, e.g., Pacific Gas & Elec. Co. v. FERC,
533 F.3d 820, 824-25 (D.C. Cir. 2008) (agreeing with
FERC that a party could not challenge FERC’s
interpretation of federal statute in the context of a
case-specific proceeding because the party did not
bring a pre-enforcement challenge against FERC’s
earlier rulemaking order). Once again, it would be
far better to resolve the meaning of Section 216 now,
before the legal landscape becomes cluttered with
potential procedural difficulties.

b. The Solicitor General also suggests that
“there is a substantial question” whether the Fourth
Circuit had jurisdiction to hear this case. SG Br. 15.
The Solicitor General does not explain how this case
is any different from New York v. FERC, 535 U.S. at

11

15-16, in which this Court considered a state’s pre-
enforcement challenge to a FERC order construing
the Federal Power Act. But, relying on this Court's
recent decision in Summers v. Earth Island Inst.,
129 S. Ct. 1142 (2009), the Solicitor General
contends that respondents failed to establish
standing to challenge FERC’s order construing
Section 216 (or, aiternatively, that FERC’s
construction was not ripe for judicial review). SG Br.
17-18.2

To the extent the Solicitor General raises
legitimate concerns, the proper course would not be
to deny certiorari but rather to grant the petition for
certiorari and add an additional question presented,
directing the parties to brief whether the Fourth
Circuit had jurisdiction over the case. See, e.g.,
Powerex Corp. v. Reliant Energy Servs., 549 U.S.
1178 (2007) (adding jurisdictional question to grant
of certiorar); Kansas v. Marsh, 544 U.S. 1060 (2005)
(same); Castro v. U.S., 5387 U.S. 1170 (2003) (same).
Suffice it to say that it would be news to the energy
bar — and presumably to other admunistrative
lawyers as well — to learn that cases of this sort are
nonjusticiable. See, e.g., Clean Air Implementation
Project v. EPA, 150 F.3d 1200, 1204 (D.C. Cir. 1998)
(‘{P]re-enforcement review of agency rules and
regulations has become the norm, not the

2 The Solicitor General also notes that FERC’s interpretation of
Section 216 1s set forth in a “preamble issued as part of a
rulemaking,” not a regulation. SG Br. 15. But this has no
relevance to any jurisdictional or legal issue here. As the
Sohcitor General herself explains, FERC’s interpretation
represents its “authoritative construction of a statute the
agency 1s charged with administering.” SG Br. 7.

12

exception.”). If pre-enforcement challenges are no
longer viable, this Court should say so, after taking
into account the impacts of such a change on orderly
agency implementation of statutes and on the
regulated community that is bound by agency rules.

At the very least, this Court should grant the
petition and vacate and remand (GVR) the Fourth
Circuit's decision for consideration of this issue. The
Summers decision, upon which the _ Solicitor
General’s jurisdictional argument rests, was decided
in March of 2009, the month afterthe Fourth Circuit
decided this case (on February 18, 2009). Pet. App.
5a. Accordingly, if the Solicitor General’s
jurisdictional argument has merit, the scenario she
describes would fall squarely within this Court’s
GVR authority, which applies when new authority
from this Court “revealls] a reasonable probability —
that the decision below rests upon a premise that the
lower court would reject if given the opportunity for
further consideration, and where it appears that
such a redetermination may determine the ultimate
outcome of the litigation.” Lawrence v. Chater, 516
U.S. 163, 167 (1996).

In short, it would be not only ironic, but unjust
and quite harmful to national energy policy, if this
Court allowed the Fourth Circuit’s decision to stand
on the ground that new authority calls into question
that court’s very exercise of jurisdiction. This Court
can, and should, avoid such an outcome.

CONCLUSION

The petition for a writ of certiorari should be

granted.

Respectfully submitted,

Brian R. Gish

DAVIS WRIGHT TREMAINE

LLP

1919 Pennsylvania Ave.,

NW, Ste. 200
Washington, DC 20006
(202) 973-4200

Edward H. Comer

Vice President and
General Counsel

Henri D. Bartholomot
Director, Regulatory
Legal Issues

EDISON ELECTRIC
INSTITUTE

701 Pennsylvania Ave.,
NW

Washington, DC 20004

Jeffrey L. Fisher

Counsel of Record
DAVIS WRIGHT TREMAINE
LLP
1201 Third Ave., Ste. 2200
Seattle, WA 98101
(206) 622-3150

Wallace Tillman
Vice President and
General Counsel
Richard Meyer
Senior Regulatory
Counsel

NATIONAL RURAL
ELECTRIC COOPERATIVE
ASSOC.

4301 Wilson Blvd.
Arlington, VA 22203

Susan N. Kelly

Vice President of Policy
Analysis and General
Counsel

AMERICAN PUBLIC
POWER ASSOCIATION
1875 Connecticut Ave.,
NW, Ste. 1200
Washington, DC 20009

Alden L. Atkins
VINSON & ELKINS, LLP
The Willard Office
Building

1455 Pennsylvania Ave..,

NW

Ste. 600

Washington, DC 20004
Counsel for Allegheny
Power and Trans:
Allegheny Interstate
Line Company

14

E. Gregory Barnes
Attorney

SAN DIEGO GAS &
ELECTRIC COMPANY
101 Ash Street

San Diego, CA 92101

Gene Grace

Senior Counsel
AMERICAN WIND ENERGY
ASSOCIATION

1501 M St. NW, Ste.
1000

Washington, DC 20005

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386017_1016%3A4. Public record. Not legal advice.