In a May 29, 2015, decision, a panel of the US Court of Appeals for the Tenth Circuit upheld Nationwide Permit (NWP) 12 against all of Sierra Club’s claims. Sierra Club, Inc. v. Bostick (10th Cir. May 29, 2015). NWP 12 is critical to timely and cost-effective construction of new projects (such as electric transmission line projects that connect new renewable or traditional power projects to the grid, or new gas or oil pipelines that allow resources to be brought to market), as well as important upgrades and repairs of existing projects (such as upgrades required for grid resiliency or to respond to major storm events).

Background on the Case

In June 2012, environmental groups filed suit in the US District Court for the Western District of Oklahoma challenging the US Army Corps of Engineers’ issuance of NWP 12 for utility line projects, and use of  NWP 12 for the Gulf Coast Project. Sierra Club v. Bostick, 5:12-cv-00742-R (W.D. Oklahoma). Hunton & Williams intervened in the lawsuit on behalf of a coalition of industry associations whose member companies depend on NWP 12 for critical electric transmission line and pipeline infrastructure projects. The coalition sought intervention to defend NWP 12 against the groups’ wide-ranging challenges seeking to block the construction of the pipeline and enjoin future use of NWP 12.

The suit challenged a number of key provisions of NWP 12, some of which go back decades, and sought to nullify the permit — thereby threatening the ability of utilities (and others) to rely on NWP 12 for important projects nationwide. Initially the groups sought a preliminary injunction, which was denied by the district court. The district court’s denial was upheld on appeal by the Tenth Circuit on October 31, 2013. The case then proceeded to the merits in the district court. On December 30, 2013, the district court issued a final decision on the merits, ruling against the plaintiffs on all claims.

Tenth Circuit Opinion

The Tenth Circuit issued a published decision on May 29, 2015, that affirmed the district court’s decision. Judge Bacharach authored the opinion of the court, rejecting the Sierra Club’s National Environmental Policy Act (NEPA) and Clean Water Act (CWA) claims. Judges Baldock and McHugh wrote concurring opinions.

Writing for the court, Circuit Judge Bacharach rejected Sierra Club’s argument that the Corps violated NEPA by issuing NWP 12 without considering the risk of oil spills and the cumulative environmental impacts of pipelines. The court held that these arguments were waived because Sierra Club failed to  raise those concerns during the Corps’ public comment period when it issued the new NWP 12. The court also rejected the argument that the Corps should have conducted a NEPA analysis before issuing the verification letters for the Gulf Coast pipeline project, holding that a NEPA analysis is not necessary at the verification stage.

The court also rejected Sierra Club’s CWA claims. The court concluded that Sierra Club failed to show that NWP 12 authorizes activities with more than minimal impacts, and that the Corps permissibly interpreted the CWA to allow partial deferral of its minimal impacts analysis. The court rejected the argument that the Corps incorrectly verified compliance with NWP 12 without analyzing cumulative effects or documenting the analysis of cumulative effects, holding that Corps officials did not need to include a cumulative effects analysis in the verification letters and that the record showed that officials conducted the necessary analysis in any event.

Circuit Judge Baldock praised Circuit Judge Bacharach’s lead opinion as “clear and concise,” and joined that opinion, but wrote a separate concurring opinion to state that he would have found the case prudentially moot because the Gulf Coast pipeline has been complete and operational for years. Judge Baldock noted that, with all of the authorized work complete and nearly all of the mitigation complete, it is difficult to imagine a scenario more appropriate for a prudential mootness holding. However, he “readily join[ed]” Judge Bacharach’s opinion, providing strong support for upholding NWP 12 on those grounds.

Circuit Judge McHugh stated that she joined “the majority’s resolution of this case and … most of its thoughtful analysis” but wrote a separate opinion “to discuss the Corps’ compliance with its obligations under NEPA because my view of this issue differs from that of the majority.” Judge McHugh agreed that Sierra Club waived its NEPA arguments. However, her concurrence asserts that the Corps’ NEPA analysis should have considered the overall environmental effects of the projects that will rely on NWP 12, and not just the effects of the authorized discharge of dredged or fill material. She acknowledged that “accounting in advance for the broad range of possible impacts resulting from the wide variety of utility lines authorized under NWP 12 is a daunting task,” but reasoned that “compliance with NEPA is not excused simply because compliance is difficult.” However, Judge McHugh did not address the scope and limits of a NEPA analysis confirmed by the Supreme Court’s decision in Public Citizen; the Corps’ regulations establishing NEPA scope of analysis limits, and CEQ’s approval of those regulations; or the cases upholding the Corps’ approach to scope of analysis.

The decision is a strong victory, reinforcing key principles of significant importance to utilities and the energy industry. The Tenth Circuit’s recognition that the Corps complied with NEPA and the CWA when it reissued NWP 12 for the construction, maintenance, and repair of a wide variety of utility lines leaves in place this important and widely used NWP that authorizes critical and time-sensitive activities throughout the country that have only minimal, and mostly temporary, impacts.