On January 25, 2019, the U.S. Court of Appeals for the District of Columbia (“D.C. Circuit”) in a unanimous decision granted a petition for review in Hoopa Valley Tribe v. FERC, No. 14-1271 (D.C. Cir., Jan. 25, 2019). The key holding in the case, which concerns the ongoing FERC’s relicensing of the Klamath Hydroelectric Project, is that the States of California and Oregon waived their authorities under section 401 of the Clean Water Act (“CWA”), 33 U.S.C. § 1341, by failing to rule on the applicant’s submitted application for water quality certification within one year from when it was initially filed in 2006. The applicant for many years had followed, at the request of the States, the common industry practice of “withdraw-and-resubmit” of its water quality certification application in an attempt to annually reset the one-year time period for the States to act, as established under CWA section 401. The D.C. Circuit in Hoopa Valley Tribe invalidated this practice as a means of resetting the statutory clock, instead holding that the clear text of CWA establishes that “a full year is the absolute maximum” time for a state to decide on a water quality certification application.

The Hoopa Valley Tribe decision is expected to have far-reaching effects for hydroelectric relicensing as well as other federal licensing and permitting activities that require CWA section 401 water quality certifications. Section 401 certification is one of the most significant tools available to states to control federally permitted activities that involve a discharge into navigable waters. Section 401(a) provides an opportunity for the state to determine whether the discharge will comply with applicable aspects of the state’s approved water quality program. Section 401(d), in turn, authorizes the state to include in its certification any effluent limitations, other limitation, standards of performance, or prohibition, effluent standard, or pretreatment standard, “and with any other appropriate requirement of State law.” 33 U.S.C. § 1341(d). Any such conditions established by the state “shall become a condition on any Federal license or permit . . . .” Id.

The U.S. Supreme Court has interpreted CWA section 401 as a broad delegation of conditioning authority to the states, Pub. Util. Dist. No. 1 of Jefferson County v. Wash. Dep’t of Ecology, 511 U.S. 700 (1994), and the permitting agency has no authority to reject or modify the conditions included in a water quality certification. Am. Rivers v. FERC, 201 F.3d 1186 (9th Cir. 1999).

While the D.C. Circuit in Hoopa Valley Tribe did not disturb the scope of states’ conditioning authority under CWA, it did interpret an absolute one-year maximum time period for states to complete their review and decide whether or not to issue their water quality certifications, and to decide what conditions, if any, should be included as part of the certification. The ruling is expected to place additional pressure on both applicants and states to ensure that the state has sufficient information to meet its statutory deadline, and for the state to place sufficient resources into such requests such that it can meet the one-year maximum time allotted under CWA section 401.

A copy of the opinion is available here.