District Court Ruling on Keystone XL Pipeline Vacates Entire Nationwide Permit 12, Sows Chaos
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District Court Ruling on Keystone XL Pipeline Vacates Entire Nationwide Permit 12, Sows Chaos

Brownstein Client Alert, April 17, 2020

In a decision with sweeping consequences for infrastructure projects authorized by nationwide permits, a federal district judge in Montana on Wednesday ruled that the U.S. Army Corps of Engineers (Corps) violated provisions of the Endangered Species Act (ESA) when it reissued Nationwide Permit 12 (NWP 12) in 2017. In a striking move, the judge vacated NWP 12 in its entirety despite the fact that the permit is relied on to authorize thousands of infrastructure projects across the nation, including utility lines, gathering lines, and major oil and gas pipelines. The court further issued an injunction prohibiting the Corps from authorizing dredge and fill activities under NWP 12 pending completion of a programmatic ESA consultation process.

Although the decision came in the context of a broad challenge to portions of the Keystone XL Pipeline, the court stayed the plaintiffs’ two Keystone XL-specific claims and instead vacated NWP 12. The court’s order immediately throws projects authorized by NWP 12 into regulatory chaos and sets up a clash between the Trump administration and the federal courts over the use of nationwide injunctions.

In the case, Northern Plains Resource Council et al v. U.S. Army Corps of Engineers, Case No. 4:19-cv-00044 (D. Mont.), several environmental groups alleged that when it reissued NWP 12 in 2017, the Corps failed to evaluate the potential programmatic impacts of doing so under the ESA, National Environmental Policy Act (NEPA) and the Clean Water Act (CWA). Nationwide permits, which are authorized by Section 404(e) of the CWA and Section 10 of the Rivers and Harbors Act of 1899 (RHA), are widely used by the Corps and project proponents to streamline the permitting process for projects that pose minimal individual and cumulative adverse environmental effects. U.S. District Judge Brian Morris agreed with the plaintiffs, holding that the Corps’ determination that NWP 12 would have “no effect” on listed species and critical habitat—thereby precluding the need for an ESA consultation with the U.S. Fish and Wildlife Service (FWS) prior to reissuing the permit—was arbitrary and capricious given that there was “substantial evidence” that projects authorized under NWP 12 may, and likely would, affect listed species and critical habitat.

Judge Morris’s order remands NWP 12 back to the Corps for programmatic consultation under the ESA, vacates the entire NWP 12 program, and enjoins the Corps from authorizing any dredge and fill activities under NWP 12 pending completion of the programmatic ESA consultation. In doing so, Judge Morris rejected the Corps’ argument that individual project-level reviews and General Condition 18, which requires consultation for any individual project that may impact ESA-covered species and habitat, were sufficiently protective. Relying in part on a 2002 decision, Judge Morris concluded that “[p]rogrammatic review of NWP 12 in its entirety, as required by the ESA for any project that ‘may affect’ listed species or critical habitat, provides the only way to avoid piecemeal destruction of species and habitat.”

The decision puts in limbo thousands of infrastructure projects nationwide that rely on NWP 12 for the construction, maintenance or repair of utility lines and poses particularly acute problems for the oil and gas industry, which relies on the permit to facilitate projects ranging from large interstate pipelines to smaller gathering lines at exploration and production sites.

Pending a reversal of this decision, parties will have to pursue the much more extensive, time-consuming and uncertain process of applying for an individual CWA Section 404 permit until NWP 12 is reissued after completion of the ESA consultation process. The decision also calls into question other portions of the nationwide program that also require interagency consultation, including under the National Historic Preservation Act. The decision, which the Trump administration is expected to immediately appeal, also sets up a showdown between the administration and the federal courts regarding the use of nationwide injunctions, as several Trump administration officials and even some members of the United States Supreme Court have criticized the ability of federal district court judges to impose nationwide injunctions on federal regulations.

Please let any of the authors know if you have any questions about what this decision might mean for any of your ongoing projects.

This document is intended to provide you with general information regarding a federal district court's ruling invalidating Nationwide Permit 12 and its impact on infrastructure projects. The contents of this document are not intended to provide specific legal advice. If you have any questions about the contents of this document or if you need legal advice as to an issue, please contact the attorneys listed or your regular Brownstein Hyatt Farber Schreck, LLP attorney. This communication may be considered advertising in some jurisdictions.

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