WASHINGTON (CN) — The full D.C. Circuit on Monday reheard a case challenging what one judge had called a “Kafkaesque” regime to approve a natural gas pipeline snaking from Pennsylvania down into Alabama.
The oral arguments marked the first en banc hearing held in Washington by teleconference since the Covid-19 outbreak forced the courts to move to virtual proceedings. Landowners argued before the 11-judge panel that the Federal Energy Regulatory Commission had kept them in administrative limbo while it greenlit the Atlantic Sunrise Project.
With the pipeline now in the ground, Siobhan Cole, attorney for the landowners, said FERC used “tolling orders” to delay consideration of opposition to the project while the company seized her clients’ property and commenced construction.
“They’re not the only way and they’re not the right way. They are the easy way,” the attorney said.
Cole urged the court to consider how the tolling orders leave a “host of problems in their wake” by denying landowners’ rights to due process. The habitual use of tolling orders in response to petitions for rehearing not only denies landowners an avenue for relief with the commission, Cole said, but further bars them from taking their grievances to the D.C. Circuit.
Warning that FERC favors projects that are collocated, Cole warned: “There is now a pipeline on my clients’ property…there may very well be another one.”
But the pipeline company cautioned the appeals court against shutting down the natural gas flow.
“That would have cataclysmic effects,” said John Stoviak, attorney for Transcontinental Gas Pipe Line Company, telling the judges such a ruling would deny heat, energy and electricity to millions of Americans.
The court’s decision to rehear the case signaled it was considering striking down FERC’s use of tolling orders. But several judges questioned what sort of relief to grant the landowners given the pipeline is in the ground and fully operational.
FERC attorney Robert Kennedy said while what the law means by “just compensation” may be “cold comfort” to landowners, payments would be available at the end of the day if the court ruled in the petitioners’ favor.
Cole had argued that there was a lack of substantial evidence that the pipeline was necessary for public convenience, the required threshold for the government to seize land under eminent domain.
Countering that there is no “serious question” regarding the matter, Stoviak responded that the pipeline is running at 100% capacity, which he said was proof that FERC made the right decision in certifying the project.
“‘The commission held Transco to this obligation. Its finding of market need rested on the existence of contracts with shippers for 100% of the project’s capacity,’” the attorney said, quoting the original D.C. Circuit ruling in the case. “That is enough.”
Undercutting that argument, Cole stressed that FERC is responsible for assessing the public need, not the private need of shippers.
“The commission either fundamentally misunderstands its duty…or it’s refusing to do so,” she argued.
The majority of judges on Monday’s panel shared confusion over the difference between a tolling order and an order to grant rehearing.
“I still don’t see what the actual practical difference is,” said U.S. Circuit Judge Neomi Rao, a Donald Trump appointee.
Kennedy told the judges that “given the volume of work at the commission, [tolling orders] are generally entered almost as a matter of routine.”
But Cole argued the difference lies in the 30-day deadline to grant a decision on an application for rehearing mandated by Congress, and the inability of petitioners to seek judicial review when FERC issues a tolling order.
The landowners’ attorney further argued that a FERC order certifying the pipeline must be “stripped away” when the commission grants rehearing.
“That underlying order cannot remain enforced. It would be inappropriate…to suggest that everything marches forward,” Cole argued.
But Kennedy claimed tolling orders merely expand on what Congress meant when it outlined in the Natural Gas Act that FERC must either grant or deny petitions to rehear a decision to certify a pipeline.
Responding to U.S. Circuit Judge Cornelia Pillard, a Barack Obama appointee, asking if FERC ever denies certifications, Kennedy claimed that “companies don’t come in the door unless they think they have a viable market and there’s a viable plan.”
The FERC attorney also said claims by the petitioners that they were “put out to sea” are false, and that landowners in the path of a future pipeline receive notice that their property could be seized.
When the court first ruled on the pipeline case last August, U.S. Circuit Judge Patricia Millett, another Obama appointee, wrote in a concurring opinion: “The commission has twisted our precedent into a Kafkaesque regime. Under it, the commission can keep homeowners in seemingly endless administrative limbo while energy companies plow ahead seizing land and constructing the very pipeline that the procedurally handcuffed homeowners seek to stop.”
On Monday, U.S. Circuit Judge Judith Rogers, a Bill Clinton appointee, followed up by asking Cole if the landowners were satisfied “now that the commission has heeded our colleague’s concern about the fairness of the process,” and the FERC chairman had instituted a restructuring.
“The commission has only said that it will try not to issue tolling orders…not that it will,” Cole responded.
Kennedy, on the other hand, said the FERC was “sensitive” to the concerns raised by Judge Millett last year, and claimed the commission is giving landowners first priority in their petitions.
Responding to a question from U.S. Circuit Judge Thomas Griffith, a George W. Bush appointee, Cole further argued that any delays to construction in the rehearing process were an intended consequence that could put a halt, for example, to potential environmental damage.
“The commission has all the time it needs on the front end to consider these applications,” the landowners’ attorney argued.