Transcon. Gas Pipe Line Co. v. Pa. Envtl. Hearing Bd.

108 F.4th 144

TRANSCONTINENTAL GAS PIPE LINE CO., LLC, Appellant v. PENNSYLVANIA ENVIRONMENTAL HEARING BOARD; Steven C. Beckman; Bernard A. Labuskes, Jr.; Michelle A. Coleman;Sarah J. Clark; Citizens for Pennsylvania's Future; Delaware Riverkeeper Network; Maya K. Van Rossum

No. 23-2052

United States Court of Appeals, Third Circuit

Argued: October 19, 2023

Filed: July 8, 2024

On Appeal from the United States District Court for the Middle District of Pennsylvania (D.C. No. 1-23-cv-00463), District Judge: Honorable Christopher C. Conner

Andrew T. Bockis, Saul Ewing, 2 N Second Street, Penn National Insurance Plaza, 7th Floor Harrisburg, PA 17101, Patrick F. Nugent, Sean T. O'Neill, John F. Stoviak, Saul Ewing, 1500 Market Street, Centre Square West, 38th Floor, Philadelphia, PA 19102, m Elizabeth U. Witmer [ARGUED], Saul Ewing, 1200 Liberty Ridge Drive, Suite 200, Wayne, PA 19087, Counsel for Transcontinental Gas Pipe Line Co., LLC

Emma H. Bast, Jessica R. O'Neill, PennFuture, 1429 Walnut Street, Suite 701, Philadelphia, PA 19102, Kacy C. Manahan [ARGUED], Delaware Riverkeeper Network, 925 Canal Street, Suite 3701, Bristol, PA 19007, Counsel for Citizens for Pennsylvania's Future

Emma H. Bast, PennFuture, 1429 Walnut Street, Suite 701, Philadelphia, PA 19102, Kacy C. Manahan [ARGUED], Delaware Riverkeeper Network, 925 Canal Street, Suite 3701, Bristol, PA 19007, Counsel for Delaware Riverkeeper Network

Kacy C. Manahan [ARGUED], Delaware Riverkeeper Network, 925 Canal Street, Suite 3701, Bristol, PA 19007, Counsel for Maya K. van Rossum

Margaret O. Murphy [ARGUED], Pennsylvania Department of Environmental Protection, 400 Market Street, P.O. Box 8469, Harrisburg, PA 17105, Curtis C. Sullivan, Pennsylvania Department of Environmental Protection, 909 Elmerton Avenue, 3rd Floor, Harrisburg, PA 17110, Counsel for Intervenor Pennsylvania Department of Environmental Protection

Before: CHAGARES, Chief Judge, PHIPPS and CHUNG, Circuit Judges.

OPINION OF THE COURT

PHIPPS, Circuit Judge.

To construct, extend, or abandon an interstate natural gas pipeline requires permits from both federal and state agencies. In this case, a pipeline company obtained all the permits needed to abandon and replace part of its pipeline and to expand its pipeline through new construction in Pennsylvania. The company then began those endeavors. But within the time permitted by state law, environmental advocates administratively appealed the Pennsylvania state agency's issuance of three of the required permits to another state agency, as allowed by state law.

With those permits in jeopardy and the construction project underway, the pipeline company initiated this action in the District Court for declaratory and injunctive relief. It also moved to preliminarily enjoin the administrative appeal. In support of its motion, the pipeline company argued that the Natural Gas Act preempts the state law allowing an administrative appeal expressly and also impliedly through field and obstacle preemption. The state agency that issued the permits intervened and supported the pipeline company's motion. The District Court rejected the preemption arguments and denied the pipeline company's motion.

In this timely appeal of that decision, the pipeline company challenges that ruling. On de novo review, because none of the theories of preemption advanced by the pipeline company or the state agency apply here, we have affirmed the District Court's denial of the preliminary-injunction motion for the reasons below.

I. FACTUAL BACKGROUND AND PROCEDURAL HISTORY

Transcontinental Gas Pipe Line Company, LLC, commonly referred to as 'Transco,' is a natural gas company subject to the Natural Gas Act. See 15 U.S.C. § 717a(6) (defining the term 'natural-gas company'). Transco operates natural gas transportation facilities spanning from offshore in the Gulf of Mexico through several states, including Pennsylvania and New Jersey, to the New York City metropolitan area. In 2021, Transco sought to abandon some of its outdated pipeline facilities and to expand others in Pennsylvania and New Jersey. But under the Natural Gas Act, before Transco could commence that project, it needed a Certificate of Public Convenience and Necessity from the Federal Energy Regulatory Commission. See id. § 717f(b)-(c).

On March 26, 2021, Transco applied for such a certificate. After notice and an opportunity for public comment, FERC issued the certificate through an order dated January 11, 2023. See Transcontinental Gas Pipe Line Co., 182 FERC ¶ 61,006 (2023). But FERC placed numerous conditions on that certificate - as it may legally do. See generally 15 U.S.C. § 717f(e) (granting FERC the power to issue certificates and to attach conditions to them when required by public convenience and necessity).

One of those conditions required Transco to provide documentation to FERC that it had "received all applicable authorizations required under federal law (or evidence of waiver thereof)" before commencing the project. Transcontinental, 182 FERC ¶ 61,006, at App. B, P 10. And a federal law, the Clean Water Act, requires a Water Quality Certification from any state in which the federally licensed activity may result in the origination of a discharge of pollutants into the navigable waters of the United States. See 33 U.S.C. § 1341(a)(1). On March 31, 2021, within a week of applying for a Certificate of Public Convenience and Necessity from FERC, Transco applied to the Pennsylvania Department of Environmental Protection for a Water Quality Certification for the pipeline project in Pennsylvania.

Under its Clean Water Act powers, PADEP, as the agency is commonly abbreviated, can impose conditions on a Water Quality Certification. See id. § 1341(d). And when PADEP issued the Water Quality Certification for the project a year later, on March 30, 2022, it did so subject to the condition that Transco receive three additional permits from PADEP: an Erosion and Sediment Control Permit, see 25 Pa. Code § 102, and two Water Obstruction and Encroachment Permits, see id. § 105. Thus, those additional permits, referred to herein as the 'Sub-Permits,' operated as sub-conditions on the Certificate of Public Convenience and Necessity for the project. See 15 U.S.C. § 717b(d)(3) (allowing state regulation of interstate natural gas pipelines under the Clean Water Act); Transcontinental, 182 FERC ¶ 61,006, at App. B, P 13 ("All conditions attached to the water quality certificate issued by the Pennsylvania Department of Environmental Protection . . . constitute mandatory conditions of the Certificate Order.").

Transco applied for the Sub-Permits, and on February 3, 2023, PADEP issued them. About a month after receiving the Sub-Permits, Transco began its pipeline project.

A Pennsylvania statute, however, allows any person adversely affected by a PADEP permitting decision to administratively appeal that ruling to a separate state agency, the Environmental Hearing Board, commonly abbreviated as the 'EHB.' See 35 Pa. Stat. Ann. § 7514(c). Three environmental advocates - Citizens for Pennsylvania's Future; the Delaware Riverkeeper Network; and the Delaware Riverkeeper, Maya K. van Rossum - claimed that the pipeline project would degrade certain streams, tributaries, and wetlands in violation of Pennsylvania law in six respects, and they timely filed a joint administrative appeal with the EHB challenging PADEP's issuance of the Sub-Permits. See 35 Pa. Stat. Ann. § 7514(g) (allowing the EHB to make rules for proceedings); 25 Pa. Code § 1021.52(a)(2)(i)-(ii) (requiring aggrieved persons to file an appeal with the EHB within thirty days from the earlier of publication in Pennsylvania Bulletin or actual notice of PADEP's action). That administrative appeal to the EHB did not automatically stay or enjoin the Sub-Permits, nor did it otherwise prevent Transco from undertaking construction on its pipeline expansion project. See 35 Pa. Stat. Ann. § 7514(d)(1) ("No appeal shall act as an automatic supersedeas."); see also Del. Riverkeeper Network v. Sec'y Pa. Dep't of Env't Prot. (Riverkeeper III), 903 F.3d 65, 72 (3d Cir. 2018) ("[A]n appeal to the EHB does not prevent PADEP's decision from taking immediate legal effect.").

Nonetheless, while that administrative appeal was pending before the EHB, Transco initiated this action in the District Court against the environmental advocates and the members of the EHB to enjoin those proceedings. See Armstrong v. Exceptional Child Ctr., Inc., 575 U.S. 320, 326-27, 135 S.Ct. 1378, 191 L.Ed.2d 471 (2015) (articulating the long-held legal principle "that federal courts may in some circumstances grant injunctive relief against state officers who are violating, or planning to violate, federal law"). Transco also sought a judgment declaring that, under the Natural Gas Act, this Court was the sole forum to dispute PADEP's issuance of the Sub-Permits. See 28 U.S.C. § 2201 (creating the declaratory judgment as a remedy and permitting a court to grant such relief in an "actual controversy within its jurisdiction").

Eight days later, Transco moved for a preliminary injunction to prevent the administrative appeal to the EHB from going forward. See Fed. R. Civ. P. 65(a). The three environmental advocates opposed that motion, but the EHB members did not make any filing in response to the motion. PADEP moved to intervene, and after that motion was granted, it filed a brief in support of Transco's position.

In exercising federal-question jurisdiction over the case,¹ the District Court denied Transco's motion. It determined that Transco did not establish either a likelihood of success on the merits or irreparable harm and therefore did not qualify for preliminary injunctive relief.

Through a timely notice of appeal, Transco invoked this Court's appellate jurisdiction to dispute the denial of its motion for a preliminary injunction. See 28 U.S.C. § 1292(a)(1); Fed. R. App. P. 4(a)(1)(A). After expedited briefing and oral...