Yellowstone to Uintas Connection v. Bolling

524 F.Supp.3d 1081

YELLOWSTONE TO UINTAS CONNECTION, and Alliance for the Wild Rockies, Plaintiffs,

v. Mel BOLLING, Forest Supervisor Caribou-Targhee National Forest; Nora Rasure, Regional Forester for Intermountain Region, United States Forest Service, an agency of the U.S. Department of Agriculture, and the United States Army Corps of Engineers, Defendants,andLower Valley Energy, Inc., and State of Wyoming, Defendant-Intervenors.

Case No. 4:20-cv-00192-DCN

United States District Court, D. Idaho.

Signed March 8, 2021

Rebecca Kay Smith, Public Interest Defense Center, P.C., Missoula, MT, for Plaintiffs.

Michele L. Walter, U.S. Department of Justice, Denver, CO, Paul Gerald Freeborne, Shampa Panda, U.S. Department of Justice ENRD Natural Resources Section, Washington, DC, for Defendants.

Murray D. Feldman, Alison C. Hunter, Holland & Hart, Boise, ID, for Defendant-Intervenors Lower Valley Energy, Inc.

Cherese De'Dominiq McLain, MSBT Law, Chtd., Boise, ID, James Kaste, Pro Hac Vice, Wyoming Attorney General, Travis Jordan, Pro Hac Vice, Wyoming Attorney General's Office, Cheyenne, WY, for Defendant-Intervenors State of Wyoming.

MEMORANDUM DECISION AND ORDER

David C. Nye, Chief U.S. District Court Judge

I. INTRODUCTION

Pending before the Court are Defendants' first Motion to Dismiss (Dkt. 23) and renewed Motion to Dismiss (Dkt. 36). On February 4, 2021, the Court held oral argument and took the motions under advisement. Upon review, and for the reasons set forth below, the Court DENIES the first motion as MOOT and DENIES the second motion on its merits.

II. BACKGROUND

This lawsuit involves the proposed installation of a natural gas pipeline stretching from Afton, Wyoming, to Montpelier, Idaho. To provide natural gas to the residents of the Afton and Star Valley, Wyoming area, Lower Valley Energy, Inc. ("LVE") has proposed to construct, operate, and maintain a 12-inch or less diameter high pressure natural gas pipeline, referred to as the Crow Creek Pipeline project, connecting a receiving facility in Afton with a Williams Gas Company interstate trunk line located south of Montpelier, Idaho. In addition to the pipeline itself and the utility corridor, there will be above-ground facilities such as valves and staging areas. The proposed pipeline would traverse the Caribou-Targhee National Forest.

In their Amended Complaint, Plaintiffs challenge the United States Forest Service's (the "Forest Service") and the United States Army Corps of Engineers' (the "Army") approvals of the natural gas pipeline proposed by LVE. Plaintiffs are non-profit public interest organizations dedicated to protecting aspects of the environment. Counts One through Six of the Amended Complaint were included in the Complaint. Those counts challenge the Forest Service's environmental impact statement and record of decision approving the construction, operation, and maintenance of the pipeline across national forest service lands. Plaintiffs allege that the Forest Service's approval violates a variety of environmental statutes, including the National Environmental Policy Act and the Endangered Species Act.

The Amended Complaint includes a new seventh claim as well. That claim challenges the Forest Service and Army's authorization of certain portions of the project under Nationwide Permit 12 ("NWP 12"). Plaintiffs allege that the agencies' authorizations are invalid because the United States District Court for the District of Montana issued a preliminary injunction to that effect, and because there is no other valid permit for the portions of the pipeline.

In May 2020, LVE sought a service area determination and waiver of the Natural Gas Act ("NGA") pursuant to 15 U.S.C. § 717f(f) from the Federal Energy Regulatory Commission ("FERC"). See generally Dkt. 36-3.¹ Ultimately, in July 2020, FERC granted LVE a service area determination, determined that LVE was a local distribution company, and granted LVE a waiver of the rules and regulations under the NGA. Id. at 5–6. These concepts and FERC's order are discussed more fully below.

In April 2020, shortly before LVE sought the determination and waiver, Plaintiffs initiated this action.² Dkt. 1. After receiving an extension, and in lieu of filing an answer, Defendants filed a motion to dismiss this case for lack of subject matter jurisdiction. Dkt. 23. Plaintiffs filed a response in opposition. Dkt. 25. Defendants filed a reply. Dkt 26. Pursuant to the Court's Order adopting the parties' litigation plan (Dkt. 18), however, Plaintiffs then filed their Amended Complaint on September 11, 2020 (Dkt. 27). Therefore, Defendants correctly conceded at the hearing that their first motion to dismiss became moot upon Plaintiffs' filing of their Amended Complaint. Ramirez v. Cty. of San Bernardino , 806 F.3d 1002, 1008 (9th Cir. 2015) (stating that an "amended complaint supersedes the original, the latter being treated thereafter as non-existent" (cleaned up)).

In response to the Amended Complaint, Defendants filed a renewed motion to dismiss instead of an answer. Dkt 36. Defendants' renewed motion largely consolidates their prior briefing on the NGA issue. They contend that the NGA divests this Court of subject-matter jurisdiction and that a United States Court of Appeals has original and exclusive jurisdiction over this case. They also add a short argument regarding whether Plaintiffs may challenge Defendants' reliance on NWP 12 in this case. The Court held a hearing on the matter on February 4, 2021. The issue is now ripe for adjudication.

III. LEGAL STANDARD

A federal court may not entertain an action over which it has no jurisdiction. A motion to dismiss under Federal Rule of Civil Procedure 12(b)(1) challenges a court's subject-matter jurisdiction. A lack of jurisdiction is presumed unless the party asserting jurisdiction establishes that it exists. See Kokkonen v. Guardian Life Ins. Co. of Am. , 511 U.S. 375, 377, 114 S.Ct. 1673, 128 L.Ed.2d 391 (1994). If the court determines that it does not have subject-matter jurisdiction, it must dismiss the claim. Fed. R. Civ. P. 12(h)(3).

IV. DISCUSSION

The parties agree that if the jurisdictional section of the NGA, 15 U.S.C. § 717r(d)(1), applied in this case, this Court would not have jurisdiction since that statute would provide one of the United States Courts of Appeals with "original and exclusive jurisdiction." See Dkt. 39, at 2. The main issue before the Court is whether § 717r(d)(1) indeed applies in this case. In short, the answer is it does not apply to this case because FERC has designated LVE a local distributor, and therefore LVE and its proposed pipeline are not subject to § 717r(d)(1). The text of the NGA, the NGA's legislative history, a plentitude of caselaw, and FERC's order in this case all support this conclusion. The Court addresses this issue first and then addresses Defendants' arguments related to count seven.

A. Jurisdiction Under the NGA

District courts have general federal question jurisdiction under 28 U.S.C. § 1331. Therefore, the default rule is that persons seeking review of agency action go first to district court rather than to a court of appeals. Initial review of agency decisions occurs at the appellate court level only when a direct review statute specifically gives the court of appeals subject matter jurisdiction to directly review agency action. The burden of establishing subject matter jurisdiction rests upon the party asserting it. See, Kokkonen v. Guardian Life Ins. Co. of Am. , 511 U.S. 375, 377, 114 S.Ct. 1673, 128 L.Ed.2d 391 (1994). Here, the issue is whether the applicable statute specifically gives the court of appeals subject matter jurisdiction to directly review the agency action as an exception to the default rule.

Congress passed the NGA to provide "a comprehensive scheme of federal regulation of all wholesales of natural gas in interstate commerce." S. Coast Air Quality Management Dist. v. FERC , 621 F.3d 1085, 1090 (9th Cir. 2010) (quoting N. Natural Gas Co. v. State Corp. Comm'n , 372 U.S. 84, 91, 83 S.Ct. 646, 9 L.Ed.2d 601 (1963) ). The Court begins its analysis with the plain language of the NGA. See Guido v. Mount Lemmon Fire Dist. , 859 F.3d 1168, 1171 n.1 (9th Cir. 2017). Section 1(b) of the NGA dictates whether the NGA is applicable in a certain scenario:

The provisions of this chapter shall apply to the transportation of natural gas in interstate commerce, to the sale in interstate commerce of natural gas for resale for ultimate public consumption for domestic, commercial, industrial, or any other use, and to natural-gas companies engaged in such transportation or sale, and to the importation or exportation of natural gas in foreign commerce and to persons engaged in such importation or exportation, but shall not apply to any other transportation or sale of natural gas or to the local distribution of natural gas or to the facilities used for such distribution or to the production or gathering of natural gas.

15 U.S.C. § 717(b) (emphasis added).³ Section 7(f) is the mechanism by which an entity avails itself of the Section 1(b) local distribution exemption. Specifically, Section 7(f) states, "If [FERC] has determined a service area pursuant to this subsection, transportation to ultimate consumers in such service area by the holder of such service area determination, even if across State lines , shall be subject to the exclusive jurisdiction of the State commission in the State in which the gas is consumed." 15 U.S.C. § 717f(f)(2) (emphasis added). In other words, entities that receive a service area determination that they provide local distribution of natural gas, including interstate pipelines, are exempt from the provisions of the NGA.

This statutory backdrop elucidates the meaning of the jurisdictional text of the NGA at issue in this case— § 717r(d)(1). It states, "The United States Court of Appeals for the circuit in which a facility subject to section 717b of this title or section 717f of this title is proposed...