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Sierra Club v. State Water Control Board

United States Court of Appeals, Fourth Circuit

August 1, 2018

SIERRA CLUB; APPALACHIAN VOICES; CHESAPEAKE CLIMATE ACTION NETWORK; WILD VIRGINIA, Petitioners,
v.
STATE WATER CONTROL BOARD; ROBERT DUNN, Chair of the State Water Control Board; HEATHER WOOD, Vice-Chair of the State Water Control Board; LOU ANN JESSE-WALLACE, Member of the State Water Control Board; TIMOTHY G. HAYES, Member of the State Water Control Board; ROBERTA A. KELLAM, Member of the State Water Control Board; G. NISSA DEAN, Member of the State Water Control Board; ROBERT WAYLAND, III, Member of the State Water Control Board; DEPARTMENT OF ENVIRONMENTAL QUALITY; DAVID K. PAYLOR, Director, Department of Environmental Quality; MELANIE D. DAVENPORT, Director, Water Permitting Division, Department of Environmental Quality, Respondents, MOUNTAIN VALLEY PIPELINE, LLC, Intervenor. CHESAPEAKE BAY FOUNDATION, INC., Amicus Supporting Petitioner. DEL. SAM RASOUL; PRESERVE CRAIG, INC.; DOE CREEK FARM, INC.; GEORGIA HAVERTY; FOUR CORNERS FARM, LLC; DAVID J. WERNER; BETTY B. WERNER; IAN ELLIOTT REILLY; CAROLYN ELIZABETH REILLY; ROBERT M. JONES; DONNA T. JONES; BLUE RIDGE ENVIRONMENTAL DEFENSE LEAGUE; PRESERVE BENT MOUNTAIN; PRESERVE FLOYD; PRESERVE FRANKLIN; PITTSYLVANIA PRIDE, Petitioners,
v.
STATE WATER CONTROL BOARD; ROBERT DUNN, Chair of the State Water Control Board; HEATHER WOOD, Vice-Chair of the State Water Control Board; LOU ANN JESSE-WALLACE, Member of the State Water Control Board; TIMOTHY GEORGE HAYES, Member of the State Water Control Board; ROBERTA A. KELLAM, Member of the State Water Control Board; G. NISSA DEAN, Member of the State Water Control Board; ROBERT WAYLAND, III, Member of the State Water Control Board; DEPARTMENT OF ENVIRONMENTAL QUALITY; DAVID K. PAYLOR, Director, Department of Environmental Quality; MELANIE D. DAVENPORT, Director, Water Permitting Division, Department of Environmental Quality, Respondents, MOUNTAIN VALLEY PIPELINE, LLC, Intervenor. CHESAPEAKE BAY FOUNDATION, INCORPORATED, Amicus Supporting Petitioner.

          Argued: May 8, 2018

          On Petition for Review of a Decision of the Virginia Department of Environmental Quality. (FERC Docket No. CP16-10-000)

         ARGUED:

          Benjamin Alan Luckett, APPALACHIAN MOUNTAIN ADVOCATES, INC., Lewisburg, West Virginia, for Petitioners.

          Toby Jay Heytens, OFFICE OF THE ATTORNEY GENERAL OF VIRGINIA, Richmond, Virginia, for Respondents.

          George Peter Sibley, III, HUNTON ANDREWS KURTH LLP, Richmond, Virginia, for Intervenor.

         ON BRIEF:

          Joseph M. Lovett, Derek O. Teaney, APPALACHIAN MOUNTAIN ADVOCATES, INC., Lewisburg, West Virginia, for Petitioner Sierra Club, et al. Tammy L. Belinsky, Copper Hill, Virginia, for Petitioner Del. Sam Rasoul, et al. Mark R. Herring, Attorney General, J. Duncan Pitchford, Assistant Attorney General, David C. Grandis, Assistant Attorney General, Matthew R. McGuire, Deputy Solicitor General, OFFICE OF THE ATTORNEY GENERAL OF VIRGINIA, Richmond, Virginia, for Respondents.

          Kevin S. Elliker, Richmond, Virginia, Deidre G. Duncan, HUNTON ANDREWS KURTH LLP, Washington, D.C.; Christopher D. Pomeroy, Justin Curtis, AQUALAW PLC, Richmond, Virginia, for Intervenor.

          Jon Mueller, CHESAPEAKE BAY FOUNDATION, INC., Annapolis, Maryland, for Amicus Curiae.

          Before GREGORY, Chief Judge, TRAXLER, and THACKER, Circuit Judges.

          TRAXLER, CIRCUIT JUDGE.

         Virginia certified under Section 401 of the Clean Water Act that it had reasonable assurance that certain activities regarding the construction of a natural gas pipeline would not degrade the state's water. Several environmental groups, individuals, and other entities petition for review. Concluding that Virginia's issuance of the certification was not arbitrary and capricious, we deny the petition for review.

         I.

         A. The Project

         The Mountain Valley Pipeline Project (the "Project") is a proposed interstate natural gas transmission pipeline that will be approximately 303 miles long and 42 inches in diameter and will transport natural gas from Wetzel County, West Virginia, to Pittsylvania County, Virginia. Much of the Project crosses topography with steep slopes and areas that are susceptible to landslides. Approximately 106 miles of the pipeline will be located in Virginia, and constructing the pipeline requires 385 stream crossings and 144 wetland crossings in the Commonwealth.

         Mountain Valley Pipeline, LLC ("MVP") proposes to construct and operate the pipeline in Virginia and West Virginia.[1] MVP generally would use a 125-foot-wide construction right-of-way in uplands and a 75-foot-wide right-of-way through wetlands. MVP would retain a 50-foot right-of-way permanently to operate the pipeline. For overland construction, MVP would generally need to clear the land of trees and vegetation, then dig a trench of up to nine feet in depth, fracturing and blasting rock where necessary. Waterbody crossings would be dry open-cut crossings; MVP would temporarily divert the water from the construction area and bury the pipeline two to four feet below the streambed.

         B. Federal Statutes and Agencies

         The Natural Gas Act ("NGA") requires that a party seeking to build or operate a natural gas pipeline must obtain authorization from the Federal Energy Regulatory Commission ("FERC") in the form of a "certificate of public convenience and necessity." The NGA and its implementing regulations set out the process for obtaining such a certificate. See 15 U.S.C. § 717 et seq.; 18 C.F.R. § 157.1 et seq.; see generally East Tenn. Nat. Gas. Co. v. Sage, 361 F.3d 808, 818 (4th Cir. 2004).

         When FERC receives an application for a certificate of public convenience and necessity, it undertakes review of the environmental impacts of the proposed project under the NGA and under the National Environmental Policy Act ("NEPA"), 42 U.S.C. §§ 4321 et seq., usually by accepting input from the public and producing an environmental impact statement ("EIS"). FERC serves as the "lead agency," coordinating the needed governmental authorizations, see 15 U.S.C. § 717n(b), including the one central to this case, Virginia's state water-quality certification under the Clean Water Act ("CWA").

         NEPA sets out the procedures FERC must employ in considering the environmental impacts of agency actions. See Robertson v. Methow Valley Citizens Council, 490 U.S. 332, 350 (1989). Council on Environmental Quality regulations require FERC to draft an EIS in stages, first preparing a draft and inviting public comment thereon, then considering the comments and responding to them, possibly by modifying its analysis. See 40 C.F.R. §§ 1503.1(a), 1503.4(a). In this way, the draft and the receipt of comments serve as a "springboard for public comment." National Comm. for the New River, Inc. v. FERC, 373 F.3d 1323, 1328 (D.C. Cir. 2004) (internal quotation marks omitted).

         Because construction of the Project would involve discharge of dredged and fill materials into wetlands and waterways, MVP needed not only a certificate of public convenience and necessity from FERC, but also approval from the U.S. Army Corps of Engineers (the "Corps") under Section 404 of the CWA. See 33 U.S.C. § 1344(a); AES Sparrows Point LNG, LLC v. Wilson, 589 F.3d 721, 724 (4th Cir. 2009). Section 404 approval from the Corps may come in the form of an issuance of individual permits or the Corps' verification of the coverage "within the scope of an existing general permit, which acts as a standing authorization for developers to undertake an entire category of activities deemed to create only minimal environmental impact." Crutchfield v. County of Hanover, Va., 325 F.3d 211, 214 (4th Cir. 2003) (citing 33 U.S.C. § 1344(e); 33 C.F.R. §§ 320.1, 330.1(b)-(c)).[2]

         The NGA largely preempts environmental regulation of interstate natural gas pipelines by states. See AES Sparrows Point LNG, LLC v. Smith, 527 F.3d 120, 125-26 (4th Cir. 2008). However, it does "allow[] states to participate in environmental regulation of [pipelines] under three federal statutes: the Clean Air Act, the Coastal Zone Management Act, and the Clean Water Act." Delaware Riverkeeper Network v. Secretary Pa. Dep't of Envtl. Prot., 833 F.3d 360, 368 (3d Cir. 2016) (citing 15 U.S.C. § 717b(d)).

         The state action challenged in the petition before us was taken pursuant to Section 401 of the Clean Water Act. The relevant language provides that "[a]ny applicant for a Federal license or permit to conduct any activity . . . which may result in any discharge into the navigable waters" must seek "a certification from the State in which the discharge originates . . . that any such discharge will comply with the applicable provisions" of the CWA. 33 U.S.C. § 1341(a)(1). It provides that "[n]o license or permit shall be granted if certification has been denied by the State," but, if a state "fails or refuses to act on a request for certification, within a reasonable period of time (which shall not exceed one year) after receipt of such request, the certification requirements of this subsection shall be waived." Id. (emphasis added). Under the CWA's implementing regulations, the State also has the option of granting the certification based on certain conditions. See 33 U.S.C. § 1341(d); 40 C.F.R. § 121.2(a)(4); PUD No. 1 of Jefferson Cty. v. Washington Dep't of Ecology, 511 U.S. 700, 712 (1994). Accordingly, a state receiving a Section 401 application has four options in total: it may grant a certificate without imposing any additional conditions; grant it with additional conditions; deny it; or waive its right to participate in the process. See Delaware Riverkeeper Network, 833 F.3d at 376 (noting states' options to deny certificate or to waive right to participate); see also S.D. Warren Co. v. Maine Bd. of Envtl. Prot., 547 U.S. 370, 380 (2006) ("Section 401 . . . was meant to continue the authority of the State to act to deny a permit and thereby prevent a Federal license or permit from issuing to a discharge source within such State." (alterations and internal quotation marks omitted)). If the state grants the certificate - whether with or without conditions - the certification must contain "[a] statement that there is a reasonable assurance that the activity will be conducted in a manner which will not violate applicable water quality standards." 40 C.F.R. § 121.2(a)(3) (emphasis added); see PUD No. 1 of Jefferson Cty., 511 U.S. at 712.

         As for appellate review of such a state certificate, § 717r of the NGA provides:

The United States Court of Appeals for the circuit in which a facility subject to . . . [15 U.S.C. § 717f] is proposed to be constructed, expanded, or operated shall have original and exclusive jurisdiction over any civil action for the review of an order or action of a . . . State administrative agency acting pursuant to Federal law to issue, condition, or deny any permit, license, concurrence, or approval . . . required under Federal law.

15 U.S.C. § 717r(d)(1). It is undisputed here that the Project is subject to 15 U.S.C. § 717f.

         C. Virginia Agencies and Virginia Law Regarding Issuance of Section 401 Certificates

         Under Virginia law, the State Water Control Board (the "Board") possesses broad authority concerning permitting and regulatory matters that affect water quality in Virginia, including authority over Section 401 certifications. See Va. Code § 62.1-44.15. During the events in question, Virginia law provided that, "[i]ssuance of a Virginia Water Protection Permit shall constitute the certification required under § 401 of the Clean Water Act." Va. Code § 62.1-44.15:20(D).[3] Pursuant to the Virginia Water Protection Program (the "VWP Program"), the Board, after consulting with appropriate agencies and accepting and considering public comment, may issue a VWP permit "if it has determined that the proposed activity is consistent with the provisions of the Clean Water Act and the State Water Control Law and will protect instream beneficial uses." Va. Code § 62.1-44.15:20(B). And the Board may certify a nationwide Corps permit as meeting these requirements so long as the permit meets specified criteria.[4] See 9 Va. Admin. Code 25-210-130(H).

         The Virginia Department of Environmental Quality ("DEQ") serves as the Board's staff, and the Board may assign DEQ tasks and delegate DEQ the authority to make decisions. See Va. Code § 62.1-44.14. We will refer to the Board and DEQ together as "the State Agencies."

         D. 2017 Guidance Document

         Until recently, it was only through the above-described process that DEQ issued its water-quality certificates for linear utility projects, including pipeline projects. However, in May 2017, as a result of comments from interested parties concerning the Project, DEQ came to the conclusion that there was an analytical gap in the Rule 401 certification process. Namely, while VWP Permit coverage addresses the impacts caused to wetlands and streams by activities conducted in wetlands and streams, see Ohio Valley Envtl. Coal. v. Aracoma Coal Co., 556 F.3d 177, 194 (4th Cir. 2009), it does not account for activities occurring in upland areas that could also result in discharges into state waters or otherwise affect Virginia's water quality. See J.A. 100 ("The permits issued by the VWP program and the permits issued by the Corps only address the impacts caused to wetlands and streams by excavating in a wetland, draining or significantly altering wetland acreage or function, filling or dumping in a stream or wetland, or permanently flooding or impounding a wetland area or stream. However, the conditions and requirements of these permits do not cover activities in upland areas, outside of wetlands and streams, which may result in a discharge to state waters or otherwise cause or contribute to an exceedance of Virginia's Water Quality Standards.").

         In recognition of this gap, DEQ recently issued its "2017 Guidance Document," establishing a process by which, as part of the 401 certification process, DEQ can review these potential effects from upland activities involved in a natural gas infrastructure project. See Va. Dep't of Envtl. Quality, Guidance Memo No. GM17-2003, Interstate Natural Gas Infrastructure Projects - Procedures for Evaluating and Developing Additional Conditions for Section 401 Water Quality Certification Pursuant to 33 USC § 1341 (May 19, 2017). It provides that DEQ may decide to seek additional information from pipeline applicants concerning upland activity that "may have the potential to affect water quality." Id. at 3. And it states that DEQ may recommend to the Board the imposition of conditions on upland activities that are in addition to the conditions already imposed by or through the VWP Permit Program, the Corps, or FERC. See id.

         E. Virginia's Water Quality Standards and Water-Protection Laws

         "Under the CWA, states have the primary role in promulgating water quality standards." Piney Run Preservation Ass'n v. County Comm'rs of Carroll Cty., 268 F.3d 255, 265 n.9 (4th Cir. 2001). To do so, a state begins by identifying the uses for which the water will be protected; then, the state determines the level of water quality needed to protect the water for those uses. See NRDC v. EPA, 16 F.3d 1395, 1400 (4th Cir. 1993). Two aspects of Virginia's water-quality policy are relevant here: its general narrative water-quality criterion and its antidegradation policy.

         Virginia's water-quality criterion requires that "State waters . . . shall be free from substances attributable to . . . waste in concentrations, amounts, or combinations which contravene established standards or interfere directly or indirectly with designated uses of such water or which are inimical or harmful to human, animal, plant, or aquatic life." 9 Va. Admin. Code § 25-260-20(A). The criteria specify that any substance "that produce[s] . . . turbidity" is a substance to be controlled. Id. "Turbidity" refers to a measure of suspended solids in a water body, such as sediment.

         By its terms, Virginia's antidegradation policy "shall be applied whenever any activity is proposed that has the potential to affect existing surface water quality."[5] 9 Va. Admin. Code § 25-260-30(A). The policy divides the state's waters into three tiers and provides different levels of protection for each tier. See 9 Va. Admin. Code § 25-260-30(A). Tier 3 encompasses waters designated as "exceptional"; these waters "shall be maintained and protected to prevent permanent or long-term degradation or impairment." 9 Va. Admin. Code § 25-260-30(A)(3)(b)(1). The policy specifically provides that "[n]o new, additional, or increased discharge of sewage, industrial wastes or other pollution into [Tier 3 waters] shall be allowed." 9 Va. Admin. Code § 25-260-30(A)(3)(b)(2). However, "[a]ctivities causing temporary sources of pollution may be allowed in [Tier 3 waters] even if degradation may be expected to temporarily occur provided that after a minimal period of time the waters are returned or restored to conditions equal to or better than those existing just prior to the temporary source of pollution." 9 Va. Admin. Code § 25-260-30(A)(3)(b)(3).

         Tier 2 encompasses waters that "exceed water quality standards." 9 Va. Admin. Code § 25-260-30(A)(2). The quality of such waters "shall be maintained and protected unless the board finds . . . that allowing lower water quality is necessary to accommodate important economic or social development in the area in which the waters are located." 9 Va. Admin. Code § 25-260-30(A)(2).

         Finally, Tier 1 encompasses all waters that do not qualify as Tier 3 or Tier 2. For those waters, "existing instream water uses and the level of water quality necessary to protect the existing uses shall be maintained and protected." 9 Va. Admin. Code § 25-260-30(A)(1).

         Virginia generally protects its water from impacts from upland construction-related activities through the National Pollutant Discharge Elimination System ("NPDES") permits issued by Virginia under CWA section 402. See 33 U.S.C. § 1342. In particular, it utilizes its Virginia Pollutant Discharge Elimination System ("VPDES") Program and, more specifically, its General VPDES Permit for Discharges of Stormwater from Construction Activities (the "Construction General Permit"). 9 Va. Admin. Code § 25-880-70 Part II. That permit, in turn, incorporates the requirements of two other state laws, the Virginia Stormwater Management ("VSM") Law, Va. Code § 62.1-44.15:24 et seq., and the Virginia Erosion and Sediment Control ("VESC") Law, Va. Code § 62.1-44.15:51, et seq., which we will discuss in more detail ahead.

         Virginia's regulatory scheme is a little different when the construction project in question is a natural gas pipeline. That is because the CWA exempts natural gas pipeline construction projects from regulation. See 33 U.S.C. § 1342(l)(2). Still, Virginia is able to impose the same substantive requirements on natural gas pipeline projects through its Annual Standards and Specifications ("AS&S") Program. See Va. Code § 62.1- 44.15:55(D). That program requires the project developer to submit annual standards and specifications for DEQ's review and approval, thereby ensuring that projects will meet the same requirements that would apply were they covered by the Virginia Construction General Permit. See 9 Va. Admin. Code § 25-870-170(A). However, once DEQ has approved a developer's annual standards and specifications as satisfying the requirements of the VSM and VESC, the entity generally need not submit site-specific VSM and VESC plans to DEQ for approval. See Va. Code § 62.1-44.15:55(D). In this way, projects become more self-regulating.

         II.

         MVP filed its application for a certificate of public convenience and necessity with FERC on October 23, 2015.

         A. FERC

         As the NGA required, see 15 U.S.C. § 717n(b), FERC acted as the lead agency in preparing an EIS for the Project. FERC first issued a draft EIS in September 2016. Then during the 90-day period that followed, FERC conducted seven public meetings and received 1, 237 written comments (many of which were from DEQ). Some of DEQ's suggestions included adjusting the Project route, requiring a revised Karst Mitigation Plan, creating an Acid Soil Mitigation Plan, revising the Blasting Plan, and adopting various measures to reduce erosion and the introduction of sediment into the water. FERC's final EIS, issued in June 2017, incorporated many of the suggestions DEQ had offered.

         The EIS recognized that many aspects of the Project created the potential to negatively impact affected waters. With regard to upland construction activities, the EIS observed:

The clearing and grading of stream banks could expose soil to erosional forces and would reduce riparian vegetation along the cleared section of the waterbody. The use of heavy equipment for construction could cause compaction of near-surface soils, an effect that could result in increased runoff into surface waters in the immediate vicinity of the proposed construction right-of-way. Increased surface runoff could transport sediment into surface waters, resulting in increased turbidity levels and increased sedimentation rates in the receiving waterbody. Disturbances to stream channels and stream banks could also increase the likelihood of scour after construction.

J.A. 771. The EIS stated that "[i]n order to limit impacts on riparian zones, the Applicants would follow measures outlined in its ...


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