Why won't Lucy ever let Charlie Brown kick the football? That question has baffled Peanuts lovers for decades. The question baffling the United States Congress, courts, and landowners alike is why the Federal Energy Regulatory Commission (FERC or Commission) won't stop natural gas pipelines from exercising their eminent domain rights after they have been granted a certificate of public convenience pursuant to section 7(c) of the Natural Gas Act (NGA), and a rehearing request has been filed. This alert won't resolve the Peanuts question but it will highlight recent actions that may impact the response to the eminent domain question.
What's the Problem?
Landowners, environmentalists, and others would say there are at least two problems. First, the Commission issues NGA section 7(c) certificates of public convenience and necessity before the applicant has obtained all the necessary federal and state permits. Second, FERC does not act on rehearing requests of its issuance of NGA section 7(c) certificates within 30 days of the rehearing request being filed, thus depriving the landowners of being able to fight the certificate issuance and the attached NGA section 7(h) eminent domain rights.
Having apparently heard these complaints, on February 18, 2020, Congressman Jamie Raskin (D-MD), the Chairman of the Subcommittee on Civil Rights and Civil Liberties, sent FERC Chairman Chatterjee a letter requesting details on the rights of NGA section 7(c) certificate holders to exercise eminent domain "as they construct underground natural gas pipelines."1 Congressman Raskin stated that "[p]ublic reporting indicates that FERC's procedures regarding these certificates may violate property owners' constitutional right to due process." Congressman Raskin seeks detailed statistics on FERC's certificate review and, as relevant here, how it informs landowners of their rights to intervene in FERC proceedings, and how FERC evaluates and processes landowner protests and rehearing requests. The letter requests documents and information by March 3, 2020.
Congressman Raskin's letter follows a hearing on the NGA held on February 5, 2020, before a different House subcommittee, where a former FERC Chairman, environmentalists, and others argued that FERC is not meeting its statutory duty to evaluate landowner issues. At that hearing, former FERC Chairman Cheryl LaFleur commented that FERC needs to "more carefully balance the need for pipeline construction with its environmental and landowner consequences."2 The Delaware Riverkeeper Network testified that FERC's use of tolling orders (to put off acting on rehearing requests) puts states and landowners in "legal limbo" while their rehearing requests are pending, and is "increasingly stretching the use of eminent domain authority in ways not intended by the [NGA]."3
That hearing culminates many years of arguments before FERC and in the courts where landowners and others have argued that the NGA requires the Commission to act on a request for rehearing in 30 days after it is filed. FERC's practice is to issue tolling orders to give it additional time to act beyond the 30 days provided under the statute. In a pending Court of Appeals case addressing the legality of tolling orders in the context of landowner rehearing requests, FERC has argued that landowners are not deprived of an opportunity to seek review of the controversial NGA 7(c) certificate order, and that "[w]here only property rights are involved, mere postponement of the judicial enquiry is not a denial of due process, if the opportunity given for the ultimate judicial determination of the liability is adequate."4
What's the Solution?
On January 31, 2020, FERC Chairman Chatterjee reorganized FERC's Office of General Counsel (OGC) "to more expeditiously process requests for rehearing of [NGA] section 7 certificate orders filed by affected landowners." According to the press release, Chairman Chatterjee has "designated attorneys in the rehearings group of [OGC's] Solicitor's Office to focus on rehearing requests involving landowner issues." The Landowner Rehearing Groups group "will give first priority to landowner rehearing requests, . . . [and] will help alleviate . . . landowner concerns about timing and fairness in infrastructure cases implicating landowner rights."
Although the United States Court of Appeals for the District of Columbia Circuit (DC Circuit) recently reaffirmed its finding that the use of tolling orders is permissible under the NGA,5 an en banc panel of the DC Circuit will hold an oral argument on March 31, 2020 and evaluate landowners' and FERC's arguments. Prior to that time, FERC will provide a response to Congressman Raskin's questions. During this period, FERC's Rehearing Group may issue orders on rehearing and FERC may issue certificate orders. Depending on the timing, the composition of FERC Commissioners will likely change as well.
Stay tuned: decisions on FERC's certificate powers and rehearing obligations are still being written. All three branches of government are now focused on the issues presented. One of them can hopefully provide us an answer on Lucy's thinking - does FERC need to change its certificate practices to ensure landowner's rights are protected in a timely manner or can FERC continue issuing conditional certificates with a new emphasis on timely review of rehearing requests?
Footnotes
1 Letter from Congressman Jamie Raskin, Chairman, Subcommittee on Civil Rights and Civil Liberties to Chairman Neil Chatterjee at 1 (Feb. 18, 2020).
2 Written Testimony of Cheryl A. LaFleur, Before the Committee on Energy and Commerce, Subcommittee on Energy, United States House of Representatives, Hearing on Natural Gas at 2 (Feb. 5, 2020).
3 Testimony of Delaware Riverkeeper Network, Before the Committee on Energy and Commerce, Subcommittee on Energy, United States House of Representatives, Hearing on Natural Gas at 4-6 (Feb. 5, 2020).
4 Transcontinental Gas Pipe Line Co., LLC, 161 FERC ¶ 61,250, at P 39 (2017) (citing Phillips v. Internal Revenue Comm’r, 283 U.S. 589, 596-97 (1931)).
5 Delaware Riverkeeper Network v. FERC, 895 F.3d 102, 113 (D.C. Cir., 2018) (citing Cal. Co. v. FPC, 411 F.2d 720, 722 (D.C. Cir. 1969) (per curiam).
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