United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued October 1, 2018 Decided January 25, 2019
No. 14-1271
HOOPA VALLEY TRIBE,
PETITIONER
v.
FEDERAL ENERGY REGULATORY COMMISSION,
RESPONDENT
AMERICAN RIVERS, ET AL.,
INTERVENORS
On Petition for Review of Orders of the
Federal Energy Regulatory Commission
Thane D. Somerville argued the cause for petitioner. With
him on the briefs was Thomas P. Schlosser.
Carol J. Banta, Attorney, Federal Energy Regulatory
Commission, argued the cause for respondent. On the brief
were James P. Danly, General Counsel, Robert H. Solomon,
Solicitor, Robert M. Kennedy, Senior Attorney, and Ross R.
Fulton, Attorney.
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Richard Roos-Collins, Julie Gantenbein, Stuart Somach,
Michael A. Swiger, and Sharon L. White were on the briefs for
intervenors American Rivers, et al. in support of respondent.
Michael A. Swiger and Sharon L. White were on the brief
for intervenor Pacificorp in support of respondent. Charles R.
Sensiba entered an appearance.
George J. Mannina Jr. was on the brief for intervenor-
respondent Siskiyou County, California. Ashley Remillard and
Paul S. Weiland entered appearances.
Robert W. Ferguson, Attorney General, Sonia A. Wolfman,
Assistant Attorney General, Office of the Attorney General for
the State of Washington, Lawrence G. Wasden, Attorney
General, Office of the Attorney General for the State of Idaho,
Joseph A. Foster, Attorney General, Office of the Attorney
General for the State of New Hampshire, Douglas S. Chin,
Attorney General, Office of the Attorney General for the State
of Hawaii, Janet T. Mills, Attorney General, Office of the
Attorney General for the State of Maine, Peter K. Michael,
Attorney General, Office of the Attorney General for the State
of Wyoming, Eric T. Schneiderman, Attorney General at the
time the brief was filed, Office of the Attorney General for the
State of New York, and Sean D. Reyes, Attorney General,
Office of the Attorney General for the State of Utah, were on
the brief for amici curiae States of Washington, et al. in support
of intervenors-respondents American Rivers, et al.
Kamala D. Harris, Attorney General at the time the brief
was filed, Office of the Attorney General for the State of
California, Robert W. Byrne, Senior Assistant Attorney
General, Eric M. Katz, Supervising Deputy Attorney General,
and Ross H. Hirsch and Adam L. Levitan, Deputy Attorneys
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General, were on the brief for amicus curiae California State
Water Resources Control Board in support of respondent.
Ellen F. Rosenblum, Attorney General, and Paul
Garrahan, Attorney-In-Charge, Office of the Attorney General
for the State of Oregon, were on the brief for amicus curiae The
State of Oregon in support of respondent.
Before: GRIFFITH and PILLARD, Circuit Judges, and
SENTELLE, Senior Circuit Judge.
Opinion for the Court filed by Senior Circuit Judge
SENTELLE.
SENTELLE, Senior Circuit Judge: Hoopa Valley Tribe
(“Hoopa”) petitions for review of Federal Energy Regulatory
Commission (“FERC”) orders, which found (1) that California
and Oregon had not waived their water quality certification
authority under Section 401 of the Clean Water Act (“CWA”)
and (2) that PacifiCorp had diligently prosecuted its relicensing
application for the Klamath Hydroelectric Project (“Project”).
Whereas statutory waiver is mandated after a request has been
pending for more than one year, the issue in this case is whether
states waive Section 401 authority by deferring review and
agreeing with a licensee to treat repeatedly withdrawn and
resubmitted water quality certification requests as new
requests. We conclude that the withdrawal-and-resubmission
of water quality certification requests does not trigger new
statutory periods of review. Therefore, we grant the petition
and vacate the orders under review.
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I. BACKGROUND
A. Statutory Background
Under Subchapter I of the Federal Power Act (“FPA”), 16
U.S.C. §§ 791a–823g, Congress granted FERC authority to
regulate the licensing, conditioning, and development of
hydropower projects on navigable waters. Under Section 401
of the CWA, any applicant seeking a federal license for an
activity that “may result in any discharge into the navigable
waters” must first seek water quality certifications from the
controlling states. See 33 U.S.C. § 1341(a)(1). Thus, a state’s
water quality review serves as a precondition to any federal
hydropower license issued by FERC. The statute further
provides that state certification requirements “shall be waived
with respect to such Federal application” if the 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.” See id. “[T]he purpose of the waiver
provision is to prevent a State from indefinitely delaying a
federal licensing proceeding by failing to issue a timely water
quality certification under Section 401.” Alcoa Power
Generating Inc. v. FERC, 643 F.3d 963, 972 (D.C. Cir. 2011).
B. History of the Klamath Hydroelectric Project
In this case, the hydropower project in question consists of
a series of dams along the Klamath River in California and
Oregon, which were originally licensed to a predecessor of
PacifiCorp in 1954. Since the original license expired in 2006,
PacifiCorp has continued to operate the Project on annual
interim licenses pending the broader licensing process. Due to
the age of the Project, the dams are not in compliance with
modern environmental standards. Since modernizing the dams
was presumably not cost-effective, PacifiCorp sought to
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decommission the lower dams. In 2004, PacifiCorp filed for
relicensing with FERC, with a proposal to relicense the upper
dams and decommission the remainder. All milestones for
relicensing have been met except for the states’ water quality
certifications under Section 401.
In 2008, a consortium of parties—California, Oregon,
Native American tribes, farmers, ranchers, conservation
groups, fishermen, and PacifiCorp—began settlement
negotiations to resolve the procedures and the risks associated
with the dams’ decommissioning. These negotiations
culminated in a formal agreement in 2010, the Klamath
Hydroelectric Settlement Agreement (“KHSA” or the
“Agreement”), imposing on PacifiCorp a series of interim
environmental measures and funding obligations, while
targeting a 2020 decommission date. Under the KHSA, the
states and PacifiCorp agreed to defer the one-year statutory
limit for Section 401 approval by annually withdrawing-and-
resubmitting the water quality certification requests that serve
as a pre-requisite to FERC’s overarching review. The
Agreement explicitly required abeyance of all state permitting
reviews:
Within 30 days of the Effective Date, the Parties,
except ODEQ [Oregon Department of
Environmental Quality], will request to the
California State Water Resources Control Board
and the Oregon Department of Environmental
Quality that permitting and environmental
review for PacifiCorp’s FERC Project No. 2082
[Klamath Hydroelectric Project] licensing
activities, including but not limited to water
quality certifications under Section 401 of the
CWA and review under CEQA [California
Environmental Quality Act], will be held in
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abeyance during the Interim Period under this
Settlement. PacifiCorp shall withdraw and re-
file its applications for Section 401 certifications
as necessary to avoid the certifications being
deemed waived under the CWA during the
Interim Period.
See KHSA at 42.
The parties to the KHSA agreed to a number of
preconditions for decommissioning, the most relevant of which
was the securing of federal funds, which never occurred.
Consequently, on April 6, 2016, a subset of parties from the
original KHSA agreed to an “Amended KHSA,” which created
an alternative plan for decommissioning that contemplated the
transfer of licensing to a company, Klamath River Renewal
Corporation (“KRRC”), formed by the signatories of the
Amended KHSA in order to limit potential liability that
existing parties anticipated from decommissioning the dams.
Of relevance, Hoopa—whose reservation is downstream of the
Project—was not a party to either the KHSA or the Amended
KHSA.
On September 23, 2016, PacifiCorp filed for an amended
license to enable transfer of the dams to KRRC. Having never
previously considered the transfer of a license for the sole
purpose of decommissioning, and based on legal, technical,
and financial concerns, FERC chose to separately review the
applications for (1) amendment and (2) transfer. On March 15,
2018, FERC approved splitting the lower dams to a separate
license, but has yet to approve transfer of that license.
PacifiCorp remains the licensee for both of these newly split
licenses.
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C. Procedural History
On May 25, 2012, Hoopa petitioned FERC for a
declaratory order that California and Oregon had waived their
Section 401 authority and that PacifiCorp had correspondingly
failed to diligently prosecute its licensing application for the
Project. On June 19, 2014, FERC denied that petition. On
July 18, 2014, Hoopa requested rehearing on its original
petition, and FERC denied that request on October 16, 2014.
Subsequently, on December 9, 2014, Hoopa petitioned this
Court to review FERC’s orders. This Court initially held the
case in abeyance once the Amended KHSA was in place. But
the decommissioning the agreement contemplated has yet to
occur, and in light of Hoopa’s pending petition, we removed
the case from abeyance on May 9, 2018.
II. DISCUSSION
We review FERC orders under the Administrative
Procedure Act (“APA”), which empowers the Court “to reverse
any agency action that is ‘arbitrary, capricious, an abuse of
discretion, or otherwise not in accordance with law.’” See, e.g.,
Wisconsin Valley Improvement v. FERC, 236 F.3d 738, 742
(D.C. Cir. 2001) (quoting 5 U.S.C. § 706(2)(A)). In
conducting the review in this case, because FERC is not the
agency charged with administering the CWA, the Court owes
no deference to its interpretation of Section 401 or its
conclusion regarding the states’ waiver. See Alcoa Power, 643
F.3d at 972.
A. Sovereign Immunity
The state of Oregon, an amicus curiae, has challenged this
Court’s jurisdiction over the instant matter. Specifically,
California and Oregon have exercised their sovereign
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immunity under the Eleventh Amendment by refusing to
intervene in this review. Oregon avers a status as an
indispensable party because this review entails a potential
finding of the states’ waiver of their Section 401 authority.
Thus, Oregon asserts that this case must be dismissed, relying
on Fed. R. Civ. P. 19.
However, California and Oregon are not indispensable
parties to the instant case. Contrary to Oregon’s argument,
Fed. R. Civ. P. 19 does not govern this joinder issue. See Int’l
Union, United Auto. v. Scofield, 382 U.S. 205, 217 n.10 (1965).
Rather, as an appellate court reviewing an agency action, we
look to Fed. R. App. P. 15. Rule 15 only requires the
respondent federal agency as a necessary party to a petition for
review—joinder of no other party is required. See Fed. R. App.
P. 15. With regard to sovereign immunity generally, Oregon’s
position is incompatible with the precepts of federalism and
this Court’s prior precedent. Hoopa’s petition does not involve
a state’s certification decision or a state’s application of state
law, but rather a federal agency’s order, a matter explicitly
within the purview of this Court when petitioned by an
aggrieved party. See 16 U.S.C. § 825l(b). Indeed, FERC
orders regarding a state’s compliance are properly reviewed by
federal appeals courts whether or not the state is a party to the
review. See, e.g., City of Tacoma v. FERC, 460 F.3d 53 (D.C.
Cir. 2006). This is especially true, in cases such as this, when
the dispositive issue on review is the interpretation of federal
law. See U.S. Const. art. III, § 2, cl. 1 (“The judicial Power
shall extend to all Cases, in Law and Equity, arising under this
Constitution, the Laws of the United States, and Treaties made,
or which shall be made, under their Authority. . . .”).
Accordingly, this Court has jurisdiction over the instant matter,
and we shall proceed to the merits of Hoopa’s claims.
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B. Waiver under Section 401
Hoopa’s petition presents three theories as bases for relief:
the states’ waiver of their Section 401 authority, PacifiCorp’s
failure to diligently prosecute its licensing application, and
FERC’s abdication of its regulatory duty. However, all of
Hoopa’s theories are connected.
Resolution of this case requires us to answer a single issue:
whether a state waives its Section 401 authority when, pursuant
to an agreement between the state and applicant, an applicant
repeatedly withdraws-and-resubmits its request for water
quality certification over a period of time greater than one year.
If this type of coordinated withdrawal-and-resubmission
scheme is a permissible manner for tolling a state’s one-year
waiver period, then (1) California and Oregon did not waive
their Section 401 authority; (2) PacifiCorp did not fail to
diligently prosecute its application; and (3) FERC did not
abdicate its duty. However, if such a scheme is ineffective,
then the states’ and licensee’s actions were an unsuccessful
attempt to circumvent FERC’s regulatory authority of whether
and when to issue a federal license.
Determining the effectiveness of such a withdrawal-and-
resubmission scheme is an undemanding inquiry because
Section 401’s text is clear.
If the State, interstate agency, or Administrator,
as the case may be, 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
with respect to such Federal application. No
license or permit shall be granted until the
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certification required by this section has been
obtained or has been waived as provided in the
preceding sentence.
See 33 U.S.C. § 1341(a)(1). The temporal element imposed by
the statute is “within a reasonable period of time,” followed by
the conditional parenthetical, “(which shall not exceed one
year).” See id. Thus, while a full year is the absolute
maximum, it does not preclude a finding of waiver prior to the
passage of a full year. Indeed, the Environmental Protection
Agency (“EPA”)—the agency charged with administering the
CWA—generally finds a state’s waiver after only six months.
See 40 C.F.R. § 121.16.
The pendency of the requests for state certification in this
case has far exceeded the one-year maximum. PacifiCorp first
filed its requests with the California Water Resources Control
Board and the Oregon Department of Environmental Quality
in 2006. Now, more than a decade later, the states still have
not rendered certification decisions. FERC “sympathizes” with
Hoopa, noting that the lengthy delay is “regrettable.”
According to FERC, it is now commonplace for states to use
Section 401 to hold federal licensing hostage. At the time of
briefing, twenty-seven of the forty-three licensing applications
before FERC were awaiting a state’s water quality
certification, and four of those had been pending for more than
a decade.
Implicit in the statute’s reference “to act on a request for
certification,” the provision applies to a specific request. See
33 U.S.C. § 1341(a)(1) (emphasis added). This text cannot be
reasonably interpreted to mean that the period of review for one
request affects that of any other request. In its decision, FERC
used this text to rescue the states from waiver. FERC found
that while PacifiCorp’s various resubmissions involved the
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same Project, each resubmission was an independent request,
subject to a new period of review. Thus, FERC averred that
the states had not failed to act. In doing so, FERC acted
arbitrarily and capriciously.
The record does not indicate that PacifiCorp withdrew its
request and submitted a wholly new one in its place, and
therefore, we decline to resolve the legitimacy of such an
arrangement. We likewise need not determine how different a
request must be to constitute a “new request” such that it
restarts the one-year clock. This case presents the set of facts
in which a licensee entered a written agreement with the
reviewing states to delay water quality certification.
PacifiCorp’s withdrawals-and-resubmissions were not just
similar requests, they were not new requests at all. The KHSA
makes clear that PacifiCorp never intended to submit a “new
request.” Indeed, as agreed, before each calendar year had
passed, PacifiCorp sent a letter indicating withdrawal of its
water quality certification request and resubmission of the very
same . . . in the same one-page letter . . . for more than a
decade. Such an arrangement does not exploit a statutory
loophole; it serves to circumvent a congressionally granted
authority over the licensing, conditioning, and developing of a
hydropower project.
While the statute does not define “failure to act” or “refusal
to act,” the states’ efforts, as dictated by the KHSA, constitute
such failure and refusal within the plain meaning of these
phrases. Section 401 requires state action within a reasonable
period of time, not to exceed one year. California and Oregon’s
deliberate and contractual idleness defies this requirement. By
shelving water quality certifications, the states usurp FERC’s
control over whether and when a federal license will issue.
Thus, if allowed, the withdrawal-and-resubmission scheme
could be used to indefinitely delay federal licensing
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proceedings and undermine FERC’s jurisdiction to regulate
such matters.
Congress intended Section 401 to curb a state’s “dalliance
or unreasonable delay.” See, e.g., 115 Cong. Rec. 9264 (1969).
This Court has repeatedly recognized that the waiver provision
was created “to prevent a State from indefinitely delaying a
federal licensing proceeding.” See Alcoa Power, 643 F.3d at
972–73; Millennium Pipeline Co. v. Seggos, 860 F.3d 696,
701–02 (D.C. Cir. 2017).
While caselaw offers some guidance regarding a state’s
waiver, e.g., North Carolina v. FERC, 112 F.3d 1175, 1183–
85 (D.C. Cir. 1997), this Court has never addressed the specific
factual scenario presented in this case, i.e., an applicant
agreeing with the reviewing states to exploit the withdrawal-
and-resubmission of water quality certification requests over a
lengthy period of time. In its supplemental brief, FERC directs
the Court’s attention to a Second Circuit opinion which
suggested, in light of various practical difficulties, that a state
could “request that the applicant withdraw and resubmit the
application.” See New York State Dep’t of Envtl. Conservation
v. FERC, 884 F.3d 450, 455–56 (2d Cir. 2018) (citing
Constitution Pipeline Co., LLC v. New York State Dep’t of
Envtl. Conservation, 868 F.3d 87, 94 (2d Cir. 2017)). That
suggestion was not central to the court’s holding. The dicta
was offered to rebut the state agency’s fears that a one-year
review period could result in incomplete applications and
premature decisions. See id. (identifying denial without
prejudice as another alternative).
While it is the role of the legislature, not the judiciary, to
resolve such fears, those trepidations are inapplicable to the
instant case. The record indicates that PacifiCorp’s water
quality certification request has been complete and ready for
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review for more than a decade. There is no legal basis for
recognition of an exception for an individual request made
pursuant to a coordinated withdrawal-and-resubmission
scheme, and we decline to recognize one that would so readily
consume Congress’s generally applicable statutory limit.
Accordingly, we conclude that California and Oregon have
waived their Section 401 authority with regard to the Project.
C. Futility
FERC postulated that a finding of waiver would require
the agency to deny PacifiCorp’s license. As a result,
PacifiCorp would have to file a decommissioning plan for the
Klamath dams, and since decommissioning of the Project is an
activity that itself would result in a “discharge into the
navigable waters,” that plan would be subject to its own set of
the oft-delayed state water quality certifications. Thus, in a
futile sequence of events, the Project would revert back to its
present state, only burdened with additional delays.
FERC may be correct that “[i]ndefinite delays in
processing [licensing] applications are . . . not in the public
interest.” See Georgia-Pacific Corp., 35 FERC ¶ 61120, 61248
n.8 (Apr. 25, 1986). However, such practical concerns do not
trump express statutory directives. See supra Section II.B.
Regardless, had FERC properly interpreted Section 401 and
found waiver when it first manifested more than a decade ago,
decommissioning of the Project might very well be underway.
Further, FERC possesses a critical role in protecting the
public interest in hydropower projects. See 16 U.S.C.
§§ 797(e), 803(a), 808(a). FERC solicits comments from
interested parties and holds public meetings. See, e.g., U.S.
Dep’t of Interior v. FERC, 952 F.2d 538, 540 (D.C. Cir. 1992).
FERC may also “participate in an advisory role in settlement
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discussions or review proposed settlements” for the
development or decommissioning of such projects. See
Settlements in Hydropower Licensing Proceedings under Part I
of the Federal Power Act, 116 FERC ¶ 61270, 62086 (Sept. 1,
2006). Here, it did neither. Hoopa’s interests are not protected
directly as it is not a party to the KHSA or Amended KHSA,
nor are its interests protected indirectly through any
participation by FERC in those same settlement agreements.
Therefore, we disagree that a finding of waiver is futile
because, at a minimum, it provides Hoopa and FERC an
opportunity to rejoin the bargaining table.
III. CONCLUSION
For the reasons set forth above, we vacate and remand the
rulings under review. FERC shall proceed with its review of,
and licensing determination for, the Klamath Hydroelectric
Project.