New Holdup for Pipelines — US District Court Judge Vacates Nationwide Permit
On April 15, 2020, Chief Judge Morris of the US District Court for the District of Montana, in Northern Plains Resource Council, et al. v. U.S. Army Corps of Engineers, cv-19-44-GF-BMM, ordered that Nationwide Permit No. 12 (NWP 12) be vacated and remanded to the Corps for compliance with the Endangered Species Act (ESA). The court also enjoined the Corps from issuing any further dredge and fill activities under the NWP 12.
The Corps issues nationwide permits to authorize certain activities that require Corps permits under Section 404 of the Clean Water Act (CWA), NWP 12 is a general permit first issued in 1977 and most recently reissued in 2017 for discharges of dredged or fill material in regulated waters associated with work on utility lines and associated facilities. Many lines are covered, including pipelines. In this case, the nationwide permit coverage was authorized for the Keystone XL Pipeline crossing of the Yellowstone and Cheyenne rivers.
The primary issue in the case was whether the Corps should have initiated programmatic consultation with the US Fish and Wildlife Service in the issuance of the 2017 NWP 12.
The Corps defended the decision not to seek consultation for the 2017 NWP 12 because General Condition 18 of the permit prohibits activity "which is likely to directly or indirectly jeopardize the continued existence of a threatened or endangered species or a species proposed for such designation…,or which will directly or indirectly destroy or adversely modify the critical habitat of such species.” General Condition 18 also provides no activity can be conducted “under an NWP that “may affect” a listed species or critical habitat, unless ESA section 7 consultation addressing the proposed activity has been completed.”  The Corps ensures compliance with this permit condition by requiring the applicant to submit a pre-construction notice if a listed species or designated critical habitat might be affected or is in the vicinity of the activity. This procedure is referred to as a “project-by-project” review.
The court found the Corps could not rely on this project-by-project-level review on NWP general conditions to circumvent ESA’s overall consultation at the programmatic level when issuing NWPs. The court, in finding substantial evidence that NWP 12 may affect listed species and required early consultation, held that the Corps should have initiated formal consultation before the issuance of the 2017 NWP, just as it had done in the 2007 NWP and throughout the 2012 issuance of NWP 12.
The court ordered that NWP 12 be remanded to the Corps for compliance with ESA and also vacated the NWP pending the consultation process and compliance with all environmental statutes and regulations. In addition, the court also enjoined the Corps from authorizing projects under NWP 12 until the formal completion of the ESA consultation. This is a lengthy process. The court did not articulate whether its ruling is retroactive. It is unknown whether there will be any appeal. However, it is expected more claims will arise under ESA and NWP 12, as the permit affects many vital infrastructure projects. The alternative of individual permits exists, but the issuance process can be prolonged and such permits do not avoid litigation.