Energy and Environment Monitor

INJUNCTION ISSUED BY MONTANA COURT APPEARS TO PROHIBIT U.S. ARMY CORPS OF ENGINEERS FROM AUTHORIZING ANY UTILITY LINE ACTIVITIES UNDER NATIONWIDE PERMIT 12 UNTIL COMPLETION OF ENDANGERED SPECIES ACT REVIEW

April 20, 2020

In a case challenging the U.S. Army Corps of Engineers’ approval of the Keystone XL pipeline, a federal district court in Montana issued a sweeping injunction last week that, on its face, seems to prohibit the Corps from approving any activities under its Nationwide Permit 12 (“NWP 12”), which authorizes discharges of dredged or fill material associated with utility line activities, until it completes programmatic consultation with the U.S. Fish & Wildlife Service (“USFWS”) under the Endangered Species Act. Northern Plains Res. Council v. U.S. Army Corps of Engineers, 2020 WL 1875455, No. 4:19-cv-44-BMM (D. Mont. Apr. 15, 2020). 

The injunction appears to be far broader than the relief requested by the environmental groups who sued the Corps, who sought to prohibit the Corps from authorizing construction of the Keystone XL pipeline in Montana, South Dakota, and Nebraska. They did not request an injunction prohibiting the Corps from authorizing any utility line activities elsewhere. The Court failed to explain whether it intended its injunction to apply nationwide or to prohibit only authorization of any activities in furtherance of the Keystone XL pipeline pending further review by the USFWS. For now, the Corps has instructed its Districts not to authorize any new projects under NWP 12. It is unclear whether the injunction could also affect any existing authorizations currently being used for utility line construction.

The Endangered Species Act (“ESA”) and its implementing regulations require federal agencies to engage in “formal consultation” with the USFWS if any agency action “may affect” an endangered or threatened species or its critical habitat. 16 U.S.C. § 1536(a)(2); 50 C.F.R. § 402.14(a). Once formal consultation is requested, USFWS prepares a “biological opinion” stating whether the federal agency action “is likely to jeopardize the continued existence of listed species or result in the destruction or adverse modification of critical habitat.” 50 C.F.R. § 402.02. 

In the Montana case, the federal agency action at issue was the Corps’ 2017 reissuance of NWP 12, which authorizes discharges of dredged or fill material associated with construction, maintenance, or repair of utility lines, including oil pipelines like the Keystone XL project. 82 Fed. Reg. 1,860 (Jan. 6, 2017). Section 404 of the Clean Water Act requires a permit for discharges of dredged or fill material and allows the Corps to issue nationwide permits for discharges that “will cause only minimal adverse environmental effects when performed separately, and will have only minimal cumulative adverse effect on the environment.” 33 U.S.C. §§ 1344(a) & (e)(1). Nationwide permits can remain in effect for up to five years, after which they must be reissued by the Corps. 33 U.S.C. § 1344(e)(2).

When the Corps reissued NWP 12 in 2017, it concluded that its reissuance would have no effect on listed species or critical habitat, so consultation under the Endangered Species Act was not required. 82 Fed. Reg. at 1873-74. In support of this conclusion, the Corps cited General Condition 18, which expressly states that “[n]o activity is authorized under any NWP which is likely to directly or indirectly jeopardize the continued existence” of a listed species or critical habitat. If a proposed activity “might affect” any listed species or critical habitat, General Condition 18 requires the permittee to submit a “pre-construction notification” (“PCN”) to the Corps identifying the listed species that might be affected, and the permittee cannot begin work until notified by the Corps that ESA consultation has been completed and the activity is authorized. When it reissued NWP 12 in 2017, the Corps determined that General Condition 18 ensures that NWP 12 will have no effect on listed species or critical habitat.

Several months after reissuing NWP 12 in 2017, the Corps issued verifications to TC Energy authorizing construction of the Keystone XL pipeline under the nationwide permit. Six environmental groups sued the Corps, arguing that both the 2017 reissuance of NWP 12 and the verifications issued for the Keystone XL project violated the Clean Water Act and the Endangered Species Act. After the Corps suspended its verifications (at TC Energy’s request) so that it could conduct further environmental review, the legal challenges to the verifications were stayed while the challenges to NWP 12 itself proceeded. The parties filed cross-motions for summary judgment on the issues regarding NWP 12.

The Court rejected the Corps’ argument that project-specific review under NWP 12 and General Condition 18 was sufficient to satisfy the Corps’ obligations under the Endangered Species Act, characterizing the Corps’ reliance on General Condition 18 as a delegation of its legal responsibility under the ESA to the permittee. Northern Plains, at *7. The ESA and federal regulations require the federal agency to determine whether its action “may affect” listed species or critical habitat. But General Condition 18 requires the permittee to determine whether its activity “might affect” listed species or critical habitat and, if so, submit a PCN to the Corps. The Court held that “[p]roject-level review does not relieve the Corps of its duty to consult on the issuance of nationwide permits at the programmatic level. The Corps must consider the effect of the entire agency action.” Northern Plains, at *6 (citing Conner v. Burford, 848 F.2d 1441, 1457-58 (9th Cir. 1988), holding that biological opinions must be coextensive with agency action).

Here, the agency action was reissuance of NWP 12, not issuance of verifications for individual projects. The Court found that there was “resounding evidence” that reissuance of NWP 12 “may affect” listed species or habitat, including several statements made by the Corps in its Decision Document for NWP 12. There, the Corps discussed the environmental impacts of activities that had been authorized by NWP 12 in the past and acknowledged that “[t]he activities authorized by [reissuance of NWP 12] will result in a minor incremental contribution to the cumulative effects to wetlands, streams, and other aquatic resources in the United States[.]” Northern Plains, at *5 (emphasis in original). In addition, the Court cited the declarations of two expert witnesses for the plaintiffs, both biologists, who “declared that the discharges authorized by NWP 12 will affect endangered species.” Id., at *6 (citing statements regarding the pallid sturgeon and American burying beetle). 

Based on this “resounding evidence” that reissuance of NWP 12 “may effect” listed species or critical habitat, the Court concluded that the Corps was required to consult with USFWS before reissuing the permit in 2017. “Programmatic review of NWP 12 in its entirety, as required by the ESA for any project that ‘may affect’ listed species or critical habitat, provides the only way to avoid piecemeal destruction of species and habitat.” Id. at *7. 

Finally, the Court noted that the Corps “remains well aware that its reauthorization of NWP 12 required” formal consultation with USFWS because in 2005, another federal district court held that the Corps violated the ESA when it failed to consult with USFWS before reissuing NWP 12 in 2002. Id. at *2, *7 (citing Nat’l Wildlife Fed’n v. Brownlee, 402 F.Supp.2d 1 (D.D.C. 2005)). As a result, the Corps did engage in formal programmatic consultation when it reissued NWP 12 in 2007 and again in 2012, but failed to do so in 2017.