Two Federal Courts of Appeals Confirm Constitutional Challenge to FERC Order is Subject to National Gas Act Review Procedures

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On July 25, the U.S. Court of Appeals for the Third Circuit decided the case of Adorers of the Blood of Christ v. FERC, and affirmed the order of the U.S. District Court for the Eastern District of Pennsylvania dismissing the complaint.  The Court of Appeals held that

A Religious Freedom Restoration Act (RFRA)” cause of action, brought by invoking a court’s general federal question jurisdiction, does not abrogate or provide an exception to a specific and exclusive jurisdictional provision prescribing a particular procedure for judicial review of an agency’s action.”

The Court of Appeals further held that

“[A]lthough we hold today that such objections must be raised in the administrative forum under FERC’s exclusive regime to preserve appellate review, nothing in this opinion should be construed to call into question the sincerity of the deeply-held religious beliefs expressed by the Adorers.”

The plaintiffs are described as “an ecclesial group of women living in community … whose religious practice includes protecting and preserving creation which they believe is a revelation of God.”  They strongly adhere to the Pope’s encyclical, “Laudato Si,” which calls on everyone to halt environmental degradation.

The Federal Energy Regulatory Commission (FERC) published a Federal Register notice in July 2014 which advised the public that it intended to prepare an environmental impact statement for this project which is called the  “Sunrise Expansion”; hundreds of comments were received, and many speakers participated in the agency’s “scoping sessions.”  Transco filed an application for the project on March 2015, prompting FERC to notify  affected landowners, including the plaintiffs.  FERC issued the necessary certificate under the Natural Gas Act (NGA) in February 2017, which also served to grant Transco the right to take private property by eminent domain if a property owner refuses to voluntarily agree to allow the pipeline to use its land.  The plaintiffs refused to grant an easement to Transco, and the pipeline initiated condemnation proceedings in the federal district court.

In August 2017, Transco obtained access to the plaintiff’s property to begin construction of the pipeline.  The Court of Appeals notes that the plaintiffs did not participate in any of these condemnation proceedings, or in the FERC pipeline proceedings. Within a few weeks they filed a complaint against FERC in the district court seeking a declaratory judgment that FERC violated their rights under the RFRA, and seeking an injunction to prevent the pipeline from running across their land, contending that allowing Transco to complete this pipeline would interfere with their ability to use the land in a manner consistent with their religious beliefs.

The plaintiffs argued that the RFRA gives them a statutory right to assert an appropriate claim in the federal district court.  However, both the trial court and the Court of Appeals held that that the NGA’s precise and “reticulated” administrative procedure set forth the exclusive manner in which such agency orders may be challenged, and only an Court of Appeals can hear such a claim.  While the RFRA provides a right to a “judicial proceeding,” the NGA “simply lays out what procedural rules a claimant must adhere to when exercising their right to a judicial proceeding before the FERC.”  No entity may seek judicial review of a FERC order unless, as provided by the NGA, it first sought rehearing from the agency.  The Court of Appeals also noted that the plaintiffs, by failing to participate in FERC’s processes—despite the official notifications they received– forfeited their rights to complain about the FERC order.  The plaintiffs also took no steps to preserve their right to appeal.

Coincidentally, the U.S. Court of Appeals for the Fourth Circuit faced a similar issue, and ruled, on July 25, 2018, that legal challenges to a Certificate of Public Convenience and Necessity issued to a natural gas pipeline company are confined to the FERC regulatory review process, whose terminus is usually a federal court of appeals. This case is Orus Ashley Berkley v. Mountain Valley Pipeline, LLC, et al. In October 2017, FERC issued a Certificate to Mountain Valley Pipeline, which authorized the construction of this pipeline and vested the company with the eminent domain authority provided by the NGA; this authority can be implemented through condemnation proceedings in federal or state court. The plaintiffs, who own land along the proposed path of the pipeline, had challenged the constitutionality of the NGA in a lawsuit they filed in the U.S. District Court for the Western District of Virginia. The Court of Appeals agreed with the District Court that it had no jurisdiction to hear this complaint. The 1977 legislation which replaced the Federal Power Commission with FERC did so with the purpose of divesting the district courts of any jurisdiction to hear these cases, and these litigants should have been engaged and involved with FERC’s administrative processes. The Court of Appeals was confident that these processes are more than adequate to decide the issues that concern the plaintiff landowners.

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