[Cite as State ex rel. Yost v. Rover Pipeline, L.L.C., 2019-Ohio-5179.]


                                         COURT OF APPEALS
                                        STARK COUNTY, OHIO
                                     FIFTH APPELLATE DISTRICT


 STATE OF OHIO, EX REL.,                                   JUDGES:
 DAVE YOST, OHIO                                           Hon. William B. Hoffman, P.J.
 ATTORNEY GENERAL                                          Hon. John W. Wise, J.
                                                           Hon. Patricia A. Delaney, J.
         Plaintiff-Appellant

 -vs-
                                                           Case No. 2019CA00056
 ROVER PIPELINE, LLC; PRETEC
 DIRECTIONAL DRILLING, LLC; MEARS
 GROUP, INC.; LANEY DIRECTIONAL
 DRILLING CO.; ATLAS TRENCHLESS,
 LLC; AND B & T DIRECTIONAL
 DRILLING, INC.

        Defendants-Appellees                               O P I N IO N




 CHARACTER OF PROCEEDINGS:                                 Appeal from the Stark County Court of
                                                           Common Pleas, Case No. 2017-CV-
                                                           02216

 JUDGMENT:                                                 Affirmed

 DATE OF JUDGMENT ENTRY:                                   December 9, 2019

 APPEARANCES:

 For Plaintiff-Appellant                                   For Defendant-Appellee Mears Group,
                                                           Inc., LLC
 DAVE YOST
 Ohio Attorney General                                     FREDERIC (“FRITZ”) X. SHADLEY
 AARON S. FARMER                                           DAVID A. MEYER
 JANEAN R. WEBER                                           600 Vine Street, Suite 2800
 AMANDA M. FERGUSON                                        Cincinnati, Ohio 45202
 Environmental Enforcement Section
 Assistant Attorney General
 30 East Broad Street, 25th Floor
 Columbus, Ohio 43215
Stark County, Case No. 2019CA00056                                                   2



For Defendant-Appellee Rover                  For Defendant-Appellee Laney
Pipeline, LLC                                 Directional Drilling Co.

STEPHEN H. DANIELS                            THOMAS A. KNOTH
MICHAEL S. MCMAHON                            J. WRAY BLATTNER
McMahon DeGulis LLP                           Thompson Hine LLP
The Caxton Building                           10050 Innovation Drive, Suite 400
812 Huron Road, E., Suite 650                 Miamisburg, Ohio 45342
 Cleveland, Ohio 44115
                                              For Defendant-Appellee Pretec
                                              Directional Drilling, LLC
WILLIAM S. SCHERMAN (pro hac vice admitted)
DAVID DEBOLD (pro hac vice admitted)          JOSEPH P. KONCELIK
JASON FLEISCHER (pro hac vice admitted)       ANTHONY R. PETRUZZI
RUTH PORTER (pro hac vice admitted)           MELISSA Z. KELLY
Gibson, Dunn & Crutcher LLP                   Tucker Ellis LLP
1050 Connecticut Avenue, N.W.                 950 Main Avenue, Suite 1100
Washington, DC 20036                          Cleveland, Ohio 44113-7213

For Defendant-Appellee B & T                  For Defendant-Appellee Atlas
Directional Drilling Inc.                     Trenchless, LLC

GRANT J. KEATING                              PHILIPS J. VALLAKALIL
Dworken & Bernstein Co., LPA                  Atlas Trenchless, LLC
60 South Park Place                           520 S. 6th Avenue
Painesville, Ohio 44077                       Mansfield, TX 75054

For Amicus Curiae Sierra Club                 KEVIN L. MURPHY
                                              J. JEFFREY LANDEN
RICHARD C. SAHLI                              MICHAEL S. JONES
Richard Sahli Law Office, LLC                 MURPHY LANDEN JONES PLLC
981 Pinewood Lane                             2400 Chamber Center Drive, Suite 200
Columbus, Ohio 43230-3662                     Fort Mitchell, KY 41017-0534

NATHAN D. MATTHEWS
2101 Webster Street, Suite 1300
Oakland, CA 94612
Stark County, Case No. 2019CA00056                                                             3


Hoffman, P.J.
          {¶1}   Appellant State of Ohio, ex rel. Dave Yost, Ohio Attorney General, appeals

the judgment of the Stark County Common Pleas Court dismissing its complaint against

Appellees Rover Pipeline, LLC; Mears Group, Inc.; Pretec Directional Drilling, LLC; Laney

Directional Drilling Co.; Atlas Trenchless, LLC; and B&T Directional Drilling, Inc.

                              STATEMENT OF THE CASE AND FACTS

          {¶2}   On July 19, 2018, Appellant filed a third amended complaint, the dismissal

of which is the entry appealed from in the instant action. The complaint alleged Appellees

illegally discharged millions of gallons of drilling fluids into Ohio’s waters, causing pollution

and degrading water quality across the state during construction of the Rover Pipeline, a

713-mile interstate natural gas pipeline crossing 18 Ohio counties. Appellee Rover was

the owner/operator of the drilling operation for construction of the pipeline. The remaining

Appellees were subcontractors hired by Rover to perform horizontal-directional drilling

related to construction of the pipeline. Appellant sought civil penalties and injunctive

relief.

          {¶3}   Specifically, Appellant’s complaint alleged the following:



                 Count one: Appellees discharged pollutants (drilling fluids) into the

          waters of the state without point source NPDES permits.

                 Count two: Appellee Rover failed to obtain a necessary storm water

          permit for its storm water discharges.

                 Count three:      Appellees violated Ohio’s general water quality

          standards (unpermitted drilling fluid discharges and storm water discharges

          into waters of the state).
Stark County, Case No. 2019CA00056                                                        4


              Count four:     Appellees violated Ohio’s wetland water quality

       standards by unpermitted drilling fluid discharges into wetlands.

              Count five: Appellee Rover violated the Director of the EPA’s orders

       by failing to obtain coverage or submit a notice of intent to obtain coverage

       for a Construction Storm Water Permit.

              Count six: Appellee Rover violated the hydrostatic permit laws.

              Count seven: Appellee Rover engaged in activity from February 14,

       2017 through May 15, 2017, without the state 401 water quality certification.



       {¶4}   Appellees moved to dismiss the complaint pursuant to Civ. R. 12(B)(1) and

(6), raising four basic arguments.

       {¶5}   First, Appellees argued Appellant’s failure to act within one year on Rover’s

November 16, 2016, application for the State to issue a §401 certification under the

federal Clean Water Act resulted in the State waiving its power to impose conditions and

enforce environmental requirements for the pipeline project as a matter of federal law.

       {¶6}   Second, Appellees argued Rover received all necessary regulatory

approvals from FERC (Federal Energy Regulatory Commission). They argued Appellant

participated in the preparation of an Environmental Impact Statement (EIS) as a part of

the process of obtaining FERC approval, and failed to identify additional State permitting

requirements through the EIS process.

       {¶7}   Third, Appellees argued the State’s claims are preempted by the Natural

Gas Act, and the trial court therefore lacked subject matter jurisdiction.
Stark County, Case No. 2019CA00056                                                      5


       {¶8}   Fourth, Appellees argued the State’s claims are an improper collateral

attack on FERC’s orders approving the pipeline project.

       {¶9}   Appellant responded Counts 1-6 were not subject to Section 401

certification. As to Count Seven, Appellant argued waiver did not apply because Rover

reapplied for Section 401 certification on February 23, 2017, and the State granted the

revised request on February 24, 2017.

       {¶10} The trial court granted Appellees’ motion to dismiss on March 12, 2019.

The court found by failing to act on Rover’s November 16, 2015, request for 401

certification, Appellant waived its rights under the Clean Water Act. The court found the

resubmission of the request for certification on February 23, 2017, did not save the State

from waiver, as the request was resubmitted outside the one-year period for action on the

initial submission.

       {¶11} It is from the March 12, 2019 judgment of the trial court Appellant

prosecutes this appeal, assigning as error:



              I. THE TRIAL COURT ERRED AS A MATTER OF LAW WHEN IT

       HELD THAT, UNDER THE CLEAN WATER ACT, 33 U.S.C. 1341, THE

       STATE OF OHIO WAIVED ALL OF ITS WATER POLLUTION AUTHORITY

       OVER ENVIRONMENTAL VIOLATIONS OCCURRING DURING THE

       CONSTRUCTION OF ROVER’S INTERSTATE PIPELINE.

              II. THE TRIAL COURT ERRED AS A MATTER OF LAW WHEN IT

       FOUND, IN A FOOTNOTE, THAT EVEN WITHOUT WAIVER, THE OTHER

       DEFENSES RAISED BY ROVER AND ITS CONTRACTORS INCLUDING
Stark County, Case No. 2019CA00056                                                                        6


        PREEMPTION BARRED THE STATE OF OHIO’S COUNTS ONE

        THROUGH SIX.



                                                         I.

        {¶12} Appellant argues the court erred in finding its failure to act in a timely

manner on Rover’s application for Section 401 certification waived its rights to enforce

Ohio’s Clean Water Act in regards to the violations alleged in Counts One through Six of

its third amended complaint.1

        {¶13} The trial court dismissed the complaint pursuant to Civ. R. 12(B)(1), lack of

subject matter jurisdiction and Civ. R. 12(B)(6), failure to state a claim upon which relief

could be granted. An order granting a Civ.R. 12(B)(1) or a 12(B)(6) motion to dismiss is

subject to de novo review. Moody v. Frazeysburg, 5th Dist. Muskingum No. CT2005-

0037, 167 Ohio App.3d 106, 2006-Ohio-3028, 854 N.E.2d 212, ¶ 9; Perrysburg Twp. v.

Rossford, 103 Ohio St.3d 79, 2004-Ohio-4362, 814 N.E.2d 44, ¶ 5. In determining

whether the plaintiff has alleged a cause of action sufficient to withstand a Civ.R. 12(B)(1)

motion to dismiss, a court is not confined to the allegations of the complaint and may

consider material pertinent to the inquiry without converting it into a motion for summary

judgment. Moody, supra, citing Southgate Dev. Corp. v. Columbia Gas Transm. Corp.,

48 Ohio St.2d 211, 2 O.O.3d 393, 358 N.E.2d 526, paragraph one of the syllabus (1976).

        {¶14} The Federal Clean Water Act specifically reserves to the states the right to

adopt and enforce standards and requirements regarding pollutants in its waterways:



1Appellant states in its brief, “While the State disagrees with the conclusion below that it waived Count
Seven, the State seeks review of the trial court’s dismissal of the water pollution claims alleged in Counts
One through Six only.” Brief of Appellant, page 6.
Stark County, Case No. 2019CA00056                                                         7


             Except as expressly provided in this chapter, nothing in this chapter

      shall (1) preclude or deny the right of any State or political subdivision

      thereof or interstate agency to adopt or enforce (A) any standard or

      limitation respecting discharges of pollutants, or (B) any requirement

      respecting control or abatement of pollution; except that if an effluent

      limitation, or other limitation, effluent standard, prohibition, pretreatment

      standard, or standard of performance is in effect under this chapter, such

      State or political subdivision or interstate agency may not adopt or enforce

      any effluent limitation, or other limitation, effluent standard, prohibition,

      pretreatment standard, or standard of performance which is less stringent

      than the effluent limitation, or other limitation, effluent standard, prohibition,

      pretreatment standard, or standard of performance under this chapter; or

      (2) be construed as impairing or in any manner affecting any right or

      jurisdiction of the States with respect to the waters (including boundary

      waters) of such States.



      {¶15} 33 U.S.C. 1370.

      {¶16} Ohio has delegated to its Director of Environmental Protection the authority

to promulgate rules and regulations, including issuing permits, concerning the discharge

of pollutants into the State’s waters. R.C. 6111.03. These rules and regulations are found

in Ohio Administrative Code Chapter 3745.

      {¶17} The Federal Clean Water Act further provides any project in which

discharge of a pollutant into navigable waters occur must receive certification from the
Stark County, Case No. 2019CA00056                                                        8


state in which the discharge will originate. This certification, referred to as the “401

certification,” is governed by 33 U.S.C. §1341(a)(1), which provides:



             Any applicant for a Federal license or permit to conduct any activity

      including, but not limited to, the construction or operation of facilities, which

      may result in any discharge into the navigable waters, shall provide the

      licensing or permitting agency a certification from the State in which the

      discharge originates or will originate, or, if appropriate, from the interstate

      water pollution control agency having jurisdiction over the navigable waters

      at the point where the discharge originates or will originate, that any such

      discharge will comply with the applicable provisions of sections 1311, 1312,

      1313, 1316, and 1317 of this title. In the case of any such activity for which

      there is not an applicable effluent limitation or other limitation under sections

      1311(b) and 1312 of this title, and there is not an applicable standard under

      sections 1316 and 1317 of this title, the State shall so certify, except that

      any such certification shall not be deemed to satisfy section 1371(c) of this

      title. Such State or interstate agency shall establish procedures for public

      notice in the case of all applications for certification by it and, to the extent

      it deems appropriate, procedures for public hearings in connection with

      specific applications. In any case where a State or interstate agency has no

      authority to give such a certification, such certification shall be from the

      Administrator. If the State, interstate agency, or Administrator, as the case

      may be, fails or refuses to act on a request for certification, within a
Stark County, Case No. 2019CA00056                                                        9


       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 certification required by this section has been obtained

       or has been waived as provided in the preceding sentence. No license or

       permit shall be granted if certification has been denied by the State,

       interstate agency, or the Administrator, as the case may be. (Emphasis

       added).



       {¶18} 33 U.S.C. § 1341(d) further provides:



              Any certification provided under this section shall set forth any

       effluent limitations and other limitations, and monitoring requirements

       necessary to assure that any applicant for a Federal license or permit will

       comply with any applicable effluent limitations and other limitations, under

       section 1311 or 1312 of this title, standard of performance under section

       1316 of this title, or prohibition, effluent standard, or pretreatment standard

       under section 1317 of this title, and with any other appropriate requirement

       of State law set forth in such certification, and shall become a condition on

       any Federal license or permit subject to the provisions of this section.



       {¶19} “The plain language of Section 401 outlines a bright-line rule regarding the

beginning of review: the timeline for a state’s action regarding a request for certification
Stark County, Case No. 2019CA00056                                                           10


‘shall not exceed one year’ after receipt of such request.’” New York State Dept. of

Environmental Conservation v. Fed. Energy Regulatory Commission, 884 F.3d 450, 455

(2nd Cir. 2018). Further, the withdrawal and resubmission of requests for certification

does not extend the time beyond one year from the original request, as resubmissions of

requests involving the same project are not independent requests, subject to a new period

of review. Hoopa Valley Tribe v. Fed. Energy Regulatory Commission, 913 F.3d 1099,

1104 (D.C. Cir. 2019), reh'g denied, 2019 WL 3928669.

       {¶20} It is undisputed in this case Appellant failed to act on Rover’s original

certification request within one year of November 16, 2015. Further, while Appellant

appears to have abandoned on appeal its argument the resubmission of the certification

request on February 23, 2017, restarted the one-year time period, pursuant to Hoopa

Valley, supra, we find the trial court did not err in finding the resubmission did not restart

the one year period within which the State must act on a request for certification.

       {¶21} Appellant first argues Section 401(d)(1)’s language stating the certification

“shall” set forth any conditions in a timely certification has been interpreted by the courts

to read “may.”     Appellant argues pursuant to O.A.C. 3745-32-02(A), Section 401

certification applies solely to fill dirt, and does not apply to discharge of drilling fluids or

stormwater.

       {¶22} Appellant cites this court to PUD No. 1 of Jefferson County v. Washington

Dept. of Ecology, 511 U.S. 700, 713-714 (1994), and Great Basin Mine Watch v. Hankins,

456 F3d 955, 963 (9th Cir. 2006) in support of its argument we should interpret the

language of Section 401(d)(1) to read “may,” thus reserving their rights over the types of

effluents set forth in counts one through six of the complaint.
Stark County, Case No. 2019CA00056                                                           11


       {¶23} We find these cases distinguishable from the issue presented in the instant

case. PUD No. 1 dealt with the question of whether a State could only impose water

quality limitations specifically tied to a discharge. In finding Section 401(d)(1) allowed a

state to impose water quality standards to other types of activities not involving

discharges, the United States Supreme Court held the states “may condition certification

upon any limitations necessary to ensure compliance with state water quality standards.”

Id. at 713-714. In Great Basin Mine Watch, the court held, “PUD No. 1 merely holds that

states may set minimum flow standards as part of section 401 certification requirements;

it does not hold that states must do so.” 456 F.3d at 963. However, the issue in Great

Basin was not whether the state could waive its rights to enforce its water pollution

statutes by failing to timely act on a certification or to include all types of pollution in its

certification process, but rather whether Congress can force a state to issue a 401

certification or to include specific conditions when it does so. Neither of these cases stand

for the proposition the clear language of the statute should be changed from “shall” to

“may” when considering the issue of whether a state has waived its right to participate in

the certification process.

       {¶24} Appellant also cites this court to Ohio Administrative Code 3745-32-02(A)

which provides, “Any applicant for a federal license or permit to conduct any activity which

may result in a discharge of dredged or fill material to a water of the state shall apply for

and obtain a 401 certification from Ohio EPA.” Appellant argues pursuant to this state

administrative code section, 401 certification in Ohio only applies to the discharge of

dredged or fill material, and thus does not apply to the types of discharges in counts one

through six of the complaint, which are governed by other regulatory schemes in Ohio.
Stark County, Case No. 2019CA00056                                                            12


       {¶25} However, we note 33 U.S.C. §1341(a)(1) is not limited to dredged or fill

material, but specifically applies to any discharge into the navigable waters. Further, 33

U.S.C. §1341(d) provides the certification “shall set forth any effluent limitations and other

limitations, and monitoring requirements necessary to assure that any applicant for a

Federal license or permit will comply with any applicable effluent limitations and other

limitations,” again without limiting the certification process to dredged or fill material.

       {¶26} A state receiving a Section 401 application has four options: it may grant a

certificate without imposing any additional conditions, grant it with additional conditions,

deny it, or waive its right to participate in the process. Sierra Club v. State Water Control

Bd., 898 F.3d 383, 388 (4th Cir. 2018).           If we accept Appellant’s argument Ohio

Administrative Code 3745-32-02(A) demonstrates Ohio’s participation in the certification

process is limited solely to activities which result in the discharge of dredged or fill material

into the waters of the state, then Ohio has waived its right to participate in the certification

process as to all activities other than those involving dredged and fill material, despite the

clear language of the United States Code allowing much broader participation.                 As

Appellee Rover states in its brief, “In short, States have choices; and their choices have

consequences.” Brief of Appellees Rover Pipeline LLC and Mears Group, Inc., page 21.

       {¶27} Appellant argues it could not anticipate the extent of the types of pollution

the pipeline project would generate at the time of the certification request. The record

reflects the Ohio EPA participated in the preparation of the Environmental Impact

Statement in the instant case, which provided a sweeping exploration of the scope of the

pipeline project. From its active participation in the EIS process, Appellant should have

been aware of the types of pollution the project would be likely to generate. Further, the
Stark County, Case No. 2019CA00056                                                         13


State could have simply denied the certification based on a lack of information, or granted

it by imposing additional conditions subjecting all types of discharge to compliance with

the laws of Ohio. See Sierra Club, supra. However, the state failed to act on the

certification request in a timely manner, thereby waiving its right to participation in the

certification process.

       {¶28} Appellant also argues the trial court’s interpretation of the certification rules

runs contrary to the overarching intent of the Federal Clean Water Act. We agree with

the findings of the trial court to the contrary:



              The holding of this Court in no way stands for the position that the

       State of Ohio does not have rights relative to the construction of a natural-

       gas pipeline through the State and a right to impose regulations to curb

       disastrous environmental impacts on its waterways as a result of such

       construction. Nor does this holding provide natural gas companies carte

       blanche to perform drilling and other construction related to natural-gas

       lines regardless of the environmental impact of such action. Rather, in order

       to assert its rights, the State of Ohio is required to act in conformance with

       the Clean Water Act, as opposed to instigating litigation as a collateral

       attack subsequent to the completion of a pipeline. Moreover, the Court finds

       that, despite the State of Ohio’s inability to pursue the instant litigation, all

       aspects of the construction of the pipeline, including the discharging of

       pollutants into waterways, were subject to oversight by FERC, which

       responded to environmental concerns presented by the State of Ohio,
Stark County, Case No. 2019CA00056                                                         14


       including, but not limited to, halting construction operations. As such, any

       alleged discharges were still subject to Federal Regulations, including the

       Clean Water Act.



       {¶29} Judgment Entry, March 12, 2019, pp. 9-10.

       {¶30} Finally, Appellant argues the court erred in dismissing count six of its

complaint regarding hydrostatic water, because Appellees did obtain a permit concerning

hydrostatic water from the Ohio EPA, which was listed in the Environmental Impact

Statement.

       {¶31} We find a state’s 401 waiver cannot be undone by agreement of the parties.

See Hoopa Valley, supra, at 1105 (state waived participation in certification despite

applicant’s agreement with state in withdrawal and resubmission of certification request

in attempt to extend one year time deadline). The mere fact Appellees chose to obtain a

certificate from the state, as set forth in the EIS, does not change the fact the state waived

its right to enforce its hydrostatic water laws by failing to include such permit requirement

in a timely issued 401 certificate.

       {¶32} The first assignment of error is overruled.


                                              II.

       {¶33} Any discussion of Appellant’s second assignment of error is rendered moot

by our disposition of the first assignment of error.
Stark County, Case No. 2019CA00056                                             15


      {¶34} The judgment of the Stark County Common Pleas Court is affirmed.




By: Hoffman, P.J.
Wise, John, J. and
Delaney, J. concur
