UNITED STATES DISTRICT COURT
F()R THE DISTRICT OF COLUMBIA

Bold Alliance, et al., )
)
Plaintiffs, )
)
v. ) Civil Case No. 17-cv-01822 (RJL)
)
Federal Energy Regulatory Commission, et )
az., ) F I L E D
) EP 2 a
Defendants. ) S 2018
) C|erk, U.S. District & Bankruptcy
Courts for the Distrlct of Columbia
MEMORANDUM OPINION

 

¢-r__
september ZZ __2018 [Dkt. ## 11, 16, 20, 21, 22]

Plaintiffs challenge the F ederal Energy Regulatory Commission’s (“FERC’s”)
issuance of certificates of public convenience and necessity to defendants Atlantic Coast
Pipeline LLC (“ACP”) and Mountain Valley Pipeline, LLC (“MVP”). Those certificates
authorize ACP and MVP to exercise certain limited eminent domain rights on property in
the path of two planned natural gas pipelines. Plaintiffs raise a bevy of constitutional and
statutory claims - l7 in total - and ask this Court to issue declaratory and injunctive relief
in order to prevent ACP and MVP from using their certificates to condemn land in the
pipelines’ Way. Seel Am. Compl. 1111 57-145. Defendants respond that plaintiffs have
selected the wrong forum, and that this Court lacks subject-matterjurisdiction to adjudicate
plaintiffs’ claims. See Fed. R. Civ. P. lZ(b)(l). That is so because Congress, through the
Natural Gas Act, has vested FERC With the sole jurisdiction to adjudicate challenges to the

construction of natural gas pipelines, and designated the courts of appeals as the exclusive

forum for issues arising from FERC proceedings ln addition, defendants maintain that
plaintiffs have brought their claims prematurely, running afoul of both the doctrines of
ripeness and exhaustion And, even Were this Court to find jurisdiction, certain defendants
contend that plaintiffs have failed to state a claim under Which relief can be granted See
Fed. R. Civ. P. l2(b)(6).

'l`hc motions to dismiss are fully briefed, and ripe for rcview. For the reasons that
follow, this Court lacks subject-matter jurisdiction over plaintiffs’ claims. l therefore
cannot proceed to the merits ofplaintiffs’ claims, and Will GRANT the l\/lotion to Dismiss
filed by Defendants Federal Energy Regulatory Commission, Commissioner Neil
Chatterjee, Commissioner Cheryl A. LaFleur, and Commissioner Robert F. Powelson, in
their official capacities`(together, “Federal Defendants”) [Dl<t. # 20]. l Will also DENY as
moot the l\/lotions to Dismiss plaintiffs’ Amended Complaint filed by l\/lountain Valley
Pipeline [Dl<t. # Zl] and Atlantic Coast Pipeline [Dl<t. # 22:|, and DENY as moot the
l\/lotions to Dismiss the original Complaint filed by l\/lountain Valley Pipeline [Dl<t. # ll]
and Federal Defendants [Dl<t. # 16].

BACKGROUND
I. Regulatory Scheme

ff he Natural Gas Act “confers on [FERC] exclusive jurisdiction over transportation
and sale, as well as over the rates and facilities of natural gas companies engaged in
transportation and sale” ofnatural gas in interstate commerce. Myersvz`lle Citz`zensfor a
Ruml ley. v. FERC, 783 F.3d l3()l, 1315 (D.C. Cir. 2015) (citation and quotation marks

omitted). 'l`he Act lays out procedures for a party to obtain authorization to construct an

interstate natural gas pipeline See 15 U.S.C. § 717f. 'l`he keystone to that process is a so-
called “certificate of public convenience and necessity.” ]d. § 717f(d). "l`he certificates
authorize construction, establish the terms under which construction may proceed, and
grant the project sponsor the power to condemn land along the approved route. [a’. §§
717f(e), (h).[ Congress has vested FERC with the sole power to grant or deny such
certificates [d.

FF,RC has issued regulations setting out an extensive application process for all
certificates See 18 C.F.R. § 157.6. Applicants must submit technical, economic, and
environmental information concerning the project. See z`d. § 157.6(b). And, as will become
important in this case, while an application is pending, interested members of the public
may intervene in the 1"`ERC proceeding and file comments See z`a’. § 157.10. lndeed,
li`ERC has adopted procedures to allow members of the public to intervene even after the
relevant deadlines have passed. See z`d. § 385.21'4.

After reviewing materials submitted by the applicant and interested third parties,
liERC “will approve an application for a certificate only if the public benefits from the
project outweigh any adverse effects.” Cerlz`fz`cation ofNew [nterstale Nat. Gas Pipeline
Facilz`ties, 88 FERC il 61,227, 61,750 (1999). FERC has issued guidance as to how it

reaches such a determination First, FERC considers “whether the project can proceed

 

' FERC issues two forms of`ceitificates of public convenience and necessity: “blanket” certificates
and “conditional” certificates See 18 C.F.R. § 157.203(a). Blanket certificates authorize the certificate-
holder to engage in certain, defined activities in addition to the construction of the proposed pipeline. ]d.;
see also id. §§ 157.208-157.218 (enumerating activities available to blanket ceitificate-holders). By
contrast, conditional certificates require the applicant to return to FERC to secure permission for those
activities

without subsidies . . . from [:| existing customers.” [cz’. p. 61, 745. lf` that initial condition
is met, the Commission then considers the costs and benefits of the project, measured as
an economic and as an environmental matter. Id. pp. 61,745-746. lfFERC concludes that
the applicant has demonstrated its eligibility pursuant to these criteria, the Act directs that
“a certificate shall be issued.” 15 U.S.C. § 717f(e).

The Natural Gas Act provides a review process for “aggrievcd” parties parties
disappointed with the outcome of the certificate proceeding [d. § 717r. This process is
open not only to the applicant itself, but also to interested parties that have intervened in
the li`ERC proceedings ]d. An aggrieved party begins by seeking rehearing from the
Commission, and “set[ting] forth specifically the ground or grounds upon which such
application is based.” [d. § 717r(a). lf`rehearing is denied, the party “may obtain a review
of |:the order denying rehearing] in the court of appeals ofthe United States for any circuit”
where the natural-gas company is located or the D.C. Circuit by “'filing . . . a written
petition.” [d. § 717r(b). The Act continues “[ujpon the filing of`such petition such court
shall have jurisdiction, which upon the filing of the record with it shall be exclusive, to
affirm, modify, or set aside such order in whole or in part.” Id. The Natural Gas Act bars
the courts of appeals from considering any objection that was not “urged before [FERC] in
the application for rehearing unless there is a reasonable ground for failure to do so.” [cz'.

Il. Procedural History

ln October 2015, Atlantic Coast Pipeline, LLC (“ACP”) and l\/lountain Valley

Pipeline LLC (“l\/lVP”) each submitted applications for blanket certificates of public

convenience and necessity. Am. Compl. 1111 40, 49. "l`hey did so in order to construct the

Atlantic Coast Pipeline, which will transport natural gas from northern West Virginia to
North Carolina, and the l\/fountain Valley Pipeline, which will do the same between West
Virginia and Virginia. Id. 1111 38, 46. Both applications were subject to a public comment
period, during which time most of the named plaintiffs in this case intervened and filed
comments See liERC Dkt. Nos. CPl5-554-OOO, CPl5-554-O()1 (ACP); CP16-1() (l\/l\/P).
/~\fter nearly two years of review, FERC issued its final environmental impact statements
on .fune 23, 2017 (MVP) and July 21, 2017 (ACP), which recommended the applications’
approval as to the certificate ofpublic convenience and necessity subject to certain terms
and conditions See Order lssuing certificates Atlcml’l`c Coast Pipeline, LLC, 161 FERC 11
61,042, pp. 198-199 (2()17); Order lssuing certificates Mow/zmm Valley Pipeline, LLC,
161 FERC1161,043 (2()17).

On ()ctober 13, 2017, roughly two years after the applications were iiled, l»"ERC
issued blanket certificates of public convenience and necessity to ACP and l\/lVP. ld. fn
its certificate orders FERC found “that the benefits that the [ACP and l\/lVP projects] . . .
will provide to the market outweigh any adverse effects on existing shippers other
pipelines and their captive customers and on landowners and surrounding communities.”
]d. p. 4; M()umam Valley Pipeline, LLC, 161 FERC1161,()43,p. 28 (2017). The intervening
parties ~ who comprise most of the plaintiffs in this case - asked FERC to rehear and stay
its decision granting a certificate order to l\/lVP. See FERC Dkt. No. CPl6-l(), Submittal

No. 20171113-5375 (Nov. 13, 2()17).2 Within two weeks l\/fVP filed a condemnation

 

2 FERC subsequently affirmed the certificate orders See 163 FERC ii 61,197 (`lune 15, 2018).

action as authorized by the Certificate Order and 15 U.S.C. §7l7f(h). Mowzlcim Valley
Pipeline LLC v. Easemerils to Coiistrucl, Operate, and Mal`ntal'/i a Natural Gas Pipeline,
No. 7:17-CV-492-EKD (W.D. Va.).

Plaintif`fs filed this suit in early September 2017, while both ACP’s and l\/lVP’s
applications were pending and before FERC had issued certificates of public convenience
and necessity to those entities Compl. 1 [Dkt. # 1:|. Shortly thereafter, l\/fountain Valley
Pipeline filed a l\/lotion to Dismiss the original Complaint. 1Dkt. # 1 11. Federal Defendants
also filed a l\/lotion to Dismiss as to that original Complaint. 1Dkt. # 161.

ln November 2017, after FERC had issued the certificates plaintiffs filed an
Amended Complaint. See Am. Compl. 1Dkt. # 191. "l"his Court’s scheduling order
accepted plaintif`fs" Amended Complaint as timely filed, and afforded defendants the
opportunity to file new motions to dismiss as to the Amended Complaint. See 11/9/2()17
l\/lin. ()rder. 'fhe Amended Complaint contains 17 counts raising both constitutional and
statutory challenges Am. Compl. 1111 57-147. 'f`he Amended Complaint contains three
broad categories of claims: (i) FERC’s certificate conferring eminent domain authority
rested on inadequate findings by the Commission (Counts 3-7); (ii) FERC imposed
improper conditions on the l\/[VP and ACP certificates (Counts 1-2, 10-12); (iii) FERC’s
decision to issue certificates to MVP and ACP impinges on procedural rights grounded
either in the U.S. Constitution or in the Natural Gas Act (8-9, 13~17).

'1"he Amended Complaint maintains that, ifplaintif'fs prevail on any one eount, they
are entitled to a declaratory judgment that FERC’s actions are unlawful Plaintif'fs also

seek an injunction preventing ACP and l\/fVP “'from proceeding with development oftheir

respective projects or moving forward with eminent-domain actions” under 15 U.S.C. §
717f(h). See Am. Compl. 11 147(b). Federal Defendants filed a l\/lotion to Dismiss the
Amended Complaint on December 21, 2017. [Dkt. # 2()1. l\/fountain Valley Pipeline filed
a 1\/fotion to Dismiss Plaintiffs’ Amended Complaint |Dkt. # 211 on lanuary 3, 2018, and
Atlantic Coast Pipeline did the same on that day, 1Dkt. # 22_1. On February 23, 2018,
plaintiffs filed a motion to expedite, which this Court denied. See 3/1/2018 l\/lin. Order.
fn recent months Federal Defendants and plaintiffs have each filed a supplemental notice
of authority. 1_Dkt. ## 3(), 32]. ln addition, l\/lVP has advised the Court that plaintiffs Bold
Alliance and Bold Education Fund filed a petition for review with our Circuit Court under
the Natural Gas Act, 15 U.S.C. § 717r(b). See Petition for Review, BolclA[lz`a/ice, et al. v.
FERC, No. 18-1216 (l).C. Cir.). That petition seeks review ofthe Certificate Order issued
by FERC to l\/lVP (and the Commission’s Order on Rehearing, which upheld that
Certificate Order), but not the one issued to ACP. [d.
STANDARD OF REVIEW

li"ederal Rule of Civil Proeedure 12(b)(1) authorizes a party to move for dismissal
for lack ofsubject-matterjurisdiction l'~"ed. R. Civ. P. l2(b)(1). Under Rule 12(b)(l), the
plaintif`f, rather than defendant, “bears the burden of establishing the factual predicates of
jurisdiction by a preponderance ofthe evidence.” Hum‘er v. FERC, 569 F. Supp. 2d 12, 15
(D.D.C. 2008). In considering a Rule 12(b)(l) motion, this Court “must accept as true all
well-pleaded factual allegations and draw all reasonable inferences in favor of the
plaintiffs.” Loga)i v. Dep’t off/elerans A}j”ai'rs, 357 F. Supp. 2d 149, 153 (D.D.C. 2004).

Nevertheless 1 “may give the plaintiff1:s’1 factual allegations closer scrutiny and may

consider materials outside the pleadings” when evaluating my ability to hear a claim. [ci.;
see also Pearl v. Latham & Walkl`izs LLP, 985 F. Supp. 2d 72, 81 (D.D.C. 2013) (holding
that a court may rely on materials that are appropriate forjudicial notice when evaluating
a Rule l2(b)(l) motion, including public records). l\/foreover, 1 “need not . . . accept
inferences unsupported by the facts alleged or legal conclusions that are cast as factual
allegations"' Saa’()ws/ci` v. Bash, 293 F. Supp. 2d 15, 17 (D.D.C. 2003). “lf` the court
determines at any time that it lacks subject-matter jurisdiction, the court must dismiss the
action.” l""ed. R. Civ. P. l2(h)(3).
ANALYSIS

Def`endants contend that plaintiffs have chosen the wrong venue for their claims
'l`he Natural Gas Act, defendants argue, vests the courts of appeals with “exclusive”
jurisdiction for challenges of this kind. l\/loreover, defendants contend that plaintiffs have
filed their complaint prematurely, running afoul of the distinct doctrines of ripeness and
exhaustion. Plaintif`fs for their part, respond that (i) their claims are merely “collateral” to
li`ERC’s process for certificate applications (ii) FERC lacks the authority and expertise to
adjudicate their claims and (_iii) denyingjurisdiction would foreclose meaningful review.
fn addition, plaintiffs assert that their claims are ripe and that the doctrine of exhaustion
does not apply. For the reasons that follow, l conclude that this Court lacks subject matter
jurisdiction over plaintiffs’ claims

At the start, the Natural Gas Act provides the sole avenue of review for parties
aggrieved by FERC orders See 15 U.S.C. § 717r. As discussed above, the Act allows

parties to intervene, and provides a specific procedural path for review: seeking a rehearing

before li`l%lRC, followed by filing a petition for review with the appropriate court of appeals
Ia’. § 717r(a), (b). Under the Act, the jurisdiction of our Court of Appeals “shall be
exelusive.” ]a. § 717r(b). Congress could hardly have been more clear.

When Congress provides for exclusive review in a court of appeals that specific
grant ofjurisdiction displaces the general federal question statute, 28 U.S.C. § 1331. See
Ci`ty of Tacoma v. Taxpaye/”s ofTacoma, 357 U.S. 320, 336 1958). That is true for “all
issues inhering in the controversy.” Id. '1"his doctrine, with its “expansive scope,” has
commonsense roots Wi`[li`ams Nal. Gas C0. v. Cz`ty of()k]a. Ci`ly, 890 F.2d 255, 262 (10th
Cir. 1989). As our Circuit Court put it, “1t1he policy behind having a special review
procedure in the first place . . . disfavors bifurcating jurisdiction over various substantive
grounds between district court and the court of appeals” because of “[t]he likelihood of
duplication and inconsistency.” Ci'ty r)fRoc/iesz‘er v. Bo/ia', 603 1*`.2d 927, 936 (D.C. Cir.
1979). Courts have affirmed the exclusive nature of the FERC procedures time and again
- including within the past year in the context of similar challenges See, e.g., U/”[)a)i v.
FERC, No. 5:17-cv-1005 (JRA), slip op. at 5 (N.D. Ohio Dec. 19, 2017); Berkley v.
Mozmla/,'n Valley Pipeline, LLC, No. 7:17-cv-00357 (EKD), slip op. at 1-3 (W.D. Va. Dec.
1 1, 2017).

The D.C. Circuit has however, recognized two narrow exceptions to otherwise
exclusive FERC jurisdiction over challenges to the issuance ofeertificates. Unfortunately
for plaintiffs neither applies here. The first exception applies when “denial of review in
the District Court will truly foreclose all judicial review.” Telecommzm ’cns Researc/i &

Aclz`on Cl')". v. FCC, 750 F.2d 70, 78 (f).C. Cir. 1984). Because plaintiffs as affected

landowners are “aggrieved” parties for purposes of the Natural Gas Act’s circuit court
review procedure, that exception does not apply here. FERC regulations afforded plaintiffs
the opportunity to intervene and comment during the application process to seek rehearing,
and, ultimately, to petition for review before a federal court of appeals The vast majority
ofthe plaintiffs in this ease -- 46 out of55 - did intervene before FERC. Failure to intervene
on the part of the other 9 plaintiffs does not change the fact that judicial review was
available to them.

"l`he second exception to exclusive review involves “a constitutional challenge that

9

is exclusively directed to the source of putative agency authority.’ T[me Wamer Em’mt
C()., L.P., v, FCC, 93 F.3d 957, 965 (D.C. Cir. 1996) (_per euriam) (emphasis added). As
such, this exception applies to cases that “challenge[] the constitutionality of the agency’s
enabling statute,” Hzmter, 569 F. Supp. 2d at 15, ncr to claims “raised . . . in a suit that is
collateral to one challenging the validity of. . . agency action” or “a challenge to the manner
in which the agency has exercised or . . . failed to exercise that authority.” Ti`me Warner,
9317.3d at 965.

Plaintiffs cannot find refuge in this second exception, either. '1"hat is so because
plaintiffs’ constitutional theories go to FERC’s practice of adjudicating claims - not to its
power to do so. See, e.g., Am. Compl. Count 4 (“FERC’s Practice of Granting Certificates
Conditioned on Subsequent State or Federal Approvals#But Allowing for the Exercise of
Eminent Domain¢Violates the Fifth Amendment’s Takings Clause”; z`a’. Count 9
(“FERC’s Granting of ‘Blanket Certificates’ Violates Plaintiffs’ Procedural-Due-Process

Rights Under the F_ifth Amendment”); id. Count 12 (“FERC’s Granting of Certificates to

10

Private, Nongovernmental Entities Without Ensuring the Entities Have Adequate Assets
Sufficient to Guarantee f)ayment of .lust Compensation Violates the Fifth Amendment’s
fl`akings Clause”). lndeed, plaintiffs plainly object to FERC’s issuance of the particular
certificates issued to l\/lVP and ACP, meaning that this suit is not “collatcral to one
challenging the validity of. . . agency action.” Tz`me Warne/”, 93 F.3d at 965.

Finally, plaintiff`s` claims of standing, and their prayer for relief, make clear that
their constitutional theories are not “exclusively directed to the source of putative agency
authority,” thereby depriving this Court ofjurisdiction. [a’.3 To the contrary, plaintiffs’
constitutional claims are deeply intertwined with allegations that FERC’s practices deviate
from the provisions of the Natural Gas Act. See, e.g., Am. Compl. Count 1 (“FERC’s
Pracli'ce ofGranli`iig Certificates Conditioned on Subsequent State or Federal Approvals_-
But Allowing for the Exercise of liminent Domain----Exceeds FERC’s Authority Undcr the
Natural Gas Act” (emphasis added)); see also id. Counts 2, 3, 5, 6, 7, 8, 11,. and 13.

CONCLUSION

Because Congress has elected by statute to confer sole jurisdiction on our Courts of

Appeals for petitions of this nature, l need not consider whether plaintiffs’ claims are ripe

or properly exhausted Nor can 1 proceed to the merits of plaintiff`s’ claims Federal

 

3 Nor cali Sections 717f(h) and 717u of the Natural Gas Act provide this Court with jurisdiction
over plaintiffs’ claims Section 717f(h) furnishesjurisdiction only for “any holder of a certificate,” and
plaintiffs are not holders ofcertificates. And Section 717u provides only l"orjurisdiction for claims arising
under sources ofauthority other than the Natural Gas Act. As the Eighth Circuit put it, Section 717u “does
not create a cause of action, but merely states that federal district courts have exclusive jurisdiction over
cases that otherwise arise under federal law.” Great Lakes Gas Transmission Lla'. P’ship v. Essar Sleel
Mi)m. LL(.', 843 F.3d 325, 329 (8th Cir. 2016). l-lere, because plaintiffs’ theories are anchored in pipeline
proceedings and target a FERC decision, Section 717u has no relevance N() Gas Pipeline v. ]i`ER(,`, 756
l".3d 764, 769 (D.C. Cir. 2014).

ll

Defendants’ Motion to Dismiss [Dkt. # 201 is therefore GRANTED. The Motions to
Dismiss the Amended Complaint filed by Mountain Valley _Pipeline [Dkt. # 211 and
Atlantic Coast Pipeline [Dkt. # 221, and the Motions to Dismiss the original Complaint
filed by Mountain Valley Pipeline [Dkt. # 111 and Federal Defendants [Dkt. # 161 are

DENIED as moot. A separate order consistent with this Opinion is attached hereto.

YJ»&¢W

RICHARD. L-E N
United States District Judge

12

