Court Decision Vacating Nationwide Permit 12 Creates Concern for All Nationwide Permits

[Legal Alert]

UPDATE: On May 11, 2020, the District Court in Montana amended its initial Order, which completely vacated Nationwide Permit 12, to make the Court’s Order applicable only to the construction of new oil and gas pipelines.  All other activities may once again continue using NWP 12, at least for the time being.  Entities intending to begin a new project which will rely on NWP 12 should consult with counsel to assess the project’s vulnerability to future challenges, and to assess whether alternative compliance strategies are advisable.

On April 15, 2020, the United States District Court for the District of Montana issued a decision in the case of Northern Plains Resource Council v. U.S. Army Corps of Engineers which vacated the Corps of Engineers’ Nationwide Permit (“NWP”) 12.   NWP 12 is a general permit issued under the Federal Water Pollution Control Act (Clean Water Act) that authorizes discharges or fills that result in the loss of up to 1/2 acre of wetlands associated with the construction, maintenance, repair, and removal of utility lines and associated facilities, which includes electric transmission lines, oil and gas pipelines, telephone, cable TV, and internet cables. 

NWP 12 was challenged by Northern Plains Resource Council (“NPRC”), which was primarily focused on preventing TC Energy Corporation’s development of portions of the Keystone XL pipeline. Among other challenges, the NPRC alleged that the Corps violated the Endangered Species Act (“ESA”) when the Corps reissued NWP 12 by failing to consult with the Fish and Wildlife Service (“FWS”). 

The ESA requires that any Federal agency engaged in an action, such as issuance of a permit, which “may affect” an endangered species must consult with FWS before it may perform that action.  All NWPs are governed by General Conditions (“GC”).  GC 18 prohibits the use of an NWP if the proposed activity is likely to “directly or indirectly jeopardize the continued existence of a threatened or endangered species or a species.” 

When the Corps reissued its NWPs in 2017, it did not consult with FWS because it reasoned that compliance with GC 18 would satisfy its ESA requirements.  The Court, however, agreed with NPRC’s assertion that issuance of NWP 12 would have effects on endangered species, and this mandates consultation with FWS.  Since the Corps failed to consult with FWS, the Court held that the issuance of NWP 12 violated the ESA. 

The overall impact of this decision is still unclear.  Without the availability of NWP 12, project proponents should consult with counsel to determine if another NWP is available to support a project involving utility infrastructure that may impact wetlands.  Proponents may otherwise be required to apply for an individual permit for a particular project, which can be expensive and significantly impact a project’s timeline. 

Alternatively, a project proponent may be forced to redesign the project to avoid wetland impacts, potentially impacting the project’s economic viability.  This decision could also complicate Virginia’s goal of dramatically expanding its renewable energy portfolio pursuant to the Virginia Clean Economy Act.  If this decision stands, and the Corps is delayed in reissuing this general permit, the inability to rely on NWP 12 may, in particular, complicate the siting of transmission lines and other utilities necessary for new renewable energy projects.

A larger concern with this decision is that it calls into question numerous Corps’ NWPs because the Corps relied on compliance with GC 18 to satisfy its ESA obligations when it reissued 50 other NWPs in 2017.  While it is possible, perhaps likely, that the Corps will seek an appeal of this decision, the Court has already rejected the Government’s request to stay, or pause, the effect of its ruling. 

Importantly, this Court opinion provides a roadmap for how to challenge a controversial project that relies on a Corps NWP, and it is certain that potential plaintiffs have taken notice.  As a result, project proponents for any controversial project that relies on a Corps NWP should assess whether this case creates a legal vulnerability that should be mitigated.