Stop the Pipes? Corps' Nationwide Permit 12 Vacated by Federal District Court

An April 15, 2020 decision by the United States District Court for the District of Montana has held that Nationwide Permit 12 (NWP 12) issued by the U.S. Army Corps of Engineers (Corps’) is unlawful. Nationwide permits address discharges of dredge or fill materials into federally protected waters and wetlands under the Clean Water Act. They are issued for certain categories of activity that have well-understood impacts, allowing for predetermined permit conditions and a streamlined permit process. NWP 12 addresses crossings of such waters and wetlands by linear utility projects, such as liquid and gas pipelines, power and telephone lines and data and other communication cables. Although the decision resulted from an environmental group’s challenge to the portion of the Keystone Pipeline that runs through Montana, it has implications for linear utility projects across the nation and development projects dependent on pending or planned linear projects.

The basis for the court’s decision is that the Corps’ 2017 reissuance of NWP 12 failed to comply with the interagency programmatic consultation process required under the Endangered Species Act (ESA). Under ESA § 7(a)(2), each federal agency must consult with the Secretary of the Interior to ensure “that any action authorized, funded, or carried out by such agency is not likely to jeopardize the continued existence of” any species listed under the ESA or to “result in the destruction or adverse modification of” critical habitat of such species. Under attendant regulations of the U.S. Fish and Wildlife Service and/or the National Marine Fisheries Service (together, the Services), barring any applicable exception, a federal agency must determine “at the earliest possible time” whether an action it is taking (regulatory or permitting) “may affect” a species listed as protected pursuant to the ESA or any critical habitat of any such species. If so, that agency is required to carry out the ESA § 7(a)(2) consultation with the Services as to any such effects.

The Corps’ justification for not performing the programmatic consultation was there would be no effect as contemplated in the Services’ regulation due to other protections baked into NWP 12, the Clean Water Act and General Conditions issued for all NWPs. In particular, General Condition 18 prohibits the use of any NWP where the permitted activity would likely threaten the existence of an ESA-listed species or adversely impact critical habitat of a listed species. Furthermore, under General Condition 18, “if any listed species or designated critical habitat might be affected or is in the vicinity of the activity, or if the activity is located in designated critical habitat,” the permittee is obligated to send a preconstruction notification (PCN) to the Corps so it can evaluate whether there will be any effects and, if so, consult with other resource agencies pursuant to the ESA.

The court determined the Corps’ reliance on the site-specific implementation of General Condition 18 and the PCN review process improperly relinquished the Corps’ programmatic gatekeeper role under the ESA. In essence, the Corps’ role to determine whether its actions, including issuance of NWPs, had any effects on listed species and their critical habitats needed to be done “at the earliest possible time,” i.e., at the time of the NWP promulgation. The court also found evidence of at least some minimal adverse impacts in the Corps’ own decision document for its reissuance of the NWPs and in plaintiff’s experts’ opinions of adverse impacts. Finally, the Corps itself had performed this same programmatic consultation with the Services in previous reissuances of NWP 12 and, as recently as 2012, was compelled by court order in one such instance. Accordingly, the court held that the Corps’ reissuance of NWP 12 was illegal and ordered that it be vacated and remanded to the Corps for further action to comply with the ESA. The court also enjoined further approvals of any NWP 12 activities until these defects are corrected.

This decision presents major uncertainties and implications for both the Corps and regulated parties. First, the effect of the decision is arguably national in scope given the lack of limiting language in the decision. Whether a federal district court can issue a ruling with binding national effect is matter of debate, particularly in the past several years. There is also some uncertainty as to whether the decision applies to NWP 12 coverage in cases involving less than 1/10 acre where no PCN is normally required. However, the court vacated NWP 12 in its entirety and enjoined issuances of NWP 12s generally, so even these so-called “self-certification” sites are shadowed by the decision. In addition, a broader NWP program concern is raised because NWP 12 reissuance was only part of a single regulatory action to reissue and issue 52 NWPs. If a fatal flaw exists for the 2017 NWP 12 reissuance, then challenges to other NWPs based on the same premise could bring the entire NWP program to its knees until the underlying defect is resolved by the Corps.

In an immediate response to the decision, the Corps issued on April 17 a directive to its regional offices to stop review of any NWP 12 permits that require PCNs. This means the practical effect of the ruling is national for the time being. While the decision, or at least its national effect will certainly be challenged, the Corps will likely feel compelled to begin to address the defects noted by the court. Given the inherent delays associated with the administrative process for redoing the 2017 NWP 12 reissuance, including programmatic review per ESA § 7(a)(2) and associated reevaluations pursuant to the National Environmental Policy Act, any such action would not be completed for many months, if not into 2021.

Options for regulated parties depend on the nature of and potential impacts on their projects. Individual permits may be an alternative if time and money allow. For certain renewable energy projects, NWP 51 may suffice. Crosscutting all of this is the recent new definition of “waters of the United States” in the Navigable Waters Protection Rule (NWPR) to take effect June 22, 2020. The NWPR may offer relief to regulated parties from permitting for impacts to previously regulated ephemeral streams and certain isolated waters and wetlands. That said, the NWPR will almost certainly be challenged as an unlawful relaxation of federal protection of waters under the Clean Water Act, so uncertainty lingers there as well. All parties with, or dependent upon, pending or planned linear utility projects should carefully evaluate the ramifications of this decision for their projects’ costs and timelines.

North Plains Resource Council v. U.S. Army Corps of Engineers, CV-19-44-GF-BMM (D. Mt. April 15, 2020); Issuance and Reissuance of Nationwide Permits, 82 Fed. Reg. 1860-2008 (January 6, 2017); 50 C.FR. § 402.14(a).