United States: DC Circuit To Take Second Look At FERC 'Kafkaesque' Tolling Order Regime

On December 5, 2019, the Court of Appeals for the DC Circuit granted a petition for rehearing en banc of the DC Circuit's August 2, 2019 order in Allegheny Defense Project, et al., v. FERC.¹ In the en banc proceeding, the parties are required to address whether the Federal Energy Regulatory Commission's (FERC) practice of issuing "tolling orders" is allowable under the Natural Gas Act, specifically 15 U.S.C. § 717r(a). 

FERC regularly uses tolling orders after parties submit requests for rehearing to give itself additional time to consider rehearing petitions, sometimes putting parties on hold for years before an order on rehearing is issued. Because a request for rehearing does not prevent a FERC order from taking effect,² but must be ruled on before a Court can review FERC's action,³ parties seeking judicial review are put "into a bureaucratic purgatory only Dante could love,"⁴ per Judge Patricia Millett. In her lengthy and critical concurrence to the August 2 order, she further explained that FERC had "twisted our precedent into a Kafkaesque regime,"⁵ and noted that the "case starkly illustrates why a second look by us or by the Commission is overdue."⁶ The underlying case involved challenges to pipeline routing and adverse impact to landowners who timely sought rehearing that was "tolled" by FERC even as the pipeline construction began. 

The DC Circuit is now taking a second look—oral argument will occur on March 31, 2020. While the en banc proceeding relates to the Natural Gas Act, a ruling could have significant impacts on the other industries FERC regulates given similarities in rehearing statutes,⁷ and that the Federal Power Act is read in pari materia to the Natural Gas Act.⁸ The Steptoe Energy Team will closely monitor these proceedings and provide further updates once the DC Circuit issues a revised opinion.

Footnotes

1 932 F.3d 940 (D.C. Cir. 2019), rehearing en banc granted by 2019 WL 6605464 (Dec. 5, 2019).

2 18 C.F.R. § 385.713(e) (2019).

3 See, e.g., Clifton Power Corp. v. FERC, 294 F.3d 108, 110 (D.C. Cir. 2002).

4 932 F.3d at 956 (Millett, J., concurring).

5 Id. at 948 (Millett, J., concurring).  

6 Id. at 956 (Millett, J., concurring).

7 Cf. 15 U.S.C. § 717r (natural gas pipelines); 16 U.S.C. 825l (electric utilities); 49 U.S.C. §17(6) (1988 Supp.) (oil pipelines). FERC's regulation concerning rehearing, 18 C.F.R. § 385.713, applies across all of these industries.   

8 See, e.g., New Dominion Energy Coop., 122 FERC ¶ 61,174 at n. 91 (2008) ("Cases under the Natural Gas Act and the Federal Power Act typically are read in pari materia, that is, in the same way when they involve similar provisions"); Arkansas Louisiana Gas Co. v. Hall, 453 U.S. 578 n.7 (1981) (noting that courts have an "established practice of citing interchangeably decisions interpreting the pertinent sections of the two statutes"). 

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.