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Sierra Club, Inc. v. Bostick

United States Court of Appeals, Tenth Circuit

May 29, 2015

SIERRA CLUB, INC., CLEAN ENERGY FUTURE OKLAHOMA, EAST TEXAS SUB REGIONAL PLANNING COMMISSION, Plaintiffs - Appellants,
v.
LIEUTENANT GENERAL THOMAS P. BOSTICK, in his official capacity as Commanding General and Chief of Engineers of the U.S. Army Corps of Engineers; MAJOR GENERAL MICHAEL J. WALSH, in his official capacity as U.S. Army Commanding General for Civil and Emergency Operations; COLONEL RICHARD PRATT, in his official capacity as Tulsa District Commander of U.S. Army Corps of Engineers; COLONEL RICHARD PARNELL, in his official capacity as Galveston District Engineer of the U.S. Army Corps of Engineers; [*] UNITED STATES ARMY CORPS OF ENGINEERS, Defendants - Appellees, and TRANSCANADA KEYSTONE PIPELINE LP, a Deleware limited partnership; TRANSCANADA CORPORATION, a Canadian public company; INTERSTATE NATURAL GAS ASSOCIATION, AMERICAN GAS ASSOCIATION, ASSOCIATION OF OIL PIPE LINES, AMERICAN PETROLEUM INSTITUTE, UTILITY WATER ACT GROUP, Intervenors - Appellees

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[Copyrighted Material Omitted]

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Appeal from the United States District Court for the Western District of Oklahoma. (D.C. No. 5:12-cv-00742-R).

Douglas P. Hayes, Sierra Club, Boulder, Colorado (Eric E. Huber, Sierra Club, Boulder, Colorado, with him on the briefs), for Appellants.

David C. Shilton, U.S. Department of Justice, Washington, D.C. (Sam Hirsch, Acting Assistant Attorney General, Michele Walter, Maureen E. Rudolph, and Ty Bair, U.S. Department of Justice, Washington, D.C.; and Ann P. Navaro, Assistant Chief Counsel and Milton S. Boyd, Assistant Counsel, U.S. Army Corps of Engineers, with him on the brief), for Appellees.

Peter R. Steenland, Sidley Austin LLP, Washington, D.C. (Lauren C. Freeman, Lisa E. Jones, Sidley Austin LLP, Washington, D.C.; and Deidre G. Duncan, Andrew J. Turner, and Karma B. Brown, Hunton & Williams LLP, Washington, D.C., with him on the brief), for Intervenors-Appellees.

Before BACHARACH, Circuit Judge, BALDOCK, Senior Circuit Judge, and McHUGH, Circuit Judge. BALDOCK, J., concurring. McHUGH, Circuit Judge, concurring.

OPINION

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BACHARACH, Circuit Judge.

This case involves the authority of the U.S. Army Corps of Engineers to issue nationwide permits under § 404(e) of the Clean Water Act. These permits authorize activities involving discharge of dredged or fill material in U.S. waters and wetlands. See 33 U.S.C. § 1344(e) (2012). Exercising this permitting authority, the Corps issued Nationwide Permit 12, which allows anyone to construct utility lines in U.S. waters " provided the activity does not result in the loss of greater than 1/2 acre of [U.S. waters] for each single and complete project." Reissuance of Nationwide Permits, 77 Fed.Reg. 10,184, 10,271 (Feb. 21, 2012).[2]

TransCanada Corporation proposed to rely on the nationwide permit to build an oil pipeline, the Gulf Coast Pipeline,[3] which would run approximately 485 miles and cross over 2,000 waterways. The Corps issued letters verifying that Nationwide Permit 12 would cover the proposed construction. Shortly thereafter, TransCanada began constructing the pipeline, which has since been completed and is currently transporting oil.

Three environmental groups (Sierra Club, Inc.; Clean Energy Future Oklahoma; and East Texas Sub Regional Planning Commission) have challenged the validity of the nationwide permit and verification letters. The district court rejected these challenges and entered judgment for the defendants.

In this appeal, we address and reject three sets of claims:

o Claims Involving the National Environmental Policy Act (NEPA) : The environmental groups argue that the Corps violated NEPA by issuing the nationwide permit without considering the risk of oil spills and the cumulative environmental impacts of pipelines. These arguments are waived.
The environmental groups also argue that the Corps issued the verification letters without conducting a NEPA analysis. We conclude that this analysis was not necessary at the verification stage.
o Claims Involving the Clean Water Act : According to the environmental groups, the nationwide permit violates

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the Clean Water Act by (1) effectively authorizing activities with more-than-minimal environmental impacts and (2) unlawfully deferring a portion of the minimal-impacts analysis to project-level personnel. We reject both arguments. The environmental groups have not shown that the permit authorizes activities with more-than-minimal impacts, and the Corps has permissibly interpreted the statute to allow partial deferral of its minimal-impacts analysis.
o Claims Involving the Nationwide Permit 12 : Finally, the environmental groups contend that the Corps incorrectly verified compliance with the nationwide permit without analyzing the cumulative effects or documenting the analysis of cumulative effects. We reject this contention. Corps officials did not need to include a cumulative-effects analysis in the letters, and the record shows that officials conducted the necessary analysis.

Based on our conclusions, we affirm the entry of judgment in favor of the defendants.[4]

I. Standard of Review

We review the challenges under the Administrative Procedure Act (APA). See 5 U.S.C. § § 701-706 (2012). In applying this standard, we will set aside agency actions that are " arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." 5 U.S.C. § 706(2)(A) (2012).

Review under the APA is narrow: " [T]he agency need only demonstrate that it considered relevant factors and alternatives . . . and that the choice it made was reasonable based on that consideration." Mt. Evans Co. v. Madigan, 14 F.3d 1444, 1453 (10th Cir. 1994).

II. NEPA

The environmental groups make two arguments to challenge the district court's disposition of the NEPA claims:

1. The Corps' environmental analysis is deficient because the agency failed to consider the risk of oil spills and the cumulative impacts of pipelines.
2. The Corps failed to conduct an environmental analysis when verifying that the pipeline was permissible under the nationwide permit.

We reject both arguments. The environmental groups waived their claims involving failure to address oil spills and cumulative impacts, and the Corps was not required to conduct an environmental analysis when verifying compliance with the nationwide permit.

A. Requirements of NEPA

NEPA requires an agency to take a " hard look" at the environmental impacts of proposed actions. Robertson v. Methow Valley Citizens Council, 490 U.S. 332, 350, 109 S.Ct. 1835, 104 L.Ed.2d 351 (1989). In taking this " hard look," the agency must take appropriate steps: If the venture involves a " major Federal action" that would " significantly affect[] the quality of the human environment," the agency must prepare a detailed environmental impact statement. 42 U.S.C. § 4332(2)(C) (2012).

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But if the future effects are unclear, the agency can prepare an environmental assessment instead of a more detailed environmental impact statement. Dep't of Transp. v. Pub. Citizen, 541 U.S. 752, 757, 124 S.Ct. 2204, 159 L.Ed.2d 60 (2004). If the environmental assessment shows that the impact would be insignificant, the agency need not provide any further environmental report.[5] Id. at 757-58.

B. Issuance of Nationwide Permit 12

The Corps prepared an environmental assessment of activities permitted under Nationwide Permit 12, which is challenged by the environmental groups. They contend the Corps unlawfully failed to consider

o the risk of oil spills associated with pipelines and
o the cumulative impacts of pipelines.

We conclude that these challenges are waived.

1. Waiver: The General Rule and the Pertinent Exceptions

Parties challenging an agency's compliance with NEPA must ordinarily raise relevant objections during the public comment period. Dep't of Transp. v. Pub. Citizen, 541 U.S. 752, 764-65, 124 S.Ct. 2204, 159 L.Ed.2d 60 (2004). But two exceptions exist. First, commenters need not point out an environmental assessment's flaw if it is " obvious." Id. at 765. Second, a commenter does not waive an issue if it is otherwise brought to the agency's attention. Forest Guardians v. U.S. Forest Serv., 495 F.3d 1162, 1170 (10th Cir. 2007).

2. Risk of Oil Spills

The environmental groups concede that no commenter raised the oil-spill issue. See Appellants' Reply Brief at 11. Nonetheless, the environmental groups contend that the issue is not waived because

o the risk of oil spills is obvious, and
o the Corps knew about the risk of oil spills when issuing the nationwide permit.

We reject both of these contentions.[6] The environmental groups have not shown an obvious deficiency in the Corps' environmental assessment, and the Corps' knowledge of oil-spill risks does not relate to a deficiency in the Corps' assessment for the construction, maintenance, and repair of utility lines.

a. Obviousness

The environmental groups assert that the oil-spill issue is not waived because the risk of oil spills is obvious. We reject this contention.

To qualify for this exception, the environmental groups must show that the

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omission of any discussion of oil-spill risks entailed an obvious flaw in the environmental assessment. The environmental groups argue that the risk of oil spills is obvious. But that is not the groups' burden. The environmental groups must show that the assessment for the construction, maintenance and repair of utility lines contained an obvious flaw, not that the agency failed to discuss impacts of an obvious risk associated with certain activity. See Dep't of Transp. v. Pub. Citizen, 541 U.S. 752, 765, 124 S.Ct. 2204, 159 L.Ed.2d 60 (2004) (stating that " an [environmental assessment's] . . . flaws might be so obvious that there is no need for a commenter to point them out" ). The fact that pipelines create a risk of spillage does not mean that the alleged deficiency in the Corps' environmental assessment for the construction, maintenance, and repair of utility lines would have been obvious.

Nationwide Permit 12 authorized the discharge of dredged or fill material in the construction, maintenance, and repair of a wide variety of utility lines, including lines to transmit gas, cable, electricity, telephone calls, radio transmissions, sewage, and oil. Appellants' App. at 488-89; Reissuance of Nationwide Permits, 77 Fed.Reg. 10,184, at 10,271-72 (Feb. 21, 2012). In light of the variety of utility lines involved, the Corps focused on the actions that it authorized (discharge of dredged and fill material in the construction, maintenance, and repair of utility lines) rather than the eventual operation of the utility lines. See Appellants' App. at 528 (assessing the environmental consequences of the activities authorized by Nationwide Permit 12). Once the utility lines were completed, each utility would seek approval from the pertinent regulatory body with jurisdiction over operations. For example, TransCanada would need to seek and obtain authorization from the Pipeline and Hazardous Materials Safety Administration, which had jurisdiction over the operation of oil pipelines. See 49 C.F.R. § § 195.401-402 (2012) (stating the requirements for operation of pipelines). Upon construction of the pipeline, TransCanada could not transport oil until it complied with the Pipeline and Hazardous Materials Safety Administration's requirements addressing the risk of oil spills. 49 C.F.R. § 194.7 (2012).

The environmental groups argue that the Corps' environmental assessment should have been broader, examining the risks from the utility lines' operations as well as their construction. But this criticism relates to the merits of the NEPA claim rather than the obviousness of the alleged deficiency to the Corps.[7] The Corps set out to consider all categories of environmental risks from the activities authorized under Nationwide Permit 12 (as well as the cumulative impacts of other activities affecting the nation's aquatic resources). Appellants' App. at 528, 530. In considering these categories of environmental risks, the Corps distinguished between the activities that it authorized under the nationwide permit (construction, maintenance, and repair of utility lines) and the utility lines' future operations. If that view was too restrictive, the deficiency would not have been obvious to the Corps, for TransCanada could not begin operations until it submitted a suitable plan to the Pipeline and Hazardous Materials Safety Administration to address the risk of oil spills. 49 C.F.R. § 194.7 (2012).

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The environmental groups argue that the risk of oil spills would have been obvious to the Corps because of comments submitted to agencies concerning the proposed Keystone XL project. But these comments would have led the Corps to believe that the risk of oil spills fell within the domain of other agencies, for all of the comments about oil spills had been directed to the Pipeline and Hazardous Materials Safety Administration (rather than the Corps). See Appellants' App. at 1180-92. In these comments, no one questioned the Corps' focus on environmental risks from the activities authorized under the nationwide permits (rather than the environmental risks from future operations).

Because the Corps ordinarily confined its environmental assessments to impacts from the activities authorized under the nationwide permit (construction, maintenance, and repair of utility lines), rather than the eventual operation of these utility lines, the risk of oil spills would not have alerted the Corps to an obvious deficiency in its environmental assessment.

b. Independent Knowledge of the Risk/Otherwise Brought to the Corps' Attention

The environmental groups also assert the oil-spill issue is not waived because the Corps knew about spill risks when issuing the nationwide permit. We reject this argument. Even if the Corps knew about spill risks, this knowledge would not have prevented a waiver.

We have recognized an exception to waiver when an issue is brought to the agency's attention. See p. 7, above. The Ninth Circuit Court of Appeals has equated this exception and the obviousness exception. See Barnes v. U.S. Dep't of Transp., 655 F.3d 1124, 1132 (9th Cir. 2011) (" This court has interpreted the 'so obvious' standard as requiring that the agency have independent knowledge of the issues that concern petitioners." ). We need not decide whether to adopt the Ninth Circuit's view, as we have elsewhere concluded that the risk of oil spills would not have created an obvious deficiency in the Corps' environmental analysis of the construction, maintenance, and repair of utility lines.

Even if we were to adopt the Ninth Circuit's approach, its application here would make little sense. The Corps' " independent knowledge" would be based on its role as a cooperating agency in the State Department's environmental impact statement for the Keystone XL Pipeline. This environmental impact statement contained ample discussion of environmental risks involving oil spills. But the environmental impact statement addressed these risks as the domain of a separate agency: the Pipeline and Hazardous Materials Safety Administration. See Appellants' App. at 1990 (" [Pipeline and Hazardous Materials Safety Administration] is responsible for regulations that require safe operations of hazardous liquid pipelines to protect human health and the environment from unplanned pipeline incidents." ). None of the commenters suggested that the Corps had any responsibility to address the risk of oil spills.

We may assume, for the sake of argument, that the Corps knew that issuance of the nationwide permit could lead to installation of oil pipelines, which in turn could create environmental risks from oil spills. How would that knowledge have mattered to the Corps? It considered that risk to fall within another agency's responsibility. Regardless of whether that view was correct, it went unchallenged in the public comments for the issuance of Nationwide Permit 12 and the State Department's consideration of the Keystone XL Pipeline. Thus, there would have been little reason

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for the Corps to consider oil spills in its environmental assessment.

In these circumstances, the Corps' alleged knowledge about oil spills would not have avoided a waiver.

3. Cumulative Impacts

The environmental groups also argue the Corps violated NEPA by failing to consider the cumulative impacts of oil pipelines. This argument is also waived, as no commenter objected to the Corps' assessment on this ground.

As discussed, parties challenging an agency's compliance with NEPA must raise relevant objections during the comment period. See p. 7, above. These objections must specifically raise the issue presented on appeal; if the objections do not raise the issue, it is waived. See Ariz. Pub. Serv. Co. v. E.P.A., 562 F.3d 1116, 1127 (10th Cir. 2009) (stating that the appellant could not " rely on general or vague commentary . . . to avoid the established principles of ...


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