Justia U.S. 3rd Circuit Court of Appeals Opinion Summaries

Petitioners sought to prevent the expansion of Transco’s interstate natural gas pipeline facilities, arguing that the Federal Energy Regulatory Commission (FERC) violated the Natural Gas Act (NGA), 15 U.S.C. 717–717z and environmental protection statutes, by arbitrarily approving Transco’s proposed project. Petitioners also argued that the New Jersey Department of Environmental Protection (NJDEP) violated state law by improperly issuing permits required under federal law before commencement of construction activities and by denying the petitioners’ request for an adjudicatory hearing to challenge the permits, based only on the NJDEP’s allegedly incorrect belief that the New Jersey regulations establishing the availability of such hearings were preempted by federal law. The Third Circuit concluded that the challenges to FERC’s orders lacked merit because no discharge-creating activity can commence without New Jersey independently awarding Transco with a Section 401 permit; no activities that may result in a discharge can follow as a logical result of just FERC’s issuance of the certificate. FERC adequately addressed the need for the project and its cumulative impacts, as required by the National Environmental Policy Act. The court remanded to NJDEP. NJDEP misunderstood the scope of the NGA’s assignment of jurisdiction to the federal Courts of Appeals, rendering unreasonable the sole basis for its denial of the petitioners’ request for a hearing--preemption. View "Township of Bordentown v. Federal Energy Regulatory Commission" on Justia Law

The Natural Gas Act (NGA) requires a Certificate of Public Convenience and Necessity from the Federal Energy Regulatory Commission, 15 U.S.C. 717f(c)(1)(A), for construction or operation of a natural gas pipeline, which requires compliance with other legal mandates. Transco sought a Certificate for expansion of its natural-gas distribution network, then received Water Quality Certification under the Clean Water Act, (CWA) 33 U.S.C. 1341(a)(1) from the Pennsylvania Department of Environmental Protection (PADEP), subject to conditions requiring a permit under the National Pollutant Discharge Elimination System, for discharges of water during hydrostatic pipeline testing, and state permits, covering erosion and sediment disturbance and obstructions and encroachments on Pennsylvania waters. Transco challenged the conditions in the Third Circuit under the NGA and before the Pennsylvania Environmental Hearing Board.The Third Circuit concluded that it has jurisdiction; NGA provides “original and exclusive jurisdiction" to review a state agency’s “action” taken “pursuant to Federal law to issue . . . any . . . concurrence” that federal law requires for the construction of a natural-gas transportation facility. PADEP issues Water Quality Certifications “pursuant to federal law," which requires PADEP concurrence before construction can proceed. The court then rejected claims that PADEP failed to provide public notice the CWA requires and acted arbitrarily by issuing a Certification that was immediately effective despite being conditioned on obtaining additional permits; that PADEP’s decision violated the Due Process and Takings Clauses, given that the approval was necessary for Transco to begin eminent domain proceedings; and that the approval violated PADEP’s obligation to safeguard the Commonwealth’s natural resources. View "Delaware Riverkeeper Network v. Secretary Pennsylvania Department of Environmental Protection" on Justia Law

Wayne Land and Mineral Group, wanting to obtain natural gas by fracking reserves, sought a declaratory judgment that an interstate compact does not give the Delaware River Basin Commission authority to review Wayne’s proposal. The district court dismissed the case after determining that Wayne’s proposed activities constituted a “project” subject to the Commission’s oversight, according to the Compact's unambiguous terms. The Third Circuit vacated, concluding that the meaning of the word “project” is ambiguous. The court remanded the case for fact-finding on the intent of the Compact's drafters. The Compact defines “project” as “any work, service or activity which is separately planned, financed, or identified by the [C]ommission, or any separate facility undertaken or to be undertaken within a specified area, for the conservation, utilization, control, development or management of water resources which can be established and utilized independently or as an addition to an existing facility, and can be considered as a separate entity for purposes of evaluation” and requires approval for any project having a substantial effect on the water resources of the Basin. In 2009 the Commission imposed a moratorium on fracking. View "Wayne Land and Mineral Group LLC v. Delaware River Basin Commission" on Justia Law

In 2004, after traveling from Venezuela to Paulsboro, New Jersey, Frescati’s single-hulled oil tanker, Athos, came within 900 feet of its intended berth and struck an abandoned anchor in the Delaware River, causing 264,000 gallons of crude oil to spill. The shipment was intended for CARCO. Frescati paid $143 million for the cleanup and was reimbursed $88 million by the government, under the Oil Pollution Act (OPA), 33 U.S.C. 2701. The Third Circuit held that Frescati was a third-party beneficiary of CARCO’s warranty that CARCO’s berth would be safe if the ship had a draft of 37 feet or less and that CARCO had an unspecified tort duty of care. On remand, the district court held that CARCO was liable to Frescati and the government as Frescati’s subrogee, for breach of contract because the Athos had a draft of 36′7″ and exercised good seamanship; CARCO had a duty to use sonar to locate unknown obstructions in the berth approach and to remove obstructions or warn invited ships. CARCO argued that the conduct of the Coast Guard, NOAA, and the Army Corps of Engineers misled CARCO into believing that the government was maintaining the anchorage. The court awarded Frescati $55,497,375.958 for breach of contract and negligence, plus prejudgment interest. The government, after the court’s 50% reduction, was awarded $43,994,578.66 on its subrogated breach of contract claim. The Third Circuit affirmed in favor of Frescati on the breach of contract claim but vacated as to negligence. The court affirmed the government’s judgment with respect to its subrogated breach of contract claim but, because CARCO’s equitable recoupment defense failed, remanded for recalculation of damages and prejudgment interest. View "Frescati Shipping Co., Ltd. v. Citgo Asphalt Refining Co." on Justia Law

In 2004, after traveling from Venezuela to Paulsboro, New Jersey, Frescati’s single-hulled oil tanker, Athos, came within 900 feet of its intended berth and struck an abandoned anchor in the Delaware River, causing 264,000 gallons of crude oil to spill. The shipment was intended for CARCO. Frescati paid $143 million for the cleanup and was reimbursed $88 million by the government, under the Oil Pollution Act (OPA), 33 U.S.C. 2701. The Third Circuit held that Frescati was a third-party beneficiary of CARCO’s warranty that CARCO’s berth would be safe if the ship had a draft of 37 feet or less and that CARCO had an unspecified tort duty of care. On remand, the district court held that CARCO was liable to Frescati and the government as Frescati’s subrogee, for breach of contract because the Athos had a draft of 36′7″ and exercised good seamanship; CARCO had a duty to use sonar to locate unknown obstructions in the berth approach and to remove obstructions or warn invited ships. CARCO argued that the conduct of the Coast Guard, NOAA, and the Army Corps of Engineers misled CARCO into believing that the government was maintaining the anchorage. The court awarded Frescati $55,497,375.958 for breach of contract and negligence, plus prejudgment interest. The government, after the court’s 50% reduction, was awarded $43,994,578.66 on its subrogated breach of contract claim. The Third Circuit affirmed in favor of Frescati on the breach of contract claim but vacated as to negligence. The court affirmed the government’s judgment with respect to its subrogated breach of contract claim but, because CARCO’s equitable recoupment defense failed, remanded for recalculation of damages and prejudgment interest. View "Frescati Shipping Co., Ltd. v. Citgo Asphalt Refining Co." on Justia Law

Tennessee Gas applied to several federal and state agencies seeking approval to build the Orion interstate pipeline project, comprising 12.9 miles of pipeline looping that would transport 135,000 dekatherms of natural gas per day via Pennsylvania. Approximately 99.5% of the new pipeline would run alongside existing pipeline. The Pennsylvania Department of Environmental Protection issued a permit approving the project. Riverkeeper argued that the court lacked jurisdiction to rule on its challenge because PADEP’s order was not final and that PADEP made an erroneous “water dependency” finding and improperly rejected a “compression” alternative to the pipeline project. The Third Circuit concluded that PADEP’s decision was final and upheld the decision on the merits because the agency’s unique interpretation of water dependency was reasonable and worthy of deference. PADEP considered and rejected the compression alternative for reasons that are supported by the record. Where an interstate pipeline project is proposed to be constructed,15 U.S.C. 717f provides “original and exclusive jurisdiction over any civil action for the review of an order or action of a . . . State administrative agency acting pursuant to Federal law to issue . . . any permit, license, concurrence, or approval . . . required under Federal law,” View "Delaware Riverkeeper Network v. Secretary, Pennsylvania Department Environmental Protection" on Justia Law

About 99.5% of the Orion Project, 12.9 miles of pipeline looping that would transport an additional 135,000 dekatherms per day of natural gas through Pennsylvania, would run alongside existing pipelines. According to Riverkeeper, construction will lead to deforestation, destruction of wetland habitats, and other forms of environmental damage. Riverkeeper asserts that such damage can be avoided by building or upgrading a compressor station. The Army Corps of Engineers, which administers certain provisions of the Clean Water Act, 33 U.S.C. 1344(a), 1362(7) issued a Section 404 permit approving the project. The Third Circuit rejected Riverkeeper’s challenge. The Corps considered the compression alternative but rejected it for reasons supported by the record. While the compression alternative would disturb less land, its impact would be mostly permanent. The pipeline project would disturb more land, but its impact would be mostly temporary. In making a policy choice between those environmental tradeoffs, the agency’s discretion “was at its apex.” View "Delaware Riverkeeper Network v. United States Army Corps of Engineers" on Justia Law

Seneca, an oil and natural gas exploration and production company, sought to convert a natural gas well in Highland Township into a Class II underground injection control well in which to store waste from fracking. Highland Township, in Elk County, Pennsylvania, enacted an ordinance that, among other things, prohibited “disposal injection wells” from existing within Highland. In Seneca’s lawsuit, challenging the ordinance, the Community Environmental Legal Defense Fund sought to intervene on the side of the Township to represent the interests of underlying environmental groups (appellants). The district court denied its motion to intervene, holding that the Township adequately represented underlying interests in defending the ordinance. While a motion for reconsideration was pending, the Township repealed the ordinance and entered into a settlement with Seneca that culminated in a consent decree adopted by the district court. The Third Circuit affirmed, finding that original motion to intervene was moot because there is no longer an ordinance to defend. The Consent Decree does not bind any of the appellants nor does it deprive them of any rights after the ordinance has been repealed. Because the appellants are nonparties, they cannot appeal the Consent Decree. View "Seneca Resources Corp v. Township of Highland" on Justia Law

The Third Circuit affirmed the approval of a settlement of an FRCP 23(b)(3) class action arising out of hexavalent chromium contamination in Jersey City, New Jersey. The class action was brought on behalf of property owners in several neighborhoods whose homes were allegedly contaminated by by-products disposed of at chromium chemical manufacturing plants, owned and operated by the predecessors of Honeywell and PPG. Plaintiffs asserted common law tort claims and civil conspiracy claims for depreciation of their property values due to the alleged contamination, but not claims for harm other than economic loss to property value, such as personal injury or medical monitoring claims. The district court certified a settlement-only class as to the claims against Honeywell and approved a $10,017,000 settlement fund, which included an award of costs and attorneys’ fees for plaintiffs’ counsel. Overruling an objection by a member of the Honeywell settlement class, the Third Circuit concluded that the class certification requirements of FRCP 23(a) and (b)(3) are satisfied, and the district court did not abuse its discretion in approving the settlement under FRCP 23(e) and the award of attorneys’ fees under FRCP 23(h). The court remanded for reconsideration of the award of costs under Rule 23(h). View "Halley v. Honeywell International Inc" on Justia Law

Transco, which operates the 10,000-mile-long Transcontinental Pipeline from South Texas to New York City, sought a certificate of public convenience and necessity for the Leidy Southeast Expansion Project, including construction of four new pipeline “loops” and the upgrade of turbines at four compressor stations. The Skillman Loop and the Pleasant Run Loop, totaling 13.23 miles, would be located in New Jersey; the Franklin Loop and Dorrance Loop, totaling 16.74 miles, would be located in Pennsylvania. The Federal Energy Regulatory Commission (FERC) completed the requisite Environmental Assessment and issued the certificate in December 2014, conditioned on Transco’s receipt of “all applicable authorizations under federal law” enumerated in the Environmental Assessment, including from New Jersey and Pennsylvania. Pursuant to the Clean Water Act, the Pennsylvania and New Jersey Departments of Environmental Protection (PADEP, NJDEP) reviewed Transco’s proposal for potential water quality impacts and issued. In consolidated appeals, the Third Circuit upheld the approvals. NJDEP and PADEP did not act arbitrarily or capriciously in issuing the permits. View "New Jersey Conservation Foundation v. New Jersey Department of Environmental Protection" on Justia Law