Locke Lord QuickStudy: USACE Nationwide Permit 12 Vacated: What You Need to Know

Locke Lord LLP
April 20, 2020

On April 15, in a case challenging the U.S. Army Corps of Engineers’ (“Corps”) Nationwide Permit (“NWP”) 12, a federal court in the District of Montana determined that the Corps’ 2017 reissuance of NWP 12 was arbitrary and capricious and violated the Endangered Species Act (“ESA”). As a result, the court vacated NWP 12 and remanded it to the Corps for reconsideration in compliance with the ESA. The court also enjoined the Corps from authorizing any dredge or fill activities under NWP 12 pending completion of the necessary consultation process required by the ESA. 

Initial questions as to whether the court’s order applied nationwide or just within the District of Montana were at least temporarily rendered moot on April 17 when the Corps issued a directive to all of its regions not to process any more NWP 12 verifications until further notice. The vacatur and injunction against the use of NWP 12 has significant implications for all utility line construction projects, and also raises many legal and practical questions for developers with projects under or nearing construction.  This QuickStudy explores several of those issues based on the reasoning in the court’s opinion, provides a look ahead at what may come next, and addresses strategies that may be available to allow project construction to proceed in the interim.  

Background of NWP 12

NWP 12 is a general permit under the Clean Water Act that authorizes discharges associated with the construction, maintenance, repair, and removal of utility lines and associated facilities, including oil and gas pipelines, electric transmission and collection lines, telephone, cable TV and internet cables, and the like. NWP 12 authorizes discharges that result in the loss of up to  1/2 acre of waters of the U.S. Discharges resulting in the loss of less than 1/10 acre can be self-certified by the permittee without any notification to the Corps, while discharges of more than 1/10 acre require the submission of a pre-construction notification (“PCN”) to the Corps for verification of applicability.

All Nationwide Permits are subject to a series of general conditions, including General Condition (“GC”) 18, which prohibits the use of NWPs to authorize any activity that is likely to directly or indirectly jeopardize the continued existence of a listed species or destroy or adversely modify the critical habitat of a listed species. If a prospective permittee’s proposed activity “might” affect any listed species or critical habitat of a listed species present in the vicinity, the permittee must submit a PCN to the Corps and may not begin work until the Corps verifies that the activity is authorized.

The Corps reissues the NWPs every five years with various, usually minor changes.  The NWPs were last reissued in 2017 to be effective until 2022.

Background of the Case

The case, Northern Plains Resource Council, et al., v. U.S. Army Corps of Engineers, et al.,  involved an action filed by Northern Plains Resource Council (“NPRC”), a non-profit conservation group,‎ to challenge the Corps’ 2017 reissuance of NWP 12.  It also specifically challenged the Corps’ verification of TC Energy Corporation’s NWP 12 PCN to authorize crossings of the Yellowstone and Cheyenne Rivers by the company’s Keystone XL Pipeline. The plaintiffs argued, among other things, that the Corps’ reissuance of the NWPs violated the Endangered Species Act (“ESA”). 

Section 7(a)(2) of the ESA requires all federal agencies to determine “at the earliest possible time” whether an action they propose to take “may affect” a species listed as endangered or threatened under the ESA.  If the “may affect” determination is affirmative, the agency must consult with the U.S. Fish and Wildlife Service and/or National Marine Fisheries Service  (collectively, “Services”) regarding the effect of the proposed action on listed species before proceeding. 

When last reissuing NWP 12, the Corps did not perform any consultation with the Services.  Instead, the Corps determined that issuance of NWP 12 would have “no effect” on listed species, because GC 18 would preclude effects on listed species or critical habitat.  The Court found that the Corps’ reasoning was flawed.  GC 18 itself fails to ensure that the Corps fulfills its obligations under ESA Section 7(a)(2) because it delegates the Corps’ initial effect determination to individual non-federal permittees. Further, Section 7(a)(2) requires the Corps to make its “may affect” determination “at the earliest possible time,” which would mean the time of reissuance of the NWP.  Relying on GC 18 delays that determination until the time when NWP authorization is sought for a particular project. 

The court also found substantial evidence in the Corps’ own Decision Document for the 2017 NWP reissuance that, despite the Corps’ conclusion that NWP 12 would result in “no more than minimal individual and cumulative adverse effects on the aquatic environment,” the reissuance of NWP 12 “may affect” listed species due to the vast quantity of impacts it would be used to authorize. Based on these findings, the court held that the Corps’ reissuance of NWP 12 without conducting a programmatic consultation with the Services under Section 7(a)(2) was arbitrary and capricious and violated the ESA. As a result, the court issued an order remanding NWP 12 to the Corps for consultation with the Services in compliance with the ESA. But rather than leave NWP 12 intact pending the Corps’ completion of that process, the court took the step of vacating NWP 12 and enjoining the Corps from authorizing any dredge or fill activities under NWP 12 until it has complied with the ESA and all other applicable laws, including NEPA and the Clean Water Act.

Effect of the Court’s Order

1. Is the Order Effective Nationwide?

The immediate question that arose with respect to the court’s order was whether its vacatur of NWP 12 and associated injunction applied nationwide, or just within the District of Montana.  Certainly, there is nothing in the language of the court’s order to suggest that it intended to limit the scope of its decision just to the District of Montana. It simply states that “NWP 12 is remanded to the Corps for compliance with the ESA,” and that “NWP 12 is vacated pending completion of the consultation process and compliance with all environmental statutes and regulations.” Assuming that it was the intent of the court for its order to have nationwide effect, the question then becomes whether the District Court has the power to issue a nationwide injunction.

The issue of nationwide injunctions by district courts has been the subject of a great deal of political and jurisprudential attention over the years, and especially in recent years.  Numerous district courts have issued injunctions with nationwide effect, among the most recent being the injunction against implementation of the Corps’ Waters of the U.S. rule.  It has generally been accepted that district courts have the power to do so, but that principle has come under increasing criticism, particularly recently. The Department of Justice objects to the issuance of nationwide injunctions, and formalized that policy in a 2018 memo from the Attorney General to U.S. Attorneys laying out advocacy guidelines for Department of Justice attorneys to “reaffirm the constitutional and prudential limitations on the remedial authority available to judges” in cases where nationwide injunctions may be in play.

Among the purely legal (rather than political) arguments against nationwide injunctions are that (1) they purport to bind parties that were not before the District Court; (2) the scope of a case may not allow for the development of a factual record supporting such a broad injunction; (3) local conditions would lead to a different result in other areas of the country, and (4) courts should tailor their relief as narrowly as possible, so that it is no more burdensome to the defendant than necessary to provide complete relief to the plaintiffs. 

The first three of these arguments would seem to have little application to this case.  Both TC Energy Corporation and the Corps were before the District Court and had the opportunity to make their case.  The record of the case included extensive facts and briefing regarding the Corps’ 2017 and prior reissuances of NWP 12, and the question of local conditions has little relevance given that NWP 12 is in name and effect a nationwide permit.  But the last argument may indeed have merit.  The plaintiffs in this case were not seeking a nationwide bar on NWP 12, they were seeking to block construction of the Keystone Pipeline by attacking the Corps’ verification of TC Energy’s use of NWP 12 to authorize impacts from construction of its pipeline.  It was not necessary for the court to vacate NWP 12 entirely to grant the plaintiffs the relief they sought.  It could have vacated just the verification of TC Energy’s PCN or otherwise limited the scope of its order. 

2. What about Self-Certifications?

Another question that is being asked by project developers which has potentially even greater consequences for industry is whether the order also precludes the use of NWP 12 for impacts which do not require a PCN and Corps verification, often referred to as “self-certifications.”  This includes separate and complete projects impacting less than 1/10 acre that also meet the terms of GC 18 and all other General Conditions.  The injunctive language in the court’s order can be read as being limited to PCN verifications, as it states that the “Corps is enjoined from authoring [sic] any dredge or fill activities under NWP 12 pending completion of the consultation process and compliance with environmental statutes and regulations.”  Because self-certification does not require any notice to or verification by the Corps, a plain reading of that aspect of the order may suggest that self-certifications can continue.  But that most likely is not the case as the vacatur of NWP 12 essentially means that NWP 12 is no longer valid and cannot be used in any context. 

Corps’ Response and Path Forward

1. Corps Directive Suspending NWP 12 Verifications

Recognizing the need for clarity and direction in the immediate aftermath of the court’s decision, less than 48 hours after the decision Corps Headquarters issued an e-mail directive to the chiefs of all Regulatory Districts. The directive indicates that the Corps is still reviewing the order to determine its next steps, but “out of an abundance of caution, effective immediately, Corps Districts should not verify any pending PCNs for compliance with NWP 12 under 33 C.F.R. 330.6 until further direction from this office is issued.” 

The Corps’ directive renders questions about the nationwide effect of the court’s order moot, at least for the time being. From this point forward, the Corps will not authorize the use of NWP 12 for any projects requiring a PCN.  Notably, the order is silent with respect to self-certifications. That could be interpreted to mean the Corps still views NWP 12 as available for projects that do not require a PCN, or it could simply be that Headquarters did not feel the need to provide instruction to the Districts on an issue for which they are not required to take any action. 

Looking ahead, it seems likely that the Corps will seek review and reversal of the District Court’s order. That could take several forms: a motion for reconsideration by the District Court seeking to lift the vacatur and injunction while the Corps corrects the ESA and other legal deficiencies on remand, or an appeal to the Ninth Circuit, for example. Whatever the legal strategy, it seems highly unlikely that the Corps and the Department of Justice will simply accept such a broad order from the District Court on an issue with such far-ranging implications for construction of energy and infrastructure projects across the country – especially at a time when those industries and the nation’s economy as a whole are already in drastic decline due to the continuing COVID-19 pandemic.

In addition to seeking a limitation or reversal of the court’s order, the Corps will likely begin on a parallel path to remedy the deficiencies on which the order was based. The costs of delay, both in terms of the economic impact on industry and the administrative burden on the Corps to process the crush of individual permit applications that will likely be filed in the absence of NWP 12 are simply too great. While there is no minimum timetable for the Corps to complete such a process, it will need to complete a Section 7 consultation with the Services and also ensure compliance with other applicable laws such as the National Historic Preservation Act.  It will then need to undertake the appropriate level of NEPA analysis before reissuing the Nationwide Permit package.  While the Corps can be expected to give this process the highest priority, it is likely that it will take at least until 2021 before it can be completed. 

2. Additional Implications

As significant as the vacatur of NWP 12 is, the court’s opinion raises even broader concerns. While the opinion and order focused solely on the Corps’ reissuance of NWP 12, the fact is that the entire Nationwide Permit package was reissued as a whole, as has been the Corps’ practice since its originally issuance of the NWPs in 1977. Likewise, GC 18 and the other General Conditions are part of the NWP package and apply to all NWPs. Thus, the legal deficiencies that the court found with the reissuance of NWP 12 apply equally to all of the NWPs.  Recognizing that the challenge before it involved only NWP 12, the court showed at least some restraint in limiting the applicability of its order to NWP 12.  But the court’s opinion sets up a clear opportunity for a subsequent challenge to the entire Nationwide Permit program. That fact surely has not been lost on the plaintiffs in this case and other opponents of the program, and such a challenge should be expected as soon as they find the right opportunity. This only increases the urgency for the Corps to seek modification, reversal, or a stay of the District Court’s order, while seeking to remedy the legal deficiencies with the NWP reissuance as expeditiously as possible.

Final Thoughts

The vacatur of NWP 12 and suspension of PCN verifications nationwide puts project developers in a very difficult position, but a number of strategies may be available to help keep projects moving until the Corps can resume processing permits. Developers can make their own determinations about the continuing legal viability of self-certifications under NWP 12 in the context of a particular project. Depending upon the nature of the project there may be other NWPs that could apply in lieu of NWP 12.  For example, renewable energy projects may be able to make use of NWP 51, although it should be noted that NWP 51 has been disallowed in those parts of Texas within the Galveston District’s jurisdiction. If a suitable NWP is not available, developers can seek an individual permit if they have sufficient time to do so before construction (generally months or more, and with timelines likely expanding due to COVID-19 limitations and the expected crush of new applications). Finally, some projects may be able to be reconfigured to avoid impacts to waters of the U.S. entirely.  This option is likely to become more feasible than might be expected once the Administration’s Navigable Waters Protection Rule (“NWPR”) becomes effective, likely sometime this summer, as the NWPR will significantly limit the scope of waters that are subject to federal jurisdiction, including by excluding all ephemeral waters.

In any event, it will be important for developers of affected projects to consult with their attorneys and technical consultants to discuss the effect of this development on their individual projects as well as develop compliance strategies that will enable them to continue development and construction of critical projects with minimal disruption or delay.

Chris Dove, a partner in the Firm’s Appellate Section, and Rachael Beavers-Horne, a law clerk with the Firm, also contributed to this article.