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Indigenous Environmental Network v. United States Department of State

United States District Court, D. Montana, Great Falls Division

November 22, 2017

INDIGENOUS ENVIRONMENTAL NETWORK and NORTH COAST RIVER ALLIANCE, Plaintiffs,
v.
UNITED STATES DEPARTMENT OF STATE, et al., Defendants, and TRANSCANDA CORPORATION, et al., Intervenor-Defendants

          ORDER

          Brian Morris, United States District Court Judge.

         Plaintiffs Indigenous Environmental Network ("IEN") and North Coast River Alliance ("NCRA") (collectively "Plaintiffs") bring this action against the United States Department of State and various other governmental agencies and agents in their official capacities ("Federal Defendants"). Plaintiffs allege that the State Department violated the Administrative Procedure Act ("APA"), National Environmental Policy Act ("NEPA"), and Endangered Species Act ("ESA") when it published its Record of Decision ("ROD") and National Interest Determination ("NID") and issued the accompanying Presidential Permit to allow defendant- intervenes TransCanada Keystone Pipeline, LP ("TransCanada") to construct a cross-border oil pipeline. Federal Defendants and TransCanada move to dismiss this action for lack of jurisdiction.

         BACKGROUND

         Under Secretary Thomas A. Shannon published a ROD/NID on March 23, 2017, to recommend that the State Department approve a Presidential Permit to TransCanada to construct, connect, operate, and maintain an 875-mile long pipeline. (Doc. 61 at 6.) Executive Order 13337 delegates to the State Department the President's authority to issue a permit for the construction of an oil pipeline across the border of the United States if it finds that issuance of the permit to the applicant "would serve the national interest." Issuance of Permits, Exec. Order No. 13337, 69 Fed. Reg. 25299 (2004). The State Department issued the accompanying Presidential Permit on April 4, 2017. Notice of Issuance of a Presidential Permit, 82 Fed. Reg. 16467-02 (Apr. 4, 2017).

         TransCanada is a limited Delaware partnership owned by the affiliates of TransCanada Corporation of Canada. TransCanada proposed the Keystone XL Pipeline as an expansion to its existing Keystone Pipeline System in 2008. (Doc. 49 at 11.) The proposed Keystone XL Pipeline would transport up to 830, 000 barrels per day of crude oil from Alberta, Canada and the Bakken shale formation in Montana to existing pipeline facilities near Steele City, Nebraska. Id. The proposed Keystone XL Pipeline crossing of the United States-Canada border requires TransCanada to obtain a Presidential Permit as part of the overall construction and operation of the entire facility. Id. at 12.

         TransCanada first applied for a Presidential Permit in September of 2008. Id. at 11. Congress mandates that all federal agencies prepare a detailed environmental analysis of all "major federal actions." 42 U.S.C. § 4332(2)(C). The environmental analysis constitutes an "action-forcing device" that ensures NEPA's goals "are infused into the ongoing programs and actions" of the federal government. 40 C.F.R. § 1502.1. The State Department recognized that the issuance of a Presidential Permit would constitute a "major Federal action" and retained the role as the lead agency. Notice of Intent to Prepare an EIS, 74 Fed. Reg. 5019-02 (Jan. 28, 2009). As a result, the State Department undertook the duty to provide an analysis of the Keystone XL Pipeline under NEPA. Id. The State Department issued a draft environmental impact statement ("EIS") in April 2010, supplemented the EIS in April 2011, and issued a final EIS in August 2011. (Doc. 49 at 13.)

         Congress passed the Temporary Payroll Cut Continuation Act of 2011, which directed the State Department to render a final decision on TransCanada's application within sixty days. Id. The State Department denied TransCanada's application for a cross-border permit in early 2012. The State Department explained that the arbitrary sixty-day deadline failed to provide sufficient time to complete its consideration of Keystone XL Pipeline's potential environmental impacts. Id TransCanada submitted a new application to the State Department for a Presidential Permit for the proposed pipeline on May 4, 2012. Id. at 14. The State Department again recognized its duty as lead agency and reviewed this new application for potential environmental effects. (Doc. 44-1 at 12). This review included input from the public and from federal, state, and tribal entities. Id. The State Department issued a final Biological Assessment ("BA") to the Fish, Wildlife and Service ("FWS") on December 21, 2012. FWS published its Biological Opinion ("BiOp") and concurrence statement regarding the proposed pipeline on May 15, 2013, (Doc. 61 at 13.) The State Department released its Final Supplemental Environmental Impact Statement ("FSEIS") in January 2014. (Doc. 44-1 at 12.)

         Secretary of State John Kerry denied TransCanada's application on November 6, 2015. (Doc. 61 at 14.) Secretary Kerry determined that issuing a Presidential Permit for the pipeline would not serve the national interest as required by Executive Order 13337. Id., Secretary Kerry's denial did not end the matter.

         President Trump issued a Presidential Memorandum Regarding Construction of the Keystone XL Pipeline ("Memorandum") on January 24, 2017. Construction of the Keystone XL Pipeline, 82 Fed. Reg. 8663, 8664 (Jan. 24, 2017). The Memorandum invited TransCanada to reapply. Id. The President delegated to the State Department his authority to issue the Presidential Permit within sixty days. Id. The Memorandum further stated that the State Department should consider, to the maximum extent permitted by law, the FSEIS released in January 2014 to satisfy all applicable NEPA requirements, and any other provision of law that would require executive department consultation or review, including the consultation or review required under ESA section 7(a). Id.

         The State Department received a renewed application from TransCanada on January 26, 2017. (Doc. 61 at 14.) Under Secretary Shannon relied on the 2014 FSEIS and FWS's 2013 BiOp in determining whether the issuance of the Presidential Permit would serve the national interest. Under Secretary Shannon published the ROD/NID on March 23, 2017. (Doc. 44-1 at 13.) The State Department did not supplement or revise either the 2014 FSEIS or the 2013 BiOp in any manner. The State Department issued the accompanying Presidential Permit on April 4, 2017.

         Plaintiffs challenge the State Department's publication of the ROD/NID and its decision to issue the accompanying Presidential Permit. (Doc. 61 at 11.) Plaintiffs first seek for Federal Defendants to withdraw their FSEIS and Keystone XL Pipeline approvals, including the ROD/NID and Presidential Permit, until Federal Defendants have complied with NEPA. Plaintiffs next seek for Federal Defendants to withdraw their BA and BiOp until Federal Defendants have complied with the ESA and APA. Plaintiffs further seek a declaration that Federal Defendants violated the aforementioned acts and permanent injunctive relief that would prevent Federal Defendants and TransCanada from initiating any activities in furtherance of the Keystone XL Pipeline. (Doc. 61 at 51-52.)

         DISCUSSION

         Federal Defendants and TransCanada move to dismiss Plaintiffs' Complaint pursuant to Rule 12(b)(1) and Rule 12(b)(6) of the Federal Rules of Civil Procedure. A challenge to a court's jurisdiction to hear a claim may be brought either as a facial attack on the sufficiency of the pleadings, or as a factual attack that contests the complaint's allegations. Leite v. Crane Co., 749 F.3d 1117, 1121 (9th Cir. 2014). Federal Defendants question whether Plaintiffs have presented a cause of action. The Rule 12(b)(6) standard applies. Leite, 749 F.3d at 1121.

         I. NEPA Claims Against the Federal Defendants

         Federal Defendants and TransCanada argue that the following jurisdictional defects require the Court to dismiss Plaintiffs alleged NEPA violations: (1) the issuance of a Presidential Permit constitutes presidential action that a court may not review under the APA; (2) even if the issuance of the Presidential Permit could be deemed an agency action, it represents an action committed to agency discretion by law thereby shielding it from judicial review under the APA; and (3) Plaintiffs lack the ability to redress their alleged injuries.

         A. Agency Action

         NEPA provides no private right of action. Nuclear Info. & Res. Serv. v. Nuclear Regulatory Comm'n, 457 F.3d 941, 950 (9th Cir. 2006). This Court possesses jurisdiction to review alleged NEPA violations under the provisions of the APA under 28 U.S.C. § 1331. The APA waives the government's sovereign immunity and provides a private cause of action. 5 U.S.C. §§ 701-706. The APA provides for judicial review where a party suffers a "legal wrong because of agency action" or is "adversely aggrieved by agency action within the meaning of a relevant statute." 5 U.S.C. § 702.

         1. Actions of the State Department

         TransCanada first applied for a Presidential Permit in 2008. The State Department recognized that issuance of the Presidential Permit would "constitute a major Federal action that may have a significant impact upon the environment within the meaning of the NEPA." Notice of Intent to Prepare an EIS, 74 Fed. Reg. at 5019-02. The State Department concluded that an EIS was necessary to address reasonably foreseeable impacts from the proposed action and alternatives. Id.

         TransCanada reapplied in 2012. The State Department again recognized the need to "evaluate the potential environmental impacts of the proposed project consistent with NEPA and the State Department's regulations." Application for Presidential Permit, 77 Fed. Reg. 27533-02 (May 10, 2012). The State Department in February 2017 acknowledged that TransCanada had applied for the third time for a Presidential Permit. Notice of Receipt of TransCanada's Re-Application, 82 Fed. Reg. 10429-01 (Feb. 10, 2017). The State Department announced that it would conduct a review of TransCanada's third application in accordance with the Presidential Memorandum and any other applicable requirements. Id.

         The State Department further announced that it would seek no further public comment on the national interest determination because it already had taken public comment in February of 201 A. Id The Federal Register notices indicate that the State Department originally acknowledged that the issuance of the Presidential Permit would constitute a "major Federal action." Notice of Intent to Prepare an EIS, 74 Fed. Reg. at 5019-02. The State Department also originally acknowledged its duty to prepare an EIS to address reasonably foreseeable impacts from the proposed action. Id. The logical conclusion to be drawn is that the State Department intended for the publication of the ROD/NID and the issuance of the accompanying Presidential Permit to be reviewable as final agency action. Federal Defendants now attempt to recast the State Department's original decision to comply with NEPA, as required for a major Federal action, into a policy choice, or "act of grace, " to avoid judicial review.

         Federal Defendants and TransCanada argue the State Department acted pursuant to the President's inherent authority under the Constitution and the law of the United States when it published the ROD/NID and when it issued the accompanying Presidential Permit. In particular, Federal Defendants contend that Under Secretary Shannon considered the Keystone application in conjunction with Executive Order 13337, and the Memorandum.

         The Court considers the Under Secretary's publication of the ROD/NID "final" in the sense that it: 1) "mark[s] the consummation of the agency's decisionmaking process;" and 2) constitutes an action "by which rights or obligations have been determined, or from which legal consequences will flow." Bennett v. Spear, 520 U.S. 154, 177-78 (1997). Under Secretary Shannon's publication of the ROD/NID consummated the State Department's review of the Presidential Permit Application. The Under Secretary's publication of the ROD/NID represents the type of action from which legal consequences will flow. Id., The publication of the ROD/NID prompted the issuance of the accompanying Presidential Permit that enabled TransCanada to begin construction of the pipeline.

         2. Actions of the President

         Federal Defendants and TransCanada argue that the Supreme Court has made it clear out of respect for the separation of powers, however, that a party cannot challenge a President's actions under the APA. Franklin v. Massachusetts, 505 U.S. 788, 800-01 (1992). The Court considers two factors in determining whether an action taken by an agency or official constitutes presidential action: 1) whether the President carries out the final action himself and the manner in which he does so; and 2) whether Congress has curtailed in any way the President's authority to direct the "agency" in making policy judgments. Natural Res. Def. Council v. U.S. Dep't of State, 658 F.Supp.2d 105, 111 (D.C. Cir. 2009).

         The President waived any right in his Memorandum to review the State Department's decision under Executive Order 13337. The State Department's obligation to study the environmental impacts of its decision fundamentally does not stem from the foreign relations power. The State Department's own NEPA regulations recognize that the issuance of a Presidential Permit represents a "major Departmental action" subject to Congress's mandates in NEPA. 22 C.F.R. §§ 161.7, 161.7(c)(1). The State Department, on its own initiative, prepared a FSEIS and published a subsequent ROD/NID in this case.

         Federal Defendants contend that the State Department's NEPA regulations require no NEPA analysis. They point out that the State Department's NEPA regulations predate Executive Order 13337. President George W. Bush issued Executive Order 133337 to expedite the processing of permits for cross-border pipelines. Nothing in Executive Order 13337 abrogates the State Department's NEPA regulations. Moreover, the President conceded in his Memorandum that the State Department should consider the FSEIS as part of its obligation to satisfy all applicable requirements of NEPA. Construction of the Keystone XL Pipeline, 82 Fed. Reg. at 8663.

         3. ...


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