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Constitution Asks Federal Court for Rehearing in New York Case

Constitution Pipeline Co. LLC won’t back down in its fight with New York, asking the U.S. Court of Appeals for the Second Circuit on Friday for a rehearing of the court’s refusal to vacate the state’s denial of a water quality certificate (WQC) and other permits.

The pipeline operator petitioned for a rehearing of the case en banc, which would be before all of the court’s active judges. After nearly three years of review, the New York State Department of Environmental Conservation (DEC) in April 2016 denied the project’s Section 401 WQC under the U.S. Clean Water Act (CWA). The Second Circuit recently denied Constitution’s challenge of that decision, ruling DEC is entitled to its review under relevant federal laws. The three-judge panel, however, said it lacked jurisdiction over how long it took DEC to issue the denial, deferring on that matter to the U.S. Court of Appeals for the District of Columbia.

But Constitution’s legal team argued in its petition on Friday that if the panel’s opinion is allowed to stand, it could have far-reaching implications for natural gas infrastructure projects across the country.

“Left unchecked, states like New York, with an intent to exercise their particular interests over the interests of the nation, will use the panel’s expanded reading of Section 401 of the CWA to undermine FERC’s routing determinations,” Constitution said.

In reaching the opinion, Constitution said the panel deviated from Second Circuit precedent and that of the U.S. Supreme Court. The Supreme Court “has long held that the Federal Energy Regulatory Commission exercises comprehensive authority over interstate facilities of natural gas companies,” it said.

The DEC has battled the natural gas industry for years now, most recently denying a WQC for Millennium Pipeline Co. LLC’s Valley Lateral Project. National Fuel Gas Co. is also fighting the agency in the Second Circuit over its decision to deny the Northern Access expansion project a WQC.

The companies have argued that the DEC’s denials were “arbitrary and capricious,” far exceeded the scope of the state’s authority under the CWA, were politically motivated and exceeded the statutory timeframe in which a decision should have been made. DEC has fired back to say its reviews have been transparent and thorough.

Constitution, like the other companies, has argued that DEC’s authority is preempted by the Natural Gas Act (NGA). The company repeated in its petition on Friday that the agency’s decision is also disruptive of the cooperative federalism of the NGA.

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