Islander East Pipeline Co. v. McCarthy

May 2: In the U.S. Court of Appeals, Second Circuit, Case No. 06-5764. The Appeals Court denied a petition for review by Islander East Pipeline Company, LLC, who needed a water quality certification from the State of Connecticut Department of Environmental Protection (CTDEP) in order to secure Federal approval to build a natural gas pipeline across Long Island Sound. Islander East contended that the State's second denial of the certification was arbitrary and capricious.

The Appeals Court notes, citing previous decisions, that while the Natural Gas Act (NGA) generally preempts local permit and licensing requirements, the Clean Water and Coastal Zone Management Acts are notable in effecting a Federal-state partnership to ensure water quality and coastal management around the country, so that state standards approved by the Federal government become the federal standard for that state. Under the Clean Water Act, state water quality standards approved by U.S. EPA becomes ‘the water quality standard for the applicable waters of that State. Consistent with that scheme, the two Acts require applicants for Federal permits to provide Federal licensing agencies such as the FERC [Federal Energy Regulatory Commission] with certifications from affected states confirming compliance with local standards.

In a 2-1 decision, the Appeals Court concluded, "To summarize, Islander East’s proposed installation of a natural gas pipeline from Connecticut to New York across Long Island Sound must comport with various statutes, including the Clean Water Act. The Clean Water Act requires Islander East to procure from the CTDEP a certification that the proposed pipeline will comply with state water quality standards. Record evidence supports the CTDEP’s finding that various techniques to be employed by Islander East in installing the proposed pipeline would violate state water quality standards by eliminating a significant area of nearshore waters from their existing and designated use of shellfishing. On such a record, we cannot conclude that the CTDEP’s decision to deny Islander East a certificate of compliance was 'arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.' Islander East’s petition for review is denied."

Access the complete opinion (click here).