D.C. Circuit Ends FERC's Use Of Tolling Orders To Delay Judicial Review, Leaves More Questions Than Answers

• Published date: 08 July 2020
• Law Firm: Akin Gump Strauss Hauer & Feld LLP
• Author: Mr J. Porter Wiseman

On June 30, 2020, the U.S. Court of Appeals for the District of Columbia Circuit ("D.C. Circuit"), sitting en banc, upended¹ decades of Federal Energy Regulatory Commission (FERC or the "Commission") practice. Allegheny Defense Project v. FERC ("Allegheny Defense") examined a "focused question of statutory construction,"² namely whether FERC has the statutory authority to postpone judicial review by issuing orders "granting rehearing" that serve only to extend the statutory 30-day period for taking action on requests for rehearing following issuance of a FERC order ("Tolling Orders"). Because an aggrieved party cannot seek judicial review until FERC acts on a request for rehearing, the routine issuance of Tolling Orders has delayed access to appellate review of FERC orders for months and occasionally for over a year.³ In Allegheny Defense, the D.C. Circuit found that Tolling Orders could not extend the time for FERC action on rehearing requests.

Although Allegheny Defense addresses Tolling Orders under the Natural Gas Act (NGA),⁴ the Federal Power Act (FPA)⁵ includes nearly identical language, which is noted in the Opinion.⁶ The NGA and the FPA are sister statutes, and decisions interpreting them are frequently cited interchangeably when the relevant provisions of each statute "'are in all material respects substantially identical.'"⁷ It is therefore likely that Allegheny Defense has brought an end to the routine issuance of Tolling Orders under the FPA as well as the NGA. What that means in practice, however, is not entirely clear.

Rehearing and Judicial Review of FERC Orders

The NGA and the FPA both require that a party seeking rehearing of a Commission order must request rehearing within 30 days of the issuance of that order. Once a request for rehearing is received, the Commission may "grant or deny rehearing or [] abrogate or modify its order without further hearing."⁸ If the Commission does not act on the request for rehearing within 30 days, the request is deemed denied and, at that point, the order would be ripe for judicial review. Until FERC acts on the request for rehearing, or it is denied by operation of law, no party may seek judicial review of a FERC order.

As noted above, the issuance of Tolling Orders, which "grant rehearing" but only for the limited purpose of giving the Commission more time to act on a rehearing request, precludes parties aggrieved by a FERC order from seeking judicial review until such time as the Commission chooses to act on the merits of a rehearing request. Often, the delay was only a few months, but it has at times stretched into years, particularly in natural gas pipeline certificate cases.⁹

Where the D.C. Circuit previously considered the lawfulness of Tolling Orders, it has upheld them as a reasonable exercise of agency discretion.¹⁰ In Allegheny Defense, however, the D.C. Circuit revisited those earlier decisions. The petitioners in Allegheny Defense were landowners opposing the construction of a natural gas pipeline across their land. FERC issued a certificate of public convenience and necessity to Transcontinental Gas Pipe Line Co. ("Transco") in February 2017. The landowners sought rehearing. FERC issued a Tolling Order in March 2017. While the substantive order on rehearing was pending, Transco sought and received eminent domain authority in court, and FERC granted authorization to construct the pipeline. By the time a substantive order on...