Allegheny Defense Project v. FERC

Summary

The D.C. Circuit en banc held that the Federal Energy Regulatory Commission's (FERC) "tolling orders"—which merely grant rehearing for the limited purpose of further consideration and prevent the application from being deemed denied—do not constitute "action upon" a rehearing application under § 717r(a) of the Natural Gas Act. Therefore, after thirty days of inaction, the rehearing application is deemed denied, and judicial review is available. The court overruled its prior precedent (California Co. v. FPC) that had upheld such tolling orders, relying on plain statutory text and the principle that agencies do not receive Chevron deference for jurisdictional provisions. On the merits, the court denied the petitions for review, finding that FERC's market-need determination was supported by evidence beyond precedent agreements.

Holdings

1. A tolling order that merely grants additional time for consideration and prevents a deemed denial is not an 'act upon' the application within the meaning of § 717r(a). The Commission must take one of the four enumerated actions (grant rehearing, deny rehearing, abrogate order, or modify order) to avoid a deemed denial.
2. The Commission reasonably found market need based on precedent agreements and additional evidence, including comments by shippers and an end-user and a study submitted by one of the Environmental Associations.

Questions Presented

1. Whether the Federal Energy Regulatory Commission 'acts upon' an application for rehearing within the meaning of 15 U.S.C. § 717r(a) by issuing a tolling order that does nothing more than prevent the application from being deemed denied and preclude judicial review until the Commission acts.
2. Whether the Commission's finding of market need for the pipeline was arbitrary and capricious.

Disposition

denied