Louisiana 5th Circuit Greenlights Permit For New Pipeline

In January, the Louisiana Fifth Circuit Court of Appeal reinstated a permit issued by the Department of Natural Resources (DNR) back in April 3, 2017 to allow a new pipeline, reversing the district court that ordered the DNR to reevaluate the possible environmental effects.  Joseph v. Sec’y, La. Dep’t of Nat. Res., 18-414 (La. App. 5 Cir. 1/30/19); 2019 WL 364466.  This decision clears the way for the proposed pipeline to advance.

On February 22, 2016, Bayou Bridge Pipeline, LLC submitted an application to DNR to construct and operate a new pipeline, which was designed to carry 280,000 barrels or more of light or heavy crude oil per day from the existing Clifton Ridge Terminal in Lake Charles, Louisiana to various crude oil terminals in St. James, Louisiana.  During the evaluation period, DNR made nine different requests on Bayou Bridge for additional information before holding a public hearing.  Based on comments it received after the public hearing, DNR made three additional requests for information.  After completing an analysis of the proposed pipeline and finding that Bayou Bridge had “modified, avoided or reduced all adverse environmental impacts to the maximum extent practical,” DNR issued the permit for the proposed pipeline.

The plaintiffs, several individuals and environmental groups, filed petitions for reconsideration, which the Secretary denied after addressing the concerns in a written response.  The plaintiffs then filed suit for judicial review and alleged that DNR “violated the Louisiana Constitution and its own Guidelines by issuing the proposed permit to Bayou Bridge.”  Specifically, the plaintiffs asserted that DNR (1) did not consider potential adverse environmental impacts of the pipeline; (2) did not consider the cumulative impact of the pipeline; (3) ignored evidence that the people of St. James Parish may be trapped in the event of an emergency; and (4) misapplied its own guidelines.

The district court ruled in favor of the plaintiffs.  The district court found that DNR did not apply Costal Use Guidelines 711(A) and 719(K), and ordered Bayou Bridge “to develop effective environmental protection and emergency or contingency plans relative to evacuation in the event of a spill or other disaster, in accordance with guideline 719(K), PRIOR to the continued issuance of said permit.”  Both DNR and Bayou Bridge appealed.

In analyzing the district court’s judgment, the court of appeal first noted that because the district court was acting as an appellate court in reviewing the decision of DNR, it “was constrained to afford considerable weight to DNR’s reasonable construction and interpretation of its rules and regulations adopted pursuant to the Administrative Procedures Act.”  This set the bar high for the plaintiffs to prevail on appeal.

In granting the permit, DNR found that Guidelines 711(A) and 719(K) were not applicable.  Because those determinations were not unreasonable, the court of appeal held that the district court erred in substituting its own judgment and ruling otherwise.  The court similarly found that “DNR made a reasonable determination, within the permissible scope of its authority, that the submitted emergency response and contingency plan overview constitutes effective environmental protection and emergency or contingency plans for the proposed pipeline,” and that therefore “the district court erred in remanding this matter to DNR for development of further environmental protection and emergency or contingency plans.”

The majority’s decision prompted a dissent from Judge Johnson.  Aside from questioning the court’s appellate jurisdiction, Judge Johnson was concerned that that DNR’s analysis did not adequately consider the overall welfare of the public, as required by the Louisiana Constitution.  Specifically, DNR’s review of alternative sites/methods was based solely on an analysis provided by Bayou Pipeline, which it adopted as its own conclusions.  There was no independent verification of Bayou Pipeline’s submission.  Judge Johnson believed this violated DNR’s duty of public trust, and would have vacated the coastal use permit remanded the matter to DNR for consideration of the public welfare.

The Louisiana Fifth Circuit’s decision indicates that the courts should not get into the business of micromanaging or second-guessing DNR decisions, so long as they are in some way supported by the record.  There is an obvious wisdom to this deference, as DNR officials are arguably better positioned and trained to make such determinations, and almost every pipeline of this magnitude will garner some objection; in fact, environmental groups tried, unsuccessfully, to stop Bayou Bridge’s efforts to construct this pipeline in federal court last summer.  See Atchafalaya Basinkeeper v. United States Army Corps of Eng’rs, 984 F.3d 692 (5th Cir. 2018).   However, Judge Johnson’s dissent raises a valid concern.  When DNR adopts in full the submissions and conclusions of an interested party, without the benefit of other sources, it is only fair to be skeptical.  While the permitting process should not be unduly burdensome, it should not be a rubber stamp either.  But of course the plaintiffs were free to submit their own analyses, so perhaps Judge Johnson’s concern was overblown.  We shall see if the Louisiana Supreme Court decides to take this case up and have the final say on the issue.

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