California Supreme Court Grants Review of Third District Decision Involving FERC Relicensing of State’s Oroville Hydroelectric Dam Project To Decide Extent To Which Federal Power Act Preempts CEQA; Merits Briefing Underway

Miller Starr Regalia
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Miller Starr Regalia

On December 11, 2019, the California Supreme Court by a 7-0 vote granted the petition for review of Butte and Plumas Counties and the Plumas County Flood Control and Water Conservation District in County of Butte v. Department of Water Resources (State Water Contractors), Case No. S258574 (formerly published at (3d Dist. 2019) 39 Cal.App.5th 708).  The order granting review, which also directed that the Third District’s opinion be depublished at the request of defendant and respondent Department of Water Resources (which interestingly filed no answer to the petition for review), specified the following two issues for briefing:

“1. To what extent does the Federal Power Act preempt application of the California Environmental Quality Act when the state is acting on its own behalf, and exercising its discretion, in deciding to pursue licensing for a hydroelectric dam project?

2. Does the Federal Power Act preempt state court challenges to an environmental impact report prepared under the California Environmental Quality Act to comply with the federal water quality certification under section 401 of the federal Clean Water Act?”

The Third District’s underlying opinion was its second in the case; both of its opinions concluded that California state courts lacked jurisdiction over plaintiffs’ CEQA challenges to the state project’s environmental review due to federal law preemption, and that plaintiffs had failed to pursue and exhaust their available federal remedies before the Federal Energy Regulatory Commission (FERC).  After the first opinion was published in late 2018 at 30 Cal.App.5th 630 (see my December 26, 2018 post on that decision here), the Supreme Court granted and transferred the cause back to the Third District for reconsideration in light of its opinion in Friends of Eel River v. North Coast Railroad Authority (2017) 3 Cal.5th 677.  In Friends of Eel River (my July 31, 2017 post on which can be found here), the Supreme Court held that another federal law – the Interstate Commerce Commission Termination Act of 1995 (“ICCTA”) – does not preempt CEQA’s application to a railroad project undertaken by a state public entity on a rail line also owned by that state entity; it reasoned that even though a state’s imposition of environmental regulations like CEQA on a privately owned railroad would be preempted if they prevented or delayed the project’s operation, as applied to a subdivision of the sovereign state the CEQA process constituted “self governance” rather than federally preempted “regulation.”  (On the complexities created by that California Supreme Court decision, see my May 4, 2018 post, “When “Tigers Eat Their Young” – Federal Preemption of CEQA In Context of Railroad Projects Will Continue To Present Complex Issues Following U.S. Supreme Court’s Denial of Certiorari In Friends of Eel River Case.”)

The Third District’s second opinion in the Oroville dam case reached the same conclusion as its first, finding Friends of Eel River distinguishable, and holding the ICCTA, with its largely “deregulatory” purpose, was materially distinguishable from the broadly preemptive Federal Power Act, which has been held to occupy the field of licensing a hydroelectric dam and bar environmental review of the federal licensing procedure in state courts.  It rested its conclusions on what it found to be clear and controlling U.S. Supreme Court and Ninth Circuit precedents, and on the limited authority granted to states under the Clean Water Act’s section 401 water quality certification process to impose stricter water quality conditions than federally required on a FERC license, which authority must be exercised within a reasonable time not to exceed one year, or it is deemed waived.

Petitioners’ Opening Brief on the merits was filed February 10, 2020, and Respondent’s and Real Parties’ Answer Briefs were due on April 10, 2020, a date set prior to the COVID‑19 emergency orders, but have apparently (as of this post’s drafting) not yet been filed.  Stay tuned. . . .

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