Seal of the Court of Appeals for the District of Columbia

On June 30, 2020, the United States Court of Appeals for the District of Columbia Circuit issued an en banc opinion regarding the use of tolling orders issued by the Federal Energy Regulatory Commission (“FERC”) for requests for rehearing of its actions taken pursuant to the National Gas Act (“NGA”). The opinion eliminates the current practice by FERC of issuing a tolling order in response to a request for rehearing and will affect the rights of parties before FERC to seek judicial review of FERC actions.

The NGA and Federal Power Act (“FPA”) explicitly state that the absence of FERC action on a request for rehearing within 30 days may be deemed a denial of rehearing, permitting the aggrieved party to seek appellate review. FERC’s standard practice has been to extend the time for its action by issuing a tolling order on the 30th day following submission of a request for rehearing. The Court held that FERC’s practice of responding to requests for rehearing by issuing a tolling order does not constitute “action” that would delay judicial review. Should an applicant receive a tolling order from FERC in response to its request for rehearing, it can proceed to seek judicial review of FERC’s underlying order. The Court determined that the tolling orders had the unlawful effect of delaying the aggrieved party’s opportunity to seek judicial review.

The Court held that FERC has four options once an applicant files a request for rehearing: FERC may (1) grant rehearing, (2) deny rehearing, (3) abrogate its order without further hearing, or (4) modify its order without further hearing. If 30 days pass and FERC has not responded, the Court states that the applicant may deem its rehearing application denied and seek judicial review of the now-final agency action. The Court noted that FERC has statutory authority, however, to modify the underlying order even following the initiation of an appeal by an aggrieved party whose request for rehearing has been denied by FERC inaction.

While this opinion applies to the NGA, the FPA’s provisions on rehearing requests are substantially similar, a fact the Court observed. This particular decision was made in the backdrop of homeowners in Pennsylvania contesting FERC’s certification of a gas pipeline, which paved the way for construction of the nearly 200-mile pipeline through the homeowners’ property. Because seeking rehearing does not stay the effectiveness of a FERC order, the construction of the pipeline was allowed to proceed while the request for rehearing was pending, and FERC’s tolling order prevented judicial review. Not wanting to await FERC action on rehearing, homeowners appealed FERC’s order granting the certificate and its tolling order, claiming a manifest unjustness. The Court, however, did not rely on the underlying facts of this case in finding the practice of issuing tolling orders unlawful and instead based its opinion exclusively on the statutory text, suggesting that FERC’s tolling order practice under the FPA is similarly invalid. We have already seen FERC apply the Court’s holding to pending requests for rehearing filed under the FPA. The Case Number is 17-1098, Allegheny Defense Project v. FERC.

For further information regarding the opinion and the FERC’s application procedures, please contact Michael Postar, Joshua Adrian, Matthew Rudolphi, Sean Neal, or Bhaveeta Mody.