`United States Court of Appeals
`FOR THE DISTRICT OF COLUMBIA CIRCUIT
`
`
`Decided December 20, 2022
`
`Argued October 11, 2022
`
`
`No. 21-1139
`
`WATERKEEPERS CHESAPEAKE, ET AL.,
`PETITIONERS
`
`
`v.
`
`
`FEDERAL ENERGY REGULATORY COMMISSION,
`RESPONDENT
`
`CONSTELLATION ENERGY GENERATION, LLC, ET AL.,
`INTERVENORS
`
`
`
`Consolidated with 21-1186
`
`
`On Petitions for Review of Orders
`of the Federal Energy Regulatory Commission
`
`
`
`
`James S. Pew argued the cause for petitioners. With him
`on the briefs were Paul W. Smail, Brittany E. Wright, and
`Kathleen Riley.
`
`Paula Dinerstein was on the brief for amici curiae
`Maryland State Senator Stephen S. Hershey, Jr., et al. in
`support of petitioners.
`
`
`
`
`
`2
`
`
`Carl S. Pavetto was on the brief for amicus curiae National
`Wildlife Federation in support of petitioners.
`
`Sandra P. Franco was on the brief for amicus curiae
`Maryland Charter Boat Association, Inc. in support of
`petitioners.
`
`Scott Ray Ediger, Attorney, Federal Energy Regulatory
`Commission, argued the cause for respondent. With him on the
`brief were Matthew R. Christiansen, General Counsel, and
`Robert H. Solomon, Solicitor.
`
`
`Jonathan E.C. May, Assistant Attorney General, Office of
`the Attorney General for the State of Maryland, argued the
`cause for intervenor State of Maryland, Department of the
`Environment in support of respondent. With him on the brief
`was Brian E. Frosh, Attorney General.
`
`David W. DeBruin argued the cause for intervenor
`Constellation Energy Generation, LLC
`in support of
`respondent. With him on the brief was Zachary C. Schauf.
`
`John E. Bies, Attorney, U.S. Department of Justice, argued
`the cause for intervenor U.S. Department of the Interior in
`support of respondent. On the brief were Todd Kim, Assistant
`Attorney General, and Justin D. Heminger, Attorney.
`
`
`
`
`
`
`
`
`
`
`3
`
`Before: SRINIVASAN, Chief Judge, MILLETT, Circuit
`Judge, and TATEL, Senior Circuit Judge.
`
`Opinion for the Court filed by Senior Circuit Judge TATEL.
`
`TATEL, Senior Circuit Judge: This case involves the
`Federal Energy Regulatory Commission’s (FERC) licensing of
`the Conowingo Dam on the Susquehanna River in Maryland.
`Under section 401(a)(1) of the Clean Water Act, FERC may
`issue a license only if the state where the dam is located either
`certifies that the dam will comply with the Act’s water quality
`standards or waives its authority to do so. After initially
`granting a section 401(a)(1) certification, Maryland attempted
`to withdraw it and waive its authority as part of a settlement
`with the dam’s operator, which FERC then used as the basis for
`the Conowingo license. By issuing a license under such
`circumstances, FERC exceeded its authority under section
`401(a)(1), and we therefore vacate the license and remand to
`FERC.
`
`I.
`
`The Federal Power Act authorizes FERC to issue licenses
`for the operation of hydroelectric projects on navigable waters.
`16 U.S.C. § 797(e). The Clean Water Act makes states the
`“prime bulwark in the effort to abate water pollution, . . .
`expressly empower[ing] them to impose and enforce water
`quality standards that are more stringent than those required by
`federal law.” Keating v. FERC, 927 F.2d 616, 622 (D.C. Cir.
`1991) (internal quotation marks and citation omitted).
`Accordingly, before applying to FERC for a license to operate
`a dam, the operator must first obtain state certification of the
`project under section 401(a)(1) of the Clean Water Act. 33
`U.S.C. § 1341(a)(1) (“Any applicant for a Federal license . . .
`shall provide [FERC] a certification from the State . . . that any
`
`
`
`
`
`4
`
`[discharge from the dam] will comply with the [Clean Water
`Act].”).
`
`Section 401(a)(1) gives a state presented with a
`certification request three options: First, the state can deny the
`request, in which case “[n]o license or permit shall be granted”
`by FERC. 33 U.S.C. § 1341(a)(1). Second, the state may grant
`the request, either in full or with specified “limitations” and
`“monitoring requirements” that FERC must incorporate into
`the license. Id. §§ 1341(a)(1), (d); see also Department of
`Interior v. FERC, 952 F.2d 538, 548 (D.C. Cir. 1992)
`(explaining that FERC “may not alter or reject conditions
`imposed by the states through section 401 certificates”). Or
`third, the state may “fail[] or refuse[] to act on a request” within
`a reasonable period and thus “waive[]” its right to certify. 33
`U.S.C. § 1341(a)(1). In that situation, the license “shall be
`granted” by FERC without any input from the state. Id.
`
`In 2014, petitioner Constellation Energy Generation, LLC,
`the Conowingo Dam’s operator, submitted a certification
`request to Maryland’s Department of the Environment.
`Following years of back-and-forth, a public notice and
`comment period, and a public hearing, Maryland issued a
`section 401(a)(1) certification in 2018. The certification
`required Constellation to develop a plan to reduce the amount
`of nitrogen and phosphorus in the dam’s discharge, improve
`fish and eel passage, make changes to the dam’s flow regime,
`control trash and debris, provide for monitoring, and undertake
`other measures for aquatic resource and habitat protection.
`Calling these conditions “unprecedented” and “extraordinary,”
`Constellation challenged the certification in several fora.
`Constellation Br. 14–16. Specifically, it filed (1) a request to
`the Maryland Department of
`the Environment
`for
`reconsideration; (2) suits against the state of Maryland in both
`federal and state court; and (3) a petition to FERC requesting a
`
`
`
`
`
`5
`
`“declaratory order” that Maryland had waived its opportunity
`to issue a certification.
`
`While those proceedings were pending, Maryland and
`Constellation entered mediation and arrived at a settlement.
`The settlement agreement contained a series of “proposed
`license articles,” which the parties agreed to jointly submit to
`FERC for incorporation into the dam’s license. “[U]pon, but
`only upon” FERC’s incorporation of the proposed license
`articles in the Conowingo license, Maryland agreed to
`“conditionally waive[] any and all rights it had or has to issue
`a water quality certification.” Joint Appendix 588–89. After
`receiving comments on the settlement, FERC issued a 50-year
`license, “adopting the Proposed License Articles and only
`making modifications to ensure that [FERC] can enforce those
`articles.” Exelon Generation Company, LLC, 174 F.E.R.C.
`¶ 61,217, at 61,979 (2021).
`
`In response, several environmental groups—Waterkeepers
`Chesapeake, Lower Susquehanna Riverkeeper Association,
`ShoreRivers, and Chesapeake Bay Foundation (collectively,
`“Waterkeepers”)—filed a petition for rehearing. They argued
`that Maryland had no authority to retroactively waive its 2018
`certification and that FERC therefore exceeded its authority
`under the Clean Water Act by issuing a license that failed to
`incorporate the conditions of that certification. Rejecting that
`argument, FERC ruled that “[t]he settlement agreement makes
`clear that [Maryland] intended to waive its section 401
`authority and nullify the 2018 certification if [FERC] approved
`the agreement.” Exelon Generation Company, LLC, 176
`F.E.R.C. ¶ 61,029, 2021 WL 3013502, at *3 (2021). In FERC’s
`view, because “[n]othing in the Clean Water Act prevents a
`state from affirmatively waiving its authority to issue a water
`quality certification,” Maryland’s waiver satisfied
`the
`requirements of section 401(a)(1) and the Commission had
`
`
`
`
`
`6
`
`authority to issue the Conowingo license. Id. Waterkeepers
`petitioned for review, renewing their argument that section
`401(a)(1) does not permit retroactive waiver of the kind
`Maryland has attempted.
`
`II.
`
`It goes without saying that we begin with the text of
`section 401(a)(1), asking whether it empowers FERC to issue
`a license under these circumstances. Our review is de novo, as
`FERC’s interpretation of section 401 “is entitled to no
`deference by the court because the Environmental Protection
`Agency, and not [FERC], is charged with administering the
`Clean Water Act.” Alcoa Power Generating Inc. v. FERC, 643
`F.3d 963, 972 (D.C. Cir. 2011) (citing Alabama Rivers
`Alliance v. FERC, 325 F.3d 290, 296–97 (D.C. Cir. 2003)).
`
`The Clean Water Act provides that “[n]o license or permit
`shall be granted until the certification required . . . has been
`obtained or has been waived as provided in the preceding
`sentence.” 33 U.S.C. § 1341(a)(1). The preceding sentence
`authorizes just two routes to waiver: “fail[ure] or refus[al] to
`act on a request for certification, within a reasonable period of
`time.” Id. If a state has neither granted a certification nor failed
`or refused to act on a certification request, section 401(a)(1)
`plainly prohibits FERC from issuing a license. Here, Maryland
`did not fail or refuse to act. Just the opposite. The state acted
`when it issued the 2018 certification. See Turlock Irrigation
`District v. FERC, 36 F.4th 1179, 1183 (D.C. Cir. 2022)
`(explaining that “[e]ach time” a state agency denies or grants a
`certification application, it “act[s] within the meaning of
`section 401(a)(1)”). Because Maryland’s
`subsequent
`backtracking in the settlement agreement, in which it
`“conditionally waiv[ed]” its authority to issue a water quality
`certification after the fact, is neither a “fail[ure]” nor a
`
`
`
`
`
`7
`
`“refus[al]” to act, it cannot qualify as a section 401(a)(1)
`waiver.
`
`FERC does not argue that section 401(a)(1) expressly
`authorizes a state that has issued a certification to later waive
`it. Instead, it contends that “nothing in the Act prevents a state
`from affirmatively waiving its authority to issue a water quality
`certification before the statutory time period expires or during
`the pendency of the certification’s appeal.” FERC Br. 25
`(emphasis added). Pressed at oral argument, FERC counsel
`went so far as to argue that “if we can’t conclude that Congress
`thought of an unnamed [potential course of action],” by resort
`to legislative or congressional reports, then we must treat the
`course of action as available to the agency. Oral Arg. Rec.
`27:20–30:30. That, however, is not how we interpret statutes.
`Our court has “repeatedly rejected the notion that the absence
`of an express proscription allows an agency to ignore a
`proscription implied by the limiting language of a statute.”
`Southern California Edison Co. v. FERC, 195 F.3d 17, 24
`(D.C. Cir. 1999). Section 401(a)(1) limits FERC’s power to
`issue a license to two circumstances: (1) where a state has
`granted a certification; or (2) where the state has waived its
`authority to certify “as provided in the preceding sentence” by
`failing or refusing to act. 33 U.S.C. § 1341(a)(1). This leaves
`no room for FERC’s third alternative, in which it issued a
`license based on a private settlement arrangement entered into
`by Maryland after the state had issued a certification with
`conditions but then changed its mind.
`
`III.
`
`This brings us to the question of remedy. At oral argument,
`FERC “strenuously urge[d] [us] to consider remand without
`vacatur” to avoid the “disruptive consequences” stemming
`from vacating a license that limits the environmental impact of
`
`
`
`
`
`8
`
`the Conowingo Dam. Oral Arg. Rec. 40:50–42:25. “The
`decision whether to vacate depends on the seriousness of the
`[license’s] deficiencies . . . and the disruptive consequences of
`an interim change that may itself be changed.” Allied-Signal,
`Inc. v. Nuclear Regulatory Commission, 988 F.2d 146, 150–51
`(D.C. Cir. 1993) (internal quotation marks and citation
`omitted). Vacatur, however, “‘is the normal remedy’ when [a
`court is] faced with unsustainable agency action.” Brotherhood
`of Locomotive Engineers & Trainmen v. Federal Railroad
`Administration, 972 F.3d 83, 117 (D.C. Cir. 2020) (quoting
`Allina Health Services v. Sebelius, 746 F.3d 1102, 1110 (D.C.
`Cir. 2014)).
`
`Vacatur is appropriate here. As to the seriousness of the
`license’s deficiencies, given that FERC had no statutory
`authority to issue the license under review, supra, at 6–7, there
`is no “‘possibility that [FERC] may find an adequate
`explanation for its actions’” on remand. Standing Rock Sioux
`Tribe v. United States Army Corps of Engineers, 985 F.3d
`1032, 1051 (D.C. Cir. 2021) (quoting Williston Basin Interstate
`Pipeline Co. v. FERC, 519 F.3d 497, 504 (D.C. Cir. 2008)).
`Neither
`does
`the
`second
`factor—the
`disruptive
`consequences—support remand without vacatur. Although the
`Conowingo Dam is operational and vacatur may disrupt some
`of the environmental protections included in the current
`license, at oral argument FERC’s counsel acknowledged that
`such disruption could be avoided through issuance of interim,
`annual licenses. Oral Arg. Rec. 43:10–43:40 (agreeing that
`“whatever the disruptive consequences [FERC is] concerned
`about” would be “adequately address[ed]” on a year-to-year
`basis). Equally important, Waterkeepers, which brought this
`action for the very purpose of strengthening the dam’s
`environmental protections, agrees. Oral Arg. Rec. 1:26:14–
`1:27:10 (affirming that the “short-term loss of protections”
`
`
`
`
`
`9
`
`caused by vacatur can be avoided and that vacatur “in the long
`run [is] better for the quality” of the dam).
`
`Vacating the license, moreover, will allow completion of
`the administrative and judicial review that was interrupted by
`the settlement agreement. See supra, at 4–5. That review could
`result in either (1) the invalidation of Maryland’s 2018
`certification, which would require Constellation to request a
`new certification, or (2) the validation of the 2018 certification,
`which would require FERC to issue a license incorporating the
`conditions contained therein. Either result would comport with
`a major goal of the Clean Water Act: to make states the “prime
`bulwark in the effort to abate water pollution.” Keating, 927
`F.2d at 622 (internal quotation marks and citation omitted).
`
`Accordingly, we vacate the Conowingo license and
`remand to FERC for further proceedings consistent with this
`opinion.
`
`So ordered.
`
`
`
`
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