Full Opinion (html_with_citations)

United States Court of Appeals
         FOR THE DISTRICT OF COLUMBIA CIRCUIT



Argued October 11, 2022          Decided December 20, 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.
Âś 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. Âś 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.