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The 10th Circuit Court of Appeals ruled a handful of environmental conservation organizations had grounds to challenge a license granted by the Army Corps of Engineers to allow Denver to expand a local reservoir.
The appeal arose out of a regulatory dispute involving a hydroelectric project that aimed to boost a municipality’s water supply.
To obtain more water, the City and County of Denver and Denver Water proposed raising a local dam and expanding a nearby reservoir. Implementing the proposal would’ve required an amendment to the municipality’s license with the Federal Energy Regulatory Commission, which is entrusted with authorizing all hydroelectric projects. To raise the dam and expand the reservoir, the municipality would’ve needed to discharge fill material into surrounding waters, which would require a permit from the Corps.
The municipality applied to both FERC for amendment of the license and to the Corps for a permit allowing discharge of materials.
The Corps granted the permit to the municipality first. To grant this, the Corps issued an environmental impact statement and consulted with the U.S. Fish and Wildlife Service. A group of conservation organizations challenged the Corps’ decision by petitioning in federal district court. While the petition was pending, FERC allowed the amendment of the municipality’s license to raise the dam and expand the reservoir.
FERC cooperated with the Corps and the U.S. Fish and Wildlife Service to comply with statutory requirements. FERC also issued its own supplemental environmental assessment to comply with the National Environmental Policy Act, in which it concluded the license wouldn’t result in significant environmental damage.
Following the supplemental assessment, the conservation organizations moved to intervene in FERC proceedings. This motion was denied and the organizations sought rehearing which FERC also denied but noted that its proceeding wouldn’t affect the organization’s ability to challenge the Corps’ actions.
Challenging the Corps’ discharge permit, the conservation organizations petitioned the federal district court, claiming that the Corps and the U.S. Fish and Wildlife Service violated the National Environmental Policy Act, the Clean Water Act and the Endangered Species Act. The municipality sided with the Corps and the U.S. Fish and Wildlife Service.
After FERC allowed the municipality to amend its license following two years of the petition pending in court, the federal district court dismissed the case for lack of subject-matter jurisdiction. The federal district court concluded that jurisdiction only existed in the federal court of appeals. After the dismissal, the conservation organizations appealed.
The 10th Circuit Court of Appeals concluded the district court misapplied the jurisdictional statute because the conservation organizations are challenging the Corps’ issuance of a permit, not the FERC’s amendment of a license.
The 10th Circuit reversed the district court’s decision and remanded the case.