Case 4:17-cv-00031-BMM Document 93 Filed 11/22/17 Page 1 of 33

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MONTANA
GREAT FALLS DIVISION

FILED
NOV 2 2 2017
Clerk. u.s District Court 

District Of Montana 

G..... t Foil. 


CV-17-29-GF-BMM

INDIGENOUS ENVIRONMENTAL
NETWORK and NORTH COAST
RIVER ALLIANCE,
Plaintiffs,
VS.

UNITED STATES DEPARTMENT
OF STATE, et aI.,
ORDER

Defendants,
and
TRANSCANDA CORPORATION, et
aI.,

Int'mnO~D'f,nd""J

Plaintiffs Indigenous Environmental Network ("IEN") and North Coast
River Alliance ("NCRA") (collectively "Plaintifrs") bring this action against the
United States Department of State and various other governmental agencies and
agents in their official capacities ("Federal Defendants"). Plaintiffs allege that the
State Department violated the Administrative Procedure Act ("AP A"), National
Environmental Policy Act ("NEP A"), and Endangered Species Act ("ESA") when
it published its Record of Decision ("ROD") and National Interest Determination
("NID") and issued the accompanying Presidential Permit to allow defendant­

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intervenor TransCanada Keystone Pipeline, LP ("TransCanada") to construct a
cross-border oil pipeline. Federal Defendants and TransCanada move to dismiss
this action for lack ofjurisdiction.

BACKGROUND
Under Secretary Thomas A. Shannon published a RODINID on March 23,
2017, to recommend that the State Department approve a Presidential Permit to
TransCanada to construct, connect, operate, and maintain an 875-mile long
pipeline. (Doc. 61 at 6.) Executive Order 13337 delegates to the State Department
the President's authority to issue a permit for the construction of an oil pipeline
across the border of the United States if it finds that issuance ofthe permit to the
applicant "would serve the national interest." Issuance of Permits, Exec. Order No.
13337,69 Fed. Reg. 25299 (2004). The State Department issued the accompanying
Presidential Permit on April 4, 2017. Notice of Issuance of a Presidential Permit,
82 Fed. Reg. 16467-02 (Apr. 4,2017).
TransCanada is a limited Delaware partnership owned by the affiliates of
TransCanada Corporation of Canada. TransCanada proposed the Keystone XL
Pipeline as an expansion to its existing Keystone Pipeline System in 2008. (Doc.
49 at I L) The proposed Keystone XL Pipeline would transport up to 830,000
barrels per day of crude oil from Alberta, Canada and the Bakken shale formation
in Montana to existing pipeline facilities near Steele City, Nebraska. fd. The
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proposed Keystone XL Pipeline crossing of the United States-Canada border
requires TransCanada to obtain a Presidential Permit as part of the overall
construction and operation of the entire facility.ld. at 12.
TransCanada first applied for a Presidential Pemlit in September of2008.1d.
at 11. Congress mandates that all federal agencies prepare a detailed environmental
analysis of all "major federal actions." 42 U.S.C. § 4332(2)(C). The environmental
analysis constitutes an "action-forcing device" that ensures l\T£PA's goals "are
infused into the ongoing programs and actions" of the federal government. 40
C.F.R. § 1502.1. The State Department recognized that the issuance of a
Presidential Permit would constitute a "major Federal action" and retained the role
as the lead agency. Notice oflntent to Prepare an EIS, 74 Fed. Reg. 5019-02 (Jan.
28, 2009). As a result, the State Department undertook the duty to provide an
analysis of the Keystone XL Pipeline under NEPA. Jd. The State Department
issued a draft environmental impact statement ("EIS") in April 2010, supplemented
the EIS in April 2011, and issued a final EIS in August 2011. (Doc. 49 at 13.)
Congress passed the Temporary Payroll Cut Continuation Act of2011,
which directed the State Department to render a final decision on TransCanada's
application within sixty days. Jd. The State Department denied TransCanada's
application for a cross-border permit in early 2012. The State Department
explained that the arbitrary sixty-day deadline failed to provide sufficient time to
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complete its consideration of Keystone XL Pipeline's potential environmental
impacts. ld.
TransCanada submitted a new application to the State Department for a
Presidential Permit for the proposed pipeline on May 4, 2012.1d. at 14. The State
Department again recognized its duty as lead agency and reviewed this new
application for potential environmental effects. (Doc. 44-1 at 12). This review
included input from the public and from federal, state, and tribal entities. ld. The
State Department issued a final Biological Assessment ("BA") to the Fish, Wildlife
and Service ("FWS") on December 21,2012. FWS published its Biological
Opinion ("BiOp") and concurrence statement regarding the proposed pipeline on
May 15,2013. (Doc. 61 at 13.) The State Department released its Final
Supplemental Environmental Impact Statement ("FSEIS") in January 2014. (Doc.
44-1 at 12.)
Secretary of State John Kerry denied TransCanada's application on
November 6, 2015. (Doc. 61 at 14.) Secretary Kerry determined that issuing a
Presidential Permit for the pipeline would not serve the national interest as
required by Executive Order 13337. ld. Secretary Kerry's denial did not end the
matter.
President Trump issued a Presidential Memorandum Regarding
Construction of the Keystone XL Pipeline ("Memorandum") on January 24, 2017.
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Construction of the Keystone XL Pipeline, 82 Fed. Reg. 8663, 8664 (Jan. 24,
2017). The Memorandum invited TransCanada to reapply.ld. The President
delegated to the State Department his authority to issue the Presidential Permit
within sixty days. ld. The Memorandum further stated that the State Department
should consider, to the maximum extent permitted by law, the FSEIS released in
January 2014 to satisfY all applicable NEPA requirements, and any other provision
oflaw that would require executivc department consultation or review, including
the consultation or review required under ESA section 7(a). Id.
The State Department received a renewed application from TransCanada on
January 26, 2017. (Doc. 61 at 14.) Under Secretary Shannon relied on the 2014
FSEIS and FWS's 2013 BiOp in determining whether the issuance ofthe
Presidential Permit would serve the national interest. Under Secretary Shannon
published the RODINID on March 23, 2017. (Doc. 44-1 at 13.) The State
Department did not supplement or revise either the 2014 FSEIS or the 2013 BiOp
in any manner. The State Department issued the accompanying Presidential Permit
on April 4, 2017.
Plaintiffs challenge the State Department's publication of the RODINID and
its decision to issue the accompanying Presidential Permit. (Doc. 61 at 11.)
Plaintiffs first seek for Federal Defendants to withdraw their FSEIS and Keystone
XL Pipeline approvals, including the RODINID and Presidential Permit, until

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Federal Defendants have complied with NEPA. Plaintiffs next seek for Federal
Defendants to withdraw their BA and BiOp until Federal Defendants have
complied with the ESA and APA. Plaintiffs further seek a declaration that Federal
Defendants violated the aforementioned acts and permanent injunctive reliefthat
would prevent Federal Defendants and TransCanada from initiating any activities
in furtherance of the Keystone XL Pipeline. (Doc. 61 at 51-52.)
DISCUSSION

Federal Defendants and TransCanada move to dismiss Plaintiffs' Complaint
pursuant to Rule 12(b)(1) and Rule 12(b)(6) of the Federal Rules of Civil
Procedure. A challenge to a court's jurisdiction to hear a claim may be brought
either as a facial attack on the sufficiency of the pleadings, or as a factual attack
that contests the complaint's allegations. Leite v. Crane Co., 749 F.3d 1117, 1121
(9th Cir. 2014). Federal Defendants question whether Plaintiffs have presented a
cause of action. The Rule 12(b )(6) standard applies. Leite, 749 F.3d at 1121.
I.

NEPA Claims Against the Federal Defendants

Federal Defendants and TransCanada argue that the following jurisdictional
defects require the Court to dismiss Plaintiff's alleged NEPA violations: (1) the
issuance of a Presidential Permit constitutes presidential action that a court may
not review under the APA; (2) even if the issuance of the Presidential Permit could
be deemed an agency action, it represents an action committed to agency discretion
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by law thereby shielding it from judicial review under the AP A; and (3) Plaintiffs
lack the ability to redress their alleged injuries.
A. Agency Action
NEP A provides no private right of action. Nuclear Info. & Res. Servo v.
Nuclear Regulatory Comm 'no 457 F.3d 941,950 (9th Cir. 2006). This Coun

possesses jurisdiction to review alleged NEP A violations under the provisions of
the APA under 28 U.S.C. § 1331. The APA waives the government's sovereign
immunity and provides a private cause of action. 5 U.s.C. §§ 701-706. The APA
provides for judicial review where a party suffers a "legal wrong because of
agency action" or is "adversely aggrieved by agency action within the meaning of
a relevant statute." 5 U.S.c. § 702.

1. Actions of the State Department
TransCanada first applied for a Presidential Permit in 2008. The State
Department recognized that issuance of the Presidential Permit would "constitute a
major Federal action that may have a significant impact upon the environment
within the meaning ofthe NEPA." Notice ofIntent to Prepare an EIS, 74 Fed. Reg.
at 5019-02. The State Department concluded that an EIS was necessary to address
reasonably foreseeable impacts from the proposed action and alternatives.Id.
TransCanada reapplied in 2012. The State Department again recognized the
need to "evaluate the potential environmental impacts of the proposed project
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consistent with NEPA and the State Department's regulations." Applieation for
Presidential Permit, 77 Fed. Reg. 27533-02 (May 10,2012). The State Department
in February 2017 aeknowledged that TransCanada had applied for the third time
for a Presidential Permit. Notice of Receipt ofTransCanada's Re-Application, 82
Fed. Reg. 10429-01 (Feb. 10,2017). The State Department announced that it
would conduct a review of TransCanada's third application in accordance with the
Presidential Memorandum and any other applicable requirements. Id. The State
Department further announced that it would seek no further public comment on the
national interest determination because it already had taken public comment in
February of2014. Id
The Federal Register notices indicate that the State Department originally
acknowledged that the issuance of the Presidential Permit would constitute a
"major Federal action." Notice ofIntent to Prepare an EIS, 74 Fed. Reg. at 5019­
02. The State Department also originally acknowledged its duty to prepare an EIS
to address reasonably foreseeable impacts from the proposed action. ld The logical
conclusion to be drawn is that the State Department intended for the publication of
the RODINID and the issuance of the accompanying Presidential Permit to be
reviewable as final agency action. Federal Defendants now attempt to recast the
State Department's original decision to comply with NEPA, as required for a major
Federal action, into a policy choice, or "act of grace," to avoid judicial review.
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Federal Defendants and TransCanada argue the State Department acted
pursuant to the President's inherent authority under the Constitution and the law of
the United States when it published the RODINID and when it issued the
accompanying Presidential Permit. In particular, Federal Defendants contend that
Under Secretary Shannon considered the Keystone application in conjunction with
Executive Order 13337, and the Memorandum.
The Court considers the Under Secretary's pUblication of the RODINID
"final" in the sense that it: 1) "mark[s] the consummation of the agency's decision­
making process;" and 2) constitutes an action "by which rights or obligations have
been determined, or from which legal consequences will flow." Bennett v. Spear,
520 US. 154, 177-78 (1997). Under Secretary Shannon's publication ofthe
RODINID consummated the State Department's review of the Presidential Permit
Application. The Under Secretary's publication of the RODINID represents the
type of action from which legal consequences will flow. Id. The publication of the
RODINID prompted the issuance ofthe accompanying Presidential Permit that
enabled TransCanada to begin construction of the pipeline.

2. Actions of the President
Federal Defendants and TransCanada argue that the Supreme Court has
made it clear out of respect for the separation of powers, however, that a party
cannot challenge a President's actions under the APA. Franklin v. Massachusetts,
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505 U.S. 788, 800-01 (1992). The Court considers two factors in determining
whether an action taken by an agency or official constitutes presidential action: 1)
whether the President carries out the final action himself and the manner in which
he does so; and 2) whether Congress has curtailed in any way the President's
authority to direct the "agency" in making policy judgments. Natural Res. De!

Council v. Us. Dep 't ofState, 658 F.Supp.2d 105, III (D.C. Cir. 2009).
The President waived any right in his Memorandum to review the State
Department's decision under Executive Order 13337. The State Department's
obligation to study the environmental impacts of its decision fundamentally does
not stem from the foreign relations power. The State Department's own l\TEPA
regulations recognize that the issuance of a Presidential Permit represents a "major
Departmental action" subject to Congress's mandates in NEPA. 22 C.F.R. §§
161.7, 161.7(c)(1). The State Department, on its own initiative, prepared a FSEIS
and published a subsequent RODINID in this case.
Federal Defendants contend that the State Department's NEPA regulations
require no J',TEPA analysis. They point out that the State Department's NEP A
regulations predate Executive Order 13337. President George W. Bush issued
Executive Order 133337 to expedite the processing of permits for cross-border
pipelines. Nothing in Executive Order 13337 abrogates the State Department's
NEP A regulations. Moreover, the President conceded in his Memorandum that the
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State Department should consider the FSEIS as part of its obligation to satisfy all
applicable requirements ofNEPA. Construction of the Keystone XL Pipeline, 82
Fed. Reg. at 8663.

3. Case Analysis
Federal courts have divided on the question of whether Executive Order
13337 renders any decision on a cross-border project "Presidential action" that
stands beyond judicial review. The Court analyzes these decisions at some length.

a. President's Retention of Authority
Federal Defendants rely heavily on three district court decisions. These
courts determined that the issuance of a Presidential Permit by a federal agency
pursuant to an Executive Order constitutes Presidential action immune from
judicial review under the APA. Natural Res. Del Council, 658 F.Supp.2d 105;

Sisseton-Wahpeton Oyate v. U.S. Dep'tofState, 659 F.Supp.2d 1071 (D.S.D
2009); and White Earth Nation v. Kerry, 2015 WL 8483278 (D. Minn. 2015). Both

NRDC and Sisseton-Wahpeton attribute significance to the language in Executive
Order 13337 that provides for the President to make the "final decision." White

Earth Nation relied, in tum, on the "overwhelming authority" found in NRDC and
Sisseston-Wahpeton to support its conclusion that the State Department's actions
qualify as Presidential in nature. White Earth Nation, 2015 WL 8483278 at *7.

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NRDC noted that the President's decision to retain ultimate authority to
settle any interagency dispute "signals the President's belief" that the issuance of
presidential permits ultimately constitutes a presidential action. Natural Res. Del

Council, 658 F.Supp.2d at 111. Sisseton-Wahpeton likewise determined that
Executive Order 13337 explicitly states that the President retains the authority to
issue a final decision on whether to issue the Presidential Permit. Sisseton­

Wahpeton, 659 F.Supp.2d at 1081. The President remains the final actor in
determining the issuance of the Presidential Permit.ld. President Trump
specifically waived, in his Memorandum, any authority that he retained to make
the final decision regarding the issuance of the Presidential Permit. This distinction
proves persuasIve.

b. Agency Action on Application
The district court in Sierra Club v. Clinton, 689 F.Supp.2d 1147 (D. Minn.
201 0), declined to follow NRDC and Sisseton- Wahpeton. Sierra Club disagreed
with the reasoning ofNRDC and Sisseton-Wahpeton "insofar as they hold that any
action taken by the State Department pursuant to an executive order" escapes
judicial review. Sierra Club, 689 F.Supp.2d at 1157 n. 3. The court expressed
particular skepticism at the notion of shielding from judicial review under the APA
"the preparation of an EIS for a major federal action." ld.

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The plaintiffs in Sierra Club alleged that federal defendants violated NEPA
and the APA by issuing a Presidential Pennit to build and operate an oil pipeline
from Alberta, Canada to Superior, Wisconsin. Id. at 1151. The State Department
detennined that issuing the pipeline pennit would constitute a "major federal
action" under NEP A. Id. at 1157. The State Department considered itself the lead
agency on the project and exercised its discretion to prepare and issue the FEIS
under NEPA. Id. Deputy Secretary of State James Steinberg published the State
Department's ROD and issued the Presidential Pennit. Id. at 1152. Federal
defendants argued that the State Department's "presidential actions" insulated the
decision from judicial review. Id. at 1155.
The mere fact that the pipeline crossed the international border did not
insulate the State Department's analysis of the environmental impacts ofthe
pipeline projeet from judicial review under the APA. Id. at 1157. The State
Department recognized that the pipeline constituted a "major federal action" and
acted accordingly in issuing the FElS. Id. The pipeline's crossing of the
international border tailed to convert the State Department's actions into
presidential action. Id.

Protect Our Communities Found. v. Chu, 2014 WL 1289444 at *6 (S.D. Cal.
2014), agreed with the reasoning in Sierra Club. The federal defendants in Chu
sought to dismiss a complaint arising from the issuance of a presidential pennit for

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a cross-border electric transmission line. ld. at 2. The Department of Energy
("DOE") prepared an EIS after having received the application. ld. The federal
defendants argued that the DOE had acted pursuant to Presidential authority in
issuing the permit. The DOE suggested that an executive order constituted an
express delegation of executive authority that insulated DOE's acts from judicial
review. ld. at 5.
The court rejected the idea that an agency could shield itself from judicial
review under the APA for any action "by arguing that it was' Presidential,' no
matter how far removed from the decision the President actually was." ld. at 6.
Congress designed NEP A to "promote environmentally sensitive decision-making
without proscribing substantive standards." ld. at 5. No agency possesses
discretion whether to comply with procedural requirements such as NEPA. Thc
relevant information provided by a NEPA analysis needs to be available to the
public and the people who playa role in the decision-making process. This process
includes the President. ld. The DOE based the issuance of its Presidential Permit
on its own EIS. The court possessed authority to review this agency action to
ensure compliance with NEPA. ld.
The reasoning of Sierra Club and Chu applies here. The State Department
took final agency action when it published the RODINID for the Keystone XL
Pipeline and issued the accompanying Presidential Permit. The Ninth Circuit has
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determined that "once an EIS's analysis has been solidified in a ROD, the agency
has taken final agency action, reviewable under [AP A section] 706(2)(A)." Or.
Nat. Desert Ass 'n v. Bureau ofLand Mgmt., 625 F .3d 1092, 1118-19 (9th Cir.
2010); Laub v. Us. Dep't ofInterior, 342 F.3d 1080, 1088 (9th Cir. 2003). The

publication of the RODINID led to the State Department's issuance of the
accompanying Presidential Permit.
B. Agency Discretion by Law

A strong presumption exists that Congress intends judicial review of
administrative action. ASSE Int" v. Kerry, 803 F.3d 1059, 1068 (9th Cir. 2015).
Two narrow exceptions apply: (1) when Congress expressly bars review by statute,
or (2) where an agency action is "committed to agency discretion by law." Id.
Federal Defendants and TransCanada argue that the second exception applies as
they contend that Congress committed the State Department's decision to issue the
Presidential Permit "to agency discretion by law."
1. NEPA Provides Standard

Congress commits agency action to agency discretion in those rare instances
where Congress draws statutes in such broad terms that no law exists to apply in a
given case. 5 U.S.C. § 701(a)(2). Congress's decision to draft a statute in such
broad terms leaves the court "with no meaningful standard against which to judge
the agency's exercise of discretion." Id. Courts must consider "the language of the
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statute" and whether judicial review would endanger "the general purposes of the
statute." Cnty. O/Esmeralda v. Dep't o/Energy, 925 F.2d 1216, 1218 (9th Cir.
1991).
Congress has provided a meaningful standard in the form ofNEPA against
which to judge the State Department's conduct. Congress enacted NEPA to
"protect the environment by requiring that federal agencies carefully weigh
environmental considerations and consider potential alternatives to the proposed
action before the government launches any major federal action." Barnes v.

u.s.

Dep'to/Transp., 655 F.3d 1124, 1131 (9th Cir. 2011). NEPA, as enacted by
Congress, its regulations, and any judicial opinions that address similar NEPA
claims, have developed these standards more fully. 42 U.S.C.A. § 4332(2)(C);
Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 410 (1971).
The Ninth Circuit has made clear that the State Department cannot avoid
judicial review simply by invoking its consideration of "foreign policy" or
"security" factors. Kerry, 803 F.3d at 1069. The State Department in Kerry sought
to avoid judicial review of its own regulations in the State Department's
administration of a visa exchange program. Id. The Ninth Circuit concluded that it
could consider the State Department's compliance without infringing on the State
Department's prerogative to create the progranl, or related national-security

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concerns. Id. The Ninth Circuit emphasized that a weak connection to foreign
policy fails to commit an agency action to the agency's discretion. Id.

2. Foreign Policy Implications
Federal Defendants maintain that No Oi/port! v. Carter, 520 F. Supp. 344
(W.D. Wash. 1981), and Jensen v. Nat'{ Marine Fisheries Service, 512 F.2d 1189,
1191 (9th Cir. 1975), illustrate the lack of any meaningful standard for this Court
to apply. A closer look at these decisions explains the courts' reluctance to review
the President's actions. Plaintiffs' claims do not raise similar concerns.
Congress enacted the Public Utility Regulatory Policies Act ("PURPA") to
"expedite action on federal permits required for the construction of a west-to-east
crude oil transportation system." No Oi/port!, 520 F. Supp. at 344. To achieve this
goal, Congress mandated expedited judicial review, established a sixty-day statute
of limitations, and prohibited the issuance of preliminary injunctive relief. Id.
citing 43 U.S.C. § 2011 (b) and (c). The pipeline at issue would run from the North
Slope of Alaska to Minnesota.
PURPA directed that certain agency heads, including the Secretary of
Interior, were to make recommendations to the President and establish an
expedited schedule for review of applications of parties who sought to obtain the
benefit of PURP A. Id. The President selected the west-to-east pipeline route based
on his determination that the prevailing project proposal would be "in the national
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interest." No Oi/port! 520 F.Supp. at 350. The court deemed the President's
national interest determination to fall "beyond the competency of the judiciary to
review." Id. citing Chicago & Southern Airlines v. Waterman Steamship Corp.,
333 U.S. 103 (1948) (reasoning that Presidential approval of the decision of the
Civil Aeronautics Board ("CAB") regarding certificate for overseas air
transportation constituted political decisions beyond the competency of the courts
to adjudicate); BraniffAinvays, Inc. v. C.A.B., 581 F.2d 846 (D.C. Cir. 1978)
(determining that federal court lacked authority to review decision of the CAB
awarding an airline authority to operate between Chicago, Illinois and Montreal,
Canada).
Tellingly, the court cited to decisions ofthe Supreme Court in Chicago &

Southern Airlines, 333 U.S. at 104, and the D.C. Circuit in BraniffAinvays, 581
F.2d at 848, in which the President selected among competing airlines the
preferred provider of particular international routes. The CAB selected airlines to
service particular routes under the highly regulated system in place at that time. Id.
The President had to approve the CAB's choice in each case due to the overseas
nature of the routes to be serviced. Id. The President's need to consider particular
foreign policy factors left these decisions beyond the competency of the courts to
review. Id. at 852.

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The court in No Oi/port! evaluated whether the Secretary ofInterior and the
President adequately had complied with the procedural requirements of PURPA.
No Oi/port!, 520 F.Supp. at 352. It deemed only the President's decision regarding
the choice of the route to be "unreviewable." Id. The court showed no hesitation in
evaluating the compliance of the Secretary of the Interior and the President with
the procedural requirements ofNEPA. In fact, the court examined in detail the four
volume EIS and whether it satisfied the various scoping, notice, and review
requirements, as well as alternatives. Id. at 352-59.
Plaintiffs here challenge, in large part, Federal Defendants' compliance with
the procedural requirements ofNEPA. Unlike PURPA, Congress has passed no
law to expedite review of proposed pipelines like the Keystone XL Pipeline. 43
U.S.c. § 2011 (b )-( c). Congress has not established a truncated statute of
limitations or prohibited a court from granting preliminary injunctive relief. Id.
And Congress has not delegated to the President the decision as to the route of any
pipeline. Id. Congress has enacted NEP A to ensure a full analysis of potential
environmental impacts of pipeline projects such as the Keystone XL Pipeline. The
State Department's own regulations require compliance with NEPA for projects of
this type. 22 C.F.R. §§ 161.3, 161.5.
Plaintiffs in Jensen challenged under the AP A the legality of a specific
halibut fishing regulation adopted by the International Pacific Halibut Commission
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("Commission"). Jensen, 512 F .2d at 1190. A 1953 Treaty between the United
States and Canada to preserve the halibut fish population of the Northern Pacific
Ocean and Bering Sea created the Commission. Jensen, 512 F.2d at 1190. The
Senate ratified the Treaty on July 27,1953. Preservation of Halibut Fishery of
Northern Pacific Ocean and Bering Sea, Mar. 2, 1953,5 U.S.T. 5.
The Treaty granted the Commission the authority to enact fishing
regulations with the approval of the President and the Governor General of
Canada. Jensen, 512 F.2d at 1196. The President expressly delegated to the State
Department his authority under the Treaty to approve halibut fishing regulations
proposed by the Commission. The nature of the regulation arising from an
international Treaty with Canada implicated the field of foreign affairs committed
to presidential discretion by law. Jd. at 1190.
The regulation at issue prohibited fisherman from keeping halibut that they
caught incidentally in their nets to other fish that the fishermen intended to eateh.
Jd. The Commission's scientifie staff had recommended that the fishermen be
permitted to keep a certain pereentage of halibut taken. The Commission disagreed
with the scientific staff and enaeted the regulation that allowed the fisherman to
keep no halibut. Jd.
The Secretary of State's adoption of the Commission's fishing regulations
qualified as actions of the President.ld. at 1191. The law commits presidential
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action in the field of foreign affairs to presidential discretion. Id Jensen expressly
assumed that the action of the Secretary of State in adopting the regulation
qualified as presidential in nature. More specifically, the court reasoned that the
APA placed the decision whether to adopt the regulation beyond judicial review as
agency action "committed to agency discretion by law." Id. citing 5 U.S.C. § 70l.
Chu specifically distinguished Jensen based on the fact that the Treaty
created the Commission and delegated to the Commission the authority to enact
fishing regulations subject to the approval of the President and the Governor
General of Canada. Chu, 2014 WL 1289444 at 8. Jensen did not analyze the Ninth
Circuit's explicit requirements for exemption from judicial review. See ASSE Int 'I
v. Kerry, 803 F.3d at 1068. Plaintiffs do not challenge the Secretary of State's
approval of a regulation enacted by an international Commission. Plaintiffs seek,
by contrast, to enforce the State Department's compliance with its own regulations.
Jensen and its reasoning provide limited guidance in determining whether to
commit the State Department's decision to publish the RODINID and issue the
accompanying Presidential Permit to agency discretion by law.

3. State Department's Regulations Require NEPA Review
Section § 70 1(a)(2) ofthe APA prohibits judicial review of an administrative
agency's decision if Congress enacted the statute in question in a way that the
court would have no meaningful standard against which to judge the agency's
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exercise of discretion. 5 U.S.c. § 701 (a)(2); Heckler v. Chaney, 470 U.S. 821, 822
(1985). No statute prohibits review here. The AP A embodies the basic presumption
of judicial review to "a person suffering legal wrong because of agency action." 5
U.S.c. § 702. In the absence of a statute, the Court deems it appropriate to look to
the State Department's own regulations to determine whether judicial review
would endanger the general purposes of the regulations.
The State Department's regulations require a NEPA review for actions of
this type. 22 C.F.R. §§ 161.3, 161.5. NEPA serves to require proper environmental
considerations before the government takes action. ld. The State Department
acknowledged the need for NEPA review throughout TransCanada's previous
applications. Federal Defendants and TransCanada have failed at this stage to meet
their burden to demonstrate that Congress has committed to agency discretion by
law the State Department's decision to publish the RODINID and issue the
accompanying Presidential Permit. See Kerry, 803 F.3d at 1068-69.
C. Redressability ofInjuries

Federal Defendants next argue that an order by this Court to enjoin the
Presidential Permit unconstitutionally would infringe on the President's authority.
Plaintiffs must demonstrate that their alleged injury likely would be redressed by a
favorable decision. Summers v. Earth lslandlnst" 555 U.S. 488, 493 (2009). A

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relaxed redress ability standard applies as Plaintiffs have alleged procedural injuries
under NEPA. Sierra Club, 689 F.supp.2d. at 1150.
Plaintiffs allege procedural injuries under NEPA similar to those alleged in

Sierra Club.ld. at 1151. The Ninth Circuit has determined that a remedy
"procedural in nature" would redress a procedural NEP A injury. Ocean Advocates
v. Us. Army Corps ofEng'rs, 402 F.3d 846, 860 (9th Cir. 2005). Plaintiffs'
alleged procedural injuries could be redressed through the procedural remedy of
adequate environmental review under NEP A. Jd.

II.

ESA and APA Claim Against FWS
Federal Defendants argue that the Court should dismiss for lack of standing

the alleged ESA and APA violations committed by FWS in preparing the BiOp.
TransCanada asserts that Plaintiffs' second claim for relief should be dismissed for
failure to state a claim pursuant to Rule 12(b)(6).

A. Standing
Federal Defendants argue that Plaintiffs lack standing because their
Complaint contains only vague allegations regarding adverse environmental and
cultural impacts, as well as land and water resources being affected by the
Keystone XL Pipeline. Federal Defendants also argue that Plaintiffs' failure to
allege an interest in any ESA-listed species defeats causation or redressability.
Federal Defendants contend that this failure prevents Plaintiffs from identifYing a
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causal link between the BiOp's alleged infirmities and any injury to Plaintiffs'
members.
Plaintiffs must demonstrate an injury-in-fact that is fairly traceable to the
challenged action and that is likely to be redressesed by a favorable court decision
in order to establish standing. Summers, 555 U.S. at 493. To show injury-in-fact, a
plaintiff must show "an invasion of a legally protected interest" that is both
"concrete and particularized." Lujan v. Deft of Wildlife, 504 U.S. 555, 560 (1992).
The relevant showing "is not injury to the environment, but injury to the plaintiff."

Friends ofthe Earth, Inc. v. Laidlaw Envtl. Servs. (TOC), Inc., 528 U.S. 167, 181
(2000).
Plaintiffs' First Amended Complaint describes their interests in the wildlife
and wildlife habitat. (Doc 61.) As noted by the Supreme Court in Lujan, the "desire
to use or observe an animal species, even for purely esthetic purposes, is
undeniably a cognizable interest for the purpose of standing." Lujan, 504 U.S. at
562-63. Plaintiffs allege that the Keystone XL Pipeline would affect a host of
species, induding the endangered black-footed ferret, northern swift fox,
whooping crane, interior least tern, pallid sturgeon, American burying beetle,
threatened piping plover, northern long-eared bat and western prairie fringed
orchid, among other. Plaintiffs allege that its members highly value all of these

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species, have studied and observed them in the wild, and will continue to do so in
the future. These alleged harms constitute injuries-in-fact. Id.
Plaintiffs have met the redressability requirement for the ESA and AP A
claims. A plaintiff asserting a procedural violation under Section 7 of the ESA
needs to show only that the relief requested could protect the plaintiffs concrete
interest in the species. Salmon Spawning & Recovery Alliance v. Gutierrez, 545
F.3d 1220, 1226 (9th Cir. 2008). Plaintiffs' request that FWS engage in a formal
consultation that includes a complete and non-arbitrary analysis of the Keystone
XL Pipeline's alleged threat to the potentially affected species. This formal
consultation could protect the Plaintiffs' concrete interests and thereby redress
Plaintiffs' claim. Id.
B. Failure to State a Claim

TransCanada contends that the imprecise and generalized nature of
Plaintiffs' allegations supports denial of Plaintiffs , second claim for relief. Fed.
Rule ofCiv. Pro. 8 requires "a short and plain statement of the claim showing that
the pleader is entitled to relief' in order to "give the defendant fair notice of what
the ... claim is and the grounds upon which it rests." Bell Atlantic Corp. v.
Twombly, 550 U.S. 41,47 (1957). The complaint needs to plead only "enough

facts to state a claim to relief that is plausible on its face." Id. at 570. TransCanada

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further contends that Plaintiffs have failed to identify the actual conduet alleged to
violate the ESA with sufficient speeificity to meet the Rule 12(b)(6) standard.
Plaintiffs' First Amended Complaint deseribes their interest in the affected
wildlife and their habitat. Plaintiffs allege that the State Department's BA for FWS
contained defieiencies and that FWS failed to identify these deficiencies. For
example, Plaintiffs eontend that the BA failed to analyze adequately the potential
effects of the Keystone XL Pipeline on proteeted species. Plaintiffs further allege
that the BA did not provide adequate mitigation methods of the Keystone XL
Pipeline's threats to these species. FWS used the BA to prepare the BiOp.
Plaintiffs assert that based on the BA's alleged deficiencies, FWS's BiOp also
failed to analyze Keystone Pipeline XL's risks to endangered and threatened
species. Plaintiffs further argue that the BiOp's relianee on the flawed BA eaused
FWS to presume the effieacy of unproven mitigation measures, inappropriately to
defer analysis of connected aetions such as power lines, and completely fail to
analyze risks to the endangered northern swift fox. These alleged violations by
FWS may be enforced under the APA. 5 C.S.C. §§ 701-706. Plaintiffs have
alleged sufficient facts to state a claim for relief under Rule 12(b)(6).

III.

ESA and AP A Claim Against Federal Defendants

Federal Defendants and TransCanada argue that Plaintiffs' alleged violations
of the ESA and AP A in their third claim for relief should be dismissed. Federal
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Defendants cite two deficiencies: (1) no waiver of sovereign immunity for the ESA
citizen-suit claim; and (2) Plaintiffs lack of standing to bring the ESA citizen suit­
claim.

A. Waiver of Sovereign Immunity
The ESA mandates that each federal agency shall insure, in consultation
with and with the assistance of the Secretary, that any action authorized, funded, or
carried out by such agency will not ')eopardize the continued existence of any
endangered species or threatened species or result in the destruction or adverse
modification of [critical] habitat of such species." 16 U.S.c. § 1536(a)(2). The
consultation process generally involves preparation by the federal agency of aBA,
followed by a preparation of a BiOp, and accompanying incidental take statement
by the consulting agency. 16 U.S.C. § 1536; Bennett, 520 U.S. at 157-58. Plaintiffs
ground this claim under the ESA citizen-suit provision.
The ESA citizen-suit provision otfers the only jurisdictional basis for
Plaintiffs' third claim for relief. The citizen-suit provision represents "a waiver of
sovereign immunity." South Yuba River Citizens League v. Nat '/ Marine Fisheries
Service, 629 F.Supp.2d 1123, 1130 (E.D. Cal. 2009). The ESA's waiver of
sovereign immunity permits a citizen to bring suit to enjoin "any person including
the United States and any other governmental instrumentality or agency" alleged to
be violating the ESA. 16 U.S.C. § 1540(g)(l)(A). The citizen-suit provision
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provides private parties with a vehicle to "enforce the substantive provisions ofthe
ESA against" government agencies. Bennett, 520 U.s. at 173.
Federal Defendants and TransCanada argue that this waiver of sovereign
immunity excludes the President. Federal Defendants again argue that the State
Department's publication of the RODINID and its issuance of the accompanying
Presidential Permit qualify as presidential action. They do not. They represent
agency actions by the State Department. The State Department recognizes in its
own regulations that it sits as a federal agency subject to the consultation
requirements of Section 7 ofthe ESA for "any Departmental action that may have
effects in the United States on listed species or their habitat." 22 C.F.R. §
161.11 (a). These regulations provide no exclusion for Presidential Permits.
Federal Defendants contrast the citizen-suit provision'S specification of
parties subject to suit to the APA's definition of "agency" addressed by the
Supreme Court in Franklin. Franklin, 505 U.S. at 800-01. Franklin acknowledged
that the APA's definition of agency did not explicitly include or exclude the
President. Jd. This textual silence shielded the President from the provisions of the
APA.Jd.

Federal Defendants misplace reliance on Franklin and its definition of
agency under the AP A. The Ninth Circuit distinguished the ESA citizen-suit
provision from the APA in W. Watersheds Project v. Kraayenbrink, 632 F.3d 472,
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495-97 (9th Cir. 2011). The ESA does not look to the APA to define who remains
subject to suit. ld. The ESA turns, by default, to the APA solely for its standard of
review due to the lack of an internal standard in the ESA. Id.
The State Department forthrightly accepted its ESA duties when it issued a
BA of the Keystone XL Pipeline in December 2012. The State Department also
consulted with FWS in order for FWS to prepare its BiOp. FWS prepared and
issued the BiOp in May 2013. TransCanada at the oral argument dismissed these
activities as "acts of grace." The Court disagrees. The State Department, or any
other federal agency, rarely undertakes voluntarily needless activities as acts of
grace to our citizens.
The State Department coupled its review obligations under the ESA with its
decision to issue the Presidential Permit Under Secretary Shannon stated in
issuing the accompanying Presidential Permit that he "considered the
environmental effects of the proposed action consistent with ... Section 7 ofthe
Endangered Species Act ofl973." Notice ofIssuance of a Presidential Permit, 82
Fed. Reg. at 16467-02. The State Department's publication of the RODINID and
its issuance of the accompanying Presidential Permit qualify as agency actions
subject to review by this Court under the ESA citizen-suit provision. 16 U.S.CA. §
1540(g)(1 )(A).

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TransCanada further argues that Congress specifically refers to the President
in some ESA citizen-suit provisions, including the Comprehensive Environmental
Response, Compensation, and Liability Act ("CERCLA"). The Court's application
of the canon of statutory interpretation, TransCanada suggests, should lead to a
detennination that Congress's lack of reference to the President in the ESA citizen­
suit provision indicates an intentional omission. TransCanada ignores the reason
for the specific mention ofthe President in the CERCLA citizen-suit provision.
The President administers the CERCLA statute and warrants specific mention. See
42 U.S.c. § 9659(a)(2). The President plays no similar administrative role under
the ESA. See 16 U.S.c. § 1540(g)(I)(A).

B. Standing
Federal Defendants and TransCanada argue that Plaintiffs lack standing to
bring the ESA citizen-suit claim because Plaintiffs fail to allege a sufficient
concrete interest in listed species that will be hanned. To have standing, Plaintiffs
must establish (I) injury-in-fact; (2) plausible connection between defendants'
conduct and plaintiffs' injury; and (3) redressability. Injuries may be redressed
under the ESA where a ruling would ensure that "protections accorded by the ESA
would then come back into operation." Deft a/Wildlife v.
420 F.3d 946,957 (9th Cir. 2005).

30 


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 Case 4:17-cv-00031-BMM Document 93 Filed 11/22/17 Page 31 of 33

1. Injury-In-Fact
Plaintiffs' allegations establish injury-in-fact under Rule 8. The First
Amended Complaint alleges that Plaintiffs' members inhabit the states through
which TransCanada proposes to build the Keystone XL Pipeline. (Doc. 61 at 10.)
Plaintiffs allege that its members highly value and have studied the ESA-protected
species whose habitat the Keystone XL Pipeline threatens. ld. These ESA
protected species include the "endangered black-footed ferret, northern swift fox,
whooping crane, interior least tern, pallid sturgeon, and American burying beetle,
and the threatened piping plover, northern long-eared bat and western prairie
fringed orchid, among others." ld. at 39-40. Plaintiffs allege that the pipeline will
spill an average of 1.9 times annually, for a total of34,OOO gallons of oil each year,
to the detriment of these ESA-protected species. Id. at 45.

2. Causal Connection
Plaintiffs' allegations likewise show a plausible causal connection between
Federal Defendants' conduct and Plaintiffs' injury. To survive a motion to dismiss
for lack of constitutional standing, Plaintiffs must establish a "more than
attenuated" line of causation between Federal Defendants' action and the alleged
harm. Maya v. Centex Corp., 658 F.3d 1060, 1070 (9th Cir. 2011). Plaintiffs'
allegations establish an affirmative duty for the federal agencies to consult and
detail the manner in which Federal Defendants have failed to perform their
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consultation duties under the ESA. Plaintiffs' allegations further catalogue how
Federal Defendants have violated the ESA and how each violation hanns each
specific species.

3. Redressability
Finally, Plaintiffs present redressable claims. A ruling that would ensure
"protections accorded by the ESA would then come back into operation" would
redress injuries under the ESA. Deft of Wildlife, 420 F.3d at 957. As determined
above, the State Department's publication of the ROD/NID and its issuance ofthe
accompanying Presidential Permit constitute agency action. Plaintiffs' injuries
would be redressed ifthe State Department were to set aside the Presidential
Permit and engage in a more thorough analysis ofthe Keystone XL Pipeline's
impacts on the protected species and the protected habitat to ensure compliance
with the ESA. 50 C.F.R. § 402.14(a)-(b).
CONCLUSION

Accordingly, it is HEREBY ORDERED that Federal Defendants' Motion
to Dismiss (Doc. 44) and Supplemental Motion to Dismiss (Doc. 70) are DENIED.

It is FURTHER ORDERED that TransCanada's Motion to Dismiss (Doc.
48) and Supplemental Motion to Dismiss (Doc. 68) are DENIED.

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DATED this 22nd day of November, 2017.

Brian Morris
l:nited States District Court Judge

33