Adaptive, Condition‑Based §401 Certifications and the “Appreciable Permanent Loss” Threshold under Tennessee ARAP Rules

Commentary on Sierra Club v. Tennessee Department of Environment and Conservation, No. 23-3682 (6th Cir. Apr. 4, 2025)

Introduction

This published Sixth Circuit decision addresses a high-stakes clash over a §401 Clean Water Act certification for a 32‑mile natural gas pipeline—the Cumberland Pipeline—proposed by Tennessee Gas Pipeline Company (TGP) to serve the Tennessee Valley Authority’s conversion from coal to natural gas at its Cumberland facility. The Tennessee Department of Environment and Conservation (TDEC) issued an Aquatic Resource Alteration Permit (ARAP)/§401 certification authorizing crossings of scores of streams, wet weather conveyances (WWCs), wetlands, and ponds, subject to thirty‑six special conditions. Sierra Club and Appalachian Voices petitioned for review, arguing TDEC’s decision was arbitrary and capricious under the Administrative Procedure Act (APA).

The key issues were:

• Whether federal courts have jurisdiction to review a state §401 decision under the Natural Gas Act (NGA) §19(d)(1).
• Whether Petitioners had Article III standing, particularly on traceability and redressability where TDEC could waive §401 and FERC had issued a certificate of public convenience and necessity.
• Whether TDEC acted arbitrarily in approving open‑cut crossing methods for most waterbodies, adopting a controlled‑blasting framework, treating WWC activities, relying on conditions akin to general utility permits, and declining to require additional baseline data or cumulative‑impact analysis beyond what was undertaken.

Judge Clay, writing for the court (joined by Judge Moore), denied the petition, upholding TDEC’s certification. Judge Thapar dissented on jurisdictional grounds, reiterating his earlier view that the Sixth Circuit lacks statutory subject‑matter jurisdiction to review TDEC’s §401 decision.

Summary of the Opinion

The court:

• Held it had jurisdiction under NGA §19(d)(1), concluding TDEC acted “pursuant to federal law” in issuing the §401 certification.
• Found Petitioners had organizational standing on behalf of their members. Injuries from pipeline construction were traceable to TDEC’s certification (a necessary precondition to construction) and redressable by vacatur, notwithstanding TDEC’s discretionary ability to waive §401 in the future.
• Applied deferential APA review and held TDEC did not act arbitrarily or capriciously. Specifically:
  • Waterbody crossings: TDEC reasonably evaluated practicable alternatives on a stream‑by‑stream basis and required HDD at four crossings where feasible, while recognizing site constraints limiting trenchless methods.
  • Rock removal: Special Conditions g and h lawfully imposed a hierarchy of less‑impactful methods, restricted blasting to limited circumstances, required professional oversight, and mandated prior TDEC authorization—an acceptable “adaptive” framework rather than unlawful delegation.
  • Wet Weather Conveyances: TDEC reasonably concluded WWC activities, conducted in compliance with state law and permit conditions, would not violate water quality standards; sediment control and dewatering conditions addressed downstream risks.
  • Reliance on general utility permits: TDEC permissibly drew on its general ARAP experience and mirrored conditions in this individualized certification.
  • Baseline and cumulative impacts: Because TDEC found no “appreciable permanent loss of resource value,” it did not trigger mitigation or additional baseline data duties; cumulative effects were evaluated at the stream and waterbody‑ID levels consistent with statewide practice.

Result: Petition for review denied; certification stands. Dissent: Judge Thapar would dismiss for lack of statutory jurisdiction.

Analysis

Precedents Cited and Their Role

• NGA §19(d)(1) and Delaware Riverkeeper Network v. Secretary Pa. DEP (3d Cir. 2016): The court relied on this framework to conclude it had original and exclusive jurisdiction to review state actions “pursuant to federal law” that issue or condition permits required by federal law. The majority tracked Delaware Riverkeeper to locate TDEC’s §401 decision within federal review.
• Clean Water Act cases:
  • PUD No. 1 v. Washington Dept. of Ecology: Recognizes state authority to condition §401 certifications to ensure compliance with state water quality standards.
  • S.D. Warren Co. v. Maine Board of Environmental Protection: Emphasizes that §401 certification is a precondition to federal licensing; here, this undergirded traceability/redressability.
• Standing jurisprudence:
  • Lujan v. Defenders of Wildlife; Spokeo, Inc. v. Robins: Injury‑in‑fact, traceability, redressability framework.
  • FEC v. Akins: Discretionary agency decisions remain reviewable where the complaint is that the decision rested on legal error—used to reject TDEC’s “we could waive anyway” redressability argument.
  • California v. Texas; R.K. v. Lee; Sierra Club v. EPA (6th Cir. 2015): Applied to anchor traceability and redressability in the relief sought (vacatur halts construction) and the causation chain.
• APA standards:
  • Motor Vehicle Manufacturers Ass’n v. State Farm; Burlington Truck Lines: Require a rational connection between facts found and choices made.
  • Oakbrook Land Holdings; Wolverine Pipe Line; Chamber of Commerce v. SEC (6th Cir.): Stress deferential review and the “discernible path” principle.
  • Klein v. DOE: Review on the “whole record.”
• Agency compliance with own rules:
  • Billeke‑Tolosa v. Ashcroft; City of Cleveland v. Ohio; Jomaa v. United States: Agencies must follow their own regulations—used to test TDEC’s Special Conditions against Tennessee’s ARAP regulations.
• Other circuit analogues:
  • Appalachian Voices v. State Water Control Board (4th Cir. 2019): Reinforces organizational standing in §401 challenges.
  • Sierra Club v. Slater (6th Cir. 1997): Courts don’t second‑guess method choices where the record shows reasoned analysis.

Legal Reasoning: How the Court Reached Its Decision

1) Jurisdiction and Standing

Jurisdiction: The court briefly but decisively held that TDEC’s §401 certification was issued “pursuant to federal law,” fitting NGA §19(d)(1)’s jurisdictional grant. Delaware Riverkeeper supplied persuasive support. Judge Thapar dissented solely on this point, urging dismissal for lack of jurisdiction as he had at the stay stage.

Standing: Petitioners’ declarations established concrete and particularized harms to property use, water quality, and recreation. Traceability was satisfied because pipeline construction was conditioned on TDEC’s certification; FERC’s certificate did not break the causal chain. Redressability was satisfied because vacatur would halt construction and abate harms. Importantly, the court rejected the argument that TDEC’s theoretical ability to waive §401 in the future defeats redressability, citing Akins for the principle that discretionary agency choices are reviewable if the claim is that the decision rests on legal error.

2) APA Review and the Merits

Standard: Deferential arbitrary‑and‑capricious review, looking for a rational connection between facts and choices, and considering the whole record.

a) Waterbody Crossing Methodology

TDEC’s regulations prohibit issuing an ARAP if a less adverse, practicable alternative exists (considering cost, technology, logistics, and project purposes). TDEC reviewed stream‑specific data and required trenchless HDD at four crossings deemed suitable, while allowing “dry open cut” for others given site‑specific constraints such as shallow terrain, geology, feasibility limits, and the risks and expense associated with HDD (e.g., borehole collapse, fluid loss). The court found this a record‑based, crossing‑by‑crossing analysis rather than a “rubberstamp” of the applicant’s preferences.

b) Rock Removal and Controlled Blasting

Petitioners argued TDEC unlawfully delegated decision‑making by allowing TGP to select in‑field methods and by approving the certification before finalizing blasting choices. The court disagreed. Special Condition g requires selecting the least‑impactful practicable trenching technique at each crossing; blasting may occur only if other methods are impracticable and at least one alternative is tried. Special Condition h:

• Prohibits blasting in wetlands and in streams with karst‑prone geology or unacceptable hydrologic‑loss risks.
• Requires a Geohazard Inspector operating under a licensed Professional Engineer.
• Demands TDEC’s written authorization before any controlled blast.

This “adaptive” framework lawfully implements Tennessee’s practicable‑alternatives rule. It establishes an ex ante hierarchy, measurable criteria (rock hardness, fracture susceptibility, volume, location), and retains TDEC gatekeeping over blasting. Under the APA, that is a rational and non‑delegatory way to account for field conditions while enforcing environmental standards.

c) Wet Weather Conveyances (WWCs)

Because Tennessee law generally does not require a §401/ARAP for WWC activities absent discharges or wetland‑flow impairment, TDEC treated WWC work under state law and set permit conditions to ensure only de minimis sedimentation. The certification:

• Mandates sediment controls before any earth moving begins.
• Requires dewatering practices that prevent discharge of sediment‑laden water to waters of the state.

With substrate data in the record and clear conditions, the court found TDEC neither ignored relevant evidence nor failed to explain how downstream sedimentation would be avoided.

d) Reliance on General Utility Permits and Experience

Petitioners argued site‑specific certification could not rely on general ARAP permit experience. The court found TDEC reasonably drew on its extensive general‑permit track record, imported comparable conditions into this certificate, and explained why compliant open‑cut crossings ordinarily do not violate standards. That is a paradigmatic rational connection between facts and choice.

e) Baseline Data and Cumulative Effects

Under Tenn. Comp. R. & Regs. 0400‑40‑07‑.04(6)(c), mitigation and certain analyses attach where there is “any appreciable permanent loss of resource values.” TDEC concluded the certification allows only:

• Temporary impacts remediated by required restoration to original contours and stabilization.
• Minimal permanent impacts confined to a 10‑foot corridor immediately over the pipeline, including 0.03 acres of forested‑to‑emergent wetland conversion and minor riparian vegetation conversion near streams.

Given those minimal permanent impacts, TDEC reasonably determined there would be no “appreciable permanent loss,” so additional baseline data collection and the mitigation calculus tied to that threshold were not triggered. On cumulative impacts, TDEC evaluated crossings cumulatively per stream and per TDEC waterbody ID, consistent with statewide ARAP practice. The court found no regulatory inconsistency.

Impact: Why This Decision Matters

• Adaptive, condition‑based §401 certifications are validated. The court endorses using ex ante criteria, method hierarchies, professional oversight, and agency pre‑authorization triggers (e.g., for blasting) to manage field uncertainties without violating practicable‑alternative mandates. Agencies can require the “least impactful practicable” method on a crossing‑by‑crossing basis while leaving room for in‑field engineering choices under tight controls.
• Clarifies the “appreciable permanent loss” threshold under Tennessee ARAP rules. Where a state agency reasonably finds that permanent impacts are minimal and bounded—and restoration conditions assure temporary impacts are remediated—mitigation and additional baseline data obligations keyed to that threshold need not be triggered. Future challengers will need to demonstrate either that the “appreciable permanent loss” finding lacks substantial record support or that conditions are inadequate to ensure impacts are temporary.
• Relies on general‑permit experience as record support. Agency experience with general ARAP permits and the importation of comparable protective conditions into individual §401 certifications are legitimate bases for decision‑making, provided the agency explains the fit.
• Standing and redressability lessons. Even where a state could later waive §401, current injuries are redressable by vacatur; conditioning of construction on §401 certification suffices for traceability. This will ease the standing burden for environmental plaintiffs challenging state §401 decisions in the Sixth Circuit.
• Jurisdictional backdrop remains contested. Although binding within the circuit, Judge Thapar’s dissent signals a continuing debate over whether NGA §19(d)(1) reaches state §401 actions. Regulated entities and petitioners alike should monitor for en banc or Supreme Court developments.
• Practical guidance for agencies. Build a crossing‑by‑crossing record; articulate why trenchless methods are or are not practicable for each location; document geological constraints; use special conditions to control high‑risk methods; and tie decisions to codified definitions (e.g., “practicable alternatives”).
• Signals for developers. Proposals that align early with general‑permit best practices, provide granular hydrologic and geologic data, and accept oversight conditions (e.g., geohazard inspectors, pre‑authorization for blasting) are more likely to survive APA scrutiny.

Complex Concepts Simplified

• §401 Water Quality Certification: A state’s certification that a federally licensed project will comply with water quality standards. Without it (or a waiver), the federal permit cannot issue.
• ARAP (Aquatic Resource Alteration Permit): Tennessee’s permitting mechanism, functionally synonymous with §401 certification for activities that alter waters of the state.
• Practicable Alternative: An alternative that is available and can be done considering cost, technology, and logistics in light of overall project purposes. If a less‑harmful practicable alternative exists, TDEC cannot authorize the proposed activity.
• Open‑Cut vs. Trenchless (HDD): Open‑cut dewaters the channel and excavates a trench across it; HDD drills beneath the waterbody without excavation in the channel. HDD often reduces surface impacts but can be infeasible in certain geologies and is more costly and failure‑prone in some conditions.
• Karst Geology: Terrain with soluble rock (like limestone) featuring sinkholes and underground drainage—blasting here risks hydrologic loss or subsurface damage.
• Wet Weather Conveyance (WWC): Ephemeral channels that flow briefly after rainfall. Tennessee law treats them differently from jurisdictional streams for permitting.
• General Permit vs. Individual Permit: General permits authorize categories of activities meeting standard conditions; individual permits are tailored to specific projects but may incorporate general‑permit conditions by reference.
• Appreciable Permanent Loss of Resource Values: A regulatory trigger for mitigation and deeper analysis. If permanent impacts are not appreciable, the state may rely on restoration conditions for temporary impacts rather than impose additional mitigation or demand more baseline studies.
• Adaptive Management Conditions: Permit terms that require best‑available method selection at the time and place of construction, with guardrails (criteria, oversight, and pre‑approval) to ensure environmental protection.
• Arbitrary and Capricious Review: A deferential APA standard—courts look for a rational link between the evidence and the agency’s decision; the question is not whether the court would choose differently.

Conclusion

Sierra Club v. TDEC cements two important guideposts for §401 practice in the Sixth Circuit. First, states may adopt adaptive, condition‑rich certifications that require the “least impactful practicable” method at each crossing while reserving agency control over high‑risk activities like blasting. Such frameworks—anchored in ex ante criteria, professional oversight, and pre‑authorization—are not unlawful delegations and satisfy practicable‑alternatives mandates when supported by a record of site constraints and risk analysis. Second, Tennessee’s ARAP regulations make additional baseline data and mitigation analyses contingent on a finding of “appreciable permanent loss.” Where permanent impacts are minimal and temporary effects are subject to robust restoration conditions, the agency need not trigger that heightened regime.

The court also clarifies standing in this niche: environmental petitioners can establish traceability and redressability when construction is conditioned on §401 certification, and the possibility of future waiver does not defeat redressability. Although a dissent flags a live jurisdictional debate under NGA §19(d)(1), the majority’s reasoning now provides published, precedential support for condition‑based §401 certifications and for pragmatic reliance on general‑permit experience in individualized decisions. For agencies, applicants, and challengers alike, the opinion underscores the centrality of a detailed, crossing‑specific record and plainly articulated, enforceable permit conditions.