D.C. Circuit Amends Its Smith Lake Opinion Dismissing Appeal of FERC Licensing Order

On January 30, 2015, the U.S. Court of Appeals for the D.C. Circuit (D.C. Circuit) took the highly unusual step of amending an earlier opinion and issuing a statement to further explain its rejection as untimely of an appeal filed by property owners in response to FERC's issuance of a new 30-year hydroelectric license to Alabama Power Company.  Although the D.C. Circuit amended its prior opinion and issued an explanatory statement, it nevertheless denied en banc review of its earlier decision.

Previously, on September 26, 2014, the D.C. Circuit issued an opinion holding that a petition for review by the Smith Lake Improvement and Stakeholder Association was filed too late with the Court.  Under Section 313(b) of the Federal Power Act, an aggrieved party wishing to appeal a final FERC order has 60 days from the date of the order being appealed to seek court review.

After the issuance of the license order, the Association had requested rehearing at FERC.  FERC denied the Association's rehearing request and, rather than seek review with the D.C. Circuit at that time, the Association filed a second rehearing request with FERC, which was denied by FERC on the grounds that it had already considered and denied the Association's arguments without modifying any prior orders.  Following denial of the second rehearing request, the Association filed its petition for judicial review with the D.C. Circuit, on March 18, 2013 - 124 days after the first rehearing order but within sixty days after the second rehearing notice.  The D.C. Circuit dismissed the Association's appeal in its September 2014 opinion as being filed too late, concluding that the 60-day timeline to petition court review was triggered with FERC's issuance of the first rehearing order, not the second.  The basis for the dismissal was that the request for rehearing of the first rehearing order raised no new issues, and therefore the case was ripe for appeal after the Commission first denied rehearing.

In the statement accompanying the January 30, 2015 amended opinion, the D.C. Circuit appeared to sympathize with the Association to the extent that FERC might have provided confusing guidance for parties seeking rehearing and judicial review.  The court noted that FERC's first rehearing order in this case did not give any particular guidance to the Association related to its finality or further rehearing.  However, the court noted that FERC's second rehearing notice"”the very notice concluding that the Association's second rehearing petition was unnecessary"”also advised that further requests for rehearing "must be filed within 30 days of the date of issuance of this notice."  The court pointed out that FERC has not been consistent in stating in its orders whether they are subject to rehearing requests.  The court dryly indicated that "[i]t would help interested parties to its decisions if FERC took greater care with this type of guidance."  The suggestion appeared to be that FERC should be more consistent with its guidance and potentially avoid using discussion of rehearing in orders that deny rehearing so that parties do not confuse such discussion of rehearing as an invitation to seek further rehearing when it is not necessary.  Nevertheless, the court did not alter its holding that the Association waited too long before petitioning court review.

The amended opinion does not alter the determination that would-be petitioners must make as to either seek appellate court review of an order on rehearing or seek further rehearing from FERC.  The opinion advises that for "an erstwhile petitioner" who is unsure whether an initial order on rehearing is ripe for judicial review or whether to seek additional rehearing at FERC, "the safer course clearly is to file a petition in our court" to avoid the Association's fate in the Smith Lake case.  The Smith Lake case may lead to more parties filing "precautionary" petitions for judicial review of FERC orders to ensure their appellate rights are not forfeited.