The Delaware River Basin Commission (“DRBC”) was created with the approval of Congress in 1961 through the Delaware River Basin Compact, an agreement between the New York, Pennsylvania, New Jersey, Delaware, and the federal government for planning, conservation, utilization, development, management and control of the water resources of the Delaware River Basin (the “Basin”).  In June, 2010, the DRBC placed  a moratorium on natural gas development in the Basin, which includes areas within the Marcellus Shale formation, pending the adoption of regulations governing such development.  Draft regulations were published for comment in 2010, and revised draft regulations were published in November, 2011.  However, they have not yet been adopted by the DRBC, leaving the moratorium in place.

Against this background, three lawsuits were filed by various environmental advocacy groups and the State of New York challenging the DRBC’s authority to adopt the proposed regulations.  The cases, consolidated in the Eastern District of New York as State of New York v. U.S. Army Corps. of Eng’rs, 11-cv-2599, focused on whether in issuing proposed regulations, the DRBC or various federal agencies were required to perform an environmental impact analysis pursuant to the National Environmental Policy Act (“NEPA”), a process that requires federal agencies to consider the environmental impacts of proposed federal regulations or actions.  The primary dispute in the cases centered around whether the DRBC is, in fact, a federal agency required to comply with NEPA.  Multiple amici curiae, including City Councils of Philadelphia and New York intervened in support of plaintiffs, with various oil and gas industry groups and the Susquehanna River Basin Commission intervening in support of the DRBC and various federal agency defendants.

On Monday, a federal judge dismissed all three suits, finding that the plaintiffs lacked standing and that the claims were not ripe for judicial review. The Court held that because the DRBC regulations were still in draft, rather than final, form, it was unable to determine the probability that the regulations would ultimately be enacted, making it impossible to assess whether the risks that plaintiffs alleged were presented by natural gas development were “more than mere conjecture,” noting that “the mere existence of proposed regulations is not sufficient to allow this court to say Plaintiffs’ interests are at risk.”  As an alternative ground for dismissal, the Court also held that the claims were not ripe because the harms plaintiffs alleged were “speculative, and rely on a chain of inferences that may never come to pass.” Indeed, plaintiffs’ challenge to the proposed regulations would be moot if the DRBC never adopted final regulations and instead decided to leave the current moratorium on natural gas exploration and extraction in place.

Frustrating many watchers, the Court did not rule on the seminal issue of whether the DRBC is a federal agency.  However, despite dismissing plaintiffs’ cases, the Court noted that if and when DRBC adopted final regulations permitting natural gas development in the Delaware River Basin, plaintiffs could then bring new suits raising the same issue of NEPA’s applicability to DRBC’s actions.  Thus, we are likely to see this suit revived at some time in the future, and multiple interesting questions of federal administrative law addressed, including whether the DRBC is considered a “federal agency” for administrative rulemaking purposes.

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