//  4/3/17  //  Commentary

The Trump Administration’s recent revival of the Keystone XL pipeline marks the latest high-profile turn in the continued saga over the pipeline’s construction.  Less noticed: by hastily reviving the project, the Trump Administration may have set the stage for a broader legal battle over judicial review of executive actions. 

Last month, the State Department issued a Presidential Permit authorizing cross-border construction of the 1,179-mile Keystone XL oil pipeline.  The proposed pipeline—which would be capable of carrying 830,000 barrels of oil into the United States from Canada per day—had previously been blocked by the Obama Administration as incompatible with “the national interest of the United States.”  In denying Keystone’s permit application, the Obama State Department concluded that the pipeline would “not increase America’s energy security,” and would undercut American leadership on climate change.

Like so many other actions taken by the Trump Administration, its reversal of the Obama State Department on Keystone XL seemed rushed and half-baked.  The Obama Administration’s denial of the construction permit followed years of study, and the publication of a comprehensive environmental impact statement.  Trump’s reversal, by contrast, came just sixty days into his term in office, and without the benefit of additional study or a revised impact statement.

What's more, the Trump State Department’s Record of Decision granting the permit barely engaged with the Obama Administration’s previous denial of that permit. Most notably: when the Obama Administration denied the permit, it made a detailed case for why approval of the pipeline would undercut America’s global leadership “in promoting the transformation to low-carbon economies.”  The Trump Record of Decision dismissed that rationale in a single vague paragraph, brusquely noting that—because many foreign countries had subsequently announced their decisions “to address climate change”—“a decision to approve this proposed Project at this time would not undermine U.S. objectives in this area.” 

So, what’s next?  At least two challenges to the permit have already been filed in federal court. Could a judge block the Keystone permit—perhaps as an abuse of State Department discretion? The answer is less clear than one might think.

At first blush, it certainly seems as though the Trump Administration’s decision to issue the permit should be amenable to legal challenge. Under the Administrative Procedure Act (APA), “final agency action” is “subject to judicial review,” and can be overturned if it is arbitrary, capricious, an abuse of discretion, or otherwise unlawful.  The APA expressly provides that the State Department—which issued the permit—is an “agency.”  And it is beyond cavil that the State Department’s decision to issue the permit is a “final action.”

The reviewability of a permit, however, is more muddled than the plain text of the APA might suggest.  Typically, federal agencies act (in whole or in part) pursuant to a delegation of authority from Congress.  Here, however, the State Department was delegated authority to issue (or deny) permits not by an act of Congress, but via executive order.  Specifically, pursuant to a series of executive orders issued by previous administrations, the State Department has long been charged with issuing permits for proposed projects that will cross international boundaries.  And when those executive orders delegated permitting authority to the State Department, they (apparently) delegated nothing more than the President’s inherent constitutional authority to conduct foreign affairs.

The fact that the State Department was exercising delegated Presidential authority when permitting the Keystone XL pipeline arguably makes a difference.  In Franklin v. Massachusetts, the Supreme Court held that the President is not an “agency” within the meaning of the APA—so “final actions” carried out by the President are not subject to APA judicial review.  Building on Franklin, several district courts have recently held that where an agency is “exercising purely presidential prerogatives,” its actions are not subject to APA review, either.  The logic: a President can issue a permit himself, and that action would be non-reviewable under Franklin.  So why should a non-reviewable Executive action suddenly become reviewable just because it’s delegated to an executive agency? 

Yet the non-reviewability of such agency actions is hardly well-established.  No appellate court has squarely addressed the question.  What's more, in a context analogous to Keystone XL, at least one district court has held that “the State Department’s analysis (or alleged lack thereof) of the environmental impacts of” cross-border pipelines is not “insulat[ed] . . . from judicial review.”  And of course, the plain text of the APA suggests that any final agency action is reviewable. The degree to which agency actions implementing “purely presidential prerogatives” are subject to judicial review, in short, is very much an open question.

With environmental groups committed to using “every tool in the kit” to fight the Keystone XL project, those questions are likely to be litigated—and may soon be answered.[1]  And those answers could well affect other legal challenges to the Trump Administration.  Trump has thus far demonstrated a fondness for dictating to agencies via executive orders.  An appellate ruling that agency actions are non-reviewable if promulgated pursuant “purely presidential prerogative” could complicate legal efforts to ensure the Trump Administration’s fidelity to the rule of law.  Among other issues, it could be difficult to discern precisely when an agency is acting pursuant to Trump’s “purely” presidential prerogatives.  Would such a doctrine apply only to presidential exercise of foreign affairs authority? Or would it encompass other actions as well?  And what if Congress has weighed in on, for example, a question that touches on foreign affairs?

Against that background, a prediction: if it is litigated, I think the Keystone XL permit will ultimately be held reviewable.  There is scant textual justification in the APA for exempting so-called “presidential prerogative” actions from review.  The Supreme Court, moreover, has broadly stated that “Congress's evident intent when enacting the APA” was “to make agency action presumptively reviewable.”  In light of that presumption, I see little reason agency actions should be immune from review just because the agency is exercising “purely presidential” authority.  Indeed, I find the contrary conclusion bizarre.  If the purpose of the APA is to ensure judicial review of unelected agencies, why should it matter if the unelected agency is exercising “presidential” power or “legislative” power?

Of course, none of this means that the Keystone XL permit will be revoked.  Any challenge to the pipeline will of course have to succeed on the merits.  But, at the very least, I think it is more likely than not that opponents of the pipeline will ultimately get their day in court. 

 

Follow Eli on Twitter: @EliNSavit

 

[1] There may be an appellate ruling on point even sooner. Many of these same issues are currently being litigated in the D.C. Circuit in connection with the State Department’s issuance of a Presidential Permit for the Gordie Howe bridge—a planned new bridge across the Detroit River that will connect the United States to Canada.  (Full disclosure: I work on issues related to the Gordie Howe Bridge for the City of Detroit, but neither I nor the City has been involved in the D.C. Circuit litigation).


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