Administrative Law Report - February 2025, Vol. 4

Welcome to your monthly rundown of all things administrative law, where we highlight all the happenings you may have missed.

Sign up to receive future newsletters by email here.

Environmental/Energy:  

• FERC Settles Pending Enforcement Case That Had Been Affected by Jarkesy: As previously outlined in the November Report, on September 19, 2024, the Federal Energy Regulatory Commission (FERC) issued an order in Total Gas & Power North America Inc. terminating the use of the Administrative Law Judge (ALJ) hearing procedures. FERC had been using these procedures in this long-standing enforcement matter involving alleged natural gas price manipulation, based on the U.S. Supreme Court’s Jarkesy decision holding that SEC enforcement-action civil penalty respondents are entitled to a 7th Amendment jury trial for claims “legal in nature” and similar to common law fraud. On January 8, 2025, FERC approved a settlement in which the respondent will only pay a $5 million penalty to several non-governmental organizations (with no liability admission). This contrasts with what the initial enforcement action sought, about $214 million in civil penalties and disgorgement of about $9 million in unjust profits.
• Initial FERC Changes as a Result of the New Administration: The new President has appointed sitting FERC Commissioner Mark Christie, a Republican as the new agency Chair. Willie L. Phillips, a Democrat, and former Chair, is still a Commissioner (thus maintaining a three-Democrat majority until mid-2026 unless he resigns before his term ends). Also, various Executive Orders of the new President undergird existing trends at FERC regarding liquefied natural gas projects, natural gas pipeline projects, and National Environmental Policy Act reviews.  Finally, like other governmental agencies, “environmental justice” or other “Diversity Equity & Inclusion” offices and positions, funding, and employee positions have been terminated by the new Executive Orders.

Transportation:  

• DOT’s Disadvantage Business Enterprise Program May Become A Battle of Intervenors: Following the Eastern District of Kentucky’s September 23, 2024 injunction in Mid-America Milling v. US Dept. of Transportation staying the use of a rebuttable presumption standard to find social and economic disadvantage in the Department of Transportation’s Disadvantaged Business Enterprise (DBE) Program, six new parties have filed motions to intervene – two as a new plaintiffs and the other four to join the Department of Justice as defendants. The intervenor plaintiffs seek to expand the Court’s limited injunction to encompass additional contracts beyond those of the original plaintiffs. Including individual Disadvantaged Business Enterprises, and associations and organizations that represent such enterprises, the intervenor defendants seek to step in and defend DOT’s DBE program based on their contention that President Trump’s recent executive actions mean that the DOT, represented by the Justice Department, “is now poised to support Plaintiffs’ efforts to end the DBE Program altogether.” The Court now must decide whether the intervenor defendants can step in to replace DOJ, or if their briefs must be treated as non-party amicus submissions (as argued by the intervenor plaintiffs). The Court’s decision will hinge upon whether it believes that DOJ has exclusive jurisdiction to conduct litigation on behalf of the Government and its agencies, and as a result the intervenor defendants lack standing to intervene.
• Leadership Changes at the Surface Transportation Board: President Trump has designated Patrick Fuchs as Chairman of the Surface Transportation Board (STB). Mr. Fuchs is serving in his second, five-year term following his confirmation by the U.S. Senate on May 14, 2024. His current term expires January 14, 2029. The STB is the nation’s economic regulator of transportation – primarily railroad transportation. It is a five-member agency and currently has four members – 2 Republican appointees and 2 Democratic appointees. Prior to his appointment to the STB, Mr. Fuchs was senior professional staff member working on surface transportation and maritime issues for the United States Senate Committee on Commerce, Science, and Transportation under the leadership of Chairman John Thune of South Dakota.
• FRA Approves Waiver Allowing Autonomous Rail Car Pilot Program: On January 15, 2025, the Federal Railroad Administration (FRA) approved a waiver request from Georgia Central Railway, L.P. and Heart of Georgia Railroad, Inc. to test self-propelled, zero-emission, battery-electric rail vehicles and their associated computer and telemetry technology systems, manufactured by Parallel Systems, Inc. The goal of the autonomous cars is to deliver containers from the Port of Savanna to a small intermodal terminal thus potentially allowing competition with trucks for short-haul markets. According to the FRA, the agency “has determined that granting the [railroad’s] request for relief for the purpose of performing the testing, related to the petition for a pilot test program, is in the public interest and consistent with railroad safety.”

This publication is intended for general informational purposes only and does not constitute legal advice or a solicitation to provide legal services. The information in this publication is not intended to create, and receipt of it does not constitute, a lawyer-client relationship. Readers should not act upon this information without seeking professional legal counsel. The views and opinions expressed herein represent those of the individual author only and are not necessarily the views of Clark Hill PLC. Although we attempt to ensure that postings on our website are complete, accurate, and up to date, we assume no responsibility for their completeness, accuracy, or timeliness.