Pereira v. New England LNG Co., Inc.

• Citation: 301 N.E.2d 441,364 Mass. 109
• Parties: Manuel PEREIRA et al. v. NEW ENGLAND LNG CO., INC.
• Decision Date: 17 September 1973
• Court: United States State Supreme Judicial Court of Massachusetts

Page 441

301 N.E.2d 441

364 Mass. 109

Manuel PEREIRA et al. v. NEW ENGLAND LNG CO., INC.

Supreme Judicial Court of Massachusetts, Bristol.

Argued April 3, 1973.

Decided Sept. 17, 1973.

Acheson H. Callaghan, Jr., Boston (Reginald H. Howe, Boston, with him), for defendant.

Michael Sahady, Fall River (Douglas F. MacPhail, New Jersey, with him), for plaintiffs.

Hans F. Loeser, Roger I. Abrams & Henry P. Monaghan, Boston, for Boston Gas Company & others, amici curiae, submitted a brief.

Before TAURO C.J., and REARDON, QUIRICO, HENNESSEY and KAPLAN, JJ.

QUIRICO, Justice.

This is a bill in equity by which the plaintiffs ask the court to determine and declare whether the defendant is entitled to use certain parcels of land located in Fall River, in Bristol County, together with buildings, equipment and facilities to be erected thereon, for the temporary storage, transportation and distribution of propane gas, and ultimately for the permanent liquefaction, storage, transportation and distribution of liquefied natural gas (LNG). The case was submitted to a judge of the Superior Court on a case stated. Thereafter the judge entered a final decree (a) declaring that the defendant could not use the premises and facilities for the intended purpose without first obtaining a license from the municipal authorities under G.L. c. 148, § 13, as amended, and (b) enjoining the defendant's use of the premises for such purpose unless it first obtained such a license. The case is before us on the defendant's appeal from the final decree.

The following are the agreed facts, stripped of many details not material to the limited issue before us. The defendant is a Massachusetts corporation engaged in the business of buying, selling and distributing gas. It is a natural gas company within the meaning of the Federal Natural Gas Act and it holds a certificate of public convenience and necessity issued to it by the Federal Power Commission authorizing it to engage in the proposed LNG business, subject to the acquisition of supplies of LNG. It proposes to conduct its business on and from 22.17 acres of land (the locus) bordering on Mount Hope Bay in Fall River. One plaintiff owns and resides on property abutting the locus, and the other five plaintiffs own and reside on property located in the immediate vicinity of the locus.

The defendant proposes to build a liquefaction and storage facility for LNG on the locus, to import LNG by ship from foreign and domestic sources, to process and store it at the locus and to sell and distribute it to gas distribution companies in various locations throughout Massachusetts and New England. The facility will include three storage tanks aboveground, each having a capacity of 600,000 barrels, and the overall size of each being about 250 feet in diameter and 107.5 feet in height. Each tank will be located within an impounding area inclosed by a dike seventeen feet in height. Ships delivering natural gas to the locus will be unloaded by means of two pipelines extending between the facility and a pier in Mount Hope Bay. Shipments from the facility will be (a) by pipeline to the Fall River Gas Company or to the Algonquin Gas Transmission Company, a natural gas pipeline company, and (b) by barge, rail or truck to other gas distribution companies. The facility will also include one building to house liquefaction machinery and one to house administrative offices and control facilities.

At the start of its operation the defendant proposes to use one of the tanks at the locus for the storage and distribution of propane, and ultimately to shift to the storage and distribution of LNG as the latter becomes available. Ultimately, perhaps in about six years, the handling of propane will be phased out and the facility will be used only for LNG if sufficient quantities of the latter become available. The peak demand for gas in Massachusetts and the rest of New England occurs in the winter months and the two pipeline companies supplying this area have not been able to meet the increasing demand. By contrast, gas is available during the summer months when the demand for it is at its lowest level. The defendant's facility would be able to store available gas during the summer months for sale and delivery to gas companies when they experience the peak demands of the winter months.

On July 16, 1971, the defendant filed a petition with the Department of Public Utilities (Department) requesting (a) that its proposed use of the locus and the facilities to be erected thereon for the processing, storage, sale and distribution of propane and LNG to gas distributing companies be exempted from the operation of the zoning ordinance of Fall River under the provisions of G.L. c. 40A, § 10, inserted by St.1954, c. 368, § 2, ¹ and (b) that the Department approve 'the manner in which and the pressures at which gas, both propane and LNG is to be stored, transported and distributed in connection with the proposed LNG storage and regasification equipment and related facilities.' The latter request was made under the provisions of G.L. c. 164, § 105A, inserted by St.1932, c. 119. ²

After giving notice and holding a public hearing on the defendant's petition, the Department decided 'that the proposed situation of the parcel of land in question and the proposed facilities for the storage, transportation, processing and distribution of liquid natural gas and propane gas to be erected therein and thereon are reasonably necessary for the convenience and welfare of the public,' and on the basis thereof it ordered that the locus and facilities to be constructed thereon 'be and hereby are exempted from the operation of the zoning ordinance of the City of Fall River under the provisions of section 10 of Chapter 40A of the General Laws,' subject to certain prescribed conditions. No party to this proceeding has questioned the validity of the Department's decision and order. Neither has any party questioned the power of the Legislature to provide by statute, either expressly or impliedly, that a decision by State regulatory authorities shall prevail over that of municipal regulatory authorities as to a use of land or an operation thereon over which both levels of authority appear to be permitted to act. See BOARD OF APPEALS OF HANOVER V. HOUSING APPEALS COMM. IN DEPT. OF COMMUNITY AFFAIRS, MASS., 294 N.E.2D 393^A.

The only legal question presented by this case is whether the defendant, having obtained the required approval of the Department for the construction and operation of its proposed facility at the locus, must, in addition thereto, also obtain a license therefor from the municipal authorities under the provisions of G.L. c. 148, § 13 as amended through St.1959, c. 353, § 1. ³ We hold that it is not required to obtain such a municipal license.

The defendant argues that since G.L. c. 148, §§ 9 and 13, requiring municipal licenses for the storage of certain substances contain no express reference to 'gas,' whereas G.L. c. 164, § 105A, which is part of a comprehensive statutory pattern for the regulation of gas companies by the Department, expressly vests authority in the Department 'to regulate and control the storage, transportation and distribution of gas and the pressure under which these operations may respectively be carried on,' the latter statute must prevail.

The plaintiffs, on the other hand, argue that although G.L. c. 148, §§ 9 and 13, do not use the word 'gas,' they do use the words 'crude petroleum or any of its products,' that propane and LNG are products of crude petroleum, and that therefore a municipal license is required for their storage, transportation and distribution. They argue further that the defendant is barred from contending to the contrary because of the following agreement in the case stated: 'Both propane and LNG are substances that come within the language of . . . (G.L. c. 148, § 9, and G.L. c. 164, § 105A).'

Of course, the defendant is bound by its stipulation in the case stated (Savage v. Blanchard, 148 Mass. 348, 350, 19 N.E. 396; Abbott v. Link-Belt Co., 324 Mass. 673, 677, 88 N.E.2d 551, and Dalton v. Post Publishing Co., 328 Mass. 595, 599, 105 N.E.2d 385) unless the court vacates it as improvident or not conducive to justice (Malone v. Bianchi, 318 Mass. 179, 182--183, 61 N.E.2d 1, and cases cited, and Loring v. Mercier, 318 Mass. 599, 601, 63 N.E.2d 466). We assume that the defendant did not intend to stipulate itself out of court or to concede that it was not entitled to use the locus for the intended purpose when it agreed that '(b)oth propane and LNG are substances that come within the language' of G.L. c. 148, § 9. While that stipulation may preclude the defendant from now contending that propane and LNG do not come within the language of § 9, it does not preclude it from contending, as it does, that § 9 has no application to this case because of G.L. c. 164, § 105A. As thus construed, the stipulation is not decisive of this case, and we need not, and do not, exercise our power to vacate it.

We therefore assume by reason of the stipulation, but without so deciding, that we have two different statutes, G.L. c. 148 § 9, and G.L. c. 164, § 105A, which, despite their differences in language, both purport to include propane and LNG as substances which are subject to regulation thereunder, the regulation under c. 148 to be by municipal authorities and under c. 164 by the Department. The applicability of c. 164, § 105A, providing for regulation by the Department is not questioned. The question is whether G.L. c. 148, §§ 9 and 13, also apply to the defendant's proposed operations. If they do, the defendant's right to use the locus and facilities thereon for the storage, distribution and transportation of propane and LNG will be subject to regulation and licensing by two levels of government, one State and the other municipal. If that is the effect of the statutes, it would be within the...