Del. Riverkeeper Network v. Sunoco Pipeline L.P.

• Decision Date: 20 February 2018
• Docket Number: No. 952 C.D. 2017,952 C.D. 2017
• Citation: 179 A.3d 670
• Parties: The DELAWARE RIVERKEEPER NETWORK, Maya van Rossum, The Delaware Riverkeeper, Thomas Casey, and Eric Grote, Appellants v. SUNOCO PIPELINE L.P.
• Court: Pennsylvania Commonwealth Court

179 A.3d 670

The DELAWARE RIVERKEEPER NETWORK, Maya van Rossum, The Delaware Riverkeeper, Thomas Casey, and Eric Grote, Appellants

v.SUNOCO PIPELINE L.P.

No. 952 C.D. 2017

Commonwealth Court of Pennsylvania.

Argued: October 18, 2017

Filed: February 20, 2018

Mark L. Freed and Jordan B. Yeager, Doylestown, for appellants.

Robert L. Byer and George J. Kroculick, Philadelphia, for appellee.

BEFORE: HONORABLE MARY HANNAH LEAVITT, President Judge, HONORABLE RENÉE COHN JUBELIRER, Judge, HONORABLE ROBERT SIMPSON, Judge, HONORABLE P. KEVIN BROBSON, Judge, HONORABLE PATRICIA A. McCULLOUGH, Judge, HONORABLE ANNE E. COVEY, Judge, HONORABLE MICHAEL H. WOJCIK, Judge

OPINION BY JUDGE SIMPSON

In this appeal, the Delaware Riverkeeper Network, Maya van Rossum, the Delaware Riverkeeper, and residential landowners Thomas Casey and Eric Grote (collectively, Plaintiffs) challenge orders of the Court of Common Pleas of Chester County¹ (trial court) that dismissed their complaint and denied their petitions for injunctive relief. Through their complaint and requests for injunctive relief, Plaintiffs seek to prevent Sunoco Pipeline, L.P. (Sunoco) from constructing a new set of pipelines known as the Mariner East 2 pipeline (ME2) in West Goshen Township (Township) in a manner that violates the West Goshen Township Zoning Ordinance (zoning ordinance). Plaintiffs contend the trial court erred in determining that: (1) the Township's power to regulate the location of the ME2 pipeline was preempted by the Pennsylvania Public Utility Commission's (PUC) authority; (2) the trial court lacked subject matter jurisdiction over Plaintiffs' claims; (3) Plaintiffs did not establish a claim based on substantive due process; (4) the ME2 pipeline is a public utility facility; and, (5) Plaintiffs were not entitled to injunctive relief. Upon review, we affirm.

I. Background

A. Sunoco I

Sunoco is regulated as a public utility by the PUC and is a public utility corporation. In re Sunoco Pipeline, L.P., 143 A.3d 1000 (Pa. Cmwlth.) (en banc ), appeal denied, 164 A.3d 485 (Pa. 2016) ( Sunoco I ). The PUC regulates the intrastate movement of natural gas and petroleum products or service by Sunoco through pipelines, and not the actual physical pipelines conveying those liquids. Id. at 1004.

In Sunoco I, we set forth the following relevant factual background. Pursuant to the PUC's Orders, Sunoco has Certificates of Public Convenience (CPCs) that authorize it to transport, via its pipeline system, petroleum and refined petroleum products, including propane, from and to points within Pennsylvania. In 2012, Sunoco announced its intent to develop an integrated pipeline system for transporting petroleum products and natural gas liquids (NGLs) such as propane, ethane, and butane from the Marcellus and Utica Shales in Pennsylvania, West Virginia, and Ohio to the Marcus Hook Industrial Complex (MHIC) and points in between. Sunoco's various filings described the overall goal of the Mariner East Project as an integrated pipeline system to move NGLs from the Marcellus and Utica Shales through and within the Commonwealth, and to provide take away capacity for the Marcellus and Utica Shale plays and the flexibility to reach various commercial markets, using pipeline and terminal infrastructure within the Commonwealth.

The Mariner East Project has two phases. The first phase, referred to as Mariner East 1 (ME1), was completed and utilized Sunoco's existing pipeline infrastructure, bolstered by a 51–mile extension from Houston, in Washington County, to Delmont, in Westmoreland County, to ship 70,000 barrels per day of NGLs from the Marcellus Shale basin to the MHIC.

Sunoco has begun work on the second phase of the Mariner East Project, known as ME2. Unlike ME1, which used both existing and new pipelines, ME2 requires construction of a new 351–mile pipeline largely tracing the ME1 pipeline route, with origin points in West Virginia, Ohio, and Pennsylvania. With the exception of some valves, ME2 will be below ground level.

Significant for further discussion, new ME2 construction will be parallel to and mostly within the existing right of way of the ME1 pipeline. Id. at 1008–09.

While ME1 was underway, Marcellus and Utica Shale producers and shippers advised Sunoco that there was a need for additional capacity to transport more than the 70,000 barrels of NGLs per day being transported by ME1. As a result, Sunoco undertook to expand Mariner East Project capacity and developed the ME2 pipeline.

This expansion of the ME1 service will enlarge capacity to allow movement of an additional 275,000 barrels per day of NGLs, thereby allowing shippers from the Marcellus and Utica Shales to transport more barrels of NGLs through the Commonwealth to destinations within the Commonwealth, as well as to the MHIC for storage, processing, and distribution to local, domestic, and international markets. It is intended to increase the take-away capacity of NGLs from the Marcellus and Utica Shales and to enable Sunoco to provide additional on-loading and off-loading points within Pennsylvania for both interstate and intrastate propane shipments and increase the amount of propane that would be available for delivery or use in Pennsylvania.

Sunoco sought and obtained PUC approval to provide intrastate service on the ME1 and ME2 pipelines. The PUC issued three final Orders in 2014 and two final Orders in 2015 confirming that Sunoco is a public utility corporation subject to PUC regulation as a public utility. The PUC also recognized that the service provided by both phases of the Mariner East Project is a public utility service.

As a result of the PUC's actions and through Sunoco's previously obtained CPCs, the PUC authorized Sunoco as a public utility to transport, as a public utility service, petroleum and refined petroleum products both east to west and west to east in the following Pennsylvania counties through which the Mariner East Project is located: Allegheny, Westmoreland, Indiana, Cambria, Blair, Huntingdon, Juniata, Perry, Cumberland, York, Dauphin, Lebanon, Lancaster, Berks, Chester, and Delaware. Sunoco's CPCs apply to both ME1 service and to ME2 service, as it is an authorized expansion of the same service. Sunoco I.

B. Current Litigation

As the trial court explained, in 2014, the Township enacted a zoning ordinance (2014 Ordinance) that regulates the location and setbacks for gas and liquid pipeline facilities. Section 84–56(B) of the zoning ordinance states: "Gas and liquid pipeline facilities" are only permitted in the I–1, I–2, I–2R, I–3 and I–C zoning districts by conditional use, subject to several enumerated standards. Gas and liquid pipeline facilities are not permitted in residential districts. Id. The conditional use standards include setback requirements for projects located in the I–1, 1–2, I–2R, 1–3 and I–C districts. Id.

In May 2017, Plaintiffs filed a complaint in the trial court, alleging that Sunoco's proposed ME2 pipeline, which is planned to run through the Township, violates the zoning ordinance (Count I).² They further averred that a violation of the zoning ordinance was a violation of Plaintiffs' substantive due process rights (Count II).³

In response, Sunoco filed preliminary objections, asserting: (1) the trial court lacked subject matter jurisdiction over Plaintiffs' claims because the PUC had exclusive jurisdiction over the regulation of public utilities and public utility service; (2) Plaintiffs' alleged facts were legally insufficient to state a claim upon which relief could be granted because (a) Plaintiffs lacked standing, and (b) Plaintiffs' attempt to enforce the zoning ordinance was preempted by state and federal law.

On May 25, 2017, as Sunoco began mobilizing and engaging in pre-construction activity in surrounding townships, Plaintiffs filed a petition for special injunction and a petition for preliminary injunction to stop any mobilization in the Township. After a conference with the parties to discuss the petition for special and preliminary injunction, the parties agreed that (1) many of the relevant facts were likely to be undisputed, and (2) the legal issues raised by Sunoco in its preliminary objections would impact any decision on the outstanding requests for injunction. Therefore, the parties agreed that proceeding first with the presentation and disposition of those legal issues would be appropriate.

In June 2017, the trial court heard oral argument on the issues raised in Sunoco's preliminary objections. Shortly thereafter, the trial court issued an order that sustained in part and overruled in part Sunoco's preliminary objections. In particular, the trial court: overruled Sunoco's preliminary objection alleging Plaintiffs lacked standing; sustained Sunoco's preliminary objections alleging a lack of subject matter jurisdiction and a lack of authority to regulate; sustained as moot Sunoco's preliminary objection alleging a lack of authority to regulate based on federal law; and, sustained Sunoco's preliminary objection alleging that Plaintiffs failed to establish a claim based on substantive due process. As a result, the trial court dismissed Plaintiffs' complaint with prejudice.

C. Trial Court's Decision

In support of its order, the trial court offered the following analysis. As to Sunoco's jurisdictional challenges, the trial court explained, Sunoco raised two challenges to Plaintiffs' suit. First, Sunoco asserted that the trial court lacked subject matter jurisdiction over Plaintiffs' claims because the PUC had exclusive jurisdiction over the regulation of public utilities and public utility service and the courts lack jurisdiction over collateral attacks on the PUC's decision to authorize public utility service. Second, and relatedly, Sunoco argued the PUC's exclusive jurisdiction over public utilities and their facilities prevented application of the zoning ordinance to Sunoco's construction of the ME2 pipeline.

The trial court stated that, in order for it to...