Save Our Ill. Land v. Ill. Commerce Comm'n
| Citation | 2022 IL App (4th) 210008,200 N.E.3d 870,460 Ill.Dec. 322 |
| Decision Date | 12 January 2022 |
| Docket Number | 4-21-0008 |
| Parties | SAVE OUR ILLINOIS LAND, Sierra Club, Natural Resources Defense Council, and William Klingele, Plaintiffs-Appellants, v. The ILLINOIS COMMERCE COMMISSION; Dakota Access, LLC; Energy Transfer Crude Oil Company, LLC; International Brotherhood of Electrical Workers, Local 702; Laborers’ International Union of North America ; Southwestern Illinois Laborers’ District Council; Great Plains Laborers’ District Council ; and Southern and Central Illinois Laborers’ District Council and Its Affiliated Local Unions 231, 622, 773, and 1197, Defendants-Appellees. |
| Court | United States Appellate Court of Illinois |
John D. Albers and William M. Shay, of Shay Law, Ltd., of Peoria, for appellants.
Robert W. Funk, Rebecca L. Segal, and Thomas R. Stanton, Special Assistant Attorneys General, of Chicago, for appellee Illinois Commerce Commission.
Claire A. Manning and Anthony D. Schuering, of Brown, Hay & Stephens, LLP, of Springfield, Owen MacBride, Bina Joshi, and Amy Antoniolli, of Schiff Hardin LLP, of Chicago, and Bret Dublinske, of Fredrikson & Byron, P.A., of Des Moines, Iowa, for appellees Dakota Access, LLC, and Energy Transfer Crude Oil Company, LLC.
Jeff Naville, of Springfield, and Patrick K. Shinners, of Schuchat, Cook & Werner, of St. Louis, Missouri, for other appellees.
¶ 1 Dakota Access, LLC (Dakota Access), and Energy Transfer Crude Oil Company, LLC (Energy Transfer), which, collectively, we will call "the carriers," own a crude-oil pipeline that runs hundreds of miles through Illinois, from the northwest to the south. Dakota Access owns the pipeline from Hamilton, Illinois, to Patoka, Illinois, and Energy Transfer owns the rest of the pipeline, from Patoka to Joppa, Illinois. The carriers petitioned the Illinois Commerce Commission (Commission) for permission to add more pumping stations to this Illinois pipeline.
¶ 2 In the administrative proceeding on the carriers’ petition, two groups intervened. One group opposed the petition: Save Our Illinois Land, Sierra Club, Natural Resources Defense Council (Natural Resources), and William Klingele. We will call this group "the objectors." The second group of intervenors advocated for the carriers’ petition: International Brotherhood of Electrical Workers, Local 702; Laborers’ International Union of North America; Southwestern Illinois Laborers’ District Council; Great Plains Laborers’ District Council; and Southern and Central Illinois Laborers’ District Council and its affiliated Local Unions 231, 622, 773, and 1197. We will call them collectively, "the unions."
¶ 3 After hearing evidence, the Commission granted the carriers’ petition to construct the additional pumping stations. The objectors petitioned for a rehearing, and the Commission denied their petition. Now the objectors appeal to the appellate court. In their appeal, they make seven arguments.
¶ 4 First, the objectors contend that the Commission erred by failing to apply section 15-401 of the Public Utilities Act (Act) ( 220 ILCS 5/15-401 (West 2020) ) to the petition to construct the pumping stations. To the extent, however, that section 15-401(a) ( id. § 15-401(a) ) was applicable, it was satisfied. The carriers already possessed the certificates in good standing that section 15-401(a) required. Contrary to the objectors’ contention, the carriers did not have to obtain new or amended certificates in good standing in order to install additional pumping stations on their completed pipelines. Section 15-401 says nothing about obtaining new or amended certificates in good standing.
¶ 5 Second, the objectors complain that the Commission's decision fails to provide sufficient factual findings and reasons to make possible an informed judicial review. We find the Commission's single-spaced 80-page decision to be adequate to that purpose.
¶ 6 Third, the objectors claim that, in its assessment of the public need for the proposed pumping stations (see id. § 8-503), the Commission misapplied case law and failed to consider substantial evidence that militated against a finding of public need. The objectors argue, and we agree, that the Commission misinterpreted a prior decision of ours as equating the "public" with the world. Under section 8-503, the Commission must consider the public need for the proposed improvement, but the "public," in the broadest sense of that word, is the United States, not the world. We are unconvinced by the objectors’ argument, however, that the Commission failed to consider the evidence adduced against the claim of public need. Just because the Commission did not give the opposing evidence the weight that the objectors believe it deserved, it does not follow that the Commission failed to consider the evidence.
¶ 7 Fourth, the objectors contend that the Commission erred by regarding itself as federally preempted from addressing the risk of greater leakage posed by nearly doubling the throughput of the pipeline. In its decision, the Commission recounted evidence that the carriers’ leak-detection system could not readily detect leaks of less than 1% of throughput flowing past a given point per hour. But then, at the conclusion of the part of its decision in which the Commission discussed the leak-detection system, the Commission announced that it would "not rule on this issue" because (1) "the safety regulation of petroleum pipelines" was "within the jurisdiction of [Pipeline and Hazardous Materials Safety Administration]" and (2) "inconsistent state requirements [were] specifically preempted." The Pipeline Safety Improvement Act of 2002 does indeed forbid "[a] State authority [to] adopt or continue in force safety standards for interstate pipeline facilities or interstate pipeline transportation." 49 U.S.C. § 60104(c) (2018). If the Commission had denied permission to construct the proposed pumping stations and if the Commission had cited, as the reason for the denial, the inability of the leak-detection system to readily detect leaks of less than 1% of throughput, the Commission thereby would have adopted a safety standard for this interstate pipeline. The Commission is correct that it is federally preempted from doing so. See id.
¶ 8 Fifth, the objectors criticize the Commission for ignoring evidence of discrimination by the carriers in their treatment of shippers (that is, users of their pipeline). According to the objectors, some of the transportation shipping agreements, or contracts for transportation of crude oil through the pipeline, have provisions illegally favoring some shippers over other shippers. Because of these discriminatory provisions, the objectors argue, the agreements are void and unenforceable as violative of state and federal law, and the increased throughput that the void agreements purport to require really is unrequired. If the transportation shipping agreements are void, the reasoning runs, the need for additional pumping stations to fulfill the agreements is illusory. A weakness of this reasoning is that the invalidity of the agreements as a whole does not automatically follow from the invalidity of some of their provisions. The objectors do not show, nor do they even argue, that the contractual provisions in question are essential and inseverable.
¶ 9 Sixth, the objectors accuse the Commission of "arbitrarily and capriciously prohibiting inquiry into the operator's record." The "operator," in this context, is Sunoco Pipeline, L.P. (Sunoco). The carriers have subcontracted the operation of their Illinois pipeline to Sunoco. In view of that fact, the objectors offered evidence that, in Pennsylvania, Sunoco repeatedly had been fined for safety and environmental violations in its operation of pipelines there. The Commission sustained the carriers’ irrelevancy objection to this evidence from Pennsylvania. That ruling, we hold, was an abuse of discretion. Sunoco's conduct as a pipeline operator in Pennsylvania is relevant to "the security *** of *** the public" ( 220 ILCS 5/8-503 (West 2020) ) and ought to be taken into consideration.
¶ 10 Seventh, the objectors claim that the Commission "arbitrarily and capriciously refus[ed] to acknowledge" the evidence they had presented of a steep decline in oil demand as COVID-19 had spread over the world. But the Commission did acknowledge that evidence. The objectors presented online documentation that the per-barrel price of oil had declined by 50% in less than a year and that, because of reduced demand, there was a glut of oil on the market. The Commission took the objectors’ point. The Commission agreed that the pandemic "certainly [would] lead to some questions about future need." At the same time, however, the Commission could have reasonably assumed that the pandemic would be temporary and that the demand for oil eventually would return to prepandemic levels.
¶ 11 In sum, we agree with some of the arguments that the objectors make, and we disagree with their other arguments. We find enough merit in their third and sixth arguments that a remand is necessary. Therefore, we vacate the Commission's decision, and we remand this case to the Commission for further proceedings.
¶ 14 On December 9, 2015, in Energy Transfer Crude Oil Co. , Ill. Comm. Comm'n No. 14-0755, 2015 WL 9257681 (Order-Final Dec. 9, 2015), the Commission issued to Energy Transfer a certificate in good standing. The certificate provided three authorizations.
¶ 15 First, citing section 15-401 of the Act ( 220 ILCS 5/15-401 (West 2014) ), the certificate authorized Energy Transfer "to operate as a common carrier by pipeline" within a 500-foot-wide corridor of land that was about 128 miles long. The corridor began near Patoka, in Marion County; extended southeast "to a point of intersection with an existing natural...
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