“Lookout, Here They Come!” Private Causes of Action to Enforce Pennsylvania Pipeline Safety

Pennsylvania pipeline operators may be dealing with allegations of pipeline safety problems brought by private citizens at the Pennsylvania Public Utility Commission (PaPUC or Commission) based on a recent decision. In a case of first impression, the Commission recently held that it will entertain private party complaints to enforce federal pipeline safety laws relating to non-public utility gas and hazardous liquids and facilities within the Commonwealth.

In Sharon Laffey v. Knox Energy Cooperative Association, Inc., C-2015-2462487 (Order entered September 3, 2015), the Commission considered a complaint from a member of a cooperative association, alleging that a gas line located near her residence protruded from the ground, creating an allegedly hazardous condition. The owner and operator of the gas pipeline, Knox Energy Cooperation Association, Inc. (Knox), was a bona fide cooperative association under Pennsylvania law but not a public utility. Under Section 102 of the Pennsylvania Public Utility Code, 66 Pa. C. S. § 102, the term “public utility” does not include “any bona fide cooperative association which furnishes service only to its stockholders or members on a nonprofit basis.”

The presiding Administrative Law Judge (ALJ) dismissed the complaint on a preliminary motion because Knox was a bona fide cooperative association and not a public utility subject to PaPUC jurisdiction. Upon review by the full Commission, however, the Commission disagreed. It observed that neither the parties to the formal complaint nor the ALJ addressed potential Commission jurisdiction over the complaint under the Gas and Hazardous Liquids Pipelines Act of 2011 (Act 127). Act 127 expanded the PaPUC’s jurisdiction and authority to enforce, up to the limits of federal safety standards, pipeline safety laws relating to non-public utility gas and hazardous liquids and facilities within the Commonwealth. Among other things, under Act 127, the Commission has the authority to promulgate regulations, investigate pipeline operators’ facilities, practices and safety-related conditions and, where necessary, impose civil penalties and take other enforcement action for violations.

Importantly, the Commission found that: (i) Knox is a registered “pipeline operator” under Act 127; (ii) the gas service line involved in the dispute is a “pipeline facility” under that act; and (iii) therefore, such pipeline facility is subject to Commission jurisdiction.

The complaint proceeding was remanded to the ALJ for hearings and the development of a record to determine if there is a safety-related condition that should be examined by the Commission’s Bureau of Investigation and Enforcement (I&E).

Since the Commission retained jurisdiction of the complaint – not as a result of a pipeline inspection initiated by I&E under Act 127 but as a result of the formal complaint commenced by a member of the Knox cooperative – the Commission needed to determine if such a third-party complaint seeking to enforce Act 127 was lawful and permissible. In finding that a private complaint could be initiated under Act 127, the Commission relied in part upon portions of federal law that expressly permit private causes of action of pipeline safety laws. See 49 U.S.C. § 60121. Section 60121 authorizes persons to bring civil actions in federal district court for an alleged federal pipeline safety infraction, but with several caveats. The “person” bringing the action must have given 60 days’ notice of the violation to the Secretary of Transportation or the appropriate state authority. Moreover, the action cannot be brought if the Secretary or state authority is “diligently” pursuing an administrative proceeding for the violation. 49 U.S.C. § 60121(A)(B). Considering that the Commission is expressly authorized to supervise pipeline operators like Knox in a manner consistent with federal pipeline safety laws, the Commission concluded that allowing a private cause of action under Act 127 was appropriate.

It remains to be seen how groundbreaking the Commission’s decision in Sharon Laffey v. Knox Energy Cooperative Association, Inc. will be. After all, most safety concerns about Pennsylvania jurisdictional pipelines or potential violations of Act 127 result from safety inspections initiated by the Commission via its investigatory and prosecution arm, the Bureau of I&E, and not by third parties. Also, it is not clear if other entities or individuals – public or private – can intervene and participate as full parties in these private enforcement actions.

Nevertheless, with customers now having a right to file a complaint under Act 127 there will be more non-expert “boots on the ground” evaluating the condition of thousands of miles of pipeline located in the Commonwealth. Pipeline owners and operators will need to be mindful that the Commission’s decision in Sharon Laffey v. Knox Energy Cooperative Association, Inc. has expanded the universe of “pipeline inspectors” in Pennsylvania.