Delaware Riverkeeper Network v. Sunoco Pipeline, 179 A.3d 670 (Pa. 2018)

In general, the Public Utility Commission preempts local zoning ordinances and will dictate the installation terms of pipeline.
Case Details:

Sunoco Pipeline, LP (Developer) sought to construct a pipeline (Pipeline) that would traverse the state and pass through a residential district in West Goshen Township (Township) within which “gas and liquid pipeline facilities” were prohibited by the Township’s zoning ordinance. Objectors requested a preliminary injunction to block the construction of the Pipeline.  The trial court denied Objectors’ requested relief, citing Developer’s argument that the Township’s zoning ordinance was preempted by Pennsylvania Public Utility Commission (PUC) regulations because the Pipeline was a public utility facility and the PUC holds exclusive jurisdiction over the regulation of public utilities and public utility facilities. Objectors appealed to the Commonwealth Court.

On appeal, Objectors argued that the Township’s power to regulate the location of the Pipeline was not preempted by the PUC. When assessing whether a municipality’s authority to regulate a pipeline is preempted by the PUC’s authority, the Commonwealth Court explained the initial question is whether the pipeline developer or operator is a public utility corporation and whether the pipeline, itself, is a public utility facility. Relying on an earlier eminent domain case addressing Developer and the Pipeline, the Court determined that Developer was a public utility providing public utility services under the Public Utility Code and that the Pipeline was a public utility facility. Thus, Developer and the Pipeline were subject to regulation under the PUC.

Next, the Court assessed whether the Township’s authority to regulate the construction of the Pipeline for the protection of the public health, safety and welfare – through zoning – was preempted by the PUC’s authority. The Court determined that the Township lacked authority to zone out a public utility facility because such facilities were regulated by the PUC.  In this case, the Township was preempted under the legal theory of “field preemption.”  Field preemption occurs when a state statute conveys the General Assembly’s intent to legislate an entire matter and prohibit the introduction of any local law, such as zoning regulations.  The Court determined the General Assembly intended for the PUC to occupy the entire field of public utility regulation. Therefore, the Township lacked the authority to prohibit the Pipeline from being constructed in certain locations under its zoning laws.

Date of Decision: 2/16/18

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