This Blog Post was authored by Timothy Johnson, a summer associate.

Earlier this month, the Commonwealth Court of Pennsylvania concluded that the Pennsylvania Environmental Hearing Board (EHB) erred in its dismissal of the petitioners’ appeal of the approval of a compressor station plan by the Pennsylvania Department of Environmental Protection (PADEP) for lack of subject matter jurisdiction. Cole v. Pennsylvania Dep't of Env't Prot., No. 1577 C.D. 2019, 2021 WL 2420667 (Pa. Cmwlth. 2021). In doing so, the Court held that Section 717r(d)(1) of the federal Natural Gas Act, which provides that federal courts have exclusive jurisdiction over “civil actions” for review of an approval or denial of a permit or approval required by federal law, does not preclude state administrative agency review of state permitting decisions. Accordingly, the EHB’s review of the matter was not preempted.

In April 2019, PADEP approved a plan for construction of a natural gas compressor station, a minor source under the Clean Air Act, as part of Adelphia Gateway, LLC’s (Adelphia) Gateway Project, an interstate natural gas pipeline. Petitioners, a group of concerned citizens, filed an appeal of the approval with the EHB in a timely manner. Adelphia responded with a motion to dismiss, arguing that the approval was a federally delegated permitting decision under the authority of the Federal Energy Regulatory Commission (FERC) and the Natural Gas Act. Thus, Adelphia argued, the Third Circuit Court was the only proper venue for appeal.  The EHB agreed with Adelphia, relying on a series of Third Circuit decisions applying Section 717r(d)(1). The petitioners then appealed to the Commonwealth Court.

On appeal, the petitioners promoted three major arguments in favor of EHB jurisdiction: that a statutory appeal to the EHB is not a “civil action,” that the approval did not implicate federal law, namely the Clean Air Act, and finally that no federal law required Adelphia to seek plan approval for this matter. PADEP largely relied on a line of cases known as the Riverkeeper cases, which generally upheld the jurisdiction of federal courts to hear appeals of pipeline permitting decisions, to counter these arguments. The Commonwealth Court addressed these questions of statutory interpretation and federal law preemption of state law in its analysis.

The Commonwealth Court reversed the EHB’s order on the issue of whether the appeal to the EHB was a “civil action,” and remanded the case back to the EHB for further proceedings. First, it held that Section 717r(d)(1) unambiguously grants federal circuit courts of appeals original and exclusive jurisdiction over “any civil action” reviewing state permitting decisions that fall within the scope of the Natural Gas Act, but that this does not include administrative agency review, which was the matter at issue. The Court came to this conclusion through an analysis of the statute’s language and Pennsylvania legal precedent. As “civil action” is left undefined in the statute, it is customary under federal law to use the term’s ordinary meaning. See Taniguchi v. Kan Pac. Saipan, Ltd., 566 U.S. 560, 566 (2012). “Civil action” refers only to “civil cases brought in courts of law or equity.” Twp. of Bordentown, New Jersey v. Fed. Energy Regulatory Comm'n, 903 F.3d at 267 (3d Cir. 2018). It does not refer to proceedings before administrative agencies. East v. W.C.A.B., 574 Pa. 16, 828 A.2d at 1020 (Pa. 2003). The EHB has acted as a quasi-judicial body independent of the DEP since 1988, offering a method for petitioners to seek relief from department actions in compliance with the Administrative Agency Law (AAL). As a creature of statute, it is appropriately categorized as an administrative agency. Therefore, the petitioners' appeal before the EHB was not a civil action as described in the statute.

Next, the Court engaged in an analysis of the Riverkeeper cases which the respondents contended supported their position that the Third Circuit had original and exclusive jurisdiction of appeals of Pennsylvania permitting decisions related to interstate pipelines. In Riverkeeper I, the appeal was initially lodged in the Third Circuit and the EHB’s jurisdiction was not invoked. As a result, the Court held that the matter was unequivocally a civil action as described in the federal statute. Riverkeeper II was, according to the court, similarly distinct. There, the Third Circuit found that DEP approval decisions are final subject to EHB review. Adding further context to this decision in Riverkeeper III, the Third Circuit held that Section 717r(d)(1) extends only to final state actions and that DEP decisions were appropriately considered such actions. While the Commonwealth Court did not disagree with any of these holdings, it dismissed them as distinct issues as EHB jurisdiction was not implicated.

The Court found the Third Circuit’s decisions in Bordentown and Riverkeeper III with regard to jurisdiction more persuasive. Bordentown characterized the Riverkeeper III holding as inconsequential to the availability of administrative review by the EHB. Rejecting the notion that Section 717r(d)(1) removed states’ ability to review department issuances, the Court emphasized textual analysis of the statute and legal precedent. Federal preemption of state law is not generally presumed. A statute will either expressly address preemption through its language, or it can be implied in instances where the federal scheme “occupies the entire legislative field.” Dooner v. DiDonato, 971 A.2d at 1193 (Pa. 2009). The Court found that neither is the case here. While Section 717r(d)(1) expressly gives the Third Circuit original and exclusive jurisdiction over certain matters, it does not exclude the opportunity for petitioners to bring their appeal before the EHB in accordance with the AAL. Accordingly, the Court held that the petitioners’ appeal with the EHB was proper even though they could have originally filed to the Third Circuit if they desired.

In a concurrence, Judge J. Andrew Crompton agreed with the Court’s decision to reverse the EHB’s order but warned that the issue of proper jurisdiction for appeals of permitting decisions remains ambiguous. The EHB has indicated their position that the Third Circuit has original and exclusive jurisdiction over such appeals, leaving petitioners with an unclear legal path. The Third Circuit has addressed this issue indirectly through an array of cases. However, Judge Crompton expects litigation on this matter to continue until the circuit court makes a final decision on the specific jurisdictional question.

Share | Email| Print| Comments|  Topics: Administrative Appeals, Administrative Hearing, Air, Citizen Suit, Clean Air Act, EHB, Federal Energy Regulatory Commission, FERC, Hearing Board, Natural Gas Act, Oil and Gas, Pennsylvania Department of Environmental Protection, Permits, Pipelines, Preemption, Subject Matter Jurisdiction