The Commonwealth Court was required to determine whether or not Sunoco had authority to condemn property in order to advance phase two of its Mariner East pipeline project. Several property owners challenged the condemnations, arguing that Sunoco was not regulated by the Pennsylvania Utility Commission (PUC) and, therefore, could not exercise the eminent domain powers of the Commonwealth. The Commonwealth Court agreed with Sunoco, holding that the company was regulated by PUC for purposes of those portions of the project occurring solely in Pennsylvania.
Sunoco began Phase Two of a pipeline project, Mariner East, in Pennsylvania, which requires the construction of a 351-mile-long pipeline. It will have origin points in Ohio, Pennsylvania, and West Virginia. The PUC issued a certificate of public convenience to Sunoco for the project. Such a certificate grants the holder the power of eminent domain—simply being regulated by the state is not enough. Part of the project will run through Cumberland County. Several landowners filed preliminary objections to Sunoco’s condemnation proceedings in the Cumberland County Court of Common Pleas. The objections were dismissed.
On appeal, the property owners first contended that Sunoco lacked the authority to condemn land. According to them, Sunoco is regulated by the Federal Energy Regulatory Commission (“FERC”), rather than PUC, because the pipeline was interstate. Second, the property owners argued that there was no public need for the pipeline, which would support Sunoco’s exercise of eminent domain. In response, Sunoco argued that it is regulated by FERC for projects that are interstate but also by PUC for intrastate aspects of its projects. According to Sunoco, this gave it the power to condemn.
The Commonwealth Court agreed with Sunoco. First, the court noted that the Mariner East project is not solely interstate. While the pipeline contains access points in Ohio, West Virginia, and Pennsylvania, making it interstate, it also contains various points within Pennsylvania where natural gas is either removed or injected. For those intrastate aspects of the project, Sunoco is regulated by PUC.
Second, the Commonwealth Court rejected the property owners’ arguments that there was a public need for the project. As evidence, the court pointed to the PUC certificate of public convenience. The court stated that this was prima facie evidence that PUC did determine that there was a public need for the project. As a result, the holder of such a certificate is entitled to exercise eminent domain power.
Click here to read: In re Condemnation by Sunoco, No. 1979 C.D. 2015 (Pa. Commw. Ct. July 14, 2016).
Bob Turchick, Law Clerk
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