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Sunoco’s Mariner East Wins Another Legal Battle in Pennsylvania Court

In another legal victory for Sunoco Logistics Partners LP’s embattled Mariner East 2 (ME2) project, the Pennsylvania Commonwealth Court ruled 5-2 Thursday to uphold the pipeline’s powers of eminent domain as granted under state authority.

The ruling, which upheld a lower court’s decision to overrule challenges to condemnation proceedings in Cumberland County, PA, found that ME2 would provide intrastate service as well as interstate service and thus could be granted eminent domain powers under state law.

The Commonwealth Court -- a statewide intermediate appellate court -- found that the state Public Utility Commission had previously granted ME2 and the project’s earlier phase, Mariner East 1, a certificate of public convenience and authorization to provide intrastate service in 17 Pennsylvania counties.

“Based on our review, we conclude that the record establishes that the expanded service to be provided by the Mariner East 2 pipeline will involve both interstate service (subject to FERC regulation) and intrastate service (subject to PUC regulation) and that common pleas did not err when it overruled” challenges to the pipeline’s eminent domain powers, Judge Renee Cohn Jubelirer wrote on behalf of the majority.

ME2 would involve construction of 350 miles of new pipeline designed to transport ethane, butane and propane from processing and fractionation facilities in Eastern Ohio, Western Pennsylvania and West Virginia to the Marcus Hook Industrial Complex near Philadelphia for storage, processing and distribution to domestic and international markets.

The project, which began development in 2014 and is expected to go into service next year, has faced court challenges in multiple counties filed by landowners along its route in Pennsylvania (see Shale Daily, April 12; March 31; Feb. 26).

“Today, the Pennsylvania Commonwealth Court decisively affirmed a lower court decision that Sunoco Pipeline L.P. (Sunoco Pipeline) is a public utility corporation, as determined by the Pennsylvania Public Utility Commission, and that the company’s Mariner East 2 project provides a public service to Pennsylvanians,” Sunoco said. “...The Court's decision reaffirms every decision by lower courts across Pennsylvania as to Sunoco Pipeline’s status as a public utility corporation. The issue has been previously decided by lower courts stretching from Southwest through South Central to Southeast Pennsylvania.

“Although this case confirmed Sunoco Pipeline's public utility status, we have always worked with landowners to reach mutually acceptable agreements, and pursued legal proceedings only in those instances where an agreement could not be reached. We believe...that landowners receive more favorable terms and compensation as a result of easements that are negotiated rather than litigated.”

In his dissenting opinion, Judge P. Kevin Brobson wrote that ME2 had been modified to include intrastate service after originally being proposed as an interstate-only pipeline project.

He argued that the courts should maintain a high standard for determining whether the project would serve a public purpose for Pennsylvanians enough to justify condemnation powers under state law.

“The trial court grounded its decision below on its factual findings that ME2, as reconfigured...will have the capacity to provide both interstate service regulated by FERC and intrastate service regulated by the PUC,” Brobson wrote. “Those findings alone, however, are inadequate to address the key legal question of whether Sunoco’s ‘true purpose’ behind the takings is to provide intrastate public utility service to Pennsylvanians of the type authorized and in the territories authorized by the PUC. If the courts are to allow these takings to proceed, it must be so, and not some post-hoc, retroactive, or pre-textual justification to secure land by eminent domain.”

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