Suing for (Pipeline) Safety

As a Valentine’s Day present to federal regulators, San Francisco City Attorney Dennis Herrera took the unusual step of suing the U.S. Pipeline and Hazardous Materials Safety Administration (PHMSA). The complaint alleges that the PHMSA has “abjectly failed to oversee the [California Public Utilities Commission’s (CPUC’s)] pipeline safety program or to ensure that federal pipeline safety standards are enforced.” The complaint chastises the PHMSA for “shirking that duty for over a decade, if not longer.”

The complaint links these failures by the PHMSA to the natural gas pipeline disasters recently experienced in the Bay Area. These incidents, most infamously, the horrible tragedy in 2010 in San Bruno that killed eight people and injured more than 50 others and destroyed or damaged more than 100 homes, involve pipelines owned and operated by Pacific Gas and Electric Co. (PG&E). The complaint asserts a direct causal nexus: “[b]y abdicating its duties as a regulator and by improperly delegating those duties to gas pipeline operators like PG&E, PHMSA has placed the lives and property of millions of men, women and children—including hundreds of thousands of men, women, and children in San Francisco—at substantial and unnecessary risk.”

The complaint also criticizes what it asserts to be ineffectiveness by the CPUC in regulating PG&E and other operators of natural gas pipelines. Interestingly, it does not name the CPUC as a defendant and actually compliments the CPUC’s “actions to restructure and increase its pipeline safety enforcement resources” as “ostensibly designed to address the concerns raised” by the City of San Francisco.

The complaint expresses the city attorney’s hope that the CPUC “will conduct a thorough and independent examination of its own failures and adopt meaningful reforms to its own practices,” but it also expresses the concern that the CPUC “will revert to its past practice of failing to fulfill its duty to enforce federal pipeline safety standards in compliance with its certification [at the PHMSA].” However, the complaint contrasts the CPUC’s limited actions thus far with what it deems to be the total lack of any response by the PHMSA to similarly correct any of its own failings.

The lawsuit seeks injunctive relief directing the PHMSA to comply with its “duty to oversee certified state authorities and to ensure that federal pipeline safety standards are enforced as required by the [Pipeline Safety] Act.” It further requests that the court enjoin the PHMSA “from improperly delegating their authority to do so to gas pipeline operators like PG&E.” In other words, the San Francisco city attorney is requesting that a federal judge in San Francisco direct PHMSA to “do its job.”

Ensuring Pipeline Safety Is Complicated

To grant the relief the complaint demands, the court must find that the PHMSA has failed to fully discharge its statutory responsibilities. Any such determination is inextricably intertwined with a policy debate encompassing the proper level of safety oversight Congress intended the PHMSA to provide and the appropriate safety standards the PHMSA should enforce to fulfill its mandate to promote pipeline safety.

Resolving these issues is well beyond the proper ambit for a judicial body. Society’s desire for perfection with respect to pipeline safety demands that robust debates assessing such critical safety issues as hydrostatic testing, proper pipe engineering and installation, and future infrastructure investment should be conducted. However, allowing these debates to be conducted by legal adversaries, decided by a single judge, and based on legal precedents will not yield optimal results. Rather, the debates should be conducted by legislators and regulatory agencies that are sensitive to the necessary tradeoffs between ensuring reliable natural gas supply at the lowest possible cost while best ensuring public safety.

Litigation Produces Illusory Benefits

We assume that the San Francisco city attorney sincerely believes that prevailing in the litigation will increase pipeline safety and thus directly benefit his constituents and at least indirectly benefit the greater populace. However, the supposed linkage between a judicial declaration directing the PHMSA to act in accordance with its statutory responsibilities and advancing the objective of increased safety is at best an abstract theory predicated on the dubious assumptions that perfection in promulgating and enforcing regulations can be achieved and that achieving such perfection will guarantee absolute safety.

In any event, while the possible benefits of prevailing in the litigation are amorphous at best, the costs are real and detrimental. The PHMSA’s defense of the City of San Francisco lawsuit will require it to divert already constrained financial and human resources from enforcing safety regulations to producing documents and being deposed.

Instead, lobbying Congress to provide the PHMSA with sufficient funding to accomplish its statutory responsibilities would provide the City of San Francisco with a more positive approach to reach the results that it seeks through this lawsuit. After all, an agency can only take steps to ensure safety if it is correspondingly provided a sufficient budget.

Just as the San Bruno tragedy served to jumpstart the national debate on pipeline safety, the City of San Francisco’s lawsuit may at least serve to ensure that the focus of national lawmakers is not diverted from this very important issue with the passage of time. However, actual tangible benefits derived directly from the lawsuit seem unlikely.

Vidhya Prabhakaran (vidhyaprabhakaran@dwt.com) is an associate in Davis Wright Tremaine’s Energy Practice Group.

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