PHMSA Hails Authority to Inspect NGL Plants

In a press release issued earlier today, the U.S. Department of Transportation’s Pipeline and Hazardous Materials Safety Administration (PHMSA) stated that a recent federal court decision confirms its authority to inspect natural gas liquids (NGL) plants for compliance with the minimum federal safety standards in 49 C.F.R. Part 195.  The decision, issued by the U.S. District Court for the Northern District of Oklahoma, dismissed a lawsuit filed against PHMSA by the operator of an NGL plant.  The district court concluded that the Pipeline Safety Act’s new judicial review provision provides the federal courts of appeal with exclusive jurisdiction over the plaintiff’s claim that PHMSA does not have the authority to inspect the piping and equipment located inside the plant’s boundaries.
In its decision, the district court explained that judicial review of a “regulation or order” issued by PHMSA must be initiated within 89 days by filing a petition for review in the U.S. Court of Appeal for the District of Columbia Circuit or in the court of appeals where a person resides or has its principal place of business.  The district court reasoned that, as with other similar statutes, the term “order” should be interpreted broadly for purposes of the Pipeline Safety Act’s judicial review provision to encompass any PHMSA decision that has sufficient finality, i.e., that imposes an obligation, denies a right, or fixes some legal relationship.  The district court found that the agency action being challenged in the case—PHMSA’s decision to inspect the NGL plant—was an order that could only be reviewed in the federal courts of appeal.  Accordingly, the district court dismissed the matter for lack of subject matter jurisdiction.
It should be noted that on February 25, 2013, the plaintiff company filed a separate petition for review of PHMSA’s action in the U.S. Court of Appeals for the District of Columbia Circuit, and that the D.C. Circuit has yet to issue a ruling on the petition.