Gulf South Pipeline Company, LP v. Hershey et al

Filing 49

ORDER granting 30 Motion for Partial Summary Judgment. (Signed by Judge Keith P Ellison) Parties notified.(gclair, 4)

United States District Court
Southern District of Texas

ENTERED
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION

January 23, 2017
David J. Bradley, Clerk

GULF SOUTH PIPELINE COMPANY, LP, §
Plaintiff,
VS.

MICHAEL J. HERSHEY, et al,
Defendants.

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CIVIL ACTION NO. 4:16-CV-2459

ORDER GRANTING MOTION FOR PARTIAL SUMMARY JUDGMENT
Plaintiff Gulf South Pipeline Company, LP ("Gulf South"), has filed a Motion for Partial
Summary Judgment confirming Gulf South's right to condemn easements in this action filed
under the Natural Gas Act, 15 U.S.C. §§717 ("NGA''). (Doc. No. 30.) After reviewing the
briefing, the exhibits, and hearing oral argument, the Court concludes that it should grant
Plaintiffs motion for partial summary judgment.
On June 20, 2016, the Federal Energy Regulatory Commission ("FERC") granted Gulf
South a Certificate of Public Convenience and Necessity, allowing Gulf South to construct a 66mile natural gas pipeline through six Texas counties. (Doc. No. 31-7.) In granting this
Certificate, FERC concluded that the pipeline would be used to transport natural gas in interstate
commerce, subject to its jurisdiction. The route for this pipeline includes easements on the
properties of Defendants Atkinson and Hershey. (Doc. No. 30 at 2.) The Hershey Defendants
have withdrawn their objections to Gulf South's motion for summary judgment. But the
Atkinson Defendants object to the motion, arguing that the Court does not have jurisdiction over
the case unless Plaintiff shows that its pipeline project is interstate rather than intrastate. (Doc.
No. 45 at 1.)
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The Atkinson Defendants rest their argument on the Hinshaw Amendment to the Natural
Gas Act (15 U.S.C. §717(c)), which states that some aspects of natural gas regulation are local
concerns, not to be regulated by the Federal Energy Regulatory Commission. Specifically, the
Hinshaw Amendment states that the NGA does not apply to "natural gas received by person[s] ...
from another person within or at the boundary of a State if all the natural gas so received is
ultimately consumed within such State." (15 U.S.C.A. § 717(c) (emphasis added).) The Atkinson

Defendants argue that the gas in Plaintiffs proposed pipeline will be received and consumed
within Texas, and, as such, the pipeline is a local concern not governed by the NGA or federal
law. In tum, Plaintiff asserts that the pipeline is a lateral extension of an interstate pipeline
system, making it a part of the interstate system that falls under federal regulatory authority.
(Doc. No. 30-1 at 10.) More importantly, Plaintiff urges that the Court cannot reach this matter,
as Defendant Atkinson's argument is an impermissible collateral attack on FERC' s jurisdictional
determination. (Doc. No. 48 at 2.) The Court agrees with Plaintiffs argument.
The Natural Gas Act sets forth specific mechanisms for review of a FERC order granting
a Certificate. These procedures require a challenge to be brought first to FERC itself, and then by
direct appeal to a United States Court of Appeals. (15 U.S.C. 717r.) It is undisputed that FERC
determined that Plaintiffs pipeline would be used to transport gas in interstate commerce. (Doc.
No. 30 at 2.) It is also undisputed that the Atkinson Defendants did not appeal FERC's
Certificate in this case. (!d.)
When Congress prescribes specific procedures for review of an administrative order,
courts outside that framework lack jurisdiction to consider challenges to that order. All. Pipeline
L.P. v. 4. 360 Acres of Land, More or Less, in S/2 of Section 29, Twp. 163 N., Range 85 W.,
Renville Cty., N.D., 746 F.3d 362, 365 (8th Cir. 2014) (citing City ofTacoma v. Taxpayers of

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Tacoma, 357 U.S. 320,336, 78 S.Ct. 1209,2 L.Ed.2d 1345 (1958)). The Tenth Circuit Court of
Appeals considered an argument similar to that made by the Atkinson Defendants and concluded
that, beyond the review procedures specified in the Natural Gas Act, it did not have jurisdiction
to question PERC's determination of its own jurisdiction. Williams Nat. Gas Co. v. City of
Oklahoma City, 890 P.2d 255,262 (lOth Cir. 1989) ("a challenger may not collaterally attack the
validity of a prior PERC order in a subsequent proceeding").
Therefore, the Court does not have jurisdiction to question PERC's determination of the
interstate nature ofPlaintiffs proposed pipeline. Accordingly, Plaintiffs motion for summary
judgment is GRANTED.
IT IS SO ORDERED.
SIGNED at Houston, Texas on the 23rd of January, 2017.

KEITH P. ELLISON
UNITED STATES DISTRICT JUDGE

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