Opinion ID: 495306
Heading Depth: 3
Heading Rank: 3

Heading: The Hazardous Liquid Pipeline Safety Act

Text: 37 The district court held that the Hazardous Liquid Pipeline Safety Act of 1979 (HLPSA), 49 U.S.C.A. Secs. 2001-2014 (Supp.1987), preempts Santa Monica from imposing all safety standards on an intrastate pipeline. Our review of this legal conclusion is de novo. Humboldt Oil Co. v. Exxon Co., 823 F.2d 373, 374 (9th Cir.1987). We determine the scope of federal preemption in an area by applying the traditional two-pronged inquiry: 38 If Congress evidences an intent to occupy a given field, any state law falling within that field is pre-empted. If Congress has not entirely displaced state regulation over the matter in question, state law is still pre-empted to the extent it actually conflicts with federal law, that is, when it is impossible to comply with both state and federal law, or where the state law stands as an obstacle to the accomplishment of the full purposes and objectives of Congress. 39 Granite Rock, 107 S.Ct. at 1425 (quoting Silkwood v. Kerr-McGee Corp., 464 U.S. 238, 248, 104 S.Ct. 615, 621 (1983)) (citations omitted); see also California Fed. Sav. & Loan Ass'n v. Guerra, --- U.S. ----, 107 S.Ct. 683, 689, 93 L.Ed.2d 613 (1987) (preemption where there is (1) express statement, (2) sufficiently comprehensive regulation to infer that Congress left no room for state regulation, or (3) conflict). 40 As noted in our discussion of ripeness, this appeal concerns only the first prong. Hence, as in Granite Rock, we must search for some express statement or other clear indication of congressional intent to preempt Santa Monica's attempt to impose all safety standards. See Granite Rock, 107 S.Ct. at 1426 ([I]t is appropriate to expect an administrative regulation to declare any intention to pre-empt state law with some specificity.); id. at 1432 (applying traditional analysis of search for a congressional expression of intent to preempt). Although the search for evidence of congressional intent to preempt all state regulation can be an imprecise undertaking, we believe that the provisions of the HLPSA do not support the district court's conclusion. 11 41 The HLPSA directs the Secretary of Transportation to establish minimum Federal safety standards for the transportation of hazardous liquids and pipeline facilities. 49 U.S.C. App. Sec. 2002(a) (1982). The statute expressly preempts states from imposing any additional safety standards on interstate pipelines: No State agency may adopt or continue in force any safety standards applicable to interstate pipeline facilities or the transportation of hazardous liquids associated with such facilities. Id. Sec. 2002(d). However, the act expressly permits additional state regulation of intrastate pipelines: Any State agency may adopt additional or more stringent safety standards for intrastate pipeline facilities and the transportation of hazardous liquids associated with such facilities, if such standards are compatible with the Federal standards issued under this chapter. Id. (emphasis added). 42 This distinction between interstate and intrastate pipeline facilities parallels the one made in the Natural Gas Pipeline Safety Act of 1968 (NGPSA), 49 U.S.C.A. Secs. 1671-1686 (1976 & Supp.1987), on which the HLPSA was modeled. See H.R.Rep. No. 97-89 (Pt. I), 97th Cong., 2d Sess. 2, reprinted in 1982 U.S.Code Cong. & Admin.News 4480, 4481; S.Rep. No. 96-182, 96th Cong., 1st Sess. 5, reprinted in 1979 U.S.Code Cong. & Admin.News 1971, 1975, 1989. The House report for the NGPSA explained: 43 The relationship of Federal-State regulatory authority created by this bill differs as between local pipelines and interstate transmission lines. In the latter area, the lines of a single transmission company may traverse a number of States and uniformity of regulation is a desirable objective. For this reason, section 3 provides for a Federal preemption in the case of interstate transmission lines. 44 On the other hand, in the case of local lines ..., States may establish additional or more stringent standards, provided they are not inconsistent with the Federal minimum standards. The committee has provided for this different treatment because each State authority is uniquely equipped to know best the special aspects of local pipeline safety which are particularly applicable to that community. 45 H.R.Rep. No. 1390, 90th Cong., 2d Sess., reprinted in 1968 U.S.Code Cong. & Admin.News 3223, 3241; see id. at 3236. 46 In this case, the district court determined, and the parties agree, that whether the pipeline is interstate or intrastate in this case turns on a disputed issue of fact--the shipper's intent. See Burlington Northern, Inc. v. Weyerhaeuser Co., 719 F.2d 304, 307-10 (9th Cir.1983). Viewing the evidence in the light most favorable to Santa Monica, the district court assumed that the pipeline was intrastate. 12 Thus, Shell would be entitled to summary judgment on the federal preemption issue only if Santa Monica is not [a]ny State agency under 49 U.S.C. App. Sec. 2002(d) (1982). 47 The HLPSA does not define the term State agency. The two letters on which the district court relied 13 argued that State agency in Sec. 2002(d) means state as opposed to municipal or local. This reading has two significant problems. First, the HLPSA itself specifically contemplates that municipalities may be State agencies. See 49 U.S.C.App. Sec. 2012(a)(9)(A), Sec. 2012(a)(10)(A) (1982); cf. id. Sec. 1674(a) (same under the NGPSA). Second, applying the restrictive reading of State agency to the sentence in Sec. 2002(d) concerning interstate pipelines leads to the anomalous conclusion that the HLPSA preempts state-level agencies from regulating interstate pipelines, while saying nothing about municipalities or other local bodies. The only sensible reading of this provision is that the HLPSA preempts regulation of interstate pipelines by all State agencies--including both state and local bodies. This inclusive reading of the term State agencies would similarly apply to the other sentence in Sec. 2002(d) concerning intrastate pipelines. Congress could not have intended the same phrase to have different meanings in two consecutive sentences. Southern Pac. Pipe Lines, Inc. v. United States Dep't of Transp., 796 F.2d 539, 542 (D.C.Cir.1986) (referring to different phrase in Sec. 2002(d)). 48 The district court adopted a different interpretation. It interpreted the term State agency in Sec. 2002(d) to mean [a]ny State agency (including municipalities) to which regulatory authority has been delegated under Sec. 2004(a). Under the HLPSA, the Secretary of Transportation must cede its authority to prescribe and enforce minimum federal standards for intrastate pipelines to a state agency that annually certifies that it has adopted and will enforce those minimum standards. 49 U.S.C.App. Sec. 2004(a) (1982). 14 The district court's reading is also problematic. First, as in the foregoing analysis, this interpretation would result in the odd conclusion that Sec. 2002(d) would preempt certified state agencies (whether state or municipal) from imposing additional standards on interstate pipelines, but would say nothing about uncertified state agencies (whether state or municipal). 49 Second, the bare fact is that Sec. 2002(d) does not limit the term [a]ny State agency to certified state agencies. If Congress had intended to limit that term to state agencies that are certified under Sec. 2004(a), one would have expected it to have done so expressly. Other provisions in the HLPSA expressly limit the term State agencies to agencies that are certified. See, e.g., id. Secs. 2002(h), 2004(d)(1), 2009(a), 2012(a)(9)(A), 2014(b)(1). Other provisions refer to a State agency that is not certified under Sec. 2004(a). See id. Secs. 2004(b), 2004(g), 2012(a)(10)(A). The passages in the legislative history discussing additional, compatible state standards do not restrict the authority to issue such standards only to state agencies that have been certified; the legislative reports acknowledge broadly, and without qualification, that states may impose additional, compatible standards. See H.R.Rep. No. 99-121 (Pt. I), 99th Cong., 2d Sess. 2, reprinted in 1986 U.S.Code Cong. & Admin.News 4978, 4979; H.R.Rep. No. 98-780 (Pt. I), 98th Cong., 2d Sess. 2, reprinted in 1984 U.S.Code Cong. & Admin.News 3147, 3148; H.R.Rep. No. 97-89 (Pt. I), 97th Cong., 2d Sess. 2, reprinted in 1982 U.S.Code Cong. & Admin.News 4480, 4481. We acknowledge that some ambiguous evidence exists that at least would suggest a contrary conclusion. See 49 C.F.R. pt. 195 app. A, at 635 (1986); Southern Pac. Pipe Lines, 796 F.2d at 540 (suggesting in dicta, without discussion, that a state may impose additional safety standards on intrastate lines only after it has been certified under Sec. 2004). For example, the appendix to the hazardous pipeline regulations states: 50 [T]he HLPSA provides for a national hazardous liquid pipeline safety program with nationally uniform minimum standards and with enforcement administered through a Federal-State partnership. The HLPSA leaves to exclusive Federal regulation and enforcement interstate pipeline facilities.... For ... intrastate pipeline facilities, the HLPSA provides that the same Federal regulation and enforcement will apply unless a State certifies that it will assume those responsibilities. A certified State must adopt the same minimal standards but may adopt additional more stringent standards so long as they are compatible. 51 49 C.F.R. pt. 195 app. A, at 635 (1986). One fair reading of this passage is that the Department of Transportation believes that the HLPSA provides for exclusive federal authority over intrastate pipelines, unless a state agency is certified. However, the passage may also reflect nothing more than the uncontested point that the HLPSA provides for exclusive minimum federal regulation and enforcement, unless a state agency is certified. See also 50 Fed.Reg. 39,013 (similar ambiguous passage). We do not believe that this ambiguous passage provides a clear indication of the Department's position on the issue posed in this case. We express no view on the extent to which a contrary interpretation of the HLPSA by the Department would affect our own interpretation of the HLPSA. 52 The Department's stated policy is to allow states to assume as much responsibility for pipeline safety within their states as possible, subject only to the limitations of the HLPSA. 50 Fed.Reg. 39,008, 39,011 (1985); see also 49 U.S.C. App. Sec. 2014(f) (1982) (providing that a violation of any safety standard or practice of any State shall be a violation of federal law only to the extent that such standard or practice is not more stringent than the comparable Federal safety standard); cf. United Gas Pipeline Co. v. Terrebonne Parish Police Jury, 319 F.Supp. 1138, 1139-42 (E.D.La.1970) (holding that the NGPSA preempts state political subdivisions from regulating interstate gas pipelines, but observing in dicta that a local body could impose a compatible safety ordinance on local transmission lines), aff'd per curiam, 445 F.2d 301 (5th Cir.1971). Finally, the HLPSA authorizes the Secretary 53 to consult with, and make recommendations to ... State and local governments ... for the purpose of developing and encouraging activities, including the enactment of legislation, ... to improve State and local pipeline safety programs relating to hazardous liquids. 54 49 U.S.C. App. Sec. 2011(c) (1982) (emphases added). Thus, we see no apparent reason to give the unrestricted term [a]ny State agency in Sec. 2002(d) the restricted meaning of [a]ny certified State agency. 55 The district court's conclusion that the HLPSA preempts municipalities (or other noncertified state agencies) from imposing additional, compatible safety standards on intrastate pipelines does not withstand the type of searching inquiry undertaken in Granite Rock. Accordingly, we hold that the HLPSA does not preempt Santa Monica from imposing all safety standards on intrastate pipelines and vacate the district court's grant of summary judgment in favor of Shell. 15 We note that our holding in no way authorizes Santa Monica to impose any particular safety standard. As in Granite Rock, the plaintiff's challenge to the agency's authority to impose any standards was broad and absolute; our rejection of that challenge is correspondingly narrow. 107 S.Ct. at 1431. We have no occasion to decide, under the second prong of the preemption inquiry, whether the HLPSA would preempt any particular standard on the ground that it conflicts with federal law or is inconsistent with federal objectives.