PHILADELPHIA – The U.S. Court of Appeals for the Third Circuit has upheld a lower federal court decision which would prevent a natural gas company from receiving another bite at the apple in its battle against the Pennsylvania Environmental Hearing Board, West Rockhill Township and a group of environmentally-conscious citizens.
Adelphia Gateway, LLC is a natural gas company constructing an interstate natural gas pipeline, in addition to related facilities in Delaware and Pennsylvania. One such facility is the Quakertown Compressor Station, located in West Rockhill Township.
In order to make the project a reality, Adelphia sought to obtain approvals from state and federal regulatory entities. Adelphia applied for these approvals in early 2018 to the Federal Energy Regulatory Commission, as well as the Pennsylvania Department of Environmental Protection.
PADEP issued Adelphia an Air Quality Plan Approval in April 2019 under the Clean Air Act. In December 2019, FERC issued an order formally approving Adelphia’s pipeline project pursuant to its authority under the Natural Gas Act. FERC also issued a “Notice to Proceed” in October 2020, naming the Quakertown Compressor Station as one of the approved facilities for construction.
Several individual citizens and entities opposed Adelphia’s project due to environmental concerns, and appealed both the FERC and PADEP decisions to the EHB. When PADEP extended the expiration date of its Plan Approval, the collective defendants also appealed PADEP’s extension to the EHB.
EHB concurred with Adelphia, and dismissed the appeals – leading the collective defendants to then appeal EHB’s dismissal to the Commonwealth Court of Pennsylvania.
In June 2021, the Commonwealth Court reversed EHB’s dismissal, ruling that the EHB did have jurisdiction over the appeals of the PADEP Plan Approval. In particular, the Commonwealth Court held that a proceeding before the EHB does not constitute a “civil action” under the Natural Gas Act’s judicial review provision, and that the law does not pre-empt EHB’s administrative review of PADEP permitting decisions.
In July 2021, Adelphia filed the instant suit against the collective defendants and added the EHB and four EHB judges as defendants to the complaint, seeking declaratory and permanent injunctive relief to prevent the EHB from maintaining any oversight of the Plan Approval decision.
In response, the collective defendants filed a joint motion to dismiss the complaint, either for lack of subject matter jurisdiction or failure to state a claim.
On Nov. 23, 2021, U.S. District Court for the Middle District of Pennsylvania Judge Christopher C. Conner ruled that the EHB did in fact have proper oversight over the case and a federal court did not.
Citing the Rooker-Feldman doctrine, Conner found that Adelphia was collaterally estopped from litigating these issues once again, after doing so unsuccessfully before the Commonwealth Court.
“A federal district court has no appellate jurisdiction over the final determinations of state courts. Adelphia seeks to re-litigate in this court the issue of EHB jurisdiction over PADEP’s approval of the Quakertown Compressor Station, following the Commonwealth Court’s valid and final judgment on this very same issue. Adelphia is prohibited from doing so under Pennsylvania preclusion law,” Conner said.
Adelphia Appeals Lower Federal Court Decision to Third Circuit
Adelphia appealed Conner’s decision to the Third Circuit on Dec. 22, 2021.
It contended that “issue preclusion is optional and must cede to this dispute’s important issues of federal energy policy that courts must decide” and “cannot be applied because required criteria are unmet.
The Third Circuit issued a memorandum opinion in the matter on March 14. Like Conner, it felt that Adelphia sought to re-litigate issues already decided by the Commonwealth Court and denied the appeal on its merits.
Third Circuit Judge Thomas L. Ambro authored the Court’s memorandum on behalf of himself and colleague judges L. Felipe Restrepo and Julio M. Fuentes.
“It is of no consequence that the question decided by the Commonwealth Court bears on the scope of the federal courts’ original and exclusive jurisdiction because there is no jurisdiction-exception to [Title 28 U.S.C.] Section 1738’s unequivocal mandate. That statute requires us to give full faith and credit to state court proceedings, period. The Commonwealth Court decided that the Board has authority to hear the challenges after interpreting a statute and applying that interpretation to the facts. We are not permitted to disregard that conclusion simply because it relates to our jurisdiction. Thus the District Court had to respect the Commonwealth Court’s interpretation and application of federal law,” Ambro said.
“Of course, what Congress gives it can take away. So if ‘a later statute contains an express or implied partial repeal’ of Section 1738, federal courts may choose not to regard a state court’s resolution of an issue as conclusive. But the Natural Gas Act’s text does not mention, and therefore did not explicitly repeal, Section 1738. To find an implicit repeal, there must be an ‘irreconcilable conflict’ between the Natural Gas Act and Section 1738. The Supreme Court has ‘seldom, if ever,’ found this ‘stringent standard’ met. We do not buck that trend here. Because the Natural Gas Act is not in irreconcilable conflict with giving state court judgments concerning jurisdiction the full faith and credit called for by Section 1738, we hold there was no implied repeal of that statute.”
According to Ambro, the District Court properly “invoked issue preclusion to stop Adelphia from re-litigating the Commonwealth Court’s ruling that the Hearing Board had authority to hear the challenges.”
Ambro added that “because the federal action re-raises the same jurisdictional and pre-emption arguments decided by the Commonwealth Court, we hold that the issues in the two proceedings were identical.”
“Adelphia does not allege, nor could it, that it lacked sufficient incentive or opportunity to litigate its claims before the Commonwealth Court. Rather, it contends pre-emption ‘was not the focus of the state court action and was not the basis of the state court’s decision.’ As an initial matter, we have already observed that the Commonwealth Court rejected the pre-emption argument that Adelphia presented. But even taking as true that the Commonwealth Court was primarily focused with the jurisdictional issue, we note that issue preclusion would still apply. That doctrine precludes re-raising issues that were ‘actually litigated’ and ‘necessary to the original judgment.’ The Commonwealth Court decided the pre-emption issue and it was necessary to its judgment,” Ambro stated.
“Adelphia finally asserts that ‘it is fundamentally unfair for the court below to defer to the very courts expressly prohibited under the [Natural Gas Act] from considering appeals of permit approvals.’ But, as noted above, nothing in the Act stops state courts from determining whether their state’s administrative agencies have the authority to hear challenges to a permit subject to that Act’s provisions. There is nothing unfair in having to litigate this jurisdictional question before a state court of competent jurisdiction. Hence we hold the District Court properly invoked issue preclusion because the Commonwealth Court already decided the issues in a final judgment after giving Adelphia a full and fair opportunity to litigate them.”
Ambro offered that “when a party has its day in state court and loses, it is not permitted a do-over in federal court” and “were it otherwise, state court decisions would lack finality, litigation expenses would balloon, and lower federal courts would sit as quasi-courts of appeals over state courts.”
“That would be contrary to Section 1738’s mandate. So the District Court was correct to decline Adelphia’s invitation to re-litigate questions already decided by the Commonwealth Court,” Ambro concluded.
U.S. Court of Appeals for the Third Circuit case 21-3356
U.S. District Court for the Middle District of Pennsylvania case 1:21-cv-01241
From the Pennsylvania Record: Reach Courts Reporter Nicholas Malfitano at nick.malfitano@therecordinc.com