Tenneco Inc. v. Public Service Commission of West Virginia

489 F.2d 334
Court of Appeals for the Fourth Circuit·Decided December 19, 1973·No. No. 73-1294·Published·Cited by 3 cases

Opinion

BUTZNER, Circuit Judge:

This appeal raises the narrow issue of whether the Natural Gas Pipeline Safety Act of 1968 1 has preempted the field of safety regulation of interstate gas pipelines to the extent that a state, which has qualified as an agent of the Department of Transportation, may not assess fees against the interstate lines to help defray the cost of administering the pipeline safety program. The district judge entered summary judgment upholding the imposition of a state license fee on interstate pipelines crossing West Virginia. Tenneeo, Inc. v. Public Service Comm, of West Virginia, 352 F. Supp. 719 (S.D.W.Va.1973). We affirm.

There is no dispute about the facts. Tenneeo, Inc., and Texas Eastern Transmission Corp. are engaged in the interstate transportation of natural gas by pipeline through West Virginia. Neither company conducts intrastate business there. Acting under authority of state law, the West Virginia Public Service Commission assessed special license fees in the amount of $2,375.33 and $1,077.44, respectively, against the companies based on the length of their adjusted interstate pipeline mileage.2 The fees, together with those collected [336] from other interstate and intrastate pipeline companies, were levied for the purpose of paying the expenses of the Commission.3 On appeal, the companies make no contention that the fees unconstitutionally burden interstate commerce or that they are disproportionate to the state’s share of the cost of conducting safety surveillance of their interstate pipelines. Instead, relying on the fact that their transmission facilities are subject to the jurisdiction of the Federal Power Commission, and not to the West Virginia Public Service Commission, the companies contend that the assessments are invalid because the Natural Gas Pipeline Safety Act of 1968 has preempted the field of pipeline safety with respect to interstate transmission facilities.

The Natural Gas Pipeline Safety Act of 1968 directed the Secretary of Transportation to establish minimum federal safety standards for the design, installation, inspection, testing, construction, extension, operation, replacement, and maintenance of pipeline facilities used for the transportation of gas. The Act’s text,4 its legislative history,5 *administration implementation,6 and judicial interpretation,7 attest to federal preemption of the field of safety with respect to the establishment and enforcement of standards regulating the interstate transmission of gas by pipeline. The constitutional basis of preemption, in this instance, is the commerce clause,8 and the supremacy clause.9 In its brief, the Public Service Commission recognizes the restrictions which' the Act imposes, and we perceive no intention on the part of the Commission to infringe the federal government’s exclusive authority to prescribe the standards necessary for the safe interstate transmission of gas.10 [337] But federal preemption of the major aspects of interstate gas pipeline safety-does not settle the controversy over the power of West Virginia to levy its statutory fee on the pipelines. Preemption of all phases of interstate gas pipeline safety cannot be inferred from the fact that Congress has occupied a part of the field. Huron Portland Cement Co. v. Detroit, 362 U.S. 440, 443, 80 S.Ct. 813, 4 L.Ed.2d 852 (1960). Federal regulation of an interstate carrier does not preclude state legislation affecting the same carrier unless (1) “the nature of the regulated subject matter permits no other conclusion,” or (2) “the Congress has unmistakably so ordained.” Florida Avocado Growers v. Paul, 373 U.S. 132, 142, 83 S.Ct. 1210, 1217, 10 L.Ed.2d 248 (1963).

The first test of preemption— whether the nature of the regulated subject matter permits no other conclusion but preemption — depends primarily on whether the state law under scrutiny obstructs the Congressional objectives. See Hines v. Davidowitz, 312 U.S. 52, 67, 61 S.Ct. 399, 85 L.Ed. 581 (1941). The facts of this case demonstrate that West Virginia’s pipeline assessment law fosters state-federal cooperation. Confessing to a lack of staff,11 the federal government invited the states to act as agents of the Secretary of Transportation for the purpose of maintaining surveillance over the interstate pipelines, to assure compliance with federal regulations.12 More than a score of states, including West Virginia, accepted this responsibility.13 The complementary roles of the state and federal governments under the Act provide an opportunity for partnership that has been described as “unprecedented in federal utility regulation.” 14 Thus, it is apparent that, instead of preempting every feature of interstate gas pipeline safety, the federal government has invited the states to participate in the program by voluntarily undertaking the indispensable task of inspection. The states, of course, must obtain funds to pay for this work. The West Virginia legislature chose as a matter of state policy to defray her costs by imposing license fees measured by adjusted pipeline mileage.15

[338] This record contains no proof that West Virginia’s levy unduly burdens interstate commerce, that it is discriminatory, that it is disproportionate to the state’s cost of participating in the safety program, or that it in any way prevents the companies from complying with the 1968 Act. Indeed, it is undisputed that the fees pay part of the cost of the surveillance that is designed to promote compliance with the federal standards. Thus, West Virginia’s method of financing its participation in the gas safety program does not obstruct or impair accomplishment of the congressional objective embodied in the Act — the safe interstate transmission of gas. We conclude, therefore, that West Virginia’s license fees are not invalidated by the first test of preemption.

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Tenneco Inc. v. Public Service Commission of West Virginia, 489 F.2d 334 (4th Cir. 1973).

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