9th Cir. Rejects San Francisco’s Lawsuit Alleging DOT’s Inadequate Supervision of California PUC Was Illegal

On July 30, 2015, the U.S. Court of Appeals for the Ninth Circuit issued a ruling affirming the district court’s dismissal of an action brought by the City and County of San Francisco against the U.S. Department of Transportation (DOT) and its administering Agency, the  Pipeline & Hazardous Materials Safety Administration (Administration).  The case is City and County of San Francisco v. US Department of Transportation, et al.

The complaint alleged that  in the wake of the disastrous San Bruno, California  natural gas pipeline explosion in 2010, the federal government’s supervision of the intrastate pipeline regulatory program implemented by the California Public Utility Commission (PUC) was woefully inadequate.  Under the Pipeline Safety Act, substantial federal funds are available to states whose state public utilities assume jurisdiction of the intrastate natural gas pipelines with the concurrence and approval of the Agency.  In this case, in 2011, the California PUC received 71% of its funding from the Pipeline and Hazardous Materials Safety Administration.

The City filed this lawsuit pursuant to  the citizen suit provisions of the Pipeline Safety Act (Act) and the Administrative Procedure Act (APA), arguing that the federal government violated the law in failing to provide adequate monitoring and regulation of the California PUC, and sought declaratory and injunctive relief to compel the Administration to comply with its statutory duties.

The Court of Appeals held that the Act’s citizen suit provisions apply only to substantive statutory or regulatory violations, and not to a “mandamus-like” action to compel the Administration to perform non-discretionary regulatory duties.  In addition, it held that the City’s claim is not cognizable under the APA  because the Administration’s routine acceptance of the certification submitted by the California PUC,  annual grant of funds, area decisions presumptively committed to agency discretion, and therefore unreviewable under the APA.