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T. W. PHILLIPS GAS AND OIL COMPANY v. PEOPLES NATURAL GAS COMPANY (05/21/85)

decided: May 21, 1985.

T. W. PHILLIPS GAS AND OIL COMPANY, ALLEGHENY LUDLUM STEEL CORPORATION AND THE BOROUGH OF WEST LEECHBURG, APPELLANTS
v.
THE PEOPLES NATURAL GAS COMPANY, APPELLEE



Appeal from the Order of the Court of Common Pleas of Westmoreland County in the case of The Peoples Natural Gas Company v. T. W. Phillips Gas and Oil Co., Allegheny Ludlum Steel Corporation and The Borough of West Leechburg, No. 6229 of 1984.

COUNSEL

H. Woodruff Turner, with him, John Winship Read and Walter A. Bunt, Jr., Kirkpatrick & Lockhart, for appellant, T. W. Phillips Gas and Oil Company and Allegheny Ludlum Steel Corporation.

Joseph W. Ceraso, for appellant, The Borough of West Leechburg.

Dennis J. Lewis, with him, George E. Yokitis, for appellee, The Peoples Natural Gas Company.

Kandace F. Mellilo, for intervenor, Pennsylvania Public Utility Commission.

Judges Craig and Doyle and Senior Judge Kalish, sitting as a panel of three. Opinion by Judge Craig.

Author: Craig

[ 89 Pa. Commw. Page 379]

T. W. Phillips Gas and Oil Company, Allegheny Ludlum Steel Corporation and the Borough of West Leechburg appeal an order of the Court of Common Pleas of Westmoreland County enjoining them from further activities in connection with the construction of a pipeline via public rights-of-way in the Borough of West Leechburg for the transmission of natural gas supplied by Phillips from its main line in Allegheny Township to Allegheny Ludlum's steel plant in the Borough of West Leechburg.

We must determine whether the Court of Common Pleas of Westmoreland County had jurisdiction to address the preliminary injunction and, if so, whether Judge Scherer, as chancellor, properly granted the injunction.

In May, 1984, Allegheny Ludlum contracted with Phillips to supply gas to its West Leechburg steel plant as a cost-saving measure. At that time, Peoples

[ 89 Pa. Commw. Page 380]

Natural Gas Company, the appellee, was supplying gas to the plant at higher rates than those agreed to by Phillips. Allegheny Ludlum obtained an excavating permit from the Borough of West Leechburg and began to construct a pipeline from Phillips' transmission line in adjacent Allegheny Township to the plant in West Leechburg.

In August, 1984, Peoples filed a complaint and request for an interim order with the Public Utility Commission (PUC) alleging that Phillips had no charter to provide gas to the West Leechburg plant, and that Phillips' proposed extension of service was therefore in violation of sections 1101 and 1102 of the Public Utility Code.*fn1 The complaint also alleged that Allegheny Ludlum and the Borough of West Leechburg had conspired with Phillips to extend the unauthorized service into the borough to circumvent the PUC's jurisdiction.

In September, 1984, Peoples filed a complaint in equity in the Court of Common Pleas of Westmoreland County, setting forth essentially those same allegations. The defendants filed preliminary objections challenging the court's subject matter jurisdiction, claiming that primary and exclusive jurisdiction rested with the PUC. The trial court entered an order dismissing those preliminary objections.

Upon motion of Peoples, Judge Scherer entered an order preliminarily enjoining the defendants as follows: (1) enjoining Phillips from supplying gas to Allegheny Ludlum's West Leechburg plant until the PUC's adjudication is complete; (2) enjoining Allegheny Ludlum from further construction of the pipeline; (3) enjoining the Borough of West ...


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