Lorenzen v. West Cornwall Township Zoning Hearing Board and Sunoco Pipeline, L.P.

          Argued: September 10, 2019

          BEFORE: HONORABLE P. KEVIN BROBSON, JUDGE HONORABLE MICHAEL H. WOJCIK, JUDGE HONORABLE BONNIE BRIGANCE LEADBETTER, SENIOR JUDGE.

          OPINION

          P. KEVIN BROBSON, JUDGE.

         Doug Lorenzen, Pamela Bishop, Phillip J. Stober, and Concerned Citizens of Lebanon County (Association) (collectively, Appellants) appeal from an order of the Court of Common Pleas of Lebanon County (common pleas), which affirmed a decision of the West Cornwall Township (Township) Zoning Hearing Board (Board). We now reverse.

         I. BACKGROUND

         As background, in 2012, Sunoco Pipeline, LP (Sunoco) announced its intent to develop the Mariner East Project (ME Project). The ME Project is "an integrated pipeline system for transporting petroleum products and natural gas liquids (NGLs) such as propane, ethane, and butane from the Marcellus and Utica Shales in Pennsylvania, West Virginia, and Ohio to the Marcus Hook Industrial Complex (MHIC) and points in between." Del. Riverkeeper Network v. Sunoco Pipeline, L.P., 179 A.3d 670, 674 (Pa. Cmwlth.) (en banc), appeal denied, 192 A.3d 1106 (Pa. 2018). The ME Project consists of two main phases: (1) Mariner East 1 pipeline (ME1), which utilizes Sunoco's existing pipeline infrastructure along with an extension; and (2) Mariner East 2 pipeline (ME2), which requires construction of a new 351-mile pipeline, largely in the existing right-of-way of ME1. Id.

         On March 21, 2014, Sunoco filed 31 petitions with the Pennsylvania Public Utility Commission (PUC), naming 31 municipalities, including the Township. Through the petitions, filed pursuant to Section 619 of the Pennsylvania Municipalities Planning Code (MPC), Act of July 31, 1968, P.L. 805, as amended, 53 P.S. § 10619, Sunoco sought an exemption from local zoning requirements for various buildings that Sunoco had constructed or sought to construct in connection with its repurposing of ME1 to carry NGLs.^[1] In the petitions, Sunoco represented that its ME1 would offer interstate service. During the course of proceedings, the PUC indicated that there was a presumption that Sunoco was a public utility based on prior filings. The PUC directed the Office of Administrative Law Judges to hold hearings as required by Section 619 of the MPC, so that the PUC could make a determination as to whether Sunoco was exempt from local zoning requirements with regard to ME1. On March 5, 2015, Sunoco withdrew all 31 petitions, stating that it no longer needed PUC exemption from zoning requirements because it either had obtained local zoning approval through the municipalities or would obtain such approval, thus rendering the petitions moot. As a result of Sunoco's withdrawal of the petitions, the PUC never issued a final decision on whether Sunoco is a public utility corporation with regard to ME1 and whether the repurposing of ME1 for transporting NGLs constituted a public utility service.

         On May 7, 2015, subsequent to Sunoco's withdrawal of the permits before the PUC, the Lebanon County Planning Department (Planning Department), as the zoning officer of the Township, issued Sunoco a zoning permit (Permit) for "accessory support and maintenance structures" (Structures) for a pump station (Pump Station) and power distribution center (Power Distribution Center) located at Route 322, 370 Horseshoe Pike, West Cornwall Township, Lebanon, Pennsylvania (Site), and used by Sunoco as part of ME1. The Site contains 14.14 acres and includes a segment of ME1. The Site is located in the Township's M-Manufacturing District ("M District"), which permits manufacturing and processing only by approval for conditional use. The Permit allows the Structures to be erected on the Site, described in the Permit as "unmanned accessory support and maintenance structures, under Section 27-1722" of the Township's zoning ordinance (Zoning Ordinance), which the Permit refers to as a "Public Utilities Exemption." (Reproduced Record (R.R.) at 31a.) Basically, Sunoco built the Structures around the already-existing Pump Station and Power Distribution Center to protect its equipment and decrease noise. The Planning Department purportedly issued the Permit pursuant to Section 27-1722 of the Zoning Ordinance. The Planning Department did so without requiring Sunoco to submit an application for conditional use approval and without a hearing or any other municipal review. Although the Permit sought to "erect" the Structures, Sunoco had actually constructed the Structures eight months prior to the issuance of the Permit.

         Appellants appealed the Permit on June 5, 2015, to the Board, disputing that Sunoco had established that it was a public utility entitled to an exemption and challenging the issuance of the Permit without a review of the environmental, health, and safety impacts of the Permit as allegedly required by Section 27-1503 of the Zoning Ordinance and Article I, Section 27 of the Pennsylvania Constitution, known as the Environmental Rights Amendment. The Board conducted a hearing on September 15, 2015, at which Sunoco asserted that Appellants did not have standing. As a result, the Board limited the hearing to the issue of standing. Thereafter, the Board dismissed the appeal, having determined that Sunoco is a public utility for purposes of Section 27-1722 of the Zoning Ordinance, thereby entitling it to an exemption from zoning requirements, and that Appellants lacked standing.

         Appellants appealed to common pleas, and Sunoco intervened. Appellants argued that the Board incorrectly based its determination that Sunoco is a public utility entitled to an exemption under Section 27-1722 of the Zoning Ordinance on the PUC's general recognition of Sunoco as a public utility through the PUC's issuance of a certificate of public convenience. Appellants alleged that, as a result of that premature determination, the Board wrongly denied Appellants standing. Appellants contend that, instead, the Board should have permitted them to present evidence that Sunoco was not entitled to the exemption. By order dated November 21, 2016, common pleas reversed the Board's decision and remanded the matter for further proceedings. Common pleas directed the Board to take evidence of and consider the factors necessary to establish whether Sunoco is a public utility entitled to an exemption under Section 27-1722 of the Zoning Ordinance as set forth in Crown Communications v. Zoning Hearing Board of the Borough of Glenfield, 705 A.2d 427 (Pa. 1997).^[2] Lorenzen v. W. Cornwall Twp. Zoning Hearing Bd., Lebanon County Legal J. (C.P. Pa., No. 2015-02106, filed November 21, 2016)^[3](Lorenzen I); (Appellant's Br. at Exhibit 2.)

         On remand, the Board conducted hearings and issued a decision, dated August 23, 2017. The Board concluded: (1) for purposes of ME1, Sunoco is a public utility under Section 27-1722 of the Zoning Ordinance, thereby exempting it from Township zoning requirements for accessory support and maintenance structures and buildings not requiring human occupancy; (2) the Planning Department properly issued the Permit; and (3) Appellants lacked standing in the matter. Appellants appealed to common pleas, and common pleas affirmed.

         II. ISSUES ON APPEAL

         On appeal to this Court, ^[4] Appellants maintain that the Board erred in concluding that Sunoco's business activity involving the repurposing of ME1 to convey NGLs qualified Sunoco for exemption under Section 27-1722 of the Zoning Ordinance. More specifically, Appellants argue that the Board erred as a matter of law or abused its discretion because it based its decision under the Zoning Ordinance on the misconceived notion that Sunoco's use of ME1 necessarily meets the test for a public utility given that Sunoco is a public utility under the Public Utility Code.^[5]Rather, Appellants contend that the Board was required to apply the test for a public utility under Crown Communications and that Sunoco's use of ME1 does not meet that test because 90% of the capacity of ME1 is reserved for interstate transportation of NGLs by three shippers subject to privately negotiated and unknown rates and, therefore, does not serve the public or charge rates subject to review by a regulatory body. Appellants argue that, because Sunoco does not meet the test under Crown Communications, the Board erred by not requiring Sunoco to apply for and receive conditional use approval for its accessory support and maintenance structures and by not requiring the Planning Department to consider the environmental impacts of the Permit. Appellants also argue that the Board erred in concluding that the Planning Department properly issued the permit where the local municipality never inquired into the environmental impacts of the Permit as required by Article I, Section 27 of the Pennsylvania Constitution, often referred to as the Environmental Rights Amendment. Finally, Appellants argue that the Board erred in concluding that they lacked standing; they maintain that they have standing based on what they characterize as the dangerous use of ME1 to transport highly volatile NGLs as it relates to their specific properties.

         Upon review of the parties' briefs, the Court directed the parties to file supplemental briefs, further addressing the following two issues:

1. Whether Section 27-1722 of the Zoning Ordinance provides for an independent "public utility exemption" from the Zoning Ordinance, as presented by the parties, or, instead, should be read as limiting (or prescribing), "[f]or purposes of this Chapter," the extent of "public utility exemptions," such as the exemption set forth in Section 619 of the MPC?

2. Whether the Appellants' challenge in this matter encompasses the equipment housed in the structures on the property, and, if so, how the presence of that equipment violates, if at all, the Zoning Ordinance?

         III. DISCUSSION

         At the outset, we note that the issues on appeal do not affect the legality of Sunoco's general operation of ME1 at this Site. Rather, the issues relate only to the accessory support and maintenance structures erected on the Site by Sunoco to protect equipment and reduce noise.

         A. ...