IN THE UNITED STATES DISTRICT COURT FOR THE ......2015/07/31 · See Exhibit 1 (Letter from EMPCo to U.S. EPA dated July 1, 2015). 2. Relevant History of Lake Maumelle. CAW’s driving

IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF ARKANSAS

WESTERN DIVISION UNITED STATES OF AMERICA and STATE OF ARKANSAS PLAINTIFFS VS. NO. 4:13-CV-00355 KGB EXXONMOBIL PIPELINE COMPANY and MOBIL PIPE LINE COMPANY DEFENDANTS

DEFENDANTS’ RESPONSE TO LETTER

FROM CENTRAL ARKANSAS WATER

Defendants ExxonMobil Pipeline Company (“EMPCo”) and Mobil Pipe Line

Company (collectively, “Defendants”), respectfully submit this response to the letter

sent to the Court by nonparty Central Arkansas Water (“CAW”). Dkt. No. 97

(Order of July 17, 2015). Defendants have reviewed the responses submitted by

Plaintiffs (Dkt. Nos. 98-99) and write separately to emphasize several points.

1. Commitment to Safe Operation of the Pegasus Pipeline. Defendants

are committed to the safe operation of all of their pipelines and facilities, including

the Pegasus Pipeline. The northern segment of the Pegasus Pipeline1 will only be

restarted once EMPCo is convinced it is safe to do so and the Pipeline and

Hazardous Materials Safety Administration (“PHMSA”) has given its approval.

Multiple steps are required before restart could occur, including steps noted in the

1 Only the northern segment runs through Arkansas. The southern segment is located exclusively in Texas and was previously restarted in July 2014 with PHMSA approval.

Case 4:13-cv-00355-KGB Document 100 Filed 07/31/15 Page 1 of 6

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proposed Consent Decree, and EMPCo does not anticipate those steps will occur this

year. See Exhibit 1 (Letter from EMPCo to U.S. EPA dated July 1, 2015).

2. Relevant History of Lake Maumelle. CAW’s driving concern is the

proximity of a portion of the pipeline not involved in the Mayflower incident in

Faulkner County to Lake Maumelle in Pulaski County.2 Specifically, CAW seeks

rerouting of the Pegasus Pipeline in the vicinity of Lake Maumelle. See, e.g., CAW

Letter at 3-4. The historical fact is that the construction of Lake Maumelle post-

dated the construction of the Pegasus Pipeline, and a portion of the pipeline was

previously relocated to facilitate construction of the lake. In brief, cooperation

between the Little Rock Municipal Water Works (predecessor to CAW3) and

Magnolia Pipe Line Company (predecessor to Mobil Pipe Line Company) at that

time resulted in an Agreement for the relocation of a portion of the pipeline. See

Exhibit 2 (Agreement dated Dec. 1, 1956). The 1956 Agreement set forth the new

route of the pipeline around the proposed lake, required the water utility to pay the

company $376,000 for the relocation work, and required the utility to grant

easements over any city land crossed by the relocated pipeline. Id. at ¶¶ 2-4 &

Appendices. The current location of the Pegasus Pipeline near Lake Maumelle is

precisely where the water utility specified it.

2 Lake Maumelle is a man-made lake created in the 1950’s by damming the Big Maumelle River. See generally http://www.carkw.com/wp-content/uploads/2011/07/Lake_Maumelle_ Brochure_2010_web.pdf. 3 See http://www.carkw.com/about-us/history/ (“Little Rock Municipal Water Works and its largest wholesale customer, the North Little Rock Water Department, merged July 1, 2001, into Central Arkansas Water”).


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3. PHMSA’s Primary Jurisdiction. CAW’s concerns fall largely within

PHMSA’s jurisdiction. PHMSA has primary jurisdiction here as a matter of law

over most of CAW’s issues—a point argued generally by Defendants in its pending

cross-motion for summary judgment (Dkt. Nos. 78-81). While the proposed Consent

Decree has thus far obviated the need for the Court to resolve that motion, it is

indisputable at a minimum that PHMSA has jurisdiction over the Pegasus Pipeline,

is actively exercising that jurisdiction, and is the expert agency charged by

Congress with pipeline safety regulation and enforcement. CAW misdirects its

complaints about PHMSA and the PHMSA process to this Court. See also Response

by the United States to the CAW letter at 6 (Dkt. No. 99) (“CAW appears to ask the

Court to reject Congress’s delegation of authority for pipeline safety to PHMSA….”).

4. Robust Negotiations. The proposed Consent Decree was negotiated at

arm’s length after more than a year of litigation and months of intensive settlement

negotiations that pressed all parties. Yet the tone of CAW’s letter and underlying

comments suggest a belief that Plaintiffs could have obtained the relief desired by

CAW in settlement. The parties are entitled to their bargain, and judicial

precedent indicates that CAW’s suggested terms may not be imposed upon them in

the negotiated Consent Decree. See, e.g., SEC v. Citigroup Global Markets, Inc., 752

F. 3d 285 (2d Cir. 2014); United States v. Jones & Laughlin Steel Corp., 804 F.2d

348 (6th Cir. 1986).

5. Procedural Deficiencies. CAW’s letter should not be entertained by the

Court. CAW—a sophisticated entity with its own legal department—is not a party


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to this matter, has never sought such status, and now attempts an end-run around

the Federal Rules of Civil Procedure. See, e.g., Citibank Int’l v. Collier-Traino, Inc.,

809 F.2d 1438 (9th Cir. 1987) (motion filed by nonparty should not be considered by

the court). Furthermore, CAW would lack standing to participate as a party,

because it was not injured by the Mayflower incident. See, e.g., Lujan v. Defenders

of Wildlife, 504 U.S. 555 (1992) (to have standing, a party must have suffered a

concrete and particularized injury caused by the alleged violation at issue); cf. Webb

v. Exxon Mobil Corporation, No. 4:13CV00232 BSM (E.D. Ark. July 24, 2015).4

CAW’s concerns lie elsewhere, geographically and temporally.

WHEREFORE, Defendants, who remain committed to the safe operation of

all segments of the Pegasus Pipeline, pray that the Court enter the Consent Decree

in this matter.

SIDLEY AUSTIN LLP 1501 K Street, N.W. Washington, D.C. 20005 (202) 736-8000 Fax: (202) 736-8111 Email: [email protected] By /s/ Timothy K. Webster Timothy K. Webster

Roger R. Martella (Special appearance granted)

4 Webb was a proposed class action brought by easement holders along the Pegasus Pipeline. Judge Brian S. Miller found that the plaintiff easement holders had not suffered “an actual, recoverable injury” as a result of the Mayflower incident. See Dkt. No. 158 (July 24, 2015) (denying motion to alter or amend the judgment); see also Dkt. No. 152 (March 17, 2015).


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Attorneys for Defendants ExxonMobil Pipeline Company and Mobil Pipe Line Company


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CERTIFICATE OF SERVICE

I hereby certify that on July 31, 2015, the foregoing DEFENDANTS’

RESPONSE TO LETTER FROM CENTRAL ARKANSAS WATER was filed and

served using the Court’s CM/ECF system.

/s/ Timothy K. Webster


Exhibit 1

Case 4:13-cv-00355-KGB Document 100-1 Filed 07/31/15 Page 1 of 2


Exhibit 2











Documents

IN THE UNITED STATES DISTRICT COURT FOR THE ......2015/07/31 · See Exhibit 1 (Letter from EMPCo to U.S. EPA dated July 1, 2015). 2. Relevant History of Lake Maumelle. CAW’s driving