221 Cal. App. 4th 1436
Cal. Ct. App.2013Background
- Shell Pipeline and Shell Trading own the SJV Pipeline; the pipeline runs 265 miles from Kern County to the San Francisco Bay Area and includes tanks, racks, and other facilities.
- Chevron, Tesoro, and Valero (shippers) paid to transport crude via the SJV Pipeline and sought refunds for alleged overcharges after April 1, 2005.
- Chevron challenged whether the SJV Pipeline is a public utility subject to PUC regulation and whether Shell affiliates’ buy-sell arrangements circumvented regulation.
- In 2007 the PUC issued Decision 07-07-040 finding the SJV Pipeline had been dedicated to public use but did not address dedication on an asset-by-asset basis, and did not specifically mention ancillary assets like storage tanks and truck racks.
- Chevron, Tesoro, and Valero filed subsequent complaints in 2008-2009 seeking refunds and tariffs; Pipeline Company sought to transfer assets and define which ancillary assets were included in the public utility.
- In 2011-2012 the Commission reaffirmed that ancillary assets were part of the public utility; Decision 12-02-038 held that the dedication issue was resolved in 07-07-040 and thus covered the tanks and racks.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did the Commission properly determine the scope of the 2007 dedication decision as to ancillary assets? | Pipeline Company contends the 2007 decision did not address asset-by-asset dedication. | Commission contends the 2007 decision covered the ancillary assets by scope, not requiring asset-by-asset findings. | Yes; scope was properly determined, not a misapplication of 1705. |
| Was the storage tanks and truck racks properly treated as part of the public utility? | Petitioners argue there was no dedicated public-use finding for these assets. | Commission interpretatively included tanks and racks within the general dedication of the pipeline. | Yes; ancillary assets were properly within the dedication scope. |
| Did the Commission err in shifting burden of proof regarding dedication to the petitioners? | Pipeline asserts improper burden shifting after finding dedicated scope. | Burden-shifting was appropriate once dedication was found to cover the assets. | No; burden shifting was proper given the dedication finding. |
| Is asset-by-asset dedication required for ancillary assets when a general dedication exists? | Petitioners urge asset-by-asset findings for tanks and racks. | Greyhound-like principles allow interpreting general dedication by statutory scope. | No; general dedication validity can resolve scope without asset-by-asset findings. |
Key Cases Cited
- Greyhound Lines, Inc. v. Public Utilities Comm., 410 (1968) (Cal. 1968) (presumption of validity of agency decisions; not a rule requiring asset-by-asset dedication findings)
- Ponderosa Telephone Co. v. Public Utilities Com., 197 Cal.App.4th 48 (Cal. App. 2011) (discretionary review; exhaust administrative remedies; scope of review)
- San Diego Gas & Electric Co. v. Superior Court, 13 Cal.4th 893 (Cal. 1996) (broad scope of the Public Utilities Commission; governing principles)