Adelphia Gateway LLC v. Pennsylvania Environmental Hearing Board

PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
________________
No. 21-3356
________________
ADELPHIA GATEWAY, LLC,
Appellant
v.
PENNSYLVANIA ENVIRONMENTAL HEARING
BOARD; THOMAS W. RENWAND; BERNARD A.
LABUSKES, JR.; MICHELLE A. COLEMAN; STEVEN C.
BECKMAN; WEST ROCKHILL TOWNSHIP; CLIFF
COLE; PAMELA WEST; BRIAN WEIRBACK; KATHY
WEIRBACK; TODD SHELLY; CHRISTINE SHELLY
Appeal from the United States District Court
for the Middle District of Pennsylvania
(D.C. Civil Action No. 1-21-cv-01241)
District Judge: Honorable Christopher C. Conner
Argued September 20, 2022
Before: AMBRO*, RESTREPO, and FUENTES, Circuit
Judges
(Opinion filed: March 14, 2023)
Andrew T. Bockis (Argued)
Saul Ewing Arnstein & Lehr LLP
2 North Second Street
Penn National Insurance Plaza, 7th Floor
Harrisburg, PA 17101
Justin C. Danilewitz
Patrick F. Nugent
Saul Ewing Arnstein & Lehr LLP
1500 Market Street
Centre Square West, 38th Floor
Philadelphia, PA 19102
Blaine R. Feinauer
Elizabeth U. Witmer
Saul Ewing Arnstein & Lehr LLP
1200 Liberty Ridge Drive
Suite 200
Wayne, PA 19087
Counsel for Appellant
*Judge Ambro assumed senior status on February 6, 2023.
2
Michael D. Fiorentino (Argued)
Law Office of Michael D. Fiorentino
42 E. 2nd Street
Suite 200
Media, PA 19063
Counsel for Appellees
OPINION OF THIS COURT
____________
AMBRO, Circuit Judge
Adelphia Gateway, LLC (“Adelphia”) received
approval from the Pennsylvania Department of Environmental
Protection (the “DEP”) to build a natural gas compressor
station in West Rockhill Township, Pennsylvania. This drew
the ire of that town and several of its residents, who filed three
separate challenges before the Pennsylvania Environmental
Hearing Board (the “Hearing Board” or “Board”) attacking the
approval as unlawful. Adelphia moved to dismiss, arguing that
15 U.S.C. § 717r(d)(1) bars the Board from hearing the
appeals. The Board agreed and dismissed. But, on appeal, the
Commonwealth Court of Pennsylvania reversed the dismissal,
holding that the Board had jurisdiction and that hearing the
challenges was not preempted by the Natural Gas Act, 15
U.S.C. § 717 et seq. See Cole v. Pa. Dep’t of Env’t Prot., 257
A.3d 805, 821 (Pa. Commw. Ct. 2021).
Adelphia then rushed to federal court and filed a
complaint that, if successful, would have nullified the
3
Commonwealth Court’s decision. It sought declaratory
judgments that the Board lacked jurisdiction and that its review
was preempted by federal law; it also sought to enjoin the
Board from hearing the challenges. The District Court
dismissed Adelphia’s complaint under the issue preclusion
doctrine.
Because we agree that Adelphia’s challenge
impermissibly seeks to relitigate an issue decided by the
Commonwealth Court, we affirm.
I. Facts
In December 2019, the Federal Energy Regulatory
Commission conditionally approved Adelphia’s application
under § 717f(c) of the Natural Gas Act to acquire, construct,
and operate an interstate natural gas pipeline system. See
Adelphia Gateway, LLC, 169 FERC ¶ 61,220 (2019). As part
of that project, Adelphia sought to construct a compressor
station in West Rockhill Township. To do so, it applied
separately to the DEP to demonstrate that the proposed station
satisfied the requirements of the Federal Clean Air Act, 42
U.S.C. §§ 7401 et seq., and Pennsylvania’s Air Pollution
Control Act, 35 Pa. Stat. §§ 4001 et seq.
The DEP found all statutory requirements met and
granted Adelphia a Plan Approval in April 2019. 1 The Plan
Approval provides that “[a]ny person aggrieved by this action
may appeal the action to the Environmental Hearing Board.”
1
It was effective for eighteen months. In October 2020,
Adelphia obtained an Extension that remained effective until
April 19, 2022.
4
A1466. Three separate appeals (collectively, the
“Challenges”) were subsequently filed with the Board to
challenge the Plan Approval’s issuance. 2 The Challenges
centered on the Department’s alleged failure to consider
certain environmental and zoning regulations.
Adelphia moved to dismiss the Board’s actions for lack
of subject-matter jurisdiction. In its view, 15 U.S.C.
§ 717r(d)(1) grants federal courts of appeals original and
exclusive jurisdiction over challenges to environmental
permits issued by the DEP. That statute provides:
The United States Court of Appeals for the
circuit in which a facility subject to section 717b
of this title or section 717f of this title is proposed
to be constructed, expanded, or operated shall
have original and exclusive jurisdiction over any
civil action for the review of an order or action
of a Federal agency (other than the Commission)
or State administrative agency acting pursuant to
Federal law to issue, condition, or deny any
permit, license, concurrence, or approval . . .
required under Federal law.
2
On May 20, West Rockhill Township appealed the Plan
Approval’s issuance. EHB Docket No. 2019-039-L. On June
3, Appellees Cliff Cole, Pamela West, Brian Weirback, Kathy
Weirback, Todd Shelly, and Christine Shelly also challenged
the Approval. EHB Docket No. 2019-046-L. Two days later,
on June 5, Sheila Vogelsang McCarthy appealed. EHB Docket
No. 2019-049-L. Both West Rockhill Township and
McCarthy’s cases are now closed, and only Appellees’ case
remains open.
5
Adelphia argued that the Board lacked jurisdiction to
hear the Challenges because they called for the “review of an
order or action of a . . . State administrative agency acting
pursuant to Federal law to issue” the Plan Approval. 15 U.S.C.
§ 717r(d)(1). This argument proved convincing to the Board,
which dismissed them for want of jurisdiction.
The Commonwealth Court of Pennsylvania reversed.
See Cole, 257 A.3d at 821. It held the Board had jurisdiction
because its administrative proceedings are not “civil actions”
within the scope of § 717r(d)(1) and that the Natural Gas Act
did not preempt the Board from exercising its jurisdiction.
Thus the Court rejected Adelphia’s argument that we have
original and exclusive jurisdiction over the Challenges. See id.
at 813–16.
Adelphia then undertook two actions to avoid having its
Plan Approval reviewed by the Board. First, it filed suit in the
United States District Court for the Middle District of
Pennsylvania requesting that it enjoin the Board from
reviewing the Challenges. In its complaint, Adelphia argued,
as it did before the Commonwealth Court, that the Board lacks
jurisdiction to hear the Challenges and that the Natural Gas Act
preempts it from doing so.
Second, a day after its rush to federal court, Adelphia
filed a petition for allowance of appeal to the Supreme Court
of Pennsylvania. That petition has been stayed pending the
conclusion of this litigation. See Order Holding Petition for
Allowance of Appeal, Pa. Dep’t of Env’t Prot. v. Cole, No. 312
EAL 2021 (Pa. June 8, 2022).
6
The District Court dismissed Adelphia’s suit with
prejudice. It held that the issue preclusion doctrine bars
Adelphia from bringing a federal action premised on
arguments the Commonwealth Court rejected. See Adelphia
Gateway, LLC v. Pa. Env’t Hearing Bd., No. 1:21-CV-1241,
2021 WL 5494286, at *4–9 (M.D. Pa. Nov. 23, 2021).
Adelphia appealed. 3
II. Analysis
The Commonwealth Court held that the Board had
jurisdiction over the Challenges and that the Natural Gas Act
did not preempt the Board from exercising its jurisdiction. The
District Court recognized that Adelphia’s federal action sought
to revisit both these questions. Rather than doing so, it ruled
the action was barred by issue preclusion and dismissed.
Adelphia protests that ruling on two grounds. First, it
contends that issue preclusion is optional and must cede to this
dispute’s important issues of federal energy policy that courts
must decide. Second, assuming issue preclusion is
theoretically available, Adelphia contends it cannot be applied
because required criteria are unmet.
3
The District Court had jurisdiction under 28 U.S.C. §
1331 because Adelphia’s action arises under federal law. We
have jurisdiction under 28 U.S.C. § 1291. We exercise a fresh
review over a district court’s dismissal under Rule 12(b)(6).
See Max v. Republican Comm. of Lancaster Cnty., 587 F.3d
198, 200 (3d Cir. 2009).
7
We disagree on both fronts. The District Court properly
considered issue preclusion because federal courts are
statutorily required to accord full faith and credit to issues
decided by state courts. And because Adelphia’s suit sought
to relitigate questions answered by the Commonwealth Court,
we affirm.
a. Federal Courts Must Give “Full Faith and
Credit” to State Court Proceedings.
Adelphia contends that the District Court should not
have considered applying issue preclusion in this matter. It
casts the principle as a “prudential doctrine” that the Court
improperly elevated over its “virtually unflagging obligation to
exercise jurisdiction.” Opening Br. at 16, 33. And in
Adelphia’s view, this dispute’s important federal energy
considerations render the case a particularly unsuitable
candidate for issue preclusion.
This argument ignores that federal courts are obliged by
statute to give full faith and credit to state court proceedings.
Title 28 U.S.C. § 1738 provides that “[t]he records and judicial
proceedings of any court of any [] State . . . shall have the same
full faith and credit in every court within the United States . . .
as they have by law or usage in the courts of such State . . .
from which they are taken.” This “requires federal courts to
give the same preclusive effect to state court judgments that
those judgments would be given in the courts of the State from
which the judgments emerged.” Kremer v. Chem. Constr.
Corp., 456 U.S. 461, 466 (1982); see also Allen v. McCurry,
449 U.S. 90, 96 (1980) (same). Here the District Court had to
consider whether the issue in this matter was already decided
by the Commonwealth Court.
8
It is of no consequence that the question decided by the
Commonwealth Court bears on the scope of the federal courts’
original and exclusive jurisdiction because there is no
jurisdiction-exception to § 1738’s unequivocal mandate. That
statute requires us to give full faith and credit to state court
proceedings, period. The Commonwealth Court decided that
the Board has authority to hear the Challenges after
interpreting a statute and applying that interpretation to the
facts. We are not permitted to disregard that conclusion simply
because it relates to our jurisdiction. 4 See Weiner v. Blue Cross
of Md., Inc., 730 F. Supp. 674, 682 (D. Md. 1990) (Niemeyer,
J.) (explaining that “when under a given set of facts jurisdiction
depends on a legal interpretation, a state court has the power,
and when confronted with the issue, the duty, to apply federal
law and determine the issue of preemption. . . . The
determination by the state court on the issue whether it or the
federal court has subject matter jurisdiction will be given res
judicata effect on that issue.”), aff’d sub nom. Weiner v. Blue
Cross & Blue Shield of Md., Inc., 925 F.2d 81 (4th Cir. 1991).
Thus the District Court had to respect the Commonwealth
Court’s interpretation and application of federal law.
4
The question of whether § 717r(d)(1) of the Natural Gas
Act divested the Commonwealth Court of jurisdiction to hear
the issue it ultimately decided—whether the Board’s dismissal
for lack of subject matter jurisdiction was proper—is a separate
issue which we address below. As explained there, the
Commonwealth Court had jurisdiction to review the appeal of
the Board’s dismissal because, among other things, the
Commonwealth Court was not asked to review an order or
action to issue, condition, or deny any permit.
9
Of course, what Congress gives it can take away. So if
“a later statute contains an express or implied partial repeal” of
§ 1738, federal courts may choose not to regard a state court’s
resolution of an issue as conclusive. Kremer, 456 U.S. at 468.
But the Natural Gas Act’s text does not mention, and therefore
did not explicitly repeal, § 1738. To find an implicit repeal,
there must be an “irreconcilable conflict” between the Natural
Gas Act and § 1738. Id. (quoting Radzanower v. Touche Ross
& Co., 426 U.S. 148, 154 (1976)). The Supreme Court has
“seldom, if ever,” found this “stringent standard” met.
Matsushita Elec. Indus. Co. v. Epstein, 516 U.S. 367, 380–81
(1996). We do not buck that trend here. Because the Natural
Gas Act is not in irreconcilable conflict with giving state court
judgments concerning jurisdiction the full faith and credit
called for by § 1738, we hold there was no implied repeal of
that statute.
b. The District Court Properly Invoked Issue
Preclusion.
The District Court invoked issue preclusion to stop
Adelphia from relitigating the Commonwealth Court’s ruling
that the Hearing Board had authority to hear the Challenges.
We look to state law to determine when to apply this doctrine,
see Marrese v. Am. Acad. of Orthopaedic Surgeons, 470 U.S.
373, 381 (1985), and Pennsylvania courts require the party
asserting issue preclusion to establish four elements:
(1) an issue decided in a prior action is identical
to the one presented in a later action; (2) the prior
action resulted in a final judgment on the merits;
(3) the party against whom collateral estoppel is
asserted was a party to the prior action, or is in
10
privity with a party to the prior action; and (4)
the party against whom collateral estoppel is
asserted had a full and fair opportunity to litigate
the issue in the prior action.
Rue v. K-Mart Corp., 713 A.2d 82, 84 (Pa. 1998). 5 In addition,
Pennsylvania courts give preclusive effect only to judgments
from courts of competent jurisdiction. See Commonwealth v.
Reid, 235 A.3d 1124, 1143 n.10 (Pa. 2020).
We begin with ensuring the jurisdictional requirement
is met. The Commonwealth Court is the judicial body that
hears appeals from the Hearing Board, see 42 Pa. Cons. Stat.
§ 763, so it presumptively had jurisdiction to review the appeal
of the dismissal by the Board. But, at oral argument before us,
Adelphia for the first time asserted that § 717r(d)(1) divested
the Commonwealth Court of jurisdiction to review the appeal
of the Board’s dismissal. 6 We disagree.
5
In Pennsylvania, “collateral estoppel” and “issue
preclusion” are the same. See Commonwealth v. Holder, 805
A.2d 499, 502 n.3 (Pa. 2002) (“Collateral estoppel is defined
as ‘issue preclusion’ and it prevents relitigation of particular
issues.”).
6
After holding argument before the Commonwealth
Court, that Court called for supplemental briefing on whether
§ 717r(d)(1) divested it of jurisdiction to hear the appeal.
Adelphia assured the Court that it retained jurisdiction, and it
accepted that position. See Cole, 257 A.3d at 820 n.22 (“[T]he
parties agree that because the limited question on appeal before
this Court—namely, the subject matter jurisdiction of the
[Board]—does not involve a review of the merits of the DEP
plan approval, the Third Circuit’s exclusive jurisdiction under
11
Section 717r(d)(1) did not divest the Commonwealth
Court of jurisdiction because it was not reviewing agency
action under the Natural Gas Act. “Out of respect for state
courts,” we must decline “to construe federal jurisdictional
statutes more expansively than their language, most fairly read,
requires.” Merrill Lynch, Pierce, Fenner & Smith Inc. v.
Manning, 578 U.S. 374, 389 (2016). No fair reading of
§ 717r(d)(1) tells us that it divested the Commonwealth Court
of jurisdiction to review whether the Board’s dismissal for lack
of subject matter jurisdiction was proper. Rather, the statute
grants the United States Courts of Appeals original and
exclusive jurisdiction over civil actions for “review of an order
or action of a Federal agency (other than the Commission) or
State administrative agency acting pursuant to Federal law to
issue, condition, or deny any permit . . . required under Federal
law.” 15 U.S.C. § 717r(d)(1). The Commonwealth Court’s
review of whether the Board had jurisdiction is outside
§ 717r(d)(1)’s purview. We therefore hold the Commonwealth
Section 717r(d)(1) is not implicated. Accepting the parties’
position, we will not dismiss this appeal sua sponte for lack of
jurisdiction.”).
Indeed, in its briefs to us and the District Court,
Adelphia never argued that the Commonwealth Court lacked
jurisdiction to hear the appeal. Although we normally do not
consider arguments not raised in a party’s briefs, we do not
treat this argument as forfeited because jurisdiction is a
threshold issue. See Reid, 235 A.3d at 1143 & n.10 (endorsing
sua sponte analysis of a court’s jurisdiction before giving its
decision preclusive effect).
12
Court had jurisdiction to hear the appeal of the Board’s
dismissal.
We readily conclude the remaining elements of issue
preclusion are met. Pennsylvania courts apply issue preclusion
to “foreclose[] relitigation . . . of an issue of fact or law which
was actually litigated and which was necessary to the original
judgment.” Hebden v. Workmen’s Comp. Appeal Bd., 632
A.2d 1302, 1304 (Pa. 1993) (citation omitted). The
Commonwealth Court held that because § 717r(d)(1) covers
only “civil actions,” the Board has jurisdiction and that its
review of the Plan Approval is not preempted. Cole, 257 A.3d
at 815 (“Petitioners’ appeal to the [Hearing Board] is an
administrative proceeding, distinct from a civil action, and it
lies properly before the [Board] under Pennsylvania law.”); id.
at 820–21 (“There is a strong presumption against federal
preemption of state laws. . . . [Section 717r(d)(1)] does not
preempt the Commonwealth's administrative review process,
which vests within the [Board] the authority to conduct
administrative reviews of DEP permitting decisions.”). So
Adelphia was precluded from relitigating whether § 717r(d)(1)
prohibits the Board from reviewing the Challenges.
Yet Adelphia’s federal complaint tried to do just that. It
sought a declaration that “the Third Circuit has original and
exclusive jurisdiction to hear any appeal of the Plan Approval”
and “that the [Natural Gas Act] preempts any authority or
jurisdiction of the [Board] to take any further action in
connection with the Plan Approval.” A46 ¶¶ 21, 23. The
complaint further requested the District Court to enjoin the
Board from presiding over the Challenges. See A67–72. Thus
Adelphia’s federal action straightforwardly sought to relitigate
issues that the Commonwealth Court had already decided.
13
Adelphia’s attempt to distinguish the question presented
to the District Court from that decided by the Commonwealth
Court rests on an “overly-narrow characterization of the
particular legal questions at issue in the two proceedings.”
Prusky v. ReliaStar Life Ins. Co., 532 F.3d 252, 266 (3d Cir.
2008) (applying Pennsylvania law and holding issue preclusion
appropriate because the issues are identical). None of the
factual differences that Adelphia identifies alter the legal
analysis in any way. 7 Because the federal action reraises the
same jurisdictional and preemption arguments decided by the
Commonwealth Court, we hold that the issues in the two
proceedings were identical.
Turning next to whether the Commonwealth Court
reached a final judgment on the merits, we hold this element
7
For example, Adelphia argues that its federal action’s
motion for injunctive relief requires consideration of
irreparable harm and the public interest. But if there is no
likelihood of success on the merits, the Court need not reach
those issues. See Reilly v. City of Harrisburg, 858 F.3d 173,
180 n.5 (3d Cir. 2017). They do not bear on the merits at all;
thus Adelphia cannot use them to distinguish the issues.
Adelphia also contends that the Commonwealth Court
action concerned only the Plan Approval, but by the time the
federal action arose it had been issued a Plan Approval
Extension. This minor factual difference does not affect the
jurisdiction and preemption questions decided by the state
court. If the Board has jurisdiction because its proceedings are
not civil actions, as the Commonwealth Court held, it does not
matter whether the Board is presiding over a challenge to a
Plan Approval or Plan Approval Extension.
14
satisfied. “A judgment is deemed final for purposes of . . .
collateral estoppel unless or until it is reversed on appeal.”
Shaffer v. Smith, 673 A.2d 872, 874 (Pa. 1996). Adelphia
argues that the Commonwealth Court’s final judgment only
concerned the Plan Approval, not its Extension. This minor
factual difference does not affect whether the Court’s judgment
is final.
Adelphia further contends that applying issue
preclusion was improper because it did not have a full and fair
opportunity to litigate the preemption issue in state court. This
requirement is met if a party could “litigate issues in the
manner available in a court of record” and had sufficient
incentive to do so vigorously in the first proceeding. See Rue,
713 A.2d at 86; Frederick v. Action Tire Co., 744 A.2d 762,
768 ¶ 19 (Pa. Super. Ct. 1999).
Adelphia does not allege, nor could it, that it lacked
sufficient incentive or opportunity to litigate its claims before
the Commonwealth Court. Rather, it contends preemption
“was not the focus of the state court action and was not the
basis of the state court’s decision.” Opening Br. at 39. As an
initial matter, we have already observed that the
Commonwealth Court rejected the preemption argument that
Adelphia presented. But even taking as true that the
Commonwealth Court was primarily focused with the
jurisdictional issue, we note that issue preclusion would still
apply. That doctrine precludes reraising issues that were
“actually litigated” and “necessary to the original judgment.”
Hebden, 632 A.2d at 1304. The Commonwealth Court decided
the preemption issue and it was necessary to its judgment.
15
Adelphia finally asserts that “it is fundamentally unfair
for the court below to defer to the very courts expressly
prohibited under the [Natural Gas Act] from considering
appeals of permit approvals.” Opening Br. at 40. But, as noted
above, nothing in the Act stops state courts from determining
whether their state’s administrative agencies have the authority
to hear challenges to a permit subject to that Act’s provisions.
There is nothing unfair in having to litigate this jurisdictional
question before a state court of competent jurisdiction.
Hence we hold the District Court properly invoked issue
preclusion because the Commonwealth Court already decided
the issues in a final judgment after giving Adelphia a full and
fair opportunity to litigate them.
*****
When a party has its day in state court and loses, it is
not permitted a do-over in federal court. Were it otherwise,
state court decisions would lack finality, litigation expenses
would balloon, and lower federal courts would sit as quasi-
courts of appeals over state courts. That would be contrary to
§ 1738’s mandate. So the District Court was correct to decline
Adelphia’s invitation to relitigate questions already decided by
the Commonwealth Court. We thus affirm.
16