San Pablo Bay Pipeline (“SPBP II”)

243 Cal. App. 4th 295 2015 Cal. App. LEXIS 1150 (December 23, 2015)

The Fifth Appellate District affirmed a Commission decision ordering a pipeline company to pay reparations to a number of shippers of crude oil.  One of the shippers (Chevron) filed a complaint in 2005 and another in 2008 (after the Commission had closed the 2005 case without ordering reparations).  Another shipper (Tesoro) intervened in the Chevron case in 2005 and filed its own complaint in 2009.  A third shipper (Valero) filed a complaint in 2009.  Not surprisingly, the Court concluded that nothing in law barred the Commission from phasing the proceeding before it.  The case, however, turned on the Court’s holding that the Commission was vested with the authority to toll the two year statute of limitations set forth in Section 735, the applicable statute of limitations, during the initial (jurisdictional) phase of the proceeding.  The net effect was that the award of reparations to all three complainants was calculated from mid-2005 forward, without regard to when any specific complaint was filed.  The Court, citing Greyhound (Para.71) deferred to the Commission’s construction of Section 735 and opened its analysis by (again citing Greyhound) paying homage to “the well-established principle that there is a strong presumption of validity of the Commission’s decisions.”  SPBP II adds to the growing body of 21st century case law displaying a broad judicial deference to the Commission (See Paras. 7, 8 and 11, infra.)  As noted in Paras. 5, 7 and 11, infra, the jurisprudence underlying that deference is almost 50 years old and predates the major reform of appellate review enacted in 1998 (SB779).  One might question whether that level of deference actually survived the 1998 legislation.  The California Supreme Court has not addressed the question.  The Court of Appeal, however, has indicated that it regards the notion that Commission decisions are presumptively valid as alive and well.

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