Florida Gas Wins Appeal Over PHMSA Pipeline Rupture Penalties
A federal appeals court vacated PHMSA’s enforcement order against Florida Gas Transmission, ruling the agency acted arbitrarily and failed to provide fair notice in a pipeline rupture case.
(P&GJ) — A federal appeals court has vacated a PHMSA enforcement order against Florida Gas Transmission Co., ruling the agency acted arbitrarily and failed to provide fair notice in connection with a 2020 pipeline rupture investigation.
In a May 20 decision, the U.S. Court of Appeals for the Fifth Circuit overturned PHMSA findings that Florida Gas violated federal regulations tied to maximum allowable operating pressure (MAOP) documentation and pipeline inspection practices following a rupture on the company’s Sanford Lateral pipeline in Florida.
The pipeline, originally built in 1959 using low-frequency electric-resistance-welded steel pipe, ruptured in 2020 along a longitudinal seam. The incident caused a fire that burned more than 51,000 square feet of land but resulted in no injuries. Investigators later determined the rupture was caused by stress-corrosion cracking.
PHMSA alleged Florida Gas failed to maintain adequate MAOP records and improperly relied on inspection tools that were less sensitive to certain seam-related anomalies. The agency imposed civil penalties after concluding the company violated federal pipeline safety regulations.
The Fifth Circuit disagreed, finding PHMSA improperly applied regulations governing MAOP calculations as a recordkeeping requirement. The court said the agency attempted to impose penalties under a rule that did not explicitly address record retention obligations.
The court also rejected PHMSA’s argument that Florida Gas should have used a circumferential magnetic-flux leakage inspection tool during a 2019 inspection. Judges ruled the record did not establish prior seam failures that would have triggered those inspection requirements under federal regulations.
In its conclusion, the court stated that PHMSA’s final order was arbitrary and capricious and failed to provide fair notice to the operator, vacating the agency’s enforcement action in full.