{"operation":"document","citation":"CPF 320195016","title":"WOLVERINE PIPELINE CO — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2019-04-11","effective_on":null,"summary":"CLOSED notice of probable violation citing 195.420(a), 195.424(a), 195.446(c)(1), 195.446(c)(2), 195.452(c), 195.452(d), 195.452(h)(4)(i), 195.452(h)(4)(iii), 195.452(l)(1)(ii), 195.579(a), 195.581(a).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-320195016.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-320195016.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-320195016","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/320195016","body":"Notice of Probable Violation involving WOLVERINE PIPELINE CO. PHMSA's enforcement data identifies the cited regulations as 195.420(a),  195.424(a),  195.446(c)(1),  195.446(c)(2),  195.452(c),  195.452(d),  195.452(h)(4)(i),  195.452(h)(4)(iii),  195.452(l)(1)(ii),  195.579(a),  195.581(a). The case was opened on 2019-04-11 and is reported as closed as of 2023-07-12. Proposed civil penalty: $121,800. Assessed civil penalty: $65,800. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n320195016_Closure Letter_02242021.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320195016/320195016_Closure%20Letter_02242021.pdf\n\n320195016_Closure Letter_02242021_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320195016/320195016_Closure%20Letter_02242021_text.pdf\n\n320195016_Closure Letter_07122023_(16-155088S).pdf: https://primis.phmsa.dot.gov/enforcement-documents/320195016/320195016_Closure%20Letter_07122023_(16-155088S).pdf\n\n320195016_Closure Letter_07122023_(16-155088S)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320195016/320195016_Closure%20Letter_07122023_(16-155088S)_text.pdf\n\n320195016_Decision on Petition for Reconsideration_02022021.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320195016/320195016_Decision%20on%20Petition%20for%20Reconsideration_02022021.pdf\n\n320195016_Decision on Petition for Reconsideration_02022021_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320195016/320195016_Decision%20on%20Petition%20for%20Reconsideration_02022021_text.pdf\n\n320195016_Final Order_09032020.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320195016/320195016_Final%20Order_09032020.pdf\n\n320195016_Final Order_09032020_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320195016/320195016_Final%20Order_09032020_text.pdf\n\n320195016_Hearing Scheduled_08202019.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320195016/320195016_Hearing%20Scheduled_08202019.pdf\n\n320195016_Hearing Scheduled_08202019_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320195016/320195016_Hearing%20Scheduled_08202019_text.pdf\n\n320195016_NOPV PCP_04112019.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320195016/320195016_NOPV%20PCP_04112019.pdf\n\n320195016_NOPV PCP_04112019_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320195016/320195016_NOPV%20PCP_04112019_text.pdf\n\n320195016_Op Pet for Review (US Court of Appeals for 6th Circuit)_04292021_(16-155088S).pdf: https://primis.phmsa.dot.gov/enforcement-documents/320195016/320195016_Op%20Pet%20for%20Review%20(US%20Court%20of%20Appeals%20for%206th%20Circuit)_04292021_(16-155088S).pdf\n\n320195016_Operator Petition for Reconsideration_09282020.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320195016/320195016_Operator%20Petition%20for%20Reconsideration_09282020.pdf\n\n320195016_Operator Post-Hearing Submission_01302020.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320195016/320195016_Operator%20Post-Hearing%20Submission_01302020.pdf\n\n320195016_Operator Pre-Hearing Submissions_10252019.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320195016/320195016_Operator%20Pre-Hearing%20Submissions_10252019.pdf\n\n320195016_Operator Response to Notice and Request for Hearing_07222019.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320195016/320195016_Operator%20Response%20to%20Notice%20and%20Request%20for%20Hearing_07222019.pdf\n\n320195016_PHC Hearing Scheduled_08272019.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320195016/320195016_PHC%20Hearing%20Scheduled_08272019.pdf\n\n320195016_US Court of Appeal Decision_06022023_(16-155088S).pdf: https://primis.phmsa.dot.gov/enforcement-documents/320195016/320195016_US%20Court%20of%20Appeal%20Decision_06022023_(16-155088S).pdf\n\n320195016_US Court of Appeal Decision_06022023_(16-155088S).pdf\n\nCase: 21-3405 Document: 32-1 Filed: 06/02/2023 Page: 1 (1 of 24)\nDeborah S. Hunt\nClerk\nUNITED STATES COURT OF APPEALS\nFOR THE SIXTH CIRCUIT\n100 EAST FIFTH STREET, ROOM 540\nPOTTER STEWART U.S. COURTHOUSE\nCINCINNATI, OHIO 45202-3988\nTel. (513) 564-7000\nwww.ca6.uscourts.gov\nFiled: June 02, 2023\nMr. Jeremy C Marwell\nMr. Ronald J. Tenpas\nVinson & Elkins\n2200 Pennsylvania Avenue, N.W., Suite 500 W.\nWashington, DC 20037\nMr. Casen Ross\nMs. Abby Christine Wright\nU.S. Department of Justice\n950 Pennsylvania Avenue, N.W.\nWashington, DC 20530\nRe: Case No. 21-3405, Wolverine Pipe Line Company v. DOT, PHMSA\nOriginating Case No. : 3-2019-5016\nDear Counsel,\nThe court today announced its decision in the above-styled case.\nEnclosed is a copy of the court’s published opinion together with the judgment which has\nbeen entered in conformity with Rule 36, Federal Rules of Appellate Procedure.\nYours very truly,\nDeborah S. Hunt, Clerk\nCathryn Lovely\nDeputy Clerk\nEnclosures\nMandate to issue.\n\n\n\nCase: 21-3405 Document: 32-2 Filed: 06/02/2023 Page: 1 (2 of 24)\nRECOMMENDED FOR PUBLICATION\nPursuant to Sixth Circuit I.O.P. 32.1(b)\nFile Name: 23a0116p.06\nUNITED STATES COURT OF APPEALS\nFOR THE SIXTH CIRCUIT\n┐\nWOLVERINE PIPE LINE COMPANY, │\nPetitioner, │ > No. 21-3405\n│\nv. │ │\nUNITED STATES DEPARTMENT OF TRANSPORTATION, │\nPipeline and Hazardous Materials Safety │\nAdministration, │ │\nRespondent. ┘\nOn Petition for Review from the United States Department of Transportation,\nPipeline and Hazardous Materials Safety Administration.\nNo. 3-2019-5016.\nArgued: March 10, 2022\nDecided and Filed: June 2, 2023\nBefore: BATCHELDER, NALBANDIAN, and READLER, Circuit Judges.\n_________________\nCOUNSEL\nARGUED: Joshua S. Johnson, VINSON & ELKINS, LLP, Washington, D.C., for Petitioner.\nCasen B. Ross, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for\nRespondent. ON BRIEF: Joshua S. Johnson, Ronald J. Tenpas, Jeremy C. Marwell, VINSON\n& ELKINS LLP, Washington, D.C., for Petitioner. Casen B. Ross, Abby C. Wright, UNITED\nSTATES DEPARTMENT OF JUSTICE, Washington, D.C., for Respondent.\nNALBANDIAN, J., delivered the opinion of the court in which READLER, J., joined.\nBATCHELDER, J. (pp. 19–22), delivered a separate dissenting opinion.\n\n\n\nCase: 21-3405 Document: 32-2 Filed: 06/02/2023 Page: 2 (3 of 24)\nNo. 21-3405 Wolverine Pipe Line Co. v. DOT, PHMSA Page 2\n_________________\nOPINION\n_________________\nNALBANDIAN, Circuit Judge. The Pipeline and Hazardous Materials Safety\nAdministration imposed a civil penalty on Wolverine Pipe Line Company for violating two of its\npipeline regulations. Wolverine claims this action was arbitrary and capricious and violated its\ndue process rights. We disagree, and we affirm the agency’s decision and deny Wolverine’s\npetition.\nI.\nA.\nRegulatory Framework. More than two million miles of pipeline crisscross the United\nStates. These pipelines carry oil, gasoline, and natural gas from state to state, powering\nAmerican homes, infrastructure, and industry along the way. But with energy reward comes\nrisk. Pipelines can leak, fail, or spill, hurting the environment or wreaking havoc in populated\nareas. To protect against such risks, Congress enacted a series of pipeline safety laws. See\n49 U.S.C. §§ 60101 et seq. These laws direct the Secretary of Transportation to issue minimum\nsafety standards for pipelines. Id. § 60102(a)(2). The Secretary, in turn, delegates this standard-\nissuing authority to an agency: the Pipeline and Hazardous Materials Safety Administration.\nSee 49 C.F.R. § 1.97. The agency, PHMSA for short, has used this authority to issue a host of\nregulations. Although these regulations are complex, PHMSA’s collaborative approach to\npipeline safety is simple. That is, the regulations grant pipeline operators flexibility on the front\nend, but PHMSA approves operators’ plans and verifies their regulatory compliance on the back\nend.\nExamples illustrate the point. For instance, pipeline operators retain discretion to develop\nand implement their own integrity management programs, or IMPs. These IMPs set plans for\nperiodic pipeline assessments, as well as remedial plans for any pipeline repair issues an\nassessment brings to light. See generally 49 C.F.R. § 195.452(b). What’s more, in many\ninstances, the regulations allow operators to choose the methodology they will use to conduct\n\n\n\nCase: 21-3405 Document: 32-2 Filed: 06/02/2023 Page: 3 (4 of 24)\nNo. 21-3405 Wolverine Pipe Line Co. v. DOT, PHMSA Page 3\nthose assessments. By implementing “performance-based standards,” the regulations permit\noperators to choose an assessment method that best fits the needs of their specific pipelines.\n65 Fed. Reg. 75,382, 75,388 (Dec. 1, 2000). This front-end flexibility requires back-end\nverification. To that end, PHMSA approves operators’ IMPs and reviews operators’ records to\ncheck for regulatory compliance.\nThe regulations here, known as the integrity management regulations, fit this\ncollaborative mold. Taking specific aim at spill prevention in “high consequence areas,” these\nregulations set repair standards for pipelines that transport hazardous liquids. See 49 C.F.R.\n§ 195.452(h); PHMSA, HL IM Performance Measures, https://www.phmsa.dot.gov/pipeline/\nhazardous-liquid-integrity-management/hl-im-performance-measures (last updated Jan. 28,\n2020). The standards start with discovery, which “occurs when an operator has adequate\ninformation to determine that a condition presenting a potential threat to the integrity of the\npipeline exists.” 49 C.F.R. § 195.452(h)(2). Under PHMSA’s timeline, an operator must\ndiscover an integrity issue “promptly, but no later than 180 days” after it receives an assessment\nthat identifies the problem. Id.\nPost-discovery, PHMSA classifies integrity issues on a spectrum. The higher the risk, the\nfaster an operator must act. In this vein, some especially dangerous repair conditions require\nimmediate repair. If an operator identifies an immediate repair condition—like certain metal\nloss, a predicted pipe burst—or, as relevant here, a pipeline dent—it “must temporarily reduce\nthe operating pressure or shut down the pipeline until the operator completes the repair of the[]\ncondition[]” to “maintain safety.” Id. § 195.452(h)(4)(i). Other repairs, like 180-day or 60-day\nconditions, require less urgent treatment. Id. § 195.452(h)(4)(ii)-(iv). Although an operator must\ncomplete the repair within a given timeline, it needn’t reduce pressure or shut down the pipeline.\nWith this background in mind, we turn to Wolverine’s case.\nB.\nFactual Background. Wolverine transports refined petroleum products in its 700-mile\npipeline system. These pipelines run from refineries in the Chicago area to terminals and other\n\n\n\nCase: 21-3405 Document: 32-2 Filed: 06/02/2023 Page: 4 (5 of 24)\nNo. 21-3405 Wolverine Pipe Line Co. v. DOT, PHMSA Page 4\npipelines in and around Indiana and Michigan. Because Wolverine transports refined petroleum,\na hazardous liquid, the company falls into PHMSA’s regulatory orbit.\nA few years ago, PHMSA conducted a routine inspection of Wolverine’s records,\nprocedures, and facilities. That inspection identified several issues. So not long after, PHMSA\nsent Wolverine a Notice of Probable Violation, or a NOPV. The Notice, which acts as an\ninformal charging document for the agency, described nine potential violations of PHMSA’s\nregulations. Only two of those items—“Item 5” and “Item 6”—matter here.\n1. Item 5\nWe begin with the events prompting Item 5. An in-line inspection report (ILI report)\nlanded in the inbox of Daniel Cooper, Wolverine’s only risk management specialist at the time,\non June 10, 2015.1 But Cooper didn’t open the ILI report for another 13 days. Why? On June\n10, Cooper was on vacation. And right after, Wolverine sent him on a work trip. Cooper\nexplained that he “did not have access to email” on vacation. (Hr. Tr., A385.) Later, he noted\nthat he “may have seen the e-mail, but [he] did not open the report until [he] got back from [his]\ntravels.” (Id.) In any event, Cooper eventually returned to the office and read the report on June\n23, 2015. The report described a dent with metal loss on the topside of one of Wolverine’s pipe\nsegments.\nOnce Cooper learned about the dent, he sprang into action. First, he reached out to the\nthird-party vendor who prepared the ILI report to confirm that the pipe showed metal loss. After\nthe vendor confirmed, Cooper convened a June 26, 2015 meeting with his Wolverine coworkers.\nThere, they decided to treat the pipeline “anomaly” as a “possible immediate repair.” (Hr. Ex.\n29, A589.) As Wolverine worked toward a repair, the operator prepared to implement the\ntemporary pressure reduction the regulations require.\n1Pipeline operators typically outsource pipeline assessments to third-party analysts, who prepare ILI\nreports. These reports give operators a segment-by-segment look at their pipes and identify any integrity issues.\n\n\n\nCase: 21-3405 Document: 32-2 Filed: 06/02/2023 Page: 5 (6 of 24)\nNo. 21-3405 Wolverine Pipe Line Co. v. DOT, PHMSA Page 5\nBut this pressure reduction never came to pass. Based on an eight-month-old hydrostatic\ntest,2 Cooper felt “confident” that the dent could withstand any pressure “and was not likely to\nfail in the next few days.”3 (Hr. Tr., A356.) Besides, in its IMP, Wolverine had interpreted the\nimmediate repair regulation to give it a choice: “[C]omplete” the repair within “up to 5 . . .\nworking days” after an operator determines there is “an immediate repair condition” or\n“implement a pressure reduction as necessary.” (Hr. Ex. 28, A585; Hr. Tr., A351–53.) Relying\non its IMP and the recent testing, and using June 26 as the relevant trigger date, Wolverine took\nthe first path. Within four days of the June 26 meeting, Wolverine completed the repair without\nimplementing a temporary pressure reduction.\nDuring the inspection, PHMSA reviewed Wolverine’s response and found it lacking.\nSo Item 5 of the Notice cited Wolverine for a violation of the immediate repair regulation,\n49 C.F.R. § 195.452(h)(4)(i)(C). Wolverine, PHMSA explained, had “received a final ILI report\non June 10, 2015 . . . claimed a discovery date of June 26, 2015 and completed repairs on the\npipeline segment on June 30, 2015.” (NOPV, A71.) But for the time spanning June 10 to June\n30, Wolverine “could not provide a record that a temporary pressure reduction was taken.” (Id.)\nBecause Wolverine “failed to temporarily reduce the operating pressure,” the Notice alleged that\nWolverine “committed [a] probable violation[]” of the regulation and recommended a $36,000\npenalty. (Id. at A68, 71, 74.) And PHMSA’s subsequent Violation Report stated that this\nviolation started on June 10, 2015—the date Cooper received, and failed to open, the ILI report.\n2. Item 6\nNext, we turn to Item 6. This item dealt with 180-day conditions, rather than immediate\nrepair conditions. One of the 180-day conditions occurs when “[a] calculation of the remaining\nstrength of the pipe shows an operating pressure that is less than the current established\n2“A hydrostatic test is performed by subjecting a pipeline to pressures that exceed its maximum operating\npressure, thereby identifying the weakest segments of the pipeline.” ExxonMobil Pipeline Co. v. U.S. Dep’t of\nTransp., 867 F.3d 564, 568 n.1 (5th Cir. 2017).\n3According to Wolverine, the average pressure per square inch at the location of the dent hovered around\n200 pounds. About a year earlier, in October 2014, the pipe had withstood 1,700 pounds of pressure per square inch\nduring hydrostatic testing. In Cooper’s view, if the pipe withstood 1,700 pounds of pressure per square inch a year\nearlier, it could withstand 200 pounds of pressure until Wolverine completed the immediate repair.\n\n\n\nCase: 21-3405 Document: 32-2 Filed: 06/02/2023 Page: 6 (7 of 24)\nNo. 21-3405 Wolverine Pipe Line Co. v. DOT, PHMSA Page 6\nmaximum operating pressure at the location of the anomaly.” 49 C.F.R. § 195.452(h)(4)(iii)(D).\nTo calculate the remaining strength, the regulation allows operators to use “suitable” methods,\nincluding, but not limited to, two methods called the B31G method and the R-STRENG method.\nId.\nWolverine received another ILI report identifying four such conditions on June 12, 2015.\nAt each anomaly location, the report calculated the remaining strength of the pipes using both the\nR-STRENG and the B31G method. But the different methods yielded different results. Under\nthe R-STRENG method, the strength value of each anomaly was greater than the maximum\noperating pressure at that location. But under the B31G method, the strength values were less\nthan the maximum operating pressure at the four anomaly locations. So if Wolverine accepted\nand confirmed the R-STRENG calculations, the four anomalies would not qualify as 180-day\nconditions. But if it took the other path, relying on B31G instead, they would.\nWolverine took the latter route. With the report in hand, Cooper worked to confirm its\ncontents. But he only recalculated and relied on the B31G values. Indeed, at the agency hearing,\nCooper stated he “[n]ormally . . . use[d] [the] B31G [method]” to “prepar[e] repair plans.”\n(Hr. Tr., A429.) Although he doesn’t “doubt” the R-STRENG values provided in ILI reports, he\ndoesn’t “have all the information necessary to assess [them],” which leads him to “take the more\nconservative [B31G] approach.” (Id.)\nWolverine’s repair plans confirm Cooper’s assessment that Wolverine solely relied on\nthe B31G calculations to classify the four anomalies as 180-day conditions. The plans state that\nCooper ran “the modified ASME B31G calculations” and found that four anomalies qualified as\n180-day conditions. (JO-KA Repair Plan 10/19/2015, A148–49; JO-KA Repair Plan Summary\n10/19/2015, A627.)\nWith the plans complete, Wolverine started on repairs. For two of the anomalies, the\ncompany met the 180-day mark. But at the other two locations, it missed the deadline. PHMSA\nnoted the missed deadlines during its inspection. So in Item 6 of its Notice, PHMSA cited\nWolverine for violating the 180-day condition regulation and recommended a $39,200 penalty.\nIn response to the Notice, Wolverine provided a written response that admitted it did not meet\n\n\n\nCase: 21-3405 Document: 32-2 Filed: 06/02/2023 Page: 7 (8 of 24)\nNo. 21-3405 Wolverine Pipe Line Co. v. DOT, PHMSA Page 7\nthe deadline and assured PHMSA that new procedures were put in place to prevent the violation\nfrom happening again.\nAgency Hearing. After it received the Notice, Wolverine contested PHMSA’s\naccusations. Its defense started with a request for an agency hearing. See 49 C.F.R. § 190.211.\nThere, the parties debated the Item 5 and Item 6 violations.\nWolverine’s approach to Item 5 emphasized June 26 as the discovery date. To\nunderstand why, recall the language of the immediate repair regulation: “To maintain safety, an\noperator must temporarily reduce the operating pressure or shut down the pipeline until\nthe operator completes the repair.” 49 C.F.R. § 195.452(h)(4)(i). In Wolverine’s view, this\nregulation didn’t impose a categorical command. Instead, it believed the regulation was most\nnaturally read as not requiring the pipeline operator to implement a pressure reduction if the\noperator could complete the repair quickly. Under that approach, Wolverine contended it didn’t\nviolate the regulation. It discovered the repair on June 26 and completed the repair on June 30\n“before there was time to effectuate the pressure reduction.” (Hr. Tr., A391.)\nFor Wolverine to win on this theory, it needed PHMSA to accept the June 26 discovery\ndate. So at the hearing, Wolverine went back and forth with PHMSA’s investigators about\nWolverine’s claimed discovery date of June 26. In one such instance, Wolverine’s counsel asked\none of PHMSA’s investigators, Ms. Alexander, about the discovery date. Wolverine’s counsel\nsaid: “[D]o you dispute that June 26th, 2015, is the date of discovery for this subject condition?”\n(Hr. Tr., A329.) Alexander answered: “No, I’m not disputing it. That is per Wolverine.” (Id.)\nBut Wolverine’s counsel persisted: “I want to know what you think . . . . Do you have a dispute\nwith June 26th as the discovery date?” (Id.) This time, Alexander simply answered: “No.” (Id.)\nThis conversation, though, was just one of many instances when the parties argued about\ndiscovery for Item 5. At the start, Wolverine’s counsel read the Notice to Alexander. Twice\ncounsel asked if the allegation that Wolverine discovered a dent was “the regulatory version of\ndiscovery? 49 C.F.R. 195.452(h)(2).” (Id. at A326–327.) Alexander confirmed. She also\nstated: “Wolverine claims a discovery date.” (Id. at A327.) Later, PHMSA’s lawyer, Ms.\nStevens, emphasized that June 26th was “Wolverine’s date.” (Id. at A339.) When Wolverine’s\n\n\n\nCase: 21-3405 Document: 32-2 Filed: 06/02/2023 Page: 8 (9 of 24)\nNo. 21-3405 Wolverine Pipe Line Co. v. DOT, PHMSA Page 8\ncounsel retorted that Ms. Alexander “indicated no dispute with that date,” Ms. Stevens clarified\n“there’s no dispute that Wolverine stated that date [of June 26]. That’s what she’s indicating.”\n(Id.; see also id. at A341 (“Wolverine claimed the discovery date on June 26th.”).)\nAs for Item 6, Wolverine came to the table with a new theory: The repairs weren’t 180-\nday conditions under the regulation. To make its case, Wolverine first pointed out that the\nregulation included both the R-STRENG and B31G as “[s]uitable remaining strength calculation\nmethods.” 49 C.F.R. § 195.452(h)(4)(iii)(D). And under the R-STRENG values, Wolverine\ncontended that the anomalies weren’t 180-day conditions. To shore up its argument, it\nintroduced a new chart that incorporated the R-STRENG values from the ILI report. This chart\ncompared the R-STRENG values with the maximum operating pressure at each anomaly,\nshowing that the R-STRENG value was greater than the maximum operating pressure. So if\nWolverine had used the R-STRENG values instead of the B31G values, the repairs wouldn’t\nhave qualified as 180-day conditions. (Hr. Ex. 33, A626; see also Wolverine Post-Hearing Br.,\nA655 (asserting that Wolverine could “have rested on the RSTRENG results and done absolutely\nnothing”).) Still, as one of PHMSA’s officers pointed out, Wolverine didn’t provide any\nR-STRENG analysis until October 2019—two years after PHMSA’s inspection and four years\nafter it first formulated its repair plans.\nPHMSA’s decision. In the end, Wolverine’s arguments at the hearing failed to convince\nPHMSA. The agency’s Final Order found Wolverine liable for violating both the\nimmediate repair and 180-day condition regulations. And although Wolverine petitioned for\nreconsideration, the agency stayed firm, upholding both its liability findings and its $65,800 fine.\nWolverine now petitions for review of PHMSA’s Item 5 and Item 6 decisions, arguing\nthat each was arbitrary and capricious and contrary to law.\nII.\nWe review PHMSA’s action under the Administrative Procedure Act. See 49 U.S.C.\n§ 60119(a)(3). Under that Act, we may “set aside” the agency’s decision only if it is “arbitrary,\ncapricious, an abuse of discretion, or otherwise not in accordance with law.” 5 U.S.C.\n§ 706(2)(A). Arbitrary and capricious review is deferential. The question is not what we would\n\n\n\nCase: 21-3405 Document: 32-2 Filed: 06/02/2023 Page: 9 (10 of 24)\nNo. 21-3405 Wolverine Pipe Line Co. v. DOT, PHMSA Page 9\nhave done, nor whether we agree with the agency’s action. Rather, the question is whether the\nagency “examine[d] the relevant data and articulate[d] a satisfactory explanation for its action.”\nMotor Vehicle Mfrs. Ass’n of U.S., Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983)\n(explaining that there must be a “rational connection between the facts found and the choice\nmade” (citation omitted)). So long as “the agency’s path may reasonably be discerned,” we will\nuphold a decision of even “less than ideal clarity.” Alaska Dep’t of Env’t Conservation v. EPA,\n540 U.S. 461, 497 (2004) (citation omitted).\nIII.\nWe consider PHMSA’s Item 5 adjudication first. Wolverine contends this decision\nviolated its due process rights and is arbitrary and capricious. PHMSA responds that its\nconclusion was a textbook application of the immediate repair regulation.\nWe think PHMSA has the better of the two arguments here. The text of the regulation\ngoes a long way to showing why. “To maintain safety,” the regulation tells us, “an operator must\ntemporarily reduce the operating pressure or shut down the pipeline until the operator completes\nthe repair of these conditions.” 49 C.F.R. § 195.452(h)(4)(i) (emphasis added). In its Item 5\ndecision, PHMSA simply read the regulation to mean what it says. “[C]lear on its face,” the\nprovision informed the regulated community “that, pending repair, an operator must take certain\nactions.” (Reconsideration Decision, A19.) According to PHMSA, this mandate “does not\nafford operators the ability to defer a pressure reduction . . . if, in their engineering judgment it is\nsimply more convenient to proceed to a repair.” (Id. at A18.) Put another way, the regulation\nrepresents PHMSA’s call that “[t]o maintain safety,” an operator must reduce pressure pending a\nrepair. 49 C.F.R. § 195.452(h)(4)(i).\nThis position, long taken by the agency, leaves no room for an operator, like Wolverine,\nto impose its own judgment. See, e.g., In the Matter of Centurion Pipeline, LP, CPF No. 4-2014-\n5028, 2017 WL 1363408, at *9 (D.O.T. March 30, 2017) (noting that “[i]n prior enforcement\nproceedings . . . PHMSA has [] determined that § 195.452(h)(4) requires a pressure reduction or\na shutdown even if the condition meets immediate repair criteria only after factoring in\nconservative tool tolerances”); id. (“An operator must immediately reduce pipeline operating\n\n\n\nCase: 21-3405 Document: 32-2 Filed: 06/02/2023 Page: 10 (11 of 24)\nNo. 21-3405 Wolverine Pipe Line Co. v. DOT, PHMSA Page 10\npressure or shut down a pipeline that has an immediate repair condition.” (emphasis added)); In\nthe Matter of Buckeye Partners, L.P., CPF No. 1-2011-5013, 2012 WL 4025918, at *2 (D.O.T.\nJul. 27, 2012) (“Pipeline operators are obligated to take immediate action including temporarily\nreducing operating pressure . . . .”). No matter the discovery date and no matter the speed of the\nrepair, operators must take steps to reduce the pressure or shut down the pipeline.\nWolverine never took these actions. Did it have a dent that met the criteria for an\nimmediate repair? Wolverine admits as much. Did it complete the repair without temporarily\nreducing the pressure? Wolverine concedes the point. Indeed, during oral argument, Wolverine\ntook the position that whether it opened the letter on June 10 or June 26, it would not have\nimplemented a pressure reduction. In PHMSA’s view, these two concessions were enough to\nfind Wolverine liable for violating the regulation.\nWolverine reads the immediate repair regulation differently. It contends that the\nregulation “cannot reasonably be read to require a pressure reduction or shutdown if the repair\ncan precede those actions.” (Wolverine Reply Br. at 10.) “Any alternative interpretation,” it\nsuggests, would “require[] a repair to be delayed pending implementation of a pressure reduction\nor shutdown” and “undermine” the regulation’s express “objective of maintaining safety.” (Id.\n(citation omitted).) So, the argument goes, operators do not need to reduce pressure or shutdown\na pipeline if simply repairing it would be faster.\nBut Wolverine’s reading runs headlong into the regulation’s text, which tells\noperators: “To maintain safety, an operator must temporarily reduce operating pressure or shut\ndown the pipeline until the operator completes the repair of th[at] condition.” 49 C.F.R.\n§ 195.452(h)(4)(i) (emphasis added). This “prophylactic” directive represents PHMSA’s call\nabout the best way to “maintain safety.” (PHMSA Br. at 6 (“Immediate repair conditions are\nthose that PHMSA has determined could result in imminent pipeline failure; the agency thus\npromulgated this prophylactic measure—requiring an operator to reduce or shut down a\npipeline’s pressure while repairing these conditions—to ‘maintain safety’ by minimizing strain\non the pipeline and decreasing the prospect of imminent failure.”).) That we can imagine a\nscenario where an operator could complete a repair before implementing a pressure reduction is\nof no moment. The text of the regulation is clear. An operator must implement a pressure\n\n\n\nCase: 21-3405 Document: 32-2 Filed: 06/02/2023 Page: 11 (12 of 24)\nNo. 21-3405 Wolverine Pipe Line Co. v. DOT, PHMSA Page 11\nreduction or shut down the pipeline. Wolverine asks us to read an exception into this\nstraightforward directive. We decline to do so.4\nWolverine challenges this conclusion on several additional fronts. It starts with two due\nprocess arguments and then makes a Chenery claim. We consider each in turn.\nDue Process. Before we address the heart of Wolverine’s argument, we begin with a bit\nof context. The Fifth Amendment’s due process clause applies to “administrative proceedings\njust as it does to other instances of government action.” Karst Robbins Coal Co. v. Dir., Off. of\nWorkers’ Comp. Programs, 969 F.3d 316, 329 (6th Cir. 2020); see also Mullane v. Cent.\nHanover Bank & Tr. Co., 339 U.S. 306, 313 (1950).\nAnd in the administrative law context, due process arguments often come in two forms.\nFirst, an agency offends due process if it “sustain[s] a charge different from any listed in the\ncomplaint,” Hodgins v U.S. Dep’t of Agric., 238 F.3d 421, 430 (6th Cir. 2000) (table) (citations\nomitted), or “change[s] theories in midstream without giving [] reasonable notice of the change,”\nYellow Freight Sys., Inc. v. Martin, 954 F.2d 353, 357 (6th Cir. 1992) (citation omitted). And\nsecond, even if an agency “properly construe[s]” a regulation, its action might violate due\nprocess if “the regulation is so vague in its requirements that its enforcement would violate” the\n4In fact, Wolverine is as likely to fall within its proposed exception as it is to fall outside of it. In other\nwords, it’s not clear how long the pressure reduction process would have taken versus the actual repair. This is\nbecause, on the record before us, it doesn’t seem that Wolverine determined how long it would have taken to reduce\npressure. (Hr. Tr., A380 (Cooper indicated Wolverine took some steps to “begin[] the” pressure reduction “process”\nbut didn’t know whether Wolverine ever took “further action to actually implement any kind of a pressure\nreduction” or “what documentation exist[ed].”).) Instead, it seems that Wolverine made a judgment call based on\nexperience. (Id. at A354 (Cooper recommended that Wolverine forego a pressure reduction because it could “get in\nwithin just a few days and repair [the pipeline].”); Id. at A356 (In Cooper’s judgment, “if [the] anomaly had\nsurvived a 1,700 pound eight-hour test [] it was not likely to fail in the next few days at 50 pounds or maybe 200\npounds.”).) Later, the operator posited that it “might have achieved a pressure reduction ‘as soon as possible,’ and\nsafely so, but never will we know since the repair was effected so quickly.” (Wolverine Post-Hearing Br., A662.)\n“Never will we know” about sums up the record on this issue. Wolverine can point to no record\nevidence—other than its own uncorroborated statements to the contrary—that shows it could have completed the\nrepair “before there was time to effectuate a pressure reduction.” (Wolverine Br. at 34 (citation omitted).)\nFinally, Wolverine is not in a great position to be advocating for an interpretation that is grounded in\nspeediness. Wolverine, after all, received information identifying an immediate repair on June 10 and completed\nthat repair on June 30. During that time, as PHMSA noted, Wolverine took a “lackadaisical approach,” failing to\neven open the report for 13 days. (Reconsideration Decision, A20.) Then, acting on its own, Wolverine found a\npressure reduction unnecessary because it could complete the repair quickly. Given the 20 days between receipt of\nthe report and the repair, Wolverine had no excuse for its failure to act.\n\n\n\nCase: 21-3405 Document: 32-2 Filed: 06/02/2023 Page: 12 (13 of 24)\nNo. 21-3405 Wolverine Pipe Line Co. v. DOT, PHMSA Page 12\nFifth Amendment. Diebold, Inc. v. Marshall, 585 F.2d 1327, 1335 (6th Cir. 1978); see also Ohio\nCast Prods., Inc. v. OSHA, 246 F.3d 791, 798–99 (6th Cir. 2001); Albert C. Lin, Refining Fair\nNotice Doctrine: What Notice is Required of Civil Regulations? 55 Baylor L. Rev. 991, 1001\n(2003) (explaining that courts often treat “[w]hether an agency’s interpretation is permissible and\nwhether an agency gave adequate notice of that interpretation” as “separate issues”).\nWolverine claims that the agency’s actions violated both strands of due process doctrine.\nFirst, Wolverine contends that PHMSA “violated due process by relying on a novel theory of\nuntimely discovery not adequately alleged” in the Notice. (Wolverine Br. at 30 (cleaned up).) In\nother words, Wolverine argues it lacked fair notice that the agency took issue with its claimed\ndiscovery date of June 26. (Id. at 37–38.) Second, Wolverine asserts it lacked fair notice that its\nconduct would violate the discovery regulation because the regulation’s mandate to act\n“promptly” is unconstitutionally vague. (Id. at 42–43.)\nWe reject Wolverine’s argument that it did not know its claimed discovery date would be\nat issue in the proceedings. Wolverine’s claimed discovery date played an “ancillary part”\nthroughout the proceedings. (Reconsideration Decision, A21.) This is because an operator’s\n“obligation to [reduce pressure] is dictated by when it discovers that it has an immediate repair\ncondition on its pipeline.” (Id. at A17.) And so PHMSA sought to determine when that\nobligation kicked in.\nRight off the bat, PHMSA’s informal charging documents put Wolverine on notice that\nthe agency took issue with the operator’s timeline. The Notice began by faulting Wolverine for\nfailing to “temporarily reduce the operating pressure when it discovered a dent.” (NOPV, A71.)\nIt then added that “Wolverine received a final ILI report on June 10, 2015” but “claimed a\ndiscovery date of June 26, 2015 and completed repairs on June 30, 2015.” (Id.) In addition,\nPHMSA’s follow-on Violation Report listed “the [d]ate the violation started” as June 10, 2015.\n(Violation Report, A112.) These documents gave Wolverine sufficient warning that PHMSA\ntook issue both with the time between the receipt of the ILI report and the repair and with\nWolverine’s failure to implement a pressure reduction during that time. See ECM BioFilms, Inc.\nv. FTC, 851 F.3d 599, 618 (6th Cir. 2017) (“Although the complaint does not define ‘reasonably\n\n\n\nCase: 21-3405 Document: 32-2 Filed: 06/02/2023 Page: 13 (14 of 24)\nNo. 21-3405 Wolverine Pipe Line Co. v. DOT, PHMSA Page 13\nshort period of time’ as a specific time period, that level of detail was unnecessary to ‘reasonably\napprise’ [the company] of the issues in controversy.”).\nNext, Wolverine’s own actions confirm that it understood that PHMSA took issue with\nthe time between the receipt of the ILI report and the repair. At the agency hearing, Wolverine\ntried to pin PHMSA down on the June 26 discovery date. And the parties wrangled over the\ndiscovery date multiple times.5 Also, leading up to this discussion about Wolverine’s claimed\ndiscovery date, Wolverine had a line of questioning about how quickly operators must reduce\npressure when an immediate repair condition is identified.\nAgain, in its post-hearing recommendation (which Wolverine responded to), PHMSA\ntook issue both with the time between the receipt of the ILI report and the repair and with\nWolverine’s failure to implement a pressure reduction.\nSo it is not true that PHMSA shifted its theory from alleging that Wolverine violated the\nimmediate repair regulation by failing to reduce pressure to alleging that Wolverine violated the\nimmediate repair regulation by failing to reduce pressure in a timely fashion. Timeliness was an\n“ancillary” issue throughout. (Reconsideration Decision, A21.) And at the end of the day,\nPHMSA found that Wolverine violated the immediate repair regulation without fixing a\ndiscovery date, without charging Wolverine with a discovery regulation violation, cf. Carlisle\nEquip. Co. v. Sec’y of Lab. & Occupational Safety, 24 F.3d 790, 795 (6th Cir. 1994); Yellow\n5Wolverine contends that certain exchanges between its counsel and Alexander (a PHMSA investigator)\nconfirmed that PHMSA didn’t dispute its claimed discovery date. But viewing the transcript as a whole, it’s clear\nthat’s not the case. (Hr. Tr., A326–27 (Wolverine Counsel: “[The notice] says that Wolverine discovered a dent.\nTop line over to the right side. Discovered a dent.” Alexander: “I didn’t say they discovered a dent. I said\nWolverine claims a discovery date.” Wolverine Counsel: “We’ll come to that in a moment . . . .”); Id. at A329\n(Wolverine Counsel: “Regarding the statement that Wolverine claimed a discovery date of June 26, 2015, do you\ndispute that June 26, 2015, is the date of discovery for this subject condition?” Alexander: “No, I’m not disputing\nit. That is per Wolverine.” Later, Wolverine Counsel: “Do you have a dispute with June 26 as the discovery date?”\nAlexander: “No.”); Id. at A338–39 (Wolverine Counsel: “Just a couple things inside the violation report . . . .\n[T]here is a question, the date of violation started and it says what date.” Alexander: “It says June 10, 2015.” Later,\nWolverine Counsel: “Why did you start that on receipt of the ILI report? Earlier you suggested that the action\nneeded to be taken — you didn’t suggest. You stated very clearly the actions should occur upon discovery of the\ncondition. What date was that?” PHMSA Counsel: “Wolverine’s date. That’s what — Wolverine’s discovery date\nwas June 26.” Wolverine Counsel: “She indicated no dispute with [the 26th].” PHMSA counsel: “Well, there’s no\ndispute that Wolverine stated that date [June 26]. That’s what [Alexander’s] indicating.”); Id. at 340–41 (Alexander\nstates that the violation report didn’t talk about discovery and she “didn’t contest discovery.” Wolverine\nCounsel: “That’s right. And the discovery in the NOPV is stated as what date?” Alexander: “Wolverine claimed\nthe discovery date on June 26.”).)\n\n\n\nCase: 21-3405 Document: 32-2 Filed: 06/02/2023 Page: 14 (15 of 24)\nNo. 21-3405 Wolverine Pipe Line Co. v. DOT, PHMSA Page 14\nFreight, 954 F.2d at 355, 358, and without changing its theory of the case, cf. Bendix Corp. v.\nFTC, 450 F.2d 534, 542 (6th Cir. 1971).6\nChenery. Wolverine next invokes Chenery I and Chenery II, arguing that PHMSA\nshifted its reasoning on appeal. This matters because agency action “cannot be upheld unless the\ngrounds upon which the agency acted in exercising its powers were those upon which its action\ncan be sustained.” SEC v. Chenery Corp., 318 U.S. 80, 95 (1943). Wolverine points to the fact\nthat, during the agency proceedings, PHMSA acknowledged that discovery played an “ancillary”\npart of its immediate-repair regulation analysis and spent much time chastising Wolverine for its\n“lackadaisical approach.” (Reconsideration Decision, A20–21.) But on appeal, PHMSA left out\nthat chastisement, asserting that “any dispute as to when Wolverine discovered the dent that\nrequired repair is orthogonal to the regulatory requirement that Wolverine reduce or shutoff the\npipeline pressure.” (PHMSA Br. at 28.) Wolverine argues these differences in framing require\nus to vacate the agency’s order below.\nWe disagree. Whatever the space between “ancillary” and “orthogonal,” it doesn’t\nchange our outcome here. Chenery “tells us not to sustain an administrative order on a different\nground from the one the agency offered.” MISO Transmission Owners v. FERC, 860 F.3d 837,\n843 (6th Cir. 2017); Chenery Corp., 318 U.S. at 94–95; accord SEC v. Chenery Corp., 332 U.S.\n194, 196 (1947). It doesn’t keep this Court from upholding an agency action “on the same basis\narticulated in the order by the agency itself.” Burlington T","truncated":true,"body_characters":132726}