Creating a record in PHMSA enforcement actions is an important step toward protecting and preserving the legal rights of pipeline owners and operators.  If an operator seeks judicial review of the Agency’s final decision in an enforcement action, the administrative record will be a key component of the case.  The Pipeline Safety Act requires that any request for judicial review of final agency action be brought in a federal court of appeals.  Such courts do not hear witnesses or find facts; they rely solely on the administrative record presented, and the briefs and legal arguments of counsel.  For that reason, the written transcription of any administrative enforcement hearing is likely to be an essential part of that record.  Just a few months since PHMSA promulgated revisions to its procedural regulations at 49 C.F.R. Part 190 (see prior pipelinelaw alert), the Agency has indicated if an operator wishes to have a hearing transcribed, it must arrange for a court reporter to be physically present to transcribe the proceedings.  This is a new interpretation of PHMSA regulations, and one that was not clearly articulated in the Agency’s rulemaking preambles.  Final Rule, 78 Fed. Reg. 58897 (Sep. 25, 2013); NPRM, 77 Fed. Reg. 48112 (Aug. 13, 2012).

Typically, at the Respondent’s election, hearings have been recorded electronically and subsequently transcribed by a court reporting service.  In departing from that practice, PHMSA has just recently (and only informally) indicated that in lieu of recording a hearing for subsequent transcription, operators must instead now arrange for a court reporter to be present at the hearing.  This pronouncement by the Agency is surprising, especially without amendment to the rules or at least notice to the industry, because the relevant rule states that “If a respondent elects to transcribe a hearing, the respondent must make arrangements with a court-reporter at cost to the respondent and submit a complete copy of the transcript for the case file.  The respondent must notify the Presiding Official in advance if it intends to transcribe a hearing.”  49 C.F.R. Part 190.211(f).

A recording is certainly more cost effective and less intrusive to a proceeding, and it allows the respondent the opportunity to determine whether or not to proceed with preparation of a transcript after the hearing.  Whether a transcript is prepared from a recording or from the notes (and recording) of a court reporter physically present at the hearing, both parties to the enforcement proceeding have the opportunity to review the draft transcript prepared by a court reporter.  Further, the presence of a court reporter may inevitably chill the enforcement proceedings.  It is also unclear how this new informal policy pronouncement by the Agency may affect telephonic hearings.