Commissioner James Danly Concurrence Regarding Rover Pipeline, LLC, et al.

Commissioner James Danly Statement
May 11, 2022
Docket No. IN17-4-001

I concur with today’s order dismissing the request for rehearing submitted by Rover Pipeline, LLC (Rover) and its parent company Energy Transfer, L.P. (collectively, Rover) of a notice designating particular staff of the Commission’s Office of Enforcement as non-decisional.[1]  For the reasons explained in the order, I agree that Rover’s request for rehearing is procedurally improper, that rehearing does not lie, and that Rover’s request for rehearing must be rejected.[2]

I write separately because the order’s subsequent discussion “in the alternative” to address Rover’s premature rehearing request “on the merits” is also procedurally improper.[3]  Rover’s request for rehearing has been dismissed.  The end.  But the majority treats what is plainly a Rule 713[4] request for rehearing[5] as if it were a motion,[6] and addresses many of its claims—rejecting them all—anyway.[7]  The result is several paragraphs of dicta that the regulated community will now have to contend with as if it were actual precedent, even though it is not.[8]

That brings us to the third improper aspect of this order which is the Commission’s own practice of designating enforcement staff as “decisional” or “non-decisional.”  The regulated community, particularly those under investigation by the Commission, are—quite rightly—suspicious of the entire process and they have grave doubts regarding the legitimacy and efficacy of the Commission’s separations of functions regime.  The Commission’s practice of designating “decisional” staff aside, our entire enforcement program employs Commission staff to investigate and prosecute alleged wrongdoers, and then staff presents their case to the highest-ranking officials at the Commission—the Commissioners—to judge who is right: their own staff or the alleged wrongdoers.  This process necessarily commingles functions that would best be separated as much as possible.

The Commission further commingles these functions when it allows particular members of Commission staff in the same Office of Enforcement to be designated “decisional” in order for them to actively advise the Commissioners themselves as to which side in an enforcement dispute is correct, the Office of Enforcement on the one hand, or the alleged wrongdoers on the other.  It should be self-evident that such a process is fraught with conflict of interest.  Whom would the target of an enforcement action believe a Commissioner more likely to trust?  Their own staff, whom he or she consults on a regular basis, or the company “being investigated for multiple instances of serious alleged misconduct”[9] and possibly only known through the narrow lens of an Enforcement prosecution?  This is a reasonable question to ask, and it demands a reasonable answer, should the appropriate vehicle arise for it to be squarely presented to the Commission.

And although this is not the correct vehicle, the majority nevertheless offers an answer (again, in dicta):  the alleged “toxic additives” dumpers and historic “1843 farmstead” demolishers should have come forward with evidence of improper conduct by “decisional” staff.  For example, when Rover complains that certain staff in other Commission offices who worked on the investigation were not designated as decisional, the majority dismisses that concern and highlights that Rover “submit[s] no evidence that there has been any impermissible” commingling “of functions or improper communications as to the identified [Office of Energy Projects] staff member or anyone else.”[10]

It should be obvious that this is nearly an impossible burden.  What evidence could the alleged wrongdoer muster?  One possibility would be an admission by current staff of an improper communication, but that has only ever happened once, and in that case, the Commission exonerated itself and carried on with the prosecution.[11]  This burden is so difficult to satisfy that the only other possible sources of the required evidence would be either a whistleblower, a rarity since whistleblowers take great professional risk, or espionage, which would be ridiculous and illegal.  If the alleged wrongdoer submits a data request (“please provide all documents indicating any commingling between decisional and non-decisional staff”), the Commission will simply ignore it or dismiss it out of hand just as it does in this order, even though it otherwise treats Rover’s request for rehearing as a motion.[12] 

Rover provides the only kind of evidence that the subject of an investigation is ever likely to have or be afforded access to, a statement that staff which has now been designated as decisional supervised, or was likely involved in, investigations at earlier stages of this or related proceedings.  This claim, if answered at all, merits a substantive answer.  But the majority’s response—again, in dicta—simply discounts Rover’s claim, citing the “‘presumption of honesty and integrity in those serving as adjudicators.’”[13]  Perhaps this is true, but a presumption is not proof.  Only someone who has never been prosecuted would assume that prosecutors are free of bias.  The reality is that the Commission has a recent admission by staff of failing to follow the separation of functions.[14]  Besides which, the majority’s citation to Withrow, a case analyzing a state agency’s compliance with the Fourteenth Amendment’s due process requirements, is not dispositive.  Rover claims violations of the Constitution, the Administrative Procedure Act (APA) and our regulations.  The majority’s gesture toward the standard for demonstrating a constitutional due process violation simply is not responsive to Rover’s wholly credible claims that the Commission has failed to satisfy or properly discharge the APA’s statutory commandment to observe separation of functions.  I predict that the Commission will eventually have to answer this charge and when it does, more than a fleeting reference to a Constitutional standard that itself is responsive to only part of the accusation levelled against it is going to be required.

The majority further attempts to discount Rover’s claim (still in dicta) by breezily asserting that “the mere fact that two proceedings involve the same parties or same project does not render them factually related.”[15]  Perhaps in theory?  But certainly here, in this specific case, the majority’s “mere fact” pays no regard to the actual facts:  the two proceedings involve the same company, the same project, many of the same witnesses, many of the same investigators, many of the same depositions of the same witnesses by the same investigators,[16] and (we can presume) frequent simultaneous or at least contemporaneous discussion by both non-decisional and decisional staff of these related investigations throughout the life of both proceedings.

In light of all of this, what message are we sending to the regulated community?  You have no alternative but to trust us—your investigator, prosecutor, and judge, all in one—because we would never do anything wrong.  Of course, the alleged wrongdoers cannot and should not expect such uncritical, total trust from us.  I do not understand why we should expect anyone to have faith in our process in return.

It is also not clear to me why we need decisional Enforcement staff at all.  Enforcement adjudications have numerous rounds of detailed back-and-forth show cause orders, answers, and other pleadings.  The Commission has entire offices of subject matter experts.  If there is any question or doubt after the multiple rounds of orders and pleadings, read with the benefit of the Commissioners’ experience and the advice of the rest of Commission staff, then maybe Enforcement staff has failed to prove its case.

Out of an abundance of caution, in an effort to preserve our credibility, why not adopt another process, one that is less susceptible to conflict?  Why not stop designating “decisional” staff at all.  And if we are going to continue to designate decisional staff, why not designate staff with no relation to ongoing investigations involving the same company?  Or designate staff who did not supervise these investigations?

Regardless, none of the foregoing is properly before us and so, for now, the Commission can dodge and weave as much as it likes, and it can spill unnecessary ink that brings discredit upon us by offering unconvincing answers to questions that it need not even answer, further eroding the public’s confidence.

For these reasons, I respectfully concur.