PHMSA Rules Increase Maximum Penalties And Revise Investigation And Hearing Procedures

On Oct. 25, 2013, new Pipeline and Hazardous Materials Safety Administration (PHMSA) regulations went into effect that increase civil penalty maximums and update the informal hearing and adjudication process for pipeline enforcement matters. Pipeline Safety: Administrative Procedures; Updates and Technical Corrections, Final Rule, 78 Fed. Reg. 58,897 (Sept. 25, 2013). Under the new rules, the maximum penalty for a single violation increases from $100,000 to $200,000, and the maximum penalty for a related series of violations increases from $1 million to $2 million. The new civil penalty maximums apply to violations that occur after Jan. 2, 2012. PHMSA enforcement actions have been steadily increasing over the last several years, and according to the agency's website, proposed civil penalties have been higher so far in 2013 than in any prior year. With revised civil penalty maximums now in place, proposed penalties in 2014 could be even higher.