Lawsuit Claims ET “Elicit Means” In Obtaining Mariner East 2 Permits

January 13, 2020

Plaintiffs in a Pennsylvania class action lawsuit claim Dallas’ Energy Transfer LP used coercion and bribery during the permitting process for the Mariner East 2 pipeline.

Allegheny County Employees‘ Retirement System on Friday filed a putative shareholder class action which claims that  Energy Transfer violated the Securities Exchange Act in federal court.

It follows another class action suit filed on November 20, 2019, claiming violations of the Securities Exchange Act of 1934, in the Northern District of Texas on behalf of purchasers of Energy Transfer securities between February 25, 2017 and November 11, 2019 (Reinhardt v. Energy Transfer LP, et al.).

The lawsuit alleges that Energy Transfer used “illicit means” to pressure Pennsylvania public officials to approve a key permit for the pipeline system.

Throughout the suit’s active period, lawyers for the retirement system say, ET repeatedly assured investors that Energy Transfer had lawfully obtained valid permits to begin construction on its Mariner East 2 pipeline.

Mariner East 2 is a new pipeline intended to supplement Mariner East 1 in moving natural gas liquids from Western Pennsylvania to a refinery at Marcus Hook, PA

When combined with the Mariner East 1 line, the 8-inch East 2 pipeline will help carry 345,000 barrels of natural gas liquids per day.

In a statement, system lawyers (New York City’s Bernstein Litowitz Berger & Grossmann LLP) allege, “unknown to the investing public, however, Energy Transfer, acting either independently or in concert with Pennsylvania Governor Tom Wolf‘s administration, made use of coercion, bribery, and other illicit means of forcing PaDEP [the Pennsylvania Department of Environmental Protection] to approve the critical construction permits.

The Bernstein Litowitz statement references a November 12, 2019 Associated Press article, “FBI Eyes How Pennsylvania Approved Pipeline,” which cited interviews with current and former state employees who reported that Energy Transfer’s Mariner East pipeline project was under investigation by the FBI, and that the investigation “involves the permitting of the pipeline, whether [Pennsylvania Governor Tom] Wolf and his administration forced environmental protection staff to approve construction permits and whether Wolf or his administration received anything in return.”

“On this news, the price of Energy Transfer’s common units fell precipitously, and this decline in the market value of the Partnership’s common units caused significant losses and damages to the investor Class,” the Bernstein Litowitz statement adds.

The case, Allegheny County Employees’ Retirement System v. Energy Transfer LP, is now pending in the US District Court for the Eastern District of Pennsylvania.