Pennsylvania Court Holds Coal Severance Deeds Waive Pipeline Company’s Right to Support, Recover Damages

July 31, 2014

On July 29, 2014, in Pennsylvania Services Corp. v. Texas Eastern Transmission, LP, 2014 Pa. Super. 164 (Pa. Super. 2014), the Superior Court of Pennsylvania affirmed the trial court’s grant of summary judgment in favor of Pennsylvania Services Corporation, trading as Emerald Coal Resources, LP, and ruled that Emerald had the right to extract coal underlying gas transmission pipelines owned by Texas Eastern Transmission LP without any obligation to provide support to the overlying strata and without liability to Texas Eastern for surface damages caused by the extraction of such coal.

The Superior Court explained that under Pennsylvania law, the owner of the surface has the right to subjacent support, but the right may be waived either expressly or by implication. The Superior Court reasoned that the coal severance deeds executed in the 1900s, before Texas Eastern acquired its rights of way and constructed its pipelines, not only conveyed to grantee the coal estate, but also contained an express waiver from grantor of all liability for damages, including damages to the surface caused by removal of the coal. Based on this language, the Superior Court held that by their express terms, the coal severance deeds waived the right of subjacent support of the surface estate. As a result, Emerald owed Texas Eastern no duty of support and had no liability to Texas Eastern for damages to the surface.

The Superior Court based its decision on common law. It appears that, absent other peculiar circumstances, disputes between coal producers and overlying pipeline operators will be resolved based on language in the conveyancing instruments and the priority of recording of real property rights. While this may come as a surprise to pipeline operators unfamiliar with Pennsylvania practice, Pennsylvania has long recognized that the right to the support of the surface is a separate estate that may be severed from the surface estate itself and conveyed with underlying coal or mineral rights. (In fact, a notice to this effect is emblazoned in bold print on virtually every residential deed delivered in the Commonwealth.) Accordingly, those seeking to construct or expand pipelines in Pennsylvania are urged to ensure that they obtain not only the rights associated with the pipeline itself, but also (through negotiation or, where appropriate, eminent domain) the right to surface support or be prepared to take precautionary measures to address the risk of subsidence, in the event that an owner of subsurface coal wishes to mine beneath the line.