Sunoco 2015 Annual Report Download - page 38

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ITEM 3. LEGAL PROCEEDINGS
There are certain legal and administrative proceedings arising prior to the February 2002 initial public offering ("IPO")
pending against our Sunoco-affiliated predecessors and us (as successor to certain liabilities of those predecessors). Although
the ultimate outcome of these proceedings cannot be ascertained at this time, it is reasonably possible that some of them may be
resolved unfavorably. Sunoco, Inc. ("Sunoco") has agreed to indemnify us for 100 percent of all losses from environmental
liabilities related to the transferred assets arising prior to, and asserted within 21 years of February 8, 2002. There is no
monetary cap on this indemnification from Sunoco. Sunoco's share of liability for claims asserted thereafter will decrease by 10
percent each year through the thirtieth year following the February 8, 2002 date. Any remediation liabilities not covered by this
indemnity will be our responsibility. In addition, Sunoco is obligated to indemnify us under certain other agreements executed
after the IPO.
Additionally, we have received notices of violations and potential fines under various federal, state and local provisions
relating to the discharge of materials into the environment or protection of the environment. While we believe that even if any
one or more of the environmental proceedings listed below were decided against us, it would not be material to our financial
position, results of operations or cash flows, we are required to report environmental proceedings if we reasonably believe that
such proceedings will result in monetary sanctions in excess of $0.1 million.
In January 2012, the Partnership experienced a release on its products pipeline in Wellington, Ohio. In connection with
this release, the Pipeline Hazardous Material Safety Administration ("PHMSA") issued a Corrective Action Order under which
the Partnership is obligated to follow specific requirements in the investigation of the release and the repair and reactivation of
the pipeline. The Partnership also entered into an Order on Consent with the Environmental Protection Agency ("EPA")
regarding the environmental remediation of the release site. All requirements of the Order on Consent with the EPA have been
fulfilled and the Order has been satisfied and closed. The Partnership has also received a "No Further Action" approval from the
Ohio EPA for all soil and groundwater remediation requirements. The Partnership is now in initial negotiations with the EPA
and U.S. Department of Justice ("DOJ") on a potential penalty associated with this release. The timing and outcome of this
matter cannot be reasonably determined at this time. However, the Partnership does not expect there to be a material impact to
its results of operations, cash flows or financial position. The Partnership continues to cooperate with both PHMSA and the
EPA to complete the investigation of the incident and repair of the pipeline.
In 2012, the EPA issued a proposed consent agreement related to the releases that occurred at the Partnership's pump
station/tank farm in Barbers Hill, Texas and pump station/tank farm located in Cromwell, Oklahoma in 2010 and 2011,
respectively. These matters were referred to the DOJ by the EPA. In November 2012, the Partnership received an initial
assessment of $1.4 million associated with these releases. The Partnership is in discussions with the EPA and the DOJ on this
matter to resolve the issue. The timing or outcome of this matter cannot be reasonably determined at this time. However, the
Partnership does not expect there to be a material impact to its results of operations, cash flows or financial position.
In September 2013, the Pennsylvania Department of Environmental Protection ("PADEP") issued a Notice of Violation
and proposed penalties based on alleged violations of various safety regulations relating to the November 2008 products release
by Sunoco Pipeline in Murrysville, Pennsylvania. In the fourth quarter 2015, the Partnership reached an agreement with the
PADEP and settled this matter for $0.8 million, which was paid in December 2015.
In April 2015, the PHMSA issued two separate Notices of Probable Violation ("NOPV") related to the Partnership's West
Texas Gulf pipeline in connection with repairs being carried out on the pipeline. The NOPVs propose penalties in excess of
$0.1 million, and the Partnership is currently in discussions with PHMSA to resolve these matters. The timing or outcome of
these matters cannot be reasonably determined at this time, however, the Partnership does not expect there to be a material
impact to its results of operations, cash flows, or financial position.
One of the directors of our general partner, James R. ("Rick") Perry, the former Governor of Texas, has been named the
subject of a pending criminal proceeding arising from a political dispute between the Governor and the political leadership of
the Public Integrity Unit of the Travis County (Texas) District Attorney's Office. On August 15, 2014, the Travis County
District Attorney's Office caused a county grand jury to return an indictment against Governor Perry for "abuse of official
capacity" and "coercion of public servant" in retaliation for constitutional protected statements Governor Perry made in his
capacity as Governor of the State of Texas that he would veto funding for the Travis County Public Integrity Unit if District
Attorney Rosemary Lehmberg did not resign after pleading guilty to a charge of driving while intoxicated. Governor Perry pled
"not guilty" to those charges, and, as of February 2016, all of the charges have been dismissed.