With the recent proliferation of pipeline construction projects in Pennsylvania namely, Mariner East, Mariner East II and Atlantic Sunrise to name a few, contractors have been faced with the dilemma of securing payment for work performed on these projects. Within the past year, at least one major pipeline contractor has filed for bankruptcy and the Mariner East II project was stalled by citizens’ lawsuits. As a result, contractors, subcontractors and suppliers (collectively, contractors) on these projects have been forced to find alternate means to secure payment. Can these contractors receive the benefit of Pennsylvania’s Mechanics’ Lien Law to preserve their right to payment when the property to be liened is not a traditional building, but rather a natural gas transmission pipeline that traverses multiple Pennsylvania properties and counties? We believe the answer to be “yes,” but it can be tricky and costly.
The first hurdle is to establish that the pipeline owner has an interest to which a lien can attach. For a lien to be effective, the pipeline must be an “improvement” on “property” as defined in the Pennsylvania Mechanics’ Lien Law of 1963, 49 P.S. Section 1201, et seq. (Lien Law). Traditionally, mechanic’s liens are filed against the owner’s fee or leasehold interest in a building or structure. The structure is normally found at one location and in only one county. A pipeline, however, by its very nature, traverses across many individual properties and counties. Often, the pipeline owner’s interests are a mix of easements, rights-of-way, leases and fee interests that span across thousands of unrelated real property parcels.
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