Columbia Gas Transmission, LLC. v. 76 Acres et al

Filing 67

REPORT AND RECOMMENDATIONS re 48 MOTION for Default Judgment as to Against Defendants John Hagan, Robert Hagan, Donald rocker, Marco Zamora, and Maria Zizelman filed by Columbia Gas Transmission, LLC. Signed by Magistrate Judge Stephanie A Gallagher on 6/25/14. (c/m 6/26/14 jnls, Deputy Clerk) Modified on 6/26/2014 (jnls, Deputy Clerk).

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
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COLUMBIA GAS TRANSMISSION, LLC,
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Plaintiff,
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v.

Case No. ELH-14-110
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76 ACRES MORE OR LESS, IN
BALTIMORE AND HARFORD
COUNTIES, MARYLAND, et al.,

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Defendants
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REPORT AND RECOMMENDATIONS
This Report and Recommendations addresses the Motion for Default Judgment (ECF No.
48) filed by Plaintiff, Columbia Gas Transmission (“Columbia”) against the Defendants John
Herbert Hagan, IV, Robert Allen Hagan, Donald J. Rocker, Marco A. Zamora, and Maria
Guadalupe Zizelman f/k/a Maria G. Zamora (collectively “Defendants”) 1. The Defendants have
not filed an opposition, and their deadline has now passed. Judge Hollander referred this case to
me to review Plaintiff’s Motion and to make recommendations concerning Plaintiff’s requested
relief, pursuant to 28 U.S.C. § 301 and Local Rule 301.6. (ECF No. 49). I have reviewed
Plaintiff’s Motion and accompanying exhibits. (ECF No. 48). No hearing is deemed necessary.
Local Rule 105.6 (D. Md. 2011).

For the reasons discussed below, I respectfully recommend

that Plaintiff’s Motion (ECF No. 48) be GRANTED, but I make no recommendations regarding
appropriate relief.

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The other defendants named in Columbia’s Complaint (ECF No. 1) are not parties to the Motion for
Default Judgment.
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I.

BACKGROUND
Plaintiff Columbia is a Delaware-based interstate natural gas company as defined by

Section 717a(6) of the Natural Gas Act (“NGA”), 15 U.S.C. § 717 et. seq., which qualifies it to
construct, own, operate, and maintain pipelines for the transmission of natural gas and its
constituents. Compl. ¶ 4. Columbia is authorized to transport natural gas by the Federal Energy
Regulatory Commission (“FERC”), and it is subject to FERC’s jurisdiction.

Compl. ¶ 4;

McClain Aff. ¶¶ 26–30.
Since the 1950s, Columbia has operated a 26-inch natural gas pipeline (“Line MB”) in
and around Baltimore and Harford counties, Maryland. Line MB is scheduled for replacement in
2014. Compl. ¶¶ 26–29. As part of this replacement project (“Project”), Columbia intends to
construct 21.5 miles of Line MB over the Defendants’ properties. Compl. ¶ 28; McClain Aff. ¶
10. Although Columbia set April 1, 2014, as the date on which replacement work would
commence, Columbia cannot replace Line MB until it acquires licenses, permanent easements,
and temporary easements (collectively “Easements”) over the Defendants’ properties (“subject
Properties”). Compl. ¶¶ 29–30.
The scope of the proposed work is described in Columbia’s Complaint, filed on January
15, 2014, and also in Columbia’s FERC Certificate of Public Convenience and Necessity
(“FERC Certificate”), obtained on November 21, 2013. McClain Aff. ¶¶ 26–30; (ECF No. 1,
Exs. 8, 12, 16). Generally, in order to complete the Line MB Project, Columbia must secure
from the Defendants the following: (1) permanent and exclusive easements and rights-of-way to
construct, operate, maintain, replace, repair, remove, or abandon Line MB extending 25 feet on
either side of Line MB, totaling 50 feet in width; and (2) temporary construction easements 25 to
50 feet on either side of and adjoining the permanent easements. Compl. ¶¶ 31–32. In addition,

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Columbia requests the rights of ingress and egress from the subject Properties to the Easements.
McClain Aff. ¶ 30.

Columbia asserts that Defendants retain the right to use the subject

Properties in any manner that does not interfere with the use of its Easements. Compl. ¶ 34.
Columbia maintains that it negotiated in good faith with the Defendants and made bona fide
offers to compensate the Defendants for the desired Easements. Compl. ¶ 36; McClain Aff ¶¶
33–34.

Between April 4, 2013, and May 22, 2013, Columbia mailed offer letters to the

Defendants, offering to purchase the Easements for the following amounts: Hagan Property $19,500; Rocker Property - $20,125; Zamora and Zizelman Property - $7,800. McClain Aff. ¶
33. In spite of its efforts, Columbia has not been able to negotiate sale of the Easements with
Defendants. Compl. ¶ 36; McClain Aff. ¶ 35.
Columbia filed its Complaint on January 15, 2014, but Defendants did not respond to
service within the time allotted pursuant to Rules 12(a) and 71.1(e) of the Federal Rules of Civil
Procedure. (ECF No. 1). Columbia served John Herbert Hagan, IV, on March 2, 2014; his
response was due on March 24, 2014. (ECF No. 36 at 3). Columbia served Robert Allen Hagan
on March 1, 2014; his response was due on March 24, 2014. (ECF No. 36 at 2). Columbia
served Defendant Donald J. Rocker on January 24, 2014; his response was due on February 14,
2014. (ECF No. 11 at 7). Columbia served Marco A. Zamora on March 24, 2014; his response
was due on April 14, 2014. (ECF No. 36 at 1). Columbia served Maria Guadalupe Zizelman on
February 21, 2014; her response was due on March 14, 2014. (ECF No. 31). To date, the
Defendants have not filed responsive pleadings, and, thus, are in default. On April 30, 2014,
Columbia requested the Clerk to enter default against the Defendants. (ECF No. 40). On May 6,
2014, the Clerk entered an Order of Default against the Defendants. (ECF No. 44). On May 15,
2014, Columbia filed the instant Motion for Default Judgment. (ECF No. 48).

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II.

STANDARD FOR DEFAULT JUDGMENT
In reviewing Plaintiff’s Motion for Default Judgment, the court accepts as true the well-

pleaded factual allegations in the complaint as to liability. Ryan v. Homecomings Fin. Network,
253 F.3d 778, 780-81 (4th Cir. 2001). It, however, remains for the court to determine whether
these unchallenged factual allegations constitute a legitimate cause of action. Id.; see also 10A
Wright, Miller & Kane, Federal Practice and Procedure § 2688 (3d ed. Supp. 2010)
(“[L]iability is not deemed established simply because of the default . . . and the court, in its
discretion, may require some proof of the facts that must be established in order to determine
liability.”). If the court determines that Plaintiff’s allegations support a cause of action and
establish liability, the court must then determine if Plaintiff’s allegations support the relief
sought. Ryan, 253 F.3d at 780. In sum, (1) the court must determine whether the unchallenged
facts in Plaintiff’s Complaint constitute a legitimate cause of action, and, if they do, (2) the court
must make an independent determination regarding the appropriate relief.
III.

DISCUSSION
The Natural Gas Act (“NGA”) entitles Columbia to condemn the subject Properties

when:
any holder of a certificate of public convenience and necessity
cannot acquire by contract, or is unable to agree with the owner of
property to the compensation to be paid for, the necessary right-ofway to construct, operate, and maintain pipe line or pipe lines for
the transportation of natural gas . . . it may acquire the same by the
exercise of the right of eminent domain in the district court of the
United States for the district in which such property may be
located, or in the State courts. 2

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This Court has jurisdiction over eminent domain actions where the property at issue is valued at or over
$3,000. See 15 U.S.C. § 717f(h). All properties at issue in the instant case are valued at more than
$3,000. McClain Aff. ¶ 33.
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15 U.S.C. § 717f(h). As discussed more fully below, (1) Columbia holds a FERC Certificate;
and (2) Columbia cannot acquire by contract and is unable to agree with the Defendants as to the
compensation to be paid for the Easements.
A. Columbia Holds a FERC Certificate of Convenience and Necessity
Columbia meets the first condition of Section 717f(h) because it is a natural gas company
as defined by Section 717(a)(6) that holds a FERC Certificate to construct, operate, and maintain
Line MB. Compl. ¶ 4. Columbia’s FERC Certificate explicitly empowers it to exercise the right
of eminent domain over the subject Properties; however Columbia’s power to condemn is
proscribed only to rights that are necessary “to construct, operate, and maintain a pipeline or
pipelines for the transportation of natural gas.” 15 U.S.C. § 717f(h); E. Tenn. Natural Gas Co. v.
Sage, 361 F.3d 808, 818 (4th Cir. 2004). Columbia must detail these Properties by inclusion of a
“description of the [condemned] property sufficient for its identification.” Fed. R. Civ. P.
71(A)(c)(2); Columbia Gas Transmission Corp. v. An Easement to Construct, Operate &
Maintain a 24-Inch Pipeline Across Properties in Shenandoah Cnty., Va., 5:07CV04009, 2008
WL 2439889 (W.D. Va. June 9, 2008).

In compliance with this requirement, Columbia

described the subject Properties in the Affidavit of Michael S. McClain and the attached exhibit,
and submitted plats of the subject Properties. McClain Aff. Ex. A; (ECF No. 1, Exs. 8, 12, 16).
Columbia’s FERC Certificate is a valid demonstration of its authority to condemn the subject
Properties. Furthermore, it is undisputed that Columbia possesses the right to condemn. 3 For the
forgoing reasons, Columbia satisfies the first condition of Section 717f(h).

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Although the Fourth Circuit has never ruled on this particular issue, federal courts across the country
have recognized that FERC Certificates are immune from collateral attack, as the propriety of FERC’s
findings and conditions is not subject to review. See, e.g., Transwestern Pipeline Co. v. 17.19 Acres of
Prop. Located in Maricopa Cnty., 550 F.3d 770, 778 n.9 (9th Cir. 2008) (“The NGA does not allow
landowners to collaterally attack the FERC certificate in the district court, it only allows enforcement of
its provisions.”) (citing Williams Natural Gas Co. v. City of Oklahoma City, 890 F.2d 255, 262 (10th Cir.
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B. Columbia and the Defendants Failed to Agree to Compensation
Columbia satisfies the second condition of Section 717f(h) because it negotiated in good
faith with the Defendants and made bona fide offers to purchase the desired Easements. Compl.
¶ 36; McClain Aff ¶¶ 33–34. Notably, Columbia need only show that it made an offer to the
Defendants in order to demonstrate compliance with the second condition of Section 717f(h).
The burden to satisfy this condition is not onerous. E. Tenn. Natural Gas, LLC v. 1.28 Acres,
2006 WL 1133874, at *29 (W.D. Va. Apr. 26, 2006) (“…nothing in the Act or Federal Rule of
Civil Procedure 71A requires the condemnor to negotiate in good faith. All the Act requires is a
showing that the plaintiff has been unable to acquire the property by contract or has been unable
to agree with the owner of the property as to the compensation to be paid.”). In April and May,
2013, Columbia mailed offer letters to the Defendants. McClain Aff. ¶ 33. However, the
Defendants did not accept Columbia’s offers, and Columbia has not been able to negotiate sale
of the Easements with the Defendants. Compl. ¶ 36; McClain Aff. ¶¶ 34–35. Thus, because
Columbia made offers to the Defendants, but could not agree as to compensation, Columbia
satisfied its obligation under Section 717f(h) and is entitled to default judgment and to
condemnation of the property. Sage, 361 F.3d at 827–28.
C. Relief
In its Motion for Default Judgment, Columbia only sought entry of an order of default
judgment confirming its right to condemn against the Defendants, and did not seek other specific
relief. Pl.’s Mot. 9. Columbia provided sufficient evidentiary basis for an award of relief in this
case.

Thus, no hearing is necessary.

Pursuant to Rule 55 of the Federal Rules of Civil

1989) (“…a challenger may not collaterally attack the validity of a prior FERC order in a subsequent
proceeding.”). Thus, as Columbia proves that it holds a valid FERC Certificate, its right to condemn
cannot be contested.
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Procedure, default judgment is warranted because Columbia stated a legitimate cause of action
and Columbia’s allegations support the relief sought. Ryan, 253 F.3d at 780–81. Because
Columbia satisfies the conditions in Section 717f(h), I recommend that Judge Hollander grant
Columbia’s request for default judgment.
Although Columbia did not seek this relief in its Motion for Default Judgment, the Fourth
Circuit recognizes the right of this Court to exercise its equitable power to grant a natural gas
company the remedy of immediate possession by means of a preliminary injunction upon a
showing that the company has the substantive right to condemn property under the NGA. E.
Tenn. Natural Gas Co. v. Sage, 361 F.3d 808, 828 (4th Cir. 2004). I make no recommendation
as to the propriety of that relief because it was not squarely raised in Columbia’s Motion for
Default Judgment and because the issue has already been heard by Judge Hollander. See (ECF
Nos. 45, 66) (hearing held on Friday, June 20, 2014).
D. Conclusion
For the reasons set forth above, I recommend that the court GRANT Columbia’s Motion
for Default Judgment;
I also direct the Clerk to mail a copy of this Report and Recommendations to the
Defendants at the addresses listed on Columbia’s Complaint (ECF No. 1).
Any objections to this Report and Recommendations must be served and filed within
fourteen (14) days, pursuant to Fed. R. Civ. P. 72(b) and Local Rule 301.5.b.

Dated: June 25, 2014

/s/
Stephanie A. Gallagher
United States Magistrate Judge

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