PENNEAST PIPELINE COMPANY, LLC v. PERMANENT EASEMENT FOR 2.12 ACRES, TEMPORARY EASEMENT FOR 3.15 ACRES IN KINGWOOD TOWNSHIP, HUNTERDON COUNTY, NEW JERSEY, TAX PARCEL NO. 1016-5-6 et al
Filing
36
OPINION filed. Signed by Judge Brian R. Martinotti on 12/14/2018. (Attachments: # 1 Exhibit A)(km)
NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
____________________________________
:
IN RE PENNEAST PIPELINE
:
COMPANY, LLC
:
:
:
:
____________________________________:
First Filed Civ. A. No.: 18-1585
(See Exhibit A for all Case Numbers)
OPINION
MARTINOTTI, DISTRICT JUDGE
Before the Court is Plaintiff PennEast Pipeline Company, LLC’s (“PennEast”) application
for orders of condemnation and orders granting preliminary injunctive relief under the federal
power of eminent domain pursuant to the Natural Gas Act (“NGA”), 15 U.S.C. § 717f(h),
authorizing immediate access to and possession of the rights of way (“Rights of Way”) as defined
in the respective Verified Complaints in Condemnation of Property Pursuant to Federal Rule of
Civil Procedure 71.1 1 (the “Condemnation Application”), for the purpose of “constructing,
operating, and maintaining a natural gas transmission pipeline and appurtenant facilities (part of
an interstate natural gas transmission system) and conducting all other activities required by the
Order of the Federal Energy Regulatory Commission [(‘FERC’ or the ‘Commission’) issuing
certificates (‘FERC Certificates’)] dated January 19, 2018, [FERC] Docket No. CP15-558-000
1
PennEast filed verified complaints in over 130 cases related to the properties referenced therein.
The Court refers to the filings in this litigation generally and identifies case-specific documents
where necessary.
1
(‘FERC Order’)” (Am. Not. of Condemn. 2; Compl. ¶ 8). PennEast’s request is made in advance
of any award of just compensation.
In response thereto, upon the request of PennEast, and for good cause appearing, the Court
entered an Order to Show Cause 2 ordering Defendants, as defined herein, to show cause why an
order for condemnation should not be granted. Due to the number of cases and Defendants, the
Court held three show cause hearings—April 5, 2018; April 19, 2018; and April 26, 2018—at
which Defendants, both represented and pro se, appeared in opposition to PennEast’s
Condemnation Application. Having heard the arguments of the parties pursuant to Federal Rule of
Civil Procedure 78(a), and having carefully reviewed the numerous submissions filed in support
of and in opposition to PennEast’s application and in response to the Order to Show Cause, for the
reasons set forth below and for good cause shown, PennEast’s application for orders of
condemnation and for preliminary injunctive relief allowing immediate possession of the Rights
of Way in advance of any award of just compensation is GRANTED. The State Defendants’, as
defined herein, request for dismissal is DENIED.
I.
BACKGROUND 3
A. The Parties
PennEast is a Delaware limited liability company, duly registered to do business in New
Jersey, with its principal place of business in Pennsylvania. (Compl. ¶ 2.) According to FERC,
“[u]pon commencement of [its] operations . . . , PennEast will become a natural gas company
2
A subsequent Amended Order to Show Cause was entered allowing PennEast additional time to
serve all Defendants.
3
The majority of the facts herein are a matter of public record. When necessary and appropriate,
the Court relies further on the well-pled allegations in the complaints.
2
within the meaning of section 2(6) of the NGA, and will be subject to [FERC]’s jurisdiction.”4
FERC Order ¶ 3.
Defendants are a collection of individual fee simple owners and interest holders of property
(collectively, “Defendants”) on which PennEast is seeking to acquire the Rights of Way as
described in the respective complaints. 5
B. PennEast’s Application to FERC and the FERC Order 6
On September 24, 2015, PennEast filed an application (the “FERC Application”) with
FERC pursuant to section 7(c) of the NGA and Parts 157 and 284 of FERC’s regulations for the
construction and operation of a new 116-mile, 36-inch-diameter greenfield pipeline system from
Luzerne County, Pennsylvania to Mercer County, New Jersey (sometimes referred to by FERC as
the “PennEast Project”). (Compl. ¶ 12); FERC Order ¶ 1. As described in the FERC Order based
on the FERC Application:
PennEast proposes to construct a new greenfield pipeline system to
provide up to 1,107,000 [dekatherms per day (Dth/d)] of firm natural
gas transportation service to markets in New Jersey, New York,
Pennsylvania, and surrounding states. The project extends from
various receipt point interconnections with the interstate natural gas
pipeline system of Transcontinental Gas Pipe Line Company, LLC
(Transco) and with gathering systems in the eastern Marcellus Shale
region operated by UGI Energy Services, LLC, Williams Partners,
L.P., and Energy Transfer Partners, L.P., to multiple delivery point
interconnections in natural gas-consuming markets in New Jersey
4
Section 2(6) defines “[n]atural-gas company” as “a person engaged in the transportation of
natural gas in interstate commerce, or the sale in interstate commerce of such gas for resale.” 15
U.S.C. § 717a(6).
5
Unless otherwise noted, the Court consolidates Defendants’ arguments and addresses them
jointly.
6
As discussed below, this Court does not serve as an appeals court for FERC and therefore does
not review the FERC Order in that capacity. See infra note 42 and text accompanying note 42. It
is summarized here for the benefit of the reader, only.
3
and Pennsylvania, terminating at a delivery point with Transco in
Mercer County, New Jersey. PennEast states that the project is
designed to bring lower cost natural gas to markets in New Jersey,
Pennsylvania, and New York and to provide shippers with
additional supply flexibility, diversity, and reliability.
FERC Order ¶ 4. As part of the FERC Application, PennEast: (1) requested to construct several
facilities costing approximately $1.13 billion; (2) stated it executed long-term agreements with
several shippers for firm transportation service; (3) requested approval of its pro forma tariff; (4)
requested “a blanket certificate of public convenience and necessity pursuant to Part 284, Subpart
284 of the [FERC]’s regulations authorizing it to provide transportation service to customers
requesting and qualifying for transportation”; and (5) requested “a blanket certificate of public
convenience and necessity pursuant to Part 157, Subpart F of the [FERC]’s regulations authorizing
certain future facility construction, operation, and abandonment.” FERC Order ¶¶ 5-9 (citing 18
C.F.R. §§ 157.204, 284.221).
On October 15, 2015, the FERC Application was published in the Federal Register. Id.
¶ 10 (citing 80 Fed. Reg. 62,068 (2015)). In response, FERC granted various motions to intervene,
and “[n]umerous entities, landowners, individuals, and New Jersey State representatives filed
protests and adverse comments raising the following issues: (1) the need for an evidentiary
hearing[ 7]; (2) the need for the project; and (3) whether the use of eminent domain is appropriate
for this project,” as well as “numerous comments . . . raising concerns over the environmental
impacts of the project.” Id. ¶¶ 10-12. According to FERC, these issues were either “addressed in
7
FERC denied the request for a trial-type evidentiary hearing, finding it was “necessary only where
there are material issues of fact in dispute that cannot be resolved on the basis of the written record”
and “the existing written record provides a sufficient basis to resolve the issues relevant to this
proceeding.” Therefore, FERC held, “The Commission has satisfied the hearing requirement by
giving all interested parties a full and complete opportunity to participate through evidentiary
submission in written form.” FERC Order ¶ 14.
4
the Final Environmental Impact Statement” (“EIS”) or in the FERC Order. Id. ¶¶ 11, 12; see also
id. ¶ 97 n.121 (“All comments received prior to the end of the comment period and in response to
the November 4, 2016 letter that included additional substantive concerns are included in the
comment responses contained in Appendix M of the final EIS (Volume II). Any new issues raised
after December 31, 2016, which were not previously identified, are addressed in this [FERC
O]rder.”).
On January 19, 2018, after undergoing an extensive review process as discussed herein,
the FERC Order was issued authorizing the project and granting PennEast a Certificate of Public
Convenience and Necessity, subject to certain conditions. FERC Order ¶ 2. In granting the
authorization, FERC found “the benefits that the PennEast Project will provide to the market
outweigh any adverse effects on existing shippers, other pipelines and their captive customers, and
on landowners and surrounding communities.” Id. And while FERC agreed “the project will result
in some adverse environmental impacts,” as concluded by FERC staff in the EIS, it found that,
through the conditions imposed, “these impacts will be reduced to acceptable levels.” Id.
In its 99-page Order 8, FERC detailed the thorough evaluation and review process it used
in reaching its decision on the FERC Application. Specifically, FERC evaluated whether “the
construction and operation of the facilities” satisfy “the requirements of subsections (c) and (e) of
section 7 of the NGA.” Id. ¶ 15. First, FERC considered the Application of the Certificate Policy
Statement and “whether there [was] a need for a proposed project and whether the proposed project
will serve the public interest.” Id. ¶ 16. The Certificate Policy Statement establishes certain criteria
for making this determination, and FERC found PennEast “sufficiently demonstrated that there is
8
Inclusive of Appendix A—“Environmental Conditions for the PennEast Pipeline Project.”
5
market demand for the project” and that it “will provide reliable natural gas service to end use
customers and the market.” Id. ¶¶ 16, 28, 36. Therefore, FERC concluded:
Based on the benefits the project will provide to the shippers, the
lack of adverse effects on existing customers, other pipelines and
their captive customers, and effects on landowners and surrounding
communities, we find, consistent with the Certificate Policy
Statement and section 7 of the NGA, that the public convenience
and necessity requires approval of PennEast’s proposal, subject to
the conditions discussed below.
FERC Order ¶ 40.
Next, FERC addressed PennEast’s eminent domain authority. Despite arguments that
“PennEast is a for-profit company[] and has not shown that there is a genuine need for the project,
or that the public it is intended to serve will benefit from it,” FERC recognized that, “[i]n
constructing [section 7(h) of the NGA], Congress made no distinction between for-profit and
non-profit companies.” FERC Order ¶¶ 41, 42. Specifically, FERC stated:
Under section 7 of the NGA, the Commission has jurisdiction to
determine if the construction and operation of proposed interstate
pipeline facilities are in the public convenience and necessity. Once
the Commission makes that determination, it is section 7(h) of the
NGA that authorizes a certificate holder to acquire the necessary
land or property to construct the approved facilities by exercising
the right of eminent domain if it cannot acquire the easement by an
agreement with the landowner. . . . Further, as discussed above, need
for the project has been demonstrated by the existence of long-term
precedent agreements for approximately 90 percent of the project’s
capacity. Just as the precedent agreements provide evidence of
market demand/need, they are also evidence of the public benefits
of the project.
Id. ¶ 42.
With respect to the requested blanket certificates, FERC observed the objectors took
“general issue with the [FERC]’s blanket certificate program” rather than presenting “arguments
why PennEast’s specific request . . . should be denied.” Id. ¶ 46. Consequently, FERC granted
6
PennEast a blanket certificate under Part 157, Subpart F of FERC’s regulations, as well as a Part
284, Subpart G blanket certificate, “subject to the [environmental] conditions imposed [in
Appendix A of the FERC Order].” Id. ¶¶ 43-48.
Additionally, FERC outlined its environmental review process and analysis at length as
follows: Prior to entering the FERC Order, on January 13, 2015, FERC staff issued a Notice of
Intent to Prepare an EIS for the Planned PennEast Pipeline Project, Request for Comments on
Environmental Issues, and Notice of Public Scoping Meetings (“NOI”), which “briefly described
the project and the [EIS] process, provided a preliminary list of issues identified by staff, invited
written comments on the environmental issues that should be addressed in the EIS, and listed the
date and location of five public scoping meetings.” Id. ¶ 93. On February 3, 2015, the NOI was
published in the Federal Register and was
sent to more than 4,300 interested entities, including representatives
of federal, state, and local agencies; elected officials; environmental
and public interest groups; Native American tribes; potentially
affected landowners as defined in the Commission’s regulations
(i.e., landowners crossed or adjacent to pipeline facilities or within
0.5 mile of a compressor station); concerned citizens; and local
libraries and newspapers.
Id. In response, “more than 6,000 letters were filed,” and “250 speakers provided verbal
comments” at the public scoping meetings, which were held between February 10 and 12, 2015
and February 25 and 26, 2015 in Bethlehem, Jim Thorpe, and Wilkes-Barre, Pennsylvania; and
Trenton and Hampton, New Jersey. Id. ¶ 93 & n.115.
Pursuant to requirements of the National Environmental Policy Act (“NEPA”), and with
the cooperation and participation of the U.S. Army Corps of Engineers, U.S. Environmental
Protection Agency, and the U.S. Department of Agriculture’s Natural Resources Conservation
Service, FERC staff issued the draft EIS for the project on July 22, 2016. Id. ¶ 94. Notice was
7
again published in the Federal Register allowing public comment, and “[t]he draft EIS was mailed
to over 4,280 stakeholders, which included the entities that were mailed the NOI and additional
interested entities.” Id. ¶ 95. Six public comment sessions were held between August 15 and 17,
2016, where approximately 670 individuals were in attendance, 420 of which provided verbal
comments. Id. Additionally, “[a] total of 4,169 comment letters were filed in response to the draft
EIS before the comment period closed on September 12, 2016.” Id.
In response, PennEast filed route modifications “to address environmental and engineering
concerns.” Id. ¶ 96. Newly affected landowners received notice of the change and were invited to
comment. Id.
On April 7, 2017, FERC issued the final EIS “address[ing] all substantive comments
received on the draft EIS, the November 4, 2016 letter, and comments received prior to December
31, 2016,” and, on April 14, 2017, a public notice was published in the Federal Register. Id. ¶ 97
& n.121. Significantly, the FERC Order summarized and affirmed the final EIS as follows:
98. The final EIS concludes that while the project will result in some
adverse environmental impacts, these impacts will be reduced to less
than significant levels with the implementation of PennEast’s
proposed impact avoidance, minimization, and mitigation measures,
together with staff’s recommended environmental conditions, now
adopted, as modified, as conditions in the attached Appendix A of
this order. While, the Commission recognizes that there are
incomplete surveys due to lack of access to landowner property, the
conclusions in the final EIS, and affirmed by the Commission here,
were based on the information contained in the record, including
PennEast’s application and supplements, as well as information
developed through Commission staff’s data requests, field
investigations, the scoping process, literature research, alternatives
analysis, and contacts with federal, state, and local agencies, as well
as with individual members of the public. As part of its
environmental review, staff developed specific mitigation measures
that we find will adequately and reasonably reduce the
environmental impacts resulting from the construction and
operation of the PennEast Project. We believe that the substantial
8
environmental record and mitigation measures sufficiently support
reaching a decision on this project.
99. Once a certificate is issued, the Commission’s environmental
staff is charged with ensuring that the project will be constructed in
compliance with the Commission’s order, including the conclusions
regarding the project’s expected impacts upon the environment.
Recognizing that there are necessary field surveys that are
outstanding on sections of the proposed route where survey access
was denied, we are imposing several environmental conditions that
require filing of additional environmental information for review
and approval once survey access is obtained. This includes items
such as site-specific plans, survey results, documentation of
consultations with agencies, and additional mitigation measures.
The additional information ensures the EIS’s analyses and
conclusions are verified based on the best available data, enabling
us to improve and finalize certain mitigation plans and ensure
stakeholder concerns are addressed. The information will also
provide Commission staff with the site-specific details necessary to
appropriately evaluate compliance during the construction process.
In addition, Environmental Condition 10 requires that before
construction can commence, PennEast must file documentation that
it has received all applicable authorizations required under federal
law (or evidence of waiver thereof).
100. Further, the final EIS has adequately identified, as required by
section 1502.22 of the Council on Environmental Quality (CEQ)
regulations, where information is lacking. CEQ regulations
recognize that some information simply may not be available.
Moreover, the final EIS contains mitigation plans that provide for
using the correct mitigation measures, sediment control measures,
and restoration requirements based on the actual site conditions
experienced during construction. The conditions in the order will
ensure that all environmental resources will be adequately protected.
101. The Commission needs to consider and study environmental
issues before approving a project, but it does not require all
environmental concerns to be definitively resolved before a
project’s approval is issued. NEPA does not require every study or
aspect of an analysis to be completed before an agency can issue a
final EIS, and the courts have held that agencies do not need perfect
information before it takes any action. In U.S. Department of the
Interior v. FERC, [952 F.2d 538, 546 (D.C. Cir. 1992),] the court
held that “[v]irtually every decision must be made under some
uncertainty; the question is whether the Commission’s response,
given uncertainty, is supported by substantial evidence and is not
9
arbitrary and capricious.” Similarly, in State of Alaska v. Andrus,
[580 F.2d 465, 473 (D.C. Cir. 1978),] the court stated that “[i]f we
were to impose a requirement that an impact statement can never be
prepared until all relevant environmental effects were known, it is
doubtful that any project could ever be initiated.” There must,
however, be sufficient information in the record to enable the
Commission to take the requisite “hard look” required by NEPA. As
indicated above, we believe the record in this proceeding meets that
requirement.
Id. ¶¶ 98-101 (footnotes omitted).
The FERC Order went on—for over 40 pages—to address the major environmental issues
raised with respect to the EIS, namely: (1) geology; (2) soils; (3) water resources; (4) wetlands;
(5) vegetation, forested land, and wildlife; (6) threatened, endangered, and other special status
species; (7) land use, recreation, and visual resources; (8) socioeconomics; (9) cultural resources;
(10) air quality impacts; (11) noise; (12) safety; (13) upstream and downstream impacts; and (14)
alternatives. Id. ¶¶ 104-215. Ultimately, FERC modified and adopted the recommendations in the
final EIS and included them as environmental conditions to the FERC Order, “find[ing] that the
project is in the public convenience and necessity” but noting “[c]ompliance with the
environmental conditions appended to our orders is integral to ensuring that the environmental
impacts of approved projects are consistent with those anticipated by our environmental analyses.”
Id. ¶¶ 216-17. Additionally, FERC stated that “state or local permits issued with respect to the
jurisdictional facilities authorized herein must be consistent with the conditions of this certificate”
and that “this does not mean that state and local agencies, through application of state or local
laws, may prohibit or unreasonably delay the construction or operation of facilities approved by
this Commission.” Id. ¶ 218. In the end, FERC ordered:
(A) A certificate of public convenience and necessity is issued to
PennEast, authorizing it to construct and operate the proposed
PennEast Project, as described and conditioned herein, and as more
fully described in the application.
10
(B) The certificate authority issued in Ordering Paragraph (A) is
conditioned on:
(1) PennEast’s proposed project being constructed and made
available for service within two years of the date of this order
pursuant to section 157.20(b) of the Commission’s regulations;
(2) PennEast’s compliance with all applicable Commission
regulations, particularly the general terms and conditions set forth
in Parts 154, 157, and 284, and paragraphs (a), (c), (e), and (f) of
section 157.20 of the Commission’s regulations; and
(3) PennEast’s compliance with the
conditions listed in Appendix A to this order.
environmental
(C) A blanket construction certificate is issued to PennEast under
Subpart F of Part 157 of the Commission’s regulations;
(D) A blanket transportation certificate is issued to PennEast under
Subpart G of Part 284 of the Commission’s regulations;
(E) PennEast shall file a written statement affirming that it has
executed firm contracts for the capacity levels and terms of service
represented in signed precedent agreements, prior to commencing
construction.
(F) PennEast’s initial rates and tariff are approved, as conditioned
and modified above.
(G) PennEast is required to file actual tariff records reflecting the
initial rates and tariff language that comply with the requirements
contained in the body of this order not less than 30 days and not
more than 60 days prior to the commencement of interstate service
consistent with Part 154 of the Commission’s regulations.
(H) As described in the body of this order, PennEast must file any
negotiated rate agreement or tariff record setting forth the essential
terms of the agreement associated with the project at least 30 days,
but not more than 60 days before the proposed effective date of such
rates.
(I) No later than three months after the end of its first three years of
actual operation, as discussed herein, PennEast must make a filing
to justify its existing cost-based firm and interruptible recourse rates.
PennEast’s cost and revenue study should be filed through the
eTariff portal using a Type of Filing Code 580. In addition,
PennEast is advised to include as part of the eFiling description, a
11
reference to Docket No. CP15-558-000 and the cost and revenue
study.
(J) The requests for an evidentiary hearing are denied.
(K) PennEast shall notify the Commission’s environmental staff by
telephone or e-mail of any environmental noncompliance identified
by other federal, state, or local agencies on the same day that such
agency notifies PennEast. PennEast shall file written confirmation
of such notification with the Secretary of the Commission within 24
hours.
Id. at 82-83.
C. Verified Complaints
On February 6, 2018, PennEast filed complaints against Defendants, verified by Jeffrey
England of UGI Energy Services, LLC as Project Manager, Project Management and Construction,
on behalf of PennEast, asserting claims related to the respective properties for: (1) award of
possession by eminent domain pursuant to the NGA, 15 U.S.C. § 717f(h); (2) determination of just
compensation; and (3) preliminary and permanent injunctive relief allowing
immediate possession and entry onto the Property, in advance of any
award of just compensation, in order to construct, operate, and
maintain an interstate natural gas transmission pipeline and
appurtenances as approved by FERC, and enjoining Defendants and
his/her agents, servants, and representatives from interfering in any
way with the construction of the pipeline, including, without
limitation, land surveys, tree-clearing, excavation, trenching, pipe
laying, and post-construction restoration.
(Compl. ¶¶ 1, 35-41.) In support, PennEast contends (1) the FERC Order authorizes it to install
the pipeline, (2) the Rights of Way for the respective property were “reviewed and approved by
[the] FERC prior to the issuance of the FERC Order,” and (3) the Rights of Way “are necessary to
construct, install, operate, and maintain the pipeline facilities approved in the FERC Order.” (Id.
¶¶ 18-21.) Further, PennEast alleges it offered to pay the landowners at least $3000 for the Rights
of Way and attempted several times, through its land agent Western Land, to negotiate in good
12
faith for the acquisition of the Rights of Way for the properties but was unable to acquire same.
(Id. ¶¶ 29-30, 32.) Consequently, it argues it has satisfied the conditions required to exercise
eminent domain under Section 7(h) of the NGA and is therefore entitled to immediate possession.
(Id. ¶ 34.)
D. Order to Show Cause
On February 14, 2018, having reviewed the complaints and exhibits attached thereto, the
Court entered an Order to Show Cause why an order should not be entered:
1. Determining that PennEast has satisfied all of the statutory
requirements of the Natural Gas Act, 15 U.S.C. § 717f(h) and is duly
vested with the authority to condemn the Rights of Way as defined
in the Verified Complaint;
2. Granting PennEast’s application for an Order of Condemnation
of the Rights of Way;
3. Finding that PennEast is entitled under the equitable powers of
the Court to a preliminary injunction in the form of an order for
immediate access to and possession of the property rights being
condemned.
4. Requiring PennEast to post appropriate security in the form of a
surety bond or other undertaking as the Court may direct into the
Court’s Registry pursuant to Local Civil Rule 67.1(a).
5. Finding that upon this deposit with the Court, PennEast is
authorized to immediately enter and take possession of the Rights of
Way for all purposes allowed under the Federal Energy Regulatory
Commission’s Order granting PennEast a Certificate of Public
Convenience and Necessity, including, without limitation, the
performance of survey activities required by the FERC to be
completed before construction of the pipeline may commence.
(Order to Show Cause 2-3; Am. Order to Show Cause 2-3; see supra note 2.) Public hearings on
the Order to Show Cause were held on three dates: April 5, 2018; April 19, 2018; and April 26,
13
2018. 9 The Order to Show Cause also set forth a deadline, 10 prior to the hearings, for any interested
party to file any papers responsive to the Order to Show Cause. (Id. at 3.) PennEast was permitted,
by way of the Order to Show Cause, to respond to any opposition it received. (Id.)
E. Responses to the Order to Show Cause11
i. Opposition by the State Defendants and Mercer County 12
Appearing as Defendants in over twenty cases, the State, the Department of Environmental
Protection (the “DEP”), the Delaware and Raritan Canal Commission, and the State Agriculture
Development Committee (collectively, the “State Defendants”) filed briefs in opposition to
PennEast’s requested relief and seeking dismissal of the complaints. (See generally State Defs.’
Br.) The State Defendants argue the State is entitled to Eleventh Amendment immunity and
therefore, this Court does not have jurisdiction. The State contends it is a necessary party for
determining just compensation, and therefore, they ask the Court to “refrain from proceeding with
9
Due to the volume of complaints, the Court assigned a hearing date of April 5, 2018, or April 19,
2018, to Defendants based on their property’s docket number (see Am. Order 2), with the final
April 26, 2018 hearing date being used as a catch-all. While the Defendant’s specific hearing date
was set forth in his or her Order to Show Cause, all interested property owners were permitted to
comment at any hearing at which they appeared. In preparation for the hearings, PennEast was
ordered to provide the Court with a master case list. (See Text Order dated March 23, 2018.)
10
This deadline initially included the time by which Defendants had to file their answers. If and
when requested, Defendants were granted an extension for time to answer or respond to the
complaints, but the date by which to file papers in response to the Court’s Amended Order to Show
Cause was not extended by way of that extension. In light of the State’s jurisdictional challenges,
their deadline to answer was tolled pending the Court’s decision regarding jurisdiction.
11
Many parties’ arguments overlap or are common among briefs. For the sake of brevity in what
is already a complex matter, the Court highlights novel portions of each brief and discusses the
arguments infra as necessary.
12
Mercer County joined the State Defendants’ arguments to the extent applicable, e.g., they did
not (and could not) argue they were entitled to Eleventh Amendment immunity.
14
any condemnation related to these properties.” (State Defs.’ Br. 1.) Alternatively, the State
Defendants assert the actions should be dismissed because PennEast has failed to meet its burdens
both under the NGA and for injunctive relief. Specifically, they argue New Jersey has a public
policy of protecting its open space and farmland and, under the New Jersey Constitution, tax
dollars are set aside to preserve same. The State Defendants point to several programs they contend
evidence how highly they value this “long-held polic[y],” including programs supported by the
DEP and the State Agriculture Development Committee (“SADC”). (Id. at 5-7.) The State
Defendants claim a preliminary injunction is premature given the ongoing FERC proceedings and
the likelihood that the pipeline route could change, causing unnecessary condemnation. (Id. at 3745.)
ii. Opposition by the Stark Defendants 13
Stark & Stark filed notices of appearance and oppositions in over eighty cases on behalf of
Hunterdon County, West Amwell Township, Hopewell Township, Delaware Township,
Alexandria Township, the New Jersey Conservation Foundation (“NJCF”), the Hunterdon Land
Trust Alliance (“Hunterdon Land Trust”), and dozens of private property owners (collectively, the
“Stark Defendants”). The Stark Defendants’ briefs are largely consistent. They join the arguments
of the State Defendants but additionally argue, inter alia, “PennEast does not hold a final FERC
Certificate of Public Convenience and Necessity upon which it could ask this Court to determine
that it possesses a right to condemn,” constituting an improper taking under the Fifth Amendment.
(Stark Defs.’ Br. 1.) Further, the Stark Defendants contend PennEast is improperly attempting a
“quick-take or immediate possession” in contravention to the NGA, where, instead, “PennEast
13
The Columbia Environmental Law Clinic serves as co-counsel for the Hunterdon Land Trust
and the New Jersey Conservation Foundation.
15
should have moved by Summary Judgment to obtain an order of condemnation declaring that it
has the substantive right to condemn prior to receiving preliminary injunctive relief to gain access
to the property.” (Id. at 8.)
iii. Opposition by the McKirdy Riskin Defendants 14
McKirdy Riskin, Olson & Della Pelle (“McKirdy Riskin”) filed opposition briefs in
approximately eight cases on behalf of property owners (the “McKirdy Riskin Defendants”). 15
They argue PennEast failed to comply with state substantive law, PennEast failed to negotiate, and
that the McKirdy Riskin Defendants were denied substantive due process rights because the parcel
map and description is unclear as to the parcel to be acquired. 16 (See generally McKirdy Riskin
Defs.’ Br.)
iv. Cole of Hopewell
Cole of Hopewell Township, NJ, LLC (“Cole of Hopewell”) (Dkt. Nos. 18-1951 and
18-1976), represented by Giordano, Halleran & Ciesla, filed a brief in opposition, joining the
arguments of Hopewell Township, the State Defendants, and Mercer County, arguing PennEast is
not entitled to injunctive relief.
14
McKirdy Riskin also filed non-contesting answers in several cases on behalf of individual
property owners.
15
See, e.g., Dkt. Nos. 18-1722, opposition filed o/b/o Joseph and Adela Gugiotta; 18-1771 (having
since been resolved), filed o/b/o Philip and Linda Snyder; 18-1779, filed o/b/o Richard and
Elizabeth Kohler; 18-1798, filed o/b/o Carl and Valarie Vanderborght; 18-1853, filed o/b/o
Jacqueline Evans; 18-2014, filed o/b/o Dan and Carla Mackey; 18-2028, filed o/b/o Frank and
Bernice Wahl; and 18-2508, filed o/b/o Foglio and Assocs. LP (in this matter, Decotiis, Fitzpatrick,
Cole & Giblin, LLP serves as conflict counsel for PennEast).
16
The Court notes the Kohlers, for example, are not opposed to “allow[ing] PennEast access to
the Property on reasonable notice and conditions to conduct all necessary environmental, cultural,
and species surveys required under the FERC Certificate.” (See, e.g., Kohler Br. 2 n.1.)
16
v. Opposition by the Township of Kingwood
The Township of Kingwood, represented by Lavery, Selvaggi, Abromitis & Cohen, filed
opposition to PennEast’s request for an injunction and joined the arguments of Hunterdon Land
Trust. (See Dkt. Nos. 18-1638, 18-1855, 18-1995.) 17
vi. Answer and Statement of Objections filed by Holland Township
In approximately six cases, Gebhardt & Kiefer, on behalf of Holland Township, filed
Answers with counterclaims, asserting PennEast is in violation of the Takings Clause and the Due
Process Clause of the Fifth Amendment. Holland Township contends “[t]his Court is not bound
by the FERC’s findings based upon an incomplete record and/or unconstitutional practice of
conferring eminent domain authority without looking beyond precedent agreements.” (Holland
Stat. of Obj. ¶¶ 3-4.)
vii. Answer and Affirmative Defenses by Mark G. Korman 2007 Residence
Trust
The Mark G. Korman 2007 Residence Trust (the “Korman Trust”) (Dkt. No. 18-1814), by
and through its attorneys Piro, Zinna, Cifelli, Paris & Genitempo, filed an answer with affirmative
defenses, contending PennEast “failed to negotiate in good faith for access to survey the Korman
Property in that [PennEast] refused to use a licensed surveyor for activities.” Further, but without
explanation, the Korman Trust asserts a defense of lack of subject matter jurisdiction and that the
claims are barred by the doctrines of waiver, estoppel, and unclean hands. (Korman Ans. 10.)
viii. Consent by Jersey Central Power & Light
Jersey Central Power & Light Company (“JCP&L”) is named as a Defendant in over 110
cases as either an “‘[i]nterest [h]older’ by reason of JCP&L’s interest in an easement of right of
17
The Township of Kingwood was named and later dismissed in several other cases.
17
way in the [named p]roperty . . . or [] a [l]andowner by reason of JCP&L’s fee simple interest in
the [named p]roperty.” (Consent Order 1.) By way of Consent Order, which was submitted by
JCP&L and entered by the Court, JCP&L agreed to allow access to PennEast “for the purposes of
performing non-invasive surveys and studies in furtherance of PennEast obtaining requisite
governmental permits and approvals for its construction of the [p]roject.” (Id. ¶ 1.) Further, the
parties agreed to “exercise good faith, diligent efforts to (i) determine whether the proposed
location of the PennEast pipeline in the [p]roject through [the named property] shall involve any
overlapping co-location with [JCP&L’s interest in the named property] and (ii) enter an
appropriate encroachment consent agreement with respect to [JCP&L’s property interest].” (Id.
¶ 2.) PennEast also agreed that, pending execution of an encroachment consent agreement, it would
not “file or record a declaration of taking . . . and shall not commence any construction.” (Id. ¶ 4.)
To date, the parties have not reached an agreement and continue to extend the time period by which
they shall enter into an encroachment consent agreement. (See Consent Order dated November 16,
2018 (extending agreement to December 17, 2018).)
ix. Consent by Verizon
Verizon New Jersey Inc. and Cellco Partnership d/b/a Verizon Wireless (“Verizon”) was
named as a Defendant in approximately twenty complaints, in which JCP&L is also listed as
Defendants. Following suit, Verizon requested, and PennEast agreed to, similar protections as
JCP&L, allowing PennEast access to the properties to perform non-invasive surveys and studies.
(Verizon Ltr. dated March 22, 2018; PennEast Ltr. dated March 28, 2018.) Verizon has since been
voluntarily dismissed from all matters in which it was a named Defendant. 18
18
PennEast has also been able to resolve AT&T’s interest in several properties.
18
x. Additional Represented Property Owners
The Court received opposition from several represented property owners:
•
By Gaetano De Sapio, Esq. o/b/o himself (Dkt. No. 18-1809) and the Estate of
Anthony De Sapio, Anthony De Sapio, Jr., Martin De Sapio, and James De Sapio
(Dkt. No. 18-1806) (collectively, the “De Sapio Defendants”). The De Sapio
Defendants allege they were not properly served, if at all, with the summons and
complaint, nor were they furnished with an appraisal from which they could attempt
to negotiate. Beyond that, their opposition largely mirrors the Stark Defendants’.
•
By Hill Wallack o/b/o Philip and Suzanne Muller (“Mullers”) 19 (Dkt. No. 18-1915).
The Mullers argue the NGA “does not authorize private gas companies to utilize
so-called ‘quick-take’ procedures” and that PennEast is not entitled to an order
allowing the properties to be patrolled by armed federal marshals. (Muller Br. 13,
17.) The Mullers further contend bond, if required, should be at least equal to the
fair market value of the specified property. (Id. at 19.)
xi. Pro Se Property Owners
The Court received and reviewed oppositions from the following pro se Defendants:
•
Janet Mowder (Dkt. No. 18-1656)
•
Raymond Aron Jr., in the form of an answer and request for dismissal (Dkt. No.
18-1801)
•
•
19
Leonard and Sharon Goins (Dkt. No. 18-1996)
Michael and Maureen Santoro, and Thomas and Barbara Callahan (Dkt. No.
The Mullers are now represented by McKirdy Riskin.
19
18-2016)
•
Lydia Gombosi, Lana Salsano, and Lydia Dunne (Dkt. No. 18-1621)
F. Public Hearings on the Orders to Show Cause
Each of the hearings on the Orders to Show Cause generally proceeded the same way: First,
PennEast was permitted to address the Court, followed by Defendants represented by counsel.
Next, any property owner in attendance was permitted to address the Court, giving first priority to
any party who had filed an opposition. PennEast was permitted to respond. At each subsequent
hearing, the Court advised counsel they need only supplement their prior arguments. 20
Based on this procedure, at the April 5, 2018 hearing, following arguments by PennEast
and counsel for Defendants 21, the Court opened the floor to individual Defendants wishing to
address the Court. No individuals came forward with objections. Nevertheless, following
PennEast’s rebuttal, the Court provided individual Defendants with another opportunity to address
the Court. At that point, Frances Silkotch and Gary Salata 22 spoke, expressing dissatisfaction with
PennEast’s attempts to negotiate. The April 19, 2018 hearing proceeded in the same manner, with
the Court limiting the parties to new arguments and supplements to the record. 23 The following
individuals addressed the Court: Michael Voorhees, Cynthia Niciecki, Leonard Goins, Michael
20
The parties’ specific arguments raised at the hearing are incorporated and discussed infra.
21
Specifically, counsel spoke on behalf of the following Defendants: the State, NJCF, Hunterdon
Land Trust, the Stark Defendants, the McKirdy Riskin Defendants, Mercer County, JCP&L,
Kingwood Township, and Holland Township.
22
Both Silkotch (Dkt No. 18-1765) and Salata (Dkt. No. 18-1918) are represented by counsel but,
by invitation of the Court and with permission of counsel, spoke on behalf of themselves.
23
Counsel spoke on behalf of the following Defendants: the Mullers, the Stark Defendants, the
McKirdy Riskin Defendants, the De Sapio Defendants, NJCF, and the Hunterdon Land Trust.
20
and Maureen Santoro, Barbara Callahan, Janet Mowder, Gary Salata, Vincent DiBianca, Kevin
Kuchinski, Jacqueline Evans, and Dan Mackey. 24
Prior to the third and final hearing on April 26, 2018, the Court ordered PennEast to reserve certain Defendants 25 it had not been able to personally serve and who had not otherwise
appeared or filed a response to the Order to Show Cause.
Counsel had little to add to the oral record at the April 26, 2018 hearing. The following
individuals addressed the Court: Michael Voorhees, Jackie Freedman on behalf of Woodside View
Estates Homeowner’s Association, and Joseph Caparoso. 26
G. Summation Briefs
Following the hearings, the Court ordered the parties to submit written summation briefs
in lieu of closing oral arguments. 27 The Court received and carefully reviewed summation briefs
24
Individual Defendants’ arguments included but was not limited to dissatisfaction with
PennEast’s negotiation attempts, disagreement with PennEast’s offer and valuation, objections to
use of the United States Marshal Service, and objections to the route of the pipeline.
25
Defendants are listed in Exhibit A to the April 20, 2018 Order. (See Dkt Nos. 18-1585; 18-1590;
18-1658; 18-1669; 18-1695; 18-1776; 18-1811; 18-1905; 18-1909; 18-1924 (having since been
resolved); 18-1942; 18-1989; 18-2001; 18-2003; 18-2004; and 18-2025.)
26
Voorhees and Freedman objected to their late service and notice of the hearings. Therefore, the
Court permitted them three weeks to retain counsel or answer or otherwise respond to the
complaint and Order to Show Cause.
27
Following the submission of summation briefs, the D.C. Circuit, the Third Circuit, the District
Court for the District of New Jersey, and the District Court for the Middle District of Pennsylvania
issued pipeline-related decisions, including but not limited to Delaware Riverkeeper Network v.
Federal Energy Regulatory Commission, 895 F.3d 102 (D.C. Cir. 2018); Township of Bordentown
v. Federal Energy Regulatory Commission, 903 F.3d 234 (3d Cir. 2018); New Jersey Conservation
Foundation v. Federal Energy Regulatory Commission, No. 17-11991, 2018 WL 5342833 (D.N.J.
Oct. 29, 2018); Transcontinental Gas Pipe Line Co., LLC v. 2.14 Acres, 907 F.3d 728 (3d Cir.
2018); Penneast Pipeline Company v. A Permanent Easement of 0.60 Acre ± And A Temporary
Easement Of 0.60 Acre ± In Towamensing Township, Carbon County, Pennsylvania, No. 18-281,
2018 WL 6304191 (M.D. Pa. Dec. 3, 2018) (granting motion for preliminary injunction); and
Penneast Pipeline Company v. A Permanent Easement of 0.60 Acre ± And A Temporary Easement
21
from the following parties: PennEast, the State, NJCF, Hunterdon Land Trust, Mercer County,
Cole of Hopewell, the De Sapio Defendants, the Stark Defendants, and the McKirdy Riskin
Defendants.
H. FERC Rehearing Requests and Denial
While PennEast was filing complaints in this Court based on the FERC Order, several
Defendants petitioned for a rehearing of FERC’s decision. After issuing tolling orders giving
FERC additional time to review the rehearing requests 28, on August 10, 2018, “the requests for
rehearing [were] rejected, dismissed, or denied and the requests for stay [were] dismissed as moot.”
FERC Order on Rehearing, Aug. 10, 2018 ¶ 4.
II.
JURISDICTION
A. Under The NGA
This action is properly before this Court pursuant to 15 U.S.C. § 717f(h), which allows the
holder of a certificate of public convenience and necessity to acquire the necessary right of way
for a pipeline “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.” Whether PennEast has established
that it is entitled to this right—and Defendants argue it is not—is addressed below.
Of 0.60 Acre ± In Towamensing Township, Carbon County, Pennsylvania, No. 18-281, 2018 WL
6304192 (M.D. Pa. Dec. 3, 2018) (granting partial summary judgment). At the request of counsel
or at the request of the Court, the parties supplemented their briefs when these decisions were
issued, as well as when FERC issued its Order on Rehearing. Supplemental briefs were received
almost monthly and as recently as December 10, 2018. This opinion has been revised to reflect
these recent decisions, as well as the parties’ responses thereto, as necessary.
28
Pursuant to the NGA, rehearing requests are to be heard within thirty days. Despite this, courts
have upheld the use of tolling order to grant FERC additional time to review the requests.
Rehearing requests do not constitute stays of the FERC Order. Delaware Riverkeeper Network,
895 F.3d at 111; Atl. Coast Pipeline, LLC Dominion Energy Transmission, Inc., 163 FERC ¶ 61098
(May 4, 2018).
22
B. Eleventh Amendment Immunity
The State Defendants seek dismissal based on Eleventh Amendment immunity. An
assertion of Eleventh Amendment immunity is a challenge to a district court’s subject matter
jurisdiction. See Blanciak v. Allegheny Ludlum Corp., 77 F.3d 690, 693 n.2 (3d Cir. 1996) (“[T]he
Eleventh Amendment is a jurisdictional bar which deprives federal courts of subject matter
jurisdiction.”) (citing Pennhurst State Sch. & Hosp. v. Halderman, 465 U.S. 89, 98-100 (1984)).
Typically, when jurisdiction is challenged, the party asserting this Court’s jurisdiction bears the
burden of persuading the Court that subject matter jurisdiction exists. Kehr Packages, Inc. v.
Fidelcor, Inc., 926 F.2d 1406, 1409 (3d Cir. 1991). However, because “Eleventh Amendment
immunity can be expressly waived by a party, or forfeited through non-assertion, it does not
implicate federal subject matter jurisdiction in the ordinary sense,” and therefore, a party asserting
Eleventh Amendment immunity bears the burden of proving its applicability. Christy v. Pa.
Turnpike Comm., 54 F.3d 1140, 1144 (3d Cir. 1994); see also Carter v. City of Phila., 181 F.3d
339, 347 (3d Cir. 1999). Accordingly, the State Defendants must prove the Eleventh Amendment
immunity’s applicability in this case. For the reasons set forth below, the Court finds the State
Defendants are not entitled to Eleventh Amendment immunity.
The Eleventh Amendment provides: “The Judicial power of the United States shall not be
construed to extend to any suit in law or equity, commenced or prosecuted against one of the
United States by Citizens of another State, or by Citizens or Subjects of any Foreign State.” U.S.
Const. amend. XI. Courts have interpreted this to mean that State agencies and State officials acting
in their official capacities cannot be sued under the principles of sovereign immunity and the
Eleventh Amendment, subject to exceptions. Will v. Michigan Dep’t of State Police, 491 U.S. 58,
70-71 (1989).
23
Fatally, the State Defendants concede their Eleventh Amendment immunity applies only
to suits by private citizens (State Opp’n to Order to Show Cause 17) and that their arguments
would be different if the United States government were pursuing eminent domain rights (Apr. 5,
2018 Hearing Tr. 34:9-17). Indeed, PennEast has been vested with the federal government’s
eminent domain powers and stands in the shoes of the sovereign. City of Newark v. Cent. R.R. of
N.J., 297 F. 77, 82 (3d Cir. 1924); Georgia Power Co. v. 54.20 Acres of Land, 563 F.2d 1178,
1181 (5th Cir. 1977); City of Davenport v. Three Fifths of an Acre of Land, 252 F.2d 354, 356 (7th
Cir. 1958). The Court is not persuaded by the State Defendants’ argument that the NGA is silent
as to the rights of a private gas company; the NGA expressly allows “any holder of a certificate of
public convenience and necessity” to acquire rights of way “by the exercise of the right of eminent
domain” in this District Court. 29 15 U.S.C. § 717f(h). As more thoroughly discussed below,
PennEast holds a valid certificate as issued by the FERC Order. Therefore, the Eleventh
Amendment is inapplicable, and the State Defendants are not entitled to immunity. 30 The State
Defendants’ request for dismissal for lack of jurisdiction based on Eleventh Amendment immunity
is DENIED.
29
Recently, and more to the point, the Third Circuit specifically stated, “Congress may grant
eminent domain power to private companies acting in the public interest. . . . The NGA gives
natural gas companies the power to acquire property by eminent domain . . . .” Transcon. Gas Pipe
Line Co., 907 F.3d at 728-29. See also FERC Order ¶ 41, 42 (“Congress made no distinction
between for-profit and non-profit companies . . . . Once the Commission makes [a] determination
[that the construction and operation of proposed interstate pipeline facilities are in the public
convenience and necessity], it is section 7(h) of the NGA that authorizes a certificate holder to
acquire the necessary land or property to construct the approved facilities by exercising the right
of eminent domain if it cannot acquire the easement by an agreement with the landowner.”)
30
The Court is further persuaded by the State’s apparent failure to raise this Eleventh Amendment
argument in prior pipeline cases in this district.
24
III.
APPLICABLE PROCEDURE FOR PENNEAST’S CONDEMNATION APPLICATION
PennEast asks this Court: (1) to find it has satisfied the statutory requirements of the NGA
under 15 U.S.C. § 717f(h) and is therefore vested with the authority to condemn the Rights of
Way; (2) for an Order of Condemnation of the Rights of Way; and (3) to enter a preliminary
injunction allowing immediate access to and possession of the Rights of Way because PennEast
“has succeeded on the merits of its claim.” (PennEast’s Proposed Order 2-3.) Defendants argue
PennEast’s application is improper because, inter alia, PennEast is required to seek relief by way
of summary judgment motion and that PennEast’s request equates to a “quick-take” or immediate
possession. Defendants further contend PennEast’s application is improper because it does not
comply with New Jersey state law. In response, PennEast claims the Court may—and indeed,
must—summarily find the § 717f(h) factors are satisfied prior to and as part of the injunctive relief
inquiry and that such a finding is not improper or premature. Additionally, PennEast argues the
NGA preempts New Jersey state law.
A. Absence of Summary Judgment and Alleged Quick-Take
There is no doubt the NGA, “like most statutes giving condemnation authority to
government officials or private concerns, contains no provision for quick-take or immediate
possession.” E. Tenn. Nat. Gas Co. v. Sage, 361 F.3d 808, 822 (4th Cir. 2004); accord Transcon.
Gas Pipe Line Co., 907 F.3d at 728-29. However, it is also undeniable 31 that “a certificate of public
convenience and necessity gives its holder the ability to obtain automatically the necessary right
of way through eminent domain, with the only open issue being the compensation the landowner
31
Defendants challenge the effect of PennEast’s FERC Certificate. This Court discusses and
rejects these arguments infra. See Columbia Gas Transmission, LLC, 2015 WL 389402, at *3 &
n.7-8; infra note 42 and text accompanying note 42.
25
defendant will receive in return for the easement.” Columbia Gas Transmission, LLC v. 1.01 Acres,
768 F.3d 300, 304 (3d Cir. 2014). Courts are generally in agreement that, within this framework,
immediate possession is permitted through a preliminary injunction without being considered a
quick-take. Transcon. Gas Pipe Line Co., 907 F.3d at 738-39; 32 Sage, 361 F.3d at 818, 824.
Therefore, the arguably novel question before this Court is whether PennEast was required
to file a motion for summary judgment (or partial summary judgment) with respect to § 717f(h)
before or in conjunction with its motion for a preliminary injunction. 33 For the reasons set forth
32
The Third Circuit rejected landowners’ argument that “because the NGA does not grant ‘quick
take’ power, the statute does not permit immediate possession,” stating:
Nothing in the NGA suggests either explicitly or implicitly that the
rules governing preliminary injunctions should be suspended in
condemnation proceedings. . . .
[W]e see no reason to read a repeal of Rule 65, governing
preliminary injunctions, into the NGA. In fact, subsection (a) of
Rule 71.1 incorporates the other Federal Rules of Civil Procedure—
including the preliminary injunction rule, Rule 65—in
condemnation proceedings to the extent Rule 71.1 does not govern.
We do not so easily exterminate equitable remedies.
Transcon. Gas Pipe Line Co., 907 F.3d at 738-39.
33
The Third Circuit did not directly address this discreet issue in its recent Transcontinental
opinion. Transcon. Gas Pipe Line Co., LLC, 907 F.3d at 734-35. There, plaintiff filed motions for
a partial summary judgment and for a preliminary injunction. The district court in Pennsylvania
granted partial summary judgment and, because it made a favorable decision on the merits in doing
so, granted the preliminary injunction. On appeal, the Third Circuit found this did not constitute
an impermissible quick-take. However, it did not specifically discuss whether anything less that
summary judgment on plaintiff’s substantive right to take would suffice. (See id. at 739 (agreeing
with the Fourth Circuit’s decision in Sage that immediate possession through a preliminary
injunction was permissible in a condemnation proceeding, stating, “And this Court, too, albeit with
less discussion, has ruled that where summary judgment is properly granted on a condemnation
complaint, a preliminary injunction is appropriate as well. We effectively granted immediate
access on the basis that the gas company had demonstrated success on the merits and strong
arguments on the other prongs of the preliminary injunction test.”). For the reasons set forth herein,
the Court finds the Third Circuit’s decision instructive here.
26
herein, the Court finds such a motion is not required in order for this Court to make a finding as to
PennEast’s substantive right to eminent domain under § 717f(h).
District courts in the Third Circuit have repeatedly granted immediate possession and
preliminary injunctions without the benefit of summary judgment motions or briefings. See, e.g.,
Columbia Gas Transmission, LLC v. 2.510 Acres of Land in the Borough of Swedesboro,
Gloucester Cty., 86 F. Supp. 3d 291 (D.N.J. 2015); Columbia Gas Transmission, LLC v. 1.092
Acres of Land, No. 15-208, 2015 WL 389402 (D.N.J. Jan. 28, 2015); Tennessee Gas Pipeline, LLC
v. 1.693 Acres of Land in the Twp. of Mahwah, No. 2:12-cv-07921, 2013 WL 244821 (D.N.J. Jan.
22, 2013); Tennessee Gas Pipeline Co. v. 0.018 Acres of Land in Twp. of Vernon, Sussex Cty.,
N.J., No. 10-4465, 2010 WL 3883260 (D.N.J. Sept. 28, 2010); Steckman Ridge GP, LLC v. An
Exclusive Nat. Gas Storage Easement Beneath 11.078 Acres, No. 08-168, 2008 WL 4346405
(W.D. Pa. Sept. 19, 2008). In each of these cases, the court first found “[p]laintiff had demonstrated
an established right to condemn the landowner defendants’ properties under the [NGA], 15 U.S.C.
§ 717f(h),” followed by a finding that “preliminary relief in the form of immediate possession was
appropriate.” See Columbia Gas Transmission, LLC, 86 F. Supp. 3d at 292–93 (citing Columbia
Gas Transmission, 2015 WL 389402, at *3-5). This is precisely the procedure PennEast asks the
Court to follow. 34
Still, Defendants argue this seemingly standard procedure operates as an impermissible
quick-take. The Court disagrees. The Third Circuit in Transcontinental Gas Pipe Line Co. recently
confirmed there are two types of eminent domain:
One is “quick take,” permitted by the [Declaration of Taking Act
34
The pervasiveness of this practice is enough to convince the Court that this procedure is proper.
However, the Court will address Defendants’ arguments, particularly in light of Transcontinental
Gas Pipe Line Co., 907 F.3d 725.
27
(“DTA”)], 40 U.S.C. § 3114, in which the government files a
“declaration of taking” that states the authority for the taking, the
public use, and an estimate of compensation. Upon depositing the
estimated compensation, title vests automatically with the United
States. The other is standard condemnation, permitted by 40 U.S.C.
§ 3113, in which title passes and the right to possession vests after a
final judgment and determination of just compensation. The
procedures for standard condemnations are set forth in Fed. R. Civ.
P. 71.1. The NGA is an example of a grant of eminent domain power
from Congress to a private actor to condemn land for public use, but
it only embodies the second type—standard condemnation power,
not “quick take.”
In the case before us, Transcontinental followed standard
condemnation procedure. The company filed condemnation
complaints under Rule 71.1, not a declaration of taking. Rule 71.1
has requirements that go beyond the DTA. Transcontinental
followed these procedures by filing condemnation complaints under
Rule 71.1; it then established its substantive right to the property by
filing for summary judgment. Only after the District Court granted
summary judgment in Transcontinental’s favor did it grant
injunctive relief. Transcontinental also posted bond at three times
the appraised value of the rights of way, as required by the orders of
condemnation. If Transcontinental had in fact exercised “quick
take,” it would have simply filed a declaration of taking with an
estimate of compensation; title would have vested automatically.
Here, unlike in a “quick take” action, Transcontinental does not yet
have title but will receive it once final compensation is determined
and paid. Unlike in a “quick take” action, the Landowners had the
opportunity to brief the summary judgment motions and participate
in the preliminary injunction hearing. The different procedures and
opportunities for participation distinguish the grant of the injunction
here from an exercise of “quick take” power.
Transcon. Gas Pipe Line Co., 907 F.3d at 734-35 (footnotes omitted).
Against this background, it is undeniable PennEast is permissibly seeking condemnation
under the NGA by way of a preliminary injunction and not by way of a quick-take under the DTA.
The Third Circuit made clear that a quick-take under the DTA would have required “a declaration
of taking with an estimate of compensation,” and “title would have vested automatically.” Id. at
735. Like Transcontinental, PennEast “filed condemnation complaints under Rule 71.1, not a
28
declaration of taking. . . . [I]t then[ 35] established its substantive right to the property. . . .” Id. at
734. And while the Third Circuit did not specifically address whether something less than
summary judgment would suffice for determining whether a plaintiff’s substantive rights under
§ 717f(h) of the NGA were satisfied, it indicated that its previous decisions to grant immediate
access were based on “the gas company . . . demonstrat[ing] success on the merits and strong
arguments on the other prongs of the preliminary injunction test.” Id. at 739 (citing Columbia Gas,
768 F.3d at 315-16); see supra note 33. Therefore, the Court finds a summary judgment motion is
not required to determine substantive rights for condemnation under NGA. All that is required is
a finding, first, that the certificate holder has satisfied § 717f(h), demonstrating a success on the
merits. Then, based on this finding “and strong arguments on the other prongs of the preliminary
injunction test,” a court may grant preliminary injunctive relief in the form of immediate
possession. Transcon. Gas Pipe Line Co., 907 F.3d at 739.
Nevertheless, Defendants argue PennEast’s failure to file a summary judgment motion acts
as a quick-take. The Court disagrees. Logically, if PennEast did not file a quick-take under the
DTA and if there are only two types of eminent domain, it stands to reason PennEast filed its
Condemnation Application under Rule 71.1 and the NGA. Failure to file a summary judgment
motion does not convert PennEast’s NGA condemnation action into a DTA quick-take, nor does
it create a third type of eminent domain in contravention of Third Circuit directive. Transcon. Gas
Pipe Line Co., 907 F.3d at 736 (“To the contrary, we conclude that the equitable means by which
Transcontinental’s possession vested through the preliminary injunction differed in significant
ways from ‘quick take’ under the DTA. We decline the invitation to conflate the two processes.
35
See infra Section IV (finding PennEast has established its substantive right to eminent domain
under § 717f(h)).
29
These are not trivial differences of procedure or paperwork.”).
Therefore, having found PennEast’s Condemnation Application does not constitute an
impermissible quick-take, and having found a summary judgment motion was not required to be
filed as part of PennEast’s request for orders of condemnation, the Court will, as other courts in
this district have, evaluate and make a determination as to PennEast’s substantive right to the
property under § 717f(h) prior to reviewing the preliminary injunction motion.
B. Applicability of State Law
Next, Defendants argue the substantive law of New Jersey does not conflict with federal
law and therefore is not preempted. In particular, Defendants argue New Jersey state law requires
good-faith negotiations before condemnations. And while the Court finds, infra, such an obligation
does not exist under the NGA, the Court will address, generally, the issue of preemption.
Defendants argue that New Jersey law is controlling in this matter because § 717f(h)
requires “[t]he practice and procedure in any action or proceeding for [the] purpose [of exercise of
the right of eminent domain] in the district court of the United States shall conform as nearly as
may be with the practice and procedure in similar action or proceeding in the courts of the State
where the property is situated.” However, Defendants fail to cite any New Jersey or Third Circuit
law or case for this proposition. 36 Conversely, since the adoption of Federal Rule of Civil
Procedure 71.1, the Third Circuit has ended its reliance on the state conformity language in the
NGA upon which Defendants rely, expressly stating:
36
To the extent Defendants disagree with the Third Circuit and the cases on which the Court relies
(see e.g., McKirdy Riskin Defs. Supp. Auth Ltr. dated Nov. 2, 2018), that argument is not
persuasive. This Court “does not have the discretion to disregard controlling precedent simply
because it [or a party] disagrees with the reasoning behind such precedent.” Vujosevic v. Rafferty,
844 F.2d 1023, 1030 n.4 (3d Cir. 1988).
30
Reliance on state eminent domain procedures ended with the
adoption of Rule 71.1 (previously numbered 71A), which created a
nationally uniform approach to eminent domain proceedings, and
which, because it conflicted with § 717f(h), superseded the stateconformity language in the NGA. Courts now generally agree that
condemnation proceedings under the NGA should follow Rule 71.1.
Transcon. Gas Pipe Line Co., 907 F.3d at 738 (footnotes omitted); see also Columbia Gas
Transmission, 2015 WL 389402, at *3 n.8 (“Federal Rule of Civil Procedure 71.1, however,
supersedes the language in [§] 717f(h) to the extent it requires conformity with the state court
“‘practice and procedure’” concerning condemnation.” (citation omitted)); Steckman Ridge GP,
LLC, 2008 WL 4346405, at *3, *18 (“[T]he Third Circuit has determined that ‘Congress intended
to preempt state regulation of rates and facilities of natural gas companies and it [is] clear that the
Natural Gas Act was intended by Congress to occupy the field.’” (quoting Pa. Med. Soc. v.
Marconis, 942 F.2d 842, 847 (3d Cir. 1991)) (citing Schneidewind v. ANR Pipeline Co., 485 U.S.
293, 300-01 (1988))) (emphasis omitted); FERC Order ¶ 218 (“Any state or local permits issued
with respect to the jurisdictional facilities authorized herein must be consistent with the conditions
of this certificate. The Commission encourages cooperation between interstate pipelines and local
authorities. However, this does not mean that state and local agencies, through application of state
or local laws, may prohibit or unreasonably delay the construction or operation of facilities
approved by this Commission.”). 37
Accordingly, the Court will proceed with its analysis under Rule 71.1, which allows for
preliminary injunction proceedings under Rule 65, and § 717f(h) of the NGA. 38
37
Similarly, for these reasons, the Court finds the State’s Farmland Preservation Programs and the
law governing it, including but not limited to the Agriculture Retention and Development Act, N.J.
Stat. Ann. 4:1C, et seq., are preempted to the extent they conflict with the condemnation
procedures set forth in NGA and Rule 71.1.
38
See supra note 32.
31
IV.
SUBSTANTIVE RIGHT OF EMINENT DOMAIN UNDER THE NGA
Pursuant to 15 U.S.C. § 717f(h):
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-of-way to construct, operate, and maintain a pipe line or pipe
lines for the transportation of natural gas, and the necessary land or
other property, in addition to right-of-way, for the location of
compressor stations, pressure apparatus, or other stations or
equipment necessary to the proper operation of such pipe line or pipe
lines, 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. The
practice and procedure in any action or proceeding for that purpose
in the district court of the United States shall conform as nearly as
may be with the practice and procedure in similar action or
proceeding in the courts of the State where the property is situated:
Provided, That the United States district courts shall only have
jurisdiction of cases when the amount claimed by the owner of the
property to be condemned exceeds $3,000.
Therefore, in order to condemn property, the petitioner must show: (1) that it is the holder
of a FERC certificate of public convenience and necessity; (2) that it has been unable to acquire
the necessary property interests by contract or agreement; and (3) that the alleged value of the
property interest exceeds $3000. Transcontinental Gas Pipe Line Co., LLC v. Permanent Easement
for 2.59 Acres, 709 F. App’x 109, 111 (3d Cir. 2017); accord Columbia Gas Transmission, LLC,
768 F.3d at 304. The Court addresses each element in turn.
A. FERC Certificate of Public Convenience and Necessity
PennEast maintains it is the holder of a valid FERC certificate—the FERC Order issuing
blanket certificates—and that the scope of the FERC Order includes the properties against which
it filed complaints.
Several Defendants argue, for a variety reasons, the FERC Order is not a final
determination, while other Defendants concede it is. (See, e.g., State Opp’n 9 (“The Order is a final
32
order, making it eligible for a rehearing request . . . .”).) The Court finds, for the reasons set forth
below, PennEast holds a final, valid FERC certificate upon which it can, and has standing to,
pursue its right of eminent domain. Columbia Gas Transmission, LLC, 768 F.3d at 304
(“Accordingly, a certificate of public convenience and necessity gives its holder the ability to
obtain automatically the necessary right of way through eminent domain, with the only open issue
being the compensation the landowner defendant will receive in return for the easement.”).
Pursuant to subsection (e) of 15 U.S.C. § 717f:
[A] certificate shall be issued to any qualified applicant therefor,
authorizing the whole or any part of the operation, sale, service,
construction, extension, or acquisition covered by the application, if
it is found that the applicant is able and willing properly to do the
acts and to perform the service proposed and to conform to the
provisions of this chapter and the requirements, rules, and
regulations of the Commission thereunder, and that the proposed
service, sale, operation, construction, extension, or acquisition, to
the extent authorized by the certificate, is or will be required by the
present or future public convenience and necessity; otherwise such
application shall be denied. The Commission shall have the power
to attach to the issuance of the certificate and to the exercise of the
rights granted thereunder such reasonable terms and conditions as
the public convenience and necessity may require.
(emphasis added).
Here, on January 19, 2018, after issuing a final EIS, FERC granted PennEast a Certificate
of Public Convenience and Necessity, exercising its right to attach conditions to the Certificate.
FERC Order ¶ 2. See 15 U.S.C. § 717f(e). These conditions do not undermine the finality of the
Certificate under § 717f(h) and were permitted under subsection (e). See Penneast Pipeline Co.,
2018 WL 6304192, at *3 (“‘It is true that there are conditions in the FERC certificate that
[PennEast] will need to meet prior to commencing actual construction of the pipeline, but the
fulfillment of these conditions is not a prerequisite to [PennEast’s] exercise of eminent domain’;
if it were, some requirements—like surveying the property to comply with certificate conditions—
33
would never be met and as a result, the pipeline would never be built.” (quoting Transcon. Gas
Pipe Line Co., 2017 WL 3624250, at *6, aff’d, 907 F.3d 725 (3d Cir. 2018) (alterations in
original)); Constitution Pipeline Co. v. A Permanent Easement for 0.67 Acres & Temp. Easement
for 0.68 Acres in Summit, Schoharie Cty., N.Y., No. 14-2023, 2015 WL 1638477, at *2 (N.D.N.Y.
Feb. 21, 2015) (holding that “the FERC Order cannot reasonably be read to prohibit [the gas
company] from exercising eminent domain authority until it has complied with all conditions set
forth in the Appendix” and rejecting “the argument that [the gas company] must wait until it has
obtained a [Clean Water Act] 401 Certificate before it can initiate eminent domain proceedings”).
Moreover, since the filing of this matter, FERC has reviewed and rejected, denied, or
dismissed requests for a rehearing on the Order and, in another lengthy order with findings,
affirmed its findings as set forth in the final EIS and the FERC Order. See generally, FERC Order
on Rehearing. Notably absent from the many reasons the requests were rejected, denied, or
dismissed was PennEast’s alleged lack of a final certificate. Indeed, FERC treated the Certificate
as final without question. See, e.g., id. ¶ 5 (rejecting requests for a rehearing because “only a party
to a proceeding has standing to request rehearing of a final Commission decision” (emphasis
added)); see also N.J. Conservation Found., 2018 WL 5342833, at *11 n.12 (describing the
PennEast FERC process as final and complete). This Court will do the same here and finds the
Certificate to be final and valid.
Several Defendants argue the Certificate is “non-final” and is only an “incipient
authorization without current force or effect.” (See, e.g., Stark Defs.’ Opp’n 12-13.) That argument
is misplaced, and the FERC orders cited in support thereof are inapposite. For example, in Crown
Landing LLC, 117 FERC ¶ 61,209, at 62,106 (2006), on which Defendants rely, FERC denied
rehearing and stated:
34
The approval we issued in the June 20 Order is expressly
conditioned upon completion of Crown Landing’s remaining and
unchallenged duties under [the Coastal Zone Management Act and
the Clean Air Act]. Our order is an incipient authorization without
current force and effect, since it does not yet allow Crown Landing
to begin the activity it proposes[—i.e., construction and operation of
a pipeline].
Id. ¶ 21. The Crown Landing order 39 does not suggest the holder of the certificate cannot exercise
its eminent domain rights consistent with the NGA, nor do Defendants provide FERC order or
case that does.
The remaining arguments generally relate to the effect of the then-pending requests for
rehearing. In light of FERC’s Order on Rehearing, those arguments are moot. 40 To the extent
Defendants argue the FERC Order and/or Certificate did not make a finding of public necessity,
and is incomplete on those grounds, a clear reading of the FERC Order and final EIS adopted
thereby, followed by the Rehearing Order, demonstrates FERC did, in fact, make such a finding. 41
39
The Crown Landing order goes on to say that “[c]onditional Commission orders have been
described in the context of constitutional standing analysis as ‘without binding effect,’” further
distancing that FERC order from relevance to PennEast’s case. Id. ¶ 21 n.27 (emphasis added)
(citing New Mexico Attorney Gen. v. FERC, No. 04-1398, slip op. at 3 (D.C. Cir. October 13,
2006) (also discussing standing)).
40
For example, the McKirdy Riskin Defendants argue FERC’s approval was not final, and
therefore not ripe for adjudication, because of the pending rehearing requests. That argument is
moot in light of FERC Order on Rehearing.
41
For this reason, the Court finds no merit in Defendants’ argument that their Fifth Amendment
rights are being violated by PennEast’s failure to show the taking is for a public use. Specifically,
FERC found the public convenience and necessity requires approval of the project, concluding:
Based on the benefits the project will provide to the shippers, the
lack of adverse effects on existing customers, other pipelines and
their captive customers, and effects on landowners and surrounding
communities, we find, consistent with the Certificate Policy
Statement and section 7 of the NGA, that the public convenience
and necessity requires approval of PennEast’s proposal, subject to
35
This Court is not empowered to criticize that decision. See 15 U.S.C. § 717r(a), (b); N.J.
Conservation Found., 2018 WL 5342833, at *3; Columbia Gas Transmission, LLC, 2015 WL
389402, at *3 & n.7 (“Disputes over the reasons and procedures for issuing certificates of public
convenience and necessity must . . . be brought before FERC.”). 42
Therefore, for the reasons set forth above, the Court finds PennEast is the holder of a
Certificate of Public Convenience and Necessity and has satisfied that portion of the NGA.
B. Acquisition by Contract or Agreement
The next requirement under 15 U.S.C. § 717f(h) is that the holder of the certificate was not
able to “acquire by contract, or [was] unable to agree with the owner of property to the
compensation to be paid for, the necessary right-of-way.” It is undisputed that PennEast has been
unable to come to an agreement with the remaining Defendants. 43 Defendants argue, however,
PennEast did not negotiate in good faith. 44 PennEast contends the NGA does not impose a good
the conditions discussed [in Appendix A].
FERC Order ¶ 40.
42
Similarly, any arguments challenging FERC’s procedures, including that FERC’s use of tolling
orders denied Defendants of due process in this proceeding, are beyond this Court’s review. See
N.J. Conservation Found., 2018 WL 5342833, at *6 (finding no jurisdiction over a collateral attack
on the FERC order or FERC’s procedures).
43
Since the filing of this case, PennEast has come to agreements with several property owners to
allow the pipeline rights of way as requested in the Complaint. These matters have been dismissed
in their entirety. In other cases, PennEast was able to reach agreements with one or more interest
holder other than the property owner and, in those cases, those parties have been dismissed but the
case remains active. For example, the interest holder may have discharged a mortgage, disclaimed
an interest in the property, resolved its interest with PennEast or otherwise does not wish to
participate.
44
Some Defendants argue that the language used in PennEast’s offers improperly sought
permission for rights of way beyond what is permitted by § 717f(h). That argument is unsupported
by facts or law and, based on the findings herein, is not dispositive. PennEast’s “proposed orders
simply cannot have the effect of granting any right of ingress or egress not approved by FERC.”
36
faith negotiation requirement and, even so, relies on the certification of Daniel Murphy, a Project
Manager for PennEast to demonstrate its efforts.
The Third Circuit has not taken a position on whether good faith negotiations are
required, 45 and courts around the country are split. Millennium Pipeline Co., L.L.C. v. Certain
Permanent and Temporary Easements, 777 F. Supp. 2d 475, 482-3 (W.D.N.Y. 2011) (citing
Maritimes & Ne. Pipeline, L.L.C. v. Decoulos, 146 F. App’x 495, 498 (1st Cir. 2005)) (declining
to require good faith); Transcontinental Gas Pipe Line Co. v. 118 Acres of Land, 745 F. Supp. 366,
Mountain Valley Pipeline, LLC v. Easements to Construct, Operate, & Maintain a Nat. Gas
Pipeline Over Tracts of Land in Giles Cty., Craig Cty., Montgomery Cty., Roanoke Cty., Franklin
Cty., & Pittsylvania Cty., Virginia, No. 17-0492, 2018 WL 1193021, at *2 (W.D. Va. Mar. 7,
2018) (quoting Mountain Valley Pipeline, LLC v. Simmons, No. 17-211, Dkt. No. 157 (N.D.W.
Va. Feb. 20, 2018)). Defendants alternatively argue PennEast’s parcel map and description of the
Rights of Way was unclear as to the parcel to be acquired or that PennEast did not properly serve
Defendants. The Court has reviewed the complaints, certifications, and maps and descriptions
attached thereto, and finds notice and service to be satisfactory. See Fed. R. Civ. P. 71.1 (requiring
“a description sufficient to identify the property” and “the interests to be acquired”); Columbia
Gas Transmission, LLC v. 370.393 Acres, No. 14-0469, 2014 WL 5092880, at *12-13 (D. Md.
Oct. 9, 2014). To the extent Defendants allege the descriptions are incorrect, vague, or ambiguous,
PennEast will be able to amend the condemnation orders once it has accessed the property.
45
While the Third Circuit has not made a specific finding regarding this requirement, it can be
inferred there is no good faith requirement. In its October 30, 2018 Transcontinental Gas Pipe
Line Co. Opinion, the court stated:
The second and third requirements for using the eminent domain
powers under § 717f(h) of the NGA are that the gas company
negotiate with the landowner for the necessary right of way and that
value of the right of way exceeds $3000. Transcontinental extended
written offers of compensation exceeding $3000 to each of the
Landowners, but these offers were not accepted.[] Transcontinental
thus satisfied the second and third requirements.
Transcon. Gas Pipe Line Co., 907 F.3d at 731 (footnote omitted) (citing declaration from senior
land representative).
37
369 (E.D. La. 1990) (requiring good faith). Absent direction from the Third Circuit, 46 district
courts in this circuit have declined to find such a requirement, noting “the plain language of the
NGA does not impose an obligation on a holder of a FERC certificate to negotiate in good faith
before acquiring land by exercise of eminent domain.” Transcontinental Gas Pipe Line Co. v.
Permanent Easement for 0.78 Acres, No. 17-0571, 2017 WL 3485755, at *3 (M.D. Pa. Aug. 15,
2017) (quoting UGI Sunbury LLC v. A Permanent Easement for 0.4944 Acres, No. 16-0783, 2016
WL 3254986, at *6 (M.D. Pa. June 14, 2016)) (citing Steckman Ridge GP, LLC, 2008 WL 4346405
at *13 n.3; see also Kansas Pipeline Company v. A 200 Foot By 250 Foot Piece of Land, 210 F.
Supp. 2d 1253, 1257 (D. Kan. 2002)).
This Court is persuaded by the other district courts in this Circuit and finds no good faith
requirement exists in the NGA. 47 See Transcon. Gas Pipe Line Co., 2017 WL 3485755, at *3.
Accordingly, PennEast need only show, quite simply, that it 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. See 15 U.S.C. § 717f(h); Columbia Gas Transmission, LLC v. 76 Acres
More or Less, No. 14-110, 2014 WL 2919349, at *3 (D. Md. June 25, 2014) (rejecting the good
faith requirement and finding plaintiff “need only show that it made an offer to the [d]efendants in
order to demonstrate compliance with the second condition of [§] 717f(h). The burden to satisfy
this condition is not onerous.” (citing E. Tenn. Natural Gas, LLC v. 1.28 Acres, No. 06-0022, 2006
WL 1133874, at *29 (W.D. Va. Apr. 26, 2006))).
46
But see supra note 45.
47
Even if the NGA did require a showing of good faith, the Court finds such a requirement has
been met. The Court is mindful of the impact this decision may have on property owners who have
resided in their homes for years and have taken issue with the offers and forms of offers.
Nonetheless, the Court finds PennEast has satisfied this portion of § 717f(h).
38
PennEast filed a declaration of Daniel Murphy in each case. Murphy is employed by
Western Land Services (“WLS”) as a Project Manager for the PennEast Pipeline Project and, in
that capacity, oversees all communications with owners of property on the pipeline route. (Murphy
Decl. ¶¶ 6-7.) These communications include negotiations for access to properties for surveys and
to acquire the necessary rights of way. (Id. ¶ 7.) Specifically, Murphy supervises various land
agents “who, over a period of more than three years, have made numerous contacts with [p]roperty
[o]wners related to WLS’s attempts on behalf of PennEast to obtain (1) property rights for the
[p]roject and (2) access to conduct surveys and investigations.” (Id. ¶ 8.) Based on the record
before the Court describing the efforts of WLS 48, the Court finds PennEast has met its burden to
“show that it made an offer to the [d]efendants,” Columbia Gas Transmission, LLC, 2014 WL
2919349, at *3, and was not able to “acquire by contract, or [was] unable to agree with the owner
of property to the compensation to be paid for, the necessary right-of-way,” 15 U.S.C. § 717f(h). 49
Therefore, this factor is satisfied.
C. Property Value Exceeds $3000
The parties do not dispute the property value exceeds $3000. PennEast has made offers
exceeding that amount (Murphy Decl. ¶ 19) and, as expected, Defendants do not argue their
48
Including but not limited to numerous attempts to contact the property owners either through
visits or by mail; failure to obtain permission for either survey access or to acquire an easement;
and rejection of offers in excess of $3000. (See Murphy Decl. ¶¶ 16-21.)
49
Several Defendants argue this burden is not met because PennEast did not attempt to negotiate
with all interest holders. The Court disagrees. To satisfy its burden under § 717f(h), PennEast need
only show it “cannot acquire by contract, or is unable to agree with the owner of property.”
(emphasis added). PennEast has met this burden. There is no obligation to make a showing as to
all interest holders.
39
property is worth less. Therefore, this factor is satisfied for purposes of 15 U.S.C. § 717f(h). 50
V.
CONDEMNATION ORDER
Because PennEast has established it has a substantive right to eminent domain under
§ 717f(h), PennEast is “entitled to exercise eminent domain over the those [sic] specified portions
of the landowner [d]efendants’ properties, under the authority of the [NGA] and the FERC
[C]ertificate,” and the Court “may, under its equitable powers, enter an order of condemnation
concerning the subject properties.” Columbia Gas Transmission, 2015 WL 389402, at *4 (citing
Sage, 361 F.3d at 823); accord Columbia Gas Transmission, LLC, 768 F.3d at 304; Columbia Gas
Transmission, LLC v. 2.510 Acres of Land in the Borough of Swedesboro, Gloucester Cty., 86 F.
Supp. 3d 291 (D.N.J. 2015); Tennessee Gas Pipeline, LLC v. 1.693 Acres of Land in the Twp. of
Mahwah, No. 12-07921, 2013 WL 244821 (D.N.J. Jan. 22, 2013). Therefore, PennEast’s request
for orders of condemnation is GRANTED.
The next question is “whether such right entitles [PennEast] to intermediate, equitable
relief in the form of immediate possession.” Columbia Gas Transmission, 2015 WL 389402, at
*4. Having found injunctive relief is an appropriate remedy in condemnation actions, see supra
Section III.A, the only remaining question is whether PennEast meets its burden in
“demonstrat[ing] success on the merits and strong arguments on the other prongs of the
preliminary injunction test.” Transcon. Gas Pipe Line Co., 907 F.3d at 738-39. For the reasons set
forth below, the Court finds injunctive relief in the form of immediate possession is warranted.
VI.
INJUNCTIVE RELIEF
To obtain a temporary restraining order or preliminary injunction, the moving party must
50
See also supra note 45.
40
show:
(1) a reasonable probability of eventual success in the litigation, and
(2) that it will be irreparably injured . . . if relief is not granted. . . .
[In addition,] the district court, in considering whether to grant a
preliminary injunction, should take into account, when they are
relevant, (3) the possibility of harm to other interested persons from
the grant or denial of the injunction, and (4) the public interest.
Reilly v. City of Harrisburg, 858 F.3d 173, 176 (3d Cir. 2017) (quoting Del. River Port Auth. v.
Transamerican Trailer Transport, Inc., 501 F.2d 917, 919–20 (3d Cir. 1974)). The movant bears
the burden of establishing “the threshold for the first two ‘most critical’ factors . . . . If these
gateway factors are met, a court then considers the remaining two factors and determines in its
sound discretion if all four factors, taken together, balance in favor of granting the requested
preliminary relief.” Id. at 179. Significantly, a motion for injunctive relief following a
determination of plaintiff’s substantive right to eminent domain
is not a “normal” preliminary injunction, where the merits await
another day. In those situations, the probability of success is not a
certainty such that weighing the other factors is paramount. Here,
there is no remaining merits issue; we have ruled that [plaintiff] has
the right to the easements by eminent domain. The only issue is the
amount of compensation— . . . the result of which can have no affect
on [plaintiff]’s rights to the easements. That [plaintiff]’s entitlement
to relief comes in the form of injunctive relief should not dictate that
we impose similar constraints on our grant of that relief in this
context.
Columbia Gas Transmission, LLC, 768 F.3d at 315. Against this landscape, the Court weighs the
injunctive relief factors.
A. Reasonable Probability of Eventual Success in the Litigation
PennEast has more than established reasonable probability of success on the merits; indeed,
the Court has found PennEast satisfied the elements of § 717f(h) and is therefore entitled to
condemnation orders. Accordingly, the Court finds this factor is satisfied and weighs in favor of
41
granting the preliminary injunction. See Columbia Gas Transmission, 2015 WL 389402, at *4
(citing Columbia Gas Transmission, 768 F.3d at 314-15; Steckman Ridge, 2008 WL 4346405, at
*15).
B. Irreparable Harm
PennEast argues it requires immediate access to and possession of the Rights of Way in
order to meet the FERC-mandated in-service date of January 1, 2020. In support thereof, PennEast
provided the certification of Jeffrey D. England, Manager, Project Management and Construction
of UGI Energy Services, LLC on behalf of PennEast. (England Cert.) England states, “PennEast
has entered into precedent agreements with seven foundation shippers and eleven shippers in total,
which combined have committed to purchase 975,000 dekatherms per day of the natural gas to be
supplied by the [p]roject. These precedent agreements are based on the [p]roject being in service
by certain dates.” (Id. ¶ 9.) While the Court understands Defendants’ objections, 51 courts have held
that a financial loss may be sufficient to establish irreparable harm “if the expenditures cannot be
recouped,” such as where the delay would prevent the pipeline company from completing
necessary pre-construction survey and conditions or could cause the company to breach contracts
with subcontractors and vendors. See Transcon. Gas Pipe Line Co., 709 F. App’x at 112-13;
Columbia Gas Transmission, LLC, 768 F.3d at 315-16; Penneast Pipeline Co., 2018 WL 6304191,
at *2; Columbia Gas Transmission, LLC, 2015 WL 389402, at *4; Tennessee Gas Pipeline Co.,
51
Defendants argue the in-service date is not a hard deadline by which the project must be built;
rather it is “simply FERC’s inclusion of PennEast’s anticipated length of project completion, to
ensure that its nascent authorization does not languish indefinitely while an applicant sits on its
rights,” and, to the extent PennEast is bound by the timeline, “FERC can and routinely does grant
extensions upon simple request.” (See Stark Defs.’ Br. 28-29.) While this may be true, the Court
is persuaded by its sister courts’ findings which respect to the matter, cited herein, and,
nevertheless, finds additional irreparable injuries on which it bases its decision.
42
2010 WL 3883260, at *2-3. (See also England Decl. ¶ 29 (“If PennEast is unable to complete these
activities in an expeditious manner, the project will be delayed causing PennEast irreparable harm
in terms of lost contracts . . . .”).)
Moreover, FERC has tasked PennEast with a number of environmental conditions which
must be satisfied before PennEast can begin construction. Many of these conditions require
immediate access to the properties, including but not limited to Conditions 3, 4, 6, 10, 15-17, 21,
23, 30-32, 35, 39, 41, 47, and 51. (England Cert. ¶ 18 (citing FERC Order, App’x A).) Immediate
access will additionally allow PennEast to survey and collect information needed to complete its
Application to the DEP for a Freshwater Wetlands Individual Permit and Water Quality
Certificate. (Id. ¶ 17.)
Defendants argue PennEast’s lack of DEP approval is grounds for this Court to deny
injunctive relief. The Court is not persuaded by this chicken-and-egg argument. The DEP is
requiring that PennEast have 100% of the surveys “completed before the agency will undertake to
complete its review and render decisions on the Permit and Certificate Application.” (Id. ¶ 22.)
Therefore, the Court finds PennEast will be irreparably harmed if it is not granted immediate access
to the properties to begin surveys, complete its DEP Application, and satisfy FERC’s
Environmental Conditions. 52 See Constitution Pipeline Co., 2015 WL 1638477, at *2 (holding that
“the FERC Order cannot reasonably be read to prohibit [the gas company] from exercising eminent
domain authority until it has complied with all conditions set forth in the Appendix” and rejecting
52
To the extent the State Defendants argue this preliminary relief will cause irreparable harm and
is against the stated policies of the State, the Court has already found that the condemnation
procedures under the NGA and Rule 71.1 preempt any proscriptions regarding eminent domain
conveyance set forth in the State law.
43
“the argument that [the gas company] must wait until it has obtained a CWA 401 Certificate before
it can initiate eminent domain proceedings”). 53
Accordingly, this factor weighs in favor of granting the preliminary injunction.
C. Balancing Against Harm to Defendants
This Court has heard, reviewed, and carefully considered a wide range of arguments from
Defendants regarding the harm PennEast’s possession will cause, many of which have already
been addressed. 54 Other arguments, however, relate to the value of the property and just
53
On December 3, 2018, the District Court for the Eastern District of Pennsylvania issued opinions
pertaining to PennEast’s motions for summary judgment and injunctive relief. Penneast Pipeline
Co., 2018 WL 6304191 (granting motion for preliminary injunction); Penneast Pipeline Co., 2018
WL 6304192 (granting partial summary judgment). In granting summary judgment, the court
denied any argument that the FERC Order was not final because, inter alia,
If the FERC certificate was to be interpreted as requested by
[defendant], no entry onto private property could take place before
all pre-conditions were met, and yet, many of the pre-conditions
cannot be met without access to the property. This contorted
reasoning would make the FERC certificate nothing more than a
meaningless piece of paper. Said another way, such action would
effectively preclude PennEast from ever being able to submit a
completed application to the PADEP. Since the approval of the
PADEP is a condition of the FERC certification that must be met
prior to receiving authorization to begin construction of the pipeline,
without access to the [defendant’s] property, PennEast will never be
able to fulfill the necessary preconditions and receive those
approvals. Such a result would make a mockery of the process.
Penneast Pipeline Co., 2018 WL 6304192, at *4. In its opinion granting PennEast’s motion for a
preliminary injunction, with respect to irreparable harm, the court noted that “[m]any of
[defendant’s] arguments are identical to those raised in opposition to partial summary judgment
and have already been addressed in a separate memorandum issued today.” The aforementioned
portion of the summary judgment decision is particularly applicable to the irreparable harm
analysis for injunctive relief. To that end, this Court agrees with the conclusions of the Eastern
District of Pennsylvania.
54
For example, Defendants argue PennEast is in violation of the Fifth Amendment because it
cannot show the taking is for a public use and because the FERC Order is non-final. The Court has
44
compensation for same. Because this is not a quick-take under the DTA, PennEast is not required
to deposit an estimated compensation, 55 which would cause title to pass automatically. This action
is proceeding under Rule 71.1 and the NGA, and title will not pass until this Court has entered a
final judgment and determination of just compensation. That determination is not before this Court
at this time. See Transcon. Gas Pipe Line Co., 907 F.3d at 735 (“Here, unlike in a ‘quick take’
action, Transcontinental does not yet have title but will receive it once final compensation is
determined and paid.”); Columbia Gas Transmission, LLC, 768 F.3d at 304 (“[A] certificate of
public convenience and necessity gives its holder the ability to obtain automatically the necessary
right of way through eminent domain, with the only open issue being the compensation the
landowner defendant will receive in return for the easement.”).
already dismissed both arguments. See supra Section IV.A and note 41. And while the Court is
aware of Defendants’ concerns related to Constitution Pipeline’s inability to obtain a permit under
section 401 of the CWA after it took possession, see Constitution Pipeline Co. v. New York State
Dep’t of Envt’l Conservation, 868 F.3d 87 (2d Cir. 2017), the Court again finds it is not persuaded
by this chicken-and-egg argument. See Constitution Pipeline Co., 2015 WL 1638477, at *2
(rejecting defendants’ argument regarding the CWA permit). Here, PennEast cannot attempt to
obtain its permits without access, nor can it provide more adequate descriptions of the work to be
completed on the individual parcels, until it is granted access. See id. and supra note 53. Having
satisfied its substantive rights under § 717f(h), PennEast is entitled to a condemnation order and
possession; granting preliminary relief only permits access sooner. Therefore, Defendants’ request
to grant some form of interim possession pending satisfaction of the permits is inherently granted
to the extent that title and permanent possession will not transfer until this Court has entered a final
judgment and determination of just compensation. See Transcon. Gas Pipe Line Co., 907 F.3d at
734.
55
While PennEast will not be required to deposit an estimated compensation, they will be required
to post a bond in order to obtain a preliminary injunction. The Third Circuit recently rejected the
argument that depositing a bond and entering a preliminary injunction equates to a quick-take,
because PennEast “does not yet have title but will receive it once final compensation is determined
and paid.” Transcon. Gas Pipe Line Co., 907 F.3d at 735-36 (“[W]e conclude that the equitable
means by which Transcontinental’s possession vested through the preliminary injunction differed
in significant ways from ‘quick take’ under the DTA. We decline the invitation to conflate the two
processes. These are not trivial differences of procedure or paperwork.”).
45
With respect to Defendants’ argument that they will be harmed by the presence of the
United States Marshal Service (“USMS”), the Court reminds Defendants, as it did at the public
hearings, that the Court will not be granting PennEast or the USMS permission to stand guard on
individuals’ property. The order allows for PennEast to call upon the USMS in the event this
Court’s order is violated and PennEast is actively prohibited from entering the property. 56 The
Court finds Defendants will not be harmed by PennEast’s mere ability to call upon the USMS to
enforce the order.
Ultimately, Defendants will not be harmed by the Court granting immediate possession.57
While the Court is sympathetic to each property owners’ individual interests, the taking of property
can be monetarily compensated. Transcon. Gas Pipe Line Co., 709 F. App’x at 112. (“[T]he impact
of the taking . . . is an issue for the determination of just compensation.”); see Columbia Gas
Transmission, LLC, 2015 WL 389402, at *4 (citing Columbia Gas Transmission, LLC, 768 F.3d
at 316; Steckman Ridge GP, LLC, 2008 WL 4346405, at *16). Therefore, this factor weighs in
favor of granting the preliminary injunction.
56
At the hearing, counsel for PennEast stated:
[W]hat we’re asking for is if somebody is put in danger, if somebody
violates the Court order, that PennEast can make an application to
the federal marshals to have the marshals investigate that. They’re
not going to stand on the property with automatic weapons. They’re
going to investigate whether someone is violating the court order
and then execute, if they need to, as they would to enforce any other
order of this Court.
(Apr. 19, 2018 Hearing Tr., 16:3-11.)
57
Even if the Court were to find the harm to Defendants weighed against possession, the balance
of the remaining equitable factors still weighs in favor of awarding PennEast a preliminary
injunction for immediate possession of the Rights of Way.
46
D. Public Interest
By granting the certificate, FERC made a determination that the pipeline is necessary and
in the public interest. 58 This conclusion was reached after an extensive administrative process that
weighed the harm to the public against the need for the pipeline. 59 The FERC Order issued the
Certificate contingent upon PennEast complying with certain conditions in order to address these
concerns, and FERC reviewed and rejected, denied, or dismissed requests for a rehearing on the
Order, affirming its findings as set forth in the final EIS and the FERC Order. See generally, FERC
Order on Rehearing. The Court is persuaded by FERC’s finding that “the public convenience and
necessity requires approval of PennEast’s proposal, subject to the conditions discussed [in
Appendix A].” FERC Order ¶ 40. As already discussed, any challenges to FERC’s findings are
not properly before this Court. Columbia Gas Transmission, LLC, 2015 WL 389402, at *3 & n.78.
Therefore, this factor weighs in favor or granting the preliminary injunction.
VII.
BOND
Pursuant to Federal Rule of Civil Procedure 65(c), “The court may issue a preliminary
injunction . . . only if the movant gives security in an amount that the court considers proper to pay
the costs and damages sustained by any party found to have been wrongfully enjoined or
restrained.” In the context of eminent domain proceedings under the NGA, this amount serves as
a safeguard to protect the landowner. Sage, 361 F.3d at 826. For example,
if the gas company’s deposit (or bond) is less than the final
compensation awarded, and the company fails to pay the difference
within a reasonable time, “it will become a trespasser, and liable to
58
See supra note 41 and text accompanying note 41.
59
See supra Section I.B.
47
be proceeded against as such.” Cherokee Nation[ v. S. Kan. Ry. Co.],
135 U.S. [641,] 660, 10 S. Ct. 965 [(1890)]. Likewise, if a FERCregulated gas company was somehow permitted to abandon a
pipeline project (and possession) in the midst of a condemnation
proceeding, the company would be liable to the landowner for the
time it occupied the land and for any damages resulting to the [land]
and to fixtures and improvements, or for the cost of restoration.” 4
J. Sackman, Nichols on Eminent Domain § 12E.01 [07] (rev.3d ed).
Id. at 825–26.
PennEast asks the Court to set the bond in the amount of the appraised value for the Rights
of Way as determined by the independent appraiser retained by PennEast. Defendants ask for a
larger bond amount based on the market value of the entire property and contemplating the loss of
use of the property and well as construction and rebuilding costs.
The amount of the bond must be reasonably related to the property interest at issue. Often,
this amount is two or three times the appraisal value provided by plaintiff’s appraiser. See, e.g.,
Transcon. Gas Pipe Line Co., 907 F.3d at 735 (posting a bond at three times the appraised value
of the rights of way); Transcon. Gas Pipe Line Co. v. Permanent Easement for 0.16 Acres, No.
17-0545, 2017 WL 3412375 at *10 (M.D. Pa. August 9, 2017) (requiring plaintiff to post bond
based on three times the appraisal value of the easement); In re Transcon. Gas Pipeline Co., No.
16-02991, 2016 WL 8861714 at *11 (N.D. Ga. Nov. 10, 2016) (requiring a bond of twice the
appraisal value of the easement); Sabal Trail Transmission, LLC v. Real Estate, No. 16-cv-97,
2016 WL 3248367 at *6 (M.D. Ga. June 10, 2016) (setting the amount of security bond at twice
market value of the easement).
Accordingly, PennEast will be required to post a bond in an amount totaling three times
the appraised value of the Rights of Way.
48
VIII.
CONCLUSION
To be clear, this Court is not entering a final judgment, granting a permanent injunction,
or permitting construction to start prior to PennEast satisfying the environmental conditions in the
FERC Order. Rather, this Court finds: (1) PennEast is entitled to the condemnation orders pursuant
to § 717f(h); and (2) they are entitled to them on an immediate and expedited basis having
appropriately sought such relief under Rule 65. See Transcon. Gas Pipe Line Co., 907 F.3d at 736,
738-39 (finding preliminary injunctions under Rule 65 are permissible under the NGA and do not
constitute a quick-take so long as condemnation orders have been obtained); Columbia Gas
Transmission, LLC, 86 F. Supp. 3d at 292–93 (finding “[p]laintiff had demonstrated an established
right to condemn the landowner defendants’ properties under the [NGA], 15 U.S.C. § 717f(h),”
and finding that “preliminary relief in the form of immediate possession was appropriate”) (citing
Columbia Gas Transmission, 2015 WL 389402, at *3-5).
Final judgment under Rule 71.1 and the NGA will be entered following a decision on just
compensation; title will transfer upon payment of the adjudicated just compensation amount. See
Transcon. Gas Pipe Line Co., 907 F.3d at 734-35. PennEast remains bound by the FERC Order
and the conditions therein.
Accordingly, for the reasons set forth above and for good cause shown, the State
Defendants’ request for dismissal is DENIED; PennEast’s application for orders of condemnation
and for preliminary injunctive relief allowing immediate possession of the Rights of Way in
advance of any award of just compensation is GRANTED.
Further, the Court, on its own motion, hereby appoints as Special Masters/Condemnation
Commissioners the Honorable James R. Zazzali, C.J. (ret.); the Honorable Joel A. Pisano, U.S.D.J.
(ret.); the Honorable Kevin J. O’Toole; Joshua Markowitz, Esq.; and Shoshana Schiff, Esq. to
49
adjudicate and determine the quantum of just compensation.
Appropriate orders will follow.
Date: December 14, 2018
/s/Brian R. Martinotti
HON. BRIAN R. MARTINOTTI
UNITED STATES DISTRICT JUDGE
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