Columbia Gas Transmission, LLC v. Booth et al

Filing 819

Memorandum Opinion and Order on Plaintiff's Motion for Partial Summary Judgment. Columbia's Motion for Partial Summary Judgment is GRANTED IN PART. Columbia's request for an order recognizing a right to immediate possession of those easements is DENIED. See order for complete details. Magistrate Judge Thomas M. Parker on 12/22/2016. (Attachments: # 1 Appendix A to Order on Summary Judgment) (Related document 794 ) (O,K)

IN THE UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF OHIO
EASTERN DIVISION
COLUMBIA GAS TRANSMISSION, LLC.,
Plaintiff
v.
BRIANNE BOOTH, et. al.,
Defendants.

I.

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Case No. 1:16-CV-1418
MAGISTRATE JUDGE
THOMAS M. PARKER

MEMORANDUM OF OPINION
AND ORDER ON PLAINTIFF’S
MOTION FOR PARTIAL SUMMARY
JUDGMENT

Introduction
Columbia Gas Transmission, LLC (“Columbia”) instituted this action to obtain an order

of condemnation against defendant Medina County landowners (“Medina Landowners”). ECF
Doc. No. 793. Columbia claims a right to condemn easements beneath defendants’ property for
the storage of natural gas it holds for resale. Columbia seeks partial summary judgment, claiming
that there is no genuine dispute as to any material fact and that it is entitled to the requested order
of condemnation as a matter of law pursuant to the Natural Gas Act (“NGA”), 15 U.S.C.
§717f(h), and Federal Rule of Civil Procedure 71.1. 1 ECF Doc. No. 794, Page ID# 1436.
Columbia also seeks an order awarding it immediate possession of the gas storage easements.
ECF Doc. No. 794. Columbia asserts that if partial summary judgment is granted, only the issue
of how much it must pay in order to justly compensate defendants would remain. Columbia has
supplemented its motion for partial summary judgment with additional Rule 56 evidence. ECF
1

Columbia also filed a motion to appoint a commission to determine just compensation (Doc. 795) which
will be decided in a separate order.

Doc. No. 815. The Medina Landowners oppose Columbia’s motion, arguing (1) that Columbia
is not entitled to immediate possession of defendants’ properties and (2) that Columbia is not
entitled to an order of condemnation because it failed to make a “good faith” offer to acquire
easements prior to filing the condemnation complaint. 2 ECF Doc. Nos. 801, 818.
Columbia’s motion for partial summary judgment will be GRANTED IN PART;
Columbia has demonstrated that there is no genuine dispute as to any material fact, and it has
shown a right as a matter of law to condemn easements for gas storage under defendants’
properties. Columbia’s motion for an order of immediate possession of the easements will be
DENIED. The case will proceed in order to determine the compensation Columbia owes
defendants for the easements.
II.

Procedural History
This matter was transferred from the Southern District of Ohio after the parties’ claims

were severed from Wilson et al v. Columbia Gas Transmission, LLC, Case No. 2:12cv01203.
ECF Doc. 791. The Wilson plaintiffs filed a class action complaint against Columbia asserting
that Columbia was improperly storing natural gas under the land of the putative class members
without having acquired storage easements and without paying just compensation. Wilson,
2:12cv01203, ECF Doc. No. 2, Page ID# 10. Columbia later filed an amended counterclaim in
Wilson asserting a right to condemnation against the Medina Landowners and other landowners

2

The Medina Landowners also argue that Columbia’s motion for summary judgment should be denied
because the Medina Landowners filed a motion to dismiss in this matter (Doc. 798), asserting that
Columbia failed to invoke this Court’s subject matter jurisdiction in its attempted condemnation claims.
However, after briefing was complete on the motion for summary judgment, but prior to this order, this
Court overruled the Medina Landowners’ Motion to Dismiss. Doc. 807. As such, that argument is now
moot. The Medina Landowners also argue that Columbia failed to present evidence required by FRCP
56(c)(1). That argument was mooted by Columbia’s uncontested supplemental filing.

2

that Columbia brought into the case. 3 Wilson, 2:12cv01203, ECF Doc. No. 275. Columbia and
the Medina Landowners jointly requested the severance and transfer of their claims to this
district. ECF Doc. No. 789. The parties’ claims were severed, transferred and recaptioned here
as Columbia Gas, LLC v. Booth, et. al., 1:16cv01418. Columbia then filed the current amended
complaint. ECF Doc. No. 793. Columbia contemporaneously filed this motion for partial
summary judgment. ECF Doc. No. 794. It also moved for the appointment of a commission
which would determine just compensation to be paid for the easements. ECF Doc. No. 795.
III.

Standard of Review
“The court shall grant summary judgment if the movant shows that there is no genuine

dispute as to any material fact and the movant is entitled to judgment as a matter of law.”
Fed.R.Civ.P. 56(a). The court must view all evidence, and draw all reasonable inferences
therefrom, in favor of the non-moving party. Wheat v. Fifth Third Bank, 785 F.3d 230, 237 (6th
Cir.2015). Moreover, “the trial court no longer has a duty to search the entire record to establish
that it is bereft of a genuine issue of material fact.” Street v. J.C. Bradford & Co., 886 F.2d 1472,
1479-80 (6th Cir.1989) (citing Frito-Lay, Inc. v. Willoughby, 863 F.2d 1029, 1034 (D.C. Cir.
1988)). The non-moving party is under an affirmative duty to point out specific facts in the
record that create a genuine issue of material fact. Fulson v. City of Columbus, 801 F. Supp. 1, 4
(S.D. Ohio 1992). The non-movant must show “more than a scintilla of evidence to overcome
summary judgment;” it is not enough to show that there is slight doubt as to material facts. Id.
When a motion for summary judgment is made and supported as provided in this
rule, an adverse party may not rest upon the mere allegations or denials of the
adverse party’s pleading, but the adverse party’s response, by affidavits or as
3

Columbia notified the Medina Landowners that it may have been storing gas underneath their properties
after the complaint was filed in Wilson and it is undisputed that Columbia referred to the Wilson case in
its letter to the landowners.

3

otherwise provided in this rule, must set forth specific facts showing that there is a
genuine issue for trial.
Fed. R. Civ. P. 56(e).
IV.

Factual Findings
There is no genuine dispute regarding each of the following material facts:

1.
Columbia operates an extensive interstate natural gas transportation and storage
system. As an integral part of these activities, Columbia administers underground natural gas
storage fields. Columbia stores natural gas in underground storage fields during summer months
for use in the winter when cold weather causes market demand to exceed the capacity of
production and transmission pipelines. 4
2.
Company. 5

Columbia is a Delaware corporation and a successor to the Ohio Fuel Gas

3.
In 1958, the Ohio Fuel Gas Company applied for and was granted a certificate of
public convenience and necessity from the Federal Energy Regulatory Commission (“FERC”)
for the operation and maintenance of the Medina Storage Field. 6
4.
In 1970, upon merger with the Ohio Fuel Gas Company, Columbia succeeded to
the ownership of and entitlement to the 1958 FERC certificate for the Medina Storage Field.
5.
In 1987, FERC again granted Columbia a certificate of public convenience and
necessity for the operation and maintenance of the Medina Storage Field. This time, the FERC
certificate included a map identifying the reservoir and protective boundaries of the storage
field. 7
6.
The defendants are owners of parcels of land located within the 1987 FERCcertificated boundaries of the Medina Storage Field. 8

4

Columbia Gas Transmission Corp. v. Exclusive Gas Storage Easement, 776 F.2d 125, 125-26 (6th Cir.
1985).

5

ECF Doc. No. 815, Exhibits 2 and 4.

6

Id., at Exhibit 1 (1958 certificate of public convenience and necessity issued by the Federal Power
Commission to The Ohio Fuel Gas Company for the construction and operation of the Medina Storage
Field).
7

Id., at Exhibit 3 (1987 FERC certificate).

8

ECF Doc. No. 815, Exhibit 5 (The Declaration of Katie L. Monroe, Columbia’s Manager, Land
Management including Exhibits A and B to Monroe’s Declaration - two maps of the Medina Storage

4

7.
Columbia has been unable to agree with the landowner defendants as to the
compensation to be paid for the Storage Easements at issue and has not been able to acquire the
easements by contract. 9
V.

Analysis
Columbia moves for: (1) an order of condemnation granting it the right to own gas

storage easements beneath defendants’ properties, and (2) an order awarding Columbia
immediate possession the easements. ECF Doc. No. 794, Page ID# 1436.
A. Whether Columbia Has a Right to Condemn the Property
Congress enacted the NGA, 15 U.S.C. § 717 et. seq., in 1938. The NGA authorizes
private companies engaged in the interstate transportation of natural gas to use eminent domain
power to take property for the construction of gas transportation facilities. It is undisputed that
the NGA governs Columbia’s interstate natural gas operations. Columbia asserts that it meets
the NGA’s prerequisites to condemn easements for gas storage beneath the Medina Landowner’s
properties. The NGA grants the right of eminent domain to FERC certificate holders:
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
Field); Exhibit 6 (October 18, 2016, hearing transcript in which counsel for the Medina Landowners’
admitted that the Medina Landowners’ properties lies within the boundaries of the Medina Storage Field.
9

ECF Doc. No. 815, Exhibits C and D to the Monroe Declaration (Exhibit 5)(comprising written offer
letters to the landowner defendants from Columbia seeking to pay $250 compensation in exchange for an
underground natural gas storage easement and letters from opposing counsel to Columbia rejecting the
offer on behalf of the landowners); Exhibit 7 (Declaration of Jodie H. Lawson including Exhibit A to the
Lawson Declaration). See also defendant’s answer to Columbia’s Amended Complaint in Condemnation,
ECF No. 808 at 2 (“Landowners admit that they do not agree on the unsubstantiated offer of
compensation made to them by Columbia.”).

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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.
15 U.S.C. §717f(h).

The NGA has been found to be “sufficiently broad” to include the creation

of underground natural gas storage facilities. Columbia Gas Transmission Corp. v. Exclusive
Gas Storage Easement, 776 F.2d 125, 128 (6th Cir. 1985).
Columbia has demonstrated that it holds a FERC certificate for the storage of natural gas
in the Medina Storage Field which is located beneath the Medina Landowners’ properties. See
ECF Doc. Nos. 815-1, 815-3, 815-5, 817. Columbia has also submitted evidence that it has been
unable to acquire the easement rights to store gas beneath the Medina Landowners’ properties by
contract or otherwise to agree on compensation. Columbia has shown that it made a cash offer
for an easement of $250.00 per lot to each landowner. See Answer to Amended Complaint ECF
Doc. No. 808 at ¶3 (“Landowners admit that they do not agree on the unsubstantiated offer of
compensation made to them by Columbia.”); See also ECF Doc. Nos. 815-5 at ¶¶ 8-9, 815-6,
815-7, 815-9. The Medina Landowners have not disputed any of these facts.
To prevail, Columbia must not only show that it has complied with NGA’s requirements
but also the demands of Rule 71.1, Fed. R. Civ. P., which controls federal court eminent domain
actions. Rule 71.1(c)(2) requires a complaint for condemnation by eminent domain to contain
five elements: (A) a short and plain statement of the authority for the taking, (B) the uses for
which the property is to be taken, (C) a description sufficient to identify the property, (D) the
interests to be acquired, and (E) for each piece of property a designation of each defendant who
has been joined as an owner of the property or an interest in it. Rule 71.1 also sets other
requirements for the form and substance of the pleading and notice to property owners. The
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record shows that Columbia has complied with the requirements of Rule 71.1. See ECF Doc.
No. 793, Amended Complaint in condemnation. See e.g., Wilson, 2:12cv1203 at ECF Doc. Nos.
303, 315, 357.
The Medina Landowners attempt to defeat Columbia’s right to condemnation by arguing
that Columbia has not met Ohio eminent domain law requirements. ECF Doc. No. 801, Page
ID# 1505. The landowners contend Columbia had a duty to make a “good faith” offer to
purchase the easements, and they assert Columbia’s $250-per-parcel offer was not made in good
faith. ECF Doc. No. 818, Page ID# 1769.

Specifically, the landowners assert that Columbia’s

offer was insufficient because it was not based on the appraisal required by §163.04(C) of the
Ohio Revised Code. In addition, they contend they have the right to recover costs and attorney’s
fees under §163.21(C)(1), Ohio Rev. Code, in the event of a low offer. 10 The Medina
Landowners’ argument prompts a two-fold inquiry: (1) does the NGA imply a requirement to
negotiate in “good faith;” and, if so, (2) does the NGA require compliance with Ohio
condemnation law, specifically §§ 163.04(C) and 163.21 Ohio Rev. Code.
NGA §717f(h) does not mention the term good faith, thus, the court concludes that there
is no express “good faith” requirement in the statute. However, some federal courts have
10

The Ohio Revised Code provides in pertinent part:
An agency may appropriate real property only after the agency obtains an appraisal of the
property and provides a copy of the appraisal to the owner….The agency shall provide
the copy or summary of the appraisal to an owner, guardian, or trustee at or before the
time the agency makes its first offer to purchase the property.

ORC §163.04(C)
[W]hen an agency appropriates property and the final award of compensation is greater
than one hundred twenty-five per cent of the agency's good faith offer for the
property…the court shall enter judgment in favor of the owner, in amounts the court
considers just, for all costs and expenses, including attorney's and appraisal fees, that the
owner actually incurred.
ORC §163.21.

7

inferred such a requirement from the statutory language. See, e.g., U.S.G. Pipeline Co. v. 1.74
Acres in Marion County, 1 F.Supp.2d 816, 822 (E.D.Tenn.1998)(the district court held a hearing
to determine whether the offers were made in good faith); Transwestern Pipeline Co. v. 17.19
Acres of Property, 550 F.3d 770, 776 (9th Cir.2008) (noting that “[i]n addition to showing an
inability to agree on a price with the landowner, [the plaintiff] must also establish that it engaged
in good faith negotiations with the landowner.”); Florida Gas Transmission v. 9.854 Acre, No.
96–14083 CIV, 1998 WL 2018164 (S.D.Fla. June 15, 1998) (a single written offer to purchase
easement met good faith requirements); Transcontinental Gas v. 118 Acres of Land, 745 F.Supp.
366 (E.D.La.1990).
More recent decisions examining the plain language of the Act have found no such
requirement. See, e.g., Maritimes and Northeast Pipeline v. Decoulos, 146 Fed.Appx. 495 (1st
Cir.2005); Hardy Storage v. Property Interests Necessary to Conduct Gas Storage Operations,
No. 2:07CV5, 2009 WL 689054 (N.D.W.Va. Mar. 9, 2009) (condemnor has no legal duty to
engage in good faith negotiations and need only show it was unable to reach agreement
regarding compensation); Guardian Pipeline v. 295.49 Acres of Land, No. 08–C–0028 et seq.,
2008 WL 1751358, at *18 (E.D.Wisc. Apr. 11, 2008) (finding no good faith requirement and
noting that a “reasonable effort to reach agreement” is enough); Guardian Pipeline v. 529.42
Acres of Land, 210 F.Supp.2d 971 (N.D.Ill.2002). This court concludes that these more recent
decisions reflect a proper interpretation of the NGA § 717f(h).
The Court also finds that NGA §717f(h) does not incorporate these Ohio law
requirements. §717f(h) provides:
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…
8

This plain statutory requirement to follow state law has been superseded by Rule 71.1. 11 Every
circuit to consider the issue has so concluded. 12 Although the Supreme Court has not decided
this issue in an NGA case, it has held that Rule 71.1 nullified similar conformity clauses in other
federal condemnation statutes. See Kirby Forest Indus., Inc. v. United States, 467 U.S. 1, 4 n. 2,
104 S.Ct. 2187, 81 L.Ed.2d 1 (1984) (noting that condemnation proceedings brought pursuant to
40 U.S.C. § 257 are no longer controlled by the state law conformity clause of § 257 because
“[t]he adoption in 1951 of Rule 71A capped an effort to establish a uniform set of procedures
governing all federal condemnation actions”); United States v. 93.970 Acres of Land, 360 U.S.
328, 333 n. 7, 79 S.Ct. 1193, 3 L.Ed.2d 1275 (1959) (holding that “federal law was wholly
applicable” to federal condemnation proceeding because the state law conformity clause of 50
U.S.C. § 171 “was clearly repealed by Rule 71A”).
The Sixth Circuit has confirmed that condemnation under the NGA is a federal law
matter. In doing so, however, the Court also has ruled that the determination of how much

11

Rule 71.1 was originally adopted as Rule 71A in 1951. See Fed. R. Civ. P. 71.1, 2007 Amendment
notes.
12

See e.g. E. Tennessee Nat. Gas Co. v. Sage, 361 F.3d 808, 822 (4th Cir. 2004) (“Courts, including the
district court here, agree that this state procedure requirement has been superseded by Rule 71A.”); N.
Border Pipeline Co. v. 64.111 Acres of Land, 344 F.3d 693 (7th Cir.2003) (concluding that Rule 71A
supersedes §717f(h)); All. Pipeline L.P. v. 4.360 Acres of Land, More or Less, in S/2 of Section 29, Twp.
163 N., Range 85 W., Renville Cty., N.D., 746 F.3d 362, 366 (8th Cir. 2014), cert. denied sub nom. 4.360
Acres of Land, More or Less, in the S/2 of Section 29, Twp. 163 N., Range 85 W., Renville Cty., N. Dakota
v. All. Pipeline L.P., 135 S. Ct. 245, 190 L. Ed. 2d 136 (2014) (finding that §717f(h)’s state law directive
has been superseded by Rule 71.1); Transwestern Pipeline Co. v. 17.19 Acres of Prop. Located in
Maricopa Cty., 550 F.3d 770, 776 (9th Cir. 2008); S. Natural Gas Co. v. Land, Cullman County, 197 F.3d
1368, 1374 (11th Cir.1999) (“It is clear to us that Rule 71A was promulgated to override a number of
confusing federal eminent domain practice and procedure provisions, such as that of 15 U.S.C. § 717f(h),
and to provide a unified and coherent set of rules and procedures to be used in deciding federal eminent
domain actions.”). The Eastern District of Tennessee has also found that federal condemnation
proceedings under the NGA were governed by Rule 71A, not Tennessee law. USG Pipeline Co. v. 1.74
Acres in Marion Cty., Tenn., 1 F. Supp. 2d 816, 827 (E.D. Tenn. 1998).

9

compensation is due requires recourse to state law. Columbia Gas Transmission Company v.
Easement Beneath 264.12 Acre Parcel, 962 F.2d 1192 (1992) [hereinafter “Arnholt”]
(“[A]lthough condemnation under the Natural Gas Act is a matter of federal law, § 717f(h)
incorporates the law of the state in which the condemned property is located in determining the
amount of compensation due.”); See also Rockies Exp. Pipeline LLC v. 4.895 Acres of Land,
More or Less, 734 F.3d 424, 429 (6th Cir. 2013) (“While condemnation under the Natural Gas
Act is a federal matter, courts conducting such proceedings must apply ‘the law of the state in
which the condemned property is located in determining the amount of compensation due.’”).
Arnohlt supports the conclusion that §717f(h) governs condemnation, including precondemnation negotiations. In Arnholt, the Sixth Circuit determined that state law was
incorporated into §717f(h) of the NGA only with regard to “determining the amount of
compensation due.” The Arnholt court found that condemnation case procedures, on the other
hand, were governed by federal law. §717f(h) specifically addresses pre-condemnation
negotiations (e.g. “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…it may acquire the same by the exercise of the right of
eminent domain.”) Section §717f(h) requires a FERC certificate holder to attempt to acquire by
contract or agree on compensation for an easement before pursuing eminent domain
condemnation in the district court. Thus, §717f(h) address pre-condemnation negotiations.
Because the Sixth Circuit has determined that condemnation is an issue of federal law, Columbia
was not also required to comply with Ohio eminent domain law in its pre-condemnation
negotiations. See e.g. Guardian Pipeline, L.L.C. v. 295.49 Acres of Land, No. 08-C-0028, 2008

10

WL 1751358, at *14 (E.D. Wis. Apr. 11, 2008)(similarly determining that Wisconsin state law
did not apply to pre-condemnation activities under the NGA).
The Medina Landowners rely largely on this Court’s decision in Columbia Gas
Transmission, LLC v. Crawford, 746 F.Supp.2d 905 (N.D. Ohio 2010) to support their argument
that condemnation cannot take place until after the state law prerequisites of ORC §163.04 have
been satisfied. ECF Doc. No 798, Page ID# 1479-80, Crawford was also an NGA condemnation
case. Judge Gwin analyzed the issue of who was owed compensation and concluded it was
closely related to the question of how much compensation was due. Id. at 910. Judge Gwin
denied Columbia summary judgment on the condemnation issue because he found a disputed
issue of fact existed concerning Columbia’s compliance with §717f(h), which requires the
FERC-holder to attempt to acquire by contract or agree on compensation with the “owner” of the
property. Initially, Crawford is distinguishable because Judge Gwin explicitly declined to reach
the issue of whether the NGA required good faith negotiations. 746 F.Supp.2nd at 913 (“this
Court need not reach a holding on the issue of good faith negotiation because the defendants add
that they never received notice of the precise interests sought by the plaintiff.”) Additionally, to
the extent Crawford’s treatment of the issue of to whom compensation must be paid conflicts
with Arnholt’s holding that federal law governs how compensation is to be paid, this court is
bound to follow Circuit Court law.
Lastly, the “amount of compensation due” under Ohio law does not include costs,
attorney fees, or appraisals:
We hold that the proper manner to determine the value of an underground gas storage
easement was delineated by United States District Court Judge Dowd, Jr., when he
instructed the commission which he had appointed under Fed.R.Civ.P. 71A(h). Judge
Dowd's analysis is as follows:

11

“In determining just compensation for the easement, you shall consider fair market value.
The fair market value is the fair and reasonable amount which could be attained in the
open market at a voluntary sale. In this case, there are alternative methods of determining
fair market value based upon your preliminary determinations, including whether there
exists native natural gas in the Clinton formation under the condemned tract to the extent
that its recovery would be economically justified.
“1. Comparable Sales. One method in determining fair market value would be to
consider comparable sales of easements for the purpose of allowing the storage of natural
gas in the Clinton formation. If no evidence is offered of such comparable sales, this
method is not available to assist you in determining just compensation.
“2. The Existence of Sufficient Natural Gas Allowing for the Commercial Recovery in
Sale of the Natural Gas. A second method of determining fair market value, and in turn
just compensation, rests upon evidence offered by landowner that sufficient natural gas
remains under the landowner tract so as to allow the commercial recovery and sale of that
natural gas. If the landowner so proves, then in determining just compensation, you may
assess the foreseeable net income flow from the property for its productive life reduced to
a present value figure.
“In other words, in fixing just compensation, you would determine the probable revenues
and costs for the production and sale of native natural gas from the condemned tract and
reduce the net sales value by the interest the landowners will enjoy for an early, one time
payment.
“3. The Fair Market Value of the Storage Easement Based upon a Capitalization of
Retail Income for the Right to Store the Gas. If you do not find there exists commercially
recoverable reserves of oil and gas, a third alternative method of finding fair market
value, and in turn just compensation, involves determining the fair market value of the
storage easement based upon a capitalization of the rental income for the right to store the
gas. In so determining, you shall use the date of the filing of the condemnation as the
starting point and the termination of the storage field as the ending date.
“Fair market value by a capitalization of the rental income is determined by multiplying
the acreage rental by the comparable storage rights to arrive at the present worth of the
future income stream. In applying this method, the fair market value of the storage
easement is equated to a capital sum which, when invested as of the date of filing, would
earn income equal to the comparable storage rentals for the future.
“4. Depreciation in the Fair Market Value of the Condemned Tract as a **50 Whole by
Reason of the Taking of the Storage Easement. This alternative method of determining
fair market value, and, in turn, just compensation, involves determining the difference in
the fair market value of the entire condemned tract before and after the taking. This
determination is accomplished by establishing the fair market value of the entire
condemned tract before the taking and deducti[ng] the fair market value of the entire tract
immediately after the taking. If this method is chosen to determine just compensation, the
fair market value of the storage easement is equated to the difference, if any, between
these before-and-after values of the entire condemned tract.
12

“5. Mineral leases. The existence of a lease for the production of native oil and gas from
the property is not evidence of the existence of such oil and gas. However, you must
award nominal damages to the holder of such a lease even if the presence of native oil
and gas in paying quantities is not proven to a reasonable probability.
“6. Viewpoint of value. Just compensation is measured from the point of view of the
landowner. The yardstick is what the landowner has lost, not what Columbia has gained.
Therefore, you are not to consider the value of the storage easement to Columbia, nor
may you consider any increase or increment in value by virtue of the activities of
Columbia in reference to the gas storage field for which the easement is acquired. For
example, if there is, within the storage easement, some amount of native oil and gas, but
not in paying quantities, so that they had no effect on the market value of the subject tract
on the date of taking, you would not take native oil and gas into account.”
Columbia Gas Transm. Corp. v. An Exclusive Nat. Gas Storage Easement, 1993-Ohio-105, 67
Ohio St. 3d 463, 463, 620 N.E.2d 48, 49. The Medina Landowners’ attempt to require additional
costs to be included in the calculation of just compensation conflicts with the Ohio Supreme
Court’s determination and cannot be permitted without ignoring Arnholt, something this court is
not free to do.
In sum, the Medina Landowner’s argument that Columbia was required to follow Ohio
law’s pre-condemnation proceedings is not well-taken. Columbia has shown that it is entitled to
condemnation by eminent domain under the NGA and Rule 71.1.
B. Whether Columbia is Entitled to Immediate Possession
Having determined that Columbia has established a substantive right to condemn gas
storage easements under the Medina Landowners’ properties, the Court must next determine
whether Columbia has the right to immediate possession of the easements. Columbia seeks
partial summary judgment on the issue; defendants oppose that claim, pointing out that nothing
in the NGA or in Rule 71.1 authorizes a “quick take.”

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Defendants are right. Neither the NGA nor Rule 71.1 provides for immediate
possession. 13 But, in Columbia’s favor, many courts have held that when a FERC certificate
holder establishes a substantive right to condemn a property under the NGA, courts may exercise
inherent equitable powers to grant immediate possession through the issuance of a preliminary
injunction. See, e.g., East Tennessee Natural Gas Co. v. Sage, 361 F.3d 808, 828 (4th Cir.2004);
N. Natural Gas. Co. v. Approximately 9117.53 acres in Pratt, Kingman, and Reno Cntys.,
Kansas, No. 10–1232–MLB, 2012 WL 859728, at *4–*7 (D. Kansas Mar. 13, 2012); Gulf
Crossing Pipeline Co. LLC v. 7.50 Acres, No. 4:8CV178, 2008 WL 2774534, at *5 n. 1 (E.D.Tx.
July 8, 2008) (collecting cases); Humphries v. Williams Natural Gas Co., 48 F.Supp.2d 1276,
1280 (D.Kan.1999)(“[I]t is apparently well settled that the district court does have the equitable
power to grant immediate entry and possession [under the NGA].”); USG Pipeline Co. v. 1.74
Acres in Marion Cnty., Tennessee, 1 F.Supp.2d 816, 825–26 (E.D.Tenn.1998); Tennessee Gas
Pipeline Co. v. New England Power, C.T.C., Inc., 6 F.Supp.2d 102, 104 (D.Mass.1998);
Guardian Pipeline, L.L.C. v. 950.80 Acres of Land, 210 F.Supp.2d 976, 979
(N.D.Ill.2002)(immediate possession proper when condemnation order has been entered and
preliminary injunction standards have been satisfied). Although the Sixth Circuit has not
addressed the issue, the Southern District of Ohio has previously expressed similar reasoning to
grant immediate possession under the NGA. Texas E. Transmission, LP v. 3.2 Acres Permanent
Easement, No. 2:14-CV-2650, 2015 WL 152680, at *4 (S.D. Ohio Jan. 12, 2015); Rockies Exp.

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See E. Tennessee Nat. Gas Co. v. Sage, 361 F.3d 808, 822 (4th Cir. 2004) (finding that the Natural Gas
Act, like most statutes giving condemnation authority to government officials or private concerns,
contains no provision for quick-take or immediate possession.) See Kirby Forest Ind., Inc. v. United
States, 467 U.S. 1, 3–4, 104 S.Ct. 2187, 81 L.Ed.2d 1 (1984) (determining that straight condemnation
actions under Rule 71.1, the government takes possession of the land following an order of condemnation
and a trial determining just compensation. )

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Pipeline, LLC v. 4.895 Acres of Land, No. 2:08–CV–554, 2008 WL 4758688, at *2, *5
(S.D.Ohio Oct.27, 2008).
The Court need not decide whether it has the power to issue injunctive relief at this stage
because Columbia has not pleaded an injunctive relief claim. 14 Columbia bases its entitlement
to eminent domain on the NGA and Rule 71.1. Rule 71.1 governs “straight condemnation”
proceedings, including those under the NGA. 40 U.S.C. §3113. Under straight condemnation,
the taking or vesting of title to the property does not occur until after payment for just
compensation. See 40 U.S.C. § 3113; Kirby Forest Ind., Inc. v. United States, 467 U.S. 1, 3-4,
12 (1984)(“The Government’s capacity to withdraw from the proceeding [prior to payment of
just compensation] would be difficult to explain if a taking were effectuated prior to tendering of
payment.”) Therefore, unless injunctive relief is requested and granted, Columbia has no
entitlement to immediate possession of the easements. Thus, Columbia’s request for an order
recognizing its right to immediate possession of the easements is denied. 15

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Injunctive relief pursuant to FRCP 56 requires “notice to the adverse party” of the injunctive request,
“security in an amount the court considers proper.” The party seeking injunctive relief also has the
burden to show that the balance of factors for reviewing injunctive relief requests weigh in their favor (i.e.
“(1) whether the movant has a strong likelihood of success on the merits; (2) whether the movant would
suffer irreparable injury without the injunction; (3) whether issuance of the injunction would cause
substantial harm to others; and (4) whether the public interest would be served by issuance of the
injunction.” Chabad of S. Ohio & Congregation Lubavitch v. City of Cincinnati, 363 F.3d 427, 432 (6th
Cir.2004) (quoting Blue Cross & Blue Shield Mut. of Ohio v. Columbia/HCA Healthcare Corp., 110 F.3d
318, 322 (6th Cir.1997) (Citations omitted))

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The Court recognizes that although it has denied Columbia’s request for summary judgment as to its
immediate legal possession of the easements, Columbia’s representations in this case make it evident that
Columbia took possession of the gas storage cavities long ago. The legality and impact of that precondemnation possession is directly at issue in the Baatz case 1:14-cv-00505, currently pending before
the Court.

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VI.

Conclusion
Columbia’s Motion for Partial Summary Judgment is GRANTED IN PART. Columbia

is granted easements for the underground storage of natural gas within the geographic area
encompassing defendants’ properties, subject to the creation of a suitable recordable instrument
similar to the document attached hereto as Appendix A that may be filed in the office of the
Medina County Recorder. The court will conduct proceedings to determine the amount of just
compensation Columbia must pay defendants. Columbia’s request for an order recognizing a
right to immediate possession of those easements is DENIED.
IT IS SO ORDERED.

Dated: December 22, 2016
Thomas M. Parker
United States Magistrate Judge

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