Urban et al v. Federal Energy Regulatory Commission of the United States of America et al

Filing 53

Order and Decision adopting the Report and Recommendation of the Magistrate Judge (Doc. # 39 ). Plaintiffs' motion for preliminary injunction is denied (Doc. # 6 ); Defendants' motions to dismiss are granted (Doc. # 24 & 28 ); Plaintiff's motion for the Court to accept untimely brief is granted (Doc. # 47 ). This matter is dismissed for lack of subject matter jurisdiction. Judge John R. Adams on 12/19/17. (K,C)

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF OHIO
EASTERN DIVISION

Laura D. Urban, et al.,

Plaintiffs,
v.
Federal Energy Regulatory Commission
of the United States of America, et al.,

Defendants.

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CASE NO: 5:17CV1005

JUDGE JOHN ADAMS
ORDER AND DECISION

(Resolving Docs. 6, 24, 28, 47)

On July 14, 2017, this Court referred the Plaintiffs’ motion for a preliminary
injunction (Doc. 6) to Magistrate Judge Burke for a report and recommendation. On
August 7, 2017, Magistrate Judge Burke issued a Report and Recommendation (“the
Report”) that this Court deny the motion for a preliminary injunction. Plaintiffs objected
to the Report, and Defendants responded to those objections. 1 In analyzing the motion,
Magistrate Judge Burke noted that it was necessary to also review the parties’ arguments
regarding dismissal when considering the request for injunctive relief. As such, the
Report also contains an analysis that applies to the Federal Energy Regulatory
Commission’s (“FERC”) motion to dismiss (Doc. 24) and Nexus Gas Transmission,

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The Court later allowed briefing on the impact of the issuance of the Certificate by FERC. Plaintiffs’
motion to file their brief instanter (Doc. 47) is GRANTED.

LLC’s (“Nexus”) motion to dismiss. Doc. 28. Accordingly, the Court will resolve all
three motions herein.
Plaintiffs are a group of property owners that assert that they will be negatively
impacted by a natural gas pipeline that Nexus seeks to build. As such, they filed suit on
May 12, 2017 and sought injunctive relief. In their request, Plaintiffs contend that there
is error in the Final Environmental Impact Statement issued by FERC and that Nexus
proceeded under the wrong section of the Natural Gas Act. The Report, however, does
not reach the merits of these contentions. Instead, the Report concludes that this Court
lacks subject matter jurisdiction over the complaint in its entirety.
Section 7 of the Natural Gas Act grants FERC the jurisdiction to approve or deny
the construction of interstate natural-gas pipelines. See 15 U.S.C. § 717f. Before any such
pipeline can be built, FERC must grant the developer a “certificate of public convenience
and necessity,” id. § 717f(c)(1)(A), also called a Section 7 certificate, upon a finding that
the project will serve the public interest. See id. § 717f(e). FERC is also empowered to
attach “reasonable terms and conditions” to the certificate, as necessary to protect the
public. Id. A certificate holder has the ability to acquire necessary rights-of-way from
unwilling landowners by eminent domain proceedings. See id. § 717f(h). Any party to a
proceeding under the Act who is “aggrieved” by a FERC order may petition for review of
that order in a Federal Circuit Court of Appeals, provided that they first seek rehearing
before FERC. Id. § 717r(a)-(b).
The Sixth Circuit has described this process as follows:
The Natural Gas Act sets forth a highly reticulated procedure for
obtaining, and challenging, a FERC certificate to build an interstate
pipeline. A party aggrieved by such an order may apply for rehearing
before FERC. 15 U.S.C. § 717r(a). And no entity may seek judicial review

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of a FERC order unless it first sought rehearing from the agency. Id. Once
FERC concludes the rehearing, the aggrieved party may petition for
review either in the D.C. Circuit or in the circuit where the natural gas
company is located or has its principal place of business[.] 15 U.S.C. §
717r(b); R.2 at 3 (the pipeline company is a Delaware LLC and has its
principal place of business in Texas). The relevant court of appeals
thereafter has ‘exclusive’ jurisdiction ‘to affirm, modify, or set aside
[FERC’s] order in whole or in part.’ 15 U.S.C. § 717r(b); see also 15
U.S.C. § 717r(d)(1). Exclusive means exclusive, and the Natural Gas
Act nowhere permits an aggrieved party otherwise to pursue
collateral review of a FERC certificate in state court or federal
district court.
…
Now that FERC has issued its final order and now that the coal companies
have appealed that order to the D.C. Circuit, the matter lies within that
court’s exclusive jurisdiction. 15 U.S.C. § 717r; see also Williams Natural
Gas Co. v. City of Oklahoma City, 890 F.2d 255, 262 (10th Cir. 1989).
The coal companies thus may not seek what amounts to a second round of
collateral review of FERC’s order here. See Williams Natural Gas Co.,
890 F.2d at 262.
Am. Energy Corp. v. Rockies Express Pipeline LLC, 622 F.3d 602, 605-606 (6th Cir.
2010) (emphasis added).

The Tenth Circuit stated that 15 U.S.C. § 717r(b) “vests

exclusive jurisdiction to review all decisions of the Commission in the circuit court of
appeals . . . there is no area of review, whether relating to final or preliminary orders,
available in the district court.” Consolidated Gas Supply Corp v. Federal Energy
Regulatory Commission, 611 F.2d 951, 957 (10th Cir. 1979) (internal citations omitted).
Plaintiffs herein seek to avoid the conclusion that appears compelled by the
reasoning expressed by the Sixth Circuit.

Specifically, Plaintiffs contends that this

litigation was filed prior to the issuance of a Certificate and that 15 U.S.C. § 717u must
be read to confer jurisdiction upon this Court. Section 717u reads in part: “The District
Courts of the United States and the United States courts of any Territory or other place
subject to the jurisdiction of the United States shall have exclusive jurisdiction of

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violations of this chapter or the rules, regulations, and orders thereunder, and of all suits
in equity and actions at law brought to enforce any liability or duty created by, or to
enjoin any violation of, this chapter or any rule, regulation, or order thereunder.” This
Court, however, agrees that the “highly reticulated procedure” detailed by the Sixth
Circuit “would be entirely undermined if unhappy parties could come to district courts”
prior to the issuance of a Certificate to avoid that process. Lovelace v. United States,
Case No. 15CV30131 (D.Mass. Feb. 18, 2016).
Similarly, the Court finds no error in the Report’s conclusion that the Leedom
exception is not invoked under the facts presented herein. As the Report properly notes,
the Leedom exception allows for Court review in limited circumstances despite an
otherwise comprehensive statutory scheme of review. Greater Detroit Res. Recovery
Auth v. U.S. E.P.A., 916 F.2d 317, 323 (6th Cir. 1990). “In order to bring a case within
the exception, it must be shown that the action of the agency was a patent violation of its
authority or that there has been a manifest infringement of substantial rights irremediable
by the statutorily prescribed method of review.” Id. Plaintiffs’ contentions are that FERC
improperly delegated safety regulation to another agency and improperly permitted
Nexus to pursue a certificate as an interstate pipeline rather than an export pipeline.
Neither argument demonstrates a “patent violation of authority.” Rather, both simply
represent claims that FERC improperly exercised its discretion in evaluating the
circumstances before it. Those claims are precisely the type of claims that can and
should be reviewed in compliance with the regulatory scheme set forth in the Natural Gas
Act.

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Having found no merit in Plaintiffs’ objections and finding itself in agreement
with the logic espoused in the Report, the Court hereby ADOPTS the Report in its
entirety. Based upon that adoption, the motion for preliminary injunction (Doc. 6) is
DENIED. Moreover, based upon the above, both motions to dismiss for lack of subject
matter jurisdiction (Docs. 24 and 28) are GRANTED. This matter is hereby dismissed
for lack of subject matter jurisdiction.
IT IS SO ORDERED.

December 19, 2017
Date

____/s/ Judge John R. Adams_______
JUDGE JOHN R. ADAMS
UNITED STATES DISTRICT COURT

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