UGI Sunbury LLC v A Permanent Easement

Filing 28

MEMORANDUM (Order to follow as separate docket entry).Signed by Honorable Matthew W. Brann on 6/14/16. (km)

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF PENNSYLVANIA

UGI SUNBURY LLC,

:
:
PLAINTIFF
:
:
v.
:
:
A PERMANENT EASEMENT FOR
:
0.5032 ACRES, AND TEMPORARY
:
CONSTRUCTION AND ACCESS
:
EASEMENT FOR 1.0364 ACRES IN
:
EAST CHILLISQUAQUE TOWNSHIP,
:
NORTHUMBERLAND COUNTY,
:
PENNSYLVANIA TAX PARCEL
:
NO. 022-00-022-084
:
:
JOSEPH F. AGOLIA, JR.
:
989 SOUTH MILL ROAD
:
MILTON, PA 17847
:
:
THE NORTHUMBERLAND NATIONAL :
BANK
:
87 LORI LANE
:
SELINSGROVE, PA 17870
:
:
AND ALL UNKNOWN OWNERS
:
:
DEFENDANTS
:

Case No: 3:16-CV-00801
(Judge Brann)

MEMORANDUM
June 14, 2016
Pending before this Court are four Motions for Partial Summary Judgment
and four Motions for Preliminary Injunction filed by Plaintiff UGI Sunbury, LLC,
a wholly owned subsidiary of UGI Energy Services, LLC, a Pennsylvania Limited
1

Liability Company (hereinafter “UGI”). The Federal Energy Regulation
Commission (hereinafter “FERC”) has granted UGI a blanket certificate of public
convenience and necessity (hereinafter the “FERC Certificate”), authorizing it to
construct a 20-inch diameter pipeline over 34.4 miles spanning Snyder, Union,
Northumberland, Montour, and Lycoming Counties. This Pipeline is designed to
add 200,000 dekatherms per day of new pipeline capacity to industrial and
residential users.
Easements over much of the 34.4 miles have previously been acquired by
contract; condemnation actions pursuant to the Natural Gas Act, 15 U.S.C. § 717
and Federal Rule of Civil Procedure 71.1, however, have been filed against twentyfour landowners, interest holders, and all unknown owners of the properties who
have not yet agreed to contract terms. Emergency motions for preliminary
injunctions were filed in eleven of the twenty-four cases and four preliminary
injunction motions remain.1 Accordingly, this Memorandum and the Orders that
follow will resolve the Motions for Partial Summary Judgment and Motions for
Preliminary Injunction in the four remaining cases.2 For the following reasoning,
all of the motions are granted and judgment is entered in favor of UGI.

1

UGI requested expedited hearings in these eleven cases. After a telephone conference with UGI and Defendants,
this Court denied UGI’s request and scheduled the Preliminary Injunction hearing for June 3, 2016, fourteen days
after the teleconference. Prior to the Preliminary Injunction hearing, the parties reached agreements in the following
cases with regard to the Preliminary Injunction Motions: 3:16-cv-00782, 3:16-cv-00786, 3:16-cv-00797, 3:16-cv00800, and 3:16-cv-00806. Additionally, the following cases resolved in their entirety: 3:16-cv-00787 and 3:16-cv00804.
2
These cases are docketed in this Court as 3:16-cv-00783, 3:16-cv-00793, 3:16-cv-00798, and 3:16-cv-00801.

2

I. STANDARD OF REVIEW
Because of the unique procedures associated with federal condemnation
actions under the Natural Gas Act, UGI must first establish that it has a substantive
right to condemn the property at issue. Once a substantive right has been found, a
court “may exercise equitable power to grant the remedy of immediate possession
through the issuance of a preliminary injunction” pursuant to Federal Rule of Civil
Procedure 65, which governs the granting of preliminary injunctions.3 Rule 65
provides in pertinent part:
(a) Preliminary Injunction.
(1) Notice. The court may issue a preliminary injunction only
on notice to the adverse party.
(2) Consolidating the Hearing with the Trial on the
Merits. Before or after beginning the hearing on a motion for a
preliminary injunction, the court may advance the trial on the
merits and consolidate it with the hearing. Even when
consolidation is not ordered, evidence that is received on the
motion and that would be admissible at trial becomes part of the
trial record and need not be repeated at trial. But the court must
preserve any party's right to a jury trial
...
(c) Security. The court may issue a preliminary injunction or a
temporary restraining order 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. The United States, its officers, and its agencies are not
required to give security.

3

E. Tenn. Natural Gas Co. v. Sage, 361 F.3d 808, 828 (4th Cir. 2004); see also Constitution Pipeline Co., LLC. v. A
Permanent Easement for 1.92 Acres, 2015 WL 1219524, *2 (M.D. Pa. March 17, 2015).

3

Generally, a party seeking a preliminary injunction must establish four
factors: (1) a reasonable probability of success on the merits of their argument; (2)
irreparable harm to the movant in the absence of relief; (3) granting the preliminary
injunction will not result in greater harm to the nonmoving party; and (4) the
public interest favors granting the injunction.4 “It is well established that ‘a
preliminary injunction is customarily granted on the basis of procedures that are
less formal and evidence that is less complete than in a trial or on the merits.’” 5 “A
preliminary injunction[, however,] is an extraordinary remedy never awarded as of
right.”6
II. DISCUSSION
UGI seeks an Order allowing immediate entry to the properties so that it
may complete construction of its pipeline by February 1, 2017, the deadline fixed
by an agreement reached with Hummel Station, LLC (hereinafter “Hummel”),
(described as the “foundation shipper” with whom UGI contracted).7 In order to
make this deadline, UGI alleges that it is necessary to gain access to the subject
properties to engage in tree clearing, or feting, as soon as possible in order to
comply with UGI’s Migratory Bird Treaty Act Plan filed with FERC (hereinafter
“MBTA Plan”). This plan imposes restrictions seeking to minimize impacts on
4

See American Exp. Travel Related Services, Inc. v. Sidamon-Eristoff, 669 F.3d 359, 366 (3d Cir. 2012).
Kos Pharmaceuticals, Inc. v. Andrx Corp., 369 F.3d 700, 718 (3d Cir. 2004) (citing University of Texas v.
Camenisch, 451 U.S. 390, 395 (1981)).
6
Winter v. Natural Resources Defense Council, 555 U.S. 7, 24 (2008).
7
The FERC Certificate alternatively established a deadline of April 29, 2018 for completion of the pipeline.
5

4

nesting birds of special concern. The MBTA Plan requires that UGI clear the trees
on the properties at issue prior to the prime nesting of these birds, between May 1,
2016 and August 31, 2016, or take special measures, like creating a twenty-five
foot buffer around a tree where a nest is found and monitoring the tree for fortytwo days.8
As a matter of correct procedure, this Court must first resolve the motions
for partial summary judgment and find that UGI has a substantive right to condemn
the properties at issue. This Court must then decide the preliminary injunction
issue.
A. UGI’s Motions for Partial Summary Judgment
UGI’s motion for partial summary judgment seeks a finding from the Court
that UGI has a substantive right to condemn the property. It argues that it has
secured the required FERC Certificate and that the only open issue is that of just
compensation. Defendants filed responses to UGI’s motions for partial summary
judgment, setting forth two arguments.9 The Court will discuss each argument in
turn.

8

In its motions, UGI claimed that it needed to gain access to the properties by May 23, 2016 in order to complete
the tree clearing by the bird nesting season starting on June 1, 2016. During a telephone conference with the Court,
however, one of the defense attorneys pointed out that footnote 131 of the FERC plan states that the nesting period
is actually May 1 through August 31.
9
Docket No. 16-783, ECF No. 16; Docket No. 16-793, ECF No. 16; Docket No. 16-798, ECF No. 16; Docket No.
16-801, ECF No. 17. Note, Counsel filed responses and not opposition briefs.

5

1. SUMMARY JUDGMENT STANDARD
Summary judgment is appropriate where “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.”10 A fact is “material” where it “might affect the outcome of the suit
under the governing law.”11 A dispute is “genuine” where “the evidence is such
that a reasonable jury,” giving credence to the evidence favoring the nonmovant
and making all inferences in the nonmovant’s favor, “could return a verdict for the
nonmoving party.”12
The burden of establishing the nonexistence of a “genuine issue” is on the
party moving for summary judgment.13 The moving party may satisfy this burden
by either (i) submitting affirmative evidence that negates an essential element of
the nonmoving party’s claim; or (ii) demonstrating to the Court that the nonmoving
party’s evidence is insufficient to establish an essential element of the nonmoving
party’s case.14
Where the moving party’s motion is properly supported, the nonmoving
party, to avoid summary judgment in his opponent’s favor, must answer by setting
forth “genuine factual issues that properly can be resolved only by a finder of fact

10

Fed. R. Civ. P. 56(a).
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).
12
Id.
13
In re Bressman, 327 F.3d 229, 237 (3d Cir. 2003) (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 331 (1986)
(Brennan, J., dissenting)).
14
Id. at 331.
11

6

because they may reasonably be resolved in favor of either party.”15 For movants
and nonmovants alike, the assertion “that a fact cannot be or is genuinely disputed
must” be supported by “materials in the record” that go beyond mere allegations,
or by “showing that the materials cited do not establish the absence or presence of
a genuine dispute, or that an adverse party cannot produce admissible evidence to
support the fact.”16
“When opposing summary judgment, the non-movant may not rest upon
mere allegations, but rather must ‘identify those facts of record which would
contradict the facts identified by the movant.’”17 Furthermore, “[i]f a party fails to
properly support an assertion of fact or fails to properly address another party’s
assertion of fact as required by Rule 56(c), the court may . . . consider the fact
undisputed for purposes of the motion.”18
In deciding the merits of a party’s motion for summary judgment, the
Court’s role is not to evaluate the evidence and decide the truth of the matter, but
to determine whether there is a genuine issue for trial.19 Credibility determinations
are the province of the factfinder, not the district court.20 Although the Court may
consider any materials in the record, it need only consider those materials cited.21

15

Anderson, 477 U.S. at 250.
Fed. R. Civ. P. 56(c)(1); see also Anderson, 477 U.S. at 248–50.
17
Port Auth. of N.Y. and N.J. v. Affiliated FM Ins. Co., 311 F.3d 226, 233 (3d Cir. 2003).
18
Fed. R. Civ. P. 56(e)(2).
19
Anderson, 477 U.S. at 249.
20
BWM, Inc. v. BMW of N. Am., Inc., 974 F.2d 1358, 1363 (3d Cir. 1992).
21
Fed. R. Civ. P. 56(c)(3).
16

7

2. DISCUSSION
Section 717f(h) of the Natural Gas Act grants the right of eminent domain
for construction of pipelines:
When any holder of a certificate of public convenience and necessity
cannot acquire by contract, or is unable to agree with the owner of
property to the compensation to be paid for, the necessary right-ofway to construct, operate, and maintain 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.
“[A] certificate of public convenience and necessity [therefore] 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.”22

22

Columbia Gas Transmission, LLC v. 1.01 Acres, More or Less in Penn Tp., York County, Pa., et. al, 768 F.3d 300,
304 (3d Cir. 2014).

8

a. Excessive Taking
Defendants first argue that UGI “seeks property rights which are excessive
to its actual need.” Specifically, they contend that the proposed condemnation, as
stated in the complaint filed by UGI, prohibits the property owners from use of
“said permanent right of way or any part thereof for a road.”23 They argue that this
qualifies as a “taking of private property for a future, speculative need” and is
“invalid as an excessive condemnation” under Pidstawski v. South Whitehall Tp.24
Defendants object to the following language in the complaint:
“Rights of Way” shall mean the following easements and rights of
way on the Property that are necessary to install and construct the
Project:
(i) A permanent right of way and easement, containing 4.4944 acres,
as described as “Area of Permanent Right of Way” in Exhibit “A”
attached hereto, for the purpose of constructing, operating,
maintaining, altering, repairing, changing the size of, replacing and
removing a pipeline . . . for the transportation of natural gas . . . as
approved by the Federal Energy Regulatory Commission pursuant to
the Natural Gas Act and the Order of the Federal Energy Regulatory
Commission dated April 29, 2016 . . ., together with all rights and
benefits necessary or convenient for the full enjoyment or use of the
right of way and easement. Defendants shall not build any permanent
structures on said permanent right of way or any part thereof, . . . or

23

Docket No. 16-783, ECF No. 1 at 4; Docket No. 16-793, ECF No. 1 at 4; Docket No. 16-798, ECF No. 1 at 4;
Docket No. 16-801, ECF No. 1 at 4.
24
ECF Nos. 16, 16, 16, 17 at ¶¶ 7, 12 (citing Pidstawski v. South Whitehall Tp., 380 A.2d 1322 (Pa. Cmnwlth. Ct.
1977). Pidstawski, however, is not helpful to the instant matters. First, the court in Pidstawski ultimately held that
the land was appropriately condemned. Second, Pidstawski is distinguishable from the cases at hand, as the land
condemned in Pidstawski was not taken pursuant to a FERC certificate of public necessity. In order to obtain the
FERC Certificate here, FERC engaged in a thorough review of environmental impacts and operation considerations,
including hundreds of comments from the general public, including federal, state, and local agencies, elected
officials, environmental and public interest groups, potentially affected landowners, and other interested
stakeholders, all of whom were provided notice and given opportunity to comment. These same considerations were
not provided in the condemnation in Pidstawski.

9

use said permanent right of way or any part thereof for a road . .
.25
Defendants contend that UGI’s prohibition on Defendants’ use of any part of the
right of way for a road exceeds the property rights granted in the FERC
Certificate.26 As UGI pointed out at the preliminary injunction hearing, Defendants
make the same unsuccessful argument that was presented in Constitution Pipeline
Co., LLC v. A Permanent Easement for 1.92 Acres.27 In that case, the Honorable
Malachy E. Mannion, of this Court, explained:
The defendant argues that the taking at issue is not in accordance with
the fundamental principle of eminent domain law that the condemner
may only take property interest which is necessary to achieve the
particular public purpose. Specifically, this condemnation prohibits
the property owner from making any use of the permanent easement
as a road without written authorization. The defendant further
contends that the FERC Certificate did not include the authority to
condemn for this particular property right . . . [and] suggests that the
condemnation should be more narrowly tailored to serve that
particular purpose. There is also a general dispute as to whether the
restraint is needed at all.
The plaintiff argues that permanent easement “simply requires the
written consent of Constitution prior to using any part of the
permanent easement as a road.” The plaintiff explains that the
25

Docket No. 16-783, ECF No. 1 at 4; Docket No. 16-793, ECF No. 1 at 4; Docket No. 16-798, ECF No. 1 at 4;
Docket No. 16-801, ECF No. 1 at 4.
26
In the case at bar, Defendants do not appear to challenge the FERC Certificate itself. It is well established that the
proper channel to challenge the FERC certificate is to seek administrative review under the Natural Gas Act and
judicial review is only available in the Court of Appeals. Millennium Pipeline Co., L.L.C. v. Certain Permanent and
Temporary Easements, 777 F. Supp. 2d 475, 480-81 (W.D.N.Y. 2011) (citing 15 U.S.C. §§ 717r(a) and (b)).
“District Courts ... are limited to jurisdiction to order condemnation of property in accord with a facially valid
certificate. Questions of the propriety or validity of the certificate must first be brought to [FERC] upon an
application for rehearing and the Commissioner's action thereafter may be reviewed by a United States Court of
Appeals.” Id. (quoting Williston Basin Interstate Pipeline Co. v. Dolyniuk Family Trust, No. A1–03–66, 2005 WL
1398692, at *2 (D.N.D. June 7, 2005)).
27
2015 WL 1219524, *4 (M.D. Pa. March 17, 2015) (Mannion, J.).

10

addition of this requirement allows [the plaintiff] to analyze any
proposed impact on the pipeline in accordance with 29 C.F.R. §
192.317(a), which requires the pipeline operator to “take all
practicable steps to protect each transmission line ... from ... hazards
that may cause the pipeline to move or sustain abnormal loads.” The
court agrees that this restriction is reasonable, particularly in light of
this statutory requirement.
This Court agrees with Judge Mannion’s analysis. As in Constitution
Pipeline Co., the condemnation action at hand simply requires UGI’s approval in
writing prior to Defendants use of any part of the easement as a road.28
Furthermore, if Defendants contend that UGI’s use of the land exceeds the
property rights granted in the FERC Certificate, it is again well-settled that
Defendants must make that challenge directly to FERC.29 UGI may only condemn
the property rights within the scope of the FERC Order; however, this Court’s
“role in proceedings involving FERC certificates is circumscribed by statute, and
when a landowner contends that the certificate holder is not in compliance with the
certificate, ‘that challenge must be made to FERC, not the court.’”30
2. Good Faith
Second, Defendants argue that, while UGI holds the certificate of public
convenience, it has failed to properly effectuate the attempted condemnation
28

Docket No. 16-783, ECF No. 1 at 5; Docket No. 16-793, ECF No. 1 at 5; Docket No. 16-798, ECF No. 1 at 5;
Docket No. 16-801, ECF No. 1 at 5.
29
Millennium Pipeline, 777 F. Supp. 2d at 481.
30
Id. quoting Guardian Pipeline, 2008 WL 1751358, at *16 n. 6 (W.D. Wis. April 12, 2011); Portland Natural Gas
Transmission Sys. v. 4.83 Acres of Land, 26 F.Supp.2d 332, 339 (D.N.H.1998) (stating that “[t]he relevant statute
and regulations place the power to police compliance [with a FERC certificate] squarely upon FERC,” and that the
district “court's jurisdiction extends solely to examining the scope of the certificate and ordering condemnation of
property as authorized in the certificate”).

11

because it has failed to fulfill its statutory obligation of good faith under the
Natural Gas Act. Defendants specifically claim that UGI’s extended written offer
was unreasonable and not a good faith offer of compensation.
In seeking to condemn property under the Natural Gas Act, some courts
have imposed a requirement that the condemnor engage in good faith
negotiations.31 When evaluating whether a condemnor engaged in good faith
negotiations, a court must determine whether the condemnor made a good faith
attempt to acquire the property rights by conventional agreement before suit was
filed.32 “When measuring good faith, the amount offered to the landowner ‘is
material only insofar as it may have some bearing on the question of whether the
condemnor was in good faith.’”33 A single offer to purchase the right may be
sufficient to constitute good faith.34
Other courts have refused to impose a good faith requirement, stating that
the language of the Natural Gas Act does not require a showing of good faith.35

31

Transcontinental Gas Pipe Line Corp. v. 118 Acres of Land, 745 F. Supp. 366, 369 (E.D. La. 1990).
Id. citing Dixie Pipeline Co. v. Barry, 227 So.2d 1, 5 (La. Ct. App. 3d Cir. 1969), writ refused, 255 La. 145, 229
So.2d 731 (La.1970).
33
Id. citing Dixie Pipeline Co., 227 So.2d at 5.
34
Texas Gas Transmission Corp. v. Pierce, 192 So.2d 561 (La.Ct.App.3d Cir.1966).
35
See 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 & Northeast Pipeline, L.L.C. v. Decoulos, 146 Fed. Appx. 495, 498 (1st
Cir.2005) (“Absent any credible authority making good faith negotiation a requirement precedent to the
condemnation action, we decline the invitation to create one in this case”) (citations omitted), and Steckman Ridge
GP, LLC v. An Exclusive Natural Gas Storage Easement Beneath 11.078 Acres, No. 08–168, 2008 WL 4346405, at
*13 n. 3 (W.D. Pa. Sept. 19, 2008) (stating that courts that have imposed a good-faith requirement “gave no
explanation why they adopted such a requirement,” that in none of the cases imposing such a requirement did the
courts refuse to authorize condemnation on the ground that the FERC certificate holder had failed to negotiate in
good faith, and concluding that “[t]he 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”) (quoting Kansas
32

12

While the United States Court of Appeals for the Third Circuit has not yet taken a
position on the matter, federal district courts in Pennsylvania have refused to
impose a good faith requirement.36 In citing a decision from the District of Kansas,
the Honorable Kim Gibson from the United States District Court for the Western
District of Pennsylvania explained:
The court, in its own research, found that some federal district courts
have imposed a good faith negotiation requirement. These courts gave
no explanation why they adopted such a requirement. None of them
refused to authorize condemnation because a holder of a FERC
certificate failed to negotiate in good faith before seeking
condemnation.
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 . . .37
At the preliminary injunction hearing, testimony was presented that UGI and
the Defendants had engaged in negotiations for approximately eleven months prior
to the filing of the condemnation actions. Defendants contend, however, that on the
same day that the FERC Certificate was granted, UGI sent Defendants a letter with
a final offer amount noting an expiration of that offer within seven days. The “final
offer” proposed in these letters failed to include the multiple stipulations the parties
Pipeline Company v. A 200 Foot by 250 Foot Piece of Land, 210 F.Supp.2d 1253, 1257 (D.Kan.2002)). See
also Guardian Pipeline, L.L.C. v. 295.45 Acres of Land, No. 08–C–28, 2008 WL 1751358, at *14 (E.D.Wis. April
11, 2008) (collecting cases, and concluding that the NGA does not obligate the condemnor, as a jurisdictional
prerequisite, to negotiate in good faith with the landowner,” but adding that coercive, unfair, or fraudulent tactics
may render any agreement void or voidable as to the landowner)).
36
See Steckman Ridge GP, LLC v. An Exclusive Natural Gas Storage Easement Beneath 11.078 Acres, 2008 WL
4346405 at *13 n. 3 (W.D. Pa. Sept. 19, 2008); see also Constitution Pipeline, 2015 WL 1219524 at *4.
37
Steckman Ridge GP, LLC v. An Exclusive Natural Gas Storage Easement Beneath 11.078 Acres, 2008 WL
4346405 at *13 n. 3 (W.D. Pa. Sept. 19, 2008) (citing Kansas Pipeline Company v. A 200 Foot By 250 Foot Piece of
Land, 210 F.Supp.2d 1253, 1257 (D. Kansas 2002)).

13

had confirmed over the many months of negotiations. Furthermore, despite
knowledge that Defendants were represented by counsel, the final offer letter was
sent directly to Defendants.
Be that as it may, this Court need not decide whether to impose a good faith
requirement in this case. The testimony that UGI engaged in many months of
negotiations with Defendants and their counsel was undisputed. Multiple offers
were made. Whether the offers were satisfactory to Defendants is an issue to be
decided on another day in determining just compensation.
Accordingly, this Court finds that UGI has the substantive right to condemn
Defendants’ property, in accordance with the FERC Certificate.
B. Motions for Preliminary Injunctions
1. REASONABLE

PROBABILITY OF SUCCESS ON THE MERITS OF THEIR

ARGUMENT

Because this Court finds that UGI has the substantive right to
condemn the Rights of Way under the Natural Gas Act, UGI is likely to
succeed on the merits of its argument. The Third Circuit has held 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 defendant

14

will receive in return for the easement.”38 Once the right to condemn has
been established, no merits issues remain because the amount of just
compensation has no effect on the rights to the easement.39
2. IRREPARABLE HARM TO THE MOVANT IN THE ABSENCE OF RELIEF
UGI argues that, without the preliminary injunction, it will be unable
to meet the timelines established by its contract with Hummel (with a
completion deadline of February 1, 2017) and by the FERC Order (with a
completion deadline of April 29, 2018). It contends that waiting until just
compensation is paid will create a “domino effect” in delaying construction
of the pipeline, resulting in financial harm of approximately $20,000 per day
in delay costs and $87,000 per day in revenue loss.
Defendants challenge the categorization of irreparable harm and
suggest that this is simply a result of “poor planning” on behalf of UGI
which has simply “engaged in contracts prematurely.”40 Harm that UGI
created itself does not, of course, support a preliminary injunction.
Defendants also argue that the only harm that UGI articulated is
purely economic injury.41 Defendants cite Minard Run Oil Co. v. U.S. Forest

38

Columbia Gas Transmission, 768 F.3d at 304.
Id. at 315.
40
Teleconference with the Court on May 20, 2016.
41
Dockets 16-783, 16-793, 16-798 ECF No. 17 at 6; Docket 16-801 ECF No. 17 at 6.
39

15

Serv.,42 in stating that “a purely economic injury, compensable in money,
cannot satisfy the irreparable injury requirement.”
This Court agrees with Defendants that UGI’s monetary loss is the
direct result of its own actions in entering contracts prematurely. Testimony
revealed that UGI began the FERC pre-filing process in the spring of 2015
and filed its official application for the FERC Certificate in July 1, 2015.
UGI then entered the contract with Hummel in October 2015, with the
expectation that the FERC Certificate would be secured in January 2016.
This did not occur, however, and the FERC Certificate was not granted until
April 29, 2016. Accordingly, the monetary harm that UGI conceivably could
suffer would be avoided if it had waited to enter into contracts until after the
FERC Certificate was secured. The FERC Certificate provides for a
completion date fifteen months beyond the deadline in the Hummel contract,
time that could have been used to negotiate with landowners without the
need for judicial intervention.
3. GRANTING

THE PRELIMINARY INJUNCTION WILL NOT RESULT IN

GREATER HARM TO THE NONMOVING PARTY

UGI contends that there is no irreparable harm to the Defendants
because the damages are entirely compensable monetarily. Defendants argue

42

670 F.3d 236, 255 (3d Cir. 2011).

16

conversely that “no amount of money should be found to be adequate to
justify the denial of the due process rights to property protection as
guaranteed by the Fifth Amendment to the United States Constitution.”43
The issue of the taking of property, however, has already been
considered in this case prior to the granting of the FERC Certificate.
Defendants were further afforded the opportunity to appeal; none of them
pursued their administrative remedy. Accordingly, this Court agrees that the
harm to Defendants, at this stage, can only be compensable monetarily.
4. THE PUBLIC INTEREST FAVORS GRANTING THE INJUNCTION
UGI argues that there is a substantial public interest at stake in this
case because of the need for natural gas. It argues that FERC concluded in
granting the certificate that “the benefits that the UGI Pipeline 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.”44 Defendants, on the other hand, argue that the
public interest is “better served by the protection of clear constitutional
property rights than by a surface review and approval of a sprint to the
acquisition of property rights.”45

43

Dockets 16-783, 16-793, 16-798 ECF No. 17 at 8; Docket 16-801 ECF No. 17 at 8.
ECF No. 8-2, FERC Order, ¶ 17.
45
Dockets 16-783, 16-793, 16-798 ECF No. 17 at 8; Docket 16-801 ECF No. 17 at 8.
44

17

The property rights of Defendants, however, have already been
considered thoroughly by FERC. In granting the FERC Certificate, FERC
weighed the public interest at stake against the Defendants’ property
interests and found in favor of the public interest. This Court does not have
the authority to review FERC’s findings.
Consequently, three of the four factors to consider in deciding
whether to grant a motion for preliminary injunction weigh in favor of
granting UGI’s sought relief.
C. Bond
Rule 65(c) requires that the movant requesting a preliminary
injunction give security in an amount the court considers proper to pay the
costs and damages sustained by any party found to have been wrongfully
enjoined. The Third Circuit has held that “[a]lthough the amount of the bond
is left to the discretion of the court, the posting requirement is much less
discretionary. While there are exceptions, the instances in which a bond may
not be required are so rare that the requirement is almost mandatory.”46 This
exception exists only “when complying with the preliminary injunction
‘raises no risk of monetary loss to the defendant.’”47

46

Zambelli Fireworks Mfg. Co. v. Wood, 592 F.3d 412, 425-26 (3d Cir. 2010)(citing Frank's GMC Truck Center,
Inc. v. General Motors Corp., 847 F.2d 100, 103 (3d Cir.1988)).
47
Zambelli, 592 F.3d at 425 (citing Hoxworth v. Blinder, Robinson & Co., Inc., 903 F.2d 186, 210 (3d Cir.1990)).

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UGI proposes to post a bond in an amount as determined by the Court as the
appropriate security for the payment of just compensation. In the five cases that
stipulated to UGI’s motions for preliminary injunction,48 UGI proposed a bond
calculated on the acreage of the right of way multiplied by $5,000 per acre. This
Court approved their proposal and will apply the same calculation to the four
remaining Defendants.
IV. CONCLUSION
For the foregoing reasons, the Court will grant UGI’s motion for partial
summary judgment and its motion for preliminary injunctive relief.
An Order follows this Memorandum, specifying the bond amount in each
case.

BY THE COURT:

/s Matthew W. Brann
Matthew W. Brann
United States District Judge

48

Docket numbers 3:16-cv-00782, 3:16-cv-00786, 3:16-cv-00797, 3:16-cv-00800, and 3:16-cv-00806.

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