Transcontinental Gas Pipe Line Company, LLC v. PERMANENT EASEMENT FOR
Filing
37
MEMORANDUM (Order to follow as separate docket entry) re: 26 MOTION for Preliminary Injunction for Possession of Rights of Way by August 18, 2017 filed by Transcontinental Gas Pipe Line Company, LLC, and 4 MOTION for Partial Summary Judgment filed by Transcontinental Gas Pipe Line Company, LLC. Signed by Honorable Matthew W. Brann on 8/9/2017. (jn)
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF PENNSYLVANIA
TRANSCONTINENTAL GAS PIPE
LINE COMPANY, LLC,
:
:
:
Plaintiff
:
:
v.
:
:
PERMANENT EASEMENT FOR 2.49 :
ACRES, TEMPORARY EASEMENTS :
FOR 3.69 ACRES, AND TEMPORARY :
ACCESS EASEMENT FOR 1.70
:
ACRES IN COAL TOWNSHIP,
:
NORTHUMBERLAND COUNTY,
:
PENNSYLVANIA, TAX PARCEL
:
NUMBER 00A-00-068-039, PA
:
ROUTE 61, COAL TOWNSHIP,
:
NORTHUMBERLAND COUNTY, PA :
17866
:
:
HUD, INC.
:
:
AND ALL UNKNOWN OWNERS,
:
:
Defendants.
:
No. 4:17-CV-00307
(Judge Brann)
MEMORANDUM OPINION
AUGUST 9, 2017
I.
BACKGROUND
On February 20, 2017, Plaintiff, Transcontinental Gas Pipe Line Company,
LLC, hereinafter “Transco,” filed a complaint in condemnation pursuant to Federal
Rule of Civil Procedure 71.1 and the Natural Gas Act, 15 U.S.C. § 717.
1
Previously, on February 3, 2017, the Federal Energy Regulatory Commission,
hereinafter “FERC,” granted Transco a certificate of public convenience and
necessity. Transco filed suit after proving unable to negotiate the amount of
compensation to be paid for the right-of-way with the Defendants in order to
construct, operate and maintain a pipeline for the Atlantic Sunrise Project;
construct new and make modifications to existing compressor stations; construct
new and make modifications to existing meter stations; make modifications to
existing regulator stations; and make modifications to existing mainline valve
locations in South Carolina, North Carolina, Virginia, Maryland, and, as largely
relevant here, 199.5 miles through Pennsylvania.1
On February 21, 2017, Transco filed a motion for partial summary judgment
and, subsequently on June 29, 2017, a motion for preliminary injunction.2 A
hearing was held on these motions on August 3, 2017. After taking testimony and
hearing arguments, both motions are granted.
II.
DISCUSSION
a. Partial Summary Judgment will be granted in Transco’s favor.
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
1
2
15 U.S.C.A. § 717f (h)
ECF Nos. 4 and 26.
2
matter of law.”3 A fact is “material” where it “might affect the outcome of the suit
under the governing law.”4 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.”5
The burden of establishing the nonexistence of a “genuine issue” is on the
party moving for summary judgment.6 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.7
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
because they may reasonably be resolved in favor of either party.”8 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,
3
Fed. R. Civ. P. 56(a).
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).
5
Id.
6
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)).
7
Id. at 331.
8
Anderson, 477 U.S. at 250.
4
3
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.”9
“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.’”10 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.”11
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.12 Credibility determinations are
the province of the factfinder, not the district court.13 Although the court may
consider any materials in the record, it need only consider those materials cited.14
With that standard of review in mind, Section 717f(h) of the Natural Gas Act
grants the right of eminent domain for construction of pipelines, as follows:
When any holder of a certificate of public convenience and necessity
cannot acquire by contract, or is unable to agree with the owner of
9
Fed. R. Civ. P. 56(c)(1); see also Anderson, 477 U.S. at 248–50.
Port Auth. of N.Y. and N.J. v. Affiliated FM Ins. Co., 311 F.3d 226, 233 (3d Cir. 2003).
11
Fed. R. Civ. P. 56(e)(2).
12
Anderson, 477 U.S. at 249.
13
BWM, Inc. v. BMW of N. Am., Inc., 974 F.2d 1358, 1363 (3d Cir. 1992).
14
Fed. R. Civ. P. 56(c)(3).
10
4
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.
“To condemn the easements at issue, [the gas company] must demonstrate (1) it
holds a FERC certificate of public convenience and necessity; (2) the rights-of-way
to be condemned are necessary for the construction, operation, and maintenance of
the pipeline; and (3) it has been unable to acquire the proposed rights-of-way from
the landowner.”15 “[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.”16
15
Columbia Gas Transmission, LLC v. An Easement To Construct, No. CV 16-1243, 2017 WL
544596, at *3 (W.D. Pa. Feb. 9, 2017)
16
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).
5
Defendants’ argue generally that “Plaintiff’s motion for partial summary
judgment is premature because Defendants and similarly situated landowners have
been denied the opportunity to challenge the FERC Order and its findings.”17
However, this argument fails because “a certificate of public convenience and
necessity gives its holder the ability to obtain automatically the necessary right of
way through eminent domain;”18 “this court’s role is mere enforcement.”19
Defendants also argue that Transco did not negotiate in good faith.
Defendants’ argument as to “good faith” negotiations fails, as well. Although
“some courts have imposed a requirement that the condemnor engage in good faith
negotiations,”20 I have never imposed a “good faith” requirement. Moreover, “the
United States Court of Appeals for the Third Circuit has not yet taken a position on
the matter, and federal district courts in Pennsylvania have refused to impose a
good faith requirement.”21 Additionally, “the plain language of the NGA does not
17
Def. Br. at 6.
Columbia Gas Transmission, LLC v. 1.01 Acres, More or Less in Penn Twp., York Cty., Pa.,
Located on Tax ID #440002800150000000 Owned by Brown, 768 F.3d 300, 304 (3d Cir. 2014),
cert. denied sub nom. Brown v. Columbia Gas Transmission, LLC, 135 S. Ct. 2051, 768 F.3d 300
(3d Cir. 2015).
19
Tennessee Gas Pipeline Co. v. Massachusetts Bay Transportation Authority, 2 F.Supp.2d 106,
110 (D.Mass.1998).
20
UGI Sunbury LLC v. A Permanent Easement for 0.4944 Acres, No. 3:16-CV-00783, 2016 WL
3254986, at *6 (M.D. Pa. June 14, 2016) (Brann, J.).
21
Id.
18
6
impose an obligation on a holder of a FERC certificate to negotiate in good faith
before acquiring land by exercise of eminent domain.”22
In their brief, Defendants further argue that they were denied the opportunity
to be heard by FERC. But they offer no substantive evidence to support this
allegation.
FERC provided the landowners with multiple opportunities to be heard. The
relevant dates are as follows. On March 31, 2015, Transco filed a project
application. On October 22, 2015, FERC sent a letter to affected landowners. On
May 5, 2016, FERC issued an Environmental Impact Statement. The public
comment period ran for 45 days, from May 12, 2016 to June 27, 2016. Between
June 13 and 16, 2016, FERC held four public comment meetings. On October 13,
2016, FERC sent landowners letters regarding two alternative pipeline routes. The
public comment period ran for 30 days. On November 3, 2016, FERC issued a
comment for a draft General Conformity Determination. On December 30, 2016,
FERC issued a final Environmental Impact Statement. Finally, on February 3,
2017 FERC authorized the Atlantic Sunrise Project and granted Transco a
certificate of public convenience and necessity.
22
Id. citing 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) (Gibson, J.) (citing
Kansas Pipeline Company v. A 200 Foot By 250 Foot Piece of Land, 210 F.Supp.2d 1253, 1257
(D. Kansas 2002)).
7
The FERC certificate of public convenience and necessity lists timely and
untimely intervenors.23 Here, Defendants did not attempt to intervene during the
FERC proceedings. For Defendants to argue that they did not have the
opportunity to be heard is disingenuous. FERC provided Defendants and others
fifteen months, two public comment periods, and four public comment meetings
during which they had the opportunity to be heard. It strains credulity to suggest
otherwise.
Defendants also argue that the project is not for “public use” and disagree
with the proposed route. Any challenge as to “public use” and/or the route this
pipeline will take, could have, and more importantly, should have been taken up
with FERC in the first instance.24 “When a property owner comes to federal court
to challenge FERC's findings in the certificate of public convenience and necessity,
the property owner thereby mounts what in essence is a collateral attack on that
certificate.”25 “The validity and conditions of the FERC Certificate cannot be
23
Plaintiff’s Exhibit 1 at August 3, 2017 preliminary injunction hearing, pages 73 and 79.
See e.g. Guardian Pipeline, infra, 2008 WL 1751358, at *16 n. 6; Portland Natural Gas
Transmission Sys. v. 4.83 Acres of Land, 26 F.Supp.2d 332, 339 (D.N.H.1998), Millennium
Pipeline Co. v. Certain Permanent & Temp. Easements, 777 F. Supp. 2d 475, 480-481
(W.D.N.Y. 2011), aff'd sub nom. Millennium Pipeline Co. v. Certain Permanent & Temp.
Easements in Thayer Rd., S.B.L. No. 63.00-1-24.1, Town of Erin, Cty. of Chemung, N.Y., 552 F.
App'x 37 (2d Cir. 2014).
25
Steckman Ridge GP, LLC v. Exclusive Natural Gas Storage Easement Beneath 11.078 Acres,
2008 U.S. Dist. LEXIS 71302, 13-14 (W.D. Pa. Sept. 19, 2008) (Gibson, J.).
24
8
collaterally attacked in district court.”26 “Review of the validity of the certificate is
the exclusive province of the appropriate court of appeals.”27 Accordingly,
arguments regarding “public use” should have been made to FERC; they now may
be made to the United States Court of Appeals for the Third Circuit. This
argument is not properly before this Court.
Finally, the Defendants request a stay of the FERC Order. However, “A
party is not ordinarily granted a stay of an administrative order without an
appropriate showing of irreparable injury.”28 “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.”29 Because the
certificate of public convenience and necessity has previously been awarded giving
Transco the right of way, and because just compensation will be awarded at a later
date, there is no irreparable injury here.30
26
Williams Natural Gas Co. v. City of Oklahoma City, 890 F.2d 255, 262 (10th Cir.1989), cert.
denied, 497 U.S. 1003, 110 S.Ct. 3236, 111 L.Ed.2d 747 (1990).
27
Id.
28
In re Permian Basin Area Rate Cases, 390 U.S. 747, 773-774, 88 S. Ct. 1344, 20 L. Ed. 2d
312 (1968).
29
Columbia Gas Transmission, LLC v. 1.01 Acres, More or Less in Penn Twp., York Cty., Pa.,
Located on Tax ID #440002800150000000 Owned by Brown, 768 F.3d 300, 304 (3d Cir. 2014),
cert. denied sub nom. Brown v. Columbia Gas Transmission, LLC, 135 S. Ct. 2051, 768 F.3d 300
(3d Cir. 2015).
30
See also Millennium Pipeline Co., L.L.C., supra, (Landowner would not likely suffer
irreparable harm in absence of stay pending appeal of non-money judgment entered in favor of
natural gas pipeline company and order granting company permanent easement across
landowner's property, pursuant to NGA, since landowner's injury from company's alleged plan to
9
In the case at bar, I find that there is no genuine issue of material fact as to
the three conditions precedent. First, FERC has issued a certificate of public
convenience and necessity to Transco, a natural gas company as defined by the
Natural Gas Act 15 U.S.C. § 717a(6). Second, the rights-of-way to be condemned
are necessary for the construction, operation, and maintenance of the pipeline. “By
issuing the Certificate [of public necessity] to [Plaintiff], FERC has determined
that the Subject Property is necessary to the operation of the Pipeline[; t]his
determination cannot be challenged by Defendants.”31 Finally, despite its attempts
through negotiations, Transco has been unable to acquire the proposed rights-ofway from the landowner. Accordingly, partial summary judgment will be entered
in favor of Transco.
b. A preliminary injunction will be entered in Transco’s favor.
Because of the unique procedures associated with federal condemnation
actions arising under the Natural Gas Act, Plaintiff must first establish that it has a
expand pipeline on owner's property would be remedied by damages award for just
compensation at future trial on landowner's takings claim.)
31
WBI Energy Transmission, Inc., No. CV 14-130-BLG-SPW, 2017 WL 532281, at *3 (D.
Mont. Feb. 8, 2017) citing Williston Basin Interstate Pipeline Company v. Property Interests
Located in Carbon County, Montana, 2010 WL 5104991 (D. Mont. 2010) (“By issuing the
Certificate of Public Convenience and Necessity under the Natural Gas Act, FERC has already
determined that Defendants' property interests are necessary. Defendants have not offered any
arguments to the contrary, and even if they did, such arguments would be an improper collateral
attack on the FERC certificate.”); Williams Natural Gas Co. v. City of Oklahoma City 890 F.2d
255, 262 (10th Cir. 1989); Kansas Pipeline Co. v. 200 Foot by 250 Foot Piece of Land, 210
F.Supp.2d 1253, 1256 (D. Kan. 2002) (“Once the holder of a FERC certificate of public
convenience and necessity asks a district court to enforce its right to condemn, the findings of the
FERC certificate are treated as conclusive.”).
10
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.32 “The [Natural Gas Act] does not allow for ‘quick take’ powers; in a
condemnation action under the Act, we must evaluate access to property under the
preliminary injunction rubric of Federal Rule of Civil Procedure 65(c).”33 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
32
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).
33
Columbia Gas Transmission, LLC v. An Easement To Construct, No. CV 16-1243, 2017 WL
544596, at *4 (W.D. Pa. Feb. 9, 2017)
11
restrained. The United States, its officers, and its agencies are not
required to give security.
“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.’”34 “A preliminary injunction[, however,] is an
extraordinary remedy never awarded as of right.”35
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.36 The United States Court of
Appeals for the Third Circuit has recently clarified the standard. “A movant for
preliminary equitable relief must meet the threshold for the first two “most critical”
factors: it must demonstrate that it can win on the merits (which requires a showing
significantly better than negligible but not necessarily more likely than not) and
that it is more likely than not to suffer irreparable harm in the absence of
preliminary relief.”37 “If these gateway factors are met, a court then considers the
remaining two factors and determines in its sound discretion if all four factors,
34
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)).
35
Winter v. Natural Resources Defense Council, 555 U.S. 7, 24 (2008).
36
See American Exp. Travel Related Services, Inc. v. Sidamon-Eristoff, 669 F.3d 359, 366 (3d
Cir. 2012).
37
Reilly v. City of Harrisburg, 858 F.3d 173, 179 (3d Cir. 2017).
12
taken together, balance in favor of granting the requested preliminary relief.”38 In
the case at bar, the four factors favor entering the preliminary injunction as
requested by Transco.
First, Transco has succeeded on the merits. Unlike preliminary injunctions
in other types of civil actions, those sought in condemnation cases also request an
entry of judgment on the merits contemporaneously with the motion for
preliminary injunction. Defendants argue in their brief that because “the certificate
[of public use and necessity] is currently being challenged by a number of
landowners and environmental groups”39 that Transco should not be granted
immediate possession of the property. However, it is not an abuse of discretion for
the district court to hold that a gas company is entitled to immediate use and
possession if, as above, I have thoroughly explored and explained why Transco
does have the substantive right to condemn.40 Therefore, given the above grant of
partial summary judgment finding Transco’s substantive right to condemn, the
likelihood of success on the merits is established. Accordingly, this factor favors
Transco.
Second, Transco will suffer irreparable harm in the absence of preliminary
relief. In their brief opposing the motion, Defendants argue that the only harm in
38
Id.
Def. Br.
40
See e.g. 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, 369 (8th Cir. 2014)
39
13
not granting the motion is monetary harm. This is not the case. In fact, Transco
set forth several examples of irreparable harm both in its papers and at the hearing.
The first is monetary. Transco contends non-possession will cost it $500,000 per
month, and will delay revenues of thirty-three million dollars ($33,000,000) per
month because Transco needs possession in order to begin construction.
Defendants argue in their brief that these values are speculative. Defendants are
correct in one respect, as “purely speculative harm will not suffice, but rather, a
plaintiff who can show a significant risk of irreparable harm has demonstrated that
the harm is not speculative and will be held to have satisfied his burden.”41
However, the testimony of David Sztroin, hereinafter “Mr. Sztroin,” the pipeline
project manager for the Atlantic Sunrise Project, is consistent with Transco’s
assertions. Accordingly, I respectfully disagree with Defendants assertion.
Although one may never know precise value to be attributed to any further delay in
Transco’s possession of the subject property, Transco has shown a significant risk
of irreparable harm that is more than merely speculative. Thus Transco has met its
burden.
The next type of irreparable harm set forth by Transco is that it will breach
contracts with both subcontractors and vendors if it cannot possess the subject
properties in a timely fashion. The contract with shippers was designed so that the
41
RoDa Drilling Co. v. Siegal, 552 F.3d 1203, 1210 (10th Cir. 2009).
14
pipeline is in service by the 2017-2018 winter heating season. Mr. Sztroin testified
that the contracts with shippers were a prerequisite to filing with FERC, and
Transco would break contracts with the shippers if it was not permitted to enter the
property by August 18, 2017. I note that this argument also cuts against Plaintiff,
as Transco has acknowledged that delays in obtaining the FERC certificate have
already caused it to miss that deadline; the current anticipated completion date for
the project is now July 2018.42 On the other hand, Transco argues that its “in use”
date will continue to be pushed back if possession is not ordered by August 18,
2017. Mr. Sztroin explained that each delay would have a “domino effect” that
delays the entire project.
Transco also argues that it will experience other substantial delays in
completion of the project if it is not granted access. It asserts that non-possession
could set the construction project back an entire year because it must conduct
surveys on endangered and threatened wildlife species that are only permitted
during certain dates each year. Additionally, certain work must be completed in
Pennsylvania prior to the annual October deadline for work on wild trout streams.
Specifically, Transco must install in-stream supports for equipment bridges prior to
October 1, 2017.
42
Testimony of Sztroin at August 3, 2017 hearing.
15
In sum, the Atlantic Sunrise Project is large in both scope and geography,
spanning five states. “The magnitude of the Project requires a complex and
coordinated construction process, with work activities being performed in
sequential phases”43 Each piece of the construction puzzle depends on the prior
piece timely placed. Untimeliness in one small part of this enormous project would
result in a domino effect on the timeliness of all other areas of the project. This
factor weighs strongly in favor of Transco.
Third, granting the preliminary injunction will not result in greater harm to
the landowner, despite Defendants arguments to the contrary in their brief.
Transco has the substantive right to possession. Defendants argue that if the
preliminary injunction is granted, they lose the right to the “use and enjoyment of
their property” and granting the motion will “change the status quo.”44 However,
these are simply “timing arguments because productive capacity would still be
disturbed, albeit at a later time, if just compensation was determined first.”45
“The Fifth Amendment guarantees the landowners just compensation for
their land no matter when the condemnor takes possession.”46 “We fully
understand that condemnation often forces landowners to part with land that they
43
Sabal Trail Transmission, LLC v. +/- 0.41 Acres of Land in Hamilton Cty. Florida, No. 3:16CV-274-TJC-JBT, 2016 WL 3188985, at *3 (M.D. Fla. June 8, 2016)
44
Def. Br.
45
E. Tennessee Nat. Gas Co. v. Sage, 361 F.3d 808, 829 (4th Cir. 2004)
46
Id.
16
would prefer to keep for many reasons, including sentimental ones.”47 “However,
the Supreme Court long ago recognized that ‘in view of the liability of all property
to condemnation for the common good, loss to the owner of nontransferable values
deriving from his unique need for property or idiosyncratic attachment to it ... is
properly treated as part of the burden of common citizenship.’”48
It is commonplace for district courts to order immediate possession after
FERC has taken a lengthy period of time determining whether or not to issue a
certificate of public convenience and necessity. “District courts in a number of
jurisdictions grant immediate possession in the form of a preliminary injunction to
a gas company that has established its right to condemn under the [Natural Gas
Act].”49
47
Cherokee Nation v. S. Kan. Ry. Co., 135 U.S. 641, 659 (1890).
Id citing Kimball Laundry Co. v. United States, 338 U.S. 1, 5, (1949).
49
Tennessee Nat. Gas Co. v. Sage, 361 F.3d at 827 citing Northwest Pipeline Corp. v. The 20' by
1,430' Pipeline Right of Way, 197 F.Supp.2d 1241, 1245 (E.D.Wash.2002)(“[w]here there is no
dispute about the validity of [the gas company's] actual right to the easement,” denying authority
to grant immediate possession “would produce an absurd result”); 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); N. Border Pipeline Co. v. 64.111 Acres of Land, 125 F.Supp.2d 299, 301
(N.D.Ill.2000)(same); see also N. Border Pipeline Co. v. 127.79 Acres of Land, 520 F.Supp. 170,
173 (D.N.D.1981) (“the Court believes the circumstances of this case warrant the exercise of
inherent powers”); Williston Basin Interstate Pipeline Co. v. Easement and Right–of–Way Across
.152 Acres of Land, 2003 WL 21524816 (D.N.D.2003)(same); Tenn. Gas Pipeline Co. v. New
England Power, Inc., 6 F.Supp.2d 102, 104 (D.Mass.1998)(same); USG Pipeline Co. v. 1.74
Acres, 1 F.Supp.2d 816, 825–26 (E.D.Tenn.1998)(same); Kern River Gas Transmission Co. v.
Clark County, 757 F.Supp. 1110, 1117 (D.Nev.1990)(same); 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 Natural Gas
Act].”); Rivers Electric Co., Inc. v. 4.6 Acres of Land, 731 F.Supp. 83, 87
(N.D.N.Y.1990)(granting immediate possession under a statute similar to the Natural Gas Act).
48
17
Moreover, “the court does not have jurisdiction to review a collateral attack
on the FERC certificate.”50 “When a property owner comes to federal court to
challenge FERC’s findings in the certificate of public convenience and necessity,
the property owner thereby mounts what in essence is a collateral attack on that
certificate.”51 “District courts have limited jurisdiction in Natural Gas Act
condemnation actions.”52 “This court’s role is mere enforcement.”53
For these reasons, this factor favors Transco.
Fourth, granting the preliminary injunction is in the public interest as it will
give the general public access to natural gas from the Marcellus Shale deposits for
heating their homes. This pipeline will transport 1.7 million decotherms of natural
gas to the north east and mid atlantic markets. “Congress passed the Natural Gas
Act and gave gas companies condemnation power to insure that consumers would
Cf. Commercial Station Post Office, Inc. v. United States, 48 F.2d 183, 184–85 (8th
Cir.1931)(holding that government officer who exercises statutory authority to file condemnation
action may take immediate possession of the property even though there is no express provision
authorizing pre-judgment possession).
50
Williams Natural Gas Co. v. City of Okla. City, 890 F.2d 255, 262 (10th Cir. 1989).
51
Steckman Ridge GP, LLC v. Exclusive Natural Gas Storage Easement Beneath 11.078 Acres,
2008 U.S. Dist. LEXIS 71302, 13-14 (W.D. Pa. Sept. 19, 2008) (Gibson, J.).
52
Sabal Trail Transmission, LLC v. +/- 0.41 Acres of Land in Hamilton Cty. Florida, No. 3:16CV-274-TJC-JBT, 2016 WL 3188985, at *2 (M.D. Fla. June 8, 2016), see also 15 U.S.C.A. §
717r(b); Guardian Pipeline, L.L.C. v. 529.42 Acres of Land, 210 F. Supp. 2d 971, 974 (N.D. Ill.
2002) (“The validity and conditions of the FERC Certificate cannot be collaterally attacked in
district court.”); Williams Natural Gas Co. v. City of Oklahoma City, 890 F.2d 255, 262 (10th
Cir.1989), cert. denied, 497 U.S. 1003, 110 S.Ct. 3236, 111 L.Ed.2d 747 (1990) (“Review of the
validity of the certificate is the exclusive province of the appropriate court of appeals.”).
53
Id. citing Tennessee Gas Pipeline Co. v. Massachusetts Bay Transportation Authority, 2
F.Supp.2d 106, 110 (D.Mass.1998).
18
have access to an adequate supply of natural gas at reasonable prices.”54 This
factor, therefore, also favors Transco.
For all of these reasons, Transco’s motion for preliminary injunction is
granted.
c. A bond will be Ordered.
“Rule 65(c) gives the district court wide discretion to set the amount of a
bond.”55 There are sufficient safeguards to protect Defendants. If I were to order a
bond amount that is lower than the amount ultimately awarded at trial, Defendants
will be entitled to the higher amount pursuant to Federal Rule of Civil Procedure
71.1. “If the compensation finally awarded to a defendant exceeds the amount
distributed to that defendant, the court must enter judgment against the plaintiff for
the deficiency.”56 “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 be proceeded against as
such.”57 Objection to the bond amount is overruled here because Plaintiff posting
54
E. Tennessee Nat. Gas Co. v. Sage, 361 F.3d at 830, citing Clark v. Gulf Oil Corp., 570 F.2d
1138, 1145–46 (3d Cir.1977); Fla. Power & Light Co. v. Federal Energy Regulatory Comm'n,
598 F.2d 370, 379 (5th Cir.1979); Public Serv. Comm'n of Ky. v. Federal Energy Regulatory
Comm'n, 610 F.2d 439, 442–43 (6th Cir.1979).
55
New York State Elec. & Gas Corp. v. U.S. Gas & Elec., Inc., 697 F. Supp. 2d 415, 441
(W.D.N.Y. 2010), see also Zambelli Fireworks Mfg. Co. v. Wood, 592 F.3d 412 (3d Cir. 2010).
56
Fed. R. Civ. P. 71.1(j)(2).
57
Steckman Ridge GP, LLC v. An Exclusive Nat. Gas Storage Easement Beneath 11.078 Acres,
More or Less, in Monroe Twp., 2008 WL 4346405, at *11 (W.D. Pa. Sept. 19, 2008)
19
the bond is “financially capable of satisfying any award of just compensation
above and beyond the bond proposed.”58
Joseph Prociak, President and CEO of Defendant HUD, Inc., testified at the
August 3, 2017 hearing that he values the loss to the property to be four-hundred
thousand dollars ($400,000). Accordingly, he is requesting a bond for that amount.
However, $400,000 represents his valuation of the entire parcel. Transco is only
seeking to condemn a permanent easement on 2.49 acres, which they have
appraised at $30,300 and, thus, proposed a bond of $90,990. Defendants’ demand
for a bond of $400,000.00 is unsubstantiated; Transco’s proposed bond amount of
trebling the appraisal value is comparatively reasonable.
Finally, Defendants made an oral motion during the August 3, 2017 hearing
demanding that compensation be paid prior to entry on the land. This oral motion
is denied. The Constitution “does not provide or require that compensation be paid
in advance of the occupancy of the land to be taken.” 59 “The amount of
compensation…[has] no effect on [the gas company’s] rights to the easements.”60
But the owner is entitled to reasonable, certain, and adequate provision for
obtaining compensation before his occupancy is disturbed."61 Accordingly,
58
N. Nat. Gas Co. v. Approximately 9117.53 acres in Pratt, Kingman, & Reno Ctys., Kan., as
further described herein, 2011 WL 7491556, at *2 (D. Kan. Nov. 16, 2011).
59
Columbia Gas Transmission, LLC, 768 F.3d at 315.
60
Id.
61
Cherokee Nation v. S. Kan. Ry. Co., 135 U.S. 641, 659 (1890).
20
Transco will be ordered to post a surety bond with the Clerk of Court on or before
August 16, 2017.
d. The Order will contain an enforcement mechanism
Transco indicates third parties have expressed their intention to engage in
civil disobedience. I have the authority and “inherent power to enforce compliance
with lawful orders through civil contempt.”62 Defendants and any third parties
who are contemplating violating the terms of this Memorandum Opinion and the
accompanying Order are on notice that the Order contains an enforcement
mechanism so that any person unwise enough to violate its terms shall be haled
into Court by the United States Marshal and a contempt hearing conducted.63
III.
CONCLUSION
An Order will issue this date granting Plaintiff’s Motions for Partial
Summary Judgment and for Preliminary Injunction. Plaintiff will be ordered to
post a surety bond with the Clerk of Court.
Commencing August 18, 2017, pursuant to the Order of the Federal
Regulatory Commission dated February 3, 2017, Plaintiff Transcontinental Gas
Pipe Line Company, LLC is granted access to, possession of and entry to the rights
of way allowed under that Order for the above captioned property. The Order will
include an enforcement mechanism to deter those who seek to obstruct Plaintiff.
62
63
Cooper v. Aaron, 358 U.S. 1 (1958); and see Shillitani v. United States, 384 U.S. 364 (1966).
Roe v. Operation Rescue, 919 F.2d 857, 868 (3d Cir. 1990)
21
BY THE COURT:
s/ Matthew W. Brann
Matthew W. Brann
United States District Judge
22
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