COLUMBIA GAS TRANSMISSION, LLC v. 29.28 ACRES, MORE OR LESS, IN GREENE COUNTY; LOCATED ON PARCEL IDENTIFICATION NUMBER 07-000660, OWNED BY STEVEN GARTH SMITH AND LISA ANNE SMITH et al
Filing
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MEMORANDUM OPINION. Signed by Judge Mark R. Hornak on 8/22/14. (bdb)
IN THE UNITED STATES DISTRlCT COURT
FOR THE WESTERN DISTRICT OF PENNSYL VANIA
COLUMBIA GAS TRANSMISSION,
LLC,
Plaintiff,
v.
520.32 ACRES, MORE OR LESS IN
WASHINGTON AND GREENE
COUNTIES, LOCATED ON PARCEL
IDENTIFICATION NO. 020-009-00-00
0019-00, OWNED BY JOHN S.
LOMBARDO AND JEAN 1.
LOMBARDO; LOCATED ON PARCEL
IDENTIFICATI ET AL,
Defendants.
COLUMBIA GAS TRANSMISSION,
LLC,
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v.
29.28 ACRES, MORE OR LESS, IN
GREENE COUNTY; LOCATED ON
PARCEL IDENTIFICATION NUMBER
07-000660, OWNED BY STEVEN
GARTH SMITH AND LISA ANNE
SMITH,
Defendants.
Judge Mark R. Hornak
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Plaintiff,
Civil Action No. 2: 14-cv-206
LEAD CASE
Civil Action No.2: 14-cv-377
MEMBER CASE
Judge Mark R. Hornak
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MEMORANDUM OPINION
Mark R. Hornak, United States District Judge
The Court files this Memorandum Opinion to further set forth its reasoning in denying
the Plaintiff's Motion seeking to preclude certain Defendants from offering expert testimony
evidence on valuation issues at trial.
This is a condemnation case under the Natural Gas Act ("NGA"), 15 U.S.c. § 717f(h).
The Plaintiff holds a certificate from the Federal Energy Regulatory Commission ("FERC")
authorizing it to construct an upgraded pipeline facility in parts of rural Western Pennsylvania.
Plaintiff sought to obtain necessary easement rights via the process of negotiation mandated by
the NGA, and in many cases, that process was successful. By the time this action was filed,
however, there were a number of parcels which had not yielded agreed-to easement transactions,
so this condemnation proceeding was filed.
Due to exigencies related to weather and limitations on construction due to the presence
during certain seasons of protected wildlife, the Plaintiff contended that it needed the ability to
enter upon the involved land immediately to begin work, with the just compensation portion of
the proceedings to come later. Proceedings were held in open court on the Plaintiff's Motion for
such preliminary injunctive relief, and the Court entered just such an Order, finding that the
Plaintiff had fulfilled the procedural and substantive requirements for such relief. ECF No. 64.
The Court then directed the filing of the requisite pretrial papers by the parties, and set
the trial on just compensation for a date agreed to and suggested by the parties, with jury
selection set for September 17, 2014 and trial to begin the following Monday, September 22,
2014. The Court's pretrial Order, which included the schedule set and agreed to by the parties,
directed that expert disclosures, including of any valuation reports, occur in July 2014. ECF No
84.
That is an especially important matter in a case such as this, as expert testimony on
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appraised valuation is at the core of the proof in the just compensation portion of a condemnation
case.
The Smith and Kalsey Defendants,l although represented by experienced counsel, have
yet to make their expert disclosures, although they were due nearly sixty (60) days ago. The
Plaintiff, rightly concerned that it was being painted into a corner inches from trial, sought to bar
any such proof at the trial, which was set to begin in about a month. ECF No. 99. The Smith
and Kalsey Defendants countered by asking that they be permitted to file, in 15 days, either their
expert disclosures/reports or a statement that they will not use any expert testimony. ECF No.
115. They sought this allowance on the basis that their identified and disclosed appraisal expert
was evaluating an alternative valuation method based on the "highest and best" use of the land
being a pipeline corridor.
At the status conference held August 21, 2014, the Court found this state of affairs to be
wholly unacceptable, in that the Smith and Kalsey Defendants, without leave of Court, have
engaged in what is in essence a self-help modification of the Court's Pretrial Order, and have
treated the Court's filing deadlines as some sort of "advice" or "optional equipment." The
Court's Orders are not advisory, nor is compliance with them elective. While allowing the Smith
and Kalsey Defendants to unilaterally adjust their expert disclosure obligations would have
indeed painted the Plaintiff into a corner, there is no question that the conduct of those
Defendants has also done exactly that to the Court, with no good justification.
The question before the Court was what to do about that? Given that by its prior Order
granting preliminary injunctive relief, the Plaintiff has been granted the power to enter the land
and to take possession of the sought-after easements, any delay in the trial on the compensation
I Emeric Richard Kalsey, Joan W. Kalsey, Richard E. Kalsey, Melissa R. Kalsey, Steven D. Smith, Beryl L. Smith,
Steven Garth Smith, and Lisa Anne Smith.
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portion of the case would not cause the Plaintiff prejudice, beyond that which comes with having
to carry open litigation on its books, so to speak. While that may be some actual, albeit
intangible, detriment, the Court does not find it overpowering or incurable.
On the other hand, barring the Smith and Kalsey Defendants from offering any expert
testimony on valuation would in reality be pretty close to directing a judgment in favor of the
Plaintiff. Valuation testimony is at the core of the compensation phase of litigation such as this,
and the Plaintiff has raised a colorable argument that even though it was required to first seek to
acquire the involved easements via a negotiated process, allowing testimony at trial as to the
Plaintiffs offers for the property interests would violate Fed. R. Evid. 408(a). Thus, to grant the
relief sought by the Plaintiff, essentially sought in self-defense against a very late and otherwise
impermissible expert disclosure by the Smith and Kalsey Defendants, would essentially knock
those Defendants out of the box at trial.
While such powerful and preclusive relief is within the remedial arsenal available to the
Court for non-compliance with its Orders, the Court believes that the applicable rule of law leads
to the conclusion that it should not be directed except in the most egregious cases, and where
there is no less harsh alternative. In this case, the Court has noted on the record that there is an
alternative, namely continuing the trial date to a date that is acceptable to the Plaintiff, coupled
with a fixed, firm, unalterable deadline for the Smith and Kalsey Defendants to provide their full,
complete and final expert disclosures and reports,2 if any, on valuation. Thus, the Court ordered
that the parties confer and file by August 29, 2014 an agreed upon scheduling Order including a
new trial date and a set of firm and fixed deadlines for the expert disclosures and reports of the
Defendants, and which allow the Plaintiff plenty of time to respond to any such way-out-of-time
Counsel for the remaining other Defendant, Mike Makripodis, advised the Court at the status conference he does
not intend on offering any such testimony.
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expert disclosures and reports, along with sufficient time for the Plaintiff to make any Daubert
challenges and for the Court to rule on them.
But for the reality that via the preliminary injunction the Plaintiff has been granted access
to the easements, it is a lead-pipe cinch that the Court would have kept the September 22, 2014
trial date sacrosanct and barred all expert testimony by the Smith and Kalsey Defendants. Their
unilateral amendment to the Court's scheduling Order does not cut it with this Court, and would
have put the Plaintiffs in a very real jam had the trial proceeded as scheduled. By the same token,
because the actual prejudice to the Plaintiff from the non-disclosure to date by those Defendants
can be addressed by a trial continuance, to enter an Order that would have in reality cut the heart
out of the Defendants' case would in the Court's judgment be impermissible overkill.
The Court has also considered whether some sort of other sanction of the Smith and
Kalsey Defendants or their counsel would be proper, and has concluded that for the moment, it is
not. First, no notice of the possibility of any such sanction has been provided to them by the
Court. Further, there does not appear to be any inherently increased expense to the Plaintiff if
the trial date is moved stemming directly from the date of disclosure of the Defendant's expert
valuation report and the trial being moved. But, if it turns out that there is, the Plaintiff may
most certainly raise that with the Court. To otherwise impose some sort of monetary sanction
against the involved Defendants or their lawyers, while perhaps justified, would be in the Court's
estimation (given the posture in which this case sits as described above) gratuitous. If it turns out
that there are !iti gation costs for the Plaintiff that go up as a direct result of the Court granting the
continuance, or allowing these Defendants more time to get their house in order relative to their
valuation expert, then that can be taken up at the time, with all parties being given the chance to
make their case in such regards.
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This is a situation solely of the making of the Smith and Kalsey Defendants and their
la\\-'Yers, and the Court finds itself in an unpalatable position of not having much that it can do
about that, other than moving the trial date. In order to preserve the substantial rights of the
Plaintiff while at the same time not ordering a remedy that is the evidentiary equivalent of a
nuclear weapon as against those Defendants, it is forced to give those Defendants and their
counsel a "pass" on their extended
non~compliance
with an important part of the Court's
scheduling Order, and then continue the trial.
The Court would strongly caution those Defendants and their la""'Yers in regard to that
"pass" -- one to a customer.
Mark R. Hornak
United States District Judge
Dated: August 12::'2014
cc: All counsel of record
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