COLUMBIA GAS TRANSMISSION LLC v. AN EASEMENT TO CONSTRUCT, OPERATE AND MAINTAIN A 20-INCH GAS TRANSMISSION PIPELINE ACROSS PROPERTIES IN WASHINGTON COUNTY, PENNSYLVANIA, OWNED BY et al

Filing 114

ORDER-MEMORANDUM granting 67 Motion for Partial Summary Judgment and granting 67 Motion and Immediate Access and Possession of Easements on Properties Owned by Defendants Paul and Lisa Campbell, William and Pamela Griffith, Bruce and Janice Coen, Nancy Nernberg, Carol Sovchen, Terry Kubacka, Douglas and Rebecca Burig, and Stephan and Katherine Stayduhar. Signed by Judge Mark A. Kearney on 2/9/2017. (kly)

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

COLUMBIA GAS TRANSMISSION,
LLC

CIVIL ACTION

NO. 16-1243

v.

AN EASEMENT TO CONSTRUCT,
OPERA TE AND MAINTAIN A 20INCH GAS TRANSMISSION
PIPELINE ACROSS PROPERTIES IN
WASHINGTON COUNTY,
PENNSYLVANIA OWNED BY et al.

ORDER-MEMORANDUM
AND NOW, this 9th day of February 2017, upon consideration of Plaintiff's Motion for
partial summary judgment and preliminary injunctive relief granting immediate access and
possession of easements (ECF Doc. No. 67), after a noticed hearing, no opposition from the
Burig landowners, and consent from all parties as to injunctive relief but the Nern berg, Sovchen,
and Kubacka landowners challenge the amount of the bond to secure a preliminary injunction,
consistent with our Analysis below and upon finding : no party contests, and there are no genuine
issues of material fact regarding, Plaintiffs right under the Natural Gas Act to obtain an
easement; Landowners David and Rebecca Burig filed no response and did not appear at the
noticed hearing; and, no Defendant landowner objects to injunctive relief allowing Plaintiff's
access to their identified property and possession of an easement meeting each element of Fed.
R. Civ. P. 65 , although the Nemberg, Sovchen, and Kubacka landowners dispute the amount of
the bond required under Fed. R. Civ. P. 65(c);
It is ORDERED:

1.

Plaintiffs Motion for partial summary judgment (ECF Doc. No . 67) is

GRANTED; and,
2.

Plaintiffs Motion for a preliminary injunction (ECF Doc. No . 67) is GRANTED

upon Plaintiff posting a bond of $572,500 with the Clerk of Court for the United States District
Court for the Western District of Pennsylvania.

Analysis
A. Background 1
Columbia Gas Transmission, LLC ("Columbia") is an interstate "Natural-gas company"
as defined by the Natural Gas Act, 15 U.S.C . § 717a (the "Act") and qualified to construct, own,
operate, and maintain pipelines for the transmission of natural gas and its by-products. 2 As such,
Columbia is subject to the jurisdiction of the Federal Energy Regulatory Commission ("FERC").
In February 2015, Columbia filed an application under the Act and its regulations seeking
a certificate of public convenience and necessity authorizing the replacement of an existing gas
pipeline and associated facilities located in Greene, Washington, and Allegheny Counties and for
approval to abandon the facilities being replaced ("Tri-County Project"). 3 The Tri-County
Project is a multi-year modernization program designed to address Columbia' s aging

1

As no Defendant objected, we rely upon the testimony at the hearing and from Plaintiffs
Statement of Undisputed Material Facts (" SUMF") (ECF Doc. No. 70) in support of its Motion
for partial Summary Judgment (ECF Doc. No. 67) and the complaint (ECF Doc. No. 1). No
Defendant landowner filed a response.
SUMF at ~ 1. "Natural-gas company" is defined as "a person engaged in the transportation of
natural gas in interstate commerce, or the sale in interstate commerce of such gas for resale." 15
U.S.C. § 717a(6).

2

3

February 1, 2016 FERC Order at~ 1 (ECF Doc. No. 1-3).
2

infrastructure, and identifies high risk, vulnerable portions of the system needing upgrades to
meet safety regulations or to improve service reliability .4
In its application to FERC, Columbia proposed replacement of a portion of its existing
" Line 1570," a bi-directional north/south mainline serving the Pittsburgh metropolitan area. 5
Columbia currently owns, operates, and maintains Line 1570, having done so for nearly 50
6

years, and owns pipeline easements across some of the properties to be condemned.
Columbia proposed the replacement of 34 miles of pipeline on Line 1570 with
approximately 37.5 miles of new pipeline. Some portion of the existing pipeline will be replaced
in the same location, while other portions will deviate from the existing line by approximately 25
feet to avoid environmentally sensitive areas, construction challenges, or encroachments.

7

Columbia' s proposed Tri-County project will occur in three "segments," with Segment 2 located
entirely within Washington County involving Defendants' properties. In Segment 2, Columbia
will abandon the existing pipeline and replace it with new pipeline.

8

On February 1, 2016, FERC approved Columbia's application.

9

Unsuccessful in

negotiating with Defendant Landowners as to mutually agreeable terms for new easements,
Columbia filed this condemnation action on August 17, 2016 seeking to condemn the easements

4

Id. at~ 4. (ECF Doc. No. 1-3).

5

Id. at~ 5.

6

Declaration of Anthony J. Sulkowski, Jr., P.E. Appx. 23 at~ 6 (ECF Doc. No. 71).

7

FERC Order at~ 6. (ECF Doc. No. 1-3).

8

Id. at ~~7 , 9.

9

SUMF at~ 2; Appx. 2-19 (ECF Doc. No. 70).
3

across the Landowners ' properties needed for access to replace the pipeline. On most of the
properties, Columbia seeks a permanent and exclusive easement and right-of-way to construct,
operate, maintain, replace, repair, remove or abandon Line 1570.
Columbia moved for partial summary judgment and immediate access and possession of
easements on properties owned by Defendant Landowners who had not entered a stipulation or
settled with Columbia. 10 It contends it requires immediate access to and possession of the
property interests taken to meet the construction schedule and implement its project approved by
FERC.

11

To complete the project before the 2017-2018 winter heating season and meet its

schedule with FERC, Columbia contends it requires access to must prepare and clear the rightof-way by March 31, 2017. 12

0

At the time it filed its motion, Columbia had already settled and voluntarily dismissed
Defendant Landowners Cara Dobbin, Edward and Lois Koci, James and Amanda Yetter (ECF
Doc. No. 53), and Samuel and Lorraine Kraeer (ECF Doc. No. 59). After filing its motion,
Columbia settled and voluntarily dismissed Defendant Landowners Gregory and Ann Kline and
Stephen and Katherine Stayduhar (ECF Doc. No. 79) and Angelo and Jessica Quarture (ECF
Doc. No . 104). Columbia entered stipulations regarding access, but not the amount of just
compensation, with Defendant Landowners Prancing Horse Farms, Ed Morascyzk, trustee of the
Angelo M. Falconi Irrevocable Trust, Angelo and Phillip Falconi, and Patrick and Anastasia
McLaughlin (ECF Doc. No. 72); Paul and Lisa Campbell (ECF Doc. No. 81); Defendant
Landowners Nernberg, Sovchen, and Kubacka (ECF Doc. No. 82); Bruce and Janet Coen (ECF
Doc. No. 105); and William and Pamela Griffith, Jr. (ECF Doc. No. 108).
'

Columbia filed a separate motion for partial summary judgment and immediate access and
possession of easements on property owned by Defendant Landowners David and . Kristin
Podolinsky (ECF Doc. No. 74), as well as a motion for expedited hearing (ECF Doc. No. 76).
The Podolinskys did not respond and have now settled their dispute with Columbia (ECF Doc.
No. 113).
11

Motion for Summary Judgment at~ 10 (ECF Doc. No. 67).

12

Id. at~ 10.
4

We held a hearing on Columbia's motion for partial summary judgment on February 2,
2017 . At the time of the hearing, only Defendant Landowners Douglas and Rebecca Burig and
David and Kristen Podolinsky had not entered into a stipulation for access or settled with
Columbia.

13

The Burigs did not appear and do not seek a bond. At the hearing, Defendant

Landowners Nemberg, Sovchen, and Kubacka ("Nemberg Landowners") contested the amount
of bond to be posted to secure Columbia' s preliminary injunction. While Columbia presented
exhibits and testimony, the Nemberg Landowners elected to rely upon argument and without
competent expert evidence of its appraisal of its property before and after the easement, although
they attached reports to their written submissions under our December 18, 2016 Order.
B. Discussion
A. Columbia's right to condemnation under the Act.
Section 717f(h) of the Act grants the right to 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-of-way to construct, operate, and
maintain a pipe line or pipe lines for the transportation of natural gas ... 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. 14

13

Defendants Podolinsky elected not to appear at the February 2, 2017 hearing and did not
contest Columbia' s motion. Accordingly, we granted Columbia's motion (ECF Doc. No. 111).
The Podolinskys subsequently settled with Columbia. See n. 10, supra.
14

15 U.S.C. §717f (h) (emphasis added).

5

Once FERC issues a certificate of public convenience and necessity, the certificate holder
has "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." 15 Any challenge to FERC' s Order must be made by rehearing before the
Commission, with appeal to the United States Courts of Appeals. 16 Our role is "one of mere
enforcement .. . to evaluate the scope of the FERC Certificate, and order the condemnation of
property in accordance with that scope." 17
To condemn the easements at issue, Columbia 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. 18 Here, there is no dispute
Columbia holds a FERC certificate of public convenience and necessity. As set forth above, the
Defendant Landowners may not collaterally attack the FERC certificate in this court. On the
second factor, Columbia Gas argues the easements to be condemned are necessary for the
15

Columbia Gas Transmission, LLC v. 1.01 Acres, More or Less in Penn Twp., 768 F.3d 300,
304 (3d Cir. 2014).
16

15 U.S.C. §717r; Transcontinental Gas Pipe Line Co. v. Temporary Easements for 0.13 Acres
and a Temporary Easement Within the Existing Right of Way for 0118 Acres in Tobyhanna Twp.,
Monro e Cty, Pa., No. 15-151 , 2015 WL 5895808 , at *4 (M.D. Pa. Oct. 6, 2015).
17

Steckman Ridge GP, LLC v. An Exclusive Natural Gas Storage Easement Beneath 11.078
Acres, More or Less, in Monroe Twp., No. 08-168, 2008 WL 4346405 , at *3 (W.D. Pa. Sept. 19,
2008).
18

Columbia Gas Transmission, LLC v. 10.5068 Acres, More or Less in York County, No. 15360, 2015 WL 1470698, at *4 (M.D.Pa. Mar. 31, 2015) (citing Columbia Gas Transmission,
LLC v. 1.092 Acres of Land in Twp. of Woolwich, Gloucester Cnty., NJ., No. 15- 208, 2015 WL
389402, at *3 (D.N.J. Jan.28 , 2015)).
6

construction, operation, and maintenance of Line 1570 as evidenced by FERC's determination in
issuing the certificate. Finally, Columbia asserts it made offers to all the known property owners
in Segment 2 of the project and cannot yet reach a settlement with the Burigs. Only the Coens
filed an answer under Fed. R. Civ. P. 71. l(e)(2) to Columbia's complaint. 19 None of the other
Defendant Landowners filed an answer. Under Rule 71.l(e)(3), "[a] defendant waives all
objections and defenses not stated in its answer" and "[n]o other pleading or motions asserting an
additional objection or defense is allowed" to the taking; however, at the trial on compensation, a
non-answering defendant may present evidence relating to just compensation.

B. The parties do not contest injunctive relief for access is warranted.
The 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 Fed.R.Civ.P.
65(c). When determining whether a party is entitled to a preliminary injunction, we consider:
"(I) whether the movant has shown a reasonable probability of success on the merits; (2)

whether the movant will be irreparably injured by denial of the relief; (3) whether granting
preliminary relief will result in even greater harm to the nonmoving party; and (4) whether
granting preliminary relief will be in the public interest." 20 "[O]nce a district court determines
that a gas company has the substantive right to condemn property under the [Natural Gas Act],
the court may exercise equitable power to grant the remedy of immediate possession through the

19

(ECF Doc. Nos. 42, 43). The Coens subsequently signed a stipulation with Columbia allowing
access (ECF Doc. No. I 05). See note 10, supra.

° Columbia Gas

2

Transmission, LLC, 768 F.3d at 315 (quoting Am. Express Travel Related
Servs. v. Sidamon-Eristoff, 669 F.3d 359, 366 (3d Cir.2012)).
7

issuance of a preliminary injunction."21 Before we grant immediate possession, "there must be a
judicial review prior to the take as well as an injunction procedure." 22
We noticed and held a hearing on Columbia's request for injunctive relief. No party filed
an opposition or appeared to contest injunctive relief. The parties consented to the entry of
injunctive relief. We independently find Columbia showed a reasonable probability of success on
the merits. Given the FERC Order, Columbia also showed irreparable injury to its approved
FERC plan and necessarily timely development by denial of the relief. Balancing the prejudice
confirms greater harm to Columbia by denial of access than harm to landowners (who do not
object) by entering injunctive relief. Given FERC' s Order, granting preliminary relief is in the
public interest.
Absent objection and based upon our review of the evidence and argument presented at
our noticed February 2, 2017 hearing, Columbia demonstrated an ample basis for injunctive
relief.
C. A bond of$ 572,500 is warranted for the entry of a preliminary injunction.

The Nemberg Landowners dispute the bond amount Columbia is required to post under
Rule 65( c). In its motion for partial summary judgment and immediate access, Columbia states it
" is prepared to post a bond equal to its estimate of the just compensation due to the
landowners." 23 The Nemberg Landowners contend Columbia offered a bond in the amount of no

21

Constitution Pipeline Co., LLC v. A Permanent Easement for 1.92 Acres, No. 3:14-2445, 2015
WL 1219524, at *2 (M.D. Pa. Mar. 17, 2015) (quoting E. Tenn. Natural Gas Co. v. Sage, 361
F.3d 808, 828 (4th Cir.2004)).

22

Constitution Pipeline Co., 2015 WL 1219524 at *3 .

23

Brief at 7 (ECF Doc. No. 68).

8

more than $70,000. 24 The Nernberg Landowners suggest a bond of $5 million is necessary to
protect their interests representing double their preliminary estimate of damages.

25

The Nernberg

Landowners estimate $2 to $3 million as the diminution in value of the property based on the
effect of the proposed location of the pipeline easement on the marketability of their property,
and identify a number of questions to be resolved. 26 The Nernberg Landowners elected not to
present expert testimony at our February 2, 2017 hearing.
The appropriate bond amount is a matter of our discretion but posting a bond is "almost
mandatory." 27 In UGI Sunbury, the parties disputed the amount of just compensation. The
defendant landowners presented just compensation values in their briefs on the issue of bond
amounts and the plaintiff gas company provided amounts based on its offer to landowners. The
Honorable Matthew W. Brann found he "cannot assume that the amount proposed by UGI in an
offer to settle is the actual value of the just compensation calculated by UGI, especially
considering that different parcels of land are undoubtedly worth more than others."

28

We cannot

determine what, if any, evidence the objecting landowner provided to Judge Brann which
demonstrated the taking would "affect Defendant' s livelihood, ability to access fields, destroy

24

ECF Doc. No . 84 at~ 12.

25

ECF Doc. No. 87 at 6. In a later submission, the Nernberg Landowners suggest a bond of $3.5
million (ECF Doc. No. 97 at~ 7).

26

ECF Doc. No . 84 at~ 14.

27

UGI Sunbury LLC v. A Permanent Easement for 71.7575 Acres, No . 3:16-788, 2016 WL
4089120, at *5 (M.D.Pa., Aug. 2, 2016) (quoting Zambelli Fireworks Mfg. Co. v. Wood, 592
F.3d 412, 425-26 (3d Cir. 2010)).

28

Id. at *6.
9

crops, devalue farmland, alter livestock production, and land development rights." 29 Because the
issue of just compensation "is a matter for another day, after appraisals have been conducted by
all parties and the evidence is presented to the Court," Judge Brann adopted the bond amounts
proposed by defendant landowner, finding "to be prudent, courts must err on the 'high side ' so
as not to limit a wrongfully enjoined party's recover amount." 30 Judge Brann settled on the
higher amount although finding the risk to defendant landowners wrongfully enjoined is "likely
low" considering the gas company's valid FERC certificates; and the gas company will only be
required to pay the amount of just compensation if, at the time of the condemnation hearing, the
31

court determined just compensation is less than the amounts posted in the bonds.

Columbia responds their proposed bond amount of $30,900 is adequate to protect the
Nemberg Landowners, arguing Rule 65(c) does not require a bond equal to just compensation
and the Nemberg Landowners ' proposed bond amount of $3 .5 million exceeds any reasonable
estimate of just compensation because Nemberg Landowners ' calculations of "highest and best
32

use" is purely speculative and their experts ' valuation is flawed .

At our noticed injunction hearing, Columbia presented testimony describing the Nemberg
Landowners ' property including necessary steps to allow access across the easement. Columbia
presented the testimony of a qualified appraiser as to the value of 4.43 acres of the Nemberg
29

Id. at *5 (quoting from the landowner' s filings).

30

Id. We set trial on just compensation for the non-settling Defendant Landowners for April 17,
2017.

31

Id. Judge Brann denied UGI ' s motion for hearing, granted its motion for partial summary
judgment, granted its motion for preliminary injunctive relief, and ordered a bond posted in the
amounts proposed by defendant landowners.
32

ECF Doc. No. 102.
10

Landowners' 58.6 acres of property before and after the easement. The Nemberg Landowners
argued we should set a higher bond because Columbia is a private entity with no financial
guaranty of payment after the April 2017 jury verdict. The Nemberg Landowners contend they
wi ll present trial testimony demonstrating a diminution of their property values of $1,640,000
and requesting a bond at twice this alleged loss "plus some amount for the trees and
vegetation. " 33
Columbia may be correct as to the inadmissibility of the Nemberg Landowners' valuation
of just compensation. But this argument is for trial. 34 On the other hand, absent extraordinary
circumstances not present, we cannot rely on the Nemberg Landowners' hearsay expert reports,
even in a preliminary injunction context. 35 The Nemberg Landowners did not appear at the
hearing to offer their valuation. We are approximately nine weeks from the jury trial on just
compensation. We have no basis to find Columbia Gas could not satisfy a verdict in this range of
possible compensation. We set the bond today on the possible amount of just compensation
based on the evidence adduced at our hearing but tend to err on the high side in setting the bond
amount considering, in many cases, "the only recourse against wrongful enjoinment is against

33

Nemberg Landowners' Supplemental Memorandum on Bond at 4 (ECF Doc. No. 100).

34

For example, Columbia cites a post-trial finding of just compensation challenging expert
calculations in Tennessee Gas Pipeline Co. v. Permanent Easement for 1. 7320 Acres & Temp.
Easements for 5.4130 Acres in Shohola Twp., Pike Cty. , Pa., No. 11-28, 2014 WL 690700 at
*11, (M.D.Pa. Feb. 24, 2014).
35

Constellation New Energy, Inc. v. Powerweb, Inc., No. 02-2733, 2004 WL 6031010, at * 1 n.l
(E.D.Pa. Aug. 19, 2004); but see Fed. Trade Comm 'n v. Click4Support, LLC., No. 15-5777, 2015
WL 7067760 at *2 n.4 (E.D.Pa. Nov. 10, 2015) (admitting hearsay expert report affording it
" little or no weight").
11

the bond." 36
The only competent evidence presented at our hearing is a $10,000 per acre value for the
permanent easement of 1.75 acres and $5,000 per acre value for temporary workspace and
additional temporary workspace of approximately 2. 7 acres. Columbia presented this valuation
but it did not fully explain why its just compensation analysis only applied to 1.75 acres and not
the entire 58.6 acres claimed by the Nemberg Landowners as described in the expert reports. At
our hearing, Columbia's counsel referenced a smaller number of acres at issue but we have no
definite proof the Nemberg Landowners seek just compensation for the loss of value to their
entire property. Relying solely upon the competent evidence of $10,000 an acre for the effect
from a permanent easement and $5,000 for the temporary workspace, we find a bond of
$572,500 is warranted: We presently credit a $10,000 per acre value for all parcels allegedly
owned by the Nemberg Landowners net the $5,000 per acre for the approximate 2.7 acres
temporarily affected. 37 Consistent with the persuasive reasoning from other district courts, we
further find our $572,500 bond amount errs on the high side based on the maximum number of
acres claimed by the Nernberg Landowners. We find no basis for a multiplier on this potential
just compensation. The trial verdict will be entered in approximately nine weeks. The Nernberg
Landowners offer no basis to challenge Columbia's ability to satisfy any just compensation
award. Our only evidence is the FERC review of Columbia's financials. While these findings are
not conclusive on us, absent any contrary evidence, the records provided to FERC demonstrate

36

UGI Sunbury LLC at* 5 (quoting Arlington Ind., Inc. v. Bridgeport Fittings, Inc., No. 06-1105,
2011 WL 4916397, *3 (M.D.Pa. Oct. 17, 2011)).

37

$10,000 per acre x 58 .6 acres = $586,000 less $13,500 ($5,000 per acre x 2.7 acres for
temporary work space)= $572,500.
12

financial viability sufficient for this short term bond.

13