Atlantic Coast Pipeline, LLC v. 2.58 Acres, More or Less, in Buckingham County, Virginia, Located on Parcel Identification No. 171-24, Identified as Part 4 on a Plat of Survey in Plat Book 1, Page 100, and Owned by Bertese B. Booker
Filing
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FINDINGS OF FACT & CONCLUSIONS OF LAW. Signed by Senior Judge Norman K. Moon on 1/21/2020. (al) Modified on 1/21/2020 (al).
1/21/2020
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF VIRGINIA
LYNCHBURG DIVISION
ATLANTIC COAST PIPELINE, LLC,
Plaintiff,
v.
Case No.: 6:17-cv-00089-NKM
FINDINGS OF FACT &
CONCLUSIONS OF LAW
2.58 ACRES, MORE OR LESS, IN
BUCKINGHAM COUNTY, VIRGINIA, et al.,
JUDGE NORMAN K. MOON
Defendants.
This matter is before the Court on Atlantic Coast Pipeline, LLC’s (“Atlantic”) Motion for
Default Judgment Against Remaining Defendants. Dkt. 31. For the reasons set forth herein, the
Court will grant Atlantic’s Motion and enter default judgment in Atlantic’s favor in an
accompanying Order, to follow.
I.
BACKGROUND
This case arises from Atlantic’s lawful exercise of its eminent domain powers under
Section 7(h) of the Natural Gas Act, 15 U.S.C. § 717f(h). On December 15, 2017, Atlantic filed
its Complaint in Condemnation to acquire certain easements (the “Easements”) in this matter.
Dkt. 1. Atlantic later served the defendants named in this case through publication. On April 29,
2019, the Clerk of the Court entered default against all the defendants who have failed to respond
(“Non-Responding Defendants”). Dkt. 30. Atlantic filed its Motion for Default Judgment against
the Non-Responding Defendants on May 22, 2019. See Dkt. 31.
As a natural gas company in possession of a certificate of public convenience and necessity
from the Federal Energy Regulatory Commission, Atlantic is entitled to condemn the property
interests at issue in this litigation as a matter of law and is thus entitled to have default judgment
awarded in its favor against these defendants. Atlantic further presented evidence to the Court as
to the just compensation owed to these landowners at a hearing conducted on August 20, 2019.
Dkts. 38–39.
II.
FINDINGS OF FACT
A.
Atlantic Is a Natural Gas Company in Possession of a Certificate of Public
Convenience and Necessity Issued by the FERC.
1.
Atlantic is an interstate natural gas company as defined by the Natural Gas Act, 15
U.S.C. § 717a. Atlantic is subject to the jurisdiction of the Federal Energy Regulatory Commission
(“FERC”), and is authorized to construct, own, operate, and maintain pipelines for the transmission
of natural gas in interstate commerce. See 15 U.S.C. § 717, et seq.; see Dkt. 32, Memo. in Supp.
of Atlantic’s Mot. for Default J., Ex. 1, Decl. of David Aman (“Aman Decl.”) ¶ 7.
2.
Atlantic is in the process of constructing an approximately 600-mile underground
pipeline and related facilities for the purpose of transporting natural gas from West Virginia to
Virginia and North Carolina (the “ACP Project”). See Aman Decl. ¶ 5.
3.
The ACP Project will measure approximately 42 inches in diameter in West
Virginia and Virginia, and 36 inches in diameter in North Carolina. Certain extensions of the ACP
Project will measure 20 inches in diameter from Northampton County, North Carolina, to the City
of Chesapeake, Virginia, and 16 inches in diameter in Brunswick County, Virginia, and
Greensville County, Virginia. See Aman Decl. ¶ 8.
4.
Natural gas transported by the ACP Project will serve multiple public utilities. See
Aman Decl. ¶ 9.
5.
Atlantic filed an application for a certificate of public convenience and necessity
with FERC on September 18, 2015, FERC Docket No. CP15-554-000, in which it sought
permission to construct the ACP Project and attendant facilities. On October 13, 2017, FERC
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issued a certificate of public convenience and necessity (the “FERC Certificate”) authorizing
Atlantic to construct and operate the ACP Project. See Aman Decl. ¶ 10; see also Aman Decl.,
Ex. A, the October 13, 2017 Certificate of Public Convenience and Necessity issued by the Federal
Energy Regulatory Commission to Atlantic.
B.
Atlantic Seeks to Condemn Certain Property Rights from Defendants.
6.
Each of the Non-Responding Defendants owns a property interest in the certain
tract of land sought to be condemned by Atlantic. See Dkt. 1 ¶ 5.
7.
Atlantic filed its Complaint in Condemnation to acquire certain easements from the
Non-Responding Defendants. See Dkt. 1 ¶ 2.
8.
Specifically, Atlantic seeks to construct a portion of the ACP Project on the
Property described in detail below. The ACP Project cannot be constructed until Atlantic acquires
certain permanent easements (the “Permanent Easements”), temporary easements (the “Temporary
Easements”), and an easement for an access road (the “Access Road Easement”) (collectively the
“Easements”) on the Property. The Easements are necessary for constructing, maintaining,
operating, altering, testing, replacing, and repairing the ACP Project. See Dkt. 1 ¶ 16.
9.
The Permanent Easements to be taken on the Property include a permanent and
exclusive easement and right-of-way to construct, operate, maintain, replace, repair, remove or
abandon the ACP Project and appurtenant equipment and facilities, as well as the right to change
the location of the installed pipeline within the area of the Permanent Easements as may be
necessary or advisable. See Dkt. 1 ¶ 18.
10.
The Temporary Easements will enable Atlantic to construct the ACP Project and
engage in restoration or clean-up activities. The Temporary Easements are requested as of the date
of authorized entry onto the Property and their use is required until all work, including restoration,
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is complete. The Temporary Easements will be effective and condemned for a period not to exceed
five (5) years following Atlantic’s possession of the Easements. See Dkt. 1 ¶ 19.
11.
The Access Road Easement to be taken on the Property will provide Atlantic with
a mode of access to the ACP Project and related facilities, as well as the ability to transport the
personnel, materials, and machinery needed to construct the ACP Project. The Access Road
Easement to be taken on the Property includes use of both existing and new roads; the right to
construct a permanent access road with a width not to exceed thirty feet; and the right to improve
any existing access roads to a width not to exceed thirty feet. See Dkt. 1 ¶ 20.
12.
Defendants, the Remaining Unknown Heirs of Lewis Booker and the Unknown
Heirs of John Cornelius Gayle, own real property located in Curdsville Magisterial District,
Buckingham County, Virginia, identified as Parcel Identification No. 171-24, composed of 27.921
acres, more or less, and being more particularly described as Part 4 on a plat of survey in Plat Book
1, Page 100, of the public records of said County. See Dkt. 1 ¶ 5.
13.
Atlantic performed a reasonably diligent search of the records associated with the
Property (as that term is defined in the Complaint in this matter) and has been unable to determine
the identities of these defendant landowners, and therefore has been unable to acquire by contract
the condemned easement rights. See Aman Decl. ¶¶ 12–13. Atlantic represents that there are two
landowners who have already settled with Atlantic for the Booker Property. Dkt. 36 at 4–5. The
remaining, active defendants in this case are unknown heirs who collectively have a roughly
16.67% ownership interest. See Aug. 20, 2019 Hr’g Tr. (Testimony of David Aman); Aman Decl.
¶ 13. Atlantic has been unable to determine the identities of the defendant landowners and
therefore was unable to acquire by contract the necessary easements to construct, operate, and
maintain a pipeline for the transportation of natural gas. See Aman Decl. ¶¶ 12–15.
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14.
The area and dimensions of the Easements Atlantic seeks to condemn on the
Property are depicted in Exhibit 4 to the Complaint in Condemnation. See Dkt. 1-4; see also Dkt.
39-2, Atlantic’s Trial Exhibit No. 2. The legal rights that make up the Easements Atlantic seeks
to condemn on the Property are recited in Atlantic’s Complaint. See Dkt. 1 ¶¶ 18–20.
C.
None of the Defendant Landowners Responded to Atlantic’s Complaint in
Condemnation.
15.
Atlantic has properly served process on the Non-Responding Defendants and filed
the appropriate affidavits of service and certificates of proof of service by publication. See Dkt. 32
at 4; see also Dkt. 17.
16.
The Non-Responding Defendants have not filed any responsive pleading and are
thus in default. See Dkt. 30.
17.
Without gaining full access and rights to the Easements from the Non-Responding
Defendants which are necessary to the ACP Project, Atlantic cannot timely complete construction
of the ACP Project. See Aman Decl. ¶ 15.
III.
CONCLUSIONS OF LAW
A.
Entering a Default
1.
Under Rule 12(a) of the Federal Rules of Civil Procedure, a defendant must serve
an answer within 21 days after being served with the summons and complaint.
2.
Rule 55(a) of the Federal Rules of Civil Procedure provides for the entry of default
when “a party against whom a judgment for affirmative relief is sought has failed to plead or
otherwise defend.” A defendant in default admits the factual allegations in the complaint. See Fed.
R. Civ. P. 8(b)(6) (“An allegation—other than one relating to the amount of damages—is admitted
if a responsive pleading is required and the allegation is not denied.”); see also GlobalSantaFe
Corp. v. Globalsantafe.com, 250 F. Supp. 2d 610, 612 n.3 (E.D. Va. 2003) (“Upon default, facts
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alleged in the complaint are deemed admitted and the appropriate inquiry is whether the facts as
alleged state a claim.”).
3.
As a result of the Non-Responding Defendants failure to respond, the Clerk of the
Court entered default against them on April 29, 2019. See Dkt. 30.
B.
Atlantic Has the Right to Condemn
i.
4.
The Natural Gas Act Provides Atlantic with the Authority to Condemn
The Natural Gas Act provides Atlantic with the authority to condemn interests in
property where (i) Atlantic is the holder of a certificate of public convenience and necessity from
FERC and (ii) Atlantic and the landowner cannot agree on the compensation for the property
interest at stake:
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.
15 U.S.C. § 717f(h).
ii.
5.
Atlantic Has a Certificate of Public Convenience and Necessity
The FERC Certificate issued to Atlantic empowers Atlantic to exercise the right of
eminent domain, which includes the power to condemn any land, including the Easements, which
is necessary for the construction of the ACP Project. See E. Tenn. Nat. Gas Co. v. Sage, 361 F.3d
808, 818 (4th Cir. 2004).
6.
No fact can genuinely be in dispute as to the issuance of the FERC Certificate or
the contents therein because a certificate of public convenience and necessity is a matter of public
record and not subject to collateral attack. See E. Tenn. Nat. Gas, LLC v. 1.28 Acres, No. 1:06-cv00022, 2006 WL 1133874, at *13 (W.D. Va. Apr. 26, 2006) (holding that the defendants could not
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use a condemnation action to review the propriety of the issuance of a FERC certificate) (citing
Williams Nat. Gas Co. v. Oklahoma City, 890 F.2d 255, 264 (10th Cir. 1989), cert. denied, 497
U.S. 1003 (1990)); see also Am. Energy Corp. v. Rockies Express Pipeline LLC, No. 2:09-cv-284,
2009 WL 2148197, at *3 (S.D. Ohio July 14, 2009) (holding that “a district court lacks jurisdiction
to review the validity and/or conditions of a FERC certificate . . . [and] the function of the district
court is not to provide appellate review, but rather to provide for enforcement”).
7.
Here, just as in 1.28 Acres, Atlantic has satisfied the first condition of Section
717f(h) because FERC granted Atlantic a Certificate of Public Convenience and Necessity.
8.
Based on the language of the FERC Certificate and controlling case law, Atlantic
has the power of eminent domain under the Natural Gas Act and the right to the easements by
eminent domain.
iii.
9.
The Easement Rights Atlantic Seeks Are Necessary
Atlantic must acquire the Easements in order to install, construct, and maintain the
ACP Project. See Aman Decl. ¶¶ 6, 15.
10.
The FERC-approved route for the ACP Project crosses the Property. See Dkt. 1-4;
see also Dkt. 39-2, Atlantic’s Trial Exhibit No. 2.
11.
The ACP Project cannot be constructed without the Easements. See Aman Decl.
12.
Thus, the Easements are necessary for the construction of the ACP Project, entitling
¶ 15.
Atlantic to partial summary judgment on its right to condemn the Easements. See Transcon. Gas
Pipeline Co., LLC v. Permanent Easement Totaling 2.322 Acres, No. 3:14-cv-00400-HEH, 2014
WL 4365476, at *5 (E.D. Va. Sept. 2, 2014) (“Additionally, the FERC Certificate[] . . . establishes
that the property condemned in this matter is necessary for the construction, operation, and
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maintenance of the pipeline at issue.”); Hardy Storage Co. v. Prop. Interests Necessary to Conduct
Gas Storage Operations, No. 2:07-cv-5, 2009 WL 689054, at *4 (N.D. W. Va. Mar. 9, 2009)
(finding that a landowner’s challenge to the necessity of the proposed easement constitutes an
impermissible collateral attack).
iv.
13.
Atlantic Cannot Acquire the Necessary Easements by Contract
Despite diligent efforts, Atlantic has been unable to determine the identities of the
remaining defendant landowners. See Aman Decl. ¶¶ 12–13.
14.
Atlantic has been unable to obtain the remaining interest in the Easements by
contract. See Aman Decl. ¶ 13; Hardy, 2009 WL 689054, at *5 (finding that “[the condemnor] is
not required by the [NGA] or Rule 71.1 to engage in ‘good faith’ negotiations with the
landowner”); E. Tenn. Natural Gas, 2006 WL 1133874, at *10 (concluding that “[a]ll the [NGA]
requires is a showing that the plaintiff has been unable to acquire the property by contract or has
been unable to agree with the owner of the property as to the compensation to be paid”).
v.
15.
The Non-Responding Defendants Are in Default
The Non-Responding Defendants have failed to file an answer or response in the
time period required pursuant to Rule 12(a) of the Federal Rules of Civil Procedure. See Dkt. 30.
16.
As a result, the Clerk of the Court entered default for the Non-Responding
Defendants on April 29, 2019. See Dkt. 30.
17.
Atlantic is accordingly entitled to an order confirming its right to condemn the Non-
Responding Defendants’ Property pursuant to the authority conferred by 15 U.S.C. § 717f(h), and
it is entitled to default judgment against the Non-Responding Defendants. See, e.g., E. Tenn. Nat.
Gas Co. v. Sage, 361 F.3d 808, 827–28 (4th Cir. 2004) (citing cases); Columbia Gas Transmission
Corp. v. An Easement to Construct, Operate, and Maintain a 24-Inch Transmission Pipeline
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Across Properties in Greene Cty., Va., No. 3:07-cv-28, 2007 WL 2220530, at *3–4 (W.D. Va. July
31, 2007) (awarding judgment where Columbia had established that it was a holder of a FERC
certificate and no agreement with respect to just compensation could be reached); Nw. Pipeline
Corp. v. The 20’ x 1,430’ Pipeline Right of Way Easement 50’ x 1,560’ Temp. Staging Area, 197
F. Supp. 2d 1241, 1243–44 (E.D. Wash. 2002) (awarding summary judgment as to validity of
taking); Tenn. Gas Pipeline Co. v. New England Power, C.T.L., Inc., 6 F. Supp. 2d 102, 104 (D.
Mass. 1998) (granting motion for partial summary judgment where the condemnor satisfied the
elements of Section 717f(h)).
18.
Atlantic has established that it holds a FERC Certificate and that it has been unable
to reach an agreement with the Non-Responding Defendants with respect to the Easements; there
can be no dispute that Atlantic has stated a legitimate claim and is entitled to condemn the NonResponding Defendants’ Property. See Columbia Gas Transmission, LLC v. 0.85 Acres, More or
Less, in Harford Cty., Md., No. 14-cv-2288, 2014 WL 4471541, at *5 (D. Md. Sept. 8, 2014)
(granting Columbia’s Motion for Partial Summary Judgment where the court determined that
requirements of Section 717f(h) were met); Columbia Gas Transmission, LLC v. 370.393 Acres,
More or Less, in Baltimore County, Md., No. 1:14-cv-469, 2014 WL 5092880, at *4 (D. Md. Oct.
9, 2014) (same).
IV.
1.
JUST COMPENSATION
The only issue remaining for the Court is the just compensation that is owed to the
remaining, Non-Responding Defendants.
2.
Atlantic offered evidence about the property discussed above (the “Subject
Property”) and the areas of the take from each individual property, and the rights for the Easements
that Atlantic seeks to condemn. See supra, Part III, § B(i)–(iv).
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3.
The landowners have the burden of proving, by a preponderance of the evidence,
the amount of just compensation owed for the easements condemned by Atlantic. United States ex
rel. Tenn. Valley Auth. v. Powelson, 319 U.S. 266, 273 (1943); Bank of Edenton v. United States,
152 F.2d 251, 253 (4th Cir. 1945); Vector Pipeline LP v. 68.55 Acres of Land, 157 F. Supp. 2d
949, 952 (N.D. Ill. 2001).
4.
Just compensation is measured from the point of view of the landowner. The
yardstick is what a landowner has lost, not what Atlantic has gained. Boston Chamber of
Commerce v. City of Boston, 217 U.S. 189, 195 (1910); see also United States v. Causby, 328 U.S.
256, 261 (1946) (“It is the owner’s loss, not the taker’s gain, which is the measure of the value of
the property taken.”).
5.
Courts apply the objective standard of fair market value to determine what the
landowner has lost when its property is condemned. United States v. 564.54 Acres of Land, 441
U.S. 506, 511 (1979). Fair market value is defined as the fair and reasonable amount which could
be attained in the open market at a voluntary sale. Id.
6.
Where a taking is temporary in duration rather than permanent, then the
condemning authority “essentially takes a leasehold in the property,” and “the value of the taking
is what rental the marketplace would have yielded for the property taken.” United States v.
Banisadr Bldg. Joint Venture, 65 F.3d 374, 378 (4th Cir. 1995).
7.
If the condemnor is the only party to admit evidence to the Court of the value of
the real property taken, the Court is able to use that evidence to determine the just compensation
of the property and enter default judgment against defendant landowners and award the defendants
their just compensation as determined by the condemnor. See Gulf Crossing Pipeline Co. LLC v.
86.36 Acres, No. 08-cv-689, 2009 WL 194389, at *3–4 (W.D. La. Jan. 23, 2009).
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8.
Here, Atlantic offered evidence to the Court as to the value of the Easements
condemned through its valuation expert, Corey Sell, and the appraisal that Mr. Sell prepared for
the Subject Property. Atlantic offered the appraisal of the Property as Atlantic’s Trial Exhibit No.
4, Dkt. 39-4.
9.
The appraisal for the Subject Property and the testimony of Mr. Sell are proper
evidence for the determination of just compensation for the Subject Property. See 86.36 Acres,
2009 WL194389, at *4.
10.
The appraisal report for the Subject Property established that it comprises 27.921
total acres of vacant land utilized for recreational and timberland purposes. Atlantic’s Trial Exhibit
No. 4, Dkt. 39-4. It further demonstrated that the site will be encumbered by a proposed 50-footwide Permanent Easement encompassing 0.53 acres, a Temporary Easement encompassing 1.09
acres, and a Permanent Access Road Easement encompassing 0.96 acres. Mr. Sell testified, in
conformity with the appraisal report, that the value of the Permanent Easement on the Subject
Property is $2,523.00, that the damages to the remainder of the Subject Property is $0.00, and that
the total market rent for the Temporary Easement on the Subject Property is $1,090.00—making
the total just compensation for the Property $3,613.00.
11.
Therefore, based on the testimony and appraisals of Mr. Sell, the total just
compensation due to the defendants in this matter is $602.17.
V.
CONCLUSION
For the foregoing reasons, in an accompanying Order to follow, the Court will grant
Atlantic’s Motion for Default Judgment. Dkt. 31. The Court concludes that Atlantic shall pay just
compensation to the Non-Responsive Defendants as set forth above, and Atlantic is entitled to
immediate possession of Easements of the Subject Property identified in its Complaint.
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The Clerk of the Court is directed to send to the parties a certified copy of these Findings
of Fact and Conclusions of Law, and this Court’s accompanying Order.
Entered this 21st day of January, 2020.
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