Equitrans, L.P. v. 0.56 Acres More or Less of Permanent Easement Located in Marion County, West Virginia et al
Filing
15
MEMORANDUM OPINION AND ORDER DENYING DEFENDANTS' MOTION TO DISMISS THE COMPLAINT AND GRANTING PLAINTIFF'S MOTION TO DISMISS THE COUNTERCLAIMS: It is ORDERED that Defendants' 6 Motion to Dismiss the complaint is DENIED and Plaintiff's 10 Motion to Dismiss the counterclaims is GRANTED. Signed by Senior Judge Frederick P. Stamp, Jr on 11/18/15. (cnd)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF WEST VIRGINIA
EQUITRANS, L.P.,
a Pennsylvania
limited partnership,
Plaintiff,
v.
Civil Action No. 1:15CV106
(STAMP)
0.56 ACRES MORE OR LESS OF
PERMANENT EASEMENT LOCATED IN
MARION COUNTY, WEST VIRGINIA,
JEFFERY J. MOORE and
SANDRA J. MOORE,
Defendants.
MEMORANDUM OPINION AND ORDER
DENYING DEFENDANTS’ MOTION TO DISMISS THE COMPLAINT
AND GRANTING PLAINTIFF’S MOTION TO DISMISS THE COUNTERCLAIMS
This is a condemnation case arising from a prior civil action
between defendants, Jeffery and Sandra Moore (“the Moores”), and
the plaintiff, Equitrans L.P. (“Equitrans”).
In that underlying
civil action, Equitrans held a right-of-way over the Moores’
property to construct and maintain a natural gas pipeline.
The
Moores sued Equitrans, claiming that it built and maintained
portions of the pipeline outside of the right-of-way, thereby
breaching the right-of-way agreement and trespassing on the Moores’
property.
After a trial, a jury found that two portions of the
pipeline violated the right-of-way agreement or were trespassing.
This Court stayed a determination on whether to enter an ejectment
order.
Equitrans then filed this action under 15 U.S.C. § 717f(h) to
condemn a right-of-way through the portions of the Moores’ property
it was trespassing on.
The Moores filed an answer, counterclaims,
and a motion to dismiss the complaint for failure to state a claim.
Equitrans then filed a motion to dismiss the counterclaims.
For
the following reasons, this Court denies the Moores’ motion to
dismiss the complaint and grants Equitrans’ motion to dismiss the
counterclaims.
I.
Background
In 1960, Equitrans entered into a right-of-way agreement with
the Moores to build a pipeline under a portion of their property
(“the 1960 right-of-way”).
In 2012, the Moores sued Equitrans
claiming that approximately 700 feet of the pipeline was built
outside of the 1960 right-of-way (hereinafter referred to as “the
underlying
civil
action”).
Equitrans
maintained
that
it
constructed all portions of the pipeline within the 1960 right-ofway.
Following a trial, a jury found that Equitrans’ placement of
two portions of the pipeline either violated the 1960 right-of-way
agreement or trespassed on the Moores’ property.
The Moores did
not claim monetary damages and sought only ejectment.
This Court
stayed execution of the judgment so that Equitrans could seek
condemnation of a right-of-way through the property upon which it
was found to be trespassing (“the Property”).
2
The Property
consists of two portions of the Moores’ property through which the
pipeline runs, totaling approximately 0.56 acres.
Equitrans attempted to settle the underlying civil action
before and after trial, but the Moores refused and countered with
other demands. Equitrans then filed this condemnation action under
15 U.S.C. § 717f(h) to obtain a right-of-way through the Property
(“the condemnation right-of-way”).
The Moores filed a motion to
dismiss the complaint for failure to state a claim, and an answer
with counterclaims alleging vexatious litigation and trespass by
Equitrans.
Equitrans
then
filed
a
motion
to
dismiss
the
counterclaims.
II.
Applicable Law
To survive a motion to dismiss under Rule 12(b)(6), “a
complaint must contain sufficient factual matter, accepted as true,
to ‘state a claim to relief that is plausible on its face.’”
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).
This plausibility
standard requires a party to articulate facts that, when accepted
as true, demonstrate that the party has stated a claim that makes
it plausible that the party is entitled to relief.
Francis v.
Giacomelli, 588 F.3d 186, 193 (4th Cir. 2009) (citing Iqbal, 556
U.S. at 678; Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)).
3
III.
A.
Discussion
Motion to Dismiss the Complaint
To state a claim for condemnation under § 717f(h), the
plaintiff must plead that: (1) it is a “holder of a certificate of
public convenience and necessity”; (2) the right-of-way will be
used for the construction, operation, or maintenance of a pipeline;
and (3) it was unable to “acquire [the right-of-way] by contract,
or [was] unable to agree with the owner of [the] property [as] to
. . . compensation.”
15 U.S.C. § 717f(h).
Equitrans’ complaint facially states a claim for condemnation
under § 717f(h).
It alleges that Equitrans holds a certificate of
public convenience and necessity, issued by the Federal Energy
Regulatory Commission, for the creation of the pipeline running
through the Moores’ property.
Equitrans states that the Property
will be used to maintain and operate the pipeline, which is
necessary
commerce.
for
its
transmission
of
natural
gas
in
interstate
Finally, Equitrans plead that it “has attempted, but
been unable, to acquire the [condemnation] right-of-way through
negotiation with [the Moores].”
ECF No. 1 at 3.
It also attached
email correspondence between the parties’ counsel, showing that
Equitrans offered to settle the underlying civil action before and
after trial, but the Moores countered with other demands.
Equitrans’ complaint clearly pleads all that is necessary for
its condemnation claim to survive a motion to dismiss.
4
However,
the Moores argue that Equitrans’ claim fails for several other
reasons: (1) Equitrans failed to comply with the Natural Gas Act;
(2) condemnation was a compulsory counterclaim in the underlying
civil action; (3) Equitrans should be judicially estopped from
claiming
that
it
did
not
comply
with
the
1960
right-of-way
agreement; and (4) condemnation here would violate the Fifth
Amendment’s Takings Clause.
1.
Compliance With the Natural Gas Act
The Moores argue that Equitrans’ condemnation claim must be
dismissed because it failed to comply with the Natural Gas Act in
building the pipeline and in seeking condemnation.
Specifically,
the Moores argue that the 1960 right-of-way agreement precludes
condemnation of the Property under § 717f(h), and that Equitrans
unlawfully entered the Property before seeking a right-of-way or
condemnation.
a.
Existence of a Contract
The Moores argue that Equitrans obtained the necessary rightof-way from their predecessors in title in 1960, and thus Equitrans
was able to “acquire by contract” the necessary right-of-way.
However, the Property is not part of the 1960 right-of-way.
1:12-cv-123, ECF 102 at 4.
See
The jury specifically found that,
regarding the Property, the pipeline is not within the 1960 rightof-way or is trespassing.
Moreover, the Moores seek to eject
Equitrans from the Property, which would essentially force it to
5
dig up the existing pipeline and move it to a location within the
1960 right-of-way.
While Equitrans does have the 1960 right-of-
way, it also has the right to choose the route of the pipeline.
See Williams v. Transcontinental Gas Pipe Line Corp., 89 F. Supp.
485, 489 (W.D.S.C. 1950) (“A broad discretion is necessarily vested
in those to whom the power of eminent domain is delegated, in
determining what property is necessary for the public purpose, with
respect to the particular route, line[,] or location of the
proposed work or improvement . . . .” (internal quotation marks
omitted)).
Because the 1960 right-of-way has been determined by
the jury in the underlying civil action not to cover the Property,
that contract should not be deemed to cover Equitrans’ desired
condemnation right-of-way.
b.
The
Pre-Condemnation Occupation of Property
Moores
argue
that
Equitrans
failed
to
comply
with
§ 717f(h) because it entered and used the Property without first
seeking a right-of-way agreement or condemnation. Thus, the Moores
argue that Equitrans acted in bad faith and did not attempt to
obtain the right-of-way before entering the Property.
First,
this
Court
cannot
condemnation in bad faith.1
conclude
that
Equitrans
seeks
This Court must take the allegations
1
Courts are split on whether § 717f(h) requires good faith
negotiations. The Ninth Circuit requires proof that the plaintiff
engaged in good faith negotiations, Transwestern Pipeline Co. v.
17.19 Acres, 550 F.3d 770, 776 (9th Cir. 2008), while the First
Circuit has refused to require a showing of good faith, Maritimes
6
in Equitrans’ complaint as true. Based on the complaint, Equitrans
attempted to obtain by contract the condemnation right-of-way
several times, but the Moores refused and countered with other
demands.
Taking these allegations in Equitrans’ best light, this
Court must conclude that Equitrans attempted in good faith to
obtain the condemnation right-of-way by contract and that the
Moores rejected those offers.
Second, § 717f(h) does not require the condemnor to seek
condemnation before entering the property.
occupation
of
condemnation.
property
to
be
The prior unauthorized
condemned
does
not
preclude
See Searl v. Sch. Dist. No. 2, of Lake Cnty., 133
U.S. 553, 564-65 (1890) (“[P]rior occupation without authority of
law would not preclude the company from taking subsequent measures
authorized by law to condemn the land for their use.” (quoting
Secombe v. Milwaukee & St. Paul Ry. Co., 90 U.S. 108, 118
This
is
especially
true
here
because
Equitrans
(1874)).
maintained
throughout the underlying civil action that it built the pipeline
within the 1960 right-of-way and, therefore, did not unlawfully
enter the Property. Moreover, Equitrans sought to contract for the
& Ne. Pipeline, L.L.C. v. Decoulos, 146 F. App’x 495, 497-98 (1st
Cir. 2005) (unpublished). In an unpublished opinion, this Court
has refused to require a showing of good faith. Hardy Storage Co.,
LLC v. Property Interests Necessary to Conduct Gas Storage
Operations, No. 2:07CV5, 2009 WL 689054, *5 (N.D. W. Va. Mar. 9,
2009). Regardless of whether good faith is required, Equitrans has
sufficiently plead that it made good faith offers to contract for
the condemnation right-of-way.
7
condemnation right-of-way before and after the verdict in the
underlying civil action.
The Moores argue that this case is analogous to Humphries v.
Williams Natural Gas Co., 48 F. Supp. 2d 1276 (D. Kan. 1999), and
Van Scyoc v. Equitrans, L.P., No. 2:13-cv-01735, 2015 WL 1346872
(W.D. Pa. Mar. 23, 2015), requiring strict compliance with the
Natural Gas Act. However, those cases do not hold that a condemnor
must seek condemnation before entering the property.
Rather, both
cases deal with the question of whether a condemnation claim
preempts state law claims (like trespass) that arose before the
condemnor sought condemnation.
See Humphries, 48 F. Supp. 2d at
1279 (“The court finds that WNG’s condemnation action does not
preempt Humphries’ claims that existed prior to the date that WNG
filed its condemnation action.”); Van Scyoc, 2015 WL 1346872, *3
(“The primary issue facing the Court is whether the Plaintiff
landowners[’] . . . state law claims . . . must be construed as
inverse condemnation claims, which would be preempted by the [NGA]
. . . .
[T]he Court concludes that the Plaintiffs’ claims are not
preempted by the NGA.” (emphasis in original)).
Neither of the
courts in these cases concluded that the condemnors’ failure to
seek condemnation before entering the property precluded them from
seeking condemnation under § 717f(h).
Rather, the courts assumed
that the condemnation actions could continue in the face of the
unlawful prior entries.
See Humphries, 48 F. Supp. 2d at 1279 n.3
8
(considering
when
“the
damages
may
cease
to
accumulate
on
Humphries’ state law claims,” and “assum[ing] without deciding that
Humphries’ damages on his state law claims will stop accumulating
on the date that this court grants, if ever, the relief sought in
WNG’s condemnation action.”).
2.
Compulsory Counterclaim
The Moores argue that Equitrans waived its condemnation claim
because it constituted a compulsory counterclaim in the underlying
civil action that Equitrans failed to file.
Federal Rule of Civil Procedure 13(a) requires a party to file
as
a
counterclaim
any
claim
that
“arises
out
of
the
same
transaction or occurrence that is the subject matter of the
opposing party’s claim[,] . . . does not require adding another
party over whom the court cannot acquire jurisdiction,” and that
exists “at the time of its service.”
Fed. R. Civ. P. 13(a).
A
counterclaim is compulsory only if it is mature, meaning that all
the elements for the counterclaim are present before the answer is
served.
See Pace v. Timmermann’s Ranch & Saddle Shop Inc., 795
F.3d 748, 757-58 (7th Cir. 2015) (concluding that former employee’s
abuse of process claim against employer matured when all the
elements were present before the employer sued her for conversion
breach of fiduciary duty, fraud, and unjust enrichment, and it
therefore became a compulsory counterclaim); Steel v. Morris, 608
F. Supp. 274, 275-76 (S.D. W. Va. 1985) (concluding that cause of
9
action for abuse of process had not accrued before the defendant
served
the
answer,
and
therefore
was
not
a
compulsory
counterclaim).
Here, Equitrans’ condemnation claim became mature after it
served its answer in the underlying civil action.
Equitrans
maintained throughout the underlying civil action that its pipeline
was within the 1960 right-of-way. The core factual and legal issue
in that case was whether Equitrans had a contractual right to a
right-of-way over the Property. Section 717f(h)’s requirement that
Equitrans be unable to contract for the condemnation right-of-way
was logically dependent upon the resolution of the underlying civil
action.
If Equitrans was within the 1960 right-of-way, it would
have had a contract for the necessary right-of-way and condemnation
would not be available.
Therefore, Equitrans’ condemnation claim
could not have matured until after the pipeline was found to be
outside the 1960 right-of-way.
Even so, Equitrans’ condemnation claim was not a compulsory
counterclaim in the underlying civil action.
To determine whether
a counterclaim is compulsory, this Court must consider: (1) whether
“the
issues
of
fact
and
law”
raised
by
the
claim
and
the
counterclaim are “largely the same”; (2) whether res judicata would
bar a subsequent suit on the . . . counterclaim”; (3) whether
“substantially the same evidence” supports or refutes both the
claim
and
the
counterclaim;
and
10
(4)
whether
any
“logical
relationship”
exists
between
the
claim
and
the
counterclaim.
Painter v. Harvey, 863 F.2d 329, 331 (4th Cir. 1988).
The facts and law applicable to this condemnation claim, as
well as the evidence required to support it, are very different
from those required in the Moores’ trespass and breach of contract
claims in the underlying civil action.
Res judicata would not bar
this condemnation action because the underlying civil action did
not resolve any factual issues pertinent to this case other than a
determination that the relevant portions of the pipeline are
outside
the
1960
right-of-way
Equitrans’
condemnation
underlying
claim
only
the
are
is
claim
to
trespassing.2
or
logically
extent
that
Finally,
dependent
it
could
on
not
the
seek
condemnation until it was determined that the relevant portions of
the pipeline are outside the 1960 right-of-way.
Thus, none of
these factors weigh in favor of finding that the condemnation claim
was a compulsory counterclaim in the underlying civil action.
3.
Judicial Estoppel
Although the jury found in the underlying civil action that
Equitrans
did
trespassing
on
not
the
comply
with
Property,
the
the
2
1960
Moores
right-of-way
argue
that
or
was
judicial
“For the doctrine of res judicata to be applicable, there
must be: (1) a final judgment on the merits in a prior suit; (2) an
identity of the cause of action in both the earlier and the later
suit; and (3) an identity of parties or their privies in the two
suits.” Pueschel v. United States, 369 F.3d 345, 354-55 (4th Cir.
2004).
11
estoppel should apply to hold Equitrans to its losing position:
that Equitrans complied with the 1960 right-of-way.
Judicial estoppel applies only if: (1) “the party sought to be
estopped
.
.
.
[is]
seeking
to
adopt
a
position
that
is
inconsistent with a stance taken in prior litigation”; (2) “the
prior inconsistent position . . . [was] accepted by the court”; and
(3) “the party against whom judicial estoppel is to be applied
. . . intentionally misled the court to gain unfair advantage.”
Zirkand v. Brown, 478 F.3d 634, 638 (4th Cir. 2007) (internal
quotation marks omitted).
Furthermore, “[t]he position at issue
must be one of fact as opposed to one of law or legal theory,” and
the “bad faith requirement is the ‘determinative factor.’”
The
Moores
argue
that
in
the
underlying
civil
Id.
action,
Equitrans took the position that it complied with the 1960 rightof-way, but now says that it did not comply with the 1960 right-ofway in regard to the property.
However, the jury verdict in the
underlying civil action provides that Equitrans in fact did not
comply with the 1960 right-of-way regarding the property.
The
Moores are essentially asking this court to hold Equitrans to its
losing position in the underlying civil action, which is factually
inconsistent with the verdict.
But judicial estoppel applies only
where the party to be estopped took a prior position that was
“accepted by the court,” Zirkand, 478 F.3d at 638, and this Court
did not accept Equitrans’ position that it complied with the 1960
12
right-of-way.
Moreover, there is no indication that Equitrans
intended to intentionally mislead this Court in defending itself in
the underlying civil action.
4.
Unconstitutional Taking
The Moores argue that condemnation here would violate the
Fifth Amendment’s Takings Clause.
Specifically, they argue that
Equitrans lacks a public purpose in condemning the property and
that the taking would be excessive.
The Fifth Amendment to the United States Constitution permits
the taking of private property only “for public use” and with “just
compensation.”
U.S. Const. amend. V.
To satisfy the public use
requirement, a taking need only be “rationally related to a
conceivable public purpose.”
U.S. 229, 245 (1984).
Hawaii Housing Auth. v. Midkiff, 467
Public use is not necessarily established
whenever a legislative body acts, as “[t]here is, of course a role
for courts to play in reviewing a legislature’s judgment of what
constitutes a public use,” but so long as the legislative act is
not
meant
“to
benefit
a
particular
class
of
identifiable
individuals but to [further] . . . a legitimate public purpose,”
the act does not violate the Fifth Amendment.
Id. at 240, 245.
First, Equitrans has a public purpose in condemning the
property under the Natural Gas Act.
In passing the Natural Gas
Act, Congress concluded that “the business of transporting and
selling natural gas for ultimate distribution to the public is
13
affected with a public interest, and that federal regulation in
matters relating to the transportation [and sale] of natural gas
. . . is necessary in the public interest.”
15 U.S.C. § 717(a).
The Natural Gas Act is a valid exercise of Congress’ power to
regulate interstate commerce, Fed. Power Comm’n v. Natural Gas
Pipeline Co. of Am., 315 U.S. 575, 582-83 (1942), and Congress
constitutionally
delegated
licensees under § 717f(h).
the
right
to
condemn
to
private
See Thatcher v. Tenn. Gas Transmission
Co., 180 F.2d 644, 648 (5th Cir.) (“[T]he grant of the power of
eminent domain provided by the Natural Gas Act is a regulation of
interstate commerce by Congress and not the equivalent of [a taking
for a private purpose] . . . .”), cert. denied, 340 U.S. 829
(1950); Williams v. Transcontinental Gas Pipe Line Corp., 89 F.
Supp. 485, 487 (D.S.C. 1950) (“Congress [may] constitutionally
bestow the right of condemnation upon such private licensees as
have been charged with the development of the national policy as to
the interstate movement of natural gas.”).
By enacting § 717f(h),
Congress concluded that the taking of rights-of-way to build
natural gas pipelines is a public use, as it furthers the public
interest in “the business of transporting and selling natural gas
for the ultimate distribution to the public.”
15 U.S.C. § 717(a).
Section 717f(h)’s delegation of condemnation power furthers a
legitimate
public
interest
and
Amendment.
14
does
not
violate
the
Fifth
It therefore follows that Equitrans’ condemnation claim does
not violate the Fifth Amendment if its pleadings are sufficient to
state a condemnation claim under § 717f(h). Equitrans sufficiently
plead its condemnation claim and, therefore, has a public purpose
in condemning the property under § 717f(h).
Second, the Moores argue that condemnation of the property
would constitute an excessive taking because it is not strictly
necessary for Equitrans to maintain the pipeline and provide gas to
its customers.
The Moores rely on City of Cincinnati v. Vester,
281 U.S. 439 (1930), to argue that “the taking of more land than is
needed to be occupied by the improvement directly in contemplation”
violates the Fifth Amendment.
Id. at 440.
However, in that case
the Supreme Court was applying the excess condemnation provision in
the Ohio constitution, not the Fifth Amendment.
(citing Ohio Const. art. 18, § 10).
See id. at 441
Under the Fifth Amendment, a
taking is valid so long as it is for a public purpose and for just
compensation.
complaint
§
717f(h)
is
U.S. Const. amend. V.
sufficient
and
that
to
state
section
a
Thus, because Equitrans’
condemnation
satisfies
the
Fifth
claim
under
Amendment,
Equitrans’ claim does not facially violate the Fifth Amendment.
B.
Equitrans’ Motion to Dismiss the Moores’ Counterclaims
Equitrans argues that this Court should dismiss the Moores’
counterclaim because it is barred under Federal Rule of Civil
Procedure 71.1(e)(3).
Equitrans argues that the only responsive
15
pleading allowed under Rule 71.1(e)(3) is an answer and not a
counterclaim.
The Moores argue that a counterclaim is not a
pleading and therefore is not barred under that Rule.
Rule 71.1(e)(3) provides that
A defendant waives all objections and defenses not stated
in its answer. No other pleading or motion asserting an
additional objection or defense is allowed. But at the
trial on compensation, a defendant--whether or not it has
previously appeared or answered--may present evidence on
the amount of compensation to be paid and may share in
the award.
Fed R. Civ. P. 71.1(e)(3).
After extensive research into this
matter, this Court concludes that a counterclaim is not a pleading,
but is nevertheless barred under Rule 71.1(e) because it is not an
objection or defense to the condemnation claim.
First, a counterclaim is not a pleading, but is a claim for
relief that may be stated in a pleading.
Federal Rule of Civil
Procedure 7(a) provides an exhaustive definition of “pleading” as
used in the Rules.
Rule 7(a) states that “[o]nly these pleadings
are allowed: (1) a complaint; (2) an answer to a complaint; (3) an
answer to a counterclaim . . . ; (4) an answer to a crossclaim; (5)
a third-party complaint; (6) an answer to a third-party complaint;
and (7) . . . a reply to an answer.”
Fed. R. Civ. P. 7(a).
But
Rule 7(a) does not list counterclaims as a permissible pleading.
Rule 13 refers to counterclaims as claims for relief.
See Fed. R.
Civ. P. 13 (“A pleading must state as a counterclaim any claim . .
. .” (emphasis added)).
Similarly, Rule 12(a)(1)(B) suggests that
16
a counterclaim is a claim for relief stated in an answer.
See Fed.
R. Civ. P. 12(a)(1)(B) (“A party must serve an answer to a
counterclaim . . . within 21 days after being served with the
pleading that states the counterclaim . . . .” (emphasis added)).
Therefore, this Court concludes that a counterclaim is a claim for
relief that may be stated in a pleading, but is not a pleading
itself.
See Columbia Gas Transmission LLC v. Crawford, 267 F.R.D.
227, 228–29 (N. D. Ohio 2010) (concluding that a counterclaim is
not a pleading).3
Thus, Rule 71.1(e)(3) does not categorically bar
counterclaims as unauthorized pleadings.
Second, as a “claim for relief” that may be stated in a
pleading, a counterclaim is barred by Rule 71.1(e) because it is
not an objection or defense to the condemnation claim.
Rule
71.1(e) expressly “prescribes what matters the answer should set
forth.”
Fed. R. Civ. P. 71.1 advisory committee’s notes to 1951
Addition, Note to Subdivision (e).
Rule 71.1(e) provides that if
a defendant “has an objection or defense to the taking,” he may
serve an answer, and “the answer must: (A) identify the property in
which the defendant claims an interest; (B) state the nature and
extent
of
the
interest;
and
(C)
3
state
all
the
defendant’s
Although the Crawford court correctly concluded that
counterclaims are not pleadings, this Court believes that the
Crawford court incorrectly concluded that Rule 71.1(e) therefore
did not bar counterclaims. 267 F.R.D. at 228–29. As discussed
below, Rule 71.1(e) bars counterclaims because it provides that an
answer may only contain objections and defenses to condemnation,
not claims for relief.
17
objections
71.1(e)(2).
and
defenses
to
the
taking.”
Fed.
R.
Civ.
P.
Nowhere does the rule state that the defendant may
plead any claims for relief.
Moreover, Rule 71.1(a) expressly
states that the other Federal Rules of Civil Procedure do not apply
to condemnation proceedings unless Rule 71.1 provides otherwise,
and Rule 71.1 does not invoke the application of other rules
regarding what may be plead in an answer. This makes sense because
Rule
71.1
provides
for
the
narrow
adjudication
of
only
the
condemnation claim by requiring “[o]ne pleading to raise all
objections and defenses to the taking and one hearing to dispose of
them . . ., not successive pleadings and successive hearings
spanning a much longer period of time.” Atl. Seaboard Corp. v. Van
Sterkenburg, 318 F.2d 455, 458 (4th Cir. 1963) (emphasis added).
Because a counterclaim is a claim for relief, it is not an
objection or defense to a condemnation claim.
Therefore, this
Court concludes that Rule 71.1(e) allows a defendant to file an
answer containing only defenses and objections to the condemnation
claim, but not a counterclaim.
See United States v. Certain Land
Situated in City of Detroit, 361 F.3d 305, 308 (6th Cir. 2004)
(“The Rule evidences that district courts only have jurisdiction to
hear
defenses
and
objections
from
defendants
in
condemnation
cases.”).
Equitrans cites various authorities for the proposition that
Rule 71.1(e)(3) categorically bars counterclaims as unauthorized
18
pleadings.
But, after thoroughly reviewing these authorities and
the body of case law on this matter, this Court finds no credible
authority to support Equitrans’ position.
Rather, the district
courts that have concluded that Rule 71.1(e)(3) categorically bars
counterclaims as unauthorized pleadings seem, to this Court, to
have misinterpreted Circuit Court precedent regarding sovereign
immunity and subject matter jurisdiction over claims under the
Tucker Act (repealed and codified in scattered sections of 28
U.S.C.).
Equitrans cites a footnote in Washington Metropolitan Area
Transit Authority v. Precision Small Engines, 227 F.3d 224 (4th
Cir. 2000), claiming that it shows “well established precedent in
the Fourth Circuit” that counterclaims are barred under Rule 71.1.
ECF No. 11 at 6.
However, the footnote Equitrans cites is dicta,
as the Fourth Circuit concluded that the defendants failed to
preserve their arguments on the counterclaim issue.
Id. at 228.
The court went on to note that even if the issue were preserved,
the counterclaim would have been barred because the defendant
“failed to file an answer altogether to [the] notice of the taking,
. . . it effectively waived the substance of its ‘Counter Claim.’”
Id. at 228 n.2.
Thus, the Fourth Circuit did not state that
counterclaims are barred categorically, but only that a defendant
cannot file a counterclaim almost a year after it failed to file a
timely answer to a condemnation claim.
19
Id. at 226, 228 n.2.
Equitrans also relies on Columbia Gas Transmission, LLC v.
14.96 Acres, No. 2:14-cv-27773, 2015 WL 3756710 (S.D. W. Va. June
16, 2015), an unpublished opinion from the Southern District of
West Virginia wherein the court concluded that Rule 71.1(e)(3) bars
counterclaims as pleadings.
The court relied upon Washington
Metro, United States v. 191.07 Acres of Land, 482 F.3d 1132 (9th
Cir. 2007), United States v. 3,317.39 Acres of Land, 443 F.2d 104,
106 (8th Cir. 1971), and various district court decisions relying
on those cases.
However, none of those cases stand for the
proposition
counterclaims
that
are
categorically
unauthorized pleadings under Rule 71.1(e).
barred
as
Instead, it seems that
district courts may have confused early sovereign immunity based
reasoning for an interpretation of Rule 71.1(e) and its predecessor
Rule 71A(e).
All of the Circuit Court cases on this issue deal
with condemnation claims brought by the United States, and those
courts concluded that they lacked subject matter jurisdiction to
hear a counterclaim against the United States in a condemnation
action under the doctrine of sovereign immunity and the Tucker Act.
See United States v. Certain Land Situated in City of Detroit, 361
F.3d 305, 307-08 (6th Cir. 2004) (concluding that the court lacked
subject
matter
jurisdiction
to
hear
an
intervening
party’s
counterclaim against the United States in condemnation); United
States v. Banisadr Bldg. Joint Venture, 65 F.3d 374, 380 (4th Cir.
1995) (concluding that the court lacked subject matter jurisdiction
20
to hear a counterclaim because the claim must be “in a separate
action filed under the Tucker Act”); United States v. 79.20 Acres,
710 F.2d 1352, 1356 n.5 (8th Cir. 1983) (concluding that the court
had no jurisdiction to hear a counterclaim because “[t]he United
States, as sovereign, is immune from suit”); United States v. 38.60
Acres of Land, 625 F.2d 196, 199 (8th Cir. 1980) (concluding that
the court lacked subject matter jurisdiction to hear counterclaims
against the United States under sovereign immunity and the Tucker
Act); United States v. 6,321 Acres of Land More or Less in Suffolk
Cnty., 479 F.2d 404, 406-07 (1st Cir. 1973) (concluding that the
counterclaim “may only be heard in the Court of Claims” under the
Tucker Act, and that Rule 71A (Rule 71.1’s predecessor) “did not
effect a waiver of the government’s immunity”); United States v.
3,317.39
Acres
of
Land,
443
F.2d
104,
106
(8th
Cir.
1971)
(concluding that the court lacked subject matter jurisdiction on
sovereign immunity grounds).
The closest a Circuit Court has come
to concluding that counterclaims are categorically barred under
Rule 71.1(e) was in United States v. 191.07 Acres of Land, 482 F.3d
1132 (9th Cir. 2007), wherein the Ninth Circuit concluded that “[a]
property owner cannot file a counterclaim in a direct condemnation
action.”
Id. at 1140.
However, that case also involved a
counterclaim against the United States.
In making its conclusion
the court cited United States v. 40.60 Acres, 483 F.2d 927 (9th
Cir. 1973), in which the Ninth Circuit noted in dicta a split as to
21
“whether Tucker Act claims can ever be brought as counterclaims.”
Id. at 928 n.1.
authority
Thus, it appears that there is no Circuit Court
supporting
categorically
barred
the
proposition
under
Rule
that
71.1(e)
a
as
counterclaim
an
is
impermissible
pleading.
The Columbia Gas court also relied on various district court
decisions, which all seem to this Court to misinterpret the above
discussed
authority
and
conclude
that
categorically barred under Rule 71.1(e).
counterclaims
are
The court cited Kansas
Pipeline Co. v. A 200 Foot by 250 Foot Piece of Land, 210 F. Supp.
2d 1253 (D. Kan. 2002), wherein the United States District Court
for the District of Kansas relied on Washington Metro and Wright on
Federal Practice and Procedure in concluding that counterclaims are
not
permitted.
Id.
at
1258.
However
Washington
Metro,
as
discussed above, does not provide authority for that conclusion and
Wright
simply
cites
discussed above.
the
sovereign
immunity
based
decisions
See 12 Charles Alan Wright, Arthur R. Miller,
Mary Kay Kane, Richard L. Marcus & Adam N. Steinman, Federal
Practice and Procedure § 3048 n.5 (3d ed. 2014).
The Columbia Gas
court also cited United States v. 1.58 Acres of Land, 523 F. Supp.
120, 122 (D. Mass. 1981), which relied on United States v. 6,321
Acres of Land More or Less in Suffolk Cnty., 479 F.2d 404, 406-07
(1st
Cir.),
wherein
the
First
Circuit
concluded
that
the
defendants’ counterclaim “may only be heard in the Court of Claims”
22
under the Tucker Act.
Id. at 406-07.
The other unpublished
district court opinions the Columbia Gas court cited similarly rely
on decisions dealing with sovereign immunity.
See Constitution
Pipeline Co., LLC v. A Permanent Easement for 2.40 Acres, 3:14-CV2046, 2015 WL 1726223, *1 (N.D.N.Y. Apr. 14, 2015) (relying on the
Circuit Court cases discussed above and various district court
cases); New West v. City of Joliet, Nos. 05C1743, 07C7214, 11C5305,
2012 WL 366733, *6 (N.D. Ill. Jan. 30, 2012) (same);
N. Natural
Gas Co. v. Approximately 9117.53 Acres, No. 10-1232-WEB, 2011 WL
2118642, *4 (D. Kan. May 27, 2011) (citing no authority).
Because
this Court finds that counterclaims are not pleadings and that
there is no authority supporting Equitrans’ position, this Court
concludes
that
Rule
71.1(e)(3)
does
not
counterclaim as an unauthorized pleading.
categorically
bar
a
Rather, Rule 71.1(e)
bars counterclaims because they are not objections or defenses to
condemnation.
IV.
Conclusion
The plaintiff’s complaint sufficiently pleads its condemnation
claim, and the defendants’ counterclaims are barred under Rule
71.1(e).
Accordingly, the defendants’ motion to dismiss the
complaint (ECF No. 6) is DENIED, and the plaintiff’s motion to
dismiss the counterclaims (ECF No. 10) is GRANTED.
IT IS SO ORDERED.
23
The Clerk is DIRECTED to transmit a copy of this memorandum
opinion and order to counsel of record herein.
DATED:
November 18, 2015
/s/ Frederick P. Stamp, Jr.
FREDERICK P. STAMP, JR.
UNITED STATES DISTRICT JUDGE
24
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