McCurdy, et al v. Mountain Valley Pipeline, LLC
Filing
29
MEMORANDUM OPINION AND ORDER granting in part and denying in part Plaintiffs' 8 MOTION to Remand. It is ORDERED that this action be remanded for all further proceedings to the Circuit Court of Monroe County. Plaintiffs' request for attorneys' fees is DENIED. Signed by Senior Judge David A. Faber on 7/23/2015. (certified cc: counsel of record and Clerk, Circuit Court of Monroe County) (arb)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF WEST VIRGINIA
AT BLUEFIELD
BRYAN C. McCURDY and
DORIS W. McCURDY,
Plaintiffs,
v.
Civil Action No: 1:15-03833
MOUNTAIN VALLEY PIPELINE, LLC,
Defendant.
MEMORANDUM OPINION AND ORDER
Pending before the court is plaintiffs’ motion to remand.
(Doc. No. 8).
In their motion, plaintiffs argue that the amount
in controversy does not exceed $75,000, thereby depriving the
court of subject matter jurisdiction.
For reasons more fully
explained below, the motion is GRANTED in part and DENIED in
part.
I.
Background
Defendant intends to build an approximately 300-mile long
interstate natural gas pipeline originating in Wetzel County,
West Virginia and terminating in Pittsylvania County, Virginia.
(Doc. No. 11 at 1).
Under defendant’s proposed route, the
pipeline will travel through ten counties in West Virginia:
Braxton, Doddridge, Greenbrier, Harrison, Lewis, Monroe,
Nicholas, Summers, Webster, and Wetzel, but will not provide
natural gas to West Virginia customers.
(Doc. No. 1, Exh. A at
¶ 27).
Instead, the pipeline will take natural gas from West
Virginia to consumers in states farther south.
Id. at ¶¶ 29–30.
According to defendant, it plans to begin construction in
January 2017, and plans for the pipeline to be fully operational
by December 2018.
(Doc. No. 11 at 2).
Before construction begins, defendant must receive a
Certificate of Public Convenience and Necessity (hereinafter
“Certificate”) from the Federal Energy Regulatory Commission
(“FERC”).
Id. at 1.
The certification process requires
defendant to conduct surveys and environmental studies along the
proposed pipeline route.
Id. at 2.
Specifically, defendant
must inform the FERC of any potential impact upon natural
resources, wetlands, and endangered species located within the
proposed pipeline route.
Id.
Defendant has informed the FERC
of a proposed timetable for the pipeline and has scheduled a
number of these surveys for the summer of 2015.
Id.
Plaintiffs own three tracts of land in Monroe County, West
Virginia located within the “proposed survey corridor.”
No. 1, Exh. A at ¶ 20).
(Doc.
Defendant contacted plaintiffs in late
January 2015, notifying plaintiffs of its intent to conduct
surveys on their property.
Id.
According to defendant, it must
survey three specific endangered species found on plaintiffs’
land:
one animal, the Indiana Bat, and two plants, the Shale
Barren Rock Cress and the Running Buffalo Clover.
2
(Doc. No. 11
at 2).
In early February 2015, a pipeline representative called
plaintiffs and requested verbal permission to enter their
property to conduct surveys.
Plaintiffs declined.
(Doc. No. 1, Exh. A at ¶ 21).
Id. at 22.
Later that month, defendant
sent plaintiffs a letter threatening legal action unless
plaintiffs granted access to their property before March 9,
2015. 1
Id. at ¶ 23.
In response, plaintiffs filed suit in the Circuit Court of
Monroe County, seeking an injunction preventing defendant from
entering their land and a declaration that defendant has no
right to enter their property for survey purposes under West
Virginia Code § 54-1-3.
(Doc. No. 1, Exh. A).
Alternatively,
if the court finds that defendant may enter plaintiffs’
property, plaintiffs seek a determination of the area to be
surveyed and the scope of defendant’s permissible activities
while conducting surveys.
Id.
On March 27, 2015, defendant
removed the case to this court, invoking the court’s diversity
jurisdiction.
(Doc. No. 1).
Plaintiffs filed a motion to
remand on April 3, 2015, arguing that the amount in controversy
1
On the same day that defendant removed this case to federal
court, it filed suit against almost one hundred landowners in
the Southern District of West Virginia, seeking entry onto their
land for survey purposes. (Mountain Valley Pipeline, LLC v.
Dosier et al., Civil Action No. 5:15-cv-03858).
3
does not exceed $75,000, thereby preventing the court from
exercising subject matter jurisdiction.
II.
(Doc. No. 8).
Standard of Review
A defendant may remove an action from state court to
federal court only if the case could have been brought
originally in federal court.
Yarnevic v. Brink’s, Inc., 102
F.3d 753, 754 (4th Cir. 1996) (citing 28 U.S.C. § 1441).
A
federal court has original jurisdiction over actions where the
controversy exists between citizens of different states 2 and the
object of the litigation exceeds $75,000, exclusive of interests
and costs.
28 U.S.C. § 1332(a)(1) (2012).
Where a party removes a case to federal court alleging
diversity jurisdiction, the removing party bears the burden to
establish that the object of the dispute satisfies the $75,000
threshold for amount in controversy.
Mulcahey v. Columbia
Organic Chems. Co., 29 F.3d 148, 151 (4th Cir. 1994).
And, the
removing party must show, by a preponderance of the evidence,
that the amount in controversy exceeds $75,000.
See White v.
Chase Bank USA, NA., Civil Action No. 2:08-1370, 2009 WL
2762060, at *1 (S.D.W. Va. Aug. 29, 2009) (citing McCoy v. Erie
Ins. Co., 147 F. Supp. 2d 481, 488 (S.D.W. Va. 2001)).
2
Under
In this case, the parties do not dispute diversity of
citizenship, as plaintiffs are citizens of West Virginia and
defendant is a LLC formed in Delaware and no members of the LLC
hold West Virginia citizenship. (Doc. No. 1 at ¶ 3).
4
the preponderance of the evidence standard, a party must show
that it is “more likely than not” that the amount in controversy
satisfies the jurisdictional limit.
Judy v. JK Harris & Co.
LLC, et al., 2011 WL 4499316, Civil Action No. 2:10-cv-01276, at
*3 (S.D.W. Va. Sept. 27, 2011) (citing Landmark Corp. v. Apogee
Coal Co., 945 F. Supp. 932, 935 (S.D.W. Va. 1996)).
Evidence supporting the existence of subject matter
jurisdiction must be concrete, it “cannot be based upon
speculation and bare allegations that the amount in controversy
exceeds $75,000.”
O’Hara v. Capouillez, Civil Action No.
5:13CV119, 2014 WL 1479218, at *2 (N.D.W. Va. Apr. 14, 2014)
(internal citations and quotation marks omitted).
Where a
plaintiff’s complaint does not make a specific monetary demand,
“a removing defendant must present actual evidence that the
amount in controversy is exceeded; simple conjecture will not
suffice.”
Id. (citing Bartnikowski v. NVR, Inc., 307 F. App’x
730, 737 (4th Cir. 2009)).
But, as the court has noted before,
it need not leave its common sense behind when applying these
principles.
Mullins v. Harry’s Mobile Homes, 861 F. Supp. 22,
24 (S.D.W. Va. 1994).
III. Discussion
A. Natural Gas Act
The Natural Gas Act requires a party seeking to construct a
facility for transport of natural gas to obtain a Certificate of
5
public convenience and necessity from the FERC before commencing
construction.
15 U.S.C. § 717f(c)(1)(A) (2012).
The Natural
Gas Act, 15 U.S.C. § 717 et seq., and its implementing
regulations, 18 C.F.R. § 157.1 et seq., set forth the procedure
for certification.
See E. Tenn. Nat. Gas Co. v. Sage et al.,
361 F.3d 808, 818 (4th Cir. 2004).
As part of the certification
process, the FERC must “investigate the environmental
consequences of the proposed project and issue an environmental
impact statement.”
Id. (citing 42 U.S.C. § 4332).
At the end
of its investigation, the “FERC issues a certificate if it finds
that the proposed project is or will be required by the present
or future public convenience and necessity.”
Id. (citing 15
U.S.C. § 717f(e)) (internal quotation marks omitted).
When a
party receives a FERC Certificate, it may exercise “the right of
eminent domain” over any land needed for the project.
Id.
(quoting 15 U.S.C. § 717f(h)).
Often these Certificates will contain additional “terms and
conditions that FERC deems required by the public convenience
and necessity.”
Id. (citing 18 C.F.R. § 157.20) (internal
quotation marks omitted).
And, often these terms and conditions
include completion of necessary surveys.
See, e.g., Southern
Natural Gas Company, LLC, 152 FERC 61048, 2015 WL 4379314, at *8
(July 16, 2015) (issuing conditional Certificate requiring “the
completion of all required surveys and reports”); see also Ozark
6
Gas Transmission, LLC, 151 FERC 61193, 2015 WL 3477026 at *8
(June 1, 2015).
But, in many cases, a conditional Certificate will afford a
party seeking to construct a pipeline many of the same rights as
an unconditional Certificate, including the right to exercise
eminent domain.
See Gunpowder Riverkeeper v. Fed. Energy
Regulatory Comm’n, No. 14-1062, 2015 WL 4450952, at *1 (D.C.
Cir. July 21, 2015) (“Under Section 7 of the [Natural Gas Act],
. . . issuance of the conditional certificate enabled Columbia
immediately to exercise the power of eminent domain to obtain
‘the necessary right-of-way to construct, operate, and maintain
a pipe line’ . . .” (quoting 15 U.S.C. § 717f(h)).
And a party
endowed with eminent domain under the Natural Gas Act may obtain
immediate possession of land “through the equitable remedy of a
preliminary injunction.”
818.
E. Tenn. Nat. Gas Co., 361 F.3d at
Needless to say, a party who has obtained possession of
land may enter that land for survey purposes.
Consequently,
even conditional Certificates can provide a party with a route
to condemnation and, thereby, survey access.
B. Affidavit Evidence
Generally, courts ascertain the amount in controversy by
reference to the plaintiff’s complaint.
JTH Tax, Inc. v.
Frashier, 624 F.3d 635, 638 (4th Cir. 2010) (citing Wiggins v.
N. Am. Equitable Life Assurance Co., 644 F.2d 1014, 1016 (4th
7
Cir. 1981)).
Cases where a plaintiff seeks injunctive relief,
however, present a more complicated analysis.
In such cases, a
court should “ascertain the value of an injunction for amount in
controversy purposes by reference to the larger of two figures:
the injunction’s worth to the plaintiff or its cost to the
defendant.”
Id. at 639 (citing Dixon v. Edwards, 290 F.3d 699,
710 (4th Cir. 2002)).
In this case, plaintiffs argue that the
amount in controversy is only $60,000, evidenced by their
settlement offer in that amount, 3 and defendant, as the removing
party, bears the burden to prove by a preponderance of the
evidence that plaintiffs’ requested injunction will cost them
more than $75,000.
To support the amount in controversy, defendant attached a
number of affidavits to its response to plaintiffs’ motion to
remand.
(Doc. No. 11 at Exhs. 3, 4, 5, 6).
These affidavits
present evidence regarding the estimated overall cost of the
project, defendant’s proposed schedule for pipeline
3
The court may consider this $60,000 figure as evidence of the
value of the injunction to plaintiffs, rather than as an offer
of settlement. To determine the propriety of federal
jurisdiction, the court must base its decision on the record at
the time of removal and, therefore, may not consider settlement
demands made after removal. See McCoy v. Erie Ins. Co., 147 F.
Supp. 2d 481, 489 (S.D.W. Va. 2001); Watterson v. GMRI, Inc., 14
F. Supp. 2d 884, 850 (S.D.W. Va. 1997). Because plaintiffs
proffered the $60,000 figure in affidavits signed on April 3,
2015, after defendant’s March 27, 2015 removal, the court will
consider this figure as an estimate of the injunction’s value to
the plaintiffs, but not as an offer of settlement.
8
construction, the narrow windows within which defendant must
complete wildlife surveys, and the approximate daily revenue
defendant expects to receive once the pipeline is completed.
Defendant argues that an order preventing it from entering
plaintiffs’ property to conduct surveys required by the FERC for
an unconditional Certificate will prevent the timely
construction of the pipeline and, therefore, defendant will lose
money each day the pipeline is delayed.
Defendant contends that
these lost profits far exceed the jurisdictional minimum for
amount in controversy.
However, as noted above, conditional Certificates can
afford the same rights and privileges as unconditional
Certificates.
While plaintiffs seek to exclude defendant under
state law and defendant seeks to enter plaintiffs’ property to
survey under those same laws, all hope is not lost for defendant
if state law should prevent it from entering land to survey.
A
conditional Certificate could endow defendant with eminent
domain and, thereby, survey access to plaintiffs’ property.
At
oral argument on this matter, defendant represented that it
needed to have many of the environmental surveys completed to
receive a conditional Certificate.
It further represented that
a number of landowners had complied with defendant’s request for
survey access and that it has settled claims against a number of
the landowners named in other, similar litigation before this
9
court, making plaintiffs some of the few who have declined
survey access.
Therefore, the prospect of a conditional
Certificate changes the equation:
defendant need not employ
West Virginia law to conduct the necessary surveys on
plaintiffs’ land, but may conduct surveys on those properties to
which other landowners have granted access, receive a
conditional FERC Certificate, use the conditional Certificate to
obtain immediate possession of land through a preliminary
injunction, and then conduct the remaining surveys necessary for
an unconditional FERC Certificate.
In light of the route to condemnation afforded by a
conditional Certificate and upon review of defendant’s
affidavits, the court finds that the majority of defendant’s
evidence does not support a finding that the amount in
controversy is met.
A considerable amount of the information
defendant presents in its affidavits regard the overall cost of
the project.
Indeed, common sense dictates that this project
will cost more than $75,000.
While these figures exceed the
jurisdictional minimum, defendant must demonstrate that the
issue involved in this litigation, plaintiffs’ right to exclude
weighed against defendant’s right to enter, exceeds $75,000.
Because a conditional Certificate likely will allow for the
entrance which plaintiffs’ injunction seeks to prevent, evidence
regarding the delay created by a conditional, rather than
10
unconditional, FERC Certificate is of particular import in this
case.
Evidence establishing this more specific subset of costs,
rather than the cost of the pipeline as a whole, speaks to the
cost which defendant will incur as a result of plaintiffs’
requested relief.
However, defendant’s own affidavits indicate that the
amount in controversy is not satisfied.
In Exhibit 5 to
defendant’s response, Matthew Eggerding attests that a
conditional Certificate will cost defendant $35,000:
“If MVP
receives only a conditional certificate, it will be necessary
for MVP’s contractors to perform additional reviews of
information to be submitted to the FERC at an increased cost of
approximately $35,000.”
(Doc. No. 11, Exh. 5 at ¶ 12).
Needless to say, this does not meet the jurisdictional minimum.
Defendant’s remaining evidence regarding the monetary
effect of a conditional Certificate is too speculative to
support federal jurisdiction.
As the removing party, it remains
defendant’s burden “to show not only what the stakes of the
litigation could be, but also what they are given the
plaintiff’s actual demands.”
Brill v. Countrywide Home Loans,
Inc., 427 F.3d 446, 449 (7th Cir. 2005) (Easterbrook, J.)
(emphasis in original); see also Bartnikowski, 307 F. App’x at
736 (finding evidence too speculative to support subject matter
jurisdiction).
Defendant’s affidavits include statements such
11
as:
“If MVP receives a conditional FERC certificate
authorization or the FERC denies MVP’s certificate application,
then MVP will lose business good will and will be unable to meet
its customers’ expectations and demands,” (Doc. No. 11, Exh. 3
at ¶ 12), and “If the FERC determines that MVP has not filed
sufficient environmental data to warrant the issuance of a
conditional certificate for the project, then the FERC may deny
MVP’s certificate application in its entirety.”
Exh. 5 at ¶ 13).
(Doc. No. 11,
These statements do not provide the court with
actual numbers to support the amount in controversy and do not
present the actual, known cost to defendant of a ruling in
plaintiffs’ favor.
The only concrete figure remains the $35,000
cost cited in Eggerding’s affidavit.
From this evidence, the
court cannot conclude that it is “more likely than not” that the
amount in controversy exceeds the jurisdictional minimum.
Most importantly, defendant’s evidence does not demonstrate
how its failure to survey plaintiffs’ property before the
issuance of a conditional Certificate will cost defendant more
than $75,000.
Defendant’s affidavits evidence the dates with
which it must comply to survey certain wildlife species, as well
as the cost to defendant if its schedule is delayed.
But the
affidavits do not evidence the cost to defendant regarding
delays in surveying the specific properties at issue in this
case, delays that a conditional Certificate cannot remedy.
12
Defendant’s affidavits require the court to assume that it has
access to every other property along the proposed pipeline route
and that plaintiffs’ property represents the only obstacle in
its path to an unconditional Certificate.
acknowledges that this cannot be so:
But the court
while defendant represents
that a majority of landowners within the pipeline’s proposed
route have allowed access for surveys, litigation remains
pending before this court regarding these same issues of survey
access on other landowners’ properties.
Just as common sense
dictates that the pipeline’s overall cost will exceed $75,000,
common sense also allows the court to recognize that a project
of this magnitude cannot adhere to a rigid schedule and does not
hinge on plaintiffs’ property alone.
It would be improper for
this court to attribute any schedule delays, incurred for any
reason, solely to defendant’s inability to survey plaintiffs’
property.
While defendant has demonstrated what the stakes of
the litigation could be, it has not produced concrete evidence
of what the stakes are, given plaintiffs’ actual demands.
Despite defendant’s affidavits, questions remain as to
whether the object of the instant litigation exceeds $75,000.
The court must resolve these questions in favor of remand.
While defendant may prefer a federal forum, 4 it must demonstrate
4
It is important to note that this opinion does not reach the
merits of plaintiffs’ requested injunction. Instead, this
13
“a logical connection between its speculative amount and the
actual controversy.”
Jarrett-Cooper v. United Airlines, Inc.,
586 F. App’x 214, 216 (6th Cir. 2014).
For all of these
reasons, the court finds that defendant has failed to establish
by a preponderance of the evidence that the amount in
controversy is met and, accordingly, plaintiffs’ motion to
remand is GRANTED.
C. Plaintiffs’ Request for Attorneys’ Fees
Plaintiffs’ motion for remand requests attorneys’ fees and
costs.
(Doc. No. 9 at 10).
Under 28 U.S.C. § 1447(c), “[a]n
order remanding [a] case may require payment of just costs and
any actual expenses, including attorney fees, incurred as a
result of the removal.”
The court looks to the “reasonableness
of the removal” to determine whether an award of attorneys’ fees
is appropriate.
141 (2005).
Martin v. Franklin Capitol Corp., 546 U.S. 132,
“Absent unusual circumstances, courts may award
attorney fees under § 1447(c) only where the removing party
lacked an objectively reasonable basis for seeking removal.”
Id.
The court may take into consideration unusual circumstances
that warrant award of attorneys’ fees, such as the “failure to
disclose facts necessary to determine jurisdiction.”
Id. There
opinion and order concerns only federal jurisdiction and whether
defendant has demonstrated a right to litigate this matter in
federal court.
14
is no presumption in favor of awarding attorney fees and the
matter is left to the court’s discretion.
In this case, the court finds it unnecessary to award
attorneys’ fees.
The court cannot find that defendant lacked an
objectively reasonable basis for removal and there is no
indication that either party failed to disclose those facts
necessary to determine jurisdiction.
Accordingly, plaintiffs’
request for attorneys’ fees is DENIED.
D. The Court’s May 22, 2015 Memorandum Opinion
and Order
Finally, the court acknowledges that this opinion is in
conflict with its May 22, 2105 memorandum opinion and order.
In
that opinion, the court examined plaintiffs’ complaint, which
seeks relief solely on the basis of state law, and determined
that plaintiffs’ requested injunction likely would prevent
defendant from both surveying and condemning property within the
pipeline’s corridor, thereby bringing about an end to the
proposed pipeline in West Virginia.
The court based its opinion
on the broad relief sought by plaintiffs in their complaint and
an understanding that federal law did not provide defendant with
a right to enter plaintiffs’ property to conduct the surveys
necessary for FERC certification.
See Tenn. Gas Pipeline Co. v.
Garrison et al., Civil Action No. 3:10-CV-1845, 2010 WL 3632152,
at *2 (M.D. Pa. Sept. 10, 2010) (“Simply put, the Natural Gas
15
Act does not provide for pre-condemnation entry onto Plaintiff’s
property . . .”); Walker v. Gateway Pipeline
Co., 601 So.2d
970, 975 (Ala. 1992) (“The [Natural Gas Act] addresses the
actual construction of facilities, not entries that may take
place prior to such construction and in preparation for
acquiring a certificate of public convenience and necessity from
the FERC.”).
Indeed, the court understood that plaintiffs would
not seek relief solely under state law if that relief would be
undercut by federal provisions.
However, plaintiffs represented in their motion to
reconsider, and defendant acknowledged at oral argument on this
matter, that the terms of a conditional FERC Certificate would
grant defendant the right to enter and survey plaintiffs’
property.
Furthermore, defendant represented that it plans to
use West Virginia eminent domain law to gain access to property
within the pipeline’s proposed corridor, but ultimately plans to
use federal eminent domain law to condemn property and build the
pipeline.
As a result, a potential ruling in plaintiffs’ favor
would not doom the pipeline.
Plaintiffs are entitled to seek
the relief which state law affords them, even if that relief is
rendered moot by a conditional FERC Certificate.
IV.
Conclusion
For the foregoing reasons, the court concludes that it
lacks subject matter jurisdiction over this dispute.
16
Accordingly, plaintiffs’ motion to remand, (Doc. No. 8), is
GRANTED in part and DENIED in part.
It is ORDERED that this
action be remanded for all further proceedings to the Circuit
Court for Monroe County.
The Clerk is directed to send a copy of this Memorandum
Opinion and Order to counsel of record and a certified copy to
the Clerk of Court for the Circuit Court of Monroe County.
IT IS SO ORDERED this 23rd day of July, 2015.
Enter:
David A. Faber
Senior United States District Judge
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