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Mountain Valley Pipeline, LLC v. An Easement To Construct

United States District Court, S.D. West Virginia, Charleston

February 21, 2018



          John T. Copenhaver, Jr. United States District Judge

         Pending is plaintiff Mountain Valley Pipeline, LLC's (“Mountain Valley”) motion for partial summary judgment and immediate access to and possession of the easements condemned, (ECF #6), filed October 27, 2017. Also pending are three motions to dismiss, three motions to strike, and one motion to stay, each of which also will be discussed herein.

         I. Background

         A. Legal Framework

         The Natural Gas Act (“NGA”), 15 U.S.C. § 717 et seq., outlines the power to regulate and approve new pipeline construction projects. At the outset, construction of a new pipeline cannot commence until a gas company obtains from the Federal Energy and Regulatory Commission (“FERC”) a certificate of public convenience and necessity (a “certificate”). 15 U.S.C. § 717f(c)(1)(A). FERC may issue a certificate

authorizing the whole or any part of the operation . . . if it is found that the applicant is able and willing properly to do the acts and to perform the service proposed and to conform to the provisions of [the NGA] and the requirements, rules, and regulations of [FERC] thereunder, and that the proposed service, sale, operation, construction, extension, or acquisition, to the extent authorized by the certificate, is or will be required by the present or future public convenience and necessity.

Id. § 717f(e). FERC also “[has] the power to attach to the issuance of the certificate and to the exercise of the rights granted thereunder such reasonable terms and conditions as the public convenience and necessity may require.” Id.

         Once FERC issues a certificate, the certificate holder has the power of eminent domain over properties that are necessary to complete an approved project and that the holder has been unable to acquire by agreement. See id. § 717f(h). The NGA mandates that condemnation proceedings “shall conform as nearly as may be with the practice and procedure in similar action or proceeding in the courts of the State where the property is situated.” Id. The United States Court of Appeals for the Fourth Circuit holds “that this state procedure requirement has been superseded by [Federal Rule of Civil Procedure 71.1].” E. Tenn. Nat. Gas Co. v. Sage, 361 F.3d 808, 822 (4th Cir. 2004).

         The Fourth Circuit's opinion in East Tennessee Natural Gas Co. v. Sage dictates the progression of condemnation and immediate possession actions under the NGA. In Sage, the Fourth Circuit approached the following question: “[W]hether a court may use its equitable powers to grant a preliminary injunction allowing immediate possession” in an NGA condemnation action even though the NGA “is silent on the issue of immediate possession.” Id. at 823. The court answered in the affirmative and explained that

once a district court determines that a gas company has the substantive right to condemn property under the NGA, the court may exercise equitable power to grant the remedy of immediate possession through the issuance of a preliminary injunction.

Id. at 828.

         B. Factual and Procedural Background

         FERC issued Mountain Valley's certificate on October 13, 2017, authorizing construction of a 303.5-mile long natural gas pipeline of 42-inches in diameter. (See Compl. Ex. B, ¶¶ 7, 310(A).) The pipeline originates in Wetzel County, West Virginia, and terminates in Pittsylvania County, Virginia. (Id. ¶ 7.) In the Southern District of West Virginia, the pipeline traverses properties in Nicholas, Greenbrier, Summers, and Monroe Counties and specifies a compressor station in Fayette County. The certificate requires Mountain Valley to satisfy a variety of conditions, including a three-year construction and in-service deadline and a number of environmental prerequisites to be met before and during construction. (See id. ¶ 310(C)(1), App. C.)

         The easements sought by Mountain Valley are a necessary predicate to building the pipeline. (Declaration of Robert J. Cooper on Access for Construction (“Cooper Construction Decl.”) ¶ 10.) Although Mountain Valley obtained some of the necessary easements by agreement prior to filing this action, it failed to acquire many in the four-county region noted above despite offering at least $3, 000 for each one. (Id. ¶¶ 7-8.) Thus, Mountain Valley initiated this action in this court on October 24, 2017, pursuant to the NGA and Federal Rule of Civil Procedure 71.1.

         Soon thereafter, on October 27, 2017, Mountain Valley filed three motions: Motion for Partial Summary Judgment and Immediate Access to Survey the Easements Condemned (ECF #4); Motion for Partial Summary Judgment and Immediate Access to and Possession of the Easements Condemned for Construction of MVP Project (ECF #6); and Motion for Expedited Hearing on Motions for Partial Summary Judgment and Immediate Access to and Possession of the Easements Condemned (ECF #8). The court permitted limited discovery until January 12, 2018, and set a briefing schedule for the surveying and construction motions. (ECF #143.) On January 12, 2018, the court granted Mountain Valley's request for immediate access to survey “to the extent that it [sought] access to the properties . . . that ha[d] not already been surveyed by agreement of the parties, and for the limited purposes” of staking environmental and cultural resources. (ECF #186, at 2.) On January 24, 2018, briefing concluded on the pending motion, wherein Mountain Valley requests partial summary judgment of its power of eminent domain and a preliminary injunction granting it immediate possession of the condemned properties for construction activities. The court held a preliminary injunction hearing on February 7, 2018. The issues are now ripe for disposition.

         II. Motions to Dismiss, Strike, and Stay

         Before addressing the motion for partial summary judgment and preliminary injunction, the court must first address the various parties' motions to dismiss, strike, and stay.[1] The landowners[2] have filed three motions to dismiss, (ECF #78, 120, 203), and Mountain Valley has moved to strike each one, (ECF #116, 157, 212). Mountain Valley aptly points out that the motions to dismiss should be denied because Rule 71.1 does not permit such motions in condemnation actions. (See, e.g., ECF #117, at 1-2.)

         Rule 71.1 expressly states that, other than an answer, “[n]o other pleading or motion asserting an additional objection or defense is allowed.” Fed.R.Civ.P. 71.1(e)(3). The Advisory Committee Notes explain that subdivision (e) “[d]epart[s] from the scheme of Rule 12, . . . requir[ing] all defenses and objections to be presented in an answer.” Fed.R.Civ.P. 71.1(e) advisory committee notes. The notes continue that subdivision (e) “does not authorize a preliminary motion, ” of which “[t]here is little need . . . in condemnation proceedings.” Id. Correspondingly, the Fourth Circuit unequivocally holds that, under Rule 71.1, “no other pleading besides the answer is contemplated.” Wash. Metro. Area Transit Auth. v. Precision Small Engines, 227 F.3d 224, 228 n.2 (4th Cir. 2000); accord Atlantic Seaboard Corp. v. Van Sterkenburg, 318 F.2d 455, 458 (4th Cir. 1963) (“[Rule 71.1's] prohibition of any pleading other than an answer is clear and unequivocal. The preliminary motions tendered here were unallowable.”). Accordingly, Mountain Valley's motions to strike are granted, and the motions to dismiss are denied as stricken.

         Next, the landowners filed a motion for stay of proceedings. Again, Mountain Valley correctly notes that the NGA delineates when and how a certificate may be stayed. (See ECF #160, at 2-7.) The NGA directs that

[t]he filing of an application for rehearing . . . shall not, unless specifically ordered by [FERC], operate as a stay of [FERC's] order. The commencement of [appellate] proceedings [in the courts of appeal] shall not, unless specifically ordered by the court, operate as a stay of [FERC's] order.

15 U.S.C. § 717r(c). Thus, the court lacks discretion to order a stay of Mountain Valley's certificate. Accord, e.g., Tenn. Gas Pipeline Co. v. Mass. Bay Transp. Auth., 2 F.Supp.2d 106, 109 (D. Mass. 1998) (“The NGA itself directs that an order by FERC not be stayed unless either FERC itself - in the context of a rehearing - or the reviewing Court of Appeals specifically orders a stay.”).

         Even so, the landowners argue that the court retains the equitable power to stay “proceedings on [Mountain Valley's] equitable motion for preliminary injunction until FERC concludes its ‘further consideration' of Landowners' request for rehearing.” (ECF #169, at 4.) Fundamentally, the landowners ask the court to deny Mountain Valley's motion for preliminary injunction - time-sensitive by its very nature - under the guise of a stay based on the alleged irreparable harms that they may face if Mountain Valley is granted immediate possession of the easements. Assuming that the court has such authority, which it does not pursuant to the NGA, the court cannot grant the relief requested. The Supreme Court instructs that four factors are to be considered in a preliminary injunction analysis, while the landowners implore the court for an effective denial of Mountain Valley's motion based upon only one - balance of the equities. See Winter v. Nat. Res. Defense Council, Inc., 555 U.S. 7, 20, 25-26 (2008). The motion for stay of proceedings is denied.

         III. Motion for Partial Summary Judgment of Power of Eminent Domain Under the NGA

         A. Governing Standard

         Pursuant to Federal Rule of Civil Procedure 56(b), “a party may file a motion for summary judgment at any time until 30 days after the close of all discovery.” Summary judgment is appropriate only “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a).

         “As to materiality, . . . [o]nly disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment. Factual disputes that are irrelevant or unnecessary will not be counted.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986) (citing 10A Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 2725 (2nd ed. 1983)).

         Regarding genuineness, “summary judgment will not lie if the dispute about a material fact is ‘genuine, ' that is, if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Id. The moving party has the initial burden of “‘showing' - that is, pointing out to the district court - that there is an absence of evidence to support the nonmoving party's case.” Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986); see also Dash v. Mayweather, 731 F.3d 303, 311 (4th Cir. 2013). If the movant carries its burden, the non-movant must demonstrate that “there is sufficient evidence favoring [it] for a jury to return a verdict” in its favor. Anderson, 477 U.S. at 249 (citation omitted); see also Dash, 731 F.3d at 311. “Although the court must draw all justifiable inferences in favor of the nonmoving party, the nonmoving party must rely on more than conclusory allegations, mere speculation, the building of one inference upon another, or the mere existence of a scintilla of evidence.” Dash, 731 F.3d at 311 (citing Anderson, 477 U.S. at 252, and Stone v. Liberty Mut. Ins. Co., 105 F.3d 188, 191 (4th Cir. 1997)).

         B. Discussion

         Mountain Valley moves the court for entry of partial summary judgment that it has the power of eminent domain under the NGA. The NGA confers the power of eminent domain when (1) the condemnor has a certificate authorizing construction of a project; (2) the property interests to be condemned are necessary to complete the project; and (3) the condemnor has been unable to acquire the necessary property interests by agreement. See id. § 717f(h). Mountain Valley argues that the undisputed facts demonstrate its satisfaction of all three elements.[3] (See generally ECF #7.) The court agrees.

         The defendants mount a variety of attacks against Mountain Valley's condemnation authority. First, however, the court must determine whether it has the power to hear these challenges. The NGA defines the power of review over FERC orders. It sets forth a procedure that begins with FERC, then the courts of appeals, and lastly the Supreme Court. See 15 U.S.C. § 717r(a), (b). Accordingly, the Fourth Circuit holds that

15 U.S.C. § 717r(b)[] vests exclusive jurisdiction to review all decisions of [FERC] in the circuit court of appeals; there is no area of review, whether relating to final or preliminary orders, available in the district court. And this has been the uniform construction given the statute.

Consolidated Gas Supply Corp. v. FERC, 611 F.2d 951, 957 (4th Cir. 1979) (citations omitted). In other words, the NGA's review provision extends to “all issues inhering in the controversy, and all other modes of judicial review;” “all objections to the [certificate] . . . must be made in the Court of Appeals or not at all.” City of Tacoma v. Taxpayers of Tacoma, 357 U.S. 320, 335-36 (1958) (parsing a judicial review section that is virtually identical to the NGA's); see also Williams Nat. Gas Co. v. City of Oklahoma City, 890 F.2d 255, 262 (10th Cir. 1989) (“We would be hard pressed to formulate a doctrine with a more expansive scope.”).

         It follows, then, that this court does not have jurisdiction to hear any of the landowners' challenges that would require the court to undertake review of the certificate or that which FERC is authorized to consider thereunder.[4] See Williams Nat. Gas Co., 890 F.2d at 262 (“Thus, a challenger may not collaterally attack the validity of a prior FERC order in a subsequent proceeding.”). One district court has described its limited review authority as “determining whether (1) the certificate of public convenience and necessity is ‘facially valid'; and (2) the property sought to be condemned is within the scope of the certificate” - in other words, ensuring that the certificate holder is not committing a fraud on the court and the condemnees. Alliance Pipeline v. 4.500 Acres of Land, 911 F.Supp.2d 805, 813 (D.N.D. 2012) (citations omitted).

         Many of the landowners' challenges to Mountain Valley's condemnation authority are improper in this court. Those challenges can be summarized as follows: FERC has erroneously interpreted its congressional authority to condition certificates, (ECF #202, at 3 n.4); there is not yet a “public necessity” for the taking as required by the Fifth Amendment because Mountain Valley has not satisfied all of the conditions precedent to construction, and Mountain Valley thus lacks the substantive power of eminent domain, (ECF #155, at 4-5; ECF #196, at 5; ECF #202, at 1-5; ECF #206, at 2-4); if Mountain Valley lacks the power of eminent domain, it cannot show that the ...

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