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Dominion Energy Transmission, Inc. v. 3.71 Acres of Land

United States District Court, N.D. West Virginia

March 2, 2018

DOMINION ENERGY TRANSMISSION, INC., Plaintiff,
v.
3.71 ACRES OF LAND, MORE OR LESS, IN DODDRIDGE COUNTY, WEST VIRGINIA, ET AL., Defendants.

          MEMORANDUM OPINION AND ORDER GRANTING PLAINTIFF'S MOTION FOR PARTIAL SUMMARY JUDGMENT [DKT. NO. 3] AND MOTION FOR IMMEDIATE POSSESSION OF THE EASEMENTS [DKT. NO. 4]

          IRENE M. KEELEY UNITED STATES DISTRICT JUDGE.

         The plaintiff, Dominion Energy Transmission, Inc. (“DETI”), seeks to condemn certain temporary and permanent easements necessary for the construction and operation of a natural-gas pipeline that runs through West Virginia. To facilitate expeditious completion of its project, DETI seeks partial summary judgment regarding its right to condemn the easements, and a preliminary injunction allowing it to access and possess the property prior to paying just compensation. After carefully considering the record and the evidence adduced at a hearing on February 22, 2018, for the following reasons, the Court GRANTS DETI's Motion for Partial Summary Judgment (Dkt. No. 3) and Motion for Immediate Possession of the Easements (Dkt. No. 4).

         I. LEGAL FRAMEWORK

         This proceeding is governed by the Natural Gas Act (“NGA” or “the Act”), which provides private natural-gas companies the power to acquire property by eminent domain. 15 U.S.C. § 717 et seq. Under the Act, a “natural-gas company” is “a person engaged in the transportation of natural gas in interstate commerce, or the sale in interstate commerce of such gas for resale.” Id. § 717a(6). Such companies may build and operate new pipelines only after obtaining a certificate of public convenience and necessity (“Certificate”) from the Federal Energy Regulatory Commission (“FERC” or “the Commission”). As the Fourth Circuit has summarized:

The procedure for obtaining a certificate from FERC is set forth in the NGA, and its implementing regulations. The process begins with an application from the gas company that includes, among other information, (1) a description of the proposed pipeline project, (2) a statement of the facts showing why the project is required, and (3) the estimated beginning and completion date for the project. Notice of the application is filed in the Federal Register, public comment and protest is allowed, and FERC conducts a public hearing on the application. As part of its evaluation, FERC must also investigate the environmental consequences of the proposed project and issue an environmental impact statement. At the end of the process 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.” In its order issuing a certificate, FERC specifies a date for the completion of construction and the start of service. The certificate may include any terms and conditions that FERC deems “required by the public convenience and necessity.”

E. Tenn. Nat. Gas Co. v. Sage, 361 F.3d 808, 818 (4th Cir. 2004) (internal citation omitted).

         “Once FERC has issued a certificate, the NGA empowers the certificate holder to exercise ‘the right of eminent domain' over any lands needed for the project.” Id. (citing 15 U.S.C. § 717f(h)). The authority by which natural-gas companies may exercise the right is set forth fully in the Act:

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, and the necessary land or other property, in addition to right-of-way, for the location of compressor stations, pressure apparatus, or other stations or equipment necessary to the proper operation of such pipe line or pipe lines, 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. The practice and procedure in any action or proceeding for that purpose in the district court of the United States 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: Provided, That the United States district courts shall only have jurisdiction of cases when the amount claimed by the owner of the property to be condemned exceeds $3, 000.

15 U.S.C. § 717f(h). Notably, the “state procedure requirement has been superseded” by the implementation of Fed.R.Civ.P. 71.1, which provides the applicable procedure in most condemnation cases. See Sage, 361 F.3d at 822.

         There are, thus, three essential prerequisites that must be met prior to any exercise of the power of eminent domain under the NGA. The natural-gas company must only establish that “(a) It is a holder of a certificate of public convenience and necessity; (b) It needs to acquire an easement, right-of-way, land or other property necessary to the operation of its pipeline system; and (c) It has been unable to acquire the necessary property interest from the owner.” Rover Pipeline LLC v. Rover Tract No(s) WV-DO-SHB-011.510-ROW-T & WV-DO-SHB-013.000-ROW-T, No. 1:17cv18, 2017 WL 5589163, at *2 (N.D.W.Va. Mar. 7, 2017).

         Further, the law in the Fourth Circuit is clear 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.” Sage, 361 F.3d at 828. A preliminary injunction is proper when the plaintiff can “[1] establish that he is likely to succeed on the merits, [2] that he is likely to suffer irreparable harm in the absence of preliminary relief, [3] that the balance of equities tips in his favor, and [4] that an injunction is in the public interest.” Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7, 20 (2008).[1]

         II. BACKGROUND

         On October 13, 2017, FERC granted a Certificate to DETI authorizing construction of 37.5 miles of natural-gas pipeline in West Virginia (“the Project”) (Dkt. No. 1-2 at 7).[2] The Project also includes the construction of four compressor units, six valve sites, and two sets of pig launcher and receiver sites. Id. DETI must obtain easements along the Project in order to construct its pipeline, and under the appropriate circumstances the NGA grants it the authority to do so by eminent domain.

         On February 5, 2018, DETI sought to exercise that authority over certain property located in the Northern District of West Virginia, which it was unable to acquire by agreement, by filing a complaint pursuant to the NGA and Fed.R.Civ.P. 71.1 (Dkt. No. 1). As required by Rule 71.1(c)(2), DETI included a description of the property, as well as the interests to be taken (Dkt. Nos. 1 at 6-9; 1-4). On February 6, 2018, DETI moved for partial summary judgment on its right to condemn the subject property, and sought a preliminary injunction allowing it to possess immediately the easements sought (Dkt. Nos. 3; 4). DETI also moved to expedite a hearing on its motions so that it can “complet[e] necessary pre-construction and construction activities” (Dkt. No. 5). To date, no defendant has appeared in the case or filed an answer pursuant to Fed.R.Civ.P. 71.1(e)(2).

         On February 22, 2018, the Court conducted an evidentiary hearing at which, despite having been provided notice, no defendant appeared. DETI presented the testimony of Matthew Sickles (“Sickles”), Supervisor of Engineering for the Project; Jamie Burton (“Burton”), a Senior Land Agent for the Project; and Wesley Woods, a real estate appraiser retained for the Project. At the close of the hearing, the Court directed DETI to provide further information regarding efforts taken to identify existing mineral interests that may be affected by the Project.

         On February 28, 2018, DETI filed the Declaration of Jamie Burton, who declared that DETI had identified and provided notice to third-party interest holders, that there are no active coal mines near the Project, and that DETI “is negotiating mutually acceptable agreements necessary to preserve the integrity of” surface and near-surface facilities identified during surveying. (Dkt. No. 40). Burton further declared that, while the property at issue contains four existing pipelines, the shallow trenching to be utilized in constructing the Project will not affect oil and gas interests, and DETI will “either avoid these facilities or take appropriate measures to protect the[ir] integrity.” Id. at 2-3.

         III. MOTION FOR PARTIAL SUMMARY JUDGMENT

         Summary judgment is appropriate where the “depositions, documents, electronically stored information, affidavits or declarations, stipulations (including those made for purposes of the motion only), admissions, interrogatory answers, or other materials” establish 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), (c)(1)(A). When ruling on a motion for summary judgment, the Court reviews all the evidence “in the light most favorable” to the nonmoving party. Providence Square Assocs., L.L.C. v. G.D.F., Inc., 211 F.3d 846, 850 (4th Cir. 2000). The Court must avoid weighing the evidence or determining its truth and limit its inquiry solely to a determination of whether genuine issues of triable fact exist. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986).

         The moving party bears the initial burden of informing the Court of the basis for the motion and of establishing the nonexistence of genuine issues of fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Once the moving party has made the necessary showing, the non-moving party “must set forth specific facts showing that there is a genuine issue for trial.” Anderson, 477 U.S. at 256 (internal quotation marks and citation omitted). The “mere existence of a scintilla of evidence” favoring the non-moving party will not prevent the entry of summary judgment; the evidence must be such that a rational trier of fact could reasonably find for the nonmoving party. Id. at 248-52.

         The Court may only exercise its equitable power to grant a preliminary injunction after determining “that a gas company has the substantive right to condemn property under the NGA.” Mid Atlantic Express, LLC v. Baltimore Cty., Md., 410 F. App'x 653, 657 (4th Cir. 2011) (unpublished decision) (quoting Sage, 361 F.3d at 828). As discussed, to establish that it has the right to condemn, DETI must demonstrate only that 1) it holds a FERC Certificate, 2) it needs to acquire the easements, and 3) it has been unable to acquire them by agreement. 15 U.S.C. § 717f(h). DETI has satisfied each of these elements, and is entitled to partial summary judgment regarding its right to condemn.

         First, the parties cannot dispute that FERC issued a Certificate to DETI on October 13, 2017 (Dkt. No. 1-2). Second, DETI has established that the easements are “necessary and consistent with the easement rights that FERC authorized [DETI] to obtain.” Rover Pipeline LLC, No. 1:17cv18, 2017 WL 5589163, at *2. The uncontested evidence in this case demonstrates that the “[e]asements are necessary for constructing, maintaining, operating, altering, testing, replacing, and repairing” the Project (Dkt. No. 3-3 at 2). Indeed, Sickles testified that the easements sought in this case are along the route approved by FERC.

         Finally, although DETI has engaged in negotiations with all affected landowners, it has been unable to reach an agreement with the defendants in this case. DETI made written offers to acquire the necessary easements in November 2017, but the defendants rejected those offers and claim that the value of the easements exceeds $3, 000. Id. at 4. The Court thus concludes that DETI has been unable to acquire the easements by contract or agreement. Therefore, because DETI has satisfied the three requirements of 15 U.S.C. ยง 717f(h), the ...


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