Opinion
Civil Action No. 17-1297
04-25-2018
COLUMBIA GAS TRANSMISSION, LLC, Plaintiff, v. AN EASEMENT TO CONSTRUCT, OPERATE AND MAINTAIN A 20-INCH GAS TRANSMISSION PIPELINE ACROSS PROPERTIES IN WASHINGTON COUNTY AND ALLEGHENY COUNTY, PA., OWNED BY MCC INTERNATIONAL, INC., et al., Defendants.
Judge Bissoon
REPORT AND RECOMMENDATION
I. Recommendation
It is respectfully recommended that the Renewed Motion for Partial Summary Judgment and Immediate Access and Possession of Easements on Property Owned by Cecycle Klaphake, Trustee of the William Klaphake and Cecyle Klaphake Revocable Living Trust, filed on behalf of the Plaintiff (ECF No. 51), be granted.
II. Report
Plaintiff, Columbia Gas Transmission, LLC (Columbia), brings this action for condemnation under the Natural Gas Act, 15 U.S.C. §§ 717-717z, to allow it to replace segments of its interstate pipeline Line 1570 which provides the Pittsburgh region with natural gas service. Columbia has been able to negotiate agreements for access with almost all of the landowners along the pipeline route, except for the property owned by Cecycle Klaphake, Trustee of the William Klaphake and Cecyle Klaphake Revocable Living Trust (Klaphake).
Presently pending before the Court for disposition is Columbia's renewed motion for partial summary judgment and immediate access and possession of easements on the Klaphake property. Klaphake has filed a brief in opposition and Columbia has filed a reply brief. Thus, the motion is now ripe for disposition. For the reasons that follow, the motion should be granted.
Facts
By order dated February 1, 2016, the Federal Energy Regulatory Commission (FERC) approved Columbia's application for a certificate of public convenience and necessity (the "FERC Certificate") authorizing Columbia to replace 34 miles of existing pipeline and associated facilities located in Greene, Washington, and Allegheny Counties, Pennsylvania and for approval to abandon the facilities that are being replaced. (ECF No. 54 Ex. A.) Columbia had filed its application for the FERC Certificate on February 20, 2015. (Id. at 1; ECF No. 60 Ex. D.)
Line 1570 is a bi-directional (north/south) mainline that serves the Pittsburgh metropolitan area. This replacement is part of Columbia's overall program to modernize its existing infrastructure. Columbia constructed the existing Line 1570 in 1947 and has already replaced most of its existing system of uncoated, bare steel with new coated and wrapped steel pipeline. Columbia states that this project will allow it to improve the safety of the pipeline, as well as to ensure continued reliability of service and expand transportation services for new customers. (Sulkowski Decl. ¶¶ 3-5.)
ECF No. 54 Ex. B.
Columbia states that it has negotiated with almost all of the landowners for mutually agreeable terms for easements necessary on the property. As part of Segment 3 of the Project, Columbia has already negotiated agreements with the owners of 120 properties, except for Klaphake. (Sulkowski Decl. ¶¶ 6, 8, 15.)
Columbia contends that it requires immediate access to and possession of the property interests taken in order to meet its construction schedule, improve the safety and reliability of the pipeline, and implement the Project as approved by FERC. In order to complete the project before the 2018-2019 winter heating season, as well as to meet its schedule with FERC, Columbia must have access to the Properties by May 15, 2018 to commence construction. (Sulkowski Decl. ¶¶ 9, 13.)
Columbia states that construction must be completed in time for the new pipeline to be in service for the beginning of the 2018-2019 winter heating season to ensure that all of the commercial and residential customers whose gas travels through the pipeline have an adequate supply on cold days. It must also be completed in order to meet Columbia's commitment to the FERC as part of its modernization project. (Sulkowski Decl. ¶ 10.)
Columbia indicates that the majority of the construction of the new Phase III segment of the pipeline will occur in a progression to maintain gas flow as much as possible, and will require several sequential steps, which are most efficient and effective when performed in an uninterrupted path along the pipeline route. Skipping properties requires equipment loading and unloading for all phases of the construction process, which equates to additional time, costs and a longer construction duration. It further states that the anticipated construction process involves multiple steps, which if not begun by May 15, 2018, will result in substantial harm to Columbia by delaying the entire project. (Sulkowski Decl. ¶¶ 11-13.)
Columbia asserts that the public will suffer substantial harm if Columbia is unable to meet its construction schedule. Line 1570 provides natural gas to local distribution companies which provide service to the Pittsburgh metropolitan area. (Sulkowski Decl. ¶ 14.) The public will also suffer substantial harm if Columbia is unable to timely complete its replacement of its pipeline because there is a strong public interest in assuring the safety, integrity and operation of Columbia's pipelines. (Sulkowski Decl. ¶¶ 9-14.)
Columbia states that Klaphake will not suffer any harm as a result of the grant of immediate access because granting immediate access will not affect Klaphake's right to receive just compensation and Columbia is prepared to post a bond equal to its estimate of the just compensation due to Klaphake. (Sulkowski Decl. ¶ 16.)
Klaphake states that she has owned and lived on the Klaphake Farm for approximately 60 years, and that she is the successor to an agreement entered into in 1946 between a previous owner of the property and the Manufacturer's Light and Heat Co., a predecessor to Columbia. (ECF No. 25 ¶¶ 1-7.) The 1946 Agreement states as follows:
IRENE GLASS TO THE MANUFACTURERS LIGHT & HEAT CO. FOR AND IN CONSIDERATION OF One and No/100 Dollars, to her in hand paid, receipt of which is hereby acknowledged and the further sum of Three & No/100 Dollars, per rod for right of way and any and all damages from construction and patrolling to be paid upon the acceptance of the survey now being made by the Company, Irene Glass, widow [hereinafter called the Grantor], does hereby grant to the Manufacturers Light & Heat Co. [hereinafter called the Company], its successors and assigns, the right to lay a 20 inch pipe line and maintain, operate, repair and remove said line along a line which has been surveyed for the state over and through her land situate in Cecil Township, Washington County, State of Pennsylvania, bounded and described as follows:
[description of boundaries]
with the rights of ingress, egress and regress to and from the same, the said Grantor to fully use and enjoy the said premises, except for the purpose hereinbefore granted to the said Company, and said Company to pay any damage which may arise to crops and fences from the relaying, maintaining and operating of the pipe line; said damages if not mutually agreed upon, to be ascertained and determined by three disinterested persons, one thereof to be appointed by the Grantor, her heirs or assigns, one by the Company, its successors or assigns, and the third by the two appointed as aforesaid, and the award of such three persons shall be final and conclusive. And it is further agreed, that the said Company, its successors and assigns, may at any time lay, maintain, operate, repair and remove a second line of pipe alongside of the first line as herein provided; upon the payment of a like consideration, and subject to the same conditions; also may change the size of its pipes, the damages, if any, to crops and surface in making such changes to be paid by the Company.
Tap to be installed on this line at point nearest the residence.(ECF No. 25 Ex. 1.) She indicates that Columbia has refused to make any offers that would include the installation of a tap on the new pipeline. (ECF No. 60 Ex. B.)
IN WITNESS WHEREOF, the Grantor sets her hand and seal this 27th day of May A.D. 1946.
SIGNED, SEALED AND DELIVERED IN PRESENCE OF: Irene Glass (SEAL) R. S. Bauman
Klaphake had stated that the easement allowed the gas company to "change the site of its pipes," but Columbia has indicated that the word is actually "size." (ECF No. 62 at 6 & n.1.) The import of this seemingly minor variation in language is discussed below.
Procedural History
Plaintiff filed this action on October 6, 2017. Subject matter jurisdiction is based on the condemnation authority in Section 7(h) of the Natural Gas Act, 15 U.S.C. § 717f(h), and federal question jurisdiction, 28 U.S.C. § 1331. (Compl. ¶ 1.)
ECF No. 1.
Previously, on September 12, 2017, Klaphake filed a complaint in declaratory action against Columbia and related entities in the Court of Common Pleas of Washington County, Pennsylvania, seeking an adjudication of the parties' rights and obligations under the 1946 Agreement. On October 19, 2017, Columbia removed the action to this Court, and it was docketed as Klaphake v. Columbia Gas Transmission, LLC, Civ. A. No. 17-1359. No reference was made to this case and therefore the new case was randomly assigned to Judge Bissoon. On April 11, 2018, Judge Bissoon entered orders indicating that the two cases were related and assigning both of them to her (presider) and the undersigned (referred). See Civ. A. No. 17-1359, ECF No. 17.
On November 22, 2017, Klaphake filed an answer to the Complaint, in which she raised the 1946 Agreement as a defense or objection to the condemnation. (ECF No. 25.) On December 7, 2017, Plaintiff filed a Motion for Partial Summary Judgment and Immediate Access and Possession of Easements on Properties Owned by Defendants Robert and Elizabeth Cowden and Cecycle Klaphake, Trustee of the William and Cecycle Klaphake Revocable Living Trust (ECF No. 35). Subsequently, Plaintiff entered into stipulations regarding immediate access with Robert and Elizabeth Cowden (ECF No. 46) and Klaphake (ECF No. 47) and the motion for partial summary judgment was dismissed without prejudice (ECF No. 48).
Oddly, Columbia argues that Klaphake waived the argument that the parties had been unable to reach an agreement (ECF No. 62 at 8). Klaphake's answer clearly avers that the 1946 Agreement represented the "agreement" between the parties that made the resort to a condemnation action unnecessary.
On April 2, 2018, Plaintiff filed the renewed motion. On April 17, 2018, Klaphake filed a brief in opposition (ECF No. 60). On April 20, 2018, Plaintiff filed a reply brief (ECF No. 62).
Standard of Review
The Federal Rules of Civil Procedure provide that: "The court shall grant summary judgment 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). Summary judgment may be granted against a party who fails to adduce facts sufficient to establish the existence of any element essential to that party's case, and for which that party will bear the burden of proof at trial. Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). The moving party bears the initial burden of identifying evidence which demonstrates the absence of a genuine issue of material fact. Once that burden has been met, the non-moving party must set forth "specific facts showing that there is a genuine issue for trial" or the factual record will be taken as presented by the moving party and judgment will be entered as a matter of law. Matsushita Elec. Indus. Corp. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). An issue is genuine only if the evidence is such that a reasonable jury could return a verdict for the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The Court of Appeals has held that "where the movant bears the burden of proof at trial and the motion does not establish the absence of a genuine factual issue, the district court should deny summary judgment even if no opposing evidentiary matter is presented." National State Bank v. Federal Reserve Bank, 979 F.2d 1579, 1582 (3d Cir. 1992).
In following this directive, a court must take the facts in the light most favorable to the non-moving party, and must draw all reasonable inferences and resolve all doubts in that party's favor. Hugh v. Butler County Family YMCA, 418 F.3d 265, 266 (3d Cir. 2005); Doe v. County of Centre, Pa., 242 F.3d 437, 446 (3d Cir. 2001).
Columbia argues that: 1) it is entitled to partial summary judgment because it holds a certificate of public convenience and necessity, the easements are necessary for the replacement of Line 1570, it has been unable to obtain the easement by contract or negotiation with Klaphake and her objection based on the 1946 Agreement represents an improper collateral attack on the FERC Certificate; and 2) it is entitled to immediate access and possession of the easement because it is likely to succeed on the merits of its claim, it will suffer substantial harm if it cannot gain access to commence construction by May 15, 2018, the project is in the public interest and Klaphake will not suffer any substantial harm by the granting of immediate possession.
Klaphake responds that: 1) although Columbia holds a certificate of public convenience and necessity, it cannot establish the elements required by the Natural Gas Act in order to exercise a right of eminent domain with respect to the Klaphake Farm, especially the element that it "has been unable to obtain the easement by contract or negotiation," the 1946 Agreement is not a collateral attack upon the FERC certificate and Columbia failed to inform FERC of the existence of this Agreement; and 2) Columbia is not entitled to immediate access and possession.
In a reply brief, Columbia argues that: 1) all of Klaphake's arguments are based on the 1946 Agreement, but they fail because Columbia has the right to determine what is to be condemned and it has concluded that the rights condemned on the Klaphake property are necessary and that it cannot proceed under the 1946 Agreement, it has met the requirements to condemn the Klaphake property and has been unable to negotiate a contact to acquire the Klaphake interests and her objections are improper collateral attacks on the FERC Certificate; and 2) it is entitled to immediate access and possession.
Natural Gas Act Condemnation Proceedings
The Natural Gas Act provides that:
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). Courts have held that Federal Rule of Civil Procedure 71.1 (formerly designated as Rule 71A) supersedes the directive in § 717f(h) to follow state law procedures for condemnation proceedings. See Alliance Pipeline L.P. v. 4.360 Acres of Land, 746 F.3d 362, 367 (8th Cir. 2014); Northern Border Pipeline Co. v. 64.111 Acres of Land in Will County, Ill., 344 F.3d 693, 694 (7th Cir. 2003); Southern Natural Gas Co. v. Land, Cullman County, 197 F.3d 1368, 1372-73 (11th Cir. 1999).
The procedures of Rule 71.1 are as follows. First, the plaintiff files a complaint naming both the property to be condemned and the parties who have or claim an interest in the property. Fed.R.Civ.P. 71.1(c). Then the plaintiff serves notice upon the defendants. Fed.R.Civ.P. 71.1(d). The defendants then make an appearance or answer:
(1) Notice of Appearance. A defendant that has no objection or defense to the taking of its property may serve a notice of appearance designating the property in which it claims an interest. The defendant must then be given notice of all later proceedings affecting the defendant.
(2) Answer. A defendant that has an objection or defense to the taking must serve an answer within 21 days after being served with the notice. 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) state all the defendant's objections and defenses to the taking.
Fed. R. Civ. P. 71.1(e).
(3) Waiver of Other Objections and Defenses; Evidence on Compensation. 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.
Klaphake's primary objection relates to her desire to maintain what is known as a "farm" tap on the property that allows her to receive gas via a valve system connected to the existing 20-inch pipeline. Columbia contends that these "farm" tap objections are inappropriate because they are separate from the condemnation and arise from contractual obligations not implicated by this condemnation.
Columbia states that Klaphake has been receiving "free gas" (ECF No. 51 ¶ 8), but it cites no support for this statement and Klaphake indicates that she "pays Columbia for gas received via the tap, as she has done for the entirety of her 60 years at the Klaphake Farm." (ECF No. 60 at 4.) Klaphake's version, as that of the non-moving party, must be accepted with respect to this fact. In addition, at a status conference on April 6, 2018 (ECF No. 58), counsel for Columbia acknowledged that Klaphake pays for the natural gas she receives.
Further, Columbia asserts that it was contemplated by FERC and described in the FERC Certificate that Columbia would be removing 37 farm taps as part of the project to modernize this section of Line 1570. (ECF No. 54 Ex. A ¶ 10.) Accordingly, FERC considered the removal of "farm" taps and issued the FERC Certificate despite their planned removal. Columbia contends that any objection to the loss of "farm" taps therefore represents a collateral attack on the FERC Certificate, which is not permitted in this forum. Columbia notes that Klaphake will still have the opportunity to present evidence on the amount of compensation to be paid at the trial on compensation.
Most courts have held that counterclaims may not be raised in a condemnation proceeding under Rule 71.1. See, e.g., In Washington Metropolitan Area Transit Authority v. Precision Small Engines, 227 F.3d 224, 228 n. 2 (4th Cir. 2000) (counterclaim is not a permissible pleading under Rule 71.1); Constitution Pipeline Co. v. A Permanent Easement for 2.40 Acres, 2015 WL 1726223, at *1 (N.D.N.Y. Apr. 14, 2015) ("The weight of authority holds that a counterclaim may not be raised in the answer to a condemnation action under section 71.1.") (citations omitted). But see Columbia Gas Transmission, LLC v. Crawford, 267 F.R.D. 227 (N.D. Ohio 2010) (counterclaims are not "pleadings" under Rule 7(a), but claims asserted within a pleading, like an answer, which Rule 71.1(e)(2) permits). See also Equitrans, L.P. v. 0.56 Acres, 145 F. Supp. 3d 622, 634 (N.D.W. Va. 2015) ("Rule 71.1(e)(3) does not categorically bar a counterclaim as an unauthorized pleading. Rather, Rule 71.1(e) bars counterclaims because they are not objections or defenses to condemnation.")
However, Klaphake has not asserted a counterclaim. Rather, she presents the 1946 Agreement in her answer as an "objection" to the condemnation and has asserted it separately in the declaratory judgment action. She contends that, based on the 1946 Agreement and because the Natural Gas Act states that a holder of a FERC certificate can bring an action in eminent domain when it "cannot acquire by contract, or is unable to agree with the owner of the property to compensation to be paid for," Columbia should not have initiated an action in eminent domain as to her property. That is, she maintains that Columbia already has acquired the easement at issue by contract, namely by virtue of the 1946 Agreement.
Although this argument has some superficial appeal, it is ultimately unavailing for the following reasons. First, the phrase "cannot acquire by contract, or is unable to agree with the owner of property" must be read in the present tense, that is, if Columbia and Klaphake cannot reach an agreement now and they cannot. (Sulkowski Decl. ¶¶ 7-8, 15.) See Humphries v. Williams Natural Gas Co., 48 F. Supp. 2d 1276, 1280 (D. Kan. 1999) ("if efforts to strike a deal with the land owner are unsuccessful, the pipeline builder ... then proceed[s] to court to secure the property in a lawful manner.") Citing an agreement from 1946 cannot satisfy this condition because the effect of such an agreement is a matter that should be presented to FERC as part of its consideration of the issuance of a FERC certificate. Now that the certificate has been issued, Klaphake must either reach an agreement with Columbia or face a condemnation proceeding in which her rights are limited to obtaining compensation, as has happened here.
As explained below, Klaphake contends that Columbia failed to disclose the existence of the 1946 Agreement to FERC, but such a challenge must be raised to FERC and a court of appeals; it is not an appropriate matter for a district court to consider in a condemnation proceeding.
A number of courts have concluded that this provision does not require gas companies to negotiate in good faith prior to bringing condemnation proceedings. See Transcontinental Gas Pipe Line Co., LLC v. Permanent Easements for 5.67 Acres, 2017 WL 3412374, at *3 (M.D. Pa. Aug. 9, 2017); Steckman Ridge GP, LLC v. An Exclusive Natural Gas Storage Easement Beneath 11.078 Acres, 2008 WL 4346405, at * 13 n.3 (W.D. Pa. Sep. 19, 2008). Nevertheless, Columbia has indicated that it engaged in months of negotiations with Klaphake, culminating in the tendering of an August 11, 2017 final offer letter sent to Klaphake by counsel from Columbia, which Klaphake did not accept. Civ. A. No. 17-1359, ECF No. 11 Ex. A.
Second, Klaphake has presented no support for the argument that the 1946 Agreement is a proper "objection" under Rule 71.1(e)(2)(C). Rather, it represents a collateral attack upon the FERC Certificate because, if Klaphake were successful in this action (in obtaining a farm tap), the result would be inconsistent with the FERC Certificate, which indicates that Columbia will not be installing any farm taps in connection with the pipeline. (ECF No. 54 Ex. A ¶ 10.)
Moreover, the Court of Appeals has held that "a certificate of public convenience and necessity gives its holder the ability to obtain automatically the necessary right of way through eminent domain, with the only open issue being the compensation the landowner defendant will receive in return for the easement." Columbia Gas Transmission, LLC v. 1.01 Acres, 768 F.3d 300, 304 (3d Cir. 2014). Klaphake has cited no authority to support the contention that a preexisting easement agreement could constitute an "objection" to a condemnation proceeding, much less one that would impede the condemnation from being effectuated.
Klaphake argues that a holder of a FERC certificate may not condemn easements over which it already has a contractual right. However, the cases she cites do not support this contention. In Columbia Gas Transmission, LLC v. Ott, 2013 WL 28286 (E.D. Va. Jan. 2, 2013), Columbia sought a declaratory judgment regarding alleged encroachments on an easement, and the court observed that it was not seeking new rights via eminent domain. Similarly, in Columbia Gas Transmission Corp. v. Drain, 191 F.3d 552, 556 (4th Cir. 1999), Columbia sought a declaration regarding the width of an existing easement and the court noted that it could not obtain additional property outside the terms of the original easement unless it initiated a condemnation action under the Natural Gas Act and paid for the additional acreage. In this case, Columbia has brought a condemnation action and will pay for the additional acreage. Thus, neither of these cases support the argument Klaphake advances here.
Finally, Klaphake's contention that the 1946 Agreement already provides Columbia with the right to lay its pipeline cannot be reconciled with the language of the Agreement. Her argument depends upon the following propositions: 1) the 1946 Agreement gave Columbia's predecessor the right to "lay, maintain, operate, repair and remove a second line of pipe alongside of the first line as herein provided, upon the payment of a like consideration, and subject to the same conditions"; 2) those conditions include a "[t]ap to be installed on this line at point nearest the residence"; and 3) the gas company "also may change the site of its pipes." Thus, Columbia would have the right, pursuant to the 1946 Agreement, to lay a replacement line of pipe not only "alongside" the original line, but elsewhere on the Klaphake property, so long as it installed a tap on the second line as had been installed on the first line.
However, Columbia has indicated that what the 1946 Agreement actually said was that it had the right to "change the size of its pipes," that is, a right to lay a line that is different in size from the 20-inch pipeline identified in the Agreement. It did not allow the gas company to place the pipeline anywhere other than "alongside" the original and Columbia has indicated that the proposed path of the second line as authorized by FERC deviates significantly from the path of the original line and will not be "alongside" of it. (ECF No. 62 Ex. B.) See CCPS Transp., LLC v. Sloan, 2013 WL 3895314, at *6 (D. Kan. July 29, 2013) ("To hold that plaintiffs can build a pipeline in any place and direction on the land would essentially read the words 'alongside of said first pipe line' out of the contract.") Thus, Klaphake has not demonstrated that the 1946 Agreement authorized Columbia to lay the pipeline it proposes to install on the Klaphake property and Columbia is properly proceeding with a Natural Gas Act condemnation action in this case.
Klaphake has not responded to this statement. This Court's own scrutiny of the word in question supports the conclusion that it is in fact "size" and not "site."
Collateral Attacks on the FERC Certificate
Klaphake notes that federal regulations required Columbia to submit, in connection with its application to abandon facilities or services under Section 7(b) of the Natural Gas Act:
Exhibit U—Contracts and other agreements. A conformed copy of each contract or other agreement pertaining directly or indirectly to the abandonment of facilities or service, including all agreements which influenced applicant to seek the abandonment and all agreements which are dependent upon the approval of the proposed abandonment.18 C.F.R. § 157.18(b). Klaphake indicates that, despite this requirement, Columbia failed to file copies of any affected agreements, including the 1946 Agreement, in connection with its application. See ECF No. 60 Ex. D at 15 (stating that Exhibit U was "Omitted. Columbia has not entered into any agreements that will have an effect on the proposed abandonment.") Columbia also informed FERC that: "Other than by specific agreements to the contrary with affected landowners, Columbia will retain its existing easements on property where existing pipeline is being proposed for abandonment." (Id. at 6.) Thus, Klaphake argues that it would have been impossible for her or FERC to realize that Columbia would seek to extinguish her right to a farm tap pursuant to the 1946 Agreement.
Klaphake notes that the FERC Certificate requires Columbia to file weekly updated status reports to provide the agency with "a description of any landowner/resident complaints which may relate to compliance with the requirements of this Order, and the measures taken to satisfy their concerns..." (ECF No. 60 Ex. E at 17, App. B ¶ 7(f).) Klaphake argues that, despite this requirement, Columbia did not inform FERC of the declaratory judgment action that she had filed in the Court of Common Pleas of Washington County.
Courts have held that collateral attacks on FERC certificates are not permissible. See Steckman Ridge, 2008 WL 4346405, at *4 (citing Williams Natural Gas Co. v. City of Oklahoma City, 890 F.2d 255, 264 (10th Cir. 1989)). The Natural Gas Act specifically sets forth the procedure for challenging a FERC certificate: first, a party should file a motion for rehearing with FERC within 30 days of the order, followed by appeal to a court of appeals within 60 days of FERC's decision on rehearing. 15 U.S.C. § 717r(a)(b). Courts have therefore held that they lack jurisdiction to consider statutory challenges to a FERC certificate that were not raised in this manner. Alliance Pipeline, L.P. v. 4.360 Acres of Land, 746 F.3d 362, 365 (8th Cir. 2014) (rejecting challenges based on 18 C.F.R. § 157.6(d) and North Dakota law); Williams Natural Gas Co., 890 F.2d at 261. See also Columbia Gas Transmission, LLC v. Temporary Easements for the Abandonment of a Natural Gas Transmission Pipeline, 2017 WL 1284943, at *3 (W.D. Pa. Apr. 5, 2017).
Thus, this Court cannot consider Klaphake's contention, pursuant to 18 C.F.R. § 157.18(b), that Columbia failed to notify FERC of the existence of the 1946 Agreement or that it improperly obtained a FERC Certificate by so doing. Nor can Klaphake raise Columbia's failure to notify FERC of the existence of Klaphake's declaratory judgment lawsuit, a continuing obligation of the FERC Certificate that she alleges Columbia has breached. See Columbia Gas Transmission, LLC v. Temporary Easements for Abandonment of a Natural Gas Transmission Pipeline, 2017 WL 1284943, *4 (W.D. Pa. Apr. 5, 2017) ("when a landowner contends that the certificate holder is not in compliance with the FERC certificate, that challenge must be made to FERC, not the court.")
As noted above, Columbia has proffered evidence that the 1946 Agreement did not relate to the abandonment of the easement Columbia seeks over the Klaphake property because it only allowed Columbia to place a second line "alongside" of the first line and Columbia intends to install a line that deviates significantly from the path of the first line. Thus, it is possible that Columbia may not have been under a requirement to submit the 1946 Agreement to FERC.
Columbia has demonstrated that it has a properly issued FERC Certificate, that is has been unable to reach agreement with Klaphake as to the easement for the new pipeline or compensation therefor and the Klaphake's references to the 1946 Agreement represent improper collateral attacks on the FERC Certificate. Therefore, Columbia's motion for partial summary judgment should be granted.
Immediate Access
A motion for immediate access and possession in a Natural Gas Act case is treated as a motion for a preliminary injunction. However:
This is not a "normal" preliminary injunction, where the merits will await another day. In those situations, the probability of success is not a certainty such that weighing the other factors is paramount. Here, there is no remaining merits issue; we have ruled that Columbia has the right to the easements by eminent domain. The only issue is the amount of just compensation—which will definitely be determined on remand, but the result of which can have no affect [sic] on Columbia's rights to the easement.Columbia Gas Transmission v. 1.01 Acres, 768 F.3d at 315. Further, all three Pennsylvania district courts within the Third Circuit have held that the grant of a preliminary injunction is appropriate when a FERC certificate holder has established the substantive right to condemn a property, subject to a future determination of just compensation. Constitution Pipeline Company, LLC v. A Permanent Easement for 1.92 Acres, 2015 WL 1219524 at *4 (M.D. Pa. Mar. 17, 2015); Steckman Ridge, 2008 WL 4346405, at *18; Columbia Gas Transmission Corp. v. An Easement, 2006 WL 401850, at *3 (E.D. Pa. Feb. 16, 2006).
As Judge Gibson stated in a previous condemnation case relating to Line 1570:
To condemn the easements at issue, Columbia must demonstrate (1) it holds a FERC certificate of public convenience and necessity; (2) the rights-of-way to be condemned are necessary for the construction, operation, and maintenance of the pipeline; and (3) it has been unable to acquire the proposed rights-of-way from the landowner.Columbia Gas Transmission, LLC v. An Easement to Construct, Operate and Maintain a 20-Inch Gas Transmission Pipeline, 2017 WL 544596, at *3 (W.D. Pa. Feb. 9, 2017). Similarly, Columbia has established these elements here and has thus demonstrated a likelihood of success on the merits.
In addressing the other factors, Columbia contends that: it will suffer serious harm if it cannot begin work on the pipeline by May 15, 2018 in order to complete the work in time for the 2018-2019 heating season; the harm to Klaphake is minor because she retains the right to be compensated for the land condemnation; and replacement of the pipeline is in the public interest. Klaphake responds that: Columbia cannot complain of substantial harm because it could have obtained immediate access at any time by complying with the terms of the 1946 Agreement; she should have the opportunity to pursue the declaratory judgment case and take discovery in this case in order to respond to Columbia's arguments; and Columbia cannot contend that a delay in installing the pipeline will harm the public interest because it has delayed this matter for years.
As noted above, many courts have held that the grant of a preliminary injunction is appropriate when a FERC certificate holder has established the substantive right to condemn a property, subject to a future determination of just compensation. Klaphake has not responded to this caselaw. Moreover, Klaphake has not substantively responded to Columbia's arguments for immediate access and possession. She cannot dispute Columbia's statement that the public interest will be served by the installation of the new pipeline and will be negatively affected by delays in the process, that Columbia has established a likelihood of success on the merits or that the harm to her interests is minimal because she retains the right to seek compensation for the condemnation.
In addition, the Court has noted that the FERC Certificate explicitly stated that:
Columbia acknowledges that is proposal will affect some local consumers currently receiving gas through the existing Line 1570, specifically, customers of
Columbia Gas of Pennsylvania who currently receive gas via the mainline "farm" taps that are presently attached to the segments of Line 1570 proposed for abandonment. Columbia states that it will compensate these landowners such that they may transition to an alternative source of energy (e.g., propane) or reconnect service to another natural gas pipeline.(ECF No. 54 Ex. A ¶ 11; see also id. ¶ 18.) In its reply brief, Columbia further explains that it will provide bottled natural gas to Klaphake and other property owners who will be affected by an outage on May 25, 2018 when service on the existing line is interrupted during construction of the new pipeline. Columbia states that it will continue to provide bottled natural gas to the Klaphake property until a more permanent solution, consistent with the terms of the FERC Certificate, can be effected. (Franks Decl. ¶¶ 5-9.) Thus, Columbia has demonstrated that it is working to minimize the adverse effects of its construction on Klaphake.
ECF No. 62 Ex. A.
Columbia has demonstrated that it is entitled to immediate access and possession of the Klaphake property. Therefore, its motion should be granted.
For these reasons, it is recommended that the Renewed Motion for Partial Summary Judgment and Immediate Access and Possession of Easements on Property Owned by Cecycle Klaphake, Trustee of the William Klaphake and Cecyle Klaphake Revocable Living Trust, filed on behalf of the Plaintiff (ECF No. 51), be granted.
It is further recommended that, pursuant to Federal Rule of Civil Procedure 65(c), Columbia post a bond in the amount of $75,001.
In Civ. A. No. 17-1359, Judge Bissoon concluded that Columbia had demonstrated that Klaphake valued her rights in excess of $75,000. (ECF No. 14 at 5.) --------
Litigants who seek to challenge this Report and Recommendation must seek review by the district judge by filing objections by May 2, 2018. Any party opposing the objections shall file a response by May 9, 2018. Failure to file timely objections will waive the right of appeal.
Respectfully submitted,
s/Robert C. Mitchell
ROBERT C. MITCHELL
United States Magistrate Judge Dated: April 25, 2018