Transcon. Gas Pipe Line Co. v. Permanent Easements for 2.14 Acres & Temp. Easements for 3.59 Acres in Conestoga Twp. ( 2018 )

PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
________________
Nos. 17-3075, 17-3076, 17-3115 & 17-3116
TRANSCONTINENTAL GAS PIPE LINE COMPANY,
LLC
v.
PERMANENT EASEMENTS FOR 2.14 ACRES
AND TEMPORARY EASEMENTS
FOR 3.59 ACRES IN CONESTOGA TOWNSHIP,
LANCASTER COUNTY, PENNSYLVANIA, TAX
PARCEL NUMBER 1201606900000; HILLTOP HOLLOW
LIMITED PARTNERSHIP; HILLTOP HOLLOW
PARTNERSHIP LLC GENERAL PARTNER OF HILLTOP
HOLLOW LIMITED PARTNERSHIP; LANCASTER
FARMLAND TRUST; ALL UNKNOWN OWNERS
Hilltop Hollow Limited Partnership and
Hilltop Hollow Partnership, LLC,
Appellants in 17-3075
TRANSCONTINENTAL GAS PIPELINE COMPANY, LLC
v.
PERMANENT EASEMENT FOR 2.02 ACRES AND
TEMPORARY EASEMENTS FOR 2.76 ACRES IN
MANOR TOWNSHIP, LANCASTER COUNTY
PENNSYLVANIA, TAX PARCEL NUMBER
4100300500000, 3049 SAFE HARBOR ROAD,
MANOR TOWNSHIP, LANCASTER, PA; STEPHEN D.
HOFFMAN; AND ALL UNKNOWN OWNERS
Stephen D. Hoffman,
Appellant in 17-3076
TRANSCONTINENTAL GAS PIPELINE COMPANY, LLC
v.
PERMANENT EASEMENT FOR 1.33 ACRES AND
TEMPORARY EASEMENTS FOR 2.28 ACRES
CONESTOGA TOWNSHIP, LANCASTER
COUNTY, PENNSYLVANIA TAX PARCEL NUMBER
1202476100000, 4160 MAIN STREET CONESTOGA, PA
17516; LYNDA LIKE, also known as Linda Like,
AND ALL UNKNOWN DEFENDANTS
Lynda Like,
Appellant in 17-3115
2
TRANSCONTINENTAL GAS PIPELINE COMPANY, LLC
v.
PERMANENT EASEMENT FOR 0.94 ACRES AND
TEMPORARY EASEMENTS FOR 1.61 ACRES IN
CONESTOGA TOWNSHIP, LANCASTER COUNTY,
PENNSYLVANIA, TAX PARCEL NUMBER
1203589400000, SICKMAN MILL ROAD; BLAIR B.
MOHN; MEGAN E. MOHN, AND ALL UNKNOWN
OWNERS
Blair B. Mohn and Megan E. Mohn,
Appellants in 17-3116
On Appeal from the United States District Court
for the Eastern District of Pennsylvania
(D. C. Civil Actions Nos. 17-cv-00715, 17-cv-00723,
17-cv-00720, 17-cv-00722)
District Judge: Honorable Jeffery L. Schmehl
________________
Submitted under Third Circuit LAR 34.1(a)
on October 2, 2018
Before: SHWARTZ, ROTH and FISHER, Circuit Judges
(Opinion filed: October 30, 2018)
3
Siobhan K. Cole
White & Williams
1650 Market Street
One Liberty Place, Suite 1800
Philadelphia, PA 19103
Jeremy P. Hopkins
Cranfill Summer & Hartzog
5420 Wade Park Boulevard
Suite 300
Raleigh, NC 27607
Michael N. Onufrak
White & Williams
1650 Market Street
Suite 1800
Philadelphia, PA 19103
Carolyn Elefant
Law Offices of Carolyn Elefant
8th Floor
1440 G Street N.W.
Washington, DC 20005
Mark L. Freed
Curtin & Heefner
2005 South Easton Road
Suite 100
Doylestown, PA 18901
Counsel for Appellants
4
Patrick F. Nugent
Sean T. O’Neill
Saul Ewing Arnstein & Lehr
1500 Market Street
Centre Square West, 38th Floor
Philadelphia, PA 19102
Elizabeth U. Witmer
Saul Ewing Arnstein & Lehr
1200 Liberty Ridge Drive
Suite 200
Wayne, PA 19087
Counsel for Appellees
________________
OPINION
________________
ROTH, Circuit Judge
Congress may grant eminent domain power to private
companies acting in the public interest. This appeal requires
us to determine the limits on Congress’s grant of eminent
domain power to private companies building gas lines under
the Natural Gas Act (NGA), 15 U.S.C. § 717f(h).
The NGA gives natural gas companies the power to
acquire property by eminent domain, but it provides only for
standard eminent domain power, not the type of eminent
5
domain called “quick take” that permits immediate
possession. 1 The District Court granted a preliminary
injunction to Transcontinental Gas Pipe Line Company,
which effectively gave the company immediate possession of
certain rights of way owned by appellant landowners. The
landowners claim that granting immediate possession violated
the constitutional principle of separation of powers because
the taking of property by eminent domain is a legislative
power and the NGA did not grant “quick take.” We disagree
and hold that the District Court’s order did not violate the
principle of separation of powers because Transcontinental
properly sought and obtained the substantive right to the
property before seeking equitable relief. We will therefore
affirm.
I
Transcontinental is building a natural gas pipeline that
runs through Pennsylvania, Maryland, Virginia, North
Carolina, and South Carolina. For this project, named
“Atlantic Sunrise Expansion Project,” Transcontinental
needed certain rights of way, including those owned by
appellants Hilltop Hollow Limited Partnership, Stephen
Hoffman, Lynda Like, and Blair and Megan Mohn
(collectively “Landowners”). Under § 717f(h) of the NGA,
gas companies may acquire property by eminent domain if
they meet three requirements. A gas company must
demonstrate, first, that it holds a certificate of public
convenience and necessity from the Federal Energy
Regulatory Commission (FERC); second, that it was unable
to acquire the right of way through negotiation with the
1
For a further description of “quick take” see Section III.A
infra.
6
landowner; and third, that the amount claimed by the owner
of the property exceeds $3,000. If these conditions are met,
the gas company may “acquire the [necessary right-of-way]
by the exercise of the right of eminent domain in the district
court.” 2
Transcontinental has met all three requirements of §
717f(h). The administrative review leading up to the
certificate of public convenience and necessity lasted almost
three years and, as is evident from the record, included
extensive outreach and many avenues of public participation.
The process started when FERC granted the company’s
request to use the pre-filing process on April 4, 2014. 3 On
July 29, 2014, FERC issued a Notice of Intent to Prepare an
Environmental Impact Statement (EIS) for the Planned
Atlantic Sunrise Expansion Project, Request for Comments
on Environmental Issues, and Notice of Public Scoping
Meetings (NOI). 4 The NOI was then mailed to 2500
interested parties. It invited comment on the project’s
environmental issues from all levels of government, interest
groups, Native American tribes, affected property owners,
local media and libraries, and other interested parties. The
Commission heard from 93 speakers and received over 600
written comments. 5 On March 31, 2015, the company filed
its application to construct and operate the Atlantic Sunrise
project. 6 FERC mailed letters to potentially affected
landowners (as well as to government officials and other
2
§ 717f(h).
3
A1424.
4
A1424; 79 Fed. Reg. 44,023 (2014).
5
A1424.
6
A1425.
7
stakeholders) on October 22, 2015. 7 FERC issued the draft
EIS on May 5, 2016, and published it on May 12, 2016. 8 At
four public meetings in June 2016, FERC heard from 203
speakers and received over 560 written comments and 900
identical letters on the draft EIS. 9 Two alternative pipeline
routes were identified following the draft EIS, and additional
notices were mailed to potentially affected stakeholders, in
response to which FERC received 25 additional comment
letters. 10 FERC issued the final EIS on December 30, 2016,
and published it on January 9, 2017. 11
The Commission issued a certificate of public
convenience and necessity to Transcontinental—the first
requirement of § 717f(h) of the NGA—on February 3,
2017. 12 It found “[b]ased on the benefits” of the pipeline,
“the minimal adverse effects on landowners or surrounding
communities,” and “the absence of adverse effects on existing
customers and other pipelines and their captive customers, . . .
that the public convenience and necessity require[d]
approval” of the project “subject to the conditions” set out in
the Order Issuing Certificate. 13 Those conditions included
requirements that Transcontinental, inter alia, construct the
pipeline and make it available for service within three years
of the date of the order, 14 comply with certain environmental
7
A1425.
8
81 Fed. Reg. 29,557 (2016).
9
A1425.
10
A1426.
11
A1426; 82 Fed. Reg. 2,344 (2017).
12
A1396.
13
A1410.
14
See 18 C.F.R. § 157.20(b), A1466.
8
conditions, and follow certain rate schedules. 15 FERC also
required that Transcontinental execute firm contracts for
volumes and service terms “equivalent to those in its
precedent agreements” before construction. 16 The Order
Issuing Certificate contained information on those binding
precedent agreements, comprising 100% of the capacity
generated by the project, with nine shippers. 17 The
Landowners sought rehearing and included a request to stay
the Order Issuing Certificate and construction of the project, 18
15
A1466-67.
16
A1467.
17
A1400-01, A1407-10. FERC noted that while “a number
of the project shippers are producers,” its “policy does not
require that shippers be end-use consumers of natural gas. . . .
[A] project driven primarily by marketers and producers does
not render it speculative. Marketers or producers who
subscribe to firm capacity on a proposed project on a long-
term basis presumably have made a positive assessment of the
potential for selling gas to end-use consumers in a given
market and have made a business decision to subscribe to the
capacity on the basis of that assessment.” A1408.
18
Request for Rehearing and Motion for Stay of Certain
Landowners (Mar. 6, 2017), Accession No. 20170306-5123;
Petition for Rehearing of Lynda Like of Order Issuing
Certificate for the Atlantic Sunrise Project and Request for
Stay of Certificate (Mar. 6, 2017), Accession No. 20170306-
5204; Petition for Rehearing of Follin Smith and Blair and
Megan Mohn of Order Issuing Certificate for the Atlantic
Sunrise Project and Request for Stay of Certificate (Mar. 6,
2017), Accession No. 20170306-5202.
9
but FERC tolled the rehearing request on March 13, 2017, 19
denied the stay requests on August 31, 2017, 20 and finally
denied the rehearing request on December 6, 2017. 21
The second and third requirements for using the
eminent domain powers under § 717f(h) of the NGA are that
the gas company negotiate with the landowner for the
necessary right of way and that value of the right of way
exceeds $3000. Transcontinental extended written offers of
compensation exceeding $3000 to each of the Landowners,
but these offers were not accepted. 22 Transcontinental thus
satisfied the second and third requirements. The company
filed condemnation complaints pursuant to Rule 71.1 in four
19
The tolling order noted that if FERC had not responded to
the rehearing requests within 30 days, the requests would be
considered denied under 18 C.F.R. § 385.713 (2016);
therefore, FERC tolled the request “[i]n order to afford
additional time for consideration of the matters.” A669.
20
Order Denying Stay, Transcontinental Gas Pipe Line Co.,
LLC, 160 FERC ¶ 61,042 (Aug. 31, 2017), Accession No.
20170831-3088.
21
Order on Rehearing, Transcontinental Gas Pipe Line Co.,
LLC, 161 FERC ¶ 61,250 (Dec. 6, 2017), Accession No.
20171206-3073.
22
Transcontinental submitted a declaration in its summary
judgment briefing from Aaron Blair, a “Senior Land
Representative” for Transcontinental’s parent company,
Williams Partners, L.P., establishing that it had made these
offers, and there was also testimony to that effect at the
preliminary injunction hearing. A609 (Blair Declaration);
A1049 (Blair testimony).
10
separate actions against the Landowners on February 15,
2017. 23
Having met the three requirements of § 717f(h),
Transcontinental moved for partial summary judgment on
February 20, 2017, in the Hilltop, Hoffman, and Mohn
condemnation actions and on February 22, 2017, in the Like
condemnation action. 24 Transcontinental also requested an
injunction giving immediate access for the purpose of
conducting a survey in the Hilltop and Hoffman actions and
claimed immediate entitlement based on the existence of the
FERC order. 25 On April 6, 2017, the District Court denied
the motion for an injunction under the NGA because it had
not yet determined the merits of Transcontinental’s
condemnation action, though it granted Transcontinental
limited survey access pursuant to Pennsylvania state law. 26
The court held that it would have been premature to grant
such an injunction at that time given that the Landowners in
related cases had not yet finished briefing the summary
judgment motions. 27 The court noted that if Transcontinental
later established its right to condemn, the court would be able
to use its equitable power to award preliminary injunctive
relief. 28
After briefing on the summary judgment motions
concluded, Transcontinental filed an omnibus motion for
23
A130, A1537, A1709, A1832.
24
A130, A1538, A1833, A1709.
25
A679.
26
A679, A680.
27
A680.
28
A679.
11
preliminary injunction on June 28, 2017. 29 The Landowners
responded on July 14, 2017. 30 On June 30, 2017, the District
Court scheduled oral argument on the motions for July 17 and
20, 2017. At oral argument, a witness for Transcontinental
testified that construction was planned to begin in the fall of
2017 and that it would need access to the rights of way by
August 18, 31 or else it would suffer various harms. 32 The
Landowners cross-examined Transcontinental’s witness, 33
and all four Landowners testified. 34 The Landowners’
testimony included statements that they had all participated in
the FERC administrative process. 35 Counsel for Landowners
presented argument that the taking constituted a “quick take”
and that it violated separation of powers principles. 36
On August 23, 2017, the District Court granted
Transcontinental’s motions for partial summary judgment and
omnibus motion for a preliminary injunction. 37 The court
found no dispute that Transcontinental met the three
requirements for seeking eminent domain under the NGA and
held that the company was therefore entitled to the entry of
29
A685.
30
A135, A1541, A1712, A1835.
31
A953-54, A957.
32
A957-961.
33
A963.
34
A1068, A1110, A1152, A1184.
35
A1108 (Hilltop), A1124-25 (Hoffman), A1158-59 (Mohn),
A1191 (Like).
36
A1202-10, A1214-16.
37
A35; A20-28, A75-82, A97-103, A114-21; A18-19, A73-
74, A95-96, A112-13.
12
partial summary judgment. 38 The court addressed the
Hilltop/Hoffman Landowners’ due process claims and ruled
that they were essentially attacks on the FERC certificate, and
were therefore outside the court’s jurisdiction. 39 The court
added that, even if it were to exercise jurisdiction, it would
find that the Hilltop/Hoffman Landowners had received
“adequate due process” because they had participated in oral
argument, had filed a request for rehearing with FERC, and
had filed an appeal in the D.C. Circuit Court of Appeals. 40
The Hilltop/Hoffman Landowners had also argued that
FERC’s tolling order deprived them of due process because it
indefinitely extended FERC’s time limit to rule on their
Motion for Rehearing and Stay. The court rejected this
argument on the grounds that mere delay in the adjudication
of a claim does not amount to a deprivation. 41 The court then
addressed the Like/Mohn Landowners’ claim that because the
FERC certificate was conditioned on certain requirements,
some of which had not yet been met, the certificate could not
be used to exercise eminent domain. As the NGA does not
require FERC certificate holders to satisfy all the certificate’s
conditions before exercising eminent domain, and because the
certificate itself contained no such requirement, the District
Court rejected this argument. 42
On the basis of this review, the court held that
Transcontinental had met the four factor test for a preliminary
injunction. Under that test, the movant must demonstrate: 1)
38
A41-42.
39
A42.
40
A44.
41
A46-47.
42
A48-49.
13
that there is reasonable probability of success on the merits,
2) that there will be irreparable harm to the movant in the
absence of relief, 3) that granting the injunction will not result
in greater harm to the nonmoving party, and 4) that the public
interest favors granting the injunction. 43 The first two factors
are the “most critical.” 44 On the first prong, it found that
“Transco[ntinental] ha[d] already succeeded on the merits.” 45
The court quoted our decision in Columbia Gas
Transmission, LLC v. 1.01 Acres. In that case, we affirmed
the grant of partial summary judgment in an action for
condemnation and the grant of a preliminary injunction,
noting that there was “no remaining merits issue” because the
District Court had already ruled that the gas company had the
right to the easements by eminent domain. 46
On the second prong, the District Court found that
Transcontinental would suffer irreparable harm in the form of
construction delays, inability to complete surveys required to
satisfy environmental conditions, risk of non-compliance with
shipper contracts, and monetary harm. 47
43
Reilly v. City of Harrisburg, 858 F.3d 173, 176 (3d Cir.
2017).
44
Id. at 179. If the first two “gateway” factors are met, the
court “then considers the remaining two factors and
determines in its sound discretion if all four factors, taken
together, balance in favor of granting the requested
preliminary relief.” Id.
45
A51.
46
768 F.3d 300, 315 (3d Cir. 2014).
47
A53-54. The project is at an advanced stage. FERC has
issued a series of Notices to Proceed on the construction of
14
On the third prong, the District Court noted again that
Transcontinental already had the substantive right to
possession and the only question was “the timing of the
possession.” 48 If the permits to build certain pipeline sections
on the Landowners’ property were eventually denied, the
Landowners would have legal recourse to recover their
property. 49
Finally, on the public interest prong, the District Court
noted the project’s potential to provide the general public
“throughout a vast area of the country” with access to natural
gas, and found that “the mere fact that [certain subscribers]
will have access to export facilities does not mean that they
will in fact export the natural gas out of the country.” 50 The
District Court noted also that FERC had found the project to
be in the public interest, which further tipped this factor in
favor of Transcontinental. 51
The Landowners appealed.
the project, and Transcontinental states in its brief that only
23% of the construction remains to be completed.
48
A54.
49
A55.
50
The Hilltop/Hoffman Landowners point out that the project
is designed to generate 1,700,002 dekatherms per day, and
they argue that of this amount, 850,000 dekatherms, which is
just barely under 50%, will go to one shipper, Cabot Oil &
Gas, which plans to export this entire amount.
51
A56-57.
15
II
As the grant of partial summary judgment did not end
the litigation as to all claims and all parties, only the grant of
the preliminary injunction is before us. 52 We have
jurisdiction over the appeal of the injunction under 28 U.S.C.
§ 1292(a). The Landowners, however, do not bring a
standard appeal of a preliminary injunction, reviewable for
abuse of discretion. The Landowners contest only the
constitutionality of the lower court’s procedure, not the
application of the four-factor preliminary injunction test. 53
Therefore, we review their claims de novo. 54
III
The Landowners ask us to hold that the procedure
followed by the District Court—grant of partial summary
judgment, awarding possession of the rights-of-way, followed
by equitable relief in the form of preliminary injunction—is
unconstitutional. The Landowners argue that such a
procedure is an unconstitutional grant of “quick take”
eminent domain power, the type of eminent domain that
allows for immediate possession. Congress granted “quick
take” eminent domain power to government actors in the
Declaration of Taking Act (DTA), 55 but the NGA neither
contains nor incorporates such a provision. The Landowners
argue that since Congress did not grant natural gas companies
52
Andrews v. United States, 373 U.S. 334, 340 (1963).
53
A56.
54
Free Speech Coalition, Inc. v. Attorney General, 825 F.3d
149, 159 (3d Cir. 2016).
55
40 U.S.C. § 3114.
16
“quick-take” eminent domain power in the NGA, the court
cannot, in effect, grant such powers on its own; doing so
usurps the legislature’s authority. The question before us
then is whether Congress, in passing the NGA, intended to
remove the judiciary’s access to equitable remedies to enforce
an established substantive right. Put another way, did
Congress intend to forbid immediate access to the necessary
rights of way when it granted only standard condemnation
powers to natural gas companies?
A
We begin with the Landowners’ premise: that the
District Court effected a “quick-take.” As an initial matter,
eminent domain is a legislative power, but Congress can
delegate it to other governmental actors 56 or to private actors
“execut[ing] works in which the public is interested.” 57
56
E.g., 33 U.S.C. § 594 (providing the Secretary of the Army
the authority to acquire land, through eminent domain
proceedings, “needed for a work of river and harbor
improvements duly authorized by Congress”).
57
Mississippi & Rum River Boom Co. v. Patterson, 98 U.S.
403, 406 (1878); see also First English Evangelical Lutheran
Church of Glendale v. Los Angeles County, Cal., 482 U.S.
304, 321 (1987) (“[T]he decision to exercise the power of
eminent domain is a legislative function.”); Monongahela
Nav. Co. v. United States, 148 U.S. 312, 321 (1893). The
Landowners acknowledge the existence of judicial takings,
citing Stop the Beach Renourishment, Inc. v. Florida Dep’t
Enviro. Protection, 560 U.S. 702, 713-14 (2010)), but
maintain that only Congress can grant eminent domain
powers. See Secombe v. Milwaukee & St. P.R. Co., 90 U.S.
17
Congress generally does this by delegating the power of
eminent domain. There are two primary types of eminent
domain at the government’s disposal. One is “quick take,”
permitted by the DTA, 40 U.S.C. § 3114, in which the
government files a “declaration of taking” that states the
authority for the taking, the public use, and an estimate of
compensation. Upon depositing the estimated compensation,
title vests automatically with the United States. The other is
standard condemnation, permitted by 40 U.S.C. § 3113, in
which title passes and the right to possession vests after a
final judgment and determination of just compensation. The
procedures for standard condemnations are set forth in Fed.
R. Civ. P. 71.1. The NGA is an example of a grant of
eminent domain power from Congress to a private actor to
condemn land for public use, but it only embodies the second
type—standard condemnation power, not “quick take.” 58
In the case before us, Transcontinental followed
standard condemnation procedure. The company filed
condemnation complaints under Rule 71.1, not a declaration
of taking. Rule 71.1 has requirements that go beyond the
DTA. 59 Transcontinental followed these procedures by filing
108, 117-18 (1874) (“[T]he mode of exercising the right of
eminent domain, in the absence of any provision in the
organic law prescribing a contrary course, is within the
discretion of the legislature.”).
58
East Tennessee Natural Gas Co. v. Sage, 361 F.3d 808,
820-21 (4th Cir. 2004) (citing Mississippi & Rum River Boom
Co. v. Patterson, 98 U.S. at 406).
59
E.g., a condemnation complaint that explains the authority
for the taking, the uses for the property, a description
sufficient to identify the property, the interests to be acquired,
18
condemnation complaints under Rule 71.1; it then established
its substantive right to the property by filing for summary
judgment. Only after the District Court granted summary
judgment in Transcontinental’s favor did it grant injunctive
relief. Transcontinental also posted bond at three times the
appraised value of the rights of way, as required by the orders
of condemnation. 60 If Transcontinental had in fact exercised
and each owner; notice and personal or publication service;
and procedures for the determination and payment of just
compensation.
60
See A22, A99, A116, A77. We note that the Landowners
have not received any of this money. Rule 71.1(c)(4) allows
the court to “order any distribution of a deposit that the facts
warrant.” At least one court has interpreted this provision to
apply only after the final determination of just compensation.
UGI Sunbury LLC v. A Permanent Easement for 71.7575
Acres, 16-cv-788, 2016 WL 7239945, at *2 n.14 (M.D. Pa.
Dec. 15, 2016). In UGI Sunbury, the court interpreted an
Advisory Committee note on this section, which states that
the sentence “enables the court to expedite the distribution of
a deposit, in whole or in part, as soon as pertinent facts of
ownership, value and the like are established,” to mean that
distribution can only occur after just compensation is
determined. Such a reading conflicts with subsection (j)(2),
which provides that “[i]f the compensation finally awarded to
a defendant exceeds the amount distributed to that
defendant,” the court must recoup the deficiency from the
plaintiff, and the reverse is true if the final amount awarded is
less than the amount distributed. Such a scheme would be
unnecessary if deposits never occurred before final
determination of just compensation. In sum, while it does not
seem to be common practice to distribute compensation upon
19
“quick take,” it would have simply filed a declaration of
taking with an estimate of compensation; title would have
vested automatically. Here, unlike in a “quick take” action,
Transcontinental does not yet have title but will receive it
once final compensation is determined and paid. 61 Unlike in
a “quick take” action, the Landowners had the opportunity to
brief the summary judgment motions and participate in the
preliminary injunction hearing. The different procedures and
opportunities for participation distinguish the grant of the
injunction here from an exercise of “quick take” power.
B
The Landowners contend, nevertheless, that even if the
procedure below was not technically an exercise of “quick
take” eminent domain, the use of a preliminary injunction
amounted to a “quick take.” However, the technical
distinctions they seek to elide are, in the end, meaningful
distinctions in the law. According to the Landowners, there is
a difference between the substantive right to access that arises
under the NGA, and the substantive right to immediate
access, which only Congress can authorize. The Like/Mohn
Landowners argue that granting injunctive relief for
immediate possession is in itself a substantive right of
eminent domain that a court cannot confer in the absence of
Congressional authorization. There is, however, no case law
to support the proposition that an injunctive right of
immediate possession is a substantive right, conferrable only
by Congress. The fact that “quick take” power exists does
posting of the bonds, in cases presenting hardship to
landowners, the court’s hands may not be tied.
61
Danforth v. United States, 308 U.S. 271, 284-85 (1939).
20
not prohibit other kinds of immediate access. The only
substantive right at issue is the right to condemn using
eminent domain, conferred by Congress in the NGA. The
District Court found that Transcontinental had obtained that
right. 62 The preliminary injunction merely hastened the
enforcement of the substantive right—it did not create any
new rights. 63
The Like/Mohn Landowners portray Transcontinental
as a customer who pays for 90% of an item and then takes it
home, but Transcontinental did not have 90% of a right to the
rights of way—it had the whole right. The Hilltop/Hoffman
Landowners argue that the fact that title to the property had
not yet been transferred is immaterial; it is the grant of the
preliminary injunction that is the essence of the “quick take”
power. To the contrary, we conclude that the equitable means
by which Transcontinental’s possession vested through the
preliminary injunction differed in significant ways from
“quick take” under the DTA. We decline the invitation to
conflate the two processes. These are not trivial differences
of procedure or paperwork.
62
See Seymour v. Freer, 75 U.S. 202, 213-14 (1868)
(property rights “distinct from the legal ownership . . .
constitute an equity which a court of equity will protect and
enforce whenever its aid for that purpose is properly
invoked”).
63
De Beers Consol. Mines, Ltd. v. United States, 325 U.S.
212, 220 (1945) (issuing preliminary injunction
“appropriate to grant intermediate relief of the same character
as that which may be granted finally”).
21
The cases relied on by the Landowners are easily
distinguishable as they involve gas companies that failed to
obtain the crucial substantive right to condemn before seeking
a preliminary injunction. In one, Transwestern Pipeline Co.
v. 17.19 Acres of Property Located in Maricopa County, 64 the
Ninth Circuit held that a preliminary injunction was not
appropriate because the company did not obtain an order of
condemnation. While the gas company argued that it was
guaranteed success on the merits due to its FERC certificate
and the fact that it met the § 717f(h) factors, at the time it
sought equitable relief it had no right to condemn. 65 The
Ninth Circuit explicitly endorsed the procedure of first
obtaining an order of condemnation (as Transcontinental did
here through partial summary judgment) followed by a
request for preliminary injunction. 66
The Seventh Circuit’s Northern Border decision is
similar. 67 There, the gas company moved for immediate
possession before the district court issued a decision on the
merits of its eminent domain proceeding. Since the company
had only the FERC certificate, the court denied its request:
“A preliminary injunction may issue only when the moving
party has a substantive entitlement to the relief sought. . . .
[The company has] an entitlement that will arise at the
conclusion of the normal eminent domain process” but not the
right of immediate access. 68 The Landowners place much
64
550 F.3d 770 (9th Cir. 2008).
65
Id. at 773, 777.
66
Id. at 777.
67
Northern Border Pipeline Co. v. 86.72 Acres of Land, 144
F.3d 469 (7th Cir. 1998).
68
144 F.3d at 471.
22
emphasis on the recognition in Northern Border that the NGA
does not incorporate “quick take” authority under state law or
under the DTA and on the statement in Northern Border that
the NGA “does not create an entitlement to immediate
possession of the land.” 69 Both those statements are true: the
NGA does not incorporate “quick take” authority and does
not on its own create an entitlement to immediate possession.
But Northern Border is clearly distinguishable because of the
gas company’s failure to “obtain an order determining that it
had the right to condemn before it sought a preliminary
injunction .... Without having that right in substantive law
determined, the company could not invoke equity.” 70
The Landowners also suggest that due process, the
Fifth Amendment, or some combination of the two require
payment of just compensation before a condemnor can take
possession. Such an argument directly contradicts established
law that “due process does not require the condemnation of
land to be in advance of its occupation by the condemning
authority, provided only that the owner have opportunity, in
the course of the condemnation proceedings, to be heard and
to offer evidence as to the value of the land taken.” 71 In
69
Id. at 471, 472 (citation omitted).
70
Sage, 361 F.3d at 827-28.
71
Bailey v. Anderson, 326 U.S. 203, 205 (1945); see also
Presley v. City of Charlottesville, 464 F.3d 480, 489-90 (4th
Cir. 2006) (“[W]hen the alleged deprivation is effectively a
physical taking, procedural due process is satisfied so long as
private property owners may pursue meaningful
postdeprivation procedures to recover just compensation.”);
Collier v. City of Springsdale, 733 F.2d 1311, 1314 (8th Cir.
1984).
23
addition, compensation need not be paid contemporaneously
with the taking; instead, the Fifth Amendment requires only
that a provision for payment must be available. 72 Thus the
Landowners’ reliance on Kirby Forest Industries v. United
States, 73 Cherokee Nation v. Southern Kansas Railway Co.,74
and Atlantic Seaboard Corp. v. Van Sterkenburg 75 is
72
See Preseault v. I.C.C., 494 U.S. 1, 11 (1990).
73
467 U.S. 1 (1984). Kirby explained how Rule 71.1
operates in standard condemnation proceedings, where the
“practical effect of final judgment on the issue of just
compensation is to give the Government an option to buy the
property at the adjudicated price.” Id. at 4. The central
question in Kirby was how to determine the date on which a
taking should be deemed to occur, a question that affected the
amount of interest due on a condemnation proceeding award.
74
135 U.S. 641 (1890). The act at issue in Cherokee
provided for full compensation “before the railway shall be
constructed,” though the Court also stated that the
Constitution “does not provide or require that compensation
shall be actually paid in advance of the occupancy of the land
to be taken; but the owner is entitled to reasonable, certain,
and adequate provision for obtaining compensation before his
occupancy is disturbed.” Id. at 659. The Court noted that it
could sometimes be difficult to judge whether a particular
provision was “sufficient to secure the compensation” to
which a landowner is entitled under the Constitution, but that
it had no trouble finding the statute at issue constitutional. Id.
75
318 F.2d 455 (4th Cir. 1963). The gas company in this
case followed the condemnation procedures of Rule 71.1, and
after the determination of just compensation, announced that
it wished to proceed immediately with the construction of the
pipeline. Id. at 459-60. It is not clear why the gas company
24
misplaced. None of these cases lend support to the
Landowners’ argument that Transcontinental’s right to
possession of the properties will not vest until
Transcontinental has exercised its option to buy the properties
at the adjudicated price.
The Landowners go on to contend that because the
NGA does not grant “quick take” power, the statute does not
permit immediate possession. 76 They make this argument
chose to wait until after the just compensation phase to seek
possession. In any event, the court upheld an order
permitting the company to pay the award and begin using the
easement because “[i]nherently . . . the condemnation court
possesses the power to authorize immediate entry by the
condemnor upon the condemned premises . . .. There is no
valid reason why an owner . . . should be allowed, by a
fruitless and meritless appeal, to postpone indefinitely the
condemnor’s enjoyment of the premises, imposing upon the
condemnor great, perhaps irreparable, damage, all without
risk of further loss or injury to the owner.” Id. at 460
(emphasis added). The case is distinguishable because the
gas company completed condemnation procedures before
seeking possession, but even so, Atlantic Seaboard’s
recognition of an “inherent[]” power to authorize “immediate
entry” more squarely helps Transcontinental.
76
For example, the Hilltop/Hoffman Landowners cite to
Washington Metropolitan Area Transit Authority v. One
Parcel of Land in Montgomery County, 706 F.2d 1312 (4th
Cir. 1983). In that case, the Fourth Circuit upheld a quick
take because Congress explicitly made the DTA available to
the transit authority. It did not do so in the NGA. The case
does not address the use of injunctions to permit immediate
25
without any explanation for why a district court’s authority to
issue a preliminary injunction should disappear when a
condemnation proceeding has been filed. Nothing in the
NGA suggests either explicitly or implicitly that the rules
governing preliminary injunctions should be suspended in
condemnation proceedings.
Historically, the NGA, when first enacted, did
countenance a wide variety of eminent domain procedures
because it required district courts to conform “as nearly as
may be” with the eminent domain procedure of the state in
which the property was situated. The state procedures
protected landowners to a varying degree. 77 Reliance on state
eminent domain procedures ended with the adoption of Rule
71.1 (previously numbered 71A), which created a nationally
uniform approach to eminent domain proceedings, and which,
because it conflicted with § 717f(h), superseded the state-
possession, and we do not find the case to be persuasive
evidence that the NGA prohibits such injunctions.
77
In states with no specific pipe line condemnation statutes,
courts made do with laws intended for private utilities in
general. E.g., Williams v. Transcontinental Gas Pipe Line
Corp., 89 F. Supp. 485, 487-88 (W.D.S.C. 1950) (“[A]ll that
is needed to make the grant effective is a State court
procedure which meets the requirements of due process and
which can be reasonably utilized . . .. The [state] procedure . .
. meets these requirements. It furnishes due process. With its
Clerks’ juries, composed of the landowners’ neighbors, to
pass upon the compensation originally, and with the right of
appeal therefrom to the Common Pleas Court with a de novo
jury trial, the procedure affords every protection to the
landowner.” (citations omitted)).
26
conformity language in the NGA. 78 Courts now generally
agree that condemnation proceedings under the NGA should
follow Rule 71.1. 79
78
Northern Border Pipeline Co. v. 64.111 Acres of Land, 344
F.3d 693, 694 (7th Cir. 2003) (“Congress may itself decide
that procedural rules in statutes should be treated as fallbacks,
to apply only when rules are silent. And it has done just this.
. . . Thus Rule 71A(h) prevails: its nationally uniform
approach conflicts with the conformity-to-state-practice
approach of § 717f(h), and under [the Rules Enabling Act’s
supersession clause] the statutory rule ‘shall be of no further
force or effect.’”) (citing Henderson v. United States, 517
U.S. 654 (1996)); see also United States v. 93.970 Acres of
Land, 360 U.S. 328, 333 n.7 (1959) (holding similar language
in another statute “clearly repealed by Rule 71A”).
79
Northern Border Pipeline Co., 344 F.3d at 694; Sage, 361
F.3d at 822; Southern Natural Gas Co. v. Land, Cullman
County, 197 F.3d 1368, 1375 (11th Cir. 1999) (“It is clear to
us that Rule 71A was promulgated to override a number of
confusing federal eminent domain practice and procedure
provisions, such as that of 15 U.S.C. § 717f(h), and to provide
a unified and coherent set of rules and procedures to be used
in deciding federal eminent domain actions.”). But see
Delaware Riverkeeper Network v. FERC, 895 F.3d 102, 110-
11 (3d Cir. 2018) (noting that the NGA ensures the
occurrence of “a hearing that itself affords due process” with
respect to the taking because the statute provides that eminent
domain actions conform with the practice and procedure of
such actions in the courts of the state where the property is
situated); contra Township of Bordentown, NJ v. FERC, Nos.
17-1047, 17-3207, 2018 WL 4212061, at *18 n.21 (3d Cir.
27
Moreover, we see no reason to read a repeal of Rule
65, governing preliminary injunctions, into the NGA. In fact,
subsection (a) of Rule 71.1 incorporates the other Federal
Rules of Civil Procedure—including the preliminary
injunction rule, Rule 65—in condemnation proceedings to the
extent Rule 71.1 does not govern. We do not so easily
exterminate equitable remedies.
In so holding, we find the Fourth Circuit opinion in
East Tennessee Natural Gas Co. v. Sage 80 persuasive. There,
the landowners argued “that Congress does not intend for gas
companies to gain immediate possession because it has not
granted statutory quick-take power to gas companies as it has
to government officers who condemn property in the name of
the United States.” 81 But the court held that this argument
“overlooks the preliminary injunction remedy provided in the
Federal Rules.” 82 Rule 71.1 “provides . . . that the regular
rules of procedure apply to any subject not covered by the
special rule.” 83 Thus, there was no reason why equitable
relief “in the form of immediate possession” would be
“barred in a condemnation case.” 84 As the Sage court noted,
the landowners, in their attempts to protect themselves from
immediate possession, seemed to assume that the preliminary
injunction process was somehow less protective of their
interests than “quick take” procedures. The court held,
Sept. 5, 2018) (NGA “requires district courts to attempt to
mirror the state courts’ condemnation proceedings”).
80
361 F.3d 808.
81
Id. at 824.
82
Id.
83
Id.
84
Id.
28
however, that when condemning land under the NGA, “a gas
company that seeks immediate possession has a much stiffer
burden than the government does under the DTA” because
the gas company must first establish the substantive right to
condemn and then prevail on the four factors considered in
preliminary injunctions. 85
Under either procedure, a “quick take” or
condemnation under Rule 71.1, landowners are protected
from the possibility of initial underpayment; with standard
condemnation plus preliminary injunction, if the company
does not pay the difference within a reasonable time, it will
be liable for trespass. 86 The Landowners claim that Sage did
not address the separation of powers arguments they bring
here, but a panel of the Fourth Circuit recently followed Sage
and persuasively demonstrated that the opinion did in fact
consider separation of powers principles. 87 And this Court,
too, albeit with less discussion, has ruled that where summary
judgment is properly granted on a condemnation complaint, a
preliminary injunction is appropriate as well. We effectively
granted immediate access on the basis that the gas company
85
Id. at 825-26.
86
Id. at 825 (citing Cherokee Nation, 135 U.S. at 660).
87
Columbia Gas Transmission, LLC v. 76 Acres, More or
Less, 701 F. App’x 221, 231 n.7 (4th Cir. 2017) (rejecting
landowners’ argument that “Sage is distinguishable because it
did not mention the words ‘separation of powers’” in part
because Sage explicitly rejected the assertion “that only
Congress can grant the right of immediate possession”).
29
had demonstrated success on the merits and strong arguments
on the other prongs of the preliminary injunction test. 88
As the preliminary injunction was permitted by the
Rules, permitted by the NGA, and did not amount to a grant
of “quick take” eminent domain power in either name or
substance, the court did not usurp legislative power or
otherwise overstep the boundaries of its judicial power. We
therefore see no violation of the principle of separation of
powers in the District Court’s procedure.
The Hilltop/Hoffman Landowners argue separately
that the District Court’s procedure deprived them of any
meaningful opportunity to challenge FERC’s public use
determination. This argument also fails.
First, and most importantly, the Hilltop/Hoffman
Landowners do not dispute that they had the opportunity to
88
Columbia Gas v. 1.01 Acres, 768 F.3d at 315-16. We note
that district courts around the country have implemented the
procedure, relying on the Circuit decisions like Sage. See
Transcontinental Gas Pipe Line Co., LLC v. Permanent
Easement for 0.03 Acres, 17-cv-565, 2017 WL 3485752, at
*4 (M.D. Pa. Aug. 15, 2017) (“It is commonplace for district
courts to order immediate possession after FERC has taken a
lengthy period of time determining whether or not to issue a
certificate of public convenience and necessity.”) (collecting
cases). See also Alliance Pipeline L.P. v. 4.360 Acres of
Land, 746 F.3d 362 (8th Cir. 2014) (no abuse of discretion in
granting pipeline’s immediate use and possession following
FERC certificate and grant of summary judgment and
preliminary injunction).
30
raise their concerns with FERC and did in fact do so; 89 sought
stays of the construction, which were denied; 90 and sought
rehearing, 91 which was also denied on December 6, 2017.92
Before the order denying rehearing, the Landowners appealed
to the D.C. Circuit Court, where the case is pending. 93 The
NGA explicitly provides that neither a request for rehearing
before FERC nor judicial review can stay the effectiveness of
a FERC certificate. 94
89
Hilltop/Hoffman Landowners submitted 9 comments to
FERC. Like/Mohn Landowners submitted 47 comments.
90
Order Denying Stay, Transcontinental Gas Pipe Line Co.,
LLC, 160 FERC ¶ 61,042 (Aug. 31, 2017), Accession No.
20170831-3088.
91
Request for Rehearing and Motion for Stay of Certain
Landowners (Mar. 6, 2017), Accession No. 20170306-5123;
Petition for Rehearing of Lynda Like of Order Issuing
Certificate for the Atlantic Sunrise Project and Request for
Stay of Certificate (Mar. 6, 2017), Accession No. 20170306-
5204; Petition for Rehearing of Follin Smith and Blair and
Megan Mohn of Order Issuing Certificate for the Atlantic
Sunrise Project and Request for Stay of Certificate (Mar. 6,
2017), Accession No. 20170306-5202.
92
Order on Rehearing, Transcontinental Gas Pipe Line Co.,
LLC, 161 FERC ¶ 61,250 (Dec. 6, 2017), Accession No.
20171206-3073. The D.C. Circuit denied the landowners’
request for a stay pending the appeal of the FERC Order.
Allegheny Def. Project v. Fed. Energy Regulatory Comm’n,
Nos. 17-1098, 17-1128, 17-1263, 18-1030, 2018 WL
1388557 (D.C. Cir. Feb. 16, 2018) (per curiam).
93
Nos. 17-1128, 18-1030.
94
15 U.S.C. § 717r(c).
31
In sum, the Hilltop/Hoffman Landowners are attacking
the underlying FERC order, but review of the underlying
FERC order is only properly brought to FERC on rehearing
and then to an appropriate circuit court, as the
Hilltop/Hoffman Landowners are pursuing. We lack
jurisdiction to hear collateral attacks on the FERC certificate,
which contained a finding that the project was for public
use. 95 Neither the District Court nor this Court in this case
may entertain arguments such as those brought by the
Hilltop/Hoffman Landowners that FERC unduly credited
self-serving statements by Transcontinental and ignored the
potential that the project might have been intended to provide
companies with greater access to the higher priced overseas
market. 96
V
The Landowners do not appeal the preliminary
injunction based on an abuse of discretion in the District
Court’s analysis and so have waived that argument on appeal.
Even so construed, their petition lacks merit.
Transcontinental clearly showed success on the merits and
would have been harmed if the injunction were denied.
For the above reasons, we hold that the NGA’s grant
of standard condemnation powers to natural gas companies
does not preclude federal courts from granting equitable relief
in the form of a preliminary injunction when gas companies
have obtained the substantive right to condemn and otherwise
95
15 U.S.C. § 717r(b) (appeal of the certificate allowed in the
circuit where the gas company is located or in the D.C.
Circuit).
96
Hilltop/Hoffman Brief at 37, 38.
32
qualify for equitable relief. Because the Landowners fail to
recognize the District Court’s equitable power to enter
preliminary injunctions once substantive rights are
determined, their appeals lack merit. We therefore affirm the
orders of the District Court, granting the motions for
preliminary injunctions.
33