Columbia Gas v. Drain ( 2001 )

PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
COLUMBIA GAS TRANSMISSION 
CORPORATION,
Plaintiff-Appellant,
v.  No. 00-1553
DEANA WINGFIELD DRAIN,
Defendant-Appellee.

Appeal from the United States District Court
for the Northern District of West Virginia, at Elkins.
Robert Earl Maxwell, Senior District Judge.
(CA-99-127-2)
Argued: December 6, 2000
Decided: January 8, 2001
Before WILKINS and LUTTIG, Circuit Judges, and
HAMILTON, Senior Circuit Judge.
Vacated and remanded by published opinion. Senior Judge Hamilton
wrote the opinion, in which Judge Wilkins and Judge Luttig joined.
COUNSEL
ARGUED: Amy Marie Smith, STEPTOE & JOHNSON, Clarksburg,
West Virginia, for Appellant. Joseph Algernon Wallace, Elkins, West
Virginia, for Appellee. ON BRIEF: William E. Mohler, III,
COLUMBIA GAS TRANSMISSION CORPORATION, Charleston,
West Virginia, for Appellant. Paul J. Harris, NATIONAL PROP-
2 COLUMBIA GAS TRANSMISSION CORP. v. DRAIN
ERTY RIGHTS CENTER, Richmond, Virginia; Herbert G. Under-
wood, Clarksburg, West Virginia, for Appellee.
OPINION
HAMILTON, Senior Circuit Judge:
Columbia Gas Transmission Corporation (Columbia Gas) appeals
the district court’s dismissal of its declaratory judgment action against
property owner Deana Drain (Drain) for lack of subject matter juris-
diction. In its declaratory judgment action, Columbia Gas sought,
inter alia, a declaration that its use of a claimed easement fifty feet
in width over Drain’s property in Randolph County, West Virginia,
to maintain a gas pipeline, is not an unconstitutional taking under the
Fourteenth Amendment to the United States Constitution. Because the
district court would have possessed subject matter jurisdiction over a
coercive action by Drain against Columbia Gas alleging that Colum-
bia Gas’s use of the fifty-foot easement over her property constituted
an unconstitutional taking of her property under the Fourteenth
Amendment, the district court possessed subject matter jurisdiction
over Columbia Gas’s declaratory judgment action. Accordingly, we
vacate the district court’s dismissal of this action and remand for fur-
ther proceedings.
I.
A detailed statement of the facts involved in this case is set forth
in our opinion in Columbia Gas Transmission Corp. v. Drain (Colum-
bia Gas I), 191 F.3d 552 (4th Cir. 1999). We only recount those facts
here to the extent necessary for us to resolve Columbia Gas’s chal-
lenge to the district court’s dismissal of its present declaratory judg-
ment action.
Drain owns .44 acres of real property in Randolph County, West
Virginia. Pursuant to a right-of-way agreement of unspecified width
that runs with such property, Columbia Gas installed and maintains
an eight-inch gas pipeline across the property. In 1992, Drain installed
a modular home with a cement block foundation within seven and
COLUMBIA GAS TRANSMISSION CORP. v. DRAIN 3
one-half feet of the pipeline. At the time, the property already con-
tained a shed with a cement block foundation located within six
inches from the pipeline.
In April 1993, Columbia Gas informed Drain that the right-of-way
agreement impliedly granted it a fifty-foot easement in width (twenty-
five feet on either side), across her property, and that her modular
home encroached on that easement. After Drain failed to move her
modular home outside Columbia Gas’s claimed fifty-foot easement,
in December 1994, Columbia Gas brought a declaratory judgment
action in the United States District Court for the Northern District of
West Virginia (Columbia Gas’s First Declaratory Judgment Action).
In that action, Columbia Gas sought a declaration that, under West
Virginia law and federal regulations, the right-of-way agreement enti-
tled it to an easement fifty feet in width over Drain’s property, and
preliminary and permanent injunctions ordering Drain to move her
home and shed twenty-five feet from the pipeline and prohibiting her
from conducting any further construction on the asserted right-of-way
or otherwise interfering with Columbia Gas’s claimed easement.
Drain moved her modular home and shed outside Columbia Gas’s
claimed easement in July 1995. She nonetheless answered Columbia
Gas’s complaint and asserted a counterclaim "for a declaratory judg-
ment that the grant of a fifty-foot easement would affect an unconsti-
tutional taking and for injunctive relief and damages pursuant to 42
U.S.C. § 1983 on the basis of this alleged constitutional violation."
Columbia Gas I, 191 F.3d at 559. Drain also moved to dismiss
Columbia Gas’s First Declaratory Judgment Action for lack of subject
matter jurisdiction pursuant to Federal Rule of Civil Procedure
12(b)(1) (Rule 12(b)(1)).
The district court denied Drain’s Rule 12(b)(1) motion. With
regard to the merits, the district court concluded that West Virginia
law governed the question of the easement’s width and that under that
state’s law Columbia Gas was entitled by virtue of the right-of-way
agreement to a "reasonably necessary" easement, which after a bench
trial the district court determined to be fifty feet in width. The district
court granted Columbia Gas the permanent injunction and declaratory
relief it sought on these state law grounds, while exercising its equita-
ble powers to order Columbia Gas to pay Drain’s house-moving
4 COLUMBIA GAS TRANSMISSION CORP. v. DRAIN
expenses, and held that there had been no unconstitutional taking of
Drain’s property. See Columbia Gas I, 191 F.3d at 554.
Drain appealed. On appeal, Drain challenged the district court’s
denial of her motion to dismiss for lack of subject matter jurisdiction
and the district court’s decision on the merits. We agreed with Drain
that subject matter jurisdiction was lacking over Columbia Gas’s
causes of action. See id. at 554-55. We, therefore, vacated the district
court’s judgment and remanded with instructions to dismiss the com-
plaint. See id. at 560. We also directed the district court to dismiss
without prejudice Drain’s counterclaim for a declaratory judgment
that the grant of an easement fifty feet in width would affect an
unconstitutional taking and for injunctive relief and damages pursuant
to 42 U.S.C. § 1983. See Columbia Gas I, 191 F.3d at 559. In so
doing, we recognized the general rule that "a district court may exer-
cise jurisdiction over a compulsory counterclaim after the original
claim has been dismissed for lack of subject matter jurisdiction if the
counterclaim has an independent basis for jurisdiction." Id. However,
we did not force the district court to retain jurisdiction over Drain’s
counterclaim alleging an unconstitutional taking of her property in
violation of the United States Constitution, because collectively: (1)
Drain had disputed the subject matter jurisdiction of the federal forum
all along; (2) the Federal Rules of Civil Procedure had compelled her
to bring the claim or risk forfeiture; and (3) the merits of the counter-
claim were inextricably intertwined with the merits of a federal
defense to Columbia Gas’s non-federal claim. See id. at 559-60.
On September 20, 1999, Drain filed an action in West Virginia
state court asking for a declaration that Columbia Gas’s taking of the
easement fifty feet in width deprived her of her right to just compen-
sation for private property taken for public use and due process, "as
guaranteed by the Constitution of West Virginia." (J.A. 66). Drain
also sought compensatory damages based on her allegation that as a
direct and proximate result of Columbia Gas’s taking of the fifty-foot
wide easement, she has been deprived of substantially all of the bene-
ficial and productive use of her property and has been damaged in an
amount equal to the fair market value of her property. On October 21,
1999, Columbia Gas removed Drain’s state court action to the United
States District Court for the Southern District of West Virginia based
COLUMBIA GAS TRANSMISSION CORP. v. DRAIN 5
upon federal question and diversity jurisdiction. See 28 U.S.C.A.
§§ 1331-32 (West 1993).
On the same day Columbia Gas filed its notice of removal in
Drain’s state court action, it filed a second declaratory judgment
action against Drain in the United States District Court for the North-
ern District of West Virginia (Columbia Gas’s Second Declaratory
Judgment Action). The complaint is similar to the complaint Colum-
bia Gas filed in its First Declaratory Judgment Action. In contrast to
Columbia Gas’s complaint in its First Declaratory Judgment Action,
however, the second complaint sought a declaration that "Drain has
not been deprived of property without just compensation and due pro-
cess under the United States Constitution, Amend. XIV." (J.A. 15-
16). Columbia Gas’s Second Declaratory Judgment Action is the case
pending before us presently.
Drain promptly moved to dismiss Columbia Gas’s Second Declara-
tory Judgment Action for lack of subject matter jurisdiction.1 This
time, the district court granted the motion. Columbia Gas filed a
timely notice of appeal.
II.
In this appeal, Columbia Gas challenges the district court’s dis-
missal of its Second Declaratory Judgment Action. According to
Columbia Gas, the district court possessed subject matter jurisdiction
pursuant to 28 U.S.C. §§ 1331 and 1332. We review a district court’s
grant of a motion to dismiss for lack of subject matter jurisdiction de
novo. See Ahmed v. United States, 30 F.3d 514, 516 (4th Cir. 1994).
For reasons that follow, we hold the district court possessed subject
matter jurisdiction pursuant to § 1331. We, therefore, do not address
the issue of whether the district possessed subject matter jurisdiction
pursuant to § 1332.
1
The district court presiding over Drain’s removed state court action
stayed further proceedings in that action pending resolution of Drain’s
motion to dismiss for lack of subject matter jurisdiction in Columbia
Gas’s Second Declaratory Judgment Action.
6 COLUMBIA GAS TRANSMISSION CORP. v. DRAIN
Section 1331 of Title 28 provides, "The district courts shall have
original jurisdiction of all civil actions arising under the Constitution,
laws, or treaties of the United States." 28 U.S.C.A. § 1331 (West
1993). This statutory provision sets forth what is commonly known
as federal question jurisdiction. "[T]he vast majority of cases brought
under the general federal-question jurisdiction of the federal courts
are those in which federal law creates the cause of action." See Mer-
rell Dow Pharm. Inc. v. Thompson, 478 U.S. 804, 808 (1986). The
well-pleaded complaint rule requires that federal question jurisdiction
not exist unless a federal question appears on the face of a plaintiff’s
properly pleaded complaint. See id.The well-pleaded complaint rule operates no differently when the
jurisdictional issue is whether a district court possesses subject matter
jurisdiction of a declaratory judgment action purporting to raise a fed-
eral question. See TTEA v. Ysleta del Sur Pueblo, 181 F.3d 676, 681
(5th Cir. 1999); Standard Ins. Co. v. Saklad, 127 F.3d 1179, 1181 (9th
Cir. 1997); 10B Charles Alan Wright, Arthur R. Miller, & Mary Kay
Kane, Federal Practice and Procedure, § 2767, at 650-51 (3d ed.
1998). One does need to understand, however, that in a declaratory
judgment action, the federal right litigated may belong to the declara-
tory judgment defendant rather than the declaratory judgment plain-
tiff. Thus, if the declaratory judgment plaintiff is not alleging an
affirmative claim arising under federal law against the declaratory
judgment defendant, the proper jurisdictional question is whether the
complaint alleges a claim arising under federal law that the declara-
tory judgment defendant could affirmatively bring against the declara-
tory judgment plaintiff. See TTEA, 181 F.3d at 681; Standard Ins.
Co., 127 F.3d at 1181; Wright, Miller, & Kane, supra § 2767, at 650-
51; see also Franchise Tax Board v. Construction Laborers Trust,
463 U.S. 1, 19 & n.19 (1983) (observing with approval that federal
courts "have regularly taken original jurisdiction over declaratory
judgment suits in which, if the declaratory judgment defendant
brought a coercive action to enforce its rights, that suit would neces-
sarily present a federal question"). If the answer to this question is
yes, federal question jurisdiction exists.
Columbia Gas first argues that federal question jurisdiction exists
based upon the Natural Gas Act, 15 U.S.C.A. §§ 717 - 717z (West
1997 and Supp. 2000), the Natural Gas Pipeline Safety Act, 49
COLUMBIA GAS TRANSMISSION CORP. v. DRAIN 7
U.S.C.A. §§ 60101 - 60128 (West 1997 and Supp. 2000), and the fed-
eral regulations promulgated pursuant to those acts. This argument is
a rehash of the unsuccessful argument Columbia Gas made before us
in Drain’s appeal from the district court’s refusal to dismiss Columbia
Gas’s First Declaratory Judgment Action. See Columbia Gas I, 191
F.3d at 555-59. After carefully reviewing Columbia Gas’s complaint
in its Second Declaratory Judgment Action, we conclude that it con-
tains no additional allegations with regard to the Natural Gas Act, the
Natural Gas Pipeline Safety Act, or the regulations thereunder requir-
ing us to embrace Columbia Gas’s rehashed argument in this appeal.
Because the complaint at issue does not assert an affirmative cause
of action arising under federal law, we must ask whether it seeks
declaratory relief on a matter for which Drain could bring a coercive
action arising under federal law against Columbia Gas. See TTEA,
181 F.3d at 681; Standard Ins. Co., 127 F.3d at 1181; Wright, Miller,
& Kane, supra § 2767, at 650-51. The answer to this question is yes.
Specifically, the complaint requests a declaration that Columbia Gas’s
use of a fifty-foot wide easement on Drain’s property is not an uncon-
stitutional taking under the Fourteenth Amendment. This is the
reverse of the compulsory counterclaim that Drain alleged against
Columbia Gas pursuant to 42 U.S.C. § 1983 in Columbia Gas’s First
Declaratory Judgment Action, which counterclaim undoubtedly arose
under federal law.2 Because Columbia Gas’s complaint in its Second
Declaratory Judgment Action seeks declaratory relief on a matter for
which Drain could bring a coercive action against Columbia Gas aris-
ing under federal law, we conclude the district court possessed subject
matter jurisdiction pursuant to § 1331. Accordingly, we vacate the
district court’s order dismissing Columbia Gas’s Second Declaratory
Judgment Action for lack of subject matter jurisdiction and remand
for further proceedings.
VACATED AND REMANDED
2
We note that because Columbia Gas has eminent domain powers
under the Natural Gas Act, see 15 U.S.C. § 717f(h), it is a quasi-
governmental entity for purposes of a § 1983 action.