Mid-Atlantic Express, LLC v. Baltimore County , 410 F. App'x 653 ( 2011 )

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 09-2234
MID-ATLANTIC EXPRESS, LLC, a Delaware LLC,
Plaintiff - Appellee,
v.
BALTIMORE COUNTY, MARYLAND,
Defendant – Appellant,
and
CHAPOLINI ASSOCIATES; 2010 RESERVIOR ROAD INVESTORS, LLC;
QUAD PARTNERS LIMITED PARTNERSHIP; DUNDALK OPTIMIST
FOUNDATION, INCORPORATED; STATE OF MARYLAND STATE ROADS;
ANTHONY SZLACHETKA, JR.; GEORGE T. WISE, III; HARRY RUDO;
SHIRLEY M. RUDO; OAK GROVE APARTMENTS ASSOCIATION, LLC;
MICHAEL J. FLORIAN; PHYLLIS JANE FLORIAN; KIMBERLY RICHTER;
HAWKINS MANOR, LLC; MARY M. BENIK; ANNA BROCKMEYER; MARTHA
B. FRAZIER; WILLIAM J. GORGE; LEONARD W. MAUNES; ROBERT
HOLTHAUS; RONNIE DIETZ; PATRICIA DIETZ; DENNIS PARKER; HELEN
PARKER; GEORGE A. NELSON, JR.; PATRICIA C. HANLEY; WILLIAM
G. VON PARIS; MARY C. VON PARIS; WAYNE JAMES; CAROLINE J.
SEAMON; SUSAN J. CLARKE; ANDREW J. BAUER; LORRAINE BAUER;
WILLIAM D. CLARK; MAUREEN R. CLARK; ANTHONY PASZKIEWICZ; ANN
PASZKIEWICZ; DANIEL DAVID DRAPINSKI; KATHLEEN DRAPINSKI;
ANDREW C. HUTTON; ROY WISNIEWSKI; KYUNG WISNIEWSKI; KAMAL M.
IBRAHIM; KATHERINE MULDOON IBRAHIM; MARCIA ZBIKOWSKI; JOEL
ZBIKOWSKI; RALPH ALLEN; LINDA ALLEN; LINDA R. WARFIELD;
KEVIN REEVES; LAURIE REEVES; JOSEPH FICO, et al.; MICHAEL
HARRINGTON; BONNIE HARRINGTON; LLOYD MARTIN ST OURS;
CHRISTINE LOUISE ST OURS; LARRY D. KEEFER; GEORGIA L.
KEEFER; JOHN H. SWAM; DONNA K. SWAN; RICHARD GORDON; JOANNE
GORDON; HENRY A. FUGGI, JR.; DIXIE LEE FUGGI; HARDY
MANAGEMENT CO. LLC; DAVID WEAVER WARFIELD; WILLOWBROOK
PARTNERS LLC; PAUL M. WILKINSON; ELYSE S. WILKINSON; RAYMOND
E. WHEELER; ELLEN J. WHEELER; DANIEL ZORN; KRISTA ZORN;
BRUCE BRETON; ANGELA BRETON,
Defendants.
Appeal from the United States District Court for the District of
Maryland, at Baltimore. Catherine C. Blake, District Judge.
(1:09-cv-02386-CCB)
Submitted: December 10, 2010 Decided: January 7, 2011
Before WILKINSON, NIEMEYER, and KEENAN, Circuit Judges.
Vacated and remanded by unpublished per curiam opinion.
John E. Beverungen, County Attorney, James J. Nolan, Jr.,
Assistant County Attorney, Towson, Maryland, for Appellant.
Jerrold A. Thrope, GORDON, FEINBLATT, ROTHMAN, HOFFBERGER &
HOLLANDER, Baltimore, Maryland, for Appellee.
Unpublished opinions are not binding precedent in this circuit.
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PER CURIAM:
Baltimore County, Maryland (“Baltimore County”) seeks
to appeal the district court’s order granting a preliminary
injunction to Mid-Atlantic Express, LLC (“Mid-Atlantic”) for
pre-acquisition entry into certain county properties and
residences along a proposed liquid natural gas pipeline route.
Mid-Atlantic sought entry in order to complete certain surveys
for submission to the Federal Energy Regulatory Commission
(“FERC”) for final project approval. During the pendency of
this appeal, Mid-Atlantic completed the surveys and voluntarily
dismissed the action. Mid-Atlantic has now moved to dismiss
Baltimore County’s appeal. After we deferred action on the
motion to dismiss, Mid-Atlantic represented to the court that it
would neither file a brief nor attend oral argument. For the
reasons that follow, we deny the motion to dismiss, vacate the
district court’s judgment, and remand for further proceedings.
I. Motion to Dismiss
Mid-Atlantic argues that because it has dismissed its
complaint in the district court and because it has completed the
survey work that was at issue, the controversy presented in this
case is no longer live. Baltimore County responds that the
controversy remains extant because of the injunction bond Mid-
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Atlantic posted and because of the “capable of repetition, yet
evading review” exception to the mootness doctrine
“‘[A] case is moot when the issues presented are no
longer “live” or the parties lack a legally cognizable interest
in the outcome.’” United States v. Hardy, 545 F.3d 280, 283
(4th Cir. 2008) (quoting Powell v. McCormack, 395 U.S. 486, 496
(1969)). “‘The inability of the federal judiciary to review
moot cases derives from the requirement of Art. III of the
Constitution under which the exercise of judicial power depends
upon the existence of a case or controversy.’” Id. (quoting
DeFunis v. Odegaard, 416 U.S. 312, 316 (1974)). Because the
requirement for a live case or controversy exists through all
stages of the proceedings, “litigation may become moot during
the pendency of an appeal.” Id. (internal quotation marks and
citation omitted).
Baltimore County first argues that under Fed. R. Civ.
P. 65.1, it is entitled to seek damages under the $50,000
injunction bond filed by Mid-Atlantic. Baltimore County cites
Groupo Mexicano v. Alliance Bond Fund, Inc., 527 U.S. 308(1999), for the proposition that an otherwise moot controversy
may be live if a party has a claim against a Rule 65.1
injunction bond. Other cases, however, note that the mere
possibility of recovery on an injunction bond is not sufficient
to render an otherwise moot case ripe for appeal. See, e.g.,
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Am. Can Co. v. Mansukhani, 742 F.2d 314, 320 (7th Cir. 1984)
(“If it were highly unlikely that defendants would seek to
recover on American Can’s injunction bonds, the existence of
these bonds would not prevent the controversy from becoming
moot.”); International Union v. Dana Corp., 697 F.2d 718, 721-22
(6th Cir. 1983) (en banc) (injunction bond did not preserve
issue where defendant had agreed not to seek recovery on bond).
Here, the parties have not indicated whether the
surveys caused any damage to any properties, or whether any
claims against the bond have been or will be made. Accordingly,
we decline to rule on this issue because we are not in a
position to determine with any certainty whether the existence
of an injunction bond renders this a “live” controversy.
Baltimore County next argues that this case remains
viable under the exception to the mootness doctrine that permits
the court to consider disputes that, although moot, are “capable
of repetition, yet evading review.” Fed. Election Comm’n v.
Wis. Right to Life, Inc., 551 U.S. 449, 462 (2007) (internal
quotation marks omitted). The exception is limited to the
“exceptional situation[].” Incumaa v. Ozmint, 507 F.3d 281, 289
(4th Cir. 2007) (quoting Los Angeles v. Lyons, 461 U.S. 95, 109
(1983)). “[I]n the absence of a class action, the ‘capable of
repetition, yet evading review’ doctrine [is] limited to the
situation where two elements combined: (1) the challenged
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action was in its duration too short to be fully litigated prior
to its cessation or expiration, and (2) there was a reasonable
expectation that the same complaining party would be subjected
to the same action again.” Weinstein v. Bradford, 423 U.S. 147,
149 (1975).
The Supreme Court recently stated that “[t]he second
prong of the ‘capable of repetition’ exception requires a
‘reasonable expectation’ or a ‘demonstrated probability that
‘the same controversy will recur involving the same complaining
party.’” Fed. Election Comm’n, 551 U.S. at 462. In district
court, Mid-Atlantic represented that it might perform further
surveys in connection with the construction of this pipeline.
In arguing its motion to dismiss, Mid-Atlantic claims that this
concession is not sufficient to keep this controversy alive. In
light of the obvious fact that Mid-Atlantic can complete surveys
of this type in a short enough time to evade our review, and in
light of Mid-Atlantic’s representations in the record, we
conclude that this case does fall into an exception to the
mootness doctrine; accordingly, we deny the motion to dismiss as
moot.
II. Preliminary Injunction
Turning to the merits of this case, Baltimore County
argues that the district court erred in three respects: first,
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it lacked subject matter jurisdiction to issue the injunction;
second, it erred in granting the injunction because Mid-Atlantic
did not satisfy the elements for issuance of an injunction; and
third, that Mid-Atlantic failed to exhaust its administrative
remedies with the FERC. Mid-Atlantic has elected not to
respond.
If the district court determines at any time that it
lacks subject matter jurisdiction, it “must dismiss the action.”
Fed. R. Civ. P. 12(h)(3); see Arbaugh v. Y&H Corp., 546 U.S.
500, 514 (2006); United States ex rel. Vuyyuru v. Jadhav, 555
F.3d 337, 347 (4th Cir. 2009). When the district court lacks
jurisdiction, this court has jurisdiction over the appeal “not
of the merits but merely for the purpose of correcting the error
of the lower court in entertaining the suit.” Arizonans for
Official English v. Arizona, 520 U.S. 43, 73 (1997).
Mid-Atlantic bears the burden of demonstrating the
existence of subject matter jurisdiction over its claims. See
Piney Run Pres. Ass’n v. County Comm’rs, 523 F.3d 453, 459
(4th Cir. 2008). Federal question jurisdiction is based on
actions “arising under the Constitution, laws, or treaties of
the United States.” 28 U.S.C. § 1331 (2006). However, “[t]he
mere assertion of a federal claim” does not confer subject
matter jurisdiction under § 1331. Lovern v. Edwards, 190 F.3d
648, 654 (4th Cir. 1999). Instead, the plaintiff is required to
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allege a substantial federal claim. Id. (citing Hagans v.
Lavine, 415 U.S. 528, 536 (1974)).
In the district court, Mid-Atlantic indicated that it
brought the action for an injunction on the basis of the Natural
Gas Act (“NGA”), 15 U.S.C. § 717 (2006). The pertinent
provision of the NGA states:
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) (emphasis added). Baltimore County notes
that in this case, Mid-Atlantic did not bring an action “to
acquire” rights “by the exercise of eminent domain.” In fact,
though Mid-Atlantic represented that it had condemnation
authority in district court, the FERC certificate upon which it
relied contained significant restrictions on its ability to
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condemn property in furtherance of the construction of the
pipeline. Environmental Condition 55 of the certificate stated
that “Mid-Atlantic shall not exercise eminent domain authority
granted under [the Natural Gas Act] section 7(h) to acquire
permanent rights-of-way on [residential] properties until the
required site specific residential construction plans have been
reviewed and approved in writing by the Director of [the Office
of Energy Projects (“OEP”)].” Recognizing the significance of
Condition 55, Mid-Atlantic sought clarification from the FERC,
stating “[t]he limitation on using eminent domain authority
. . . in Condition No. 55 appears to preclude Mid-Atlantic
Express from exercising eminent domain authority to gain access
to site-specific plans, unless that exercise of the authority
takes some form other than seeking a permanent right-of-way.”
At the time the district court heard the complaint, the
clarification motion was pending with the FERC.
In E. Tenn. Natural Gas Co. v. Sage, 361 F.3d 808(4th Cir. 2004), we held that “once a district court determines
that a gas company has the substantive right to condemn property
under the NGA, the court may exercise equitable power to grant
the remedy of immediate possession through the issuance of a
preliminary injunction.” Sage, 361 F.3d at 828. Baltimore
County notes that although the district court’s preliminary
injunction order does contain a finding that Mid-Atlantic is the
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holder of a FERC Certificate of Public Convenience and
Necessity, it fails to find that the Certificate grants
condemnation authority to Mid-Atlantic. Indeed, in light of
Condition 55, we conclude that Mid-Atlantic did not have the
authority to condemn property, and accordingly, the district
court was without jurisdiction to enter the preliminary
injunction.
Accordingly, we deny the motion to dismiss, vacate the
district court’s judgment, and remand with instructions to
dismiss for lack of subject matter jurisdiction. In light of
this disposition we do not address Baltimore County’s remaining
challenges to the preliminary injunction. We dispense with oral
argument because the facts and legal contentions are adequately
presented in the materials before the court and oral argument
would not aid the decisional process.
VACATED AND REMANDED
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