Maritimes & Northeast Pipeline, L.L.C. v. Decoulos

Not For Publication in West's Federal Reporter
Citation Limited Pursuant to 1st Cir. Loc. R. 32.3
United States Court of Appeals
For the First Circuit
No. 04-1371
MARITIMES & NORTHEAST PIPELINE, L.L.C.,
Plaintiff, Appellee,
v.
NICHOLAS J. DECOULOS, as Trustee of Willowdale Realty Trust,
Defendant, Appellant,
1.55 ACRES OF LAND, MORE OR LESS, IN PEABODY, MASSACHUSETTS;
DANVERS SAVINGS BANK; MATTRESS GIANT CORPORATION;
CELLCO PARTNERSHIP, d/b/a VERIZON WIRELESS,
Defendants.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Rya W. Zobel, U.S. District Judge]
Before
Torruella and Lipez, Circuit Judges,
and Barbadoro,* District Judge.
Nicholas J. Decoulos, for appellant.
James T. Finnigan, with whom Rich May, P.C., was on brief, for
appellee.
August 16, 2005
*
Of the District of New Hampshire, sitting by designation.
Per Curiam. This appeal arises out of an action for
condemnation of land pursuant to the Natural Gas Act ("NGA"), 15
U.S.C. § 717f(h). The NGA grants private natural gas companies the
federal power of eminent domain in the event that they hold a
Certificate of Public Convenience and Necessity ("CPCN") from the
Federal Energy Regulatory Commission ("FERC") and either cannot
acquire property by contract, or are unable to agree with the owner
of the property on the amount of compensation to be paid for a
necessary right of way for the transportation of gas. Id.
Appellee Maritimes & Northeast Pipeline, L.L.C.
("Maritimes"), a natural gas company as defined in the NGA, 15
U.S.C. § 717a(6), and the holder of a CPCN authorizing the building
and operation of a 25-mile, 30-inch gas pipeline from Methuen to
Salem, Massachusetts, filed the present action to take temporary
and permanent easements on 1.55 acres of land located in Peabody,
Massachusetts. The purpose of the easements is to construct and
operate an underground natural gas pipeline along the approved
alignment of the CPCN. The temporary easement requires
approximately 0.14 acres of the property, while the permanent
easement needs 0.25 acres. The land is owned by Willowdale Realty
Trust, of which appellant Nicholas J. Decoulos is the trustee. A
building on the trust land is leased to the Mattress Giant
Corporation and Celico Partnership d/b/a Verizon Wireless.
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Maritimes attempted to purchase the easement rights over
the course of several months of negotiations and discussions,
during which time an agent of Maritimes met with or attempted to
meet with Decoulos on several occasions. Having failed to reach an
agreement, Maritimes dispatched a "final offer letter" on May 20,
2002, in which Maritimes made its final bid based on an appraisal
performed by an independent, licenced Massachusetts real estate
appraiser. According to this communication, the easement was
appraised at $93,894. Nevertheless, Maritimes made a final offer
of $237,400. Upon rejection of this offer by Decoulos, Maritimes
proceeded to file this suit.
Thereafter, Maritimes filed a motion for partial summary
judgment and/or immediate entry, seeking an order from the district
court to gain easement title to the required property by eminent
domain. Notwithstanding Decoulos' opposition, the motion was
granted, allowing Maritimes to enter the property to install the
pipeline. On April 9, 2003, the district court entered an
additional order authorizing Maritimes to take the requested
permanent right of way and easement. The matter then proceeded to
trial for the purpose of determining the damages to be paid by
Maritimes for the takings in question.
The case was tried before a jury, which entered a verdict
determining the value of the permanent easement to be the amount of
$68,063. This appeal followed, in which Decoulos raises four
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issues: (1) whether the district court erred in allowing Maritimes
to proceed based on a complaint which allegedly failed to identify
"the interest to be taken" as required by Fed. R. Civ. P.
71A(c)(2), (2) whether Maritimes was required to conduct its
negotiations with Decoulos in "good faith," (3) whether Maritimes'
actions deprive appellant of due process under the Fifth Amendment,
and (4) whether the district court erred in refusing to give an
instruction requested by Decoulos regarding an alleged element of
damages. We discuss these seriatim and find them without legal
merit.
Decoulos argues that Fed. R. Civ. P. 71A(c)(2)'s language
to the effect that "[t]he complaint shall contain a short and plain
statement . . . [of] the interests to be acquired," made defective
Maritimes' complaint because it was "devoid of any statement as to
the interest to be acquired," and thus appellant "was subjected to
the conundrum of speculating the extent of the servitude."
This court has held that Rule 71A(c)(2) "is consistent
with the notice theory of pleading embodied in the Federal Rules,"
id., under which we "do not require a claimant to set out in detail
the facts upon which he bases his claim . . . [because of] the
liberal opportunity for discovery and the other pretrial procedures
. . . to disclose more precisely the basis of both claim and
defense and to define more narrowly the disputed facts and issues,"
id. (quoting Conley v. Gibson, 355 U.S. 41, 47-48 (1957)). The
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complaint at issue more than sufficiently notified Decoulos of the
substance of the action sought by Maritimes. See Southern Natural
Gas Co. v. Land, Cullman County, 197 F.3d 1368, 1375 (11th Cir.
1999); East Tenn. Natural Gas Co. v. Sage, 361 F.3d 808, 830 (4th
Cir. 2004).
After deciding the partial summary judgment in favor of
Maritimes, and before trial, the district court also decided
Maritimes' motion in limine to the effect that Decoulos would not
be allowed to introduce any evidence of Maritimes' alleged bad
faith negotiations because, as ruled upon by the court, bad faith
was irrelevant to the issue of just compensation.
It is unclear to what Decoulos anchors his claim that
good faith negotiations must precede the filing of the condemnation
action, as the NGA contains no specific language to this effect.
See Lamie v. United States Trustee, 540 U.S. 526, 534-35 (2004)
(inquiry begins with the statutory text, and ends there as well if
the text is unambiguous). The relevant section of the NGA
provides:
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, . . . 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
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property may be located, or in the State
courts.
15 U.S.C. § 717f(h).
Once a CPCN is issued by the FERC, and the gas company is
unable to acquire the needed land by contract or agreement with the
owner, the only issue before the district court in the ensuing
eminent domain proceeding is the amount to be paid to the property
owner as just compensation for the taking. See Guardian Pipeline,
L.L.C. v. 329.42 Acres of Land, 210 F. Supp. 2d 971, 974 (N.D. Ill.
2002); Tennessee Gas Pipeline Co. v. Mass. Bay Transp. Auth., 2 F.
Supp. 2d 106, 110 (D. Mass. 1998). Absent any credible authority
making good faith negotiation a requirement precedent to the
condemnation action, see Kansas Pipeline Co. v. 200 Foot by 250
Foot Piece of Land, 210 F. Supp. 2d 1253, 1257 (D. Kan. 2002) ("The
plain language of the NGA does not impose an obligation on a holder
of a FERC certificate to negotiate in good faith before acquiring
land by exercise of eminent domain . . . ."), cf. National R.R.
Passenger Corp, v. Boston and Maine Corp., 503 U.S. 407, 423 (1992)
(refusing to interpret statutory language referring to parties
being "unable to agree" to require Amtrak to engage in good faith
negotiations before it could invoke its condemnation powers under
the Rail Passenger Service Act), but see USG Pipeline Co. v. 174
Acres, 1 F. Supp. 2d 816, 822 (E.D. Tenn. 1998) (noting that
"[c]ourts . . . have imposed a requirement that the holder of the
FERC Certificate negotiate in good faith with the owners to acquire
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the property"), we decline the invitation to create one in this
case. Furthermore, we do not imply that the negotiations at issue
here were not in good faith.
Appellant's due process argument is intermingled with his
"good faith" issue, and results in a similar outcome. Decoulos
claims that "Maritimes, by acting in bad faith and arbitrarily
. . . deprived The Trust of its property rights." The district
court rejected an offer of proof by appellant to the effect that
there was lack of uniformity in Maritimes' exercise of the power of
condemnation as between the various property owners. The district
court was undoubtedly correct in ruling that this matter was
outside the scope of the only triable issue: the value of the
property condemned.
The last question raised by appellant regards a claimed
error by the district court in its failure to give a requested
instruction dealing with severance and stigma damages. There are
several reasons why this contention should not prosper. First,
Decoulos failed to properly preserve this claim in accordance with
Rule 51(c). Fed. R. Civ. P. 51(c). A party who objects to the
court's failure to give a requested instruction must do so on the
record before the jury retires to deliberate. See, e.g., Faigin v.
Kelly, 184 F.3d 67, 87 (1st Cir. 1999). Second, Decoulos points to
nothing in the record that justifies an instruction for severance
or stigma damages. See, e.g., United States v. 760.807 Acres of
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Land, 731 F. 2d 1443, 1448 (9th Cir. 1984) ("Severance damages are
compensable only if the landowner incurs a direct loss reflected in
the marketplace that results from the taking. Since the landowner
has the burden of proof in establishing severance damages, the
landowner must demonstrate that the taking caused the severance
damages.") (internal quotations and citations omitted).
Nevertheless, the district court gave an appropriate instruction
("you may add any damages, including stigma damages, as to the
remainder of the property, the part that was not taken, but which
may have been damaged by the taking and that is called severance
damages"), and Decoulos fails to explain why this instruction was
inappropriate.
We have considered all other arguments and issues raised
by appellant and find them as frivolous and lacking in merit as the
rest of this appeal.
Affirmed. Appellant is granted 10 days within which to
show cause why double costs should not be imposed against him.
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