Township of Piscataway v. Duke Energy

Opinions of the United
2007 Decisions States Court of Appeals
for the Third Circuit
6-6-2007
Piscataway v. Duke Energy
Precedential or Non-Precedential: Precedential
Docket No. 05-4521
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PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 05-4521
TOWNSHIP OF PISCATAWAY; ALLEN HOWARD;
PEGGY FRIEDMAN; ROBERT HESELTINE;
GAIL HESELTINE; EDWIN MARKANO;
WILLIAM MALLEK; GUY SUABEDISSEN;
TIMOTHY SIMMONDS; PATRICIA SIMMONDS;
JUDITH PAYNE; MICHAEL MATUCH;
DONNA MATUCH; THERESA FLEMING;
ANGELO BARISO; CHARLENE BARISO;
KYLLENE COX; NORMAN HERMAN; LIBBY HERMAN;
NAOMI SHAPIRO; JOEL SHAPIRO
v.
DUKE ENERGY; TEXAS EASTERN TRANSMISSION,
CORP., Appellants
On Appeal from the United States District Court
for the District of New Jersey
(D.C. No. 01-4828)
District Judge: Honorable Faith S. Hochberg
Argued November 27, 2006
Before: FUENTES and GARTH, Circuit Judges, and POLLAK,*
District Judge
*
The Honorable Louis H. Pollak, U.S. District Judge for
the Eastern District of Pennsylvania, sitting by designation.
(Filed: June 6, 2007)
Edwin C. Landis, Jr. (Argued)
William H. Schmidt, Jr.
Meyner & Landis, LLP
One Gateway Center, Suite 2500
Newark, NJ 07102
Counsel for Appellants
Steven D. Cahn (Argued)
Cahn & Parra, LLC
1015 New Durham Road
Edison, NJ 08817
Counsel for Appellees
_____
OPINION OF THE COURT
FUENTES, Circuit Judge.
This action was initiated by the Township of Piscataway
and a group of homeowners to prevent Duke Energy Operating
Company, LLC (“Duke”) and Texas Eastern Transmission, LP
(“Texas Eastern”) from removing fifty shade trees planted along
a public street in Piscataway, New Jersey. The companies
claimed that it was necessary to remove the trees for the safe
inspection and maintenance of three high-pressure, natural gas
pipelines located beneath the street. After the Township settled
with Duke and Texas Eastern, the companies and the
homeowners cross-moved for summary judgment. The District
Court ruled in favor of the homeowners and permanently
enjoined Duke and Texas Eastern from removing the trees.
Because we conclude that there are genuine issues of material
2
fact as to (1) whether removal of the trees is reasonably
necessary to the maintenance of the pipelines, and (2) whether
Duke and Texas Eastern are barred by the doctrine of laches
from asserting a right to remove the trees pursuant to an
easement grant, we will vacate the District Court’s judgment and
remand for further proceedings.
I.
In the early 1940s, Flora and H. Morgan Heath,
predecessors-in-title to the homeowners in this lawsuit, took title
to a large tract of undeveloped land located in the Township of
Piscataway (the “Heath property”).1 In May 1944, the Heaths
granted Defense Plant Corporation (“Defense Plant”), and its
successors and assigns, “the right to lay, operate, renew, alter,
inspect and maintain” two pipelines for the transportation of
natural gas. App. at 72. The 1944 grant required Defense Plant:
to bury such pipelines so that they will not
interfere with the cultivation or drainage of the
land, and also to pay any and all damages to stock,
crops, fences, timber and land which may be
suffered from the construction, operation, renewal,
alteration, inspection or maintenance of such
pipelines.
Id. Defense Plant subsequently constructed two twenty-inch
diameter natural gas pipelines.
In the years that followed, Max and Mildred Richter and
Ethel and Philip Gerber assumed title to the Heath property, and
Texas Eastern Transmission Corporation (“TETCO”) succeeded
to Defense Plant’s easement rights. In January 1960, the
Richters and Gerbers granted TETCO the right to construct a
1
In the Final Pretrial Order entered by the District Court
on November 25, 2003, the parties to this appeal stipulated that
the Heaths, as the original grantors of the easement, are
predecessors-in-title to the homeowners in this case.
3
third pipeline across the property. The 1960 grant imposed the
following restrictions on the parties:
The said Grantor is to fully use and enjoy
the said premises, except for the purposes granted
to [TETCO] and provided the said Grantor shall
not construct nor permit to be constructed any
house, structures or obstructions on or over, or that
will interfere with the construction, maintenance or
operation of, any pipe line or appurtenances
constructed hereunder, and will not change the
grade over such pipe line.
[TETCO] agrees to bury all pipes to a
sufficient depth so as not to interfere with
cultivation of soil, and agrees to pay such damages
which may arise to growing crops, timber, or
fences from the construction, maintenance and
operation of said lines.
App. at 74. TETCO then constructed a third, thirty-six-inch
diameter pipeline.
Over the next several years, the Heath property passed
through the hands of a number of different owners. In February
1963, three real estate development companies that then owned
the property entered into an agreement with TETCO in which
TETCO agreed to reduce the size of the easement by releasing
all portions of the land in the 1944 and 1960 grants not needed
for the pipelines. Attached to the 1963 agreement is a drawing
prepared by TETCO, which shows a proposed residential
neighborhood (referred to as “University Hill”) through which
TETCO’s sixty-foot wide easement runs at a slight diagonal.
The 1963 agreement preserved all of the rights and restrictions
set forth in the 1944 and 1960 grants.2 Sometime thereafter,
appellant Texas Eastern succeeded to TETCO’s easement rights,
2
All three instruments are hereinafter collectively
referred to as “the easement grant.”
4
and later became an affiliate of appellant Duke.3
As a result of residential development of the property, the
land on which the easement is located became a one-block long
public street named Fountain Avenue. The street is flanked by a
large number of trees, many of which were planted in the early
1960s as part of the original residential development of the
neighborhood and have grown to nearly seventy-five feet in
height. The homeowner-appellees live in single-family homes
built by the developers on lots adjacent to Fountain Avenue.
Though all of the trees at issue in this appeal are located on
Township property, the homeowners view the trees, from a
practical and aesthetic perspective, as extensions of their front
yards.
In April 2000, Duke announced that it would be removing
approximately eighty trees from Fountain Avenue in order to
better maintain the pipelines. Township residents vehemently
opposed the proposed action. In October 2001, after several
attempts to negotiate an agreement with Duke failed, the
Township and the homeowners sued for injunctive relief in the
Superior Court of New Jersey, Middlesex County, Chancery
Division. The verified complaint asserted state law causes of
action for trespass, breach of easement, and nuisance. The
Superior Court immediately entered a preliminary injunction
prohibiting Duke from removing the trees on Fountain Avenue.
Duke thereafter removed the matter to federal court based
on diversity jurisdiction. In its answer, Duke denied the
allegations set forth in the verified complaint, and
counterclaimed for injunctive relief prohibiting the Township
and the homeowners from interfering with their rights under the
easement grant. In May 2002, the District Court denied Duke’s
motion for a preliminary injunction and noted that the state court
3
Texas Eastern owns the easement and pipelines. Duke
is responsible for inspecting and maintaining the pipelines. For
the sake of convenience, we refer to appellants collectively as
“Duke.”
5
preliminary injunction prohibiting removal of the trees remained
in effect.
In March 2003, the Township settled with Duke and
consented to the immediate removal of fifty-five trees from
Fountain Avenue, as well as to the future removal of any trees
that exceed eight inches in diameter. The homeowners
proceeded with the action and, following a hearing on April 26,
2005, the District Court denied the homeowners’ request for a
jury trial and dismissed the trespass claim. The District Court,
however, held that the homeowners had standing to pursue the
remaining breach of easement and nuisance claims. After
discovery, the parties filed cross-motions for summary judgment
on their respective breach of easement claims.
On September 20, 2005, the District Court granted the
homeowners’ motion for summary judgment and denied Duke’s
cross-motion for summary judgment on the parties’ respective
breach of easement claims. The Court concluded that Duke
failed to proffer any evidence that removal of the trees was
“reasonably necessary” to the maintenance of the pipelines. In
addition, the District Court found that Duke was barred by the
doctrine of laches from asserting a right to remove the trees
pursuant to the terms of the easement grant. Accordingly, the
District Court permanently enjoined Duke from removing any of
the trees from Fountain Avenue.4
This timely appeal followed. We have appellate
jurisdiction pursuant to 28 U.S.C. § 1291. We exercise plenary
review over standing issues, Gen. Instrument Corp. v. Nu-Tek
Elecs. & Mfg., Inc., 197 F.3d 83, 86 (3d Cir. 1999), as well as a
district court’s summary judgment ruling, Mortellite v. Novartis
Crop Prot., Inc., 460 F.3d 483, 488 n.3 (3d Cir. 2006).5
4
The District Court noted in its opinion that
circumstances might change so as to justify Duke’s removal of
the trees in the future.
5
We note that after the Court heard oral argument in this
matter, the parties consented to have the case referred to
6
II.
After first addressing Duke’s contention that the
individual homeowners lack standing to bring this action, we
turn to the District Court’s rulings on the issues of reasonable
necessity and laches.
A.
The doctrine of standing encompasses both constitutional
requirements and prudential considerations. Miller v. Nissan
Motor Acceptance Corp., 362 F.3d 209, 221 (3d Cir. 2004). The
constitutional component derives from the Article III “case or
controversy” requirement and has three elements:
(1) the plaintiff must have suffered an injury in
fact—an invasion of a legally protected interest
which is (a) concrete and particularized and (b)
actual or imminent, not conjectural or hypothetical;
(2) there must be a causal connection between the
injury and the conduct complained of—the injury
has to be fairly traceable to the challenged action
of the defendant and not the result of the
independent action of some third party not before
the court; and (3) it must be likely, as opposed to
merely speculative, that the injury will be
redressed by a favorable decision.
Trump Hotels & Casino Resorts v. Mirage Resorts, 140 F.3d
478, 484-85 (3d Cir. 1998) (citing Lujan v. Defenders of
Wildlife, 504 U.S. 555, 560-61 (1992)). “These requirements
ensure that plaintiffs have a personal stake or interest in the
outcome of the proceedings” sufficient to justify federal court
intervention. Joint Stock Soc’y v. UDV N. Am., Inc., 266 F.3d
164, 175 (3d Cir. 2001) (internal quotation marks omitted).
mediation. Mediation was not successful, and we now issue our
opinion.
7
Prudential standing “constitute[s] a supplemental aspect
of the basic standing analysis and address[es] concerns regarding
the need for judicial restraint.” Oxford Assoc. v. Waste Sys.
Auth., 271 F.3d 140, 145 (3d Cir. 2001). Thus, “[w]e . . . use the
prudential limits of standing to ensure that only those parties
who can best pursue a particular claim will gain access to the
courts.” Id. Prudential standing rests on the following
principles:
(1) the plaintiff generally must assert his own legal
rights and interests, and cannot rest his claim to
relief on the legal rights or interests of third
parties; (2) even when the plaintiff has alleged
redressable injury sufficient to meet the
requirements of Article III, the federal courts will
not adjudicate abstract questions of wide public
significance which amount to generalized
grievances pervasively shared and most
appropriately addressed in the representative
branches; and (3) the plaintiff’s complaint must
fall within the zone of interests to be protected or
regulated by the statute or constitutional guarantee
in question.
Trump Hotels & Casino Resorts, 140 F.3d at 485 (internal
quotation marks and citations omitted).
Duke contends that the homeowners do not have standing
to enforce the terms of the easement grant because the
homeowners were neither parties to the grant, nor owners of the
land that is subject to its terms. We are not persuaded by Duke’s
argument and conclude that the homeowners have standing to
pursue this action.6
6
It is not entirely clear from Duke’s brief whether they
are arguing that the homeowners lack standing to bring this
action, or that they do not have a cause of action under state law.
See 13 Charles Alan Wright, Arthur R. Miller, Edward H.
Cooper & Richard D. Freer, Federal Practice and Procedure §
8
The fifty trees that Duke wishes to remove are located in
front of the homeowners’ property. In affidavits submitted to
the District Court, the homeowners stated that they purchased
their homes in part because of the economic and aesthetic value
of the trees. Expert reports and certifications submitted to the
District Court attest that the trees add to the value of the
homeowners’ property, help reduce air pollution, improve air
quality, and provide cooling shade which reduces energy costs in
the summer months. As the District Court observed, given the
age and size of the trees, they are effectively irreplaceable.
Removing the trees would cause actual injury to the
homeowners, and a judicial determination that Duke cannot
lawfully engage in the proposed conduct would unquestionably
prevent that injury. Accordingly, we agree with the District
Court that the homeowners have standing to pursue this action.
We also note that the homeowners have a cause of action
under New Jersey law. As New Jersey’s highest court stated in
Clarke v. Kurtz, 196 A. 727, 728 (N.J. 1938):
[W]hen it appears by the true construction of the
terms of a grant that it was the well-understood
purpose of the parties to create or reserve a right . .
. for the benefit of other land owned by the grantor
. . . any grantee of the land to which such right is
appurtenant acquires by his grant a right to have
the servitude or easement . . . protected in equity . .
..
See also, Roehrs v. Lees, 429 A.2d 388, 391 (N.J. Super. Ct.
App. Div. 1981) (“The judge properly ruled that plaintiff had the
burden of demonstrating that the covenant was intended for his
benefit and that defendants were aware of its existence and of its
3531 & n.7 (2d ed. 1984 & Supp. 2007) (noting that existing
case law sometimes conflates the concepts of standing and cause
of action). Because the homeowners plainly satisfy both
requirements, we see no need to comment on the distinction
between standing and stating a cause of action.
9
purpose to benefit plaintiff. Once that burden had been met
plaintiff was entitled to enforce the covenant for his benefit . . .
.”); Mango v. Brodsko, 108 A.2d 879, 880 (N.J. Super Ct. Ch.
Div. 1954) (“Generally, a restrictive covenant imposed upon
land by a grantor in a conveyance of a portion of a tract of land,
if such restrictions are for the benefit of the balance of the land
retained by the grantor, may be enforced by him or a subsequent
grantee of the whole or a part of said retained land.”).
In this case, the restrictions set forth in the easement grant
were clearly intended by the original grantor, the homeowners’
predecessors-in-title, to benefit the land by ensuring that the
pipelines would not unduly interfere with the cultivation and
development of the property. The homeowners took title to their
homes with notice of the easement grant, and the rights and
restrictions set forth in the grant. It is reasonable to infer from
the drawing attached to the 1963 agreement that when TETCO,
Duke’s predecessor-in-title, executed the agreement, it was
aware that the owners of the property—three real estate
development companies—planned to build a residential
neighborhood through which the pipelines would run. Based on
these facts, the individual homeowners have a cause of action
under New Jersey law.7
B.
We now turn to (1) whether removal of the trees on
Fountain Avenue is “reasonably necessary” to Duke’s
maintenance of the pipelines, and (2) whether Duke is barred by
the doctrine of laches from asserting a right to remove the trees
pursuant to the terms of the easement grant.
7
As the homeowners have a cause of action under New
Jersey law, they plainly satisfy the requirements of prudential
standing. See Trump Hotels & Casino Resorts, 140 F.3d at 485
(noting that in order to satisfy the requirements of prudential
standing, a litigant must “assert his own legal rights and
interests”).
10
1.
Duke operates the pipelines and maintains the easement
pursuant to certificates of public convenience and necessity
issued by the Federal Energy Regulatory Commission (“FERC”).
The Company is subject to regulation by FERC under the
Natural Gas Act, 15 U.S.C. § 717, and by the Department of
Transportation (“DOT”) under the Natural Gas Pipeline Safety
Act, 49 U.S.C. § 60101. Applicable regulations require Duke to
inspect the pipelines on a regular basis, but do not prescribe a
particular method of inspection. See 49 C.F.R. § 192.705(2006).
Duke has promulgated a set of Standard Operating
Procedures (“SOPs”) that meet and, in some cases, exceed
federal requirements. Pursuant to its SOPs, Duke typically
conducts aerial surveillance of the easement three times per
week in order to identify any encroachments on or near the
pipeline right-of-way, as well as any distressed vegetation that
might indicate a gas leak. Duke also routinely patrols the
pipeline right-of-way by car.
Every few years, Duke inspects the pipelines using a
device referred to in the industry as a “smart pig,” which is
placed inside the pipelines to measure the thickness of the
pipeline walls. Because of the difficulty and expense associated
with its use, the smart pig is not deployed on a routine basis. As
of May 2006, the date the parties briefed this appeal, the smart
pig had last been used to inspect the Fountain Avenue portion of
the pipelines in 2003 and 2004, at which time no irregularities or
weaknesses in the walls were detected.
In addition, the state of New Jersey has implemented a
“One-Call System,” which requires contractors to notify the state
several days prior to the start of any excavation project. Duke
and other pipeline operators are required by the One-Call System
to respond to any such notification and to work with the
contractors to ensure that the pipelines are not damaged or
disturbed in the course of excavation. See N.J. Stat. Ann. §§
48:2-73 to -91 (1998 & Supp. 2007).
11
The easement grant explicitly confers upon Duke the right
to inspect and maintain the pipelines, but does not specify
whether that right includes the authority to remove trees or
foliage from the pipeline right-of-way. Even in the absence of
an express right, however, “there is, arising out of every
easement, an implied right to do what is reasonably necessary for
its complete enjoyment, that right to be exercised, however, in
such reasonable manner as to avoid unnecessary increases in the
burden upon the landowner.” Tide-Water Pipe Co. v. Blair
Holding Co., 202 A.2d 405, 412 (N.J. 1964). As the New Jersey
Supreme Court has explained, “the touchstone is necessity and
not convenience.” Hammett v. Rosensohn, 140 A.2d 377, 383
(N.J. 1958).
Duke asserts that removal of the trees is reasonably
necessary for inspection and maintenance of the pipelines. More
specifically, Duke contends that (1) the trees prevent it from
conducting aerial surveillance of the pipeline right-of-way; (2)
the trees impede emergency access to the pipelines in the event
of an unexpected and potentially devastating pipeline
emergency; and (3) root growth from the trees is damaging the
protective coating of the pipelines thereby increasing the
possibility of a dangerous gas leak or explosion.
a) Aerial Surveillance
The District Court found that Duke “proffer[ed] no
evidence that airplanes could not see construction equipment
through the trees’ branches, and they proffer[ed] no facts to
demonstrate that land surveillance, in combination with the
warning signs against construction on Fountain Avenue
(required by law) and the Township’s ability to regulate
construction on its property, is ineffective to give them notice
regarding safety and maintenance of the pipelines.” App. at 25.
We disagree, and conclude that Duke introduced sufficient
evidence to raise a triable issue as to whether aerial surveillance
is reasonably necessary to the maintenance of the pipelines and,
if so, whether the Fountain Avenue trees prevent such
surveillance.
12
For example, Duke presented an expert report prepared by
Terry Mock, a right-of-way consultant with experience in the
utilities industry. Mock stated in his report:
While the [DOT] Regulations allow that the Right-
of-Way can be inspected by Walking, Driving or
Flying, Pipeline Companies utilize airplanes to
comply with the inspection of there [sic] Right-of-
Way because they are the least obtrusive, and most
efficient means to perform this task.
Patrol Planes are looking for distressed vegetation
that might indicate a leak or release of product . . .
.
Patrol Planes are looking for encroachment
activities that affect the safe operation of the
pipeline. The pilots are inspecting conditions on
and adjacent to the Right-of-Way. Construction
activity that is taking place on the Right-of-Way
without a one-call notice is too late . . . when a
pilot observes activity approaching the Right-of-
Way, that activity can be reported and investigated
before the threat reaches the Right-of-Way.
App. at 360-62.
According to the certified statement of Don Thompson, a
Right-of-Way Supervisor for Duke Energy:
The most effective way to patrol the pipeline on a
regular basis (i.e. three (3) times a week, weather
permitting) is by air. Inspection by “drive by”
alone is not as effective because of parked
vehicles, blockage of lateral view by vegetation
and the difficulty in observing dying grass or other
vegetation (indicating gas leaks) from a horizontal
view. “Drive by” inspections are also cost
prohibitive.
13
App. at 486.
Duke also submitted to the District Court “Special Report
281,” prepared in 2004 by the Transportation Research Board of
the National Academies,8 which states:
Companies are required by federal regulation to
inspect their rights-of-way on a regular basis; they
often do so by using aircraft, especially for
properties lacking public access. Without regular
clearing of the rights-of-way, such inspection can
be ineffective.
App. at 532.
In addition, the Pre-Trial Order entered by the District
Court indicated that Duke intended to present Steven Warner, a
Duke pilot, as a trial witness who would “testify pertaining to
tree cover making him unable to observe the Easement from the
air.” App. at 656.
This evidence, of course, does not necessarily establish
that aerial surveillance is necessary to the safe maintenance of
the pipelines, as opposed to being more convenient or cost-
effective than land surveillance. On a motion for summary
judgment, however, Duke must only proffer evidence sufficient
to raise a genuine issue for trial. We think Duke has done so,
and that the evidence Duke has presented justifies a full hearing
on the merits of their argument.
b) Emergency Access
8
The Transportation Research Board of the National
Academies is a division of the National Academy of Sciences, a
private, nonprofit society of scholars engaged in scientific and
engineering research. According to Special Report 281, “[o]n
the authority of the charter granted to it by the Congress in 1863,
the Academy has a mandate that requires it to advise the federal
government on scientific and technical matters.” App. at 498.
14
The District Court likewise rejected Duke’s contention
that the Fountain Avenue trees prevent them from gaining quick
access to the pipelines in the event of an emergency. The sole
explanation offered by the District Court was that “[n]o evidence
has been proffered regarding what trees are currently in the way
or that any such tree could not be quickly removed in the event
of an emergency.” App. at 26.
Duke points out that in settling with the Township, it
agreed to remove only the fifty-five trees that posed the greatest
danger to the pipelines. According to the certified statement of
Tim Vaughan, Duke’s Area Superintendent in New Jersey, it is
these trees “that can result in an inspection missing dangerous
earthmoving or other construction activities in the Right of Way
Grant. In the event of an emergency, these same trees can cause
life threatening delays when we must gain quick access to the
Pipelines.” App. at 161. As with Duke’s evidence concerning
its inability to effectively inspect the pipeline right-of-way by
air, we conclude that the evidence in the record concerning
emergency access to the pipelines raises a factual issue that is
properly resolved at trial.
c) Root Growth
With respect to alleged dangers posed by root growth, the
District Court stated:
[Duke] proffered no evidence during discovery
that any of the tree roots that have been on
Fountain Avenue for forty years are rubbing
against the pipelines; have proffered no evidence
as to how long after excavation the “atypical” root
growth will continue; and no proffer of any test on
the roots of the five trees that have recently been
cut down on Fountain Avenue (with the consent of
some residents) to determine if they had reached or
were in fact rubbing against the pipeline.
App. at 26. Although the District Court raises significant
concerns, there is also substantial evidence in the record
15
suggesting that the tree roots nevertheless pose a significant
threat to the integrity of the pipelines. For example, Duke’s
expert, Terry Mock, stated in his report:
[R]oots do atypical things in a pipeline
environment. The friction of the gas/product
moving through the pipeline causes the soil
temperatures to be warmer along the pipeline. . . .
Pipelines are constructed by excavating a
ditch/trench into the soil, many times into
undisturbed soil. Making those undisturbed areas
now disturbed. . . . The soils have be[en]
oxygenated by the disturbance, and the nutrients in
the topsoil were mixed throughout the ditch/trench
. . . thus providing for an environment that
promotes tree development. . . . You’ll find root
development at deeper depths than typical. . . .
Not only does a pipeline environment allow tree
roots to do atypical things, I believe those factors
attract tree roots to develop around and along the
pipeline. . . . As the tree root becomes in contact
with the pipeline it damages the protective
coatings. . . . Over time the coating will be
damaged to [the] point that [it] will be rendered
useless.
App. at 379-83; 390; 392-93.
Mock further stated:
In my professional opinion, both from my
horticulture background and my experience in the
Right-of-Way profession in the pipeline industry, I
strongly believe that the trees along Fountain
Avenue interfere with the Operation and
Maintenance of the pipeline. The trees have the
ability to cause the pipeline company to be out of
compliance with the Federal Regulations which
they operate under.
16
App. at 434-35.
Moreover, we think the District Court overlooked
evidence that would explain Duke’s decision not to conduct root
tests on either the existing Fountain Avenue trees or the five
trees that were removed from Fountain Avenue in December
2004 with the consent of the parties.9 According to the certified
statement of Vaughan, Duke’s Area Superintendent, for
example:
15. On every occasion of actual exposure of the
pipes and my inspection of them, the critical
protective coating has been discovered to be very
brittle and fragile.
16. If roots are in contact with this brittle and
fragile coating, it is almost a certainty that any
disturbance of the roots proximate to the pipe will
result in a breach of the coating.
17. It is for this reason that the decision was made,
with my full agreement, not to excavate the root
system of any of the trees recently removed on
Fountain Avenue.
....
19. Because I anticipated root contact with the
pipes [on Fountain Avenue], I realized that digging
into a root system would probably result in a
9
On December 17, 2004, Duke filed an unopposed
motion with the District Court to partially vacate the state court’s
preliminary injunction so as to permit them to remove five trees
pursuant to the terms of the settlement agreement with the
Township. The District Court granted Duke’s request on
January 27, 2005. Duke removed the trees by cutting them down
and grinding the remaining stumps to ground-level, but left the
roots of the trees intact.
17
breach of the coating system which would
necessitate replacement of the coating system.
....
22. The correct way to deal with the Fountain
Avenue situation is to stop the roots from growing
by cutting down the trees. That will prevent future
growth of the roots that could damage the coatings.
App. at 478-79. In view of this evidence, we conclude that a full
hearing on the dangers posed by root growth is appropriate.
In sum, we conclude that because there is a triable issue
of fact as to whether removal of the trees is reasonably necessary
to Duke’s maintenance of the pipelines, the District Court should
not have entered summary judgment in favor of the
homeowners.
2.
The District Court also ruled that Duke was barred by the
doctrine of laches from asserting a right to remove the trees
pursuant to the terms of the easement grant. Specifically, the
District Court found that Duke’s “forty-year delay” in asserting a
right to remove the trees was inexcusable and prejudicial to the
homeowners, who purchased their homes believing that the trees
would remain on Fountain Avenue and thereby contribute to
their use and enjoyment of their property.
Under New Jersey law, laches is “an equitable defense
that may be interposed in the absence of the statute of
limitations.” Lavin v. Bd. of Ed., 447 A.2d 516, 519 (N.J.
1982). “Laches may only be enforced when the delaying party
had sufficient opportunity to assert the right in the proper forum
and the prejudiced party acted in good faith believing that the
right had been abandoned.” Knorr v. Smeal, 836 A.2d 794, 800
(N.J. 2003). “The key factors to be considered in deciding
whether to apply the doctrine are the length of the delay, the
18
reasons for the delay, and the ‘changing conditions of either or
both parties during the delay.’” Id. (quoting Lavin, 447 A.2d at
520). These are factual determinations that typically should be
made after a full evidentiary hearing. See, e.g., 27A Am. Jur. 2d
Equity § 201 (1996) (“Where a defendant asserts the laches
defense, a full hearing of testimony on both sides of the issue is
required.”).
In its decision, the District Court rejected, out of hand,
Duke’s proffered explanation for not seeking to remove the trees
prior to April 2000. In the District Court’s words, “[Duke’s]
explanation for this delay is that they have increased the
stringency of their SOPs beyond that legally required by safety
standards, an event completely within [Duke’s] control.
Stringent procedures are laudable, but [Duke] can produce equal
results with ground surveillance as with aerial surveillance.”
App. at 30. There is, however, significant evidence in the record
that would explain Duke’s failure to remove the trees prior to
April 2000.
For example, Thompson, Duke’s Right of Way Manager,
offered the following explanations in his certified statement:
4. Due to advances in safety technology and
lessons learned from accident experiences
nationwide over time, safety standards for the
pipeline industry have continually evolved over the
years I have worked in the industry.
5. While Duke has always been diligent in terms
of pipeline safety and has maintained internal
safety procedures (SOPs) and Guidelines that
exceed the minimum required by the U.S.
Department of Transportation, Office of Pipeline
Safety, Duke became even more diligent in its
safety standards following (a) the explosion that
occurred in its right-of-way located in Edison,
New Jersey on March 23, 1994 and (b) integrity
management program regulations (the “Integrity
Management Regulations”) promulgated by the
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DOT which became effective in February 2004.
The Edison accident was caused by third party
damage to the pipe there.
6. [Duke’s Guideline TG-010] states that
“[p]lanting of trees is not permitted on the pipeline
right-of-way,” [and] “[p]lanting of shrubs, bushes
or other plants associated with landscaping on the
pipeline right-of-way is subject to Company
approval and shall not exceed 4 feet in height.”
7. These requirements are fully consistent with
industry standards and are substantiated by recent
research on the subject.
....
12. Duke, Texas Eastern and other affiliates of
Duke operate approximately 18,000 miles of high
pressure natural gas pipelines. In 1992, Texas
Eastern started a program to improve pipeline
safety by more thoroughly clearing right of way.
App. 484-86.
Duke introduced other evidence to explain why it did not
seek to remove the trees before 2000. For example, Special
Report 281 discusses recent pipeline failures and accidents, as
well as the industry’s response to these incidents:
Excavation and construction-related damage to
pipelines remain the leading causes of pipeline
failure. Such failures in 2003 were estimated by
USDOT to contribute 22 percent of hazardous
liquids and 24 percent of natural gas transmission
pipeline incidents.
....
Recently [the Office of Pipeline Safety]
20
implemented the Integrity Management Program, a
regulatory approach that requires pipeline
operators to comprehensively assess, identify, and
address the safety of pipeline segments that are
located in areas where the consequences of a
pipeline failure could be significant.
....
On March 23, 1994, a 36-inch-diameter pipeline
owned and operated by Texas Eastern
Transmission Corporation ruptured
catastrophically in Edison Township, New Jersey .
. . The force of the rupture and of natural gas
escaping at a pressure of about 970 pounds per
square inch gauge excavated the soil around the
pipe and blew gas hundreds of feet into the air,
propelling pipe fragments, rocks, and debris more
than 800 feet. Within 1 to 2 minutes of the
rupture, the gas ignited, sending flames upward
400 to 500 feet. Heat radiating from the massive
fire ignited several building roofs in a nearby
apartment complex. Occupants, alerted to the
emergency by noises from escaping gas and rocks
hitting the roofs, fled from the burning buildings.
The fire destroyed eight buildings. Approximately
1,500 apartment residents were evacuated.
Although none of the residents suffered a fatal
injury, response personnel evacuated 23 people to
a local hospital and another 70 apartment residents
made their own way to hospitals.
....
The final rule for integrity management of
natural gas transmission pipelines in high-
consequence areas went into effect in February
2004. This rule requires operators of natural gas
transmission pipelines to develop integrity
management programs for pipelines located where
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a leak or rupture could do the most harm (i.e.,
could affect high-consequence areas). The rule
requires gas transmission pipeline operators to
perform ongoing assessment of pipeline integrity;
to improve data collection, integration, and
analysis; to repair and remediate the pipeline as
necessary; and to implement preventive and
mitigative actions.
App. at 512; 513; 524; 609. In light of these newly promulgated
standards, as well as the greater attention paid to pipeline safety
as a result of recent catastrophes, we believe the evidence is
sufficiently compelling to create a genuine issue for trial on the
homeowners’ laches defense to Duke’s breach of easement
claim.
III.
We recognize that a bench trial on the merits could result
in precisely the same outcome should the District Court, after a
full evidentiary hearing, conclude that removal of the trees is not
reasonably necessary to the safe maintenance of the pipelines, or
that Duke’s decision not to seek removal of the trees prior to
April 2000 bars it from doing so now.10 Nevertheless, we
conclude that such a determination should only be made after the
parties have the opportunity to fully develop the factual record at
10
We note that the parties also moved for summary
judgment on the issue of whether the provision of the easement
grant that prohibited Duke and Texas Eastern from interfering
with the “cultivation” of the land applied to the removal of trees.
In addition, at the invitation of the District Court, Duke filed a
Fed. R. Civ. P. 12(b)(6) motion challenging the homeowners’
nuisance claim. Because the District Court ruled in favor of the
homeowners on the breach of easement claim, it concluded that
it did not need to reach the “cultivation” issue or Duke’s Rule
12(b)(6) motion. On remand, the District Court may find that it
is necessary to rule on these issues before proceeding to trial.
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trial.11
For the foregoing reasons, we will vacate the judgment of
the District Court and remand for further proceedings consistent
with this opinion.
11
For the same reasons, we reject Duke’s argument that
the District Court should have entered summary judgment in its
favor on the breach of easement claim.
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