Columbia Gas Transmission, LLC v. 1.01 Acres

• Decision Date: 26 September 2014
• Docket Number: 13–4461.,13–4459,Nos. 13–4458,13–4460,s. 13–4458
• Citation: 768 F.3d 300
• Parties: COLUMBIA GAS TRANSMISSION, LLC, Appellant v. 1.01 ACRES, MORE OR LESS IN PENN TOWNSHIP, YORK COUNTY, PENNSYLVANIA, LOCATED ON TAX ID # 440002800150000000 OWNED BY Dwayne P. BROWN and Ann M. Brown; Dwayne P. Brown; Ann M. Brown Columbia Gas Transmission, LLC, Appellant v. 101 Acres, and 41,342 Sq. Ft More or Less in Heidelberg Township, York County, Pennsylvania, Located on Tax Id # 30000EE1600000000, Owned by Bradley E. Herr and Elizabeth M. Herr; Bradley E. Herr; Elizabeth M. Herr Columbia Gas Transmission, LLC, Appellant v. 1.5561 Acres, More or Less in Heidelberg Township, York County Pennsylvania, Located on Tax Id # 30000ED010300000000, Owned by Myron A. Herr and Mary Jo Herr; Myron A. Herr; Mary Jo Herr Columbia Gas Transmission, LLC, Appellant v. 1.010 Acres, More or Less in Penn Township, York County Pennsylvania, Located on Tax ID # 440002800240000000, Owned by Douglas W. Hilyard and Tessa J. Hilyard; Douglas W. Hilyard; Tessa J. Hilyard.
• Court: U.S. Court of Appeals — Third Circuit

768 F.3d 300

COLUMBIA GAS TRANSMISSION, LLC, Appellant

v.1.01 ACRES, MORE OR LESS IN PENN TOWNSHIP, YORK COUNTY, PENNSYLVANIA, LOCATED ON TAX ID # 440002800150000000 OWNED BY Dwayne P. BROWN and Ann M. Brown; Dwayne P. Brown; Ann M. Brown

Columbia Gas Transmission, LLC, Appellant

v.101 Acres, and 41,342 Sq. Ft More or Less in Heidelberg Township, York County, Pennsylvania, Located on Tax Id # 30000EE1600000000, Owned by Bradley E. Herr and Elizabeth M. Herr; Bradley E. Herr; Elizabeth M. Herr

Columbia Gas Transmission, LLC, Appellant

v.1.5561 Acres, More or Less in Heidelberg Township, York County Pennsylvania, Located on Tax Id # 30000ED010300000000, Owned by Myron A. Herr and Mary Jo Herr; Myron A. Herr; Mary Jo Herr

Columbia Gas Transmission, LLC, Appellant

v.1.010 Acres, More or Less in Penn Township, York County Pennsylvania, Located on Tax ID # 440002800240000000, Owned by Douglas W. Hilyard and Tessa J. Hilyard; Douglas W. Hilyard; Tessa J. Hilyard.

Nos. 13–4458, 13–4459, 13–4460, 13–4461.

United States Court of Appeals, Third Circuit.

Argued on July 9, 2014.

Filed: Sept. 26, 2014.

Anastasia P. Cordova, Esquire Stephen P. Mulligan, Esquire John D. Wilburn, Esquire, (argued), McGuireWoods Tysons Corner, VA, Erin N. Fischer, Esquire McGuireWoods Pittsburgh, PA, for Appellant.

Joshua M. Autry, Esquire, (argued), Michael F. Faherty, Esquire, Lavery Faherty Patterson, Harrisburg, PA, for Appellees.

Before: RENDELL, CHAGARES and JORDAN, Circuit Judges.

OPINION

RENDELL, Circuit Judge:

The issue before us is straightforward: does Columbia Gas Transmission, LLC (“Columbia”), have the right of eminent domain to obtain easements over the land of objecting landowners, outside of the existing right of way, in order to replace deteriorating pipeline? The answer is equally straightforward and clear: yes.

The regulatory authority given to natural gas companies such as Columbia actually anticipates replacement outside the existing right of way as we discuss below, and contains no adjacency requirement. The issue before us, then, whether Columbia has a right to replace the pipeline outside of the existing right of way, is actually a non-issue. But, the District Court put a peculiar “spin” on the regulations in question, finding them to be ambiguous by adopting its own definition of “replace” and concluding that a “notice” of “proposed rulemaking” for “Emergency Reconstruction of Interstate Natural Gas Facilities” promulgated by the Federal Energy Regulatory Commission (“FERC”) after 9/11 should somehow be viewed as resolving this ambiguity in the law. Our dissenting colleague adopts this argument. However, we suggest that the statute and regulations are clear and the case before us is easily resolved.

Columbia, an interstate natural gas company subject to the jurisdiction of FERC, seeks to replace a portion of a natural gas pipeline (“Line 1655”) that runs in and around York County, Pennsylvania. Because the original location of the pipeline has become heavily populated, the replacement will not track the original line but instead will be outside the existing right of way. (App.27.) ¹ In an effort to obtain easements necessary to complete construction of the replacement, in March 2013, Columbia filed Complaints in Condemnation against four land-owning couples (the “Landowners”) in federal court. In May 2013, Columbia filed motions for partial summary judgment and for preliminary injunctions to acquire immediate possession of the easements. In June 2013, the Landowners also filed motions for summary judgment. The District Court subsequently denied Columbia's motions and granted the Landowners' motions, holding that Columbia did not have the right of eminent domain required to condemn the easements. The District Court's conclusion rested on the determination that the relevant FERC regulation, 18 C.F.R. § 157.202(b)(2)(i), was ambiguous. As a result, the Court looked outside the regulations to a sentence in a notice of proposed rulemaking that it concluded set forth the agency interpretation. This was a mistake. The language of the governing regulations could not be more clear. For the reasons set forth below, we will reverse the judgments of the District Court.²

I. Background

Line 1655 is over fifty years old, and Columbia asserts that portions of the pipeline must be replaced to meet safety standards established by the Pipeline and Hazardous Materials Safety Administration. Columbia has already replaced 19,000 feet—or 95%—of the pipeline but has been stalled in replacing the last 1,000 feet becauseit lacks the remaining necessary easements—that is, the easements on and across the Landowners' properties. Columbia attempted to obtain these easements through negotiation, as it had the others it needed, but was unsuccessful.³ Accordingly, Columbia filed a complaint in the District Court, seeking condemnation of the remaining easements to which it was entitled pursuant to the Natural Gas Act, 15 U.S.C. § 717f(h). Before addressing the District Court's disposition of the case, we will set forth the statutory scheme that underpins Columbia's entitlement to the easements.

A. Statutory Scheme

The Natural Gas Act 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 ... 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.

15 U.S.C. § 717f(h) (emphasis added). Accordingly, a certificate of public convenience and necessity gives its holder the ability to obtain automatically the necessary right of way through eminent domain, with the only open issue being the compensation the landowner defendant will receive in return for the easement. In 1983, FERC issued a blanket Certificate of Public Convenience and Necessity (the “FERC Certificate”) to Columbia that covers Line 1655. Columbia's FERC Certificate states that Columbia is “authorized to conduct many routine activities and abandon facilities and service on a self-implementing basis without further authorization by the Commission.” (App.104.) (emphasis added) In defining “routine activities,” the Certificate references 18 C.F.R. § 157.203(b). This regulation provides that blanket certificate holders have automatic authorization to engage in transactions described in certain other provisions, including 18 C.F.R. § 157.208(a), which states, in relevant part:

If the project cost does not exceed the cost limitations set forth in column 1 of Table I, under paragraph (d) of this section, or if the project is required to restore service in an emergency, the certificate holder is authorized to make miscellaneous rearrangements of any facility, or acquire, construct, replace, or operate any eligible facility.

18 C.F.R. § 157.208(a) (emphasis added). Costs limitations are not an issue in this case.⁴ Thus, if Columbia is replacing an “eligible facility,” this constitutes a “routine activity” and Columbia can conduct this activity on a “self-implementing basis without further authorization by the Commission.” (App.104.) ⁵

It is important to note that if Columbia Gas did not have a blanket certificate, and instead merely possessed a certificate of public convenience and necessity authorizing construction of a mainline, for instance, it would be able nonetheless to construct or extend facilities “which constitute the replacement of existing facilities that have or will soon become physically deteriorated or obsolete, to the extent that replacement is deemed advisable, if ... [t]he replacement facilities ... will be located in the same right-of-way or on the same site as the facilities being replaced....” 18 C.F.R. § 2.55(b)(1); 15 U.S.C. § 717(f)(c)(1)(A). This provision is an exemption that relieves natural gas companies from the requirement of having to obtain a certificate of public convenience and necessity.

However, with the instant blanket certificate of public convenience and necessity, authorizing routine activities on a self-implementing basis, Columbia is not limited to replacing within the same right of way, pursuant to Section 2.55(b). Instead, as noted above, it can engage in any routine activity without further authorization including generally “replac[ing] ... any eligible facility.” 18 C.F.R. § 157.208(a). The issue becomes: is Columbia replacing an “eligible facility”? If so, it needs no further authorization.

Section 157.202(b)(2)(i) defines an “eligible facility” as including “ main line, lateral, and compressor replacements that do not qualify under § 2.55(b) of this chapter because they will result in an incidental increase in the capacity of main line facilities, or because they will not satisfy the location or work space requirements of § 2.55(b).” Thus, by definition, this provision includes the replacement of facilities that cannot “be located in the same right-of-way or on the same site as the facilities being replaced.” 18 C.F.R. § 2.55(b)(ii). Accordingly, by their terms, Sections 157.203(b) and 157.208(a) specifically and automatically authorize the main line replacement at issue here as a routine activity in connection with an eligible facility that cannot be located in the same right of way or same site, which Columbia Gas has the right to “self-implement [ ]” without further authorization from FERC. (App.104.)

Though not disputed here, even the right of blanket certificate holders to replace eligible facilities is not without limits. The Dissent points out four such checks: a reporting requirement, a notice requirement, an environmental-impact-statement requirement, and monetary restrictions. (Dissent Op. at 329.)

Other curbs significantly restrict the...