D.C. Gas Transmission Llc v. Crawford

• Decision Date: 29 October 2010
• Docket Number: Case No. 1:09–CV–2547.
• Citation: 746 F.Supp.2d 905
• Parties: COLUMBIA GAS TRANSMISSION, LLC, Plaintiff,v.CRAWFORD, et al., Defendants.
• Court: U.S. District Court — Northern District of Ohio

746 F.Supp.2d 905

COLUMBIA GAS TRANSMISSION, LLC, Plaintiff,

v.CRAWFORD, et al., Defendants.

Case No. 1:09–CV–2547.

United States District Court, N.D. Ohio.

Oct. 29, 2010.

Jerome W. Cook, Michael L. Snyder, McDonald Hopkins, Cleveland, OH, Jodie N. Herrmann, John D. Wilburn, M. Melissa Glassman, McGuire Woods McLean, VA, Leonard J. Marsico, McGuire Woods, Pittsburgh, PA, for Plaintiff.Alan T. Ackerman, Darius W. Dynkowski, Ackerman Ackerman & Dynkowski, Bloomfield Hills, MI, David N. Haring, Brown Bemiller Murray McIntyre & Haring, Mansfield, OH, Elizabeth A. Davis, Vorys, Sater, Seymour & Pease, Cleveland, OH, John K. Keller, Timothy B. McGranor, Vorys, Sater, Seymour & Pease, Columbus, OH, for Defendants.

OPINION & ORDER

JAMES S. GWIN, District Judge.

In this Natural Gas Act condemnation case, Plaintiff Columbia Gas Transmission, LLC moves for partial summary judgment on the issue of its right to condemn the Defendants' property. [Doc. 113.] For the following reasons, this Court GRANTS IN PART and DENIES IN PART the Plaintiff's motion.

I. Background

Columbia Gas, an interstate natural gas company, brings this action against the owners of land parcels in Richland County, Ohio (Ava Crawford, Charles Crawford, the Lois Oyster Revocable Living Trust, Van Ross Wade, and Shirley Wade) and the corporate lessees of six natural gas productions wells on those parcels (Interden Industries and Roman Well Services). Defendant Interden holds leases with the Owner Defendants to mine for oil and natural gas, and to erect structures on the land for that purpose. [Doc. 1–5; Doc. 1–6; Doc. 1–7.] Defendant Roman Well operates natural gas production wells on these leased properties. Columbia Gas maintains a gas storage field in a geologic stratum called the Clinton Sandstone Formation, which neighbors the Defendants' well. The Plaintiff seeks permanent easements from the Owner Defendants and leasehold rights from the Lessee Defendants, which Columbia Gas says are necessary to protect the integrity of its natural gas storage and production. [Doc. 1.]

The Court must consider whether Columbia Gas has established its authority under the Natural Gas Act's eminent domain provisions to condemn the easements and leasehold interests in these neighboring wells, leaving only the issue of just compensation for trial. This case focuses on six of those gas production wells: one well on the Crawford property, two wells on the Oyster Trust property, and three wells on the Wade property.

Plaintiff Columbia Gas discovered that the Defendants' wells were producing natural gas from the Plaintiff's storage field. [Doc. 1.] On February 25, 2008, Columbia Gas applied to the Federal Energy Regulatory Commission (FERC) for a Certificate of Public Convenience and Necessity authorizing an expansion of the storage field and protective boundaries to include a protective area encompassing the six neighboring wells. On July 15, 2009, FERC issued a certificate approving Columbia Gas's proposed expansion of approximately 3,000 acres out from the Plaintiff's existing gas storage field boundary. [Doc. 114–2.]

After obtaining the FERC certificate, Columbia Gas says it attempted to negotiate storage easements from the Owner Defendants. On August 27, 2009 and again on October 5, 2009, Columbia Gas sent letters to the Owner Defendants that referenced the FERC certificate and offered compensation for the easements. [Doc. 114 at 11; Doc. 114–3; Doc. 114–4; Doc. 114–5.] Columbia Gas says its August 27, 2009 letter informed each owner that the owner's land lay within the extended boundary approved by FERC, stated that Columbia Gas sought storage rights under that land, and offered compensation. [Doc. 114 at 11.] The Plaintiff's October 5, 2009 letter offered $50 in compensation for the right to store natural gas in certain areas under the land and calculated a total payment based on the number of acres the Plaintiff sought to acquire. The letter set this offer to expire on October 13, 2009 and indicated that Columbia Gas would file a condemnation action thereafter. [Doc. 114–3; Doc. 114–4; Doc. 114–5.] The parties did not agree to contract for the rights or to an amount of compensation.

Columbia Gas claims it also attempted to acquire Interden and Roman Well's leasehold rights by contract. The Plaintiff says it discussed possible compensation with Interden and Roman Well representatives on seven separate occasions: February 1, 2007, August 19, 2008, December 1, 2008, December 5, 2008, December 17, 2008, February 6, 2009, and February 17, 2009. [Doc. 114 at 13–14.] The parties did not agree to compensation during any of these meetings. Columbia Gas adds that counsel for Interden and Roman Well unequivocally declared, in a related court hearing, that it would not sell the wells. [Doc 114 at 7.]

All the Defendants challenge the legitimacy of these negotiations. The Owner Defendants say that Columbia Gas never disclosed a map of the FERC-approved expansion, leaving the Defendants unaware of how much property Columbia Gas sought from them and thus unable to negotiate. [Doc. 127.] Defendants Interden and Roman Well say that the Plaintiff's only attempts to negotiate with them occurred before FERC had issued its certificate, and thus before Columbia Gas acquired a statutory right to exercise the eminent domain power. [Doc. 128.]

Columbia Gas maintains that because it has (1) obtained a FERC certificate, and (2) been unable to acquire the property by contract, the Natural Gas Act permits it to condemn the Defendants' easements and leasehold interests through eminent domain. Columbia Gas says that the plain language of the Natural Gas Act speaks for itself and that its failure to acquire the easement and leasehold interests by contract satisfies this language. [Doc. 113.]

II. Legal Standard

Under Federal Rule of Civil Procedure 56(c), summary judgment is proper “if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law.” Daugherty v. Sajar Plastics, Inc., 544 F.3d 696, 702 (6th Cir.2008).

The moving party has the initial burden of showing the absence of a genuine issue of material fact as to an essential element of the non-moving party's case. See Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). “A fact is material if its resolution will affect the outcome of the lawsuit.” Martingale, LLC v. City of Louisville, 361 F.3d 297, 301 (6th Cir.2004) (citing Daughenbaugh v. City of Tiffin, 150 F.3d 594, 597 (6th Cir.1998) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986))). The moving party meets its burden by “informing the district court of the basis for its motion, and identifying those portions of ‘the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any,’ which it believes demonstrate the absence of a genuine issue of material fact.” Celotex Corp., 477 U.S. at 323, 106 S.Ct. 2548 (quoting Fed.R.Civ.P. 56(c)). However, the moving party is under no “express or implied” duty to “support its motion with affidavits or other similar materials negating the opponent's claim.” Id.

Once the moving party satisfies its burden, the burden shifts to the non-moving party to set forth specific facts showing a triable issue. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). It is not sufficient for the nonmoving party merely to show that there is some existence of doubt as to the material facts. See id. at 586, 106 S.Ct. 1348. Nor can the non-moving party rely upon mere allegations or denials of its pleadings. Fed.R.Civ.P. 56(e). In responding to a summary judgment motion, the non-moving party “cannot rely on the hope that the trier of fact will disbelieve the movant's denial of a disputed fact, but must present affirmative evidence to defeat a properly supported motion for summary judgment.” Street v. J.C. Bradford & Co., 886 F.2d 1472, 1477 (6th Cir.1989) (internal quotation omitted). The non-moving party must adduce more than a scintilla of evidence to overcome the summary judgment motion. Id.

In deciding a motion for summary judgment, the Court views the factual evidence and draws all reasonable inferences in favor of the non-moving party. Thomas v. Cohen, 453 F.3d 657, 660 (6th Cir.2006) (citations omitted). “The disputed issue does not have to be resolved conclusively in favor of the non-moving party, but that party is required to present some significant probative evidence that makes it necessary to resolve the parties' differing versions of the dispute at trial.” 60 Ivy Street Corp. v. Alexander, 822 F.2d 1432, 1435 (6th Cir.1987) (citing First Nat'l Bank of Ariz. v. Cities Serv. Co., 391 U.S. 253, 288–89, 88 S.Ct. 1575, 20 L.Ed.2d 569 (1968)). Ultimately the Court must decide “whether the evidence presents sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law.” Martingale, 361 F.3d at 301 (citing Terry Barr Sales Agency, Inc. v. All–Lock Co., Inc., 96 F.3d 174, 178 (6th Cir.1996)) (internal quotations omitted).

III. Analysis

Columbia Gas commenced this action under the eminent domain provision of the Natural Gas Act. This provision permits natural gas companies operating in interstate commerce to apply to the Federal Energy Regulatory Commission for a certificate of public convenience and necessity authorizing the operation, construction, extension, or acquisition of natural gas facilities. 15 U.S.C. § 717f. To issue a certificate, FERC must determine that the public will be well-served by the company's proposed development; the Commission may also impose terms and conditions it believes the public convenience and necessity require. The...