Gas Transmission Nw., LLC v. 15.83 Acres of Permanent Easement More or Less, Located in Morrow Cnty.

• Decision Date: 27 August 2015
• Docket Number: No. 2:15–CV–00359–BR.,2:15–CV–00359–BR.
• Citation: 126 F.Supp.3d 1192
• Parties: GAS TRANSMISSION NORTHWEST, LLC, a Delaware limited liability company, Plaintiff, v. 15.83 ACRES OF PERMANENT EASEMENT MORE OR LESS, LOCATED IN MORROW COUNTY; 25.09 Acres of Temporary Easement More or Less, located in Morrow County; Clinton Krebs; Maureen Krebs; and Pilz & Co., LLC, Defendants.
• Court: U.S. District Court — District of Oregon

126 F.Supp.3d 1192

GAS TRANSMISSION NORTHWEST, LLC, a Delaware limited liability company, Plaintiff,

v.15.83 ACRES OF PERMANENT EASEMENT MORE OR LESS, LOCATED IN MORROW COUNTY; 25.09 Acres of Temporary Easement More or Less, located in Morrow County; Clinton Krebs; Maureen Krebs; and Pilz & Co., LLC, Defendants.

No. 2:15–CV–00359–BR.

United States District Court, D. Oregon.

Signed Aug. 27, 2015.

Charles F. Hudson, Cozette T. Tran–Caffee, Lane Powell, PC, Portland, OR, for Plaintiff.

Jill S. Gelineau, Schwabe Williamson & Wyatt, PC, Portland, OR, for Defendants Clinton and Maureen Krebs.

Timothy R. Volpert, Portland, OR, for Defendant Pilz & Co., LLC.

OPINION AND ORDER

BROWN, Judge.

This matter comes before the Court on Plaintiff's Motion (# 49) for Order of Condemnation and Immediate Possession. For the reasons that follow, the Court GRANTS Plaintiff's Motion.

BACKGROUND

Plaintiff Gas Transmission Northwest, LLC (GTN), is a natural-gas company engaged in the transportation of natural gas in interstate commerce and, therefore, is subject to the jurisdiction of the Federal Energy Regulatory Commission (FERC).

On March 14, 2013, FERC issued to Plaintiff an Order Issuing Certificate and a Certificate of Public Convenience and Necessity¹ for the construction and operation of a natural-gas pipeline (the Carty Lateral), which consists of approximately 24.4 miles of 20–inch diameter pipeline between Plaintiff's Ione Compressor Station and Portland General Electric's planned Carty Generating Station. The easements required for the Carty Lateral "cross 25 parcels in 15 ownerships."

The March 14, 2013, Certificate authorized the ownership, construction, and operation of the Carty Lateral by Plaintiff. No party filed a petition for rehearing with respect to the Certificate within the 30–day limit set out in 15 U.S.C. § 717r(a). FERC has required Plaintiff to "place" the Carty Lateral in service by December 31, 2015.

After FERC issued the Certificate, Plaintiff began negotiations with the various landowners for purchase of the easements necessary for construction of the Carty Lateral.

On October 20, 2014, Defendant Pilz & Co., LLC, recorded a conservation easement on a portion of the property owned by Defendants Clinton Krebs and Maureen Krebs. The conservation easement, which specifically excludes "energy development, or industrial or commercial development," occupies a portion of the route that FERC approved for the Carty Lateral pipeline. At some point, therefore, Plaintiff provided to the Krebs and to Pilz a copy of an appraisal of the value of the easement and a January 7, 2015, written purchase offer from Plaintiff. Plaintiff, however, was unable to reach an agreement with Pilz for possession of the necessary property.

On March 2, 2015, Plaintiff filed a Complaint for Eminent Domain pursuant to 15 U.S.C. § 717f(h) against a number of property owners, including the Krebs and Pilz. In its Complaint Plaintiff seeks an order condemning the necessary property, determining compensation, and granting any other proper relief.

On April 22, 2015, Plaintiff filed a Motion for Order of Condemnation in which it seeks an order of condemnation and immediate possession of the easements sought in the Complaint. At the time that Plaintiff filed its Motion for Order of Condemnation, Plaintiff had negotiated the purchase of easements from all but two property owners and expected to close on the purchase of an easement from one of the remaining owners shortly thereafter. The remaining property that is the subject of Plaintiff's Motion consists of approximately 15.83 acres on land owned by the Krebs and on which the Krebs provided the conservation easement to Pilz.

In its Motion Plaintiff seeks a permanent easement 50 feet wide for the Carty Lateral underground pipeline and related appurtenances and a "temporary workspace easement" for one year of 22 acres "of variable width."² Plaintiff contends just compensation for the takings sought in this action is $148,200.

On May 18, 2015, Pilz filed Objections to Plaintiff's Motion for Order of Condemnation on the grounds that the property that Plaintiff sought to have condemned in its Complaint did not conform to the Certificate and that Plaintiff had failed to comply with certain environmental conditions contained in the Certificate.

On June 18, 2015, the Court heard oral argument during which Plaintiff conceded its Complaint did not conform to the Certificate. The Court, therefore, directed Plaintiff to file an Amended Complaint that conformed to the Certificate. Pilz, nevertheless, continued to object to Plaintiff's Motion for Condemnation on the basis that Plaintiff was not complying with certain environmental requirements. The Court, therefore, directed the parties to file by June 24, 2015, a Joint Statement of Issues remaining for the Court to address together with their arguments in support of their positions. The Court set further oral argument on June 26, 2015.

On June 22, 2015, Plaintiff filed an Amended Complaint conforming the property sought therein to the Certificate.

On June 26, 2015, the Court heard further oral argument on Plaintiff's Motion for Order of Condemnation and took the matter under advisement.

DISCUSSION

I. Condemnation Standards

"The Natural Gas Act (NGA), 15 U.S.C. § 717f(h), gives a gas company the power to acquire property by eminent domain, but the Act does not provide for immediate possession, that is, possession before just compensation is determined and paid in a condemnation action." E. Tenn. Natural Gas Co. v. Sage, 361 F.3d 808, 818 (4th Cir.2004). Specifically, § 717f(h) provides:

When any holder of a [FERC] certificate of public convenience and necessity cannot acquire by contract, or is unable to agree with the owner of the 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.

The procedure for obtaining a certificate from FERC is set out in the NGA and its implementing regulations, 18 C.F.R. § 157.1 et seq. The process begins with an application from a gas company that includes, among other things: (1) a description of the proposed pipeline project, (2) a statement of the facts showing why the project is required, and (3) the estimated beginning and completion date for the project. 15 U.S.C. § 717f(d) ; 18 C.F.R. § 157.6(b). Notice of the application is filed in the Federal Register, public comment and protest is allowed, and FERC has to conduct a public hearing on the application. 15 C.F.R. §§ 157.9–157.11. As part of its evaluation, FERC must investigate the environmental consequences of the proposed project and issue an environmental impact statement. 42 U.S.C. § 4332. At the end of the process FERC issues a certificate when it finds the proposed project "is or will be required by the present or future public convenience and necessity." 15 U.S.C. § 717f(e).

The Ninth Circuit has held to obtain an order of condemnation a plaintiff must meet the requirements of § 717f of the NGA,

which include [the plaintiff] showing: "(1) that it holds a FERC certificate authorizing the relevant project, (2) that the land to be taken is necessary to the project; and (3) that the company and the landowners have failed to agree on a price for the taking.... In addition to showing an inability to agree on a price with the landowner, [the plaintiff] must also establish that it engaged in good faith negotiations with the landowner."

Transwestern Pipeline Co. v. 17.19 Acres of Prop. Located in Maricopa Cnty., 550 F.3d 770, 776 (9th Cir.2008) (quoting Nat'l Fuel Gas Supply Corp. v. 138 Acres of Land, 84 F.Supp.2d 405, 416 (W.D.N.Y.2000) ). The Ninth Circuit has made clear that "an order of condemnation must be issued before the substantive right of taking accrues." Transwestern Pipeline Co., 550 F.3d at 777. This "strikes the correct balance of requiring the gas company to satisfy all elements of the statute, but does not require it to wait for the full determination of just compensation for each parcel before the district court uses its equitable powers to grant possession." Id.

After the court issues an order of condemnation, a plaintiff is entitled to possession of the property on the same showing required for a temporary injunction: (1) likelihood of success on the merits, (2) irreparable harm if the injunction is denied, (3) no greater harm to the defendants if relief is granted, and (4) the relief is in the public interest. Nw. Pipeline Corp. v. The 20' x 1,430' Pipeline Right of Way Easement 50' x 1,560' Temp. Staging Area, 197 F.Supp.2d 1241, 1245 (E.D.Wash.2002).

II. Order of Condemnation

Plaintiff asserts it is entitled to an order of condemnation because it has complied with all of the requirements of § 717f. Specifically, Plaintiff notes FERC issued a Certificate of Public Convenience and Necessity to Plaintiff for the construction, ownership, and operation of the Carty Lateral, and no party filed a petition for rehearing within 30 days of the issuance of the certificate order as required under § 717r(a). In addition, courts have held "by issuing the Certificate of Public Convenience and Necessity under the Natural Gas Act, FERC has already determined that Defendants' property interests are necessary." Williston Basin Interstate Pipeline Co. v. Prop. Interests Necessary to Conduct Gas Storage Operations in Subterranean Geological Formations on & Beneath Prop. Located in Twp. 9 S., Range 23 E., Section 34, 35 & 36, No. CV–09–167–BLG–RFC, 2010 WL 5104991, at *2 (D.Mont. Dec. 9, 2010...