Palmer v. Atl. Coast Pipeline, LLC

• Decision Date: 13 July 2017
• Docket Number: Record No. 160630
• Citation: 801 S.E.2d 414
• Parties: Hazel F. PALMER v. ATLANTIC COAST PIPELINE, LLC
• Court: Virginia Supreme Court

293 Va. 573

801 S.E.2d 414

Hazel F. PALMER

v.ATLANTIC COAST PIPELINE, LLC

Record No. 160630

Supreme Court of Virginia.

July 13, 2017

Henry E. Howell, III, Norfolk; Benjamin L. Perdue (Eminent Domain Litigation Group, on briefs), for appellant.

Benjamin L. Hatch (John D. Wilburn ; Richard D. Holzheimer, Jr. ; Brooks H. Spears, Tysons Corner; Robert W. Loftin, Richmond; McGuireWoods, on brief), for appellee.

Amicus Curiae: Commonwealth of Virginia; Stuart A. Raphael (Mark R. Herring, Attorney General; Trevor S. Cox, Deputy Solicitor General; Matthew R. McGuire, Assistant Attorney General, on brief), in support of appellee.

PRESENT: Goodwyn, Mims, McClanahan, Powell, Kelsey, and McCullough, JJ., and Millette, S.J.

OPINION BY JUSTICE WILLIAM C. MIMS

In this appeal, we consider whether a foreign corporation may exercise the entry-for-survey privilege given to natural gas companies by Code § 56–49.01. We also consider whether Code § 56–49.01 infringes upon provisions of the Constitution of Virginia.

I. Background and Procedural History

The Atlantic Coast Pipeline, LLC ("ACP") is a public service company organized under the laws of the State of Delaware. It is primarily "engaged in the underground storage and transportation of natural gas in interstate commerce." As such, it is a "natural gas company" as defined by 15 U.S.C. § 717a(6) and is subject to the jurisdiction of the Federal Energy Regulatory Commission ("FERC") under the Natural Gas Act, 15 U.S.C. § 717 et seq. ACP is engaged in FERC's regulatory approval process to build a natural gas transmission line that would extend from West Virginia to North Carolina, passing through the Commonwealth. As part of this process, ACP must conduct surveys, tests, appraisals, and other examinations upon properties located along the pipeline's proposed routes.

Hazel Palmer owns real property in the Commonwealth along a proposed route. On March 6, 2015, ACP sent Palmer a letter seeking permission to enter her property to conduct preliminary surveys. When Palmer withheld her consent, ACP provided a notice of intent to enter her property pursuant to Code § 56–49.01. The notice explained that Code § 56–49.01"authorizes certain natural gas companies to enter upon property, without permission, for examinations, tests, hand auger borings, appraisals and surveys for proposed natural gas lines in order to satisfy regulatory requirements and to select the most advantageous route."

Palmer continued to deny ACP access to her property, and ACP filed a petition for a declaratory judgment in the circuit court requesting a declaration of its rights under Code § 56–49.01. Palmer filed a plea in bar, contending that Code § 56–49.01 only applies to domestic public service companies because it is within Title 56 of the Code of Virginia. She also demurred, arguing that Code § 56–49.01 is unconstitutional under Article I, § 11 of the Constitution of Virginia because it impermissibly burdens a fundamental right.

The circuit court overruled Palmer's plea in bar and demurrer. Regarding the plea in bar, it found that the applicability of Code § 56–49.01"turns upon a definition borrowed from [15 U.S.C. § 717a ] rather than an implied definition suggested by its placement within the Code of Virginia." Regarding the demurrer, the circuit court noted that the "legal challenges to the validity of [statutes like Code § 56–49.01 across the country] on the basis that they [e]ffect a taking without just compensation have been consistently rejected." (quoting Klemic v. Dominion Transmission, Inc. , 138 F.Supp.3d 673, 690 (W.D. Va. 2015) ). Accordingly, it concluded that "[a] landowner has no constitutionally protected property right to exclude an authorized utility from entering his property for survey purposes." We granted Palmer this appeal.

II. Analysis

A. Applicability of Code § 56–49.01 to Foreign Corporations

Palmer contends that ACP cannot exercise the entry-for-survey power of Code § 56–49.01 for two reasons. First, she argues that a "natural reading" of the statute "dictates that [it] only applies to Virginia public service companies." Second, she argues that the statute must be interpreted to avoid conflicting with Article IX, § 5 of the Constitution of Virginia. These arguments present "purely legal questions of statutory and constitutional interpretation which we review de novo." L.F. v. Breit , 285 Va. 163, 176, 736 S.E.2d 711, 718 (2013).

1. Unambiguous Language of Code § 56–49.01

In analyzing a statute, the Court's primary objective is "to ascertain and give effect to legislative intent." Conger v. Barrett , 280 Va. 627, 630, 702 S.E.2d 117, 118 (2010) (quoting

Turner v. Commonwealth , 226 Va. 456, 459, 309 S.E.2d 337, 338 (1983) ). "That intention is initially found in the words of the statute itself, and if those words are clear and unambiguous, we do not rely on rules of statutory construction." Crown Cent. Petroleum Corp. v. Hill , 254 Va. 88, 91, 488 S.E.2d 345, 346 (1997).

Code § 56–49.01 provides, in relevant part, that

A. Any firm, corporation, company, or partnership, organized for the bona fide purpose of operating as a natural gas company as defined in 15 U.S.C. § 717a, as amended, may make such examinations, tests, hand auger borings, appraisals, and surveys for its proposed line or location of its works as are necessary (i) to satisfy any regulatory requirements and (ii) for the selection of the most advantageous location or route, ... [and] may enter upon any property without the written permission of its owner....

On appeal, Palmer argues that Code § 56–49.01 only applies to domestic natural gas companies because it is located within Title 56 of the Virginia Code, which governs "Public Service Companies." She suggests that if the statute was intended to apply to "any" natural gas company, "it would have been placed in Title 13.1, which governs ‘[c]orporations' generally."

This argument is not persuasive. Code § 56–49.01 provides its entry-for-survey power to "[a]ny ... corporation [or] company ... organized for the bona fide purposes of operating as a natural gas company as defined in 15 U.S.C. § 717a." Id. (emphasis added). For the purposes of Title 56, the term "[c]orporation" or "company" includes not only corporations "created by acts of the General Assembly of Virginia, or under the general incorporation laws of this Commonwealth," but also "all corporations ... doing business therein ." Code § 56–1 (emphases added). Thus, both domestic corporations and foreign corporations that are "doing business" within the Commonwealth—such as ACP—are included in the definition of "corporation" for the purposes of Title 56.

Next, Code § 56–49.01 applies to "[a]ny" such "corporation" that fits within 15 U.S.C. § 717a's definition of a "natural gas company." That is, the corporation must be "engaged in the transportation of natural gas in interstate commerce, or the sale in interstate commerce of such gas for resale." 15 U.S.C. § 717a(6) ; see also 15 U.S.C. § 717a(1). Palmer does not contest that ACP fits within this definition. Accordingly, by its plain language, Code § 56–49.01 applies to foreign natural gas companies as defined by 15 U.S.C. § 717a(6) that do business in Virginia, including ACP.

2. Article IX, Section 5 of the Constitution of Virginia

Palmer next argues that we must deny the entry-for-survey privilege to foreign corporations to avoid conflicting with Article IX, § 5 of the Constitution of Virginia. This constitutional provision states, in relevant part, that "[n]o foreign corporation shall be authorized to carry on in this Commonwealth the business of, or to exercise any of the powers or functions of, a public service enterprise." Va. Const. art. IX, § 5. We cannot consider this argument because Palmer neither presented it to the circuit court nor raised it in her opening brief on appeal.

Rule 5:25 states that "[n]o ruling of the trial court ... will be considered as a basis for reversal unless an objection was stated with reasonable certainty at the time of the ruling." This rule "exists to protect the trial court from appeals based upon undisclosed grounds, to prevent the setting of traps on appeal, to enable the trial judge to rule intelligently, and to avoid unnecessary reversals and mistrials." Reid v. Boyle , 259 Va. 356, 372, 527 S.E.2d 137, 146 (2000) (quoting Fisher v. Commonwealth , 236 Va. 403, 414, 374 S.E.2d 46, 52 (1988) ).

Palmer admitted at oral argument that she failed to present her Article IX, § 5 argument to the circuit court. As a result, there is no ruling on the issue, and we will not accept Palmer's invitation to reverse the circuit court's opinion based on this undisclosed ground. McDonald v. Commonwealth , 274 Va. 249, 255, 645 S.E.2d 918, 921 (2007) (refusing to consider a facial invalidity challenge to Code § 18.2–361(A) because the appellant never raised such a claim in the circuit court); see also Jones v. Commonwealth , 293 Va. 29, 39 n.5, 795 S.E.2d 705, 710 n.5 (2017) (The Court "will not consider an argument that differs from the specific argument presented to the trial court even if it relates to the same general issue." (citing Floyd v. Commonwealth , 219 Va. 575, 584, 249 S.E.2d 171, 176 (1978) )).

Palmer also failed to raise the argument in her opening brief on appeal. Rule 5:27 states that "[t]he opening brief of the appellant ... must contain ... [t]he standard of review, the argument, and the authorities relating to each assignment of error." Rule 5:27(d). The failure to comply with this rule "results in waiver of the arguments the party failed to make." John Crane, Inc. v. Hardick , 283 Va. 358, 376, 722 S.E.2d 610, 620 (2012).

Regarding her first assignment of error, Palmer's opening brief argues, as discussed above, that the location of Code § 56–49.01 within the Code of Virginia prohibits foreign public service companies from utilizing its entry-for-survey power. In the last four lines of her argument relating to the placement of the statute...