Usg Pipeline v. 1.74 Acres in Marion County, Tenn.
| Citation | 1 F.Supp.2d 816 |
| Decision Date | 25 March 1998 |
| Docket Number | Nos. 1:97-CV-34 through 1:97-CV-42.,No. 1:97-CV-32.,No. 1:97-CV-61.,No. 1:97-CV-60.,Nos. 1:97-CV-622 through 1:97-CV-630.,No. 1:97-CV-59.,No. 1:97-CV-33.<SMALL><SUP>1</SUP></SMALL>,s. 1:97-CV-622 through 1:97-CV-630.,1:97-CV-32.,1:97-CV-33.<SMALL><SUP>1</SUP></SMALL>,s. 1:97-CV-34 through 1:97-CV-42.,1:97-CV-59.,1:97-CV-60.,1:97-CV-61. |
| Parties | USG PIPELINE COMPANY, Plaintiff, v. 1.74 ACRES IN MARION COUNTY, TENNESSEE, Carl W. Puryear, Sheila W. Puryear, East Tennessee Natural Gas Company, Carl H. Blevins, Marion County Assessor of Property, John Doe, et al., and Unknown Owners, Defendant. |
| Court | United States District Courts. 6th Circuit. Eastern District of Tennessee |
Roger W. Dickson, Miller & Martin, Chattanooga, Tennessee, William H. Farmer, Michael Mozelle, Waller, Lansden, Dortch & Davis, Nashville, Tennessee, William H. Penniman, Sutherland, Asbill & Brennan, Washington, D.C., for plaintiff.
Tracy C. Wooden, Wooden & Presley, Chattanooga, Tennessee, Edwin Z. Kelly, Kelly & Kelly, Jasper, Tennessee, Howard G. Swafford, Sr., Swafford & Swafford, Jasper, Tennessee, Kevin L. Featherston, Jenkins & Featherston, Jasper, Tennessee, Marshall A. Raines, Jr., Jasper, Tennessee, Carol Ballard, Horton, Maddox & Anderson, Chattanooga, Tennessee, for defendants.
Before the Court in these 23 consolidated cases is Plaintiff USG Pipeline Company's ("USGP") Motion For Possession (Court File Nos. 4, 15, 16, 17). USGP is seeking to condemn Defendants'2 land for the purpose of securing an easement for constructing a natural gas pipeline across Defendants' property. Defendants are owners of certain real properties in Marion County, Tennessee, or persons claiming some interest in the properties. All Defendants filed a Response in Opposition to Plaintiff's Motion for Possession. Certain of the Defendants filed a Supplemental Response in Opposition to Plaintiff's Motion for Possession. Plaintiff filed replies. For the following reasons, the Court GRANTS Plaintiff's Motion For Possession in all the cases.
In 1977, the United States Congress created the Federal Energy Regulatory Commission ("FERC"). 42 U.S.C. § 7171. Because Congress determined "the business of transporting and selling natural gas for ultimate distribution to the public is affected with a public interest, and that Federal regulation in matters relating to the transportation of natural gas and the sale thereof in interstate and foreign commerce is necessary in the public interest," Congress delegated to the FERC regulatory authority over natural gas and natural gas companies. 15 U.S.C. § 717. Congress barred natural gas companies and persons from engaging in transportation or sale of natural gas, subject to the jurisdiction of the FERC, unless the company or person has been issued a certificate of public convenience and necessity. 15 U.S.C. § 717f(c). Congress granted to holders of certificates of public convenience and necessity the right of eminent domain for construction of pipelines for the transportation of natural gas. 15 U.S.C. § 717f(h).
USGP is a wholly owned subsidiary of U.S.G. Corporation. U.S. Gypsum Company ("U.S.Gypsum"), an affiliated company of USGP, is constructing a new wallboard manufacturing plant near Bridgeport, Alabama. Bridgeport is just south of the Alabama-Tennessee state line. Marion County, Tennessee, is immediately north of Bridgeport in Tennessee. U.S. Gypsum desires to have natural gas transported from an existing natural gas pipeline that transgresses Marion County through a new pipeline to its Bridgeport plant. USGP was created for this purpose. U.S. Gypsum would own the gas and would be the sole customer of USGP.
The FERC granted USGP a Certificate of Public Convenience and Necessity ("the Certificate") on October 17, 1997. This certificate authorized the construction and operation of a 14.5 mile interstate natural gas pipeline through Marion County, Tennessee, into Alabama. This Certificate also granted USGP the power of eminent domain. The Certificate requires the construction and operation of the pipeline within one year of October 17, 1997. Certain of the Defendants opposed the granting of the Certificate in administrative proceedings before the FERC. Subsequent to the issuance of the Certificate, certain of the Defendants and other interested parties petitioned the FERC to rehear and reconsider the October 17, 1997 Order. On February 11, 1998, the FERC issued its Order Denying Rehearing and/or Reconsideration ("Rehearing Order") (Court File No. 49, Exh. 1). The Rehearing Order is 22 pages in length and on its face demonstrates the FERC considered all of the matters raised in the requests for rehearing and reconsideration, including issues of notice and due process, whether the public interest would be served by the construction of the pipeline, and whether the grant of an FERC Certificate under the circumstances was unprecedented.
In this action, Defendants challenge (1) the issuance of the FERC Certificate, (2) whether USGP engaged in good faith negotiations with the Defendants in an effort to acquire the easements, (3) whether a public and necessary purpose has been demonstrated justifying condemnation of Defendants' property, (4) whether certain special rules under Tennessee law regarding condemnation of public lands have been complied with, and (5) whether Tennessee law has been complied with regarding the Motion for Possession.
The power of eminent domain by natural gas companies is conferred by Congress in the federal Natural Gas Act, 15 U.S.C. §§ 717-717w. The Act provides in pertinent part:
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, 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, or in the State courts.
15 U.S.C. § 717f(h) (1982).
That USGP possesses an FERC Certificate is not in serious dispute. A copy of the Certificate is attached to the complaint and motions filed in the record. The Certificate by its terms grants USGP the power of eminent domain. It reads:
In any event, because we have already found that USG Pipeline has demonstrated that the proposed facilities are required by the public convenience and necessity, the right of eminent domain is automatically granted to USG Pipeline once it is issued a certificate of public convenience and necessity and has attempted to engage in negotiations.
Defendants, however, contend the FERC Certificate is not facially valid. In determining facial validity, the Court is limited to looking at the face of the Certificate without "explanation, modification, or addition from extrinsic facts or evidence." West's Legal Thesaurus/Dictionary 308 (William Statsky ed., Special Deluxe ed.1986). Barring glaring errors within the four corners of the Certificate, the Court may not look beyond the Certificate itself to determine validity.
Defendants primarily premise their assertion of facial invalidity on the finding by the FERC that construction and operation of the pipeline serves a public benefit. According to Defendants, the Certificate itself establishes the pipeline serves no public benefit, but rather solely a private benefit. Defendants argue USGP seeks to condemn private and public property to construct a private pipeline for purely private purposes. They point out the pipeline will serve only the U.S. Gypsum wallboard plant in Bridgeport, Alabama. Defendants concede the FERC considered and rejected this argument. However, they urge this Court to contravene the FERC's finding that construction of the pipeline is for the public convenience and necessity. Defendants carefully style their arguments as an attack on the facial validity of the FERC Certificate, and not the substance of the Certificate.
Defendants also concede Congress explicitly has granted the courts of appeal jurisdiction to review orders of the FERC in the following provision:
(b) Review of Commission order
Any party to a proceeding under this chapter aggrieved by an order issued by the Commission in such proceeding may obtain a review of such order in the court of appeals of the United States for any circuit wherein the natural-gas company to which the order relates is located or has its principal place of business, or in the United States Court of Appeals for the District of Columbia, by filing in such court, within sixty days after the order of the Commission upon the application for rehearing, a written petition praying that the order of the Commission be modified or set aside in whole or in part.
15 U.S.C. § 717r(b).
Defendants also concede the FERC Certificate is a final and appealable order. Nevertheless, they contend the Court "must still assess whether the Certificate is `facially valid,' so as to support eminent domain and condemnation." (Court File No. 15, p. 3).
Defendants largely rely on Transcontinental v. 118 Acres of Land, 745 F.Supp. 366 (E.D.La.1990) in support of their argument district courts have authority to review the FERC's determination of public benefit. They cite the following language from Transcontinental:
The FERC Certificate is not conclusive on the issue of the right to expropriate property. A plaintiff must produce evidence, along with a FERC Certificate, that the expropriation will further the public interest.
The only authority given by the court for this statement is Tenneco, Inc. v. Harold Stream Inv. Trust, 394 So.2d 744 (La.Ct.App. 1981). A...
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