Van Scyoc v. Equitrans, L.P.

• Citation: 255 F.Supp.3d 636
• Decision Date: 23 March 2015
• Docket Number: Civil Action No. 2:13-cv-01735.
• Parties: Randal L. VAN SCYOC and Charlene S. Van Scyoc, et al., Plaintiffs, v. EQUITRANS, L.P., EQT Production Company, and Lawrence H. Miller and Eleanor S. Miller, husband and wife, Defendants.
• Court: U.S. District Court — Western District of Pennsylvania

255 F.Supp.3d 636

Randal L. VAN SCYOC and Charlene S. Van Scyoc, et al., Plaintiffs,
v.
EQUITRANS, L.P., EQT Production Company, and Lawrence H. Miller and Eleanor S. Miller, husband and wife, Defendants.

Civil Action No. 2:13-cv-01735.

United States District Court, W.D. Pennsylvania.

Signed March 23, 2015.

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Justin G. Weber, Pepper Hamilton, Harrisburg, PA, for Plaintiffs.

Nicolle R. Snyder Bagnell, Lucas Liben, Reed Smith LLP, Pittsburgh, PA, for Defendants.

OPINION

MARK R. HORNAK, District Judge.

This case started in state court. The Defendants removed it, invoking federal question jurisdiction by stating that what appeared to be paradigm state law claims really arise under a law of the United States. ECF No. 1, at ¶ 9. Before the Court is Plaintiffs' Motion to Remand the case to state court. Because the Court concludes that the Plaintiffs' claims raise issues of state law only, the case will be remanded forthwith to the Court of Common Pleas of Greene County, Pennsylvania.

I. BACKGROUND

This civil action was originally brought in the Court of Common Pleas of Greene County, Pennsylvania, by a number of Plaintiff-landowners against the Defendants Equitrans, L.P. ("Equitrans") and EQT Production Company ("EQT"). The Complaint alleges three counts: (1) an action for a declaratory judgment that the EQT Defendants have no right to the oil and gas on or within the property of the Plaintiffs; (2) for trespass by Equitrans; and (3) for unjust enrichment by Equitrans. ECF No. 1–2, at 8–11. Also named as Defendants are Lawrence and Elanor Miller, who are alleged to also be owners of a certain portion of the involved real estate, and who are alleged to have acted in concert with EQT.

The facts asserted in the Complaint are as follows. On March 8, 1918, a number of property owners entered into an oil and gas lease ("Lease") with Lloyd Pollock for property located in Morris Township, Greene County, Pennsylvania ("the Property"). The Plaintiffs attached the Lease to their Complaint. See ECF No. 1–2, at 4042. Lloyd Pollock assigned his interest in the Lease to Carnegie Natural Gas Company on March 15, 1918. EQT then acquired the Lease and is the current lessee. The Plaintiff-landowners are fee simple owners of the Property (or portions thereof), including oil and gas rights. The

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Lease states that it was "for the purpose of drilling and operating for oil, gas, or water ..." and for a ten year term beginning on March 8, 1918 "or such part of said term as [Pollock] may consider it valuable for oil and gas purposes, and comply with the terms hereinafter mentioned, or as long thereafter as oil or gas is produced in paying quantities." The Lease did not, however, provide the right to store gas under the Property or the right to use the Property for the protection of gas storage. ECF No. 1–2, at 28–38. Plaintiffs argue that the Lease has terminated. Only two wells were drilled on the property-one in 1919 and one in 1920–but none have been drilled in over 90 years. Plaintiffs say that for many years after the expiration of the primary term, the wells did not produce any oil or gas, nor have the wells produced gas in paying quantities. ECF No. 1–2, at ¶¶ 39–43. Thus, say Plaintiffs, the Lease has terminated by its own terms. Id. at ¶ 44.

Plaintiffs say that Equitrans is operating one or more natural gas storage fields below the Property despite their never having contracted with the Plaintiffs (or anyone else) to do so. Id. at ¶¶ 46–47. They assert that Equitrans intentionally stored gas on the Property owned by the Plaintiffs without permission. The Plaintiffs bring Count I under the Pennsylvania Declaratory Judgment Act, 42 Ps.C.S. § 7531 et seq., seeking a declaratory judgment on the issues of whether the Lease has terminated as a result of EQT's failures under the Lease's terms and whether EQT breach two alleged implied covenants. Id. at ¶¶ 49–53. Count II is a state law trespass claim brought against Equitrans, who the Plaintiffs say interfered with their exclusive rights of possession, use, enjoyment, and control of the Property as a result of Equitrans' gas storage on the Property. Id. at ¶¶ 54–59. Count III alleges unjust enrichment against Equitrans for not compensating Plaintiffs despite continuing to store gas on the Property. Id. at ¶¶ 60–66.

Defendants Equitrans and EQT timely removed the case to this Court.¹ ECF No. 1, at 12. The removing Defendants cited 28 U.S.C. § 1441(a) in their Statement of Removal, explaining that removal of an action originally filed in state court is proper in "any civil action brought in a State court of which the district courts of the United States have original jurisdiction." ECF No. 1, at 2. The removing Defendants also cited 28 U.S.C. § 1331 : "The district courts shall have original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States."

Plaintiffs timely filed a motion (and a supporting brief) pursuant to 28 U.S.C. § 1447(c) requesting that the case be remanded to the Court of Common Pleas of Greene County, Pennsylvania, Plaintiffs' primary basis for the propriety of remand is that this case really involves state law claims, not federal ones. As will be discussed later in this Opinion, Equitrans had not, at the time of the Plaintiffs' filing of the suit in state court or at the time of removal, initiated a proceeding under the Natural Gas Act ("NGA") seeking to condemn the property. ECF No. 10, at 2–3. According to Plaintiffs, therefore, the claims at issue were state law claims and not completely preempted by the NGA.

EQT and Equitrans filed Answers to the Complaint. ECF Nos. 11–12. Equitrans also included a Counterclaim pursuant to the Natural Gas Act, 15 U.S.C. §§ 717 –

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717(z) and Federal Rule of Civil Procedure 71.1, seeking to condemn property interests necessary to conduct natural gas storage. ECF No. 12, at 9. Accompanying the Counterclaim were Notices of Condemnation. ECF Nos. 13–33. The removing Defendants then filed a Response to the Motion to Remand to state court, ECF No. 37, and also filed a Supplemental Response and accompanying brief, ECF No. 40–41. Plaintiffs then filed a Notice of Supplemental Authority. ECF No. 42

The Court conducted oral argument and has reviewed all the papers in this case. For the reasons that follow, the Court will grant the Plaintiffs' Motion to Remand and will remand the entire case to the Court of Common Pleas of Greene County, Pennsylvania.

II. STANDARD OF REVIEW

District courts have original jurisdiction over any civil action "arising under the Constitution, laws, or treaties of the United States." 28 U.S.C. § 1331. Removal of an action brought in state court to federal court is permitted where the district court has original jurisdiction. 28 U.S.C. § 1441(a). "Where a state law cause of action is completely preempted by a federal statute, the suit is deemed within the original jurisdiction of the district court and subject to removal." Ciferni v. Day & Zimmerman, Inc., 529 Fed.Appx. 199, 201 (3d Cir.2013) (citing Avco Corp. v. Aero Lodge No. 735, 390 U.S. 557, 559–60, 88 S.Ct. 1235, 20 L.Ed.2d 126 (1968) ).

"Remand to state court is required ‘if at any time before final judgment it appears that the district court lacks subject matter jurisdiction.’ " Hoffman v. Nutraceutical Corp., 563 Fed.Appx. 183, 185 (3d Cir.2014) (quoting 28 U.S.C. § 1447(c) ) (alteration omitted). Moreover, "the removal statute should be strictly construed and all doubts should be resolved in favor of remand." Abels v. State Farm Fire & Cas. Co., 770 F.2d 26, 29 (3d Cir.1985). "The defendant's right to remove is to be determined according to the plaintiffs' pleading at the time of the petition for removal, and it is the defendant's burden to show the existence of federal jurisdiction." Id. (citing Pullman Company v. Jenkins, 305 U.S. 534, 537, 540, 59 S.Ct. 347, 83 L.Ed. 334 (1939) ).

III. DISCUSSION

The primary issue facing the Court is whether the Plaintiff landowners have brought only state law claims for trespass and unjust enrichment, or whether they have actually brought claims that must be construed as inverse condemnation claims, which would be preempted by the Natural Gas Act, 15 U.S.C. §§ 717 et seq. ("NGA"). For the reasons that follow, the Court concludes that the Plaintiffs' claims are not preempted by the NGA.

The Defendants argue that the Plaintiffs' state law trespass and unjust enrichment claims are completely preempted by the NGA, and, in support of that position, they cite Columbia Gas Transmission Corp. v. An Exclusive Storage Easement, 747 F.Supp. 401, 402 (N.D.Ohio 1990). The Defendants argue that, because Plaintiffs' only claims are for trespass and unjust enrichment, the claims are "actually inverse condemnation and/or takings claims, and are therefore subject to, and preempted by, federal law." ECF No. 37, at 4.² In Columbia Gas, the court

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concluded that a landowner's state law counterclaims for trespass...