Waldock v. Rover Pipeline LLC

• Decision Date: 31 July 2017
• Docket Number: Case No. 3:17CV959
• Parties: Thomas A. Waldock, Trustee, et al., Plaintiffs v. Rover Pipeline LLC, et al., Defendants
• Court: U.S. District Court — Northern District of Ohio

Thomas A. Waldock, Trustee, et al., Plaintiffs v. Rover Pipeline LLC, et al., Defendants

Case No. 3:17CV959

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF OHIO WESTERN DIVISION

July 31, 2017

ORDER

This is a state-law tort action that one of the defendants, Rover Pipeline LLC, removed to this court on the basis of federal-question jurisdiction.

In February, 2017, Rover obtained a Certificate of Public Convenience and Necessity from the Federal Energy Regulatory Commission to build a natural gas pipeline that runs, in substantial part, through the Northern District of Ohio. See Rover Pipeline LLC v. 5.9754 Acres of Land, More or Less, in Defiance Cnty., Ohio, 2017 WL 3130244, *1 (N.D. Ohio).

After initiating condemnation proceedings in this court under the Natural Gas Act (NGA), see 15 U.S.C. § 717f(h), Rover obtained easements on the land over which the pipeline will run - including the nine parcels that the plaintiffs in this case own - and started construction.

In May, 2017, the plaintiffs sued Rover in the Wood County, Ohio, Court of Common Pleas. (Doc. 1-2). The gravamen of their eight-count complaint is that Rover damaged their respective properties by: 1) diverting excess water out of the easement areas and onto plaintiffs' land; and 2) entering onto plaintiffs' property without permission. The same day that plaintiffs filed the complaint, Rover filed its notice of removal. (Doc. 1).

Pending is the plaintiffs' motion to remand the case to state court and for attorney fees. (Doc. 6). Because there is no federal-question jurisdiction in this case, and because Rover's arguments to the contrary are not objectively reasonable, I grant plaintiffs' motion in full.

Background

A. The State Court Complaint

Plaintiffs allege that "[t]his action arises from . . . Rover['s] . . . construction of the interstate natural gas pipeline known as the 'Rover Pipeline.'" (Doc. 1-2 at ¶2). That pipeline "crosses the properties owned by the Plaintiffs for thousands of feet in length." (Id.).

According to the plaintiffs, "[s]ince commencing construction in March, 2017," Rover has "flagrantly abused any easement rights obtained through the federal court proceeding, ha[s] intentionally - and repeatedly - trespassed on the residue farm property of the Plaintiffs by conducting operations well outside of any easement area obtained, and . . . ha[s] pumped water and waste material from the trenches [Rover is] installing onto areas outside of [the] easement area." (Id. at ¶6).

These problems stemmed, according to plaintiffs, from the "substantial amount of rainfall" that fell in Northwest Ohio during the Spring and, consequently, gathered "in Rover's non-exclusive easement[s] and dig sites." (Id. at ¶¶32-33).

Plaintiffs allege that Rover could have responded by "wait[ing] for the ground to dry" before starting construction or "de-water[ing] the easement area by pumping the water into trucks and hauling it away." (Id. at ¶38). Instead, Rover opted for a cheaper alternative and "de-watered theeasement by pumping the water and other liquid material out of the easement area and onto the Plaintiffs' properties." (Id.). This caused "significant flooding of the Plaintiffs' respective properties, all of which are currently utilized for commercial farming operations." (Id. at ¶39).

Based on these events, the plaintiffs brought eight causes of action:

Count I - Trespass: Rover, acting without authorization, dumped "storm water and ground water and . . fluids utilized in [Rover's] directional boring operations, onto the properties of the Plaintiffs." (Id. at ¶51). Rover "affirmatively entered onto Plaintiffs' respective properties in furtherance of the commission of these unauthorized intentional acts[.]" (Id. at ¶52).

Count II - Nuisance: Rover dumped storm water, ground water, and directional-boring fluids onto plaintiffs' land. (Id. at ¶57). Plaintiffs acknowledge Rover holds "easement rights pursuant to the U.S. District Court for the Northern District of Ohio's Order," but allege that Rover "nonetheless still owe[s] a duty not to create a nuisance . . . which interferes with the Plaintiffs' use, possession, and enjoyment of their respective property rights outside the easement area." (Id. at ¶56).

Count III - Negligence and Hazardous Waste: Rover negligently pumped excess storm water and hazardous materials onto plaintiffs' property. (Id. at ¶63).

Count IV - Tortious Interference with Business: Rover's actions "in flooding Plaintiffs' properties have substantially impeded and/or negatively impacted" plaintiffs' ability to use their property for commercial farming. (Id. at ¶69).

Count V - Declaratory Judgment: Plaintiffs ask the court to declare that Rover has abused its easement rights and breached the terms of its easements with the landowners. (Id. at ¶¶72-73).

Count VI - Injunction: Plaintiffs ask the court to enjoin Rover from "any further operation outside of the proscribed [sic] easement area" and "compelling the Defendants to remediate . . . any and all of the Defendants' pollutants, contaminates, hazardous substances, materials and/or wastes on and in Plaintiffs' respective properties." (Id. at ¶78).

Count VII - Abuse of Power and Authority and Bad Faith: Rover has "used and abused [its] eminent domain power beyond what was intended by Congress and ha[s] run roughshod over the rights of Plaintiffs as property owners[.]" (Id. at ¶81) (internal emphasis omitted).

Count VIII - Punitive Damages: Rover's conduct was "willful and malicious," thereby warranting punitive damages. (Id. at ¶85).

B. Removal Proceedings

Rover's notice of removal alleged that this court has federal-question jurisdiction because plaintiffs' claims "arise[ ] under the [NGA]." (Doc. 1 at ¶¶3-4).¹

In support, Rover argued that all of plaintiffs' claims revolved around the "dewatering necessary to construct the FERC approved Rover Pipeline[.]" (Id. at ¶2). Rover also argued that a settlement agreement between the parties in the principal Rover Pipeline litigation required plaintiffs to submit "any dispute 'relative to the easements'" to me for binding mediation, thereby precluding plaintiffs from bringing their claims in this suit. (Id. at ¶7).²

Plaintiffs' remand motion argues that their claims arise exclusively under Ohio law. (Doc. 6 at 11). They emphasize, first, that they do not question: 1) Rover's authority to condemn easements across their property; 2) the validity of Rover's FERC Certificate to build the pipeline; or 3) Rover's "ability to exercise complete discretion" within the easement areas. (Id.).

Plaintiffs then argue that Rover is simply asserting a federal defense to their state-law claims - i.e., that the FERC Certificate authorizes Rover to do what plaintiffs contend violates Ohio law - and that such a defenses does not create jurisdiction or a basis for removal. (Doc. 11 at 5-6).

Finally, they argue that the settlement agreement in the Rover Pipeline case addresses only disputes concerning Rover's right to immediate possession of the easements. In contrast, the complaint here concerns "Rover's conduct outside of the easement area" and after Rover took possession and began building the pipeline. (Id. at 7) (internal emphasis omitted).

Discussion

"Federal district courts 'have original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States,' 28 U.S.C. § 1331, and any action which could have been brought in federal court may be removed to federal court, 28 U.S.C. § 1441(a)." Hampton v. R.J. Corman R.R. Switching Co., 683 F.3d 708, 711 (6th Cir. 2012).

"Congress has given the lower federal courts jurisdiction to hear, originally or by removal from a state court, only those cases in which a well-pleaded complaint established either that federal law creates the cause of action or that the plaintiff's right to relief necessarily depends on resolution of a substantial question of federal law." Franchise Tax Bd. v. Construction Laborers Vacation Trust, 463 U.S. 1, 27-28 (1983).

"'Since a defendant may remove a case only if the claim could have been brought in federal court, . . . the question for removal jurisdiction must also be determined by reference to the well-pleaded complaint.'" Hampton, supra, 683 F.3d at 711 (internal quotation marks and citation omitted).

"The burden of showing that the district court has original jurisdiction is on the party seeking removal." Long v. Bando Mfg. of Am., Inc., 201 F.3d 754, 757 (6th Cir. 2000).

A. Federal-Question Jurisdiction

"For statutory purposes, a case can arise under federal law in two ways." Gunn v. Minton, 568 U.S. 251, 257 (2013).

First, "a case arises under federal law when federal law creates the cause of action asserted." Id.; see also Merrell Dow Pharm. Inc. v. Thompson, 478 U.S. 804, 808 (1986) ("the vast majority of cases brought under the general federal-question jurisdiction . . . are those in which federal law creates the cause of action").

Second, a cause of action that state law creates may nonetheless arise under federal law "if the vindication of a right under state law depends on the validity, construction, or effect of federal law." Mikulski v. Centerior Energy Corp., 501 F.3d 555, 565 (6th Cir. 2007) (en banc); see also Hampton, supra, 683 F.3d at 711 (the state-law claim must "implicate significant federal issues").

"Most importantly, for statutory purposes a case only 'arises under' federal law if a federal issue appears amid the plaintiff's cause of action." Dillon v. Medtronic, 992 F. Supp. 2d 751, 754-55 (E.D. Ky. 2014) (citing Louisville & Nashville R.R. Co. v. Mottley, 211 U.S. 149, 152 (1908)). "If the complaint relies only on state law, the district court generally lacks subject matter jurisdiction and the case is not removable." Palkow v. CSX Transp. Inc., 431 F.3d 543, 552 (6th Cir. 2005).

For that reason, federal defenses cannot create "arising under" jurisdiction. See Caterpillar Inc. v. Williams, 482 U.S. 386, 393 (1987) ("it...