Thursday, October 17, 2019

Shale Law in the Spotlight – Mountain Valley Pipeline: Overview of Litigation Regarding the Pipeline Construction (Part 3)


Written by Chloe Marie – Research Specialist

The Mountain Valley Pipeline Project consists of a proposed 303-mile interstate pipeline system designed to transport natural gas from Wetzel County in northwestern West Virginia to Pittsylvania County in southern Virginia. This article is the third in a planned four-part series addressing legal issues and the regulatory process associated with the Mountain Valley Pipeline Project to date. On October 15, 2019, we posted an article reviewing the timeline of actions taken by various federal and state regulatory entities involved with the construction of the pipeline. On October 16, 2019, we posted a second article addressing legal challenges that have been filed opposing the Mountain Valley Pipeline Project as well as related administrative actions taken by governmental entities in response to the legal challenges. In this article, we will continue to address relevant litigation within the U.S. Court of Appeals for the Fourth Circuit and related administrative actions. The three cases discussed in this article share similar facts and have been consolidated in the U.S. Court of Appeals for the 4th Circuit.  

As already mentioned in the first article of this series, FERC issued on October 13, 2017, a Certificate of Public Convenience and Necessity subject to certain conditions to Mountain Valley Pipeline, LLC for the construction and operation of the Mountain Valley Pipeline Project. Mountain Valley then went ahead and acquired temporary and permanent easements across properties located along the pipeline route. Some landowners, however, were reluctant to negotiate and allow access to their lands. Consequently, Mountain Valley Pipeline, LLC filed actions in three different federal district courts to exercise its right of eminent domain.

Mountain Valley Pipeline, LLC v. Easements to Construct, Operate, & Maintain a Natural Gas Pipeline, U.S. District Court for the Western District of Virginia, No. 7:17-cv-00492; U.S. Court of Appeals for the Fourth District, No. 18-1175 (later consolidated with No. 18-1159); U.S. Supreme Court, No. 19-54

On October 24, 2017, Mountain Valley sought a condemnation order from the U.S. District Court for the Western District of Virginia for portions of almost 300 properties located in Virginia along the pipeline route. Mountain Valley also requested the court to grant it “immediate access and entry to the properties prior to the determination of just compensation upon the posting of an appropriate bond.”

On October 27, 2017, Mountain Valley motioned the court for partial summary judgment on its right to exercise eminent domain because it had received a Certificate for Public Convenience and Necessity. Mountain Valley sought a preliminary injunction granting it immediate possession of the easements for the construction of the pipeline. On January 31, 2018, the U.S. District Court granted partial summary judgment to Mountain Valley concluding that the company was entitled to exercise eminent domain and thus condemn the necessary properties. The U.S. District Court also granted Mountain Valley’s preliminary injunction for immediate possession of the easement after applying the Winter four-pronged test.

On February 13, 2018, some defendants appealed the U.S. District Court’s decision to the U.S. Court of Appeals and sought a stay of the preliminary injunction pending appeal. On February 22, 2018, the case was consolidated with Mountain Valley Pipeline, LLC v. 6.56 Acres of Land, No. 18-1159.

Mountain Valley Pipeline, LLC v. An Easement to Construct, Operate & Maintain a 42-Inch Gas Transmission Line, U.S. District Court for the Southern District of West Virginia, No. 2:17-cv-04214; U.S. Court of Appeals for the Fourth Circuit, No. 18-3000 (later consolidated with 18-1159); U.S. Supreme Court, No. 19-54

On October 24, 2017, Mountain Valley filed a complaint to condemn property interests located in multiple counties in West Virginia. And just as in the case discussed previously, Mountain Valley filed a motion for partial summary judgment granting it immediate access to survey the easements condemned.

On February 21, 2018, the U.S. District Court declared that the court had “already determined” that Mountain Valley had the substantive rights to exercise eminent domain for the purpose of the pipeline construction, and thus, granted its motion for partial summary judgment. The court also granted Mountain Valley’s motion for a preliminary injunction allowing immediate possession of the easements after pointing out that “Mountain Valley’s certificate expires in three years, and the FERC approval process evidently encourages, if not requires, applicants to prove a market by entering into shipping agreements prior to certificate issuance.”

On March 16, 2018, defendants filed an appeal with the U.S. Court of Appeals for the 4th District. The Appellate Court ordered consolidation of this case with Mountain Valley Pipeline, LLC v. 6.56 Acres of Land, No. 18-1159, on February 22, 2018.

Mountain Valley Pipeline, LLC v. Simmons et al., U.S. District Court for the Northern District of West Virginia, No. 1:17-cv-00211; U.S. Court of Appeals for the Fourth Circuit, No. 18-1165; U.S. Supreme Court, No. 19-54

On December 8, 2017, Mountain Valley once again sought a condemnation order from the U.S. District Court for the Northern District of West Virginia for property interests located in the counties of Braxton, Lewis, Harrison, Webster, and Wetzel in West Virginia. Furthermore, Mountain Valley requested immediate possession of the easements prior to the determination of just compensation.

On December 13, 2017, Mountain Valley Pipeline motioned the court for partial summary judgment on its right to exercise eminent domain and for immediate access to the landowners’ properties for surveying activities. Mountain Valley stated that it would suffer irreparable harm if it was unable to begin the tree clearing and construction activities of the [Mountain Valley] Project on the Landowners’ properties by February 1, 2018, because a delay in its construction schedule will delay the entire [Mountain Valley] Project.”

On February 2, 2018, the U.S. District Court granted Mountain Valley’s motion for partial summary judgment and immediate access to and possession of the easements for the pipeline construction. The U.S. District Court found that some defendants’ arguments that FERC’s issuance of a conditional certificate on October 13, 2017 made it impossible for Mountain Valley to exercise eminent domain was “without merit.” The court also agreed that Mountain Valley met all requirements for immediate possession of the easements: it added that the company “has established an ability to pay such that it may seek immediate possession of the easements.”

On February 9, 2018, defendants filed an appeal in the U.S. Court of Appeals for the Fourth Circuit against the U.S. District Court’s ruling. On March 22, 2018, the Court of Appeals consolidated this case with Mountain Valley Pipeline, LLC v. 6.56 Acres of Land, No. 18-1159.

On February 5, 2019, the U.S. Court of Appeals for the Fourth Circuit affirmed the U.S. District Courts’ preliminary injunctions orders granting immediate possession of the easements. In its legal opinion published on the same day, the Court of Appeals ruled on the issue of “whether Mountain Valley may gain access to those easements now, or whether it must wait to start construction until the district courts can sort out just compensation.”

In their appeal, the appellants claimed that federal courts cannot grant immediate possession of the easements before the determination and payment of just compensation and that the district courts did not correctly apply the Winter four-pronged test, which requires the applicant to establish “that he is likely to succeed on the merits, that he is likely to suffer irreparable harm in the absence of the preliminary relief, that the balance of equities tips in his favor, and that an injunction is in the public interest;” and thus, abused their discretion in granting immediate possession. 

In answering appellants’ first argument, the Court of Appeals mentioned two precedents which govern the case at hand. The Appellate Court recalled that this issue had already been answered previously by the Supreme Court in Cherokee Nation v. Kansas Railway Co., 135 U.S. 641 (1890) where the Court determined that the Constitution “does not provide or require that compensation shall be actually paid in advance of the occupancy of the land to be taken … [s]o long as the owner is assured through ‘reasonable and adequate’ means that he ultimately will be compensated fairly.” In the case at hand, the District Courts required Mountain Valley to post a deposit in an amount equal to the appraised value of the easements and, according to the Appellate Court, this satisfied the Cherokee Nation standard.

Interestingly, the Appellate Court commented that “if the deposit turned out to be less than the final compensation awarded … the landowner would remain protected: When immediate possession is granted through a preliminary injunction, title itself does not pass until compensation is ascertained and paid, so the landowners could proceed with a trespass action if the company did not promptly make up the difference.”

The Court of Appeals also referred to a more recent case, East Tennessee Natural Gas Co. v. Sage, 361 F.3d 808 (4th Cir. 2004), in which the court concluded that “a federal court indeed may grant a gas company immediate possession of private property along an approved pipeline route, with payment of just compensation to follow.” Consequently, the Court of Appeals concluded that the district courts had properly granted immediate possession of the easements to Mountain Valley.

Concerning the appellants’ second and last argument, the Court of Appeals found that Mountain Valley satisfied the standard conditions for preliminary relief. Concerning the first Winter prong, the court asserted found Mountain Valley “has done more than establish a likelihood of success on the merits; it already has succeeded on the merits,” because FERC already granted Mountain Valley a Certificate of Public Convenience and Necessity.

For the second Winter prong, the court reasoned that “it is undisputed that without preliminary relief, Mountain Valley almost certainly would be unable to meet FERC’s October 2020 in-service deadline” for the reasons that building a pipeline takes time and that determining the just compensation for all property easements is so time-consuming that it is very likely FERC’s certificate would expire. According to the court, this qualified as an irreparable injury.

Regarding the third Winter prong, the Court of Appeals agreed with the district courts that “the balance of equities favored Mountain Valley, principally because the Landowners’ harms would be the same whether access was granted prior to or only after just compensation was paid.”

Finally, for the fourth Winter prong, the Court of Appeals stated that “granting a gas company immediate access to necessary easements during the pendency of condemnation proceedings likewise would advance the public interest, because a ‘delay in construction would postpone these benefits.’”

On July 3, 2019, a smaller group of landowners in the case Mountain Valley Pipeline, LLC v. 6.56 Acres of Land, No. 18-1159 filed a Petition for Writ of Certiorari with the U.S. Supreme Court to review “whether district courts have power, before the trial on just compensation, to issue a preliminary injunction granting immediate possession of property to a pipeline company in a condemnation proceeding under the Natural Gas Act.” On October 7, 2019, the U.S. Supreme Court declined to hear their case.

References:

Mountain Valley Pipeline, LLC v. Easements to Construct, Operate, & Maintain a Natural Gas Pipeline


Mountain Valley Pipeline, LLC v. An Easement to Construct, Operate & Maintain a 42-Inch Gas Transmission Line


Mountain Valley Pipeline, LLC v. Simmons et al




Additional Resources:







This material is based upon work supported by the National Agricultural Library, Agricultural Research Service, U.S. Department of Agriculture.


Wednesday, October 16, 2019

Shale Law in the Spotlight – Mountain Valley Pipeline: Overview of Litigation Regarding the Pipeline Construction (Part 2)


Written by Chloe Marie – Research Specialist

The Mountain Valley Pipeline Project consists of a proposed 303-mile interstate pipeline system designed to transport natural gas from Wetzel County in northwestern West Virginia to Pittsylvania County in southern Virginia. This article is the second in a planned four-part series addressing legal issues and the regulatory process associated with the Mountain Valley Pipeline Project to date. On October 15, 2019, we posted an article reviewing the timeline of actions taken by various federal and state regulatory entities involved with the construction of the pipeline. This article and two planned subsequent articles will address legal challenges that have been filed opposing the Mountain Valley Pipeline Project. Where relevant, in these articles, we also will address additional administrative actions taken by governmental entities in response to the legal challenges.

Sierra Club v. West Virginia DEP, U.S. Court of Appeals for the 4th Circuit (No. 17-1714)

On June 9, 2017, Sierra Club and four other environmental groups filed a petition for judicial review with the U.S. Court of Appeals for the 4th Circuit challenging the Section 401 Water Quality Certification issued by West Virginia DEP on March 23, 2017 for the Mountain Valley Pipeline project. On September 13, 2017, West Virginia DEP voluntarily asked the court to vacate the water quality certification on judicial review and to remand the case. West Virginia DEP declared that “[a]mong the issues raised by Sierra Club is the requirement that certifications under Section 401 of the CWA examine compliance with all water quality standards, including a state’s antidegradation policy. In light of that requirement, WVDEP recognizes that it needs to reconsider its antidegradation analysis in the Section 401 Certification and commits to doing so as expeditiously as possible.”

As stated in our prior Shale Law in the Spotlight article, West Virginia DEP waived its authority under the Federal Clean Water Act to re-evaluate whether the Mountain Valley Pipeline Project violated the state’s water quality standards (see Shale Law in the Spotlight – Mountain Valley Pipeline Part 1). 

Orus Berkley v. Mountain Valley Pipeline, LLC, U.S. District Court for the Western District of Virginia (No. 7:17-cv-00357); U.S. Court of Appeals for the 4th Circuit (No. 18-1042); U.S. Supreme Court (No. 18-561)

On July 27, 2017, a group of landowners residing along the pipeline route in Virginia brought a constitutional challenge against the Federal Energy Regulatory Commission (FERC) before the U.S. District Court for the Western District of Virginia over the exercise of eminent domain power. According to plaintiffs, FERC disregarded the Fifth Amendment of the U.S. Constitution in implementing “a series of sliding scale tests” to determine whether a project would be for a public purpose. The plaintiffs alleged that the implementation of this public purpose test, which has made it relatively easy to justify the taking of private properties, was unconstitutional.

Furthermore, plaintiffs alleged that the delegation of eminent domain powers to FERC by the Congress under the Natural Gas Act, 15 U.S.C. §717f(h) was “overly broad and unconstitutional” while also stating that “FERC has run wild in the years since, and has unconstitutionally sub-delegated the power of eminent domain to private parties seeking private profits.” As a result, plaintiffs considered that FERC’s delegation of the power of eminent domain to Mountain Valley Pipeline, LLC through a Certificate of Public Convenience and Necessity was thereby unconstitutional.

Plaintiffs also argued that Mountain Valley Pipeline, LLC has already engaged in unlawful takings in violation of Article I, §11 of the Virginia Constitution after the company surveyed and gathered valuable information and data from plaintiffs’ properties and FERC refused to release their content to plaintiffs. In its complaint, Plaintiffs note that “[t]he information gathered by [Mountain Valley Pipeline, LLC] through its surveying activities holds tangible and intangible value that forms just one part of the bundle of rights possessed by a fee simple owner of real property.”

In addition to the complaint, plaintiffs filed a motion for preliminary injunction to stop FERC from delegating its power of eminent domain to Mountain Valley Pipeline, LLC via a Certificate as well as to stop Mountain Valley Pipeline, LLC from entering landowners’ properties without their permission.

Mountain Valley Pipeline, LLC moved to dismiss the case on August 11, 2017, for lack of jurisdiction and failure to state a claim arguing that “plaintiffs have brought their challenges in the wrong court at the wrong time.” More specifically, the company argued that “[u]ntil a certificate is issued, a challenge to the project is not ripe, and the challenger lacks standing and has failed to exhaust administrative remedies.” Exactly four months later, the U.S. District Court agreed that it did not have jurisdiction over plaintiffs’ claims; therefore, denying their motion for a preliminary injunction as moot and granting Mountain Valley Pipeline, LLC’s motion to dismiss. Plaintiffs subsequently filed an appeal against that decision on January 9, 2018, with the U.S. Court of Appeals for the Fourth Circuit.

On July 25, 2018, the appellate court affirmed the U.S. District Court’s judgment that plaintiffs’ claims needed to be brought through an agency review process, as set out in the Natural Gas Act. Plaintiffs filed a Petition for Writ of Certiorari with the U.S. Supreme Court on October 24, 2018, seeking to appeal the Court of Appeals’ ruling. The U.S. Supreme Court refused to hear the petition for writ of certiorari on January 22, 2019.

Bold Alliance et al. v. FERC et al., U.S. District Court for the District of Columbia (No. 1:17-cv-01822); U.S. Court of Appeals for the District of Columbia Circuit (No. 18-5322)

On September 5, 2017, three community-based organizations, including Bold Alliance, Bold Educational Fund and Friends of Nelson County as well as a group of landowners filed a petition for declaratory and injunctive relief challenging FERC’s sub-delegation of eminent domain powers to natural gas pipeline companies.

In their amended complaint dated November 3, 2017, plaintiffs claimed, among other things, that “FERC does not inform potentially impacted landowners whose property will be taken by a pipeline through eminent domain that they must intervene to avoid waiving the right to challenge FERC’s grant of a certificate” and that “FERC grants not only  [certificates of convenience and necessity] but also ‘conditioned certificates’ and ‘blanket certificates,’ which are not statutorily authorized and which give pipeline companies eminent-domain powers far beyond statutory and constitutional limits.” Thus, plaintiffs claimed that FERC has exceeded its authority under the Natural Gas Act and raised the constitutionality of FERC’s certificate program.

On December 21, 2017, FERC filed a motion to dismiss the amended complaint for lack of subject-matter jurisdiction arguing that the Court of Appeals has exclusive jurisdiction to rule on challenges to the FERC certificate process under the Natural Gas Act. In addition, FERC argued that plaintiffs have failed to exhaust all administrative remedies and that their claims are not ripe for immediate resolution. On September 28, 2018, the U.S. District Court ruled in favor of FERC and dismissed the case. Plaintiffs filed an appeal of this decision on October 26, 2018, with the U.S. Court of Appeals for the District of Columbia.

On December 3, 2018, both parties filed a joint motion to hold this appeal in abeyance pending resolution of the pending appeals of FERC’s final orders granting certificates for the Mountain Valley and Atlantic Coast pipelines. Subsequently, on December 17, 2018, Mountain Valley Pipeline, LLC moved to dismiss said appeal “because it is not objectively clear who among the individual landowners is an appellant.”

On February 15, 2019, the Court of Appeals granted the motion to hold in abeyance and indicated that both parties are “directed to file motions to govern further proceedings within 30 days of the disposition of No. 18-1216, Bold Alliance v. FERC, or No. 18-1313, Bold Alliance v. FERC, whichever occurs later.” Bold Alliance v. FERC, No. 18-1216 was later consolidated with Appalachian Voices et al. v. FERC under the docket No. 17-1271, and will be addressed in the fourth article of this Shale Law in the Spotlight series. Bold Alliance v. FERC, No. 18-1313 concerns the Atlantic Coast Pipeline and will not be addressed as part of this series.

Sierra Club v. U.S. Army Corps of Engineers, U.S. Court of Appeals for the Fourth Circuit (No. 18-1173)

On February 13, 2018, Sierra Club along with four other environmental groups petitioned the U.S. Court of Appeals for the Fourth Circuit for judicial review of the U.S. Army Corps of Engineers’ Nationwide Permit 12 Verification for the discharge of dredged and fill material into U.S. waters that was granted to Mountain Valley Pipeline, LLC on December 22, 2017. Ten days later, petitioners also filed a motion for preliminary relief to suspend the NWP 12 Verification pending judicial review “[b]ecause discharges under that authorization and the attendant stream-trenching that will occur are likely to cause irreparable harm to Sierra Club and its members before a ruling on the merits.” The Court of Appeals denied their motion on March 16, 2018.

On May 22, 2018, petitioners again filed a motion for preliminary relief, this time asking the Court of Appeals to stay the NWP 12 Verification pending judicial review because the crossings of the Gauley, Elk, Greenbrier, and Meadow River “cannot satisfy an express condition of [NWP 12] in West Virginia limiting the duration of crossing construction,” which is expected to be around 4 to 6 weeks.

On June 21, 2018, the Court of Appeals granted the stay of NWP 12 Verification pending resolution of the petition for review; however, respondents motioned the Court of Appeals on July 11, 2018 to lift the stay arguing that the Corps had already gone through a reconsideration process of NWP 12 and issued a reinstated verification on July 3, 2018; thus, rendering petitioners’ allegations in this regard moot. On August 29, 2018, the Court of Appeals agreed to lift the stay.

On October 2, 2018, the Court of Appeals vacated the Corps’ NWP 12 verification and reinstatement in their entirety. In a published opinion dated November 27, 2018, the court further explained that “absent completion of the notice-and-comment procedures required by the Clean Water Act, a state cannot waive a special condition previously imposed as part of its certification of a nationwide permit. Because West Virginia did not follow its federally mandated notice-and-comment procedures in waiving another special condition the state imposed as part of its certification of NWP 12, that condition remains a required—but, in this case, unsatisfied—condition of the nationwide permit.”

As stated in the first article in this series, this ruling follows decisions of the Huntington, Norfolk, and Pittsburgh Districts of the U.S. Army Corps of Engineers to suspend their NWP 12 verifications issued for the Mountain Valley Pipeline.

References:

Sierra Club v. West Virginia DEP


Orus Berkley v. Mountain Valley Pipeline, LLC



Bold Alliance et al. v. FERC et al.


Sierra Club v. U.S. Army Corps of Engineers




Additional Resources:






This material is based upon work supported by the National Agricultural Library, Agricultural Research Service, U.S. Department of Agriculture.