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 was essential that the tree clearing and construction activities began on February 1, 2018; otherwise, a delay in the construction of the Mountain Valley Pipeline Project would result in irreparable damage for the project as a whole.
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.
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