October 17, 2019
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 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
The Center for Agricultural and Shale Law is a partner of the National Agricultural Law Center (NALC) at the University of Arkansas System Division of Agriculture, which serves as the nation’s leading source of agricultural and food law research and information. This material is provided as part of that partnership and is based upon work supported by the National Agricultural Library, Agricultural Research Service, U.S. Department of Agriculture.
