Alliance Pipeline L.P. v. 4.360 Acres of Land
746 F.3d 362
8th Cir.2014Background
- Alliance Pipeline sought a FERC certificate to build a 79-mile natural gas pipeline crossing the Smiths’ farm in North Dakota; FERC published notice of Alliance’s application in February 2012 and issued the certificate on September 20, 2012.
- Alliance representatives visited the Smiths in Feb 2012 to seek an easement; the Smiths (through a family member) declined to negotiate.
- Alliance filed a state-court action to enter and survey the Smiths’ property in April 2012; the state court granted entry and survey in May 2012.
- Alliance brought a federal condemnation action under its FERC certificate on October 16, 2012, moved for summary judgment and for immediate use and possession; the district court granted both motions.
- The Smiths appealed, arguing (1) lack of constitutionally and regulatorily required notice of the FERC application and failure of FERC to consider state siting criteria, (2) violation of North Dakota condemnation procedures and appraisal/jury rules, (3) failure to negotiate in good faith, and (4) error in granting immediate possession.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Notice of FERC application / Due Process and 18 C.F.R. §157.6(d) | Smiths: No adequate notice of Alliance’s FERC application; FERC/regulatory notice requirements not met. | Alliance: Visits, survey petition, and Federal Register notice provided reasonable notice. | Court: Collateral attack barred by NGA §19 review scheme; even on due-process footing, notice was reasonably calculated to apprise (Mullane) the Smiths. |
| FERC’s failure to consider state siting criteria (NDAC §69-06-08-01) | Smiths: FERC did not apply relevant state pipeline-siting criteria. | Alliance: Challenge must be brought under NGA §19 procedures to FERC/court of appeals. | Court: Lack of jurisdiction to entertain statutory challenge collateral to FERC order; §19 review is exclusive. |
| Applicability of North Dakota condemnation procedures (NDCC provisions; jury valuation) | Smiths: §717f(h) requires conforming to state practice/procedure (including negotiation, appraisal, jury). | Alliance: Federal Rule 71.1 governs federal condemnation proceedings and preempts conflicting state procedures; no right to jury in eminent-domain action. | Court: Rule 71.1 displaces state procedural rules; no Seventh Amendment jury right in eminent domain. |
| Duty to negotiate in good faith before condemnation (implied in §717f(h)) | Smiths: Alliance failed to negotiate in good faith as statutorily/implicitly required. | Alliance: Made an offer, explained calculations, attempted follow-up; most landowners accepted similar offers. | Court: Even assuming an implied duty, Alliance satisfied any such duty; no bad-faith negotiation shown. |
| Immediate use and possession (injunctive relief) | Smiths: District court abused discretion; Alliance didn’t show irreparable harm or clear right. | Alliance: Delay would cause substantial economic harm; pipeline serves critical need; posted security per court order. | Court: No abuse of discretion—district court properly applied Dataphase factors and granted immediate possession with security. |
Key Cases Cited
- Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306 (1950) (due-process notice standard: notice reasonably calculated to apprise interested parties)
- City of Tacoma v. Taxpayers of Tacoma, 357 U.S. 320 (1958) (statutory administrative-review schemes are exclusive)
- Williams Natural Gas Co. v. City of Oklahoma City, 890 F.2d 255 (10th Cir. 1989) (§19 NGA review is exclusive)
- United States v. Reynolds, 397 U.S. 14 (1970) (no constitutional right to a jury in eminent-domain proceedings)
- eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388 (2006) (standard of review for equitable relief)
- Dataphase Sys., Inc. v. C L Sys., Inc., 640 F.2d 109 (8th Cir. 1981) (four-factor preliminary-injunction framework used for immediate possession analysis)
- N. Border Pipeline Co. v. 86.72 Acres of Land, 144 F.3d 469 (7th Cir. 1998) (immediate possession precedent in pipeline condemnation cases)
- N. Border Pipeline Co. v. 64.111 Acres of Land in Will County, Ill., 344 F.3d 693 (7th Cir. 2003) (Rule 71.1/ federal procedure displaces conflicting state condemnation procedures)