478 S.W.3d 386
Ky. Ct. App.2015Background
- KURED, a Kentucky nonprofit opposing private use of eminent domain, sued to declare whether Bluegrass Pipeline Co., LLC may exercise eminent domain under Kentucky law to build an NGL pipeline.
- Bluegrass is an LLC proposing a 24-inch underground pipeline to transport natural gas liquids from the Marcellus/Utica region to the Gulf; it negotiated with Kentucky landowners for easements.
- Penny Greathouse, a Franklin County landowner and KURED board member, was contacted multiple times by Bluegrass seeking an easement; Bluegrass representatives stated they had the power of eminent domain.
- KURED sought a declaratory judgment that Bluegrass cannot condemn land under KRS 278.502 and related statutes because the pipeline and company are not in Kentucky ‘‘public service.’’
- The Franklin Circuit Court granted summary judgment for KURED, ruling Bluegrass lacks condemnation power; Bluegrass appealed.
- The Court of Appeals reviews purely legal issues de novo and affirms the trial court, holding KRS 278.502 applies to entities subject to regulation by the Public Service Commission and to services benefitting Kentucky consumers.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Justiciability: whether a court may decide the dispute now | A present controversy exists because Bluegrass claims condemnation power that affects landowner negotiations and citizen rights | No imminent condemnation; dispute speculative until Bluegrass initiates condemnation | Court: Justiciable — active negotiations and threatened use of eminent domain create a real, present controversy |
| Standing: whether KURED may sue | KURED has associational standing via member Penny Greathouse, whose property and bargaining position are affected | KURED lacks standing because its members lack individual standing (Bluegrass rerouted around Greathouse) | Court: KURED has associational standing; Greathouse still potentially affected and may sue as a citizen asserting limits on eminent domain |
| Statutory authority: whether KRS 278.502 permits Bluegrass to condemn | KURED: KRS 278.502 applies to PSC-regulated public-utility entities serving Kentucky public; Bluegrass’s interstate NGL transport is not public service | Bluegrass: statute allows any entity constructing oil/gas pipelines to condemn after good-faith efforts to contract | Court: KRS 278.502 construed within PSC/public-utility context — Bluegrass, not PSC-regulated and transporting NGLs to Gulf consumers, lacks condemnation power |
| Scope of ‘‘public service’’ under KRS Chapter 278 | KURED: public service requires serving Kentucky consumers and PSC regulation | Bluegrass: moving oil/gas products through pipeline qualifies as public service under statute | Court: ‘‘Public service’’ read in context of KRS Chapter 278 and PSC regulation; Bluegrass’s interstate export to Gulf does not constitute Kentucky public service |
Key Cases Cited
- Steelvest, Inc. v. Scansteel Service Center, Inc., 807 S.W.2d 476 (Ky. 1991) (summary judgment standard; view record for nonmovant)
- Paintsville Hosp. Co. v. Rose, 683 S.W.2d 255 (Ky. 1985) (summary judgment requirements)
- Huddleston v. Hughes, 843 S.W.2d 901 (Ky. App. 1992) (impossibility for nonmoving party to prevail)
- Scifres v. Kraft, 916 S.W.2d 779 (Ky. App. 1996) (summary judgment review standard)
- Lewis v. B & R Corp., 56 S.W.3d 432 (Ky. App. 2001) (de novo review of legal issues on appeal)
- Appalachian Racing, LLC v. Family Trust Found. of Ky., Inc., 423 S.W.3d 726 (Ky. 2014) (justiciability requires present, actual controversy)
- Combs v. Matthews, 364 S.W.2d 647 (Ky. 1963) (permissible advance declaratory relief; hardship of denying relief)
- Rose v. Council for Better Educ., Inc., 790 S.W.2d 186 (Ky. 1989) (citizens’ standing to challenge wrongful government power)
- Russman v. Luckett, 391 S.W.2d 694 (Ky. 1965) (citizen suits challenging exercise of power)
- Bob Hook Chevrolet Isuzu, Inc. v. Commonwealth Transp. Cabinet, 983 S.W.2d 488 (Ky. 1998) (statutory construction reviewed de novo)
- Rogers v. Fiscal Court of Jefferson County, 48 S.W.3d 28 (Ky. App. 2001) (statutes construed in context; related provisions given consistent meaning)