C. Hughes v. UGI Storage Company J. Albrecht, individually and o/b/o all others similarly situated v. UGI Storage Company
C. Hughes v. UGI Storage Company J. Albrecht, individually and o/b/o all others similarly situated v. UGI Storage Company - 629 and 630 C.D. 2016
Pa. Commw. Ct.Mar 13, 2017Background
- UGI Storage Company sought FERC certification (2009) to operate the Meeker underground gas storage field and to establish a 2,980-acre protective "Meeker Buffer Zone." FERC certified only areas to which UGI had property rights; some plaintiff properties within the buffer were not acquired by UGI.
- Plaintiffs (individual owners and a putative class) filed petitions under Section 502 of the Eminent Domain Code seeking appointment of a Board of Viewers, asserting UGI effected a de facto taking of subsurface oil, gas, and mineral rights by occupying a protective buffer zone without a formal condemnation.
- The trial court initially appointed viewers but later, after UGI filed preliminary objections, sustained those objections, dismissed the petitions, and vacated the viewer appointments. Plaintiffs appealed.
- Central legal questions involve (1) whether UGI possesses eminent domain power over the plaintiffs’ properties within the buffer zone absent a certificate, and (2) whether UGI’s conduct constituted a de facto taking.
- The Commonwealth Court vacated the trial-court orders and remanded for an evidentiary hearing, directing the trial court to address the impact of Robinson Township v. Commonwealth and this court’s decision in In re Sunoco Pipeline, and to proceed on the record.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether UGI has power of eminent domain over plaintiffs’ properties in the Meeker buffer zone | UGI is empowered by statutes (e.g., §3241 and related public-utility provisions) to appropriate interests in storage/reservoir protective areas | UGI contends eminent-domain power exists only for properties actually certificated by FERC and that it has not instituted a taking of plaintiffs’ properties | Remanded: court did not resolve merits; trial court directed to address Robinson Township’s effect (which struck §3241) and In re Sunoco Pipeline and hold an evidentiary hearing |
| Whether UGI’s conduct constituted a de facto taking of subsurface mineral rights | Plaintiffs allege UGI’s use and assertion of the entire buffer zone has effectively deprived them of the use/enjoyment of subsurface rights—a de facto taking—despite lack of formal condemnation | UGI argues it has not effected a taking of these specific properties and lacks condemnation power absent proper certification/authority | Remanded for evidentiary hearing to decide whether pleadings (and evidence) suffice to show a de facto taking; court declined to rule at this stage |
| Whether trial court abused discretion by refusing to consider affidavits appended to plaintiffs’ supplemental memoranda | Plaintiffs say affidavits present material facts/evidence supporting de facto taking and should be considered | UGI opposed consideration; trial court excluded them at preliminary-objection stage | Remanded: trial court instructed to conduct proceedings on the record and consider relevant evidence, including addressing Robinson and Sunoco impact |
Key Cases Cited
- Robinson Township v. Commonwealth, 147 A.3d 536 (Pa. 2016) (held 58 Pa.C.S. §3241 facially unconstitutional because it allowed private corporations eminent-domain power resulting in de facto takings)
- In re Sunoco Pipeline, L.P., 143 A.3d 1000 (Pa. Cmwlth. 2016) (certificate of public convenience from PUC is prima facie evidence of public need and supports eminent-domain power)
- McElwee v. Southeastern Pennsylvania Transportation Authority, 948 A.2d 762 (Pa. 2008) (use of another’s subsurface space by occupying it can constitute a de facto taking)
- Linde Enterprises, Inc. v. Lackawanna River Basin Sewer Authority, 911 A.2d 658 (Pa. Cmwlth. 2006) (procedure for adjudicating de facto taking claims when preliminary objections are filed: first test legal sufficiency, then, if sufficient, take evidence/hearings)
- In re Opening Private Road for Benefit of O’Reilly, 5 A.3d 246 (Pa. 2010) (discusses public-purpose limitation on delegation of eminent-domain power)