East Tennessee Natural Gas Co. v. SageEast Tennessee Natural Gas Co. v. Sage
Affirmed by published opinion. Judge MICHAEL wrote the opinion, in which Judge NIEMEYER and Judge DIANA GRIBBON MOTZ joined.
OPINION
The Natural Gas Act (NGA or the Act),
I.
East Tennessee Natural Gas Company (ETNG) is a regional gas transportation company. Several years ago the company developed plans for what it calls the Patriot Project, a project to construct an interstate gas pipeline, twenty-four inches in diameter and about ninety-four miles long, through portions of Tennessee, Virginia, and North Carolina. Before a gas company like ETNG can build and operate a new pipeline, it must obtain a certificate of public convenience and necessity from the Federal Energy Regulatory Commission (FERC or the Commission). The procedure for obtaining a certificate from FERC is set forth in the NGA,
FERC’s sixteen-month review of ETNG’s application ended on November 20, 2002, when the Commission by formal order issued ETNG a certificate of public convenience and necessity. Id. at 1. The FERC order confirms that “[ijssuance of the certificate ... permits [ETNG] to acquire land for the pipeline by eminent domain, if it cannot reach agreement with the owner of land authorized.” Id. at 20. The order requires ETNG to complete construction and make the pipeline available for service by January 1, 2005. Id. at 31. As the FEIS recommended, the certificate incorporates sixty-nine conditions that ETNG has to meet during construction. Id. at 31-44. Among other things, the conditions require ETNG to: (1) file weekly status reports with FERC during construction, (2) follow the mitigation measures described in the environmental impact statement, (3) employ environmental inspectors to monitor compliance with the mitigation measures, (4) monitor vegetation for at least two growing seasons following the completion of the project, and (5) limit construction to daylight hours.
As soon as FERC issued the certificate to ETNG, the company pursued negotiations with the affected landowners to acquire the easements to construct, operate, and maintain the new pipeline. The line will cross over 1,300 tracts of land in Tennessee, Virginia, and North Carolina. Through negotiations with landowners and a limited amount of condemnation litigation in North Carolina and Tennessee, the company was able to acquire over ninety percent of the right-of-way. That left about 130 tracts in Virginia where easements were still needed. In December 2002 ETNG filed 133 actions in the Western District of Virginia seeking orders of condemnation for the easements over the
At the same time ETNG filed the condemnation actions, it filed motions for immediate possession of the easements to prevent delays in construction. The NGA’s eminent domain provision is silent on the question of immediate possession, so ETNG contended that the district court could use its “inherent equitable power” to grant this relief. J.A. 22 (joint appendix references are to case no. 03-1708(L)). The landowners filed answers challenging the breadth of ETNG’s right to condemn, and they opposed the motions for immediate possession. The district court decided to deal with the litigation in stages, dealing first with the questions about ETNG’s right to take. Thereafter, if required, the court would consider the motions for immediate possession, leaving the issue of just compensation in each case for last.
On May 8, 2003, the district court issued several identical opinions holding that ETNG could exercise the right of eminent domain to acquire the necessary easements through the tracts in litigation. In supplemental opinions filed June 6, 2003, the court explained its decision to grant ETNG’s motions for immediate possession. The court acknowledged that there is no provision for immediate possession in the NGA. Nevertheless, the court held that it could “use its equitable powers to grant early possession to ETNG in the form of a preliminary injunction.” J.A. 76. The court found that ETNG had established its right to immediate possession by satisfying the standards required for a preliminary injunction under Blackwelder Furniture Co. of Statesville, Inc. v. Seilig,
The landowners, in several cases that we have consolidated, appeal the district court’s preliminary injunction orders granting immediate possession. The landowners’ main argument is that ETNG cannot take possession prior to the determination of just compensation. (The landowners now concede that ETNG has a legal right to take the property.) They further argue that even if the district court had the power to award immediate possession by preliminary injunction, the court erred in granting injunctions in these cases. Finally, some of the landowners claim that the district court lacked jurisdiction over their cases because the complaints did not sufficiently identify the property to be taken.
II.
A.
The first question is whether the district court can use its equitable power to order immediate possession in a condemnation case. We begin our discussion by reviewing the mechanics of how the federal power of eminent domain is usually exercised. Congressional authorization is required for land to be condemned by the government for public use. See United States v. N. Am. Transp. Co.,
In straight condemnation the government official requests the Attorney General to initiate the condemnation action in district court.
The Natural Gas Act, like most statutes giving condemnation authority to government officials or private concerns, contains no provision for quick-take or immediate possession. The Act simply says that any holder of a certificate of public convenience and necessity may acquire property “by the exercise of eminent domain in the district court.”
In any event, if the proceedings in the eighty-five separate cases here had taken their normal course under
B.
A federal court has the power to grant equitable relief, see Gordon v. Washington,
The district court discharged its duty to adjudicate these cases by first taking up the question of whether ETNG had a substantive right to condemn the landowners’ property. After considering the briefs of the parties and hearing oral argument, the court issued orders determining that “ETNG has established its right to exercise eminent domain over the [landowners’] property as outlined in the [cjertificate [of public convenience and necessity issued by FERC].” J.A. 74. These orders gave ETNG an interest in the landowners’ property that could be protected in equity if the conditions for granting equitable (in this case, injunctive) relief were satisfied. See Seymour v. Freer, 8 Wall. 202,
To begin with, the Constitution does not prevent a condemnor from taking possession of property before just compensation is determined and paid. As the Supreme Court said a long time ago, the Constitution “does not provide or require that compensation be paid in advance of the occupancy of the land to be taken. But the owner is entitled to reasonable, certain, and adequate provision for obtaining compensation before his occupancy is disturbed.” Cherokee Nation v. S. Kan. Ry. Co.,
The landowners argue that Congress does not intend for gas companies to gain immediate possession because it has not granted statutory quick-take power to gas companies as it has to government officers who condemn property in the name of the United States. This argument overlooks the preliminary injunction remedy provided in the Federal Rules of Civil Procedure that were adopted with the tacit approval of Congress. See
The subtext of the landowners’ argument that only Congress can grant the right of immediate possession is this:
In comparing the protections of the DTA to those in injunction proceedings, we return briefly to the matter of title and the payment of just compensation. Again, title passes immediately to the government under the DTA. There is the possibility, of course, that the government, in making its deposit to cover compensation, will underestimate the value of the land. In that case, the landowner is protected because the government undertakes to pay the difference between the adjudicated value of the land and the deposit. Kirby,
The landowners also argue that because statutes granting the power of eminent domain must be strictly construed, equity cannot be invoked to supply the remedy of immediate possession. This argument is rooted in the principle that “[t]he grant of authority to condemn for specific purposes must be construed as limited to the enumerated purposes.” 1A Nichols, supra, § 3.03[3][d]. The property in this ease is being condemned for the strict purpose authorized by the NGA, to build a pipeline that FERC deems necessary to supply natural gas. Moreover, our circuit has never interpreted the strict construction principle to mean that equity cannot allow for the possession of property condemned under the NGA before a case is finally ended. In Atlantic Seaboard Corp. v. Van Sterkenburg,
Finally, the landowners’ argument that equity cannot be invoked here ignores the fact that there is a substantial public interest — the need for natural gas supply — at stake in this case. As the Supreme Court has said,, courts of equity may go to greater lengths to give “relief in furtherance of the public interest than they are accustomed to go when only private interests are involved.” Va. Ry. Co. v. Sys. Fed’n No. W,
District courts in a number of jurisdictions have done exactly what the district court did here, that is, grant immediate possession in the form of a preliminary injunction to a gas company that has established its right to condemn under the NGA. See Northwest Pipeline Corp. v. The 20’ by 1,430’ Pipeline Right of Way,
One circuit case, Northern Border Pipeline Co. v. 86.72 Acres of Land,
In summary, the district court followed established principles of equity in determining that it had the power to award preliminary injunctive relief to ETNG in the form of immediate possession. Neither the Constitution, nor Congress, nor
III.
Because the district court had the authority to grant immediate possession through a preliminary injunction, we must consider the landowners’ alternative argument that ETNG does not satisfy the basic requirements for a preliminary injunction. We review the decision to grant a preliminary injunction for abuse of discretion. Factual determinations are reviewed for clear error and legal conclusions de novo. Safety-Kleen, Inc. v. Wyche,
1. The likelihood of irreparable harm to ETNG.
The district court found that without a preliminary injunction the Patriot Project would suffer “undue delay” and that this delay would cause “siguficant financial harm both to ETNG and some of its putative customers.” J.A. 78. This finding has ample support in the record. The court pointed out that separate hearings on compensation would be required for each of the eighty-five tracts involved. Scheduling and conducting those hearings, the district court noted, “will obviously take an extended period of time.” J.A. 78. ETNG estimated that if possession on some tracts was deferred until completion of the hearings, construction could be delayed until the Summer of 2004 or beyond. Constructing a ninety-four-mile pipeline is
ETNG is also under contractual obligation to provide natural gas to several electric generation plants and local gas utilities by certain dates. Without a preliminary injunction, ETNG would be forced to breach these contracts. ETNG’s inability to satisfy these commitments would have negative impacts on its customers and the consumers they serve. For example, two electric generation plants will not be able to operate at full capacity without natural gas from the Patriot Project. A North Carolina gas utility may not be able to meet its customers’ demand for gas if ETNG does not complete the project on time. ETNG estimates that it would lose in excess of $5 million if construction delay caused it to breach its contractual obligations to supply gas. Finally, delay in the construction of the pipeline would hinder economic development efforts in several Virginia counties.
2. The likelihood of harm to the landowners.
The landowners claim that ETNG’s early possession will disturb the productive capacity of their land. This is simply a timing argument because productive capacity would still be disturbed, albeit at a later time, if just compensation was determined first. In any event, as the district court observed, the early loss of use argument “is blunted by [the landowners’] right to draw down the money ETNG has deposited with the Court based on ETNG’s appraisal,” that is, an independent appraisal obtained by the company. J.A. 78-79. The landowners also argue that by awarding ETNG early possession, the district court undermined their ability to negotiate a favorable price for their land. This argument is unconvincing because the Fifth Amendment guarantees the landowners just compensation for their land no matter when the condemnor takes possession. Finally, the landowners argue that taking property before determining just compensation constitutes a type of inherent harm that is irreparable, especially when lands have been held in the same family for many years. We fully understand that condemnation often forces landowners to part with land that they would prefer to keep for many reasons, including sentimental ones. However, the Supreme Court long ago recognized that “in view of the liability of all property to condemnation for the common good, loss to the owner of nontransferable values deriving from his unique need for property or idiosyncratic attachment to it ... is properly treated as part of the burden of common citizenship.” Kimball Laundry Co. v. United States,
3. The likelihood that ETNG will succeed on the merits.
ETNG has a determination on the merits that it has a right to condemn the landowners’ property, and the landowners
4. The public interest
The district court concluded that “expeditious completion of the pipeline is in the public interest.” J.A. 79. Congress passed the Natural Gas Act and gave gas companies condemnation power to insure that consumers would have access to an adequate supply of natural gas at reasonable prices. Clark v. Gulf Oil Corp.,
Because our review must be “more searching when the preliminary in-junctive relief ordered by the district court is mandatory,” Microsoft Antitrust Litig.,
After considering the Blackwelder factors and the propriety of mandatory relief, we conclude that the district court did not abuse its discretion in entering the preliminary injunction orders in these cases.
IV.
Some of the landowners argue that the district court lacked jurisdiction over their cases because ETNG’s condemnation complaints did not sufficiently identify the property to be taken.
In sum, we hold that once a district court determines that a gas company has the substantive right to condemn property under the NGA, the court may use its equitable power to grant the remedy of immediate possession through the issuance of a preliminary injunction. Because the district court did not abuse its discretion in granting preliminary injunctive relief to ETNG in these cases, we affirm the district court’s orders.
AFFIRMED.
Notes
The DTA gives any government official with condemnation authority the right to take immediate possession. A few statutes give this right to specific officials. See, e.g.,