Civil No. 3:19-CV-464
( ) REPORT AND RECOMMENDATION
The ability of government to condemn private property for public use, conditioned upon just compensation for the taking, is beyond dispute. Indeed, this civic authority is enshrined in the Fifth Amendment to the United States Constitution which provides that: "nor shall private property be taken for public use, without just compensation." U.S. Const. amend. V. As the text of the Fifth Amendment implies, land use condemnation litigation typically has two phases: (1) the taking, and (2) determination of just compensation. Given the longstanding, settled authority of government to condemn private property for public use, the issue of the legal authority for the taking is rarely contested. Instead, the question of just compensation is the flag that most parties typically seek.
The instant case, however, turns this conventional wisdom on its head, for in this case the parties are contesting the plaintiff's current legal ability to "take" this property for public use as part of a pipeline project. On this score, the plaintiff, PennEast Pipeline Company, seeks summary judgment in its favor affirming its lawful ability to engage in this taking for the public purpose of pipeline construction. The defendants, in turn, contest the legal ability of PennEast to take this parcel of land. However, as we construe it, the defendant's objections to PennEast's legal authority to engage in this taking relate to legal questions and concerns pertaining to other properties or matters. Therefore, for the reasons set forth below, given the limited scope of our review regarding PennEast's authority under the law to engage in this taking, we recommend that the plaintiff's motion for partial summary judgment be granted.
II. Factual Background
This litigation involves an essentially undisputed set of facts. This case is a land condemnation action brought by PennEast Pipeline Company pursuant to the Natural Gas Act, 15 U.S.C. § 717 et seq. (the "NGA"). PennEast holds a January 19, 2018 Certificate of Public Convenience and Necessity issued by the Federal Energy Regulatory Commission ("FERC") under the Natural Gas Act. This certificate authorized PennEast to construct, operate, and maintain the PennEast Pipeline Project, a new natural gas pipeline system, in Pennsylvania and New Jersey. The PennEast Pipeline Project, which was approved by the FERC, contemplated the construction and operation of a 36-inch diameter, 120-mile long natural gas pipeline originating in Luzerne County, Pennsylvania and extending to Mercer County, New Jersey, along with associated equipment and facilities in both states to provide infrastructure for the project to provide approximately one billion cubic feet per day of natural gas transportation service from northern Pennsylvania to markets in New Jersey, eastern and southern Pennsylvania, and surrounding states.
As part of this pipeline construction project, PennEast has filed a number of land condemnation actions under the NGA, including the instant case, seeking to take property for the purpose of creating a pipeline right-of-way. The defendant in this case is Eric McKeever, an adult individual who is the fee simple owner of real property located in Towamensing Township, Carbon County, Pennsylvania, identified as Parcel #: 16D-56-A2. On March 15, 2019, PennEast filed a Verified Complaint in eminent domain under the Natural Gas Act, 15 U.S.C. §717f(h) and Federal Rule of Civil Procedure 71.1 against the Defendant seeking to condemn certain property rights that were allegedly necessary for the construction, operation, and maintenance of the proposed PennEast Pipeline Project.
Under the Natural Gas Act, in order to exercise the federal power of eminent domain, PennEast must show that it has met three legal prerequisites: (1) it must hold a FERC Certificate of Public Convenience and Necessity for the project; (2) it must allege that it was unable to acquire the property rights required for the FERC-approved project by agreement with the affected landowner; and (3) the complaint must assert that the affected landowner values the property rights to be taken in excess of three thousand dollars ($3,000.00). PennEast's complaint alleged these statutory requisites and specifically relied upon the January 19, 2018 Certificate of Public Convenience and Necessity issued by the Federal Energy Regulatory Commission to sustain its land condemnation claim. (Doc. 1).
On November 26, 2019, PennEast moved for a partial summary judgment in its favor, asking the court to find that the plaintiff is legally entitled to take this property, subject to providing fair compensation to the defendant. (Doc. 19). The defendant did not initially oppose this motion. However, in response to a show cause order issued by the court, in May of 2020 the defendant filed a response in opposition to PennEast's motion seeking a judicial declaration that it had satisfied the legal requisites under the NGA entitling it to take this property. (Doc. 24).
This response in opposition to the partial summary judgment motion filed by PennEast asserted that there were a number of legal obstacles to PennEast's taking of this property at this time. Notably, however, none of these alleged legal obstacles appeared to be directly related to PennEast's ability to seek condemnation of the particular parcel of land at issue in this lawsuit. Thus, the defendant cited In re PennEast Pipeline Co., LLC, 938 F.3d 96, 99 (3d Cir. 2019), a pending case addressing whether the Natural Gas Act abrogated the Eleventh Amendment immunity enjoyed by the states and thus authorized a private entity like PennEast to seek condemnation of state-owned lands, as a legal impediment to this land condemnation claim which involved only private property interests. In addition, the defendant cited to various proposed amendments to its certificate of public necessity, which PennEast was seeking from the FERC as grounds to question the continued legitimacy and legal viability of that certificate as grounds for pursuing this land condemnation lawsuit. These proposed amendments related to the sequencing of pipeline construction, and extension of construction deadlines. The parties have not identified any aspect of these amendments which would have revoked or nullified the original certificate of public necessity. Moreover, it appears that the FERC has granted a number of the amendments sought by PennEast on its certificate of public necessity, further undermining any claim that these amendments somehow vitiate the certificate of necessity. In re PennEast Pipeline Company, LLC, 170 FERC ¶61,138 (2020); In re PennEast Pipeline Company, LLC, 170 FERC ¶61,198, Docket No. CP19-78-000 (2020). Given these facts, and the deferential standard of review that courts are cautioned to employ when reviewing certificates of public necessity issued by the FERC, PennEast contends that it is entitled to a partial summary judgment in this case.
For the reasons set forth below, we agree that partial summary judgment in favor of PennEast is appropriate in this case. Therefore, we recommend that the court enter a partial summary judgment in favor of the plaintiff in this land condemnation action, finding that PennEast is legally entitled to take this parcel for public use, and proceed with the fair compensation aspect of the case.
A. Summary Judgment Standard of Review
The plaintiff has moved for partial summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure, which provides "[t]hat the court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). Through summary adjudication, a court is empowered to dispose of those claims that do not present a "genuine dispute as to any material fact," Fed. R. Civ. P. 56(a), and for which a trial would be "an empty and unnecessary formality." Univac Dental Co. v. Dentsply Int'l, Inc., No. 07-0493, 2010 U.S. Dist. LEXIS 31615, at *4 (M.D. Pa. Mar. 31, 2010). The substantive law identifies which facts are material, and "[o]nly disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A dispute about a material fact is genuine only if there is a sufficient evidentiary basis that would allow a reasonable fact finder to return a verdict for the non-moving party. Id., at 248-49.
The moving party has the initial burden of identifying evidence that it believes shows an absence of a genuine issue of material fact. Conoshenti v. Pub. Serv. Elec. & Gas Co., 364 F.3d 135, 145-46 (3d Cir. 2004). Once the moving party has shown that there is an absence of evidence to support the nonmoving party's claims, "the non-moving party must rebut the motion with facts in the record and cannot rest solely on assertions made in the pleadings, legal memoranda, or oral argument." Berckeley Inv. Group. Ltd. v. Colkitt, 455 F.3d 195, 201 (3d Cir. 2006); accord Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986). If the nonmoving party "fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden at trial," summary judgment is appropriate. Celotex, 477 U.S. at 322. Summary judgment is also appropriate if the non-moving party provides merely colorable, conclusory, or speculative evidence. Anderson, 477 U.S. at 249. There must be more than a scintilla of evidence supporting the nonmoving party and more than some metaphysical doubt as to the material facts. Id., at 252; see also, Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). In making this determination, the Court must "consider all evidence in the light most favorable to the party opposing the motion." A.W. v. Jersey City Pub. Schs., 486 F.3d 791, 794 (3d Cir. 2007).
Moreover, a party who seeks to resist a summary judgment motion by citing to disputed material issues of fact must show by competent evidence that such factual disputes exist. Further, "only evidence which is admissible at trial may be considered in ruling on a motion for summary judgment." Countryside Oil Co., Inc. v. Travelers Ins. Co., 928 F.Supp. 474, 482 (D.N.J. 1995). Similarly, it is well-settled that: "[o]ne cannot create an issue of fact merely by . . . denying averments . . . without producing any supporting evidence of the denials." Thimons v. PNC Bank, NA, 254 F. App'x 896, 899 (3d Cir. 2007) (citation omitted). Thus, "[w]hen a motion for summary judgment is made and supported . . ., an adverse party may not rest upon mere allegations or denial." Fireman's Ins. Co. of Newark NJ v. DuFresne, 676 F.2d 965, 968 (3d Cir. 1982); see Sunshine Books, Ltd. v. Temple University, 697 F.2d 90, 96 (3d Cir. 1982). "[A] mere denial is insufficient to raise a disputed issue of fact, and an unsubstantiated doubt as to the veracity of the opposing affidavit is also not sufficient." Lockhart v. Hoenstine, 411 F.2d 455, 458 (3d Cir. 1969). Furthermore, "a party resisting a [Rule 56] motion cannot expect to rely merely upon bare assertions, conclusory allegations or suspicions." Gans v. Mundy, 762 F.2d 338, 341 (3d Cir. 1985) (citing Ness v. Marshall, 660 F.2d 517, 519 (3d Cir. 1981)).
Finally, it is emphatically not the province of the court to weigh evidence, or assess credibility, when passing upon a motion for summary judgment. Rather, in adjudicating the motion, the court must view the evidence presented in the light most favorable to the opposing party, Anderson, 477 U.S. at 255, and draw all reasonable inferences in the light most favorable to the non-moving party, Big Apple BMW, Inc. v. BMW of North America, Inc., 974 F.2d 1358, 1363 (3d Cir. 1992). Where the non-moving party's evidence contradicts the movant's, then the non-movant's must be taken as true. Id. Additionally, the court is not to decide whether the evidence unquestionably favors one side or the other, or to make credibility determinations, but instead must decide whether a fair-minded jury could return a verdict for the plaintiff on the evidence presented. Anderson, 477 U.S. at 252; see also Big Apple BMW, 974 F.2d at 1363. In reaching this determination, the Third Circuit has instructed that:
To raise a genuine issue of material fact . . . the opponent need not match, item for item, each piece of evidence proffered by the movant. In practical terms, if the opponent has exceeded the "mere scintilla" threshold and has offered a genuine issue of material fact, then the court cannot credit the movant's version of events against the opponent, even if the quantity of the movant's evidence far outweighs that of its opponent. It thus remains the province of the fact finder to ascertain the believability and weight of the evidence.(Id.) In contrast, "[w]here the record taken as a whole could not lead a rational trier of fact to find for the non-moving party, there is no genuine issue for trial." Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (internal quotation marks omitted); NAACP v. North Hudson Reg'l Fire & Rescue, 665 F.3d 464, 476 (3d Cir. 2011).
It is against these legal benchmarks that we assess the instant motion for partial summary judgment.
B. The Motion for Partial Summary Judgment Should Be Granted.
There are three essential elements to the taking aspect of a land condemnation claim under the Natural Gas Act. To prevail on such a claim the plaintiff must show that: (1) a certificate of public convenience and necessity has been issued by the FERC, (2) the holder of the certificate has been unable to acquire the needed land by contract with the owner, and (3) the value of the property in question is claimed to exceed $3,000. 15 U.S.C. §717f(h); Columbia Gas Transmission, LLC, v.1.01 Acres, 768 F.3d 300, 304 (3d Cir. 2014). Where there is no material dispute as to these three elements, it follows that partial summary judgment in favor of the plaintiff is appropriate. Transcon. Gas Pipe Line Co., LLC v. Permanent Easement for 2.14 Acres, No. CV 17-1725, 2017 WL 3624250, *6 (E.D. Pa. Aug. 23,2017) (finding that summary judgment on condemnation authority is appropriate when there is no dispute as to these three material facts), aff'd, 907 F.3d 725 (3d Cir. 2018).
In the instant case, there is absolutely no dispute that PennEast has been unable to acquire this disputed parcel of land by contract with the owner, and the value of the property in question is claimed to exceed $3,000. Therefore, two of the three elements of this condemnation claim are fully satisfied. All that remains to be determined is whether PennEast holds a legitimate certificate of public necessity issued by the FERC justifying the condemnation proceeding.
As to this sole remaining issue, the scope of the parties' dispute is both narrow and essentially turns on questions of law. All parties acknowledge that a certificate of public necessity was issued by the FERC to PennEast in January of 2018. On its face, that certificate would seem to authorize this taking of private property for a public use. Moreover, it seems undisputed that many of the amendments to that certificate sought by PennEast, which were once cited by the defendant as potential legal obstacles to this taking, have been resolved by FERC in PennEast's favor. See In re PennEast Pipeline Company, LLC, 170 FERC ¶61,138 (2020); In re PennEast Pipeline Company, LLC, 170 FERC ¶61,198, Docket No. CP19-78-000 (2020). Therefore, the principal objection the defendant interposes to this taking is one stemming from a case that is unrelated to this particular parcel of land, In re PennEast Pipeline Co., LLC, 938 F.3d 96, 99 (3d Cir. 2019). This appellate court decision, which is under Supreme Court review, addressed an issue that seems far removed from the questions before us. Specifically, In re PennEast Pipeline Co., LLC, the court of appeals concluded that the Natural Gas Act did not abrogate the Eleventh Amendment immunity enjoyed by the states and thus did not permit a private entity like PennEast to seek condemnation of state-owned lands. Id.
The defendants cite this litigation—a lawsuit focused upon the arcane intricacies of the relationship between the Natural Gas Act and the Eleventh Amendment's immunity conferred upon states protecting them from suits in federal court—as grounds for nullifying the ability of PennEast to proceed with this land condemnation proceeding against the defendant's private property. Accordingly, the defendant invites us to deny the plaintiff's motion for summary judgment due to this pending litigation affecting the resolution of entirely different state property rights.
We should decline this invitation. In our view, the legal obstacles cited by the defendants simply do not constitute hurdles that defeat PennEast's ability to proceed with the talking of this particular parcel of private property for public use. Indeed, we believe that the defendant's argument founders on several fundamental grounds.
At the outset, this argument misconstrues the standard of review we must apply in assessing the validity of a certificate of public necessity. At bottom, the defendants urge us to engage in a speculative collateral attack upon this certificate of public necessity based upon other, unrelated legal proceedings. This argument, however, ignores the fact that "a certificate of public convenience and necessity gives its holder the ability to obtain automatically the necessary right of way through eminent domain, with the only open issue being the compensation the landowner defendant will receive in return for the easement." Columbia Gas Transmission, LLC v. 1.01 Acres, More or Less in Penn Twp., York Cty., Pa., Located on Tax ID #£440002800150000000 Owned by Brown, 768 F.3d 300, 304 (3d Cir. 2014) (emphasis added). Given the automatic, self-executing quality of the certificate of public necessity, the defendant errs when he suggests that we may conduct some sort of independent inquiry collaterally questioning the validity of this certificate. We cannot. Rather it is well settled that:
"[T]he court does not have jurisdiction to review a collateral attack on the FERC certificate." "When a property owner comes to federal court to challenge FERC's findings in the certificate of public convenience and necessity, the property owner thereby mounts what in essence is a collateral attack on that certificate." "District courts have limited jurisdiction in Natural Gas Act condemnation actions." "This court's role is mere enforcement."Transcon. Gas Pipe Line Co., LLC v. Certain Easements & Rights of Way Necessary to Construct, Operate & Maintain a 30' Nat. Gas Transmission Pipeline, in Northmoreland Twp., Wyoming Cty., Pennsylvania, 359 F. Supp. 3d 257, 266-67 (M.D. Pa. 2019) (footnotes and citations omitted). Therefore, we simply may not engage in the type of potentially far-reaching collateral inquiry into the validity of this certificate of public necessity proposed by the defendant.
Moreover, the legal hurdles cited by the defendant in the response to this motion for partial summary judgment do not warrant setting aside PennEast's right to secure this specific property by eminent domain pursuant to the certificate issued by the FERC. For example, the defendant's argument that PennEast's requests for amendments to this certificate in some fashion undermined the validity of that certificate fails for at least three reasons. First, there is no showing that these amendments, which dealt with the timing of pipeline construction, in any way affected or related to the particular parcel of land at issue in this case. Second, this defense argument confuses the concept of amendment of a certificate of public necessity with the notion of the invalidity of that certificate. Simply put, requesting an amendment to this certificate actually presumes the validity of the certificate, but seeks some marginal modifications of its terms. Therefore, the amendment process cannot be viewed as a course of action that casts into doubt the validity of this certificate. Third, the defendants' argument ignores the fact that it appears that the FERC has apparently granted a number of amendments sought by PennEast on this certificate of public necessity, agency rulings that further undermine any collateral attack upon this certificate based upon the amendment process. See In re PennEast Pipeline Company, LLC, 170 FERC ¶61,138 (2020); In re PennEast Pipeline Company, LLC, 170 FERC ¶61,198, Docket No. CP19-78-000 (2020).
Likewise, the defendants' reliance upon In re PennEast Pipeline Co., LLC, 938 F.3d 96, 99 (3d Cir. 2019) to prevent the condemnation of this parcel of private property is completely misplaced. This argument fails for at least two reasons. First, the legal issues presented to the court of appeals in In re PennEast Pipeline Co., LLC involved the relationship between the Natural Gas Act and the Eleventh Amendment as it relates to the taking of state property by a private company. This question, while significant, is quite narrow, concerns only state-owned properties, and simply does not in any way affect the ability of PennEast under the certificate of necessity to proceed with the taking of private property for public use. Simply put, the Eleventh Amendment considerations that control the court's analysis in In re PennEast Pipeline Co., LLC, have no application to this private land condemnation proceeding.
In any event, the defendants err when they suggest that the decision in In re PennEast Pipeline Co., LLC bars further pipeline development through the condemnation of their property. It does not, and the Third Circuit expressly held that this ruling should not be viewed as, a barrier to pipeline development, stating: "our holding should not be misunderstood. Interstate gas pipelines can still proceed." Id. at 113. Rather, this decision simply addresses the manner in which land condemnation proceedings should be brought under the Natural Gas Act when those proceedings relate to state-owned properties. Given the third circuit's admonition that its decision does not affect pipeline development, it would be odd and anomalous to embrace the defendant's suggestion that this decision—which expressly disclaims that it creates an obstacle to pipeline development under the Natural Gas Act—somehow implicitly bars this private property land condemnation proceeding that is a necessary part of pipeline development.
Finally, the defendant's effort to cite legal issues unrelated to his own property as bars to this condemnation proceeding, if adopted by this court, would be antithetical to the goals of the Natural Gas Act, which is designed to promote the orderly development of natural gas transmission facilities. Taken to its logical extreme, the defendant's position would mean that land condemnation proceedings could not take place at any location until the legal impediments to condemnation at all locations were resolved. Such an interpretation of the Act's land condemnation procedures would produce confusion and delay, an outcome at odds with the stated purposes of the statute.
In sum, the objections lodged by the defendant do not undermine the certificate of public necessity issued by the FERC to PennEast. Therefore, that certificate gives "its holder the ability to obtain automatically the necessary right of way through eminent domain, with the only open issue being the compensation the landowner defendant will receive in return for the easement." Columbia Gas Transmission, LLC, 768 F.3d at 304. As such, PennEast is entitled to partial summary judgment in its favor and the case should proceed to a just compensation determination.
Accordingly, for the foregoing reasons, IT IS RECOMMENDED THAT PennEast's motion for partial summary judgment (Doc. 19) be GRANTED.
The Parties are further placed on notice that pursuant to Local Rule 72.3:
Any party may object to a magistrate judge's proposed findings, recommendations or report addressing a motion or matter described in 28 U.S.C. § 636 (b)(1)(B) or making a recommendation for the disposition of a prisoner case or a habeas corpus petition within fourteen (14) days after being served with a copy thereof. Such party shall file with the clerk of court, and serve on the magistrate judge and all parties, written objections which shall specifically identify the portions of the proposed findings, recommendations or report to which objection is made and the basis for such objections. The briefing requirements set forth in Local Rule 72.2 shall apply. A judge shall make a de novo determination of those portions of the report or specified proposed findings or recommendations to which objection is made and may accept, reject, or modify, in whole or in part, the findings or recommendations made by the magistrate judge. The judge, however, need conduct a new hearing only in his or her discretion or where required by law, and may consider the record developed before the magistrate judge, making his or her own determination on the basis of that record. The judge may also receive further evidence, recall witnesses or recommit the matter to the magistrate judge with instructions.
Submitted this 29th day of January 2021.
S/ Martin C . Carlson
Martin C. Carlson
United States Magistrate Judge