In Palmer v. Atlantic Coast Pipeline, LLC, No. 1160630 (July 13, 2017), the Virginia Supreme Court concluded that an out-of-state natural gas company has the power under Virginia’s “entry statute” to enter private property to conduct surveys to determine if the land is suitable for condemnation for a pipeline. 

When a property owner turned down Atlantic’s request to come on her land, the company sought a declaratory judgment from the court. The owner asserted that the statute only allowed Virginia public service companies to use the statute, and Atlantic didn’t qualify. She also argued that the statute, if it allows Atlantic to enter, unconstitutionally burdens her right to exclude. The trial court agreed with Atlantic on both arguments. 

The Supreme Court made short work of Palmer’s argument that out-of-state pipeline companies can’t use the statute. Why? The statute itself doesn’t preclude them from doing so. It says “any” corporation that is a natural gas company.

The court also rejected what might have been the owner’s better argument, based on the Virginia Constitution, which has a provision which prohibits “foreign corporations” from exercising the powers of a public service enterprise. In other words, Atlantic may have qualified under the statute as a public service enterprise, but not under the Virginia Constitution. The problem was that the owner hadn’t raised this argument below, and it wasn’t briefed in her opening appellate brief. It was only argued in detail in the reply brief. Slip op. at  5-6. Ouch.

Finally, the court held that a pipeline company entering private property under color of the statute did not violate the property right to exclude others under a due process challenge. Yes, you have right to exclude others from your land, but it isn’t an absolute right. The “right of entry” is a long-standing privilege on the part of potential condemnors (said the court), and provisions like Virginia’s are pretty common. See slip op. at 8 n.2 for a list of other states which have similar statutes. Property owners have always held their land subject to the ability of condemnors to enter and have a look-see. “Virginia statutory law has done so for 235 years.” Slip op. at 8. The post-Kelo amendment to the Virginia Constitution which made public use challenges less difficult, had no effect on the right to exclude. The owner, however, didn’t raise this objection as a takings argument. See slip op. at 6 & n.1 (“In fact, she expressly stated in her reply brief that she is not making a ‘takings’ argument on appeal.”).

Here’s our takeaways:

  • Both of the issues which the court discusses may not be completely off the table in a future case. The owner’s argument under the Virginia Constitution on whether a foreign corporation can use the entry statute wasn’t properly raised on appeal, so maybe when an owner raises this claim and preserves it, the court might reach a conclusion on the merits. 
  • Same goes for the challenge to the entry statute. The court rejected a facial challenge which expressly was not a takings argument. Which means that a future as-applied challenge which asserted takings remedies should not be precluded. 

Litigate away! 

Palmer v. Atlantic Coast Pipeline, LLC, No. 1160630 (Va. July 13, 2017)