We suppose we should not be too surprised by the U.S. Court of Appeals for the Fourth Circuit's panel opinion in Mountain Valley Pipeline, LLC v. 6-56 Acres, No. 18-1159 (Feb. 5, 2019), which concluded, like the Third, Sixth, and Eleventh Circuits did recently, that a private condemnor may obtain immediate possession of property that it may condemn, even though Congress did not delegate the quick take power to those private condemnors in the Natural Gas Act.
After oral argument, we had a faint hope that the panel might see things differently. See "4th Cir Judge In Pipeline Arguments: "Condemnation is one of those monarchy things" - Is Immediate Possession Unconstitutional When Congress Has Not Delegated That Power To A Pipeline?"
But alas no, it was not to be. All three judges concluded that this case is "on all fours" with the Fourth Circuit's earlier decision in East Tennessee Nat. Gas Co. v. Sage, 361 F.3d 808 (4th Cir. 2004), which held that even though Congress did not delegate the quick take power in the NGA, a preliminary injunction under Rule 65 of the Federal Rules of Civil Procedure could achieve the same result, and thus there was no running room. Like the other courts which have analyzed the issue (incorrectly, in our view), the Fourth Circuit panel concluded that the pipeline company's summary judgment on the three predicates under the statute, means that the pipeline has what the courts call the "substantive" right to condemn.
We've been down this path before -- our latest was a rebuffed effort to get the Third Circuit to hear the same issue en banc -- and we won't go over the argument in detail. Suffice it to say that our Third Circuit amicus brief gets to what we think is the core of the way the courts should look at this:
The panel’s rationale not only violates the well-worn rule of statutory interpretation of eminent domain statutes (they must be liberally read in favor of the property owner, and strictly construed against the condemnor), but also reflects a fundamental misunderstanding of the eminent domain power, and process. Federal statutory takings become inevitable only when title transfers. And only then can the condemnor get possession. Here, by contrast, the panel acknowledged that title would not transfer until the end of the case, but nonetheless allowed possession.
In short, the "substantive" right here isn't the power to institute a condemnation action. That is the only thing which a private NGA condemnor meeting the statute's three-part test gets. No, the substantive right is the actual taking of the property, which can only occur in these cases when title transfers. And that only can happen upon the condemnor's exercise of its option to buy (after the court establishes the price), the actual payment, and the transfer of title.
The property owners in the Fourth Circuit were under no illusions that they are fighting an uphill battle, given Sage.
Now that the latest panel has ruled, will we see more, such as an en banc petition to revisit Sage, or even a cert petition if that gets nowhere?
Mountain Valley Pipeline LLC v. 6.56 Acres of Land, No. 18-1159 (4th Cir. Feb. 5, 2019)
