Here's the amici brief of the Owners' Counsel of America; New Jersey, Virginia, and West Virginia property owners; Cato Institute, and NFIB Small Business Legal Center which urges the Supreme Court to grant cert in a case we've been following for a while.
As regular readers understand, several federal courts of appeals recently have upheld giving prejudgment possession of property to a private pipeline condemnor once a district has ruled in favor of the pipeline that it qualifies under the three predicates in 15 U.S.C. § 717f(h). These courts conclude that summary judgment grants a pipeline a "substantive" right, and therefore there's no reason to not give it possession now by granting a Rule 65 injunction.
But a close read of the language of section 717f(h) shows it is only about whether a private pipeline company may institute an eminent domain lawsuit to take property. In other words, whether it has standing:
When any holder of a certificate of public convenience and necessity cannot acquire by contract, or is unable to agree with the owner of property to the compensation to be paid for, the necessary right-of-way to construct, operate, and maintain a pipe line or pipe lines for the transportation of natural gas, and the necessary land or other property, in addition to right-of-way, for the location of compressor stations, pressure apparatus, or other stations or equipment necessary to the proper operation of such pipe line or pipe lines, it may acquire the same by the exercise of the right of eminent domain in the district court of the United States for the district in which such property may be located, or in the State courts. The practice and procedure in any action or proceeding for that purpose in the district court of the United States shall conform as nearly as may be with the practice and procedure in similar action or proceeding in the courts of the State where the property is situated: Provided, That the United States district courts shall only have jurisdiction of cases when the amount claimed by the owner of the property to be condemned exceeds $3,000.
Our brief argues that summary judgment on these three factors does not grant a "substantive" right in these type of condemnations. Rather, the substantive right is ownership of the property, which will not be finally determined until a final adjudication of compensation. These courts' faulty reasoning is highlighted by their conclusion that summary judgment was an "order of condemnation."
The panel, however, wrongly concluded the district court’s grant of summary judgment was a “merits” determination. Pet. App. 13. It also mischaracterized the district court’s summary judgment order as an “order of condemnation.” Id. at 22. As outlined earlier, in straight-takings cases like these, the merits question is whether the condemnor has title, which can only happen here once Transcontinental exercises its option to buy. That, in turn, can only come after the court finally determines the amount of compensation. And that has not yet happened. An “order of condemnation” is the document by which the court transfers title to the condemnor after payment of the final adjudicated compensation.Br. at 12. For an overall flavor of the brief, here's the Summary of Argument:The unstated premise at the heart of the reasoning by the Third Circuit and the other courts which adhere to the same approach is that, once initiated, a Natural Gas Act condemnation is all but inevitable.[4] Because the pipeline company will eventually obtain the property after it pays the adjudicated compensation, the reasoning goes, what’s the harm in giving it possession now? Once the pipeline company obtains summary judgment on the three predicates that a private condemnor must satisfy to institute an eminent domain action under section 717f(h) of the NGA, it’s all over but the shouting because the summary judgment order resolved the substantive issues.Check it out.There are several fundamental problems with this approach: most critically, a misunderstanding about what the “substantive” rights are in an eminent domain action. The substantive right at stake in all federal takings, these included, is ownership of the property. And in straight takings, ownership and title are transferred to the plaintiff only after it agrees to pay the adjudicated price and exercises its option to buy at that price. Only then, and after the owner either is provided with compensation or has an irrevocably vested right to recover it, may the condemnor obtain possession. The Third Circuit concluded the district court’s summary judgment order granted Transcontinental a substantive right to Petitioners’ properties. But the summary judgment order did no such thing. It merely determined Transcontinental could be a straight taking plaintiff-condemnor and maintain a federal condemnation lawsuit. Any protections in the preliminary injunction process are hollow substitutes for the usual constitutional safeguards, because here, Transcontinental unquestionably retained the ability to walk away if it did not like the adjudicated compensation eventually established by the trial court.
By virtue of these injunctions, Transcontinental possesses both its cake (prejudgment possession of the properties), and the ability to eat it (the option to not buy if it doesn’t like the final price).
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4. This issue is not isolated. Besides the Third Circuit, the Fourth, Sixth, and Eleventh Circuits have recently considered the same issue. See Mountain Valley Pipeline, LLC v. 6.56 Acres of Land, No. 18-1159 (4th Cir. Feb. 5, 2019); Nexus Gas Transmission, LLC v. City of Green, Ohio, No. 18-3325 (6th Cir. Dec. 7, 2018); Transcontinental Gas Pipe Line Co., LLC v. 6.04 Acres, more or less, No. 16-17503 (11th Cir. Dec. 6, 2018). Nor is the issue going away. A separate petition seeking this Court’s review of the Eleventh Circuit’s opinion has been filed, see Goldenberg v. Transcontinental Gas Pipe Line Co., LLC, No. 18-1174 (Mar. 6, 2019), and others may soon be forthcoming in the other cases.
Follow along on the Court's docket here.
