A private pipeline company obtained a certificate of public convenience from FERC. Under the Natural Gas Act, FERC may issue such certificates conditioned on the applicant meeting the Clean Water Act's requirement of obtaining state environmental check off on the project. The pipeline needed an easement across Schuecker's land, and began the condemnation process under New York law. It attached to its condemnation petition the conditional FERC certificate.
Schuecker objected, asserting that the FERC certificate was no good, because the pipeline had not met the condition: it had not certified to FERC that it had received all state approvals (as required by the federal Natural Gas Act). Indeed, the New York Department of Environmental Conservation had denied the pipeline's water quality certification. The pipeline responded that it was seeking reconsideration with FERC, and that the NYDEC could not deny water quality certification because it was too late to do so. The trial court agreed with the pipeline, but the appellate department reversed. While the case was pending in the appellate department, FERC concluded that NYDEC had waited more than a year to respond to the pipeline's application, and had thus waived authority to grant or deny it.
Up to the New York Court of Appeals (dun-dun) they went.
In National Fuel Gas Supply Corp. v. Schueckler, No. 29 (June 25, 2020), the court's majority agreed with the pipeline, and concluded that the FERC certificate was good enough, and the pipeline fulfilled the requirements of New York's eminent domain statute. That statute exempts a condemnor from making findings about public use and environmental impact of the taking if it obtains a certificate of public convenience from a federal or state agency considering "factors similar" to these. The court of appeals concluded:
FERC prepared a 199-page environmental assessment as part of its review, which involved consideration of public comments and of various potential modifications of the proposal, and which took into account how the project might affect—among other things—local “geology, soils, water resources, wetlands, vegetation, fisheries, wildlife, threatened and endangered species, land use, recreation, visual resources, cultural resources, socioeconomics, air quality, noise, [and] safety.” FERC concluded that the project did “not constitute a major federal action significantly affecting the quality of the human environment” and, thus, an environmental impact statement was not required under the National Environmental Policy Act.6 Following its lengthy review, FERC determined that the public benefits of the pipeline project outweighed any adverse impacts and, accordingly, issued a certificate of public convenience and necessity to National Fuel. This certificate was incontrovertibly premised upon a meaningful review of substantial information, alternatives, and viewpoints of various stakeholders, and FERC’s analysis focused largely on the factors delineated in EDPL 204 (B). Given that FERC made a reasoned determination regarding the public benefit to be served, as envisioned by EDPL 204 (B), the certificate satisfied the plain language of EDPL 206 (A).
Slip op. at 12-13 (footnote omitted).
Yeah, the FERC certificate was conditional, but it really wasn't "conditional" in a way that would interfere with the processing of an eminent domain case. See slip op. at 13. The pipeline can't actually build anything, but it can take property.
The majority paid lip service to the idea that eminent domain requires fairness to property owners, but ultimately conceded that the fundamental purpose of New York's eminent domain statute is to make sure that public projects get built:
To be sure, the Appellate Division’s concern that the power of eminent domain should be exercised only for viable projects is legitimate; both our state and federal constitutions permit the taking of property by eminent domain only for public use (see NY Constitution art I, § 7; US Constitution, Fifth Amendment)9 and any exercise of eminent domain involves a careful balancing of the interests of property owners, the community, and the public use to be served (see EDPL 101). However, in enacting the statutory exemption set forth in EDPL 206 (A), the legislature recognized that eminent domain is, at its core, intended to advance public works and that, in connection with such public projects, government agencies may often render determinations of public use that typically need not be replicated. Where, as here, a state or federal agency has determined that a project serves a public use, duplicative and exacting review of that determination would contravene the statutory framework prioritizing efficient resolution of condemnation claims for the greater public good (see EDPL 206 [A]).
Slip op. at 15.
Bottom line: "In sum, where, as here, a gas company holds a valid certificate of public convenience or necessity from FERC for the proposed construction of a pipeline and that certificate places no relevant conditions on the eminent domain power and has not been stayed or revoked by FERC or a federal court properly reviewing its issuance, compliance with article 2 is excused under EDPL 206 (A)." Slip op. at 19.
We guess we shouldn't be surprised at this ruling. New York eminent domain law was already among the worst in the nation at protecting property owners. As our New York colleague wrote when we asked if the latest decision made thing worse, "[m]ore like worse to worse." [* Hat tip for giving us the title to this post.] He also wrote:
This is par for the course, sadly, and entirely unsurprising. There is literally nothing that cannot be condemned in NY and the Judiciary has completely abdicated any role in overseeing eminent domain actions.
As one New York appellate judge described that state's law, "there is no longer any judicial oversight of eminent domain proceedings." Uptown Holdings v. City of New York, 908 N.Y.S.2d 657 (App. Div. 2010) (Catterson, J., concurring).
Before you file this latest opinion away as just another in a long train of abuses and usurpations, check out the detailed dissent by Judge Rivera:
In concluding that the Corporation may rely on a Federal Energy Regulatory Commission certificate to satisfy its burden under the EDPL, even though the certificate expressly conditions the project on completion of additional federal and state mandatory assessments with the potential to stop the project, the majority measures the certificate by its title, the equivalent of “judging a book by its cover.” Metaphorically, and as a matter of law, no good can come from this. Indeed, the majority misinterprets the federal regulatory process and the EDPL condemnation framework, and in so doing sanctions the condemnation of private property for development projects that may never gain final approval. I do not see how the public benefits from the premature taking of private land, and therefore I dissent.
Dissent at 2-3. Judge Rivera suggested that the legislature step in and right the wrong. See Dissent at 19. We recommend you read her entire opinion.
Nat. Fuel Gas Supply Corp. v. Schueckler, No. 29 (N.Y. June 25, 2020)
