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Landowners Eye New Advantage After D.C. Circuit Pipeline Ruling

July 2, 2020, 9:30 AM

Landowner advocates and pipeline builders are zeroing in on a spinoff opinion attached to a pivotal energy law ruling that could make it harder for companies to quickly seize private land.

The Federal Energy Regulatory Commission no longer can use procedural devices called tolling orders to stall litigation over natural gas pipeline approvals, the U.S. Court of Appeals for the District of Columbia Circuit said Tuesday. The decision forces reform at the agency, giving project challengers an easier path to the courtroom.

But the impacts don’t stop there. In a concurrence that energy lawyers expect to see cited frequently in other cases, Judge Thomas B. Griffith had notes for his counterparts on the federal bench, stressing that “courts possess other tools to protect landowners.”

Griffith was referring to district court judges who oversee land seizures. When pipeline companies get FERC approval for a project, they can immediately initiate eminent domain proceedings to take private land along its route. Judges often approve the land takings before FERC resolves rehearing petitions from challengers, meaning landowners can lose their property before the agency addresses objections to a project.

But a district court “should not plow ahead in the face of a true grant of rehearing,” Griffith wrote Tuesday, joined by Judges Gregory G. Katsas and Neomi Rao. “Nothing in the Natural Gas Act prevents a district court from holding an eminent-domain action in abeyance until the Commission completes its reconsideration of the underlying certificate order.”

‘Best Part of the Ruling’

Griffith’s opinion was “the best part of the ruling,” said Washington, D.C.-based attorney Carolyn Elefant, who represents landowners in pipeline cases.

“Having that opinion, even just a concurrence, from the D.C. appellate court may embolden a few district judges to depart from the long-established precedent that if you have a FERC certificate, it’s final,” she said.

Though FERC has already announced it will no longer allow pipeline construction to start while rehearing petitions are pending, the agency’s move doesn’t stop companies from taking land during that time.

Griffith’s direction to district court judges could help landowners hold on to their property and block companies from conducting preconstruction work while pipeline challenges play out, Elefant said.

ClearView Energy Partners analyst Christine Tezak noted that the concurrence doesn’t create any binding precedent for district courts, but “sends a message to district courts that is likely to slow the processing of pipeline sponsors’ eminent domain requests.”

Future Cases

Time will tell how judges respond to that direction, said David Bookbinder, a Niskanen Center attorney who represents landowners in other pipeline cases.

But the point is clear: “If rehearing is going on, you should really seriously think about slowing down your condemnation processes,” he said.

Landowners are now likely to cite Griffith’s opinion, as well as FERC’s new policy, in district court proceedings, said Steptoe & Johnson LLP’s Monique Watson, a former FERC attorney.

“I expect landowners will implore the district court to stay the condemnation proceeding until FERC acts on rehearing” or the agency’s 30-day window for action closes, Watson said.

Pipeline companies, in turn, will likely point to the text of the Natural Gas Act, which gives eminent domain authority to any company with a FERC permit, she said.

But Bookbinder noted that the statute doesn’t guarantee pipeline companies can quickly exercise that authority. District courts have “complete control” over their dockets and how quickly they address eminent domain efforts, he said.

“It really is in the hands now of the district court judges,” Bookbinder said.

The case is Allegheny Defense Project v. FERC, D.C. Cir. en banc, No. 17-1098, 6/30/20.

To contact the reporter on this story: Ellen M. Gilmer in Washington at egilmer@bloombergindustry.com

To contact the editors responsible for this story: Gregory Henderson at ghenderson@bloombergindustry.com; Rebecca Baker at rbaker@bloombergindustry.com

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