SCV: Pipeline had right to enter, survey private property

The trial court did not err in concluding that Code § 56-49.01(A) allows a natural gas company to gain access to private property for the purpose of conducting surveys and other activities, even if it can show that these activities are necessary only for the selection of the most advantageous route. It need not show in addition that such activities are necessary for complying with regulatory requirements.

Background

Atlantic Coast Pipeline LLC  is presently engaged in the regulatory approval process to build a natural gas pipeline through the Commonwealth. As part of this process, the Pipeline sought to conduct surveys, tests, appraisals, and other examinations on the properties located along its proposed route. The Appellants, the landowners, own or are trustees for real properties along this proposed route.

On March 6, 2015, the Pipeline mailed the landowners certified letters seeking permission to enter their properties to conduct preliminary surveys and other activities. When the landowners withheld consent, the Pipeline noticed its intent to enter and sought a declaratory judgment affirming its authority to enter their properties “for the limited purposes defined in Va. Code § 56-49.01.” The trial court found that the Pipeline’s notices of intent to enter were deficient in failing to indicate specific dates of entry.

On December 6, 2016, the Pipeline sent the landowners new notices of intent to enter. These notices indicated the various activities that the Pipeline intended to perform and specified the date ranges that the Pipeline intended to enter the properties to conduct these activities. The Pipeline again petitioned for declaratory judgment. At trial, the Pipeline presented evidence of its need to conduct activities in order to determine the most advantageous route for the pipeline.

After the Pipeline had presented its evidence, the landowners moved to strike, noting that § 56-49.01(A) permits activities that are necessary for two reasons: to both satisfy regulatory requirements and to select the most advantageous route. As these provisions are separated by the word “and,” the landowners assert that these provisions must be read in the conjunctive. Therefore, according to the landowners, the Pipeline’s petitions must fail because it failed to present any evidence that the activities were necessary to satisfy any regulatory requirements. The trial court ruled that construing the operative language as disjunctive was the more logical reading and granted permission to enter the landowners’ properties to conduct the necessary activities. The landowners have appealed.

Code § 56-49.01(A)

The trial court did not err by construing the “and” separating provisions (i) and (ii) as disjunctive.

Code § 56-49.01(A) is intended to grant natural gas companies access to private property for the purpose of conducting certain activities related to the possible construction of a natural gas pipeline. Thus, the statute extends to the Pipeline, as a natural gas company, the privilege to enter another’s land, within the scope of the authority granted by the statute.

The statute leaves the determination of which activities to perform to the natural gas companies, as demonstrated by the auxiliary verb “may” preceding the inclusive list of activities. Still, discretion is not unlimited: A natural gas company may only conduct those activities that “are necessary (i) to satisfy any regulatory requirements and (ii) for the selection of the most advantageous location or route, the improvement or straightening of its line or works, changes of location or construction, or providing additional facilities.”

The legislature’s use of the present indicative verb “are” before the word “necessary” indicates that the activities the company seeks to conduct must be presently necessary, as opposed to necessary at some future time. Had the legislature intended to include future necessity, it would have used the future indicative verb “will be.”

Therefore, the language at issue must be read in the disjunctive. If the “and” separating the enumerated provisions were conjunctive, natural gas companies could only conduct those activities necessary to satisfy both provisions. But not all activities necessary to satisfy regulatory requirements are also necessary for the selection of the most advantageous route, etc., and vice versa. Moreover, the need to satisfy regulatory requirements occurs at an entirely different time from the need to select and/or improve the pipeline and its route. The few activities necessary to satisfy both provisions would not be necessary at the same time. By inextricably coupling the two enumerated provisions, any discretion granted to natural gas companies would be taken away for no discernible purpose.

Further, a conjunctive reading would render some portions of the statute meaningless. For example, the second enumerated provision is comprised of four subparts, written in the disjunctive. An activity may be deemed necessary under that provision if it involves: (1) “the selection of the most advantageous location or route;” (2) “the improvement or straightening of [a] line or works;” (3) changing the location or construction of a pipeline; or (4) “providing additional facilities.” Logically, the improvement or straightening of a pipeline would occur after the pipeline has been built, as would changing the location of the pipeline and, to some extent, the construction of additional facilities. Requiring activities to be necessary both for satisfying regulatory requirements and the several post-construction considerations would be completely unworkable. The word “and” was used in this portion of the statute to indicate that a natural gas company may undertake activities necessary to address either of the enumerated provisions.

Also considering the nature of enumerated provisions, the first enumerated provision is entirely objective while the second has a significant subjective component. By granting natural gas companies the discretion to determine what makes one route or location more advantageous than another, the General Assembly has also implicitly granted discretion to choose which activities are necessary to make such a determination. Reading the “and” separating these provisions in the conjunctive effectively eliminates this discretion and any differentiation in the two enumerated provisions.

Finally, within the first sentence of
§ 56-49.01(A), the legislature has unequivocally used the word “and” in both the conjunctive and the disjunctive. When it intends to permit some level of discretion in this statute, it uses the word “and” in the disjunctive. In contrast, when it intends to foreclose discretion, it uses the word “and” in the conjunctive. The fact that the proper application of the second enumerated factor involves the natural gas company’s exercise of discretion indicates here that the “and” is disjunctive. Any other construction would be counterproductive to the legislature’s clear intent.

Unconstitutional taking

The trial court also did not err in interpreting Code § 56-49.01 to effect an unconstitutional taking under Article I, § 11 of the Virginia Constitution.

The landowners argue that the trial court permitted the Pipeline to conduct activities that were not allowed by
§ 56-49.01. In making this argument, the landowners rely on the Pipeline’s letter of March 6, 2015, outlining the survey process. But this letter was an attempt to get permission, not a statement of the activities to be conducted if entry were permitted under § 56-49.01.

The December 6, 2016 notice indicated that “small, shallow holes may be dug, which will be promptly refilled and repaired.” The court finds no meaningful distinction between such holes and the “hand auger borings” expressly permitted by the statute. Thus, the trial court did not permit the Pipeline to conduct activities that were outside of the scope of
§ 56-49.01.

The court also finds no merit in the landowners’ final argument that § 56-49.01 did not permit the Pipeline to provide multiple date ranges for when it would conduct its activities. The December 6 notice explained that completion of the surveys and other activities would require multiple crews over several days. It provided a limited set of dates when each crew would be present. Because the landowners have not challenged these date ranges as unreasonable, the court cannot say that they violated the statute.

Having determined that the trial court’s application of Code § 56-49.01 was not improper in this case, the court does not reach the question of whether the improper application of the statute could amount to an improper taking.

Affirmed.

Dissent

(Kelsey, J.) Under Code § 56-49.01(A), the first “necessary” precondition is that the company has to enter onto the private property to comply with legal requirements. The second “necessary” precondition is that the company wants to enter onto the private property to decide whether it will later take the property using the power of eminent domain. This conjunctive has-to/wants-to test delicately balances the rights of private property owners against the public’s interest in efficient and reliable energy infrastructure.

Under the majority’s analysis, it is sufficient that an out-of-state pipeline company wants to enter onto private property against a landowner’s will (to determine whether to take the property), even though it does not have to do so in order to satisfy regulatory requirements. It does not matter that the company has never been granted a federal permit to build the pipeline or even that the company has never applied for one. All that matters is that it qualifies as a natural gas company under 15 U.S.C. § 717a(6) and wants to enter the private property to figure out whether to one day build a pipeline across it.

All of this reasoning and its conclusion collapses if “and” means “and.” I think that it does. According to the plain meaning of the statute, the Pipeline must satisfy both preconditions before it may lawfully conduct a physical survey on private property against a landowner’s will.

The intent of § 56-49.01(A) would not be completely aborted if we interpreted “and” to mean “and” in this statute. If anything, the opposite is true. Judicially substituting “or” in place of “and” in the phrase at issue here decouples the right of nonconsensual entry from its constitutional justification under the power of eminent domain. It subordinates the ancient common-law rights of private property owners to the commercial interests of a pipeline company that is under no legal requirement to enter onto another’s land. And it effectively authorizes a foreign pipeline company that has neither applied for, nor received, a FERC certificate to trespass onto private property within the Commonwealth, based solely on the company’s self-interest in determining the location of a future pipeline.

For these reasons, I respectfully dissent from the majority’s reasoning and judgment.

Barr v. Atl. Coast Pipeline LLC, Record No. 170620, July 5, 2018. SCV (Powell), from Nelson Cir. Ct. (Garrett). VLW No. 018-6-047, 43 pp.