Pipeline construction can begin before compensation paid

Where a plaintiff was entitled to use eminent domain to obtain rights-of-way to portions of private property, that plaintiff was likewise entitled to begin construction on those properties before the value of just compensation had been determined and paid.

Background

In October 2015, Mountain Valley Pipeline LLC applied to the Federal Energy Regulatory Commission for authorization to construct a natural gas pipeline through West Virginia and Virginia. The FERC issued a certificate of authorization on Oct. 13, 2017, after finding that the proposed pipeline was in the public interest, would meet a market demand and was environmentally acceptable. The certificate specifically required the pipeline to be completed and available for service by October 2020. Though numerous challenges to the certificate have been made, they have all be unsuccessful.

Within weeks of obtaining the certificate, Mountain Valley entered into three master service construction agreements to lay the pipeline. Mountain Valley acquired rights-of-way to portions of approximately 85 percent of the properties along the approved pipeline route, including permanent easements allowing the pipeline to lie underneath the land and temporary easements for construction. However, Mountain Valley was unable to reach an agreement with the hundreds of landowners who are now parties to the current litigation.

Pursuant to the Natural Gas Act, Mountain Valley’s certificate entitled it to use the power of eminent domain to obtain a condemnation order granting any rights-of-way it could not otherwise acquire that were necessary to construct, operate or maintain the planned pipeline. By December 2017, Mountain Valley had commenced proceedings in three different district courts to condemn a 50-foot-wide path along the pipeline route in each jurisdiction. Within days after commencing each proceeding, Mountain Valley moved for partial summary judgment on its substantive right to take the easements by eminent domain and, in the same motions, sought preliminary injunctions granting immediate access and possession during the pendency of the proceedings.

All three district courts granted Mountain Valley’s motions in their entirety. The landowners now appeal the district courts’ granting of the preliminary injunctions.

Analysis

The landowners argue that the district courts lacked the authority to grant the preliminary injunctions because the Natural Gas Act does not expressly allow for immediate possession prior to the determination and payment of just compensation. That argument, however, has previously been rejected by this circuit, and it remains valid and binding precedent.

The district courts likewise followed appropriate precedent and did not commit any abuse of discretion in granting preliminary injunctions to Mountain Valley.

Mountain Valley not only has a likelihood of success on the merits, they have already succeeded on the merits by virtue of the district courts’ grants of summary judgment, which have not been challenged by the landowners.

Mountain Valley has also shown a likelihood of irreparable harm by demonstrating that the October 2020 completion deadline set by the FERC will not be met if construction is not allowed to commence before the determinations and payments of just compensation have been made. The just compensation determination alone could take several years, extending well beyond the October 2020 deadline and likely resulting in Mountain Valley losing the right to construct the pipeline altogether.

Moreover, even a shorter delay in construction would result in significant financial losses for Mountain Valley, including revenues lost as a result of the delay in service, charges and penalties for breaches of existing contracts and other costs associated with prolonging the project. These economic losses likewise establish irreparable injury because they would not be recoverable at the end of the litigation.

The district court correctly found that balance of the equities also favors Mountain Valley because, by and large, the landowners would suffer identical harm whether access was granted prior to or only after just compensation had been paid. Most of the injuries complained of by the landowners result from the construction of the pipeline itself, not from the granting of preliminary relief. The specialized harms identified by a small number of landowners as a result of immediate possession fail to outweigh the potential harms to Mountain Valley.

Finally, the FERC’s issuance of the certificate to Mountain Valley demonstrates that the completion of the pipeline is in the public interest. As delaying construction would delay the public benefits identified by the FERC, granting the preliminary injunction is in the public interest.

Affirmed.

Mountain Valley Pipeline LLC v. 6.56 Acres of Land, Case Nos. 18-1159, 18-1165, 18-1175, 18-1181, 18-1187, 18-1242, 18-1300, Feb. 5, 2019. 4th Cir. (Harris), Appeals from WDVA at Roanoke (Dillon), NDWV at Clarksburg (Keeley), SDWV at Charleston (Copenhaver). Derek Owen Teaney and Christopher Stephen Johns for Appellants; Wade Wallihan Massie and Nicolle Renee Snyder Bagness for Appellee. VLW 019-2-044. 42 pp.