Above Photo: The Roanoke Times
Participants in the lawsuit hope it will protect their private property from what they describe as “a government-sanctioned land grab” for the financial gain of a private pipeline company.
A Roanoke-based lawyer representing 17 plaintiffs who own 10 properties along the current route of the proposed Mountain Valley Pipeline contend that the federal agency tasked with reviewing interstate pipelines should not be able to grant the power of eminent domain to a private company for its pursuit of “private pecuniary gain.”
A lawsuit filed Thursday in federal court in Roanoke challenges the authority of the Federal Energy Regulatory Commission to “sub-delegate” the power of eminent domain to a company like Mountain Valley Pipeline LLC. And it seeks a preliminary injunction that would prevent FERC from granting that power to Mountain Valley to acquire easements if the commission issues the certificate the company needs to begin constructing a pipeline.
Justin Lugar, a lawyer with the firm of Gentry Locke, filed the lawsuit in U.S. District Court. Defendants include: FERC, Cheryl LaFleur, the commission’s acting chairwoman, and Mountain Valley Pipeline LLC.
Opposition to the Mountain Valley Pipeline and to the separate-but-similar Atlantic Coast Pipeline to the north has focused both on environmental issues and the protection of private property rights, sometimes creating unique alliances of environmentalists and conservative Republicans.
Lugar said the concerns about private property rights should be disquieting for everyone.
“It’s not a political issue of the ‘left’ or ‘right’ but rather a pure issue of constitutional law and individual property rights,” he said. “The issue of how and when a private entity may invoke eminent domain is one that should concern all Americans, including current and prospective landowners.”
Among other allegations, the lawsuit contends FERC’s process for establishing whether a pipeline project will serve a true public benefit is deeply flawed and violates the U.S. Constitution. And it argues that when Congress amended the Natural Gas Act of 1938 in 1947 and gave FERC’s predecessor the authority to grant eminent domain it did so without sufficient guidance.
“Without boundaries from Congress, FERC has run wild in the years since, and has unconstitutionally sub-delegated the power of eminent domain to private parties seeking private properties,” the lawsuit alleges.
Setting the bar
Maureen Brady, an associate professor of law at the University of Virginia School of Law with expertise in property law, read through the lawsuit Thursday.
“Both the Virginia and federal constitutions require that property be taken for ‘public use’ only — they don’t authorize taking from Peter to give to Paul,” Brady said. “The [U.S.] Supreme Court has recently taken a fairly expansive view of what public use means, holding that the general benefits a community receives from projects generating economic development and growth may be sufficient. Still, this case says that the federal law under which the pipelines claim authority to condemn property does not contain adequate legal standards to ensure that only projects for a ‘public use’ receive FERC certification. In other words, it doesn’t set the bar high enough, even under these recent precedents.”
Tamara Young-Allen, a FERC spokeswoman, declined to comment about the lawsuit, noting it is commission policy not to discuss pending litigation.
Natalie Cox, a spokeswoman for Mountain Valley, offered a similar response.
“We are aware of the complaint and will, of course, review,” she said. “As this is pending litigation, however, we are unable to provide additional information at this time.”
The complaint alleges also that Mountain Valley’s surveys of private property for a pipeline route without an owner’s permission represent unconstitutional “takings” of private property without compensation. Surveyors leave properties with valuable information and, occasionally, tangible items such as historical artifacts, the lawsuit says.
The “takings” argument in the lawsuit filed Thursday includes “some new, intriguing claims,” Brady said.
“The federal Constitution states that ‘property’ cannot be ‘taken’ for ‘public use’ without ‘just compensation,’ ” she said. “Here, the suit alleges that the ‘property’ taken by the survey isn’t just the right to exclude — it’s also confidential data about the property, data over which the landowners generally exert control by choosing whom they let on and off their land.”
Brady said there is some U.S. Supreme Court precedent that suggests data such as trade secrets and confidential business information can be property for the purposes of the takings analysis.
“The question for the court to resolve will be whether data about one’s land can be ‘property’ used as the basis for a takings action,” she said. “This is an interesting spin on the takings issue, and I do not think it has been previously litigated or discussed in any other pipeline case, at least in Virginia.”
The Virginia Constitution includes an amendment that holds that the General Assembly “shall pass no law whereby private property, the right to which is fundamental, shall be damaged or taken except for public use.” It specifies that the “taking or damaging of private property is not for public use” if the primary use is for private gain or private benefit. Opponents of the two pipelines contend the projects primarily would benefit pipeline company stockholders. In turn, the companies respond that the projects will serve growing demand for natural gas.
On July 13, the Virginia Supreme Court issued two decisions tied to appeals of the state law that allows natural gas companies to survey private property without permission if the companies provide adequate notice as spelled out in the statute. The high court upheld the law. But neither of the appeals had raised the “takings” argument.
The 17 plaintiffs in the case filed Thursday own a total of 10 properties along the currently mapped route of the 303-mile pipeline. Their numbers include residents of Summers County and Monroe County in West Virginia and the Virginia counties of Giles, Montgomery, Roanoke and Franklin.
As proposed, the $3.5 billion Mountain Valley project would transport natural gas at high pressure through a 42-inch diameter buried pipeline from Wetzel County, West Virginia, to the Transco Pipeline in Pittsylvania County, Virginia.
The lawsuit filed Thursday focuses primarily on the Mountain Valley Pipeline. But it could have relevance also for the Atlantic Coast Pipeline.
Since June 23, FERC has released separate final environmental impact statements for each pipeline. That step sets the stage for FERC to decide whether to grant a certificate of “public convenience and necessity,” which is the green light the projects need to begin construction and to acquire easements through eminent domain if negotiations with property owners fail to yield an acceptable sum.
Yet FERC is currently without a quorum. Defendant LaFleur is the sole commissioner of what can be a five-member body. A quorum requires at least three commissioners.
‘Increasingly controversial’
When former FERC Chairman Norman Bay resigned in February he departed with a statement that suggested the commission ought to consider refining and expanding its evaluation of the need for new natural gas pipelines to guard against overbuilding.
Bay observed that “the development of natural gas pipeline infrastructure has become increasingly controversial.” Private property advocates have alleged, Bay said, that land is being taken by for-profit companies for projects that do not serve a public use.
In addition, Bay referenced FERC’s approach to conducting environmental reviews of natural gas pipeline projects. He suggested broadening the focus — echoing fervent calls, voiced for years by environmental and conservation groups, for a wide-ranging environmental impact statement designed to collectively assess the effects of numerous projects.
Bay wrote, “Despite the growing importance of Marcellus and Utica gas production — it was 22.5 billion cubic feet per day in 2016 and is projected to surpass 44 billion cubic feet per day by 2050 — the commission has never conducted a comprehensive study of the environmental consequences of increased production from that region.”
The lawsuit filed Thursday referenced Bay’s parting statement.
And the complaint noted that FERC has allowed supply contracts with affiliates of companies building pipelines to demonstrate need for the projects.
Pipeline watchdogs contend FERC’s evaluation of demand for a project’s natural gas should pay more heed to end users — customers that might include local distribution companies such as Roanoke Gas — than to affiliates of the companies building the pipelines.
Peter Anderson, Virginia program manager for Appalachian Voices, has said, “The idea that agreements between corporate affiliates somehow establish ‘need’ for a new pipeline is a sham.”
Bay’s statement referenced the debate about which criteria FERC should examine to establish need, including considering whether “precedent agreements” to reserve capacity on the pipeline “are largely signed by affiliates.”
Partners in the Mountain Valley Pipeline LLC joint venture include: EQT Midstream Partners; affiliates of NextEra Energy; Consolidated Edison; WGL Holdings; and, RGC Midstream. Current shippers of gas through the pipeline are all affiliates of the partners.