Equitrans, L.P. v. Jeffery Moore

• Court: Court of Appeals for the Fourth Circuit
• Decided: March 6, 2018
• Docket: 17-1574
• Status: Unpublished

Opinion

UNPUBLISHED

UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT

No. 17-1574

EQUITRANS, L.P., a Pennsylvania Limited Partnership,

Plaintiff – Appellee,

v.

JEFFERY J. MOORE; SANDRA J. MOORE,

Defendants – Appellants,

and

0.56 ACRES MORE OR LESS OF PERMANENT EASEMENT LOCATED IN MARION COUNTY, WEST VIRGINIA,

Defendant.

Appeal from the United States District Court for the Northern District of West Virginia, at Clarksburg. Frederick P. Stamp, Jr., Senior District Judge. (1:15-cv-00106-FPS-JES)

Argued: January 24, 2018 Decided: March 6, 2018

Before TRAXLER and FLOYD, Circuit Judges, and SHEDD, Senior Circuit Judge.

Affirmed by unpublished per curiam opinion.

ARGUED: Kenneth Eugene Webb, Jr., BOWLES RICE, LLP, Charleston, West Virginia, for Appellants. David K. Hendrickson, HENDRICKSON & LONG, PLLC, Charleston, West Virginia, for Appellee. ON BRIEF: Patrick Craig Timony, BOWLES RICE, LLP, Charleston, West Virginia, for Appellants. Barbara A. Samples, HENDRICKSON & LONG, PLLC, Charleston, West Virginia, for Appellee.

Unpublished opinions are not binding precedent in this circuit.

2 PER CURIAM:

Equitrans, L.P. moved under the Natural Gas Act, 15 U.S.C. § 717 (NGA), to

condemn .56 acres of real property owned by Jeffrey and Sandra Moore. The district court

denied the Moores’ motion to dismiss the complaint, Equitrans, L.P. v. .56 acres of

Permanent Easement, 145 F.Supp.3d 622 (N.D. W.Va. 2015), and following a trial,

awarded the Moores $5,556.16 in just compensation. The Moores now appeal, contending

that the district court erred in concluding that their property was subject to condemnation.

For the following reasons, we affirm.

I.

In 1960, Equitrans’ predecessor entered into a right-of-way agreement with Jeffrey

Moore’s family to build a 16-inch natural gas pipeline (H-557) under a portion of the

Moores’ current property. In early 1994, Equitrans discovered possible corrosion and

pitting with H-557. Because H-557 is an important transmission and storage line for West

Virginia, prompt replacement was necessary. In order to maintain pipeline pressure during

repairs, Equitrans built new sections of pipeline beside the original pipe and then tied the

new sections into the existing H-557.

In early 2012, the Moores began questioning Equitrans about the location of H-557

on the property and whether it deviated from the 1960 right-of-way. Equitrans marked the

location and explained that it was within the right-of-way. The Moores disagreed and filed

suit in state court alleging claims for breach of contract, ejectment, and trespass.

Equitrans timely removed the case to federal court on the basis of diversity

jurisdiction and filed a counterclaim for prescriptive easement. Following discovery, both

3 sides moved for summary judgment. In its motion, for the first time, Equitrans mentioned

that “to the extent that this Court is inclined to deny Equitrans’ motion for summary

judgment, Equitrans asks this Court to grant it leave to file a counterclaim for

condemnation.” (J.A. 194). The district court denied the cross-motions for summary

judgment. Moore v. Equitrans, L.P., 49 F.Supp.3d 456 (N.D. W.Va. 2014). Equitrans did

not move for leave to file a condemnation action and the case proceeded to trial. Following

a two-day trial, the jury found that two sections of H-557, totaling 624 feet, were outside

the right-of-way. The jury also rejected Equitrans’ counterclaim for prescriptive easement.

The district court entered an order adopting the jury’s findings but deferring ruling on

whether the Moores were entitled to ejectment. The court then stayed the entire action to

permit Equitrans to file for condemnation.

Thereafter, Equitrans filed a complaint in condemnation pursuant to the NGA

against .56 acres of the Moores’ property. The .56 acres represents the area covering the

624 feet of H-557 outside the right-of-way plus 25 feet on either side for maintenance

purposes. Equitrans alleged that it holds a certificate of public convenience issued by the

Federal Energy Regulatory Commission (FERC) for the operation of H-557; that the

condemned property is necessary to the continued operation of the pipeline; and that

Equitrans and the Moores were unable to come to a contractual agreement on obtaining the

right-of-way. 1

1 Equitrans alleged that its appraisal determined the property was valued at $700 and that the Moores had rejected a previous offer of $25,000 and a more recent offer of

4 The Moores moved to dismiss the action, arguing that (1) Equitrans failed to satisfy

the NGA’s requirements for condemnation; (2) the condemnation claim was a compulsory

counterclaim in the Moore’s action; (3) Equitrans was estopped from moving for

condemnation; and (4) condemnation violated the Moores’ Fifth and Fourteenth

Amendment rights. The district court denied the motion, concluding that the .56 acres were

subject to condemnation. Equitrans, 145 F.Supp.3d at 627-29. In light of its conclusion

that Equitrans was entitled to condemn the property, the district court held a trial only on

the issue of the just compensation due for the taking and ultimately awarded the Moores’

$5,556.16.

II.

The Moores argue that the district court erred in permitting Equitrans to take the

property. 2 We review the district court’s conclusion that Equitrans was entitled to condemn

the Moores’ property under the NGA de novo. Southern Natural Gas Co. v. Land, Cullman

County, 197 F.3d 1368, 1372 (11th Cir. 1999) (reviewing legal questions presented in NGA

condemnation action de novo).

The Moores’ primary argument is that the district court erroneously concluded that

Equitrans had complied with the condemnation procedures of the NGA. The NGA “created

$7,000. The Moores most recent counter-offer, according to the complaint, was for $600,000. 2 The Moores raise the same four arguments they pursued in the district court. We have reviewed their claims that judicial estoppel bars Equitrans from pursuing condemnation and that the condemnation violates the Constitution and find both to be without merit.

5 a comprehensive regulatory scheme over matters relating to the transportation of natural

gas and its sale in interstate and foreign commerce,” including the rare step of granting a

private entity, natural gas pipeline operators, the power “to acquire by eminent domain in

the district courts the rights-of-way necessary to operate and maintain their pipelines.”

Columbia Gas Transmission Corp. v. Drain, 191 F.3d 552, 555-56 (4th Cir. 1999). Section

717f(h) grants the condemnation power:

When any holder of a certificate of public convenience and necessity cannot acquire by contract, or is unable to agree with the owner of property to the compensation to be paid for, the necessary right-of-way to construct, operate, and maintain a pipe line . . . it may acquire the same by the exercise of the right of eminent domain in the district court.

15 U.S.C. § 717f(h).

Here, Equitrans holds a certificate of public convenience issued by FERC for the

operation of H-557. The Moores contend, however that Equitrans already acquired the

necessary property by contract but then subsequently breached the contract. In concluding

otherwise, the district court determined that Equitrans satisfied § 717f(h) because at the

time it filed the condemnation action, it was “unable to agree” with the Moores.

We agree with the district court. As that court recounted, Equitrans attempted to

purchase the land from the Moores but was rebuffed. The land itself was necessary for the

maintenance of a pipeline in light of the fact that H-557 currently runs through it. 3 In this

context, once the certificate “is issued by the FERC, and the gas company is unable to

3 A prior trespass does not bar a subsequent suit for condemnation. Searl v. Sch. Dist. No. 2, of Lake Cnty., 133 U.S. 553, 564-65 (1890).

6 acquire the needed land by contract or agreement with the owner, the only issue before the

district court in the ensuing eminent domain proceeding is the amount to be paid to the

property owner as just compensation for the taking.” Maritimes & Northeast Pipeline,

L.L.C. v. Decoulos, 146 Fed. App’x 495, 498 (1st Cir. 2005). Here, Equitrans has a

certificate and cannot acquire the needed land by contract with the Moores. That is all the

NGA requires for a condemnation.

Next, the Moores argue that the district court erred in concluding that the

condemnation claim was not a compulsory counterclaim in the earlier action. Rule 13(a)

provides that a:

(1) A pleading must state as a counterclaim any claim that—at the time of its service—the pleader has against an opposing party if the claim: (A) arises out of the transaction or occurrence that is the subject matter of the opposing party's claim; and (B) does not require adding another party over whom the court cannot acquire jurisdiction.

Fed. R. Civ. P. 13(a).

We have identified four “inquiries” as guiding the determination of whether a

counterclaim was compulsory:

(1) whether the issues of fact and law in the claim and counterclaim are essentially the same; (2) whether res judicata would bar a subsequent suit on the counterclaim absent the compulsory counterclaim rule; (3) whether the same evidence would support or refute the claim and the counterclaim; and (4) whether there is a logical relationship between the claim and counterclaim.

Q Int’l Courier, Inc. v. Smoak, 441 F.3d 214, 219 (4th Cir. 2006). We “need not answer

all these questions in the affirmative for the counterclaim to be compulsory” because the

inquiries “are less a litmus, more a guideline.” Painter v. Harvey, 863 F.2d 329, 331 (4th

7 Cir. 1988). Underlying most of the inquiries is a focus on evidentiary similarity because

“[w]here . . . the same evidence will support or refute both the claim and the counterclaim,

the counterclaim will almost always be compulsory.” Id. at 332.

The district court found that the condemnation action was not a compulsory

counterclaim because the facts, law, and evidence supporting it “are very different” from

the Moores’ trespass action. Equitrans, 145 F.Supp.3d at 629. In addition, the court noted

that the condemnation claim was “logically dependent” upon the Moores’ action only “to

the extent that [Equitrans] could not seek condemnation until it was determined that the

relevant portions of the pipeline are outside the . . . right-of-way.” Id. As discussed above,

in a condemnation action, the relevant fact is the question of just compensation; in contrast,

the Moores’ action required a detailed look at the original 1960 right-of-way, the meaning

of terms in that contract, and surveys detailing the location of H-557 relative to the right-

of-way. These facts and the legal determinations that flow from them are distinct from the

question of just compensation. The “same evidence” does not “support or refute both the

claim and the counterclaim,” and therefore the condemnation claim was not a compulsory

counterclaim in the Moores’ original action.

III.

The district court correctly determined that the Moores’ land is subject to

condemnation under the NGA. We therefore affirm its award of $5,556.16 in just

compensation to the Moores.

AFFIRMED