Mountain Valley Pipeline, LLC v. Wender
This text of 337 F. Supp. 3d 656 (Mountain Valley Pipeline, LLC v. Wender) is published on Counsel Stack Legal Research, covering United States District Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.
Opinion
John T. Copenhaver, Jr., United States District Judge
Pending is plaintiff Mountain Valley Pipeline, LLC's ("Mountain Valley") motion for summary judgment, filed February 5, 2018.
I. Background
The material facts of this case are undisputed and relatively simple. Mountain Valley is a natural gas company within the meaning of the Natural Gas Act ("NGA" or the "Act"),
On October 13, 2017, Mountain Valley received from FERC a certificate of public convenience and necessity (the "certificate"), authorizing the construction of a 303.5-mile long natural gas pipeline of 42-inches in diameter stretching from Wetzel County, West Virginia, to Pittsylvania County, Virginia. See Mountain Valley Pipeline, LLC, Equitrans, L.P. ("Certificate"),
Any state or local permits issued with respect to the jurisdictional facilities authorized herein must be consistent with the conditions of this certificate. We encourage cooperation between interstate pipelines and local authorities. However, this does not mean that state and local agencies, through application of state or local laws, may prohibit or unreasonably delay the construction or operation of facilities approved by this Commission.
*662Pertinent here, Mountain Valley's certificate authorizes construction of the Stallworth Compressor Station (the "Stallworth Station") on property in Fayette County owned by Mountain Valley (the "Stallworth Property"). (Verified Compl. ¶ 24.) The Stallworth Property is comprised of three tracts of land totaling about 131 acres. (Declaration of Robert J. Cooper ("Cooper Decl.") ¶¶ 5, 7.) The construction and operation of the Stallworth Station will impact a limited number of those acres, with around thirty acres needed for construction that reduces to around seven acres for operation. (Id. ¶ 7.) On January 29, 2018, FERC granted Mountain Valley permission to proceed with construction of the Stallworth Station. (Comm'rs Resp. Ex. 2.)
The Stallworth Property is currently designated a "R-R Rural-Residential" zone under the Fayette County Unified Development Code (the "UDC" or the "Fayette Zoning Code"). See UDC § 2001.4; (Verified Compl. ¶ 55).2 To situate the Stallworth Station there in compliance with the Fayette Zoning Code, the Stallworth Property must be re-zoned a "H-1 Heavy Industrial" zone. See UDC § 4002; (Verified Compl. ¶ 56). Then, before beginning construction, Mountain Valley must obtain an "improvement location permit," UDC § 1006, Part II, and a state building permit,
Mountain Valley initiated this action the same day the Commissioners denied its re-zoning application, invoking the court's federal question jurisdiction under
II. Governing Standard
Summary judgment is appropriate only "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). In reviewing a motion for summary judgment, the court is guided by the principle that it must "construe the evidence, and all reasonable inferences that may be drawn from such evidence, in the light most favorable to the nonmoving party."
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John T. Copenhaver, Jr., United States District Judge
Pending is plaintiff Mountain Valley Pipeline, LLC's ("Mountain Valley") motion for summary judgment, filed February 5, 2018.
I. Background
The material facts of this case are undisputed and relatively simple. Mountain Valley is a natural gas company within the meaning of the Natural Gas Act ("NGA" or the "Act"),
On October 13, 2017, Mountain Valley received from FERC a certificate of public convenience and necessity (the "certificate"), authorizing the construction of a 303.5-mile long natural gas pipeline of 42-inches in diameter stretching from Wetzel County, West Virginia, to Pittsylvania County, Virginia. See Mountain Valley Pipeline, LLC, Equitrans, L.P. ("Certificate"),
Any state or local permits issued with respect to the jurisdictional facilities authorized herein must be consistent with the conditions of this certificate. We encourage cooperation between interstate pipelines and local authorities. However, this does not mean that state and local agencies, through application of state or local laws, may prohibit or unreasonably delay the construction or operation of facilities approved by this Commission.
*662Pertinent here, Mountain Valley's certificate authorizes construction of the Stallworth Compressor Station (the "Stallworth Station") on property in Fayette County owned by Mountain Valley (the "Stallworth Property"). (Verified Compl. ¶ 24.) The Stallworth Property is comprised of three tracts of land totaling about 131 acres. (Declaration of Robert J. Cooper ("Cooper Decl.") ¶¶ 5, 7.) The construction and operation of the Stallworth Station will impact a limited number of those acres, with around thirty acres needed for construction that reduces to around seven acres for operation. (Id. ¶ 7.) On January 29, 2018, FERC granted Mountain Valley permission to proceed with construction of the Stallworth Station. (Comm'rs Resp. Ex. 2.)
The Stallworth Property is currently designated a "R-R Rural-Residential" zone under the Fayette County Unified Development Code (the "UDC" or the "Fayette Zoning Code"). See UDC § 2001.4; (Verified Compl. ¶ 55).2 To situate the Stallworth Station there in compliance with the Fayette Zoning Code, the Stallworth Property must be re-zoned a "H-1 Heavy Industrial" zone. See UDC § 4002; (Verified Compl. ¶ 56). Then, before beginning construction, Mountain Valley must obtain an "improvement location permit," UDC § 1006, Part II, and a state building permit,
Mountain Valley initiated this action the same day the Commissioners denied its re-zoning application, invoking the court's federal question jurisdiction under
II. Governing Standard
Summary judgment is appropriate only "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). In reviewing a motion for summary judgment, the court is guided by the principle that it must "construe the evidence, and all reasonable inferences that may be drawn from such evidence, in the light most favorable to the nonmoving party."
*663Dash v. Mayweather,
"As to materiality, ... [o]nly disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment. Factual disputes that are irrelevant or unnecessary will not be counted." Anderson v. Liberty Lobby, Inc.,
If the movant carries its burden, the non-movant must demonstrate that "there is sufficient evidence favoring [it] for a jury to return a verdict" in its favor. Anderson,
[a]lthough the court must draw all justifiable inferences in favor of the nonmoving party, the nonmoving party must rely on more than conclusory allegations, mere speculation, the building of one inference upon another, or the mere existence of a scintilla of evidence. See Anderson,477 U.S. at 252 ,106 S.Ct. 2505 ; Stone v. Liberty Mut. Ins. Co.,105 F.3d 188 , 191 (4th Cir. 1997). Rather, "a party opposing a properly supported motion for summary judgment ... must 'set forth specific facts showing that there is a genuine issue for trial.' " Bouchat v. Balt. Ravens Football Club, Inc.,346 F.3d 514 , 522 (4th Cir. 2003) (quoting Fed. R. Civ. P. 56(e) (2002) (amended 2010) ).
Dash,
III. Discussion
The Commissioners argue at the outset that Mountain Valley's motion for summary judgment "should be denied as premature because FERC is considering rehearing requests, and because there are multiple legal challenges to the FERC Certificate, any of which may invalidate the Certificate." (Comm'rs Resp. 6; Comm'rs Sur-reply 2-3.) On the contrary, this court recently recognized in Mountain Valley's related condemnation action that "a FERC order remains in effect unless FERC or a court of appeals issues a stay, see 15 U.S.C. § 717r(c), and no such stay has been issued here." Mountain Valley Pipeline, LLC v. An Easement to Construct, Operate & Maintain a 42-Inch Gas Transmission Line, No. 2:17-cv-04214,
*664Furthermore, as earlier noted, FERC denied the rehearing requests on June 15, 2018, after the close of briefing on the pending motion in this case. Thus, the Commissioners' initial arguments are without merit, and the court turns to Mountain Valley's requests for declaratory judgment and injunctive relief.
A. Declaratory Judgment-Actual Controversy
The Commissioners contend that there is no "actual controversy" from which the court may enter a declaratory judgment. (See Comm'rs Resp. 10-11.) The Declaratory Judgment Act requires, among other things, that an "actual controversy" exist prior to the entry of declaratory relief. See
The immediacy and reality of the controversy here is clear. Mountain Valley's certificate, issued by FERC, authorizes the construction of the Stallworth Station on the Stallworth Property. Mountain Valley has also applied to re-zone the Stallworth Property to the appropriate designation that allows for the targeted construction and use. The Commissioners denied that application. Mountain Valley now challenges the constitutionality of the Fayette Zoning Code on preemption grounds insofar as it applies to the Stallworth Station. These facts alone are enough to establish a sufficiently immediate and real controversy to warrant consideration of declaratory relief. See Steel Hill Dev., Inc. v. Sanbornton,
Mountain Valley also indicates that it has refrained from building the Stallworth *665Station because of a threat of enforcement pursuant to the Fayette Zoning Code. (See Verified Compl. ¶ 73.) The Commissioners point out that Mountain Valley's refrainment is belied by the evidence showing that it has already begun construction activities. (See Comm'rs Sur-reply Ex. 2.) Mountain Valley replies that its activities to-date do not constitute "construction activities ... that are prohibited by the" Fayette Zoning Code. (Mountain Valley Sur-resp. 6 (emphasis omitted).)
Regardless, the Commissioners in their answer acknowledge "that if Plaintiff violates the law [then] legal recourse will ensue." (Answer ¶ 73.) And the Fayette Zoning Code allows for such recourse through "[a]ppropriate actions and proceedings," such as civil penalties, abatement, correction of the violation, and referral to the county prosecutor for criminal prosecution. See UDC §§ 1003.VII.5 As the Supreme Court has explained,
where threatened action by government is concerned, we do not require a plaintiff to expose himself to liability before bringing suit to challenge the basis for the threat-for example, the constitutionality of a law threatened to be enforced. The plaintiff's own action (or inaction) in failing to violate the law eliminates the imminent threat of prosecution, but nonetheless does not eliminate Article III jurisdiction.
MedImmune,
The Commissioners suggest that Mountain Valley has "manufactured" the immediacy and reality of its claim through "self-inflicted" harms, such as a self-imposed in-service deadline, speculation as to lost revenues, and delay in applying to re-zone. (See Comm'rs Sur-reply 3-4.) The Commissioners look for support in Mountain Valley's precedent shipping agreements, which the Commissioners insist show that Mountain Valley contemplated trouble receiving all necessary permits, including zoning permits. (See id. 4-6.) Whether Mountain Valley's harms are self-inflicted is immaterial here. In short, Mountain Valley has a certificate from FERC authorizing the construction of the Stallworth Station, and the Commissioners denied Mountain Valley's application to re-zone the Stallworth Property to the proper designation. Moreover, the Fayette Zoning Code allows for the imposition of civil penalties and the prosecution of a criminal action for zoning violations. As noted, those facts create an actual controversy, and the court may therefore consider Mountain Valley's request for a declaratory judgment.
B. Declaratory Judgment-Preemption
The Supremacy Clause states that federal law is "the supreme Law of the Land ... any Thing in the Constitution or Laws of any State to the Contrary notwithstanding." U.S. Const. art. VI, cl. 2.
*666Consequently, Congress maintains the authority to preempt state law through federal legislation. Oneok, Inc. v. Learjet, Inc., --- U.S. ----,
Congress may explicitly or implicitly preempt state law. Oneok,
1. Field Preemption
Field preemption arises where "Congress may have intended 'to foreclose any state regulation in the area,' irrespective of whether state law is consistent or inconsistent with 'federal standards.' " Oneok,
The preemptive effect of the NGA is well-settled: "The NGA confers upon FERC exclusive jurisdiction over the transportation and sale of natural gas in interstate commerce for resale." Schneidewind,
The Fourth Circuit holds that "the NGA gives FERC jurisdiction over the siting of natural gas facilities, as a natural gas company must obtain a certificate of public convenience and necessity from FERC before constructing an interstate natural gas facility."
*667Wash. Gas Light,
FERC's NEPA implementing regulations require an applicant to prepare reports containing the following items and information, in broad terms:
A. Maps showing the physical location of jurisdictional facilities and associated land requirements, including "the location of the nearest noise-sensitive areas ... within 1 mile of [any] compressor station," and descriptions of any "reasonably foreseeable plans for future expansion of facilities,"id. § 380.12(c);
B. Descriptions of impacted water use and quality, fish and wildlife, vegetation, cultural resources, geological resources, and soils; how these items will be impacted by the jurisdictional facility; and proposed measures to mitigate and minimize those impacts,id. §§ 380.12(d)-(f), (h)-(i);
C. For projects "involving significant aboveground facilities," an analysis of the socioeconomic impact on "towns and counties in the vicinity of the project,"id. § 380.12(g);
D. Descriptions of existing land uses on and within 0.25 miles of the jurisdictional facility, consequential changes to those uses, and proposed mitigation measures,id. § 380.12(j);
E. For compressor stations, the impact "on the existing air quality and noise environment" as well as a "descri[ption of] proposed measures to mitigate th[ose] effects,"id. § 380.12(k); and
F. Descriptions and comparisons of alternatives,id. § 380.12(l).
Moreover, FERC instructs applicants to "avoid[ ] or minimize[ ] effects on scenic, historic, wildlife, and recreational values."
*668A reading of the foregoing regulations shows that Congress intends for FERC, as part of its "exclusive jurisdiction over the transportation and sale of natural gas in interstate commerce for resale," Schneidewind,
Although it seems uncontroversial that a zoning ordinance would fall in the field occupied by the NGA and FERC, the Supreme Court instructs that the ordinance must nonetheless "target" the preempted field. Oneok,
A. Protect and encourage the health, safety, and general welfare of the present and future population of Fayette County.
B. Guide the future growth and development of Fayette County in accordance with the adopted Comprehensive Plan.[7 ]
C. Encourage growth and development in areas where sewer, water, schools, and other public facilities are, or will, soon be available in order to provide services in the most cost-effective manner.
D. Insure that growth and development are both economically and environmentally sound.
E. Encourage an agricultural base in the County.
F. Encourage an improved appearance of Fayette County with relationship to the use and development of land and structures.
G. Encourage the conservation of natural resources.
H. Provide a guide for public action and the orderly and efficient provision of public facilities and services.
I. Provide a guide for private enterprise in developing and building a community with healthy businesses and tightly knit neighborhoods.
J. Encourage historic preservation.
UDC §§ 1001.II.A to J. Specifically, the Fayette Zoning Code regulates the location of "gas ... transmission lines ... and appurtenances" by requiring that they be located in a zone designated "H-1 Heavy Industrial."
Plainly, the Fayette Zoning Code targets the siting of jurisdictional facilities. FERC's NEPA implementing regulations cover most, if not all, of the Fayette Zoning Code's enumerated purposes. Compare
The Commissioners nevertheless insist that the Fayette Zoning Code does not target jurisdictional facilities since it "applies to all property located within Fayette County," (Comm'rs Resp. 14), but that position is belied by the Fayette Zoning *669Code's explicit language regarding gas transmission lines and appurtenances, UDC § 4002. Even if the Fayette Zoning Code had not explicitly mentioned gas transmission lines and appurtenances, it would nevertheless be preempted because it unquestionably aims at regulating the location of jurisdictional facilities-the field occupied by the NGA and FERC. See Oneok,
That the Fayette Zoning Code is preempted by the NGA and FERC is further bolstered "by the imminent possibility of collision between [the Fayette Zoning Code] and the NGA" and FERC's regulations. Schneidewind,
The Commissioners advance several arguments against Mountain Valley's requested declaratory relief. They contend that Congress's 2005 amendment to the portion of the NGA addressing "LNG terminals"8 negates the Act's well-settled preemptive nature. (See Comm'rs Resp. 13.) The 2005 amendment granted FERC "exclusive authority to approve or deny an application for the siting, construction, expansion, or operation of an LNG terminal." Energy Policy Act of 2005, Pub. L. No. 109-58, § 311,
There are two most prominent reasons why the Commissioners' argument is unavailing. First, the 2005 amendments to the NGA addressed the specific and limited field of LNG terminals, which, as earlier defined, are "onshore or in State waters" facilities used in the importing and exporting of liquid natural gas. § 311, 119 Stat. at 685-86. Those amendments did not, however, alter the sections from which FERC receives its preemptive power over *670the field of transporting and selling natural gas in interstate commerce. Compare id. (amending sections 1, 2, and 3 of the NGA) with Iowa Utils. Bd.,
The Commissioners also point out that Mountain Valley has not alleged that the Fayette Zoning Code has "prohibit[ed] or unreasonably delay[ed] construction of the Stallworth Station." (Comm'rs Resp. 14.) This argument invokes the certificate's instruction that certificate holders should attempt to cooperate with state and local permitting authorities. See Certificate ¶ 309. Coined the "rule of reason," FERC directs certificate holders to engage in "bona fide attempts to comply with state and local requirements." Algonquin Gas Transmission, LLC,
Lastly, the Commissioners assert that Mountain Valley has not stated why it needs to rezone all its property rather than only the acreage necessary to build the compressor station, (Comm'rs Resp. 15), and that the certificate does not explicitly reflect that FERC considered local zoning regulations in approving Mountain Valley's project, (Comm'r Sur-reply 10). These arguments are irrelevant to the question of whether the NGA and FERC preempt the Fayette Zoning Code insofar as it applies to the Stallworth Station. Furthermore, Mountain Valley does not seek a declaration mandating the Commissioners to re-zone the entire Stallworth Property. Mountain Valley instead seeks a declaration applicable only to the Stallworth Station.
Accordingly, the Fayette Zoning Code is preempted insofar as it applies to Mountain Valley's FERC-approved activities in connection with the Stallworth Station because it attempts to regulate in a field occupied by the NGA and FERC. See Algonquin LNG v. Loqa,
2. Conflict Preemption
Conflict preemption arises in two scenarios: [1] "where it is 'impossible for a private party to comply with both state and federal requirements,' or [2] where state law 'stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.' " Freightliner Corp. v. Myrick,
[a]ssessing a conflict preemption claim requires "a two-step process of first ascertaining the construction of the two statutes and then determining the constitutional question [of] whether they are in conflict." Chi. & Nw. Transp. Co. v. Kalo Brick & Tile Co.,450 U.S. 311 , 317,101 S.Ct. 1124 ,67 L.Ed.2d 258 (1981) (internal quotation marks omitted). In making this determination, a court "should not seek out conflicts ... where none clearly exist[ ]." College Loan Corp. v. SLM Corp.,396 F.3d 588 , 595-96 (4th Cir. 2005) (internal quotation marks and alteration omitted).
H&R Block E. Enters. v. Raskin,
The Commissioners' effort to regulate the siting of jurisdictional facilities has obstructed Congress's purposes in enacting the NGA and empowering FERC with the Act's implementation. FERC considered the myriad factors outlined above and decided that the public convenience and necessity required the Stallworth Station be located at the Stallworth Property. See Certificate ¶¶ 7, 310(A). The Commissioners, considering the Fayette Zoning Code and factors significantly overlapping with those considered by FERC, disagreed. (Verified Compl. ¶ 68.) Compare
In this instance, "the principles of field and conflict preemption ... are mutually reinforcing." PPL EnergyPlus,
The Commissioners contend that "[Mountain Valley] can clearly comply with both the NGA and the UDC by receiving rezoning approval for the Stallworth location or by having a denial overturned." (Comm'rs Resp. 17-18.) Thus, they suggest that compliance with both the certificate and the Fayette Zoning Code is not impossible. (See id. 16-18.) For example, the Commissioners note that Mountain Valley could have appealed the decision to deny its re-zoning application since there is no outright ban on re-zoning a parcel from R-R Rural Residential to H-1 Heavy Industrial. (See id. )
*672Impossibility of compliance with both federal and local regulation is not, however, the only measure of conflict preemption. As explained above, the Commissioners' denial of Mountain Valley's re-zoning application pursuant to the Fayette Zoning Code impedes Congress's objectives in enacting the NGA and charging FERC with its implementation.
The Commissioners also invoke FERC's rule of reason described above, suggesting that pursuit of approval of the re-zoning application is within reason since FERC granted Mountain Valley three years to place the project into service; alternatively, the Commissioners insist that there is a genuine factual dispute as to whether the Fayette Zoning Code unreasonably delays construction of the Stallworth Station. (See Comm'rs Resp. 18.) Additionally, the Commissioners insist that the Stallworth Property "is merely [Mountain Valley's] preferred location," noting that Mountain Valley considered alternate locations for its compressor station. (Id. (emphasis omitted).)
Again, the rule of reason is more suggestion than mandate, and it is nevertheless only tangentially related to preemption. Furthermore, the three-year deadline is merely the outer limit on placing the project into service, while economic and pragmatic planning considerations compel completion as soon as practicable and any unnecessary impediments will be at Mountain Valley's unrecoverable expense. And whether Mountain Valley chose the Stallworth Property as a matter of preference is beside the point: FERC concluded that the public convenience and necessity requires construction there rather than any possible alternatives.
Accordingly, the Fayette Zoning Code is preempted insofar as it applies to Mountain Valley's FERC-approved activities in connection with the Stallworth Station because it conflicts with congressional purposes and objectives outlined in the NGA and by FERC.
C. Permanent Injunction
The scope of Mountain Valley's requested injunctive relief informs the permanent injunction analysis. An injunction's scope should be restricted to only that which is "necessary to provide complete relief to the plaintiff." PBM Prods., LLC v. Mead Johnson & Co.,
Importantly, Mountain Valley does not request an injunction directing the Commissioners to re-zone the entire Stallworth Property to H-1 Heavy Industrial, (see Mountain Valley Reply 19), which would be more than necessary to build the Stallworth Station, (see Cooper Decl. ¶ 7). It also bears re-emphasis that Mountain Valley's activities, including those associated with the Stallworth Station, are circumscribed by FERC's regulation and oversight. So, enjoining the Commissioners from enforcing the Fayette Zoning Code against the Stallworth Station would not give Mountain Valley carte blanche to do whatever it wants: Mountain Valley can do only what FERC authorizes, just like the *673Fayette Zoning Code is preempted by only what FERC authorizes.
With the requested injunction's scope in mind, the court finds that a commensurate injunction naturally flows from a declaration that an enforced local law is preempted by federal law. In practical effect, Mountain Valley's requested injunction will simply enjoin the Commissioners from enforcing a law to the extent that they are already not allowed to enforce pursuant to the declaratory judgment entered herein. Some courts have awarded injunctive relief as an incident to declaratory judgment in similar circumstances. See Valley View Health Care, Inc. v. Chapman,
Nevertheless, to obtain a permanent injunction, a plaintiff must prove four elements "[a]ccording to well-established principles of equity":
(1) that it has suffered an irreparable injury; (2) that remedies available at law, such as monetary damages, are inadequate to compensate for that injury; (3) that, considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and (4) that the public interest would not be disserved by a permanent injunction.
eBay Inc. v. MercExchange, L.L.C.,
First, this court has recently recognized that Mountain Valley's harms-economic losses unrecoverable at the end of litigation, construction scheduling modifications, and tarnished business reputation, (see Cooper Decl. ¶¶ 12-21)-are irreparable. Mountain Valley Pipeline, LLC v. An Easement,
Accordingly, Mountain Valley is entitled to a permanent injunction preventing the Commissioners from enforcing the Fayette Zoning Code insofar as it applies to Mountain Valley's FERC-approved activities in connection with the Stallworth Station.
IV. Conclusion
For the foregoing reasons, it is ORDERED that Mountain Valley's motion for summary judgment be, and hereby is, granted. It is further ORDERED as follows:
1. The parties are directed to furnish within twenty days of the entry of this memorandum opinion and order proposed language for a judgment order granting Mountain Valley declaratory and injunctive relief. The parties may jointly file such language to the extent they can agree.
2. As an attachment to its proposed judgment order language, Mountain Valley is directed to furnish a plat or survey, together with a metes and bounds description, providing definition to the area affected by the declaratory and injunctive relief.
3. Mountain Valley is directed to notify the court once construction of the Stallworth Station is complete and Mountain Valley has begun occupying the approximately seven acres needed for the operation of the Stallworth Station.
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