Gas Transmission Northwest, LLC v. 15.83 Acres of Permanent Easement More or Less, Located in Morrow County

Citations: 126 F. Supp. 3d 1192; 2015 U.S. Dist. LEXIS 113747; 2015 WL 5092546Docket: No. 2:15-CV-00359-BR

Court: District Court, D. Oregon; August 27, 2015; Federal District Court

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The Court grants the Plaintiff Gas Transmission Northwest, LLC's (GTN) Motion for Order of Condemnation and Immediate Possession concerning the Carty Lateral pipeline, which is a federally authorized project for the transportation of natural gas. The Federal Energy Regulatory Commission (FERC) issued a Certificate of Public Convenience and Necessity on March 14, 2013, allowing GTN to construct approximately 24.4 miles of pipeline, requiring easements across 25 parcels owned by multiple parties. The Certificate's validity went unchallenged within the statutory 30-day period. 

GTN attempted to negotiate easements with landowners, but a conservation easement recorded by Defendant Pilz Co. LLC on the Krebs property, explicitly excluding energy development, complicated these negotiations. Following unsuccessful negotiations, GTN filed a Complaint for Eminent Domain on March 2, 2015, seeking condemnation of the necessary property and just compensation of $148,200. 

On April 22, 2015, GTN filed a Motion for Order of Condemnation for immediate possession of the easements, having secured agreements from most landowners except the Krebs and Pilz. The motion sought a permanent 50-foot wide easement and a temporary 22-acre workspace easement. Pilz objected, citing nonconformance with the Certificate and failure to meet certain environmental conditions. During a hearing, GTN conceded its Complaint did not align with the Certificate, prompting the Court to instruct GTN to file an Amended Complaint. The Court also sought a Joint Statement of Issues from both parties by June 24, 2015, with further oral argument scheduled for June 26, 2015.

On June 22, 2015, the Plaintiff submitted an Amended Complaint regarding property related to a Certificate. Following a hearing on June 26, 2015, the Court took the Plaintiff’s Motion for Order of Condemnation under advisement. Under the Natural Gas Act (NGA), 15 U.S.C. § 717f(h), gas companies can acquire property through eminent domain but cannot take possession before just compensation is determined. The NGA stipulates that if a gas company cannot contractually acquire the necessary property for a pipeline, it may seek eminent domain in federal court. The process for obtaining a Federal Energy Regulatory Commission (FERC) certificate involves submitting an application that includes project details, justifications, and timelines, followed by public notice, comment, and hearings, including an environmental impact assessment.

To secure an order of condemnation, a plaintiff must demonstrate: 1) possession of a valid FERC certificate, 2) necessity of the land for the project, and 3) failure to reach a compensation agreement with the landowner, having engaged in good faith negotiations. The Ninth Circuit mandates that an order of condemnation must be issued before a taking can occur, balancing the gas company’s need to fulfill statutory requirements without delaying possession until full compensation is determined. Upon obtaining a condemnation order, the plaintiff may take possession of the property by demonstrating: 1) likelihood of success on the merits, 2) potential for irreparable harm if possession is denied, 3) minimal harm to defendants if granted relief, and 4) that the relief serves the public interest.

Plaintiff seeks an order of condemnation under 15 U.S.C. § 717f, asserting compliance with all statutory requirements. FERC has issued a Certificate of Public Convenience and Necessity for the Carty Lateral, and no petitions for rehearing were filed within the required timeframe. The issuance of this certificate indicates that Defendants’ property interests are deemed necessary. Plaintiff has attempted good-faith negotiations with Defendants, including Pilz, but has not achieved an easement agreement, primarily due to Pilz's concerns about environmental compliance related to the certificate's conditions, specifically regarding Washington ground-squirrel habitat.

Pilz contends that compliance with the conditions of the Order Issuing Certificate is essential, arguing that noncompliance renders the certificate invalid and thus precludes condemnation. However, the Court notes that it lacks jurisdiction to assess compliance with FERC certificate conditions, as such matters are reserved for FERC. The court emphasizes that the eminent domain authority under § 717f(h) does not allow landowners to challenge the validity of a FERC order in district court, and any disputes regarding compliance must be directed to FERC rather than the court. The court affirms that its role is not to review but to enforce FERC’s provisions, consistent with established case law.

District courts lack the authority to enforce compliance with pre-construction conditions of FERC certificates, as demonstrated in cases like Millennium Pipeline Co. L.L.C. v. Certain Permanent and Temp. Easements and Columbia Gas Transmission LLC v. 76 Acres More or Less. Complaints regarding violations of certificates must be directed to the Federal Energy Regulatory Commission (FERC), not the district courts, which are limited to ordering condemnation of property based on facially valid certificates. Even if a certificate holder is found to be in violation of FERC conditions, it does not invalidate the certificate or the holder's eminent domain authority. Challenges to the validity of a FERC certificate must first be submitted to FERC for rehearing, with subsequent appeals available only in the U.S. Courts of Appeals. This principle is reinforced by multiple court rulings, which emphasize that the district court’s role is confined to evaluating the certificate's scope and authorizing property condemnation, while FERC handles certificate validity disputes.

Compliance with FERC certificate conditions and the validity of such certificates must be addressed before FERC and appealed to the Ninth Circuit, not in this Court during condemnation proceedings. The Court grants the Plaintiff’s Motion for Order of Condemnation. 

Upon issuing a condemnation order, a plaintiff can take immediate possession of the property if they show: 1) a likelihood of success on the merits, 2) irreparable harm if denied, 3) no greater harm to defendants if relief is granted, and 4) that relief serves the public interest. The elements are balanced, allowing a stronger showing in one area to compensate for a weaker one in another.

For success on the merits in National Gas Act (NGA) cases, timing of possession is the key issue rather than altering the status quo, which the Plaintiff has demonstrated. The Plaintiff has shown likelihood of success regarding possession. 

Regarding irreparable harm, the Plaintiff argues that delays in obtaining immediate possession could jeopardize critical project deadlines for the Carty Lateral and the Carty Generating Station, affecting Portland General Electric’s ability to meet power demands. 

The harm to defendants focuses on immediate possession rather than possession itself, with no specific harm identified by defendants that would arise from immediate possession. 

Public interest is served by the NGA’s intent to ensure adequate gas supply, with FERC recognizing the necessity of the Carty Lateral for meeting public energy needs. The Court concludes that the Plaintiff has met all requirements for immediate possession, thus granting the Motion for both an Order of Condemnation and Immediate Possession. The Court also clarifies that the Order Issuing Certificate and the Certificate are the same document, with details of the sought easements outlined in the Complaint's Exhibit 2.