Energy: Millennium Pipeline Company LLC v. Certain Permanent and Temporary Easements In Thayer Road (63.00-1-24.1)

Interstate Transportation —Eminent Domain — Good Faith Negotiations

Millennium Pipeline Company LLC v. Certain Permanent and Temporary Easements In Thayer Road (63.00-1-24.1)

07-CV-6560
Judge Larimer

Background: The Natural Gas Act provides the Federal Energy Regulatory Commission with jurisdiction over the transportation and sale of natural gas in interstate commerce. Section 7(c) of the act requires companies to obtain from FERC a “certificate of public convenience and necessity” before constructing or operating interstate natural gas facilities. FERC may “attach to the issuance of the certificate and to the exercise of the rights granted thereunder such reasonable terms and conditions as the public convenience and necessity may require.” Section 7(h) of the act vests the holder of a FERC certificate of public convenience with the power to condemn necessary property.

This action was commenced by Millennium Pipeline Company LLC seeking an order pursuant to the Natural Gas Act granting Millennium temporary and permanent easements in certain real property located in Chemung County, New York. The primary purpose of the easements would be to allow Millennium to construct a natural gas pipeline on or adjacent to the property, which is owned by the defendant, Nathaniel Hendricks. On Feb. 15, 2008, the court granted Millennium a preliminary injunction granting Millennium a temporary easement over the property for the purpose of constructing and maintaining a gas pipeline. The defendant’s compensation was left for future determination at trial.

Millennium now moves for summary judgment. According to Millennium, the pipeline has been completed, and the only thing that remains is for this court to enter judgment in Millennium’s favor, granting it a permanent easement over Hendricks’s property, and to limit Hendricks’s damages to the just compensation set forth in Rule 71.1 of the Federal Rules of Civil Procedure. Hendricks now moves for leave to amend his answer to include Columbia Gas Transmission as a party to this action, and to add a counterclaim against Millennium and Columbia. Hendricks claims that the approval by FERC was based upon a Millennium plan that had the pipeline north of Hendrick’s northern property line and thus the pipeline would not have actually ever crossed onto Hendrick’s property. However, the pipeline ended up crossing onto his property despite the variance from the original plan.

Ruling: The court points to the fact that the location of the pipeline was not in fact changed, and the pipeline was built in the location indicated in the documents originally filed with FERC, but it turned out that Hendricks’s property line was farther north than those earlier documents had indicated. The court observes that Hendricks “was well aware, during the FERC proceedings, that the pipeline would cross a portion of his property; it was presumably for that very reason that he provided Millennium with his own property survey, which (correctly, it appears) placed his property line farther north than had been indicated on some of the documents filed by Millennium. Any challenges to the project on that ground, then, should have been taken up with FERC in the first instance.”

The court states that it has no power to grant relief beyond that required to enable Millennium to carry out the pipeline project in accordance with the terms of the FERC certificate. As to Hendrick’s contention that Millennium should not have been granted an injunction absent a finding that it had bargained in good faith with Hendrick’s to agree on damages, the court finds that the circuits are split as to the issue of whether a good faith negotiation is required as a prerequisite for injunctive relief. However, the court finds resolution of this issue unnecessary since it appeared that Millennium did bargain in good faith and further, the record suggests that Hendricks himself never displayed any interest in agreeing on a price for the sought-after easements. The plaintiff’s motion for summary judgment is granted.

Mark D. Lansing of Hiscock & Barclay for the plaintiff; and Nathaniel Hendricks, defendant pro se