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Litigation Update

Presented by Margeaux Kimbrough, Esq.

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What’s Happening?

Eminent Domain

Siting +Environmental

Concerns

Discussion

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What’s happening?

Development in Utica +Marcellus

shale plays

Pipeline + Processing Capacity

Hurdles to meet capacity

demands

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Eminent Domain

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Tradition

Government/Agents appropriate private

property for public use

Government/Agents to compensate

Trend

Non-Government appropriate private

property for public use

Non-Government to compensate

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Eminent Domain: Authority

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Robinson Twp. v. Commonwealth, 96 A.3d 1104 (Pa. Commw. 2014)

Peregrine Keystone Gas Pipeline, LLCPennsylvania Public Utilities Commission No. A-2010-2200201, Recommendation Decision

(May 3, 2012)

Tex. Eastern Transmission, LP v. 3.2 Acres Permanent Easement,S.D. Ohio No. 2:14-cv-2650,

2015 U.S. Dist. LEXIS 3252 (Jan. 12, 2015)

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Constitutionality of Pennsylvania Oil and Gas Act (“Act 13”) conferring eminent domain

power upon corporations engaged in transport, sale or storage of natural gas

Key Points

Act 13 vests the eminent domain power in corporations

that transport, sell, or store natural gas to or for the

public

Robinson Twp.

ISSUE:

26 Pa. C.S. 204(a) is inapplicable

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Standard to be certified as “public utility” under Public Utility Code

Key PointsA company’s

operations must be determined by what it

is actually doing, rather than what it

states it will do

Peregrine

ISSUE:

Affiliated companies cannot be defined as "the public," and the intent to provide service

for others, as long as it is convenient for the provider, is

not service for the public

Granting Peregrine’s application was not necessary for the service, accommodation, convenience or

safety of the public

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Authority to condemn properties pursuant to the Natural Gas Act after obtaining FERC

Certificate

Key Points

Despite efforts, Texas Eastern was unable to acquire the property by contract so the

use of the property was necessary to comply with the certificate issued by FERC

Texas Eastern satisfied necessary requirements sufficient to have the right to condemn the

properties

Tex. Eastern

ISSUE:

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Eminent Domain:Public Service

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EQT Gathering, LLC v. Tract of Prop. Situated in Knott Cty.

970 F. Supp 2d 655 (E.D. Ky. 2013)

Kentuckians United to Restrain Eminent Domain, Inc. v. Bluegrass

Pipeline Co. No. 12-CI-1402 (Franklin Cir. Ct. March 25, 2014)

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Authority to condemn property via being in “public service” + engaging

in good faith efforts for land purchase

Key Points

Transportation of natural gas by a common carrier is in the

“public service”

EQT possessed authority but genuine issue exists regarding

good faith negotiations

EQT Gathering

ISSUE:

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Eminent domain authority to condemn property for the installation of natural

gas liquids (“NGLs”) pipelines

Key Points

Only utilities regulated by the Public Service Commission

possessed condemnation power under Kentucky law

KURED

ISSUE:

Transporting NGLs is NOT “public service” as transporting “oil or

natural gas”

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Eminent Domain: Compensation

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Tenn. Gas Pipeline Co. v. Permanent Easement for 1.7320 Acres,

M.D. Penn. No 3:CV-11-028, 2014 U.S. Dist. LEXIS 23895 (Feb. 24, 2014)

Rockies Express Pipeline, LLC v. 4.895 Acres of Land,

734 F.3d 424, 2013 FED App. 0233P (6th Cir. 2013)

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Compensation owed by for the taking of right-of-way

Key Points

To determine just compensation, federal

substantive law applies where “private condemnorsunder the Natural Gas Act

operate on a national scale with federally approved

pipelines”

Partial Takings Compensation Measurement = M.V. of entire holding immediately before the taking – remaining M.V.

immediately thereafter of the portion of property rights

Tenn. Gas Pipeline

ISSUE:

LO entitled to compensation for physically appropriated property AND

diminution in value to non-condemned property “if the value of the remaining land, on a unit basis, diminished when the condemned parcel is removed from

the larger whole”

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Compensable damages from taking

Key Points

Rockies Express

ISSUE:

A FERC certificate holder has

eminent domain authority

Under Ohio law, a property owner is entitled the value of the land taken and the damages to the residue of

the property

No damages existed as Rockies

only sought to condemn the surface estate

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Markwest Liberty Midstream v. Cecil Twp. Zoning Hearing Bd., 102 A.3d 549 (Pa.

Commw. 2014)

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ISSUES: Unlawful exclusionPreemption

Markwest Liberty Midstream

Key Points

Natural gas compressor stations not excluded in every zoning

district

Local ordinance not preempted by state law

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Siting+Environmental Concerns

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Texas Eastern Transmission, LP v. 3.2 Acres Permanent Easement, S.D. Ohio No. 2:14-cv-2650,

2015 U.S. Dist. LEXIS 3252 (January 12, 2015)

Texas Eastern Transmission, LP v. Barack, S.D. Ohio No. 2:14-cv-336 (April 10, 2014)

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Northern long-eared bat

KEY POINTS

Compliance with environmental requirements may impact entire

project

Courts have the inherent power to grant immediate possession

through the issuance of preliminary injunction

Tex. v. 3.2 Acres

ISSUE:

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More bats

Key Points

Where substantial irreparable harm would result, temporary

restraining order and preliminary injunction may be granted

Where delay in conducting business would severely impact

company’s FERC application, immediate possession may be

granted

Barack

ISSUE:

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Stay InformedMargeaux KimbroughKegler Brown Hill + Rittermkimbrough@keglerbrown.comkeglerbrown.com/kimbrough614.462.5437

@MargeauxEsq

linkedin.com/in/mkimbrough