Opinion
Case No. A1-03-66.
June 7, 2005
ORDER GRANTING PLAINTIFF'S MOTION FOR PARTIAL SUMMARY JUDGMENT
Before the Court is the Plaintiff's Motion for Partial Summary Judgment filed on January 14, 2005. For the reasons set forth below, the Court grants the motion for partial summary judgment.
I. BACKGROUND
On June 6, 2003, Williston Basin Interstate Pipeline Company ("Williston Basin") filed a condemnation action. The Defendants consist of 27 landowners, trusts, and financial institutions with interest in 18 parcels of land, totaling 69.458 acres. On June 30, 2003, this Court granted Williston Basin the immediate use and possession of the land in question. The Court ordered that Williston Basin deposit with the Court the sum of $300,000.00 in cash or surety bond. On January 14, 2005, Williston Basin filed the current motion seeking to determine as a matter of law the terms of the easements obtained pursuant to the Certificate of Public Convenience and Necessity issued by the Federal Energy Regulatory Commission. II. LEGAL DISCUSSION
Defendant, the George Kubik and Agnes Kubik Revocable Trust, was dismissed on July 10, 2003, pursuant to a stipulation with Williston Basin. Default has been entered against the following defendants: the Dolyniuk Family Trust, Alfred Wittinger, American State Bank and Trust of Dickinson, Farm Credit Services of Mandan, First State Bank of Golva, Darin Maus, Anton Metz, and Kevin Schmidt. Williston Basin and defendants Keary J. Kadrmas, Sharmaine M. Kadrmas, Edwin James Wheeler, and Melissa Irene Wheeler have informed the Court they have reached settlement agreements, but formal settlement documents have not yet been filed. Thus, fourteen defendants with interests in eleven parcels of land remain in the action.
It is well-established that summary judgment is appropriate when the evidence, viewed in a light most favorable to the non-moving party, demonstrates that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c); Clark v. Kellogg Co., 205 F.3d 1079, 1082 (8th Cir. 2000). A fact is "material" if it might effect the outcome of the case and a factual dispute is "genuine" if the evidence is such that a reasonable jury could return a verdict for the non-moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).
The basic inquiry for purposes of summary judgment is whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law. Quick v. Donaldson Co., Inc., 90 F.3d 1372, 1376 (8th Cir. 1996). The moving party has the initial burden of demonstrating to the Court that there are no genuine issues of material fact. If the moving party has met this burden, the non-moving party cannot simply rest on the mere denials or allegations in the pleadings. Instead, the non-moving party must set forth specific facts showing that there are genuine issues for trial. Fed.R.Civ.P. 56(e); Krein v. DBA Corp., 327 F.3d 723, 726 (8th Cir. 2003). A mere trace of evidence supporting the non-movant's position is insufficient. A non-movant must present more than a scintilla of evidence and must present specific facts to create a genuine issue of material fact for trial. F.D.I.C. v. Bell, 106 F.3d 258, 263 (8th Cir. 1997). The facts must generate evidence from which a jury could reasonably find for the non-moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252 (1986).
In its application seeking a Certificate of Public Convenience and Necessity (Certificate) before the Federal Energy Regulatory Commission (FERC), Williston Basin proposed the retention of "a 50-foot-wide permanent pipeline right-of-way." 67 Fed. Reg. 63,643 (Dec. 13, 2001). On June 2, 2003, the FERC issued an order stating, in part,
A certificate of public convenience and necessity is issued authorizing Williston Basin to construct and operate the Grasslands Project facilities, as described in the application, as amended, and this order.See Complaint, Exhibit 1(Docket No. 1).
In its motion for partial summary judgment, Williston Basin asks the Court to determine that, as a matter of law, the Defendants cannot challenge the terms of the right-of-way contemplated by FERC in its Certificate, and in particular that Williston Basin is entitled to a perpetual, 50-foot wide easement. The Defendants assert the Certificate did not specifically set forth the terms of the easement. The Defendants assert that the Court should rule that (1) they receive annual rental compensation for the easement, (2) the capacity of the pipeline should be limited to 80,000 Dth/d, and (3) limit the easement to 20 feet in width.
The parties have not cited any applicable Eighth Circuit precedent on the issue of the scope of an easement obtained by condemnation pursuant to a Certificate of Public Convenience and Necessity issued by FERC. Nor has the Court found any Eighth Circuit precedent. In the absence of Eighth Circuit precedent, the Court finds persuasive the case of Tennessee Gas Pipeline, Co. v. 104 Acres of Land More or Less, 749 F. Supp. 427 (D.R.I. 1990).
In Tennessee Gas Pipeline, the court set forth the limitations of a federal district court in reviewing FERC Certificates of Public Convenience and Necessity pursuant to the Natural Gas Act.
United States District Court have a limited scope of review under Section 7(h) of the Natural Gas Act. Disputes over the reasons and procedure for issuing certificates of public convenience and necessity must be brought to the Federal Energy Regulatory Commission for hearing. 15 U.S.C. § 717f(b). The District Court's role is to evaluate the scope of the certificate and to order condemnation of property as authorized in the certificate. See Williams Natural Vas Co. v. Oklahoma City, 890 F2d 255, 262 (10th Cir. 1989) ("Judicial review . . . is exclusive in the courts of appeals once the FERC certificate issues."), cert. denied, 497 U.S. 1003, 110 S.Ct. 3236, 111 L.Ed.2d 747 (1990); Transcontinental Gas Pipe Line Corp. v. 118 Acres of Land, 745 F. Supp. 366 (E.D. La. 1990) ("review of FERC orders are to be made only to United States Circuit Courts of Appeal"). District Courts, therefore, are limited to jurisdiction to order condemnation of property in accord with a facially valid certificate. Questions of the propriety or validity of the certificate must first be brought to the Commission upon an application for rehearing and the Commissioner's action thereafter may be reviewed by a United States Court of Appeals.Id. at 430. The landowners in Tennessee Gas Pipeline argued that the condemnation sought exceeded the scope or violated the terms of the FERC Certificate in a variety of manners, including the grant of perpetual easements. Id. at 431. The landowners argued that the easements must be limited to the life of the project. The district court found that FERC has the authority to grant perpetual or permanent easements.
The [Natural Gas Act] contemplates two types of condemnation: the condemnation of rights of way to construct, operate, and maintain pipelines and the condemnation of land necessary to locate surface equipment for the operation of pipelines. 15 U.S.C. § 717f(h). Because the statute contains no language to the contrary, it must be concluded that the rights of way may be easements in perpetuity. Furthermore, in its order issuing the certificate in this case, the Federal Energy Regulatory Commission authorizes the condemnation of "permanent" rights of way with restricts as set forth in its order. Plaintiff's Exhibit C, ¶ j, at 17. This Court may not alter this authorization.Id. at 431.
In the present dispute, Williston Basin requested a "a 50-foot-wide permanent pipeline right-of-way." 67 Fed. Reg. 63,643 (Dec. 13, 2001). The Defendants have not disputed this fact. In addition, the Final Environmental Impact Statement contains numerous reference to a "50-foot-wide permanent right-of-way." See Docket No. 61, Exhibit 2A. It is also undisputed that FERC authorized "Williston Basin to construct and operate the Grasslands Project facilities, as described in the application, as amended, and this order." See Complaint, Exhibit 1(Docket No. 1). While FERC certainly could have been more explicit in its Certificate, the only reasonable interpretation of the Certificate is that Williston Basin was authorized to condemn a "50-foot-wide permanent pipeline right-of-way."
This Court is not alone in its conclusion that the Certificate authorized a "50-foot-wide permanent pipeline right-of-way." In a companion action to this proceeding, the United States District Court for the District of Montana contemplated the scope of the easements and concluded it could "not place an arbitrary time limitation on an easement granted pursuant to [the] Natural Gas Act. . . . Even though the certificate does not state a duration, the Court may not arbitrarily insert what has been omitted."See Williston Basin Interstate Pipeline Co. v. Easement and Right-of-Way Across Township 9 South, Range 55 East MPM, Finding and Recommendations of the United States Magistrate Judge, Cause No. 03-87-BLG-RWA (April 2, 2004 D. Mont).
The Defendants also argue that the capacity of the pipeline should be limited to 80,000 Dth/d, so that Williston Basin would need to "recondemn" the easements to increase capacity. Williston Basin acknowledges that in the future it intends to seek permission from FERC to expand the capacity of the Grasslands Pipeline. Williston Basin cites to the North Dakota Supreme Court case of Filler v. City of Minot, 281 N.W.2d 237, 239 (N.D. 1979) for the proposition that if a modification is reasonably anticipated at the time of the original conversion, the compensation the landowners receive should account for the future modifications. Finally, as to the Defendants' argument that they should receive an annual rental fee because of the indefinite length of the easement, the Court finds this assertion is moot in light of the Court's conclusion that the easement is a permanent or perpetual easement.
The Court finds that the issue of pipeline capacity is an issue of compensation rather than a limitation on the terms of the easement. As Williston Basin has made clear, in the future it intends to seek permission to expand the pipeline. Thus, the impact of the potential for future expansion is a factor for the jury to consider in reaching a damage determination.
After carefully reviewing the entire record in this case, the Court finds that there are no genuine issues of material fact that would prevent the entry of summary judgment as to the terms of the easements. As a result, the Court finds, as a matter of law, that Williston Basin is entitled to a 50-foot-wide permanent easement over the remaining Defendants' tracts of land.
IV. CONCLUSION
The Court GRANTS the Plaintiff's Motion for Partial Summary Judgment. (Docket No. 60).