Project Report:
Defending Against Eminent Domain Abuse and Nuisance by Fossil Fuel Industry
Purpose
- Investigates the causes of economic imbalances.
- Investigates causes tending to destroy or impair the free-market system.
- Explores and develops market-based solutions.

Summary

Lawyers representing affected Texas landowners asked us to assist in litigation strategy against the proposed Kinder Morgan Permian Highway Pipeline ("PHP"), 430-miles from the Waha, Texas, area to the Gulf Coast and Mexico markets. We are now working on three separate, but extremely intertwined, cases: a state court case against the Texas Railroad Commission on the grounds that PHP is not a "public use" under the Texas Constitution's Takings Clause, along with federal and state Due Process claims based on the lack of any state oversight for pipeline siting; a case against the Corps of Engineers and the U.S. Fish and Wildlife Service and possibly other federal agencies in federal court for their failure to require NEPA analysis for PHP; and a case against Kinder Morgan and possibly FERC in federal court arguing that PHP is not an intrastate pipeline subject only to the Texas regulatory regime, but an interstate pipeline subject to FERC's jurisdiction.

Description

I. Pipelines

Niskanen’s eminent domain litigation project to protect landowners’ property rights from abuse by oil and gas pipeline companies that seek to seize land for their projects is now active in cases across the country.

A. Pending Cases

Pence v. Permian Highway Pipeline. On January 24, 2020, we filed a completely new type of case in federal district court against the Permian Highway Pipeline in Texas. Permian Highway appears to be billing itself as an “intrastate” pipeline, so that it can be built and then operate under incredibly lax state pipeline permitting scheme. In Texas, an intrastate gas pipeline need only submit a 5-page “check the box” application, and then it automatically receives a 1-sentence permit that allows the company to condemn land and build the pipeline whenever and wherever it chooses to do so. There is no public notice of either the application or the permit, and no state investigation or determination whether the pipeline is necessary or is being built in reasonable locations, no environmental review, etc.; in fact, there are no rules or regulations of any sort aside from the permit applicant agreeing to abide by federal safety standards.

No one has ever challenged an intrastate gas pipeline designation in federal court. Our claim in this case is that the PHP is actually an “interstate pipeline,” subject not to state law but rather to the jurisdiction of the Federal Energy Regulatory Commission (“FERC”) under the Natural Gas Act (“NGA”). While we have identified many procedural and substantive problems in how FERC implements the NGA’s eminent domain provision, FERC’s overall pipeline process is far more stringent than the Texas systems, including: public notice of the proposed pipeline; specific notice to landowners whose property may be taken; environmental review of the project route; project-specific safety requirements; and ultimately review in federal courts. Compelling pipelines that use this pretext to go through the FERC process would give landowners these protections, and we are actively searching out other such cases.

The defendants have moved to dismiss our complaint; the motion has been fully briefed and we are awaiting further action from the court.

Pacific Connector Pipeline/Jordan Cove. We represent dozens of landowners in connection with the Pacific Connector Pipeline, via which a Canadian company would transport Canadian gas through Oregon to the proposed Jordan Cove LNG facility for export. We filed our first lawsuit in connection with this pipeline in April, 2019, a FOIA case against FERC for refusing to provide information about which landowners were provided proper notice of the plans to take their land. On March 3, the federal magistrate judge who heard cross-motions for summary judgment issued his recommendation to the district court judge that our motion be granted and FERC’s motion denied. Further briefing on the magistrate’s recommendation has been completed and we await further action from the court.

We submitted extensive comments in FERC’s administrative process and, on March 19, FERC approved the entire project. We are preparing our request that FERC rehear our issues, a necessary formality (since FERC always says that it got things right the first time) and then we will file ur challenge to FERC’s decision in the appropriate U.S. Court of Appeals. Our primary argument will be that a pipeline being built to transport natural gas from Canada to an LNG facility in Oregon in order to ship it to the Far East does not constitute a “public use” under either the Natural Gas Act or the Takings Clause. (In City of Oberlin v. FERC, the D.C. Circuit recently affirmed that gas exports are not a public use, and remanded the Certificate for the Nexus Pipeline back to FERC for an explanation as to why it had considered exported gas a public use.) If we’re successful, the decision can be used to try and stop the use of eminent domain by other proposed interstate pipelines that will be supplying LNG export facilities (and we are actively searching out other such pipelines to make this argument.) In addition, we will make a variety of Due Process and Takings Clause arguments.

If FERC approves the project, we may also be litigating in federal district court in Oregon the issue of whether the pipeline company can use a form of “quick-take” condemnation that allows them to take property but not pay for it until years later; this will depend on whether the pipeline tries to take property via this method.

We also submitted FOIA requests to various federal agencies with regards to federal and state monitoring of Jordan Cove opponents (including landowners) that may lead to a potential lawsuit, and are gathering information as to a possible state court suit against the pipeline’s land agents for fraudulent misrepresentations to landowners.

Atlantic Coast Pipeline (ACP). We represent landowners in a D.C. Circuit Due Process challenge to ACP’s use of eminent domain. Briefing was completed and oral argument was set for October 16, 2019, but on October 4 the court put the case on hold in light of Cowpasture River Preservation Association v. Forest Service, which held that the Forest Service had no legal authority to permit ACP to cross the Appalachian Trail, and thus ACP might never get built; the Supreme Court then granted cert in that case. The D.C. Circuit simultaneously denied landowners’ request for a stay of ACP’s Certificate (ACP’s authority for exercising eminent domain), but “without prejudice to renewal should construction or other relevant activity under the Certificate of Public Convenience and Necessity be undertaken.” If ACP does undertake any such action, we would seek a stay of the Certificate; if the Court grants it, it would be an explicit endorsement of our argument that pipeline companies should not be able to take property either (1) before the pipeline has all of the necessary permits, or (2) while landowners are unable to ask courts for relief.

Meanwhile, at the request of the Respondents in the Cowpasture case, we submitted the only amicus brief to the Supreme Court explaining why ACP’s argument that the 4th Circuit’s decision would necessarily work a “taking” of all private land that the Trail crosses is nonsensical.

We also submitted a FOIA request to FERC for information as to which landowners ACP actually provided the Constitutionally-required notice of its plan to take their property. FERC refused to provide any documents; we sued FERC for this information and on January 15, the federal district court in D.C. ordered FERC to produce only limited information in response to our request. Because we believe this is not enough for us to determine whether FERC is carrying out out its constitutional responsibilities, we have appealed this to the D.C. Circuit; we are awaiting a briefing schedule. (In response to a related FOIA request, FERC admitted that it had no policies or procedures in place for overseeing whether pipeline companies do, in fact, provide such notice.)

PennEast Pipeline. At Petitioners’ request, we submitted an amicus brief on constitutional issues in the D.C. Circuit challenge to FERC’s approval of the PennEast Pipeline. Oral argument was scheduled for October 4, 2019, but the State of New Jersey asked the court to put the case on hold in light of the 3rd Circuit’s decision (see next paragraph) that the 11th Amendment barred condemnation actions against state property in federal courts; since it is unlikely the pipeline can be built without going through state lands, the D.C. Circuit then stayed its case pending a resolution of all the 3rd Circuit proceedings.

On September 10, 2019, the 3rd Circuit held that the 11th Amendment barred federal courts from hearing condemnation cases against state property; the State of New Jersey had asked us to do an amicus brief, which the 3rd Circuit then cited in its decision. After the 3rd Circuit denied PennEast’s petition to rehear the case en banc, on February 18, PennEast asked the Supreme Court to review the decision.

Elsewhere, on August 21, 2019, a federal district court in Maryland also reached the same conclusion as the 3rd Circuit (concerning state property sought by the Potomac Pipeline), and we have been asked by the Maryland Attorney General’s office to submit a similar amicus in the pending 4th Circuit appeal of that decision.

Meanwhile, PennEast has asked FERC to amend its Certificate to allow PennEast to build and operate the Pennsylvania portion of the pipeline. Although this represents an entirely new project, i.e., one that will deliver gas to eastern Pennsylvania, and not southern New Jersey, and involving entirely new economics and determination of market need, etc., PennEast claims that there is no need to go through any of that because FERC had previously OK’d the entire project. We have been contacted by a lawyer representing Pennsylvania landowners in condemnation proceedings, and asked to consider representing his clients in the FERC proceedings, which we are considering.

Atlantic Sunrise. At the request of the landowner plaintiffs, on January 17, 2020, we submitted an amicus brief to the D.C. Circuit for the court’s en banc reconsideration of its previous decision upholding FERC’s certificate for the Atlantic Sunrise pipeline. The full court is reconsidering the issue of whether tolling orders violate landowners’ constitutional rights to timely judicial review of FERC’s decision. The purpose of our brief was to present stories of how tolling orders have injured landowners across the country in connection with the Atlantic Coast, Constitution, Mountain Valley, Nexus, Pacific Connector, and PennEast pipelines. Due to the coronavirus situation, the court has postponed that argument until further notice.

Northern Access. On March 13, we submitted an amicus brief to the New York State Court of Appeals (the highest court in the state) in connection with the Northern Access pipeline, represented by a former judge on that court. The issue is whether the pipeline company can exercise eminent domain even though it has not yet received all other necessary regulatory approvals (and may never do so). The intermediate appellate court ruled 3-2 that eminent domain was not available until the pipeline company had secured all the necessary permits.

This is a critical issue for every pipeline, and federal courts have allowed pipelines to use eminent domain in those circumstances. The Northern Access case is a unique opportunity, because the pipeline developer opted to use state court eminent domain procedures instead.

B. Concluded Cases

Mountain Valley Pipeline (MVP). At Petitioners’ request, we filed amicus briefs both in the D.C. Circuit challenge to FERC’s Certificate, and in support of a cert petition from the Fourth Circuit decision allowing MVP to take landowners’ property before paying for it. The D.C. Circuit upheld the Certificate in the former, and the Supreme Court declined to grant cert in the latter.

Dakota Access. We submitted the only amicus brief in the Iowa Supreme Court in support of landowners fighting the Dakota Access pipeline, arguing that the general economic benefits that will flow to the state from increased employment and taxes do not constitute a “public use” as that term was used during the debates at the Iowa Constitutional Convention of 1857. On May 31, 2019, the Court agreed, holding that mere “economic benefits” do not justify the use of eminent domain (but then held that the takings were legal because Dakota Access is a “common carrier”). We were also asked to submit an amicus brief in support of the landowners’ petition to the U.S. Supreme Court to hear the case, but decided it was not a good use of our resources.

C. Congressional efforts to amend the Natural Gas Act

David Bookbinder testified about landowner eminent domain issues during a February 5, 2020 House Energy & Commerce Committee hearing on reforming the Natural Gas Act.

II. Climate Nuisance Litigation

Niskanen is representing Colorado’s Boulder County, San Miguel County, and the City of Boulder in one of the handful of climate nuisance cases across the nation. Like suits brought by New York City, San Francisco, Baltimore, etc., ours seeks to hold fossil fuel producers liable for the costs their products impose on local governments. However, ours (Boulder v. Suncor) is the first such case focusing on climate impacts beyond sea-level rise. Coping with drought, increased wildfires, flooding from extreme precipitation, and other climate effects will be massively expensive. The defendants, we argue, produced and sold fossil fuels knowing what the effects on the climate would be, but failed to disclose what they knew, and at times actively misled the public. Now, after finally admitting that climate change is caused almost entirely by their products, they have announced plans to produce and sell even more of them. We believe that fossil fuel producers — rather than local taxpayers — should bear the costs of adapting to climate change.

In June, 2018 we filed the current (amended) complaint in state court. Defendants removed the case to federal district court, claiming that there is exclusive federal jurisdiction over all climate-related issues, and on September 5, 2019, the court granted our motion and ordered the case sent back to state court. The defendants tried an emergency appeal to the 10th Circuit Court of Appeals to try and stop the remand, which the 10th Circuit rejected. This was followed by an appeal in the normal course, which has been fully briefed. Argument was scheduled for May 6, 2020, but that has been suspended as the 10th Circuit decides how it will handle arguments during the current situation.

Meanwhile, back in state court, the defendants moved to dismiss our complaint both on the merits and, as to ExxonMobil and Suncor Energy, for lack of personal jurisdiction. (They also filed a motion for change of venue from Boulder District Court to Denver.) Those motions have also been fully briefed and argument is scheduled for June 1; we have not heard anything from the court about whether that will take place, but we expect that it will be postponed.

Purpose

A victory on the public use and/or Due Process claims, or a decision holding that PHP is an interstate pipeline, would not only stop PHP, but have huge ramifications for every intrastate pipeline in Texas. These are the two of the three cases in which Niskanen would appear publicly as counsel; we would not appear as counsel in the NEPA case as that raises only environmental issues outside of Niskanen's interests.

Scope

Our program is national and the work for these additional projects are in Texas, but have national implications. We have been asked to help with proposed legislation that would create a more robust state regulatory regime, and would include serious procedural and substantive protections for affected landowners; we have just completed a memo describing intrastate gas pipeline regulatory regimes and landowner protections in Iowa, North Dakota, Ohio, Pennsylvania, South Dakota, and West Virginia.

Information Dissemination

Some of our policy work consists of research and analyses used in the “war of ideas” through blogging, op-ed writing, self-published policy studies, congressional testimony, public debates, speaking engagements, media appearances, and small-group meetings with key political and policy actors to educate people on better public policies. In addition, we develop policy proposals, promote them to public intellectuals and policy insiders, and mobilize the support of other groups.

Our climate blog, , offers sophisticated, high-level analysis regarding the politics, policy, economics, and the science of climate change. It is aimed at well-informed governing elites who influence the climate-related policy discussions in the White House and on Capitol Hill.

Our posts have been frequently referenced, directly and indirectly, by influential media outlets, are read extensively in congressional offices and within the right-of-center policy community, and regularly prompt calls from congressional staff for private briefings, congressional testimony, and follow-up information.

Also, our staff are frequently quoted and interviewed by influential media outlets such as the following:

Energy & Environment Publishing
InsideClimate News
The Washington Examiner
The Guardian
Quartz
Houston Chronicle
Washington Post
National Review
The Atlantic
Bloomberg
The New York Times
The Bulwark
Vox
New York Magazine
Huffington Post
Los Angeles Times
Smithsonian Magazine
Axios
Scientific America
Politico
The Daily Caller

Project Link https://www.niskanencenter.org/author/david-bookbinder/

Amount Approved
$30,000.00 on 7/1/2019 (Check sent: 7/12/2019)



Attachments
Niskanen Center -Climate Policy and Litigation Report (PDF)
House Committee on Science, Space and Technology
Niskanen Center Litigation Appendix II -Media (PDF)

Address
820 1st Street NE, Suite 675
Washington, DC 20002


Phone
(202) 899-1161


Posted 2/15/2019 3:21 PM
Updated   5/15/2020 3:54 PM

  • Nonprofit


House Committee on Science, Space and Technology
Joseph Majkut of the Niskanen Center testifying at the Science Committee hearing. Climate scientists and policy experts testified on the latest climate change research before the House Science, Space and Technology Committee. They discussed an array of topics, including clean energy technologies, environmental health issues, and climate change mitigation and adaptation strategies. Witnesses also provided recommendations for limiting global warming to 1.5 degrees Celsius and reducing carbon dioxide emissions into the Earth’s atmosphere.

 
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