Commissioner Richard Glick Statement
June 9, 2020
Concur in Part and Dissent in Part Regarding Allegheny Defense Project Final Rule
It is readily apparent that today’s final rule attempts to address some of the concerns raised in the Allegheny Defense Project v. FERC proceeding before the U.S. Court of Appeals for the District of Columbia Circuit (D.C. Circuit). In that proceeding, numerous groups have objected to the Commission’s practice of “tolling” for months, or even years, requests for rehearing of certificates issued pursuant to § 7 of the Natural Gas Act,[1] thereby preventing landowners from seeking judicial review, even while pipeline developers are permitted to condemn their land and start constructing a pipeline. In her concurring opinion in Allegheny Defense Project, Judge Millett correctly characterized the Commission’s practice as a “Kafkaesque regime”—one that allows “the Commission [to] keep homeowners in seemingly endless administrative limbo while energy companies plow ahead seizing land and constructing the very pipeline that the procedurally handcuffed homeowners seek to stop.”[2] Now that the en banc D.C. Circuit has heard oral argument on the legality of this Kafkaesque regime, the Commission is finally deciding to stop allowing developers to begin constructing a pipeline before the Commission’s rehearing process is complete. That is a step in the right direction.
Nevertheless, I dissent in part from this final rule because it does nothing to address the concern, articulated clearly in Judge Millett’s concurrence, that a pipeline developer should not be able to begin the process of condemning private land before the owners of that land can go to court to challenge the certificate. Eminent domain is among the most significant actions that a government may take with regard to an individual’s private property.[3] And the harm to an individual from having his or her land condemned is one that may never be fully remedied, even in the event they receive their constitutionally required compensation.[4] Bearing those basic facts in mind, there is something fundamentally unfair about a regulatory regime that allows a private entity to start the process of condemning an individual’s land before the landowner can go to court to contest the basis for that condemnation action.
That concern was central to Judge Millett’s concurrence in Allegheny Defense Project. Throughout her opinion, she touched on the profound inequity of allowing a developer to condemn land and construct a pipeline while the opponents of that pipeline are stuck in “administrative limbo” before the Commission.[5] I see nothing in her opinion that suggests that the problem created by the Commission’s abuse of tolling orders is limited to the actual construction of a pipeline. To the contrary, Judge Millett pointed repeatedly to the exercise of eminent domain prior to rehearing as an example of how the Commission’s use of tolling orders “runs roughshod over basic principles of fair process.”[6]
And yet this final rule deals only with construction without making any effort to address the exercise of eminent domain during that period when the courthouse doors are closed to landowners seeking to challenge the certificate. That is a shame. And the failure to do anything in that regard is a striking contrast to the Commission’s supposed concern for landowners. Rather than remaining silent on this situation, we ought to do everything in our power to address it and ensure that certificate holders are not permitted to go to court before landowners.
To that end, I believe that we should adopt a practice of presumptively staying § 7 certificates[7] pending Commission action on the merits of any timely filed requests for rehearing.[8] A practice along those lines would help protect landowners from an action seeking to condemn their property by delaying the issuance of the condition precedent for a condemnation action pursuant to the NGA.[9] Only then will we have addressed the most glaring due process shortcomings associated with the Commission’s use of tolling orders in NGA certificate proceedings.
During my time at the Commission, I have had the opportunity to meet with many landowners who lost their property rights through eminent domain proceedings authorized by the NGA. It is heartbreaking to hear their stories of watching their land be condemned while the Commission sat on rehearing requests, leaving them helpless to challenge the certificate, even as it was used to seize their land. We should be doing everything in our power to prevent such a patently unfair result.
For these reasons, I respectfully concur in part and dissent in part.
[1] 15 U.S.C. § 717f(c).
[2] Allegheny Def. Project v. FERC, 932 F.3d 940, 948 (D.C. Cir.) (Millett, J., concurring), reh’g en banc granted, judgment vacated, 943 F.3d 496 (D.C. Cir. 2019).
[3] Cf. Dolan v. City of Tigard, 512 U.S. 374, 384 (1994) (observing that government action that provides for “public access [to private property] would deprive [the owner] of the right to exclude others, ‘one of the most essential sticks in the bundle of rights that are commonly characterized as property.’”) (quoting Kaiser Aetna v. United States, 444 U.S. 164, 176 (1979)); Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419, 426 (1982) (“[W]e have long considered a physical intrusion by government to be a property restriction of an unusually serious character for purposes of the Takings Clause.”); Hendler v. United States, 952 F.2d 1364, 1374 (Fed. Cir. 1991) (“In the bundle of rights we call property, one of the most valued is the right to sole and exclusive possession—the right to exclude strangers, or for that matter friends, but especially the Government.” (emphasis in the original)).
[4] See Kimball Laundry Co. v. United States, 338 U.S. 1, 5 (1949) (“The value of property springs from subjective needs and attitudes; its value to the owner may therefore differ widely from its value to the taker.”); United Church of the Med. Ctr. v. Med. Ctr. Comm’n, 689 F.2d 693, 701 (7th Cir. 1982) (“It is settled beyond the need for citation . . . that a given piece of property is considered to be unique, and its loss is always an irreparable injury.”); accord Richardson v. City & Cty. of Honolulu, 124 F.3d 1150, 1168 (9th Cir. 1997) (O’Scannlain, J., concurring in part and dissenting in part) (“Whether because of a sentimental attachment to his property or a conviction that the property is actually worth more than what the market will currently bear, a landlord might choose not to sell, even at the ‘fair market value.’”).
[5] Allegheny Def. Project, 932 F.3d at 948, 950, 952-53, 956 (Millett, J., concurring).
[6] Id. at 950 (Millett, J., concurring).
[7] Unlike § 7 of the NGA, § 3 does not convey eminent domain authority. See Limiting Authorizations to Proceed with Construction Activities Pending Rehearing, 171 FERC ¶ 61,201, P 5 (2020). Accordingly, I do not believe it is necessary to presumptively stay the Commission’s § 3 determinations. I do, however, agree with my colleagues that it is appropriate to refrain from issuing any notices to proceed with construction under both § 3 and § 7 given the potential for irreparable harm due to construction pursuant to either provision of the NGA. See id. P 11.
[8] Under such an approach, the Commission could, in its discretion, lift the stay in response to a showing from the pipeline developer that it is necessary or appropriate to commence condemnation proceedings prior to the Commission acting on rehearing.
[9] Multiple courts have contemplated a stay having an effect along those lines. See, e.g., Mountain Valley Pipeline, LLC v. An Easement to Construct, Operate & Maintain a 42-inch Gas Transmission Line, No. 2:17-CV-04214, 2018 WL 1004745, at *5 (S.D.W. Va. Feb. 21, 2018) (“The landowners insist that the various challenges that Mountain Valley faces before FERC and the courts of appeals counsel against the granting of partial summary judgment. As explained earlier, a FERC order remains in effect unless FERC or a court of appeals issues a stay and no such stay has been issued here.” (internal citations omitted)); In re Algonquin Nat. Gas Pipeline Eminent Domain Cases, No. 15-CV-5076, 2015 WL 10793423, at *7 (S.D.N.Y. Sept. 18, 2015) (“Here, various interested parties have filed Requests for Rehearing with FERC but, absent a stay by FERC, those Requests for Rehearing neither prohibit these proceedings from going forward nor affect Algonquin’s substantive right to condemn or the need for immediate possession.”); Tenn. Gas Pipeline Co. v. 104 Acres of Land More or Less, in Providence Cty. of State of R.I., 749 F. Supp. 427, 431 (D.R.I. 1990) (“Because in this case the Commission’s order has not been stayed, condemnation pursuant to that order may proceed.”).