Court Says Pipeline Owner Can Pay for Land Later

RICHMOND, Va. (CN) – Approving a “take first, pay later” plan, the Fourth Circuit ruled Tuesday that construction for a natural gas pipeline can move forward despite unsettled eminent domain claims from hundreds of Appalachian residents whose land lies in the project’s path. 

A map of the proposed Mountain Valley Pipeline, which has faced numerous judicial hurdles as landowners push back against federally authorized eminent domain claims. (Image via Mountain Valley Pipeline LLC)

The Mountain Valley Pipeline is set to bring natural gas 300 miles from mines in West Virginia to facilities in Central Virginia but it has faced numerous legal challenges by both landowners and environmental groups since its federal permit was issued in 2015.

Those challenges have often caused work stoppages, but the Fourth Circuit allowed construction to resume Tuesday when it found that eminent domain challenges by 300 landowners in the pipeline’s path are not enough to stall work as long as the company deposits equitable funds with the court for an eventual payment on the land.   

“The Constitution does not prohibit condemnations in which possession comes before compensation,” U.S. Circuit Judge Pamela Harris, a Barack Obama appointee, wrote in a 42-page opinion affirming a ruling that gave the company the right to begin construction despite the fact property owners have not yet been paid.

She continued, “So long as the owner is assured through ‘reasonable, certain, and adequate’ means that he ultimately will be compensated fairly, constitutional requirements are met.”

The landowners had criticized what they called “take-first, pay-later” condemnations, arguing they are not supported by law.

But Judge Harris, writing for a three-judge panel, said the lower courts were careful to follow precedent on eminent domain claims and noted landowners were aware of and do not dispute the amount of money held in escrow.

If the amount held in escrow does not fairly compensate landowners as each case is decided, the judge said they can bring a trespass action against the company if it does not make up the difference. Property titles are not transferred until landowners are paid.

“A federal court indeed may grant a gas company immediate possession of private property along an approved pipeline route, with payment of just compensation to follow,” Harris wrote, pointing to the Fourth Circuit’s 2004 decision in East Tennessee Natural Gas Co. v. Sage as precedent.

Sage established the standing for natural gas companies to take land prior to paying compensation, due to federal authority rendered by a Federal Energy Regulatory Commission permit, similar to the one granted for the Mountain Valley Pipeline.

Stephen Clarke, a lawyer with the Norfolk, Virginia-based firm Waldo and Lyle, represented a number of landowners at oral arguments in the case last year.

He said his clients were disappointed with Tuesday’s ruling, but he pointed to a notably sympathetic comment made by Chief U.S. Circuit Judge Roger Gregory, a Bill Clinton appointee, during the September hearing: “Maybe Sage is wrong.”

Gregory, however, did not dissent from Harris’ opinion.  

Clarke hopes to appeal for an en banc hearing before the full Fourth Circuit, saying that’s the only way for the court to overturn the precedent set by Sage.  

“We agree [with Gregory] and believe that it’s wrong for courts to grant to pipeline companies rights which Congress has specifically withheld,” he said in a statement. 

A representative from Mountain Valley Pipeline did not immediately respond Wednesday to a request for comment.  

U.S. Circuit Judge James Wynn, another Obama appointee, was the third judge on the Fourth Circuit panel.

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