Pipeline Developer Denied Eminent Domain by NY Court

ROCHESTER, N.Y. (CN) – A New York appeals court threw pipeline plans into a tailspin Tuesday, refusing to let a developer acquire the privately owned land via eminent domain when the state has already held up environmental permits.

Construction of the $455 million Northern Access Pipeline, which would run from northwest Pennsylvania through northwestern New York State into Canada, has hit several snags over the past two years, with major opposition from Governor Andrew Cuomo and New York regulators.

Though the pipeline developer National Fuel Gas Supply Corporation received approval from the Federal Energy Regulatory Commission to build the 97-mile pipeline, state regulators denied the company environmental permits to build in 2017, citing an outpouring of opposition from activists and residents over concerns about potential water pollution due to construction.

Joseph and Theresa Schueckler, of Clarksville, have stood in the way of the project as well by refusing to sell an easement that would let the pipeline cut through 200 acres of their land.

The Schuecklers took the case to the state’s Supreme Court’s Appellate Division this year after a judge in Erie County authorized the developer to take their land via eminent domain.

Reversing on Friday, the Appellate Division’s Fourth Judicial Department emphasized that National Fuel no longer has a qualifying certificate from the federal agency because New York officials refused to issue a water-quality certification.

“Of course the pipeline’s construction is conditioned on the issuance of a WQC — that is the entire point of the certificate,” Judge Patrick NeMoyer wrote for a three-judge panel. “The certificate has no purpose except to authorize construction of the pipeline and to set the conditions precedent for such construction.”

NeMoyer accused National Fuel of playing a “semantical game” by arguing otherwise, emphasizing that it is it is up to no one but the Schuecklers, as owners of the land at issue, “whether or not to convey an interest in their property to petitioner.”

“In a constitutional order such as ours, jealous as it is of the right to own property and do with it as one pleases, only a viable public project can force respondents to surrender their rights in their land,” the ruling continues.

Distinguishing the certificate from the authority to condemn, NeMoyer said “it thus can neither authorize nor prohibit the acquisition of property by eminent domain.”

Otherwise companies could condemn land in the absence of a viable public project, the judge added.

NeMoyer noted that National Fuel can still challenge the denial of water quality certificates at the Second Circuit.

“It is undisputed, however, that that if the WQC denial is ultimately upheld, the pipeline cannot be built,” the ruling states.

Summarizing the case, NeMoyer said a ruling for the developers here would turn
“the entire concept of eminent domain on its head.”

Gary Abraham, an attorney for the Schuecklers, praised the ruling for stating that pipeline companies “cannot take people’s land when they don’t even have a project.”

Abraham, who has a similar case against National Fuel regarding the company’s plan to build a compressor in Pendleton, N.Y., added that the company’s forum shopping for a favorable ruling in the Second Circuit or the D.C. Circuit may backfire if courts start to take notice.

Craig Leslie, an attorney of counsel to Phillips Lytle who represents National Fuel, did not return an email seeking comment.

National Fuel has estimated the pipeline would deliver 500 million cubic feet of natural gas daily and raise about $12 million in tax revenues for the state. The planned pipeline is a joint project with Empire Pipeline Inc.

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