Margeaux Kimbrough presented " Litigation Update" at the Energy and Mineral Law Foundation Midstream Assets Conference on April 21, 2015. She discussed recent cases in the Utica and Marcellus region that are having an impact on the midstream industry, including matters involving appropriation, eminent domain, siting, and environmental concerns.

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Litigation
Update
Presented by Margeaux Kimbrough, Esq.

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What’s
Happening?
Eminent Domain
Siting +
Environmental
Concerns
Discussion

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What’s happening?
Development
in Utica +
Marcellus
shale plays
Pipeline +
Processing
Capacity
Hurdles to
meet capacity
demands

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Eminent Domain

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Tradition
Government/Agents
appropriate private
property for public use
Government/Agents to
compensate
Trend
Non-Government
appropriate private
property for public use
Non-Government to
compensate

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Eminent Domain:
Authority

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Robinson Twp. v. Commonwealth, 96 A.3d
1104 (Pa. Commw. 2014)
Peregrine Keystone Gas Pipeline, LLC
Pennsylvania Public Utilities Commission No.
A-2010-2200201, Recommendation Decision
(May 3, 2012)
Tex. Eastern Transmission, LP v. 3.2 Acres
Permanent Easement,S.D. Ohio No. 2:14-cv-2650,
2015 U.S. Dist. LEXIS 3252 (Jan. 12, 2015)

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Constitutionality of Pennsylvania Oil and
Gas Act (“Act 13”) conferring eminent domain
power upon corporations engaged in
transport, sale or storage of natural gas
Key Points
Act 13 vests the eminent
domain power in corporations
that transport, sell, or store
natural gas to or for the
public
Robinson Twp.
ISSUE:
26 Pa. C.S. 204(a) is
inapplicable

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Standard to be certified as “public
utility” under Public Utility Code
Key Points
A company’s
operations must be
determined by what it
is actually doing,
rather than what it
states it will do
Peregrine
ISSUE:
Affiliated companies cannot
be defined as "the public," and
the intent to provide service
for others, as long as it is
convenient for the provider, is
not service for the public
Granting Peregrine’s application
was not necessary for the service,
accommodation, convenience or
safety of the public

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Authority to condemn properties pursuant to
the Natural Gas Act after obtaining FERC
Certificate
Key Points
Despite efforts, Texas Eastern was unable
to acquire the property by contract so the
use of the property was necessary to
comply with the certificate issued by FERC
Texas Eastern satisfied
necessary requirements
sufficient to have the
right to condemn the
properties
Tex. Eastern
ISSUE:

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Eminent Domain:
Public Service

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EQT Gathering, LLC v. Tract of Prop.
Situated in Knott Cty.
970 F. Supp 2d 655 (E.D. Ky. 2013)
Kentuckians United to Restrain
Eminent Domain, Inc. v. Bluegrass
Pipeline Co. No. 12-CI-1402 (Franklin
Cir. Ct. March 25, 2014)

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Authority to condemn property via
being in “public service” + engaging
in good faith efforts for land
purchase
Key Points
Transportation of natural gas
by a common carrier is in the
“public service”
EQT possessed authority but
genuine issue exists regarding
good faith negotiations
EQT Gathering
ISSUE:

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Eminent domain authority to condemn
property for the installation of natural
gas liquids (“NGLs”) pipelines
Key Points
Only utilities regulated by the
Public Service Commission
possessed condemnation power
under Kentucky law
KURED
ISSUE:
Transporting NGLs is NOT“public
service” as transporting “oil or
natural gas”

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Eminent Domain:
Compensation

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Tenn. Gas Pipeline Co. v. Permanent
Easement for 1.7320 Acres,
M.D. Penn. No 3:CV-11-028, 2014 U.S. Dist.
LEXIS 23895 (Feb. 24, 2014)
Rockies Express Pipeline, LLC v. 4.895
Acres of Land,
734 F.3d 424, 2013 FED App. 0233P
(6th Cir. 2013)

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Compensation owed by for the taking
of right-of-way
Key Points
To determine just
compensation, federal
substantive law applies
where “private condemnors
under the Natural Gas Act
operate on a national scale
with federally approved
pipelines”
Partial Takings Compensation
Measurement = M.V. of entire
holding immediately before
the taking – remaining M.V.
immediately thereafter of the
portion of property rights
Tenn. Gas Pipeline
ISSUE:
LO entitled to compensation for
physically appropriated property AND
diminution in value to non-condemned
property “if the value of the remaining
land, on a unit basis, diminished when
the condemned parcel is removed from
the larger whole”

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Compensable damages from taking
Key Points
Rockies Express
ISSUE:
A FERC certificate
holder has
eminent domain
authority
Under Ohio law, a property
owner is entitled the value
of the land taken and the
damages to the residue of
the property
No damages
existed as Rockies
only sought to
condemn the
surface estate

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Markwest Liberty Midstream v. Cecil Twp.
Zoning Hearing Bd., 102 A.3d 549 (Pa.
Commw. 2014)

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ISSUES:
Unlawful exclusion
Preemption
Markwest Liberty Midstream
Key Points
Natural gas compressor stations
not excluded in every zoning
district
Local ordinance not preempted by
state law

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Siting+
Environmental Concerns

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Texas Eastern Transmission, LP v. 3.2 Acres
Permanent Easement, S.D. Ohio No. 2:14-cv-2650,
2015 U.S. Dist. LEXIS 3252 (January 12, 2015)
Texas Eastern Transmission, LP v. Barack,
S.D. Ohio No. 2:14-cv-336 (April 10, 2014)

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Northern long-eared bat
KEY POINTS
Compliance with environmental
requirements may impact entire
project
Courts have the inherent power
to grant immediate possession
through the issuance of
preliminary injunction
Tex. v. 3.2 Acres
ISSUE:

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More bats
Key Points
Where substantial irreparable
harm would result, temporary
restraining order and preliminary
injunction may be granted
Where delay in conducting
business would severely impact
company’s FERC application,
immediate possession may be
granted
Barack
ISSUE:

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Stay Informed
Margeaux Kimbrough
Kegler Brown Hill + Ritter
mkimbrough@keglerbrown.com
keglerbrown.com/kimbrough
614.462.5437
@MargeauxEsq
linkedin.com/in/mkimbrough