Real Estate & Property Law

Coal Companies Lose Battle Over Gas Pipeline

By Alan Ackerman

A Sixth Circuit Opinion in American Energy Corp vs Rockies Express Pipeline LLC resulted in a determination by the appellate panel that the coal company could not challenge a proposed acquisition process outside of the Federal Energy Regulatory Commission Proceeding. Challenging the authority of the acquiring agency should be held as part of the certificate process at the FERC.

The article summarized the reality; to-wit, just compensation relief is to be sought once the certificate is granted.

Courthouse News Service

The coal companies then filed a conversion action in an Ohio state court, arguing that the pipeline would cause them damages in excess of compensation offered under eminent domain.

The pipeline company then removed the action to a district court, which dismissed the coal companies' claims.

On appeal, the U.S. 6th Circuit said the two companies were simply trying to "sidestep" the "exclusive jurisdiction" of the courts handling the actions.

"Exclusive means exclusive, and the Natural Gas Act nowhere permits an aggrieved party otherwise to pursue collateral review of a Federal Energy Regulatory Commission certificate in state court or federal district court," Judge Sutton wrote for the three-judge panel.

The coal companies said it wanted the court to consider the dangers posed by the pipeline after it was built, rather than "pipeline-construction matters" in the FERC case.

"To the extent the coal companies believe that Ohio law fails fully to compensate these injuries in violation of the Fifth (and Fourteenth) Amendment, they can raise that claim in the district court and, if necessary, here," the Judge concluded.

Full post as published by National Eminent Domain Blog on October 13, 2010 (boomark / email).