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May 16, 2016 Practice Points

Will Florida’s Sabal Trail Pipeline Project Reach the Supreme Court?

The controversial project involves a 516-mile pipeline running from Alabama to south of Orlando

by Anne Duvoisin Fisher

A battle over whether the federal Natural Gas Act (NGA) provides the condemnor of pipeline easements with the right of immediate possession over Florida’s Sabal Trail Transmission project is illustrating a circuit split that may go to the Supreme Court for resolution.

The Sabal Trail Transmission project, named after Florida’s state tree, the sabal palm, is a proposed 516.2-mile natural gas pipeline running from southwestern Alabama through Georgia and Florida. In Florida, the project consists of two lateral pipelines totaling 33.6 miles, five new compressor stations, and a central hub located at the terminus of the pipeline south of Orlando. The project is controversial in part because it cuts through the Florida aquifer, and it is thought by some to endanger the water supply, be vulnerable to sinkholes in the Karst geological regions of Florida, and to endanger Florida’s wetlands. Supporters assert that the project is beneficial to Floridians because of the state’s increasing dependence on natural gas, and because it will stimulate local economies with both temporary and permanent job creation.

After several years of a heavily contested permit application process, the Federal Energy Regulatory Commission (FERC) issued a Certificate to Sabal Trial Transmission, LLC (Sabal) on March 1, 2016, permitting it to construct and operate the pipeline and its related facilities. Pursuant to the Natural Gas Act, 15 USC § 717f(h), a final FERC certificate provides its holder with the authority to condemn pipeline easements. However, the act does not explicitly provide the condemnor the right of immediate possession. In 2004, the Fourth Circuit Court of Appeals found that despite the statutory silence, a gas company could nonetheless obtain immediate possession of the easements through the mechanism of a preliminary injunction. E. Tenn. Natural Gas Co. v. Sage, 361 F.3d 808 (4th Cir. 2004), (relying on the substantial public interest in the need for natural gas in so holding).

In reliance on Sage, Sabal filed federal condemnation actions against those 263 property owners who declined Sabal’s offer to purchase their property. Simultaneously, Sabal filed motions for partial summary judgment and for preliminary injunctions allowing it immediate possession of the pipeline easements. Its quest for immediate possession is girded by evidence of the inordinate cost of piecemeal acquisition in pipeline construction.

Property owners defending against the condemnation actions challenge Sabal’s authority to condemn the property as well as its right to immediate possession of the property, relying on a competing line of authority emanating from the Seventh and Ninth Circuits. In Northern Border Pipeline Co. v. 86.72 Acres of Land, 144 F.3d 469 (7th Cir. 1998), the court held that in the absence of a substantive entitlement to immediate possession, which the NGA does not provide, the pipeline company was barred from seeking immediate possession via equitable relief, and would instead be required to wait until the conclusion of the eminent domain process to take possession. They also rely on the Ninth Circuit decision in Transwestern Pipeline Co. v. 17.19 Acres, 550 F.3d 770 (9th Cir. 2008) for the proposition that the NGA does not authorize the quick take power and that such power cannot be implied because eminent domain statutes are to be strictly construed. The defendants claim that under U.S. Supreme Court law, neither title nor possession vests until the government pays just compensation, Kirby Forest Indus. v. United States, 467 U.S. 1 (1984), and that the motions for preliminary injunction and the condemnation actions themselves are not proper.

The defendants have brought motions to dismiss Sabal’s condemnation complaints, which are scheduled to be heard in the early part of May in various Florida district courts. Sabal’s motions for partial summary judgment and preliminary injunction are scheduled for hearing on May 25, 2016. Whatever happens, one can anticipate appellate action on these issues. And with a circuit split, that appellate action may lead inexorably to the U.S. Supreme Court.

Anne Duvoisin Fisher is with Henson Fuerst in Rocky Mount, North Carolina.

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