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MVP Property Rights Case Reaches U.S. Supreme Court

The U.S. Supreme Court is expected to decide this week whether it will hear a case challenging the Mountain Valley Pipeline (MVP) and the constitutionality of parts of the Natural Gas Act (NGA).

A group of Virginia landowners is challenging Congress and the authority delegated to FERC under the NGA. The group argues that private companies should not be allowed to seize private property for their financial gain, and natural gas pipelines should not be considered the sort of public use that justifies eminent domain. MVP invoked eminent domain to condemn landowner property.

The landowners filed their petition with the Supreme Court after the U.S. District Court for the Western District of Virginia dismissed the case and said it did not have jurisdiction over the constitutional questions. The U.S. Court of Appeals for the Fourth Circuit affirmed the dismissal. Petitioners now want the Supreme Court to reverse the appeals court’s judgment so that the district court may hear the arguments.

Under the NGA, if a company receives a certificate of public convenience and necessity from the Federal Energy Regulatory Commission, it can acquire property rights by using eminent domain if a voluntary agreement with the landowner cannot be reached. The petitioners want the lower court to find that Congress’ delegation to FERC of the power of eminent domain is overly broad and unconstitutional; in violation of the nondelegation doctrine, which holds that Congress can’t impart its powers to a private organization; and more clearly define what constitutes the kind of public use eligible for eminent domain.

“Eminent domain is a governmental power. It’s mostly used for things that make common sense, like roads, bridges, things like that that everybody has access to,” said attorney Mia Yugo at Gentry Locke representing the landowners. “In this case, it’s being used by a profit-seeking company.”

In Virginia, Yugo said, eminent domain is prohibited for purposes of private enterprise or gain. At the federal level, she added, case law has not adequately addressed what exactly constitutes the kind of public use eligible for eminent domain or, more specifically, what might prohibit it.

“There’s a distinction between the federal level and the state level.” The reason that MVP and other companies are allowed to invoke eminent domain at the federal level is “because there is no such prohibition yet; it’s not clear,” she said. “It’s an issue that needs clarification by the Supreme Court because the parameters of public use have not been clarified at the federal level.”

In briefs opposing the petition, however, both FERC and MVP noted that federal courts have repeatedly resolved the constitutional claims being asserted by the petitioners. The NGA, they claim, clearly sets out that FERC decides whether interstate natural gas pipelines should be built. They note that a state or federal district court is not the appropriate venue for challenges to the Commission’s authority, saying the law provides stakeholders adequate administrative review before the agency itself and the courts of appeal, which review the agency’s decisions. 

MVP, a joint venture of Equitrans Midstream Corp., NextEra US Gas Assets LLC, Con Edison Transmission Inc., WGL Midstream and RGC Midstream LLC, is under construction for a targeted in-service date later this year. The $4.6 billion project has been plagued by legal challenges, permit issues, work stoppages and bad weather. Most of those issues have been related to environmental challenges along the pipeline’s 300-mile route.

Opposition groups dug in after FERC issued the pipeline a certificate in October 2017, a move criticized given that the system follows a similar route as the Atlantic Coast Pipeline, which was approved on the same day and has also faced an array of challenges. MVP would move 2 Bcf/d of gas from West Virginia to Virginia and connect with the Transcontinental Gas Pipe Line to deliver volumes to Southeast markets.

Yugo stressed, however, that her clients aren’t entirely opposed to the project. “It’s not an environmental case, it’s really more about property rights and the Constitution,” she said.

 

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