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In re Condemnation By Sunoco Pipeline L.P.

Commonwealth Court of Pennsylvania

July 3, 2017

In Re: Condemnation by Sunoco Pipeline L.P. of Permanent and Temporary Rights of Way for the Transportation of Ethane, Propane, Liquid Petroleum Gas, and other Petroleum Products in Edgemont Township, Delaware County, Pennsylvania, over the Lands of Charles S. Katz, Jr. and Karen M. Katz Appeal of: Charles S. Katz, Jr. and Karen M. Katz

          Argued: May 2, 2017

          BEFORE: HONORABLE PATRICIA A. McCULLOUGH, Judge HONORABLE ANNE E. COVEY, Judge HONORABLE DAN PELLEGRINI, Senior Judge

          OPINION

          DAN PELLEGRINI, Senior Judge Judge.

         Charles S. Katz, Jr. and Karen M. Katz (Condemnees) appeal from the order of the Court of Common Pleas of Delaware County (trial court) overruling all of their preliminary objections to the declaration of taking filed by Condemnor Sunoco Pipeline, L.P. (Sunoco), which seeks to condemn easements on Condemnees' property to facilitate construction of the phase of Sunoco's Mariner East Project known as the Mariner East 2 pipeline.

         I.

         To better understand the matter before us, a short review of takings law and a public utility corporation's authority to take private property is in order.

         A.

         The United States and Pennsylvania Constitutions provide that private property can only be taken from a property owner to serve a "public use." The Fifth Amendment to the United States Constitution provides, in relevant part, "[N]or shall private property be taken for public use, without just compensation." U.S. Const. amend. V. Echoing this language, Article I, Section 10 of the Pennsylvania Constitution provides, "[N]or shall private property be taken or applied to public use, without authority of law and without just compensation being first made or secured." Article X, Section 4 of the Pennsylvania Constitution, which vests corporations with the power of eminent domain, also limits the power to the "taking [of] private property for public use. . . ."[1] Our Supreme Court has held:

. . . [T]he only means of validly overcoming the private right of property ownership . . . is to take for 'public use.' In other words, without a public purpose, there is no authority to take property from private owners.
According to our Court, "a taking will be seen as having a public purpose only where the public is to be the primary and paramount beneficiary of its exercise." In re Bruce Ave., 266 A.2d 96, 99 (Pa. 1970). In considering whether a primary public purpose was properly invoked, this Court has looked for the "real or fundamental purpose" behind a taking. Belovsky v. Redevelopment Authority, 54 A.2d 277, 283 (Pa. 1947). Stated otherwise, the true purpose must primarily benefit the public. . . .

Middletown Township v. Lands of Stone, 939 A.2d 331, 337 (Pa. 2007) (emphasis in original).[2] Private property cannot be taken for private use, not even under the authorization of the Legislature. Ormsby Land Company v. City of Pittsburgh, 119 A. 730 (Pa. 1923).

         B.

         Public utility corporations are the types of corporations referred to in Article X, Section 4 of the Pennsylvania Constitution that can be vested with the power of eminent domain if it is exercised for a public purpose. Jurisdiction over the certification and regulation of public utilities in the Commonwealth is vested in the Public Utility Commission (PUC). The Public Utility Code (Code)[3] defines a "Public utility" as "Any person or corporations now or hereafter owning or operating in this Commonwealth equipment or facilities for: . . . Transporting or conveying natural or artificial gas, crude oil, gasoline, or petroleum products, materials for refrigeration, or oxygen or nitrogen, or other fluid substance, by pipeline or conduit, for the public for compensation." 66 Pa.C.S. § 102(1)(v).

         Simply being subject to PUC regulation, however, is insufficient for an entity to acquire the power of eminent domain. Pursuant to Section 1104 of the Code, 66 Pa.C.S. § 1104, a public utility must also possess a certificate of public convenience (CPC) issued by the PUC pursuant to Section 1101 of the Code, 66 Pa.C.S. § 1101.[4] To obtain a CPC, a public utility is required to submit a written application to the PUC, after which "A certificate of public convenience shall be granted by order of the commission, only if the commission shall find or determine that the granting of such certificate is necessary or proper for the service, accommodation, convenience, or safety of the public." Section 1103(a) of the Code, 66 Pa.C.S. § 1103(a).

         While the power of eminent domain is conferred on a public utility via a CPC, an entity's authorization to implement its taking power is contained in Section 1511(a) of the Business Corporation Law of 1988 (BCL), 15 Pa.C.S. § 1511(a). While that provision lists a number of services for which private property can be taken, pertinent, here, is the provision that a "public utility corporation"[5]can take private property for "The transportation of artificial or natural gas, electricity, petroleum or petroleum products or water or any combination of such substances for the public." 15 Pa.C.S. § 1511(a)(2).[6]

         The procedure for a public utility to exercise the power of eminent domain is set forth under Section 1511(c) of the BCL, 15 Pa.C.S. § 1511(c).[7] It provides, in pertinent part, that before a public utility can construct a pipeline for artificial or natural gas and/or petroleum or petroleum products, that "the service to be furnished by the corporation through the exercise of those powers is necessary or proper for the service, accommodation, convenience or safety of the public. The power of the public utility corporation to condemn the subject property or the procedure followed by it shall not be an issue in the commission. . . ." 15 Pa.C.S. § 1511(c).

         C.

         Once the PUC approves a CPC, the public utility corporation can begin taking private property by filing a declaration of taking. For a property owner to challenge the taking, Section 306(a)(3) of the Eminent Domain Code provides, in relevant part:

(3) Preliminary objections shall be limited to and shall be the exclusive method of challenging:
(i) The power or right of the condemnor to appropriate the condemned property unless it has been previously adjudicated.
(ii) The sufficiency of the security.
(iii) The declaration of taking.
(iv) Any other procedure followed by the condemnor.

26 Pa.C.S. § 306(a)(3).

         While the Rules of Civil Procedure have occasionally been applied in an "instructive" manner, this Court has repeatedly held that they are not applicable to eminent domain proceedings. Gilyard v. Redevelopment Authority of Philadelphia, 780 A.2d 793, 794 (Pa. Cmwlth. 2001). This is because in eminent domain cases, preliminary objections serve a somewhat broader purpose and are intended as a procedure to resolve expeditiously the threshold factual and legal challenges to a declaration of taking, without awaiting further proceedings. In re Condemnation of .036 Acres, More or Less, of Land Owned by Wexford Plaza Associates, 674 A.2d 1204, 1207 (Pa. Cmwlth. 1996).

         We now turn to the ...


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