United States District Court, M.D. Pennsylvania
Richard Caputo United States District Judge
before me is the Motion to Amend Memorandum and Order Dated
August 30, 2017 to Permit Appeal Pursuant to 28 U.S.C. §
1292 (Doc. 45) filed by Defendants King Arthur Estates, L.P.
(“King Arthur”) and Riothamus Corporation
“Defendants”). Because the requirements for an
immediate appeal set forth in 28 U.S.C. §1292(b) are
satisfied here, Defendants' motion will be granted and
the August 30, 2017 Order will be certified for appeal on the
question of whether federal law governs the substantive
determination of just compensation in condemnation actions
commenced under the Natural Gas Act, 15 U.S.C. § 717
Gas Pipeline Company, L.L.C. (“Tennessee”) filed
the Complaint in condemnation of property pursuant to Federal
Rule of Civil Procedure 71.1 on or about July 31, 2012.
(See Doc. 1). In the Complaint, Tennessee sought to
acquire a permanent easement and temporary easements (the
“Rights of Way”) on properties (the
“subject properties”) owned by King Arthur in
Pike County, Pennsylvania. (See id.). Prior to the
filing of the Complaint, Tennessee owned an existing
permanent easement of varying width across King Arthur's
property. (See Id. at ¶ 15; see also
Doc. 3, ¶ 15).
October 2, 2012, a Stipulated Order was entered granting
Tennessee the right to access and possess the Rights of Way
as identified in the Complaint. (See Doc. 10).
Tennessee subsequently posted the bond as required in the
Stipulated Order and took access and possession of the Rights
of Way. (See Doc. 11).
the action was administratively reopened, (see Doc.
14), the parties engaged in discovery pertinent to the
determination of just compensation. (See,
e.g., Doc. 16). Following the close of discovery,
Tennessee filed a motion for partial summary judgment.
(See Docs. 27-29). King Arthur opposed
Tennessee's summary judgment motion, (see Doc.
33), and Tennessee filed a reply thereto. (See Doc.
August 30, 2017, I granted in part and denied in part
Tennessee's summary judgment motion. For purposes
relevant here, I held that just compensation in this action
would be determined by application of federal law. See
Tennessee Gas Pipeline Co. v. Permanent Easement for 7.053
Acres (King Arthur), No. 12-1477, 2017 WL 3727449, at *4
(M.D. Pa. Aug. 30, 2017). In that opinion, I noted that I had
previously decided that “‘federal law governs the
substantive determination of just compensation in a
condemnation action commenced under the Natural Gas
Act.'” Id. (quoting Tennessee Gas
Pipeline Co. v. Permanent Easement for 1.7320 Acres and
Temporary Easements for 5.4130 Acres in Shohola Twp., Pike
Cnty. (Fox Hollow), No. 11-028, 2014 WL 690700 (M.D. Pa.
Feb. 24, 2014)). As was the case when I decided Fox
Hollow, “neither the United States Supreme Court
nor the United States Court of Appeals for the Third Circuit
has addressed whether federal or state law should be utilized
in calculating just compensation in condemnation actions
under the Natural Gas Act.” Id. Moreover,
review of recent case law decided after Fox Hollow
confirmed that courts continue to diverge on whether federal
or state law governs the measure of compensation in
proceedings under the Natural Gas Act. Id. (citing
Sabal Trail Transmission, LLC v. Real Estate, No.
16-063, 2017 WL 2783995, at *7 (N.D. Fla. June 27, 2017)
(applying state law); Equitrans, L.P. v. 0.56 Acres More
or Less of Permanent Easement Located in Marion County,
W.Va., No. 15-106, 2017 WL 1455023, at *1 (N.D. W.Va.
Apr. 21, 2017) (applying state law); Columbia Gas
Transmission, LLC v. An Easement to Construct, Operate and
Maintain a 20-Inch Gas Transmission Pipeline Across
Properties in Washington County, Pa., No. 16-1243, 2017
WL 1355418, at *2 (W.D. Pa. Apr. 13, 2017) (applying federal
law); Columbia Gas Transmission, LLC v. 252.071 Acres,
More or Less, in Baltimore Cnty., Md., No. 15-3462, 2016
WL 7167979, at *3 (D. Md. Dec. 8, 2016) (applying federal
law)). Under those circumstances, I remained of the view that
compensation in just compensation proceedings under the
Natural Gas Act should be determined by federal law. See
September 21, 2017, Defendants filed the instant motion
requesting the August 30, 2017 Memorandum and Order be
certified to the Third Circuit for an interlocutory appeal.
(See Doc. 45, generally). Defendants filed
their brief in support of the motion on October 3, 2017.
(See Doc. 46, generally). Tennessee's
brief in opposition was filed on October 17, 2017,
(see Doc. 47, generally), and
Defendants' reply brief in further support of their
motion was submitted on October 31, 2017. (See Doc.
48, generally). Defendants' motion is now fully
briefed and ripe for disposition.
to 28 U.S.C. § 1292(b), a district judge may certify an
order for immediate appeal if the judge finds that the order
“involves a controlling question of law as to which
there is substantial ground for difference of opinion and
that an immediate appeal from the order may materially
advance the ultimate termination of the litigation.” 28
U.S.C. § 1292(b). The decision to certify an order for
immediate appeal lies within the sound discretion of the
district court. Orson, Inc. v. Miramax Film Corp.,
867 F.Supp. 319, 320 (E.D. Pa. 1994) (citing Del. Valley
Toxics Coal. v. Kurz-Hastings, Inc., 813 F.Supp. 1132,
1142 (E.D. Pa. 1993)). However, the district court should
exercise its discretion mindful of the strong policy against
piecemeal appeals. Link v. Mercedes-Benz of N. Am.,
550 F.2d 860, 863 (3d Cir. 1977), cert. denied, 431
U.S. 933 (1977). The burden is on the movant to demonstrate
that such an appeal is warranted. Orson, Inc., 867
F.Supp. at 320 (citing Rottmund v. Cont'l Assur.
Co., 813 F.Supp. 1104, 1112 (E.D. Pa. 1992)).
1292(b) “imposes three criteria for the district
court's exercise of discretion to grant a § 1292(b)
certificate.” Katz v. Carte Blanche Corp., 496
F.2d 747, 754 (3d Cir. 1974). “The order must (1)
involve a ‘controlling question of law, ' (2) offer
‘substantial ground for difference of opinion' as
to its correctness, and (3) if appealed immediately
‘materially advance the ultimate termination of the
litigation.'” Id. (quoting §
1292(b)). A “district court should certify an order for
immediate appeal only if all three requirements are
met.” Orson, Inc., 867 F.Supp. at 321 (citing
Piazza v. Major League Baseball, 836 F.Supp. 269,
271 (E.D. Pa. 1993)).
Defendants demonstrate that the August 30, 2017 Memorandum
and Order satisfy the requirements of § 1292(b). As
such, Defendants' motion will be granted.
first criterion under § 1292(b) is met because the prior
Order involves a “controlling question of law.” A
question of law is controlling if: (1) an incorrect
disposition would constitute reversible error; or (2) it is
serious to the conduct of the litigation, either practically
or legally. Nationwide Life Ins. Co. v. Commonwealth Land
Title Ins. Co., No. 05-281, 2011 WL 1044864, at *2 (E.D.
Pa. Mar. 23, 2011) (citing Katz, 496 F.2d at 755).
“[O]n the practical level, saving of time of the
district court and of expense to the litigants was deemed by
the sponsors [of 28 U.S.C. § 1292(b) ] to be a highly
relevant factor.” Katz, 496 F.2d at 755
(citation omitted). Tennessee does not appear to dispute that
the decision that federal law governs the determination of
just compensation constitutes a controlling question of law
in the matter sub judice. (See Doc. 47,
4-6). Significantly, if this finding is incorrect and just
compensation is to be determined by reference to state law,
Defendants would likely be able to recover damages that are
otherwise not permitted under federal law and the decision to
the contrary would constitute reversible error. It also makes
practical sense to have the Third Circuit resolve this ...