2005 Court Opinion Case Summaries

MEMORANDUM

TO:                 Members of the Energy Bar Association
FROM:           Gary E. Guy, Secretary
                        Adrienne E. Clair, Assistant Secretary

SUBJECT:     2005 Energy-Related Court Opinions

Attached is a list of energy-related opinions issued by federal courts during 2005, along with a brief summary of each opinion.  In recognition of the prevalent use of electronic mail by its members, the Association is distributing the opinions via e-mail, with hard copies available upon request.  For the convenience of the Association’s members, we have included an internet hyperlink in each opinion summary that will allow for instant retrieval of the opinion from the Internet.  The Association encourages the members to use the Internet links provided to access the full text of the court decisions.

Finally, due care has been taken to ensure that all relevant energy-related court opinions have been included in this report.  If members are aware of energy-related court opinions issued during 2005 that are not included and that likely would be of interest to the Association’s membership, please contact Adrienne E. Clair at 202-785-9163, or by e-mail at aclair@stinsonmoheck.com.
 

UNITED STATES COURT OF APPEALS
FOR THE DISTRICT OF COLUMBIA CIRCUIT

 

DTE Energy Co. v. FERC, 394 F.3d 954 (D.C. Cir. January 14, 2005)

The Court of Appeals denied a petition for review of orders by the Federal Energy Regulatory Commission (“FERC” or “Commission”) asserting exclusive jurisdiction of certain electric facilities as transmission through application of its seven-factor test adopted in Order No. 888.  The petitioner argued on appeal that the facilities are for dual-use as both transmission and distribution, but the Court found substantial evidence for the Commission’s findings.  The Court also ruled that the petitioners were attempting to mount a collateral attack on FERC’s single-jurisdiction approach without having raised the matter before FERC.

The petitioner is a utility that transferred operational control of facilities to a Regional Transmission Organization.  FERC found that the particular facilities at issue should be included in the transfer as they are high-voltage, looped, lines that provide for flows into and out of the facilities.  FERC also denied a motion by the utility to reopen the record to adduce additional evidence on the ground that the utility failed to show an extraordinary change in circumstances outweighing the need for finality.

The Court agreed with the Commission that the record supports its findings of exclusive jurisdiction under the seven-factor test.  It found that FERC properly looked at the present primary function of the facilities.  The Court rejected as irrelevant the petitioner’s contentions that the facilities were intended to serve a local distribution function and had been requested by local distribution customers.  According to the Court (mimeo, pp. 15 – 16), “the historical purpose or alleged intended use of the facilities does not speak to the issue at hand, which is their present primary function.”  Similarly, the Court held that the petitioner forfeited a new contention that the facilities are only looped due to the configuration of third-party facilities because the argument had not been asserted before FERC.  Finally, the Court ruled that FERC had no obligation to defer to a classification order by a state public service commission cited by the petitioner because the order did not purport to apply FERC’s seven-factor test in making its own assessment.

http://pacer.cadc.uscourts.gov/docs/common/opinions/200501/04-1020a.pdf

 

 Edison Mission Energy, Inc. v. FERC, 394 F.3d 964 (D.C. Cir. January 14, 2005)

 The Court of Appeals vacated and remanded FERC’s rulings upholding an Automatic Mitigation Procedure (“AMP”) whereby an Independent System Operator (“ISO”) can reduce a bid price offered by an independent power producer to sell into a Real-Time Market whenever the ISO determines that the bid price exceeds competitive market prices due to market power.  The Court found that FERC has not distinguished between times when a high price bid is due to market power and times when a high price bid is due to scarcity.  In the latter situation, according to the Court, the high price bid is consistent with competitive market forces, and no price mitigation by the ISO is justified.  The Court further found that new market entrants could be dissuaded from participating in the bidding process when the prices are ramped down purely due to scarcity.  Also, the Court found the petitioner’s argument persuasive that bids may be kept artificially low during a time of scarcity based on the knowledge by bidders that if they bid a high price the ISO may exercise its authority to reduce the bid.

The Court noted that FERC had previously voiced similar concerns in prior orders allowing the AMP to be put into effect on a temporary basis.  The Court found that FERC gave no explanation why its concerns had been alleviated such that it now approved the AMP for inclusion in the ISO tariff for an unlimited duration.  Also, the Court found that the orders may do more harm than good by reducing prices when there is no market power being exercised, and therefore no cause for mitigation of the effects of market manipulation.  Finally, the Court concluded (mimeo, p. 11) that FERC’s “contradiction of its prior rulings acknowledging the potential ill effects of forcing down prices absent structural market distortions is the epitome of agency capriciousness.”

http://pacer.cadc.uscourts.gov/docs/common/opinions/200501/03-1228a.pdf

 

Burlington Resources Oil & Gas Co. v. FERC, 396 F.3d 405 (D.C. Cir. January 21, 2005)

The Court of Appeals granted a petition to review FERC’s orders requiring refunds of state ad valorem taxes paid by two natural gas pipelines to a producer in excess of maximum lawful prices established for such first sales by Section 504(a) of the Natural Gas Policy Act of 1978 (“NGPA”).  In those orders, the Commission rejected the producer’s claim that the refunds should not be required because it gave valuable consideration to the two gas purchasers in return for waivers by them against any entitlement to such refunds.  FERC ruled that the private party agreements to pay in excess of maximum lawful prices are unenforceable, and that the pipelines themselves must flow through the refunds to their customers who were not parties to the agreements.  In so holding, FERC distinguished these private contracts that it had never approved from FERC-approved settlements that provide for reductions in refunds of ad valorem taxes so that the net result is that payments in excess of NGPA ceiling prices will not be fully remedied.  FERC reasoned that it has a public policy to encourage settlements, that the customers supported the settlements, and that only a partial reduction in refunds was provided for in return for prompt refunds that would otherwise be delayed pending litigation of the issues.

Upon its review, the Court rejected as inadequate these distinctions made by FERC between Commission-approved settlements and private agreements.  The Court stated that FERC’s assertion that it possesses prosecutorial discretion to approve settlements that provide for payments exceeding NGPA maximum lawful prices is a tacit recognition that such agreements are not always unlawful.  Here, the Court found that FERC failed to articulate a legally relevant explanation of why the consideration given by the producer to secure a waiver against claims for refunds of ad valorem taxes (as well as any other refunds) should not result in the same exercise by FERC of its discretion to uphold agreements to forego refunds.

Significantly, the Court did not rule that a satisfactory distinction between the settlements and the private agreements cannot be drawn, but only that FERC had failed to provide a reasoned and consistent explanation to which it can defer.  The matter was remanded to FERC for further proceedings consistent with the Court’s opinion.

http://pacer.cadc.uscourts.gov/docs/common/opinions/200501/03-1340a.pdf

 

Arizona Corp. Comm. v. FERC, 297 F.3d 952 (D.C. Cir. February 11, 2005)

The Court of Appeals denied petitions for review of FERC’s orders modifying three FERC-approved settlements under the Mobile-Sierra public interest standard to prevent an excessive burden from being imposed on third parties.  The settlements obligate the pipeline to provide full requirements service to its customers.  The pipeline had a capacity surplus when the settlements were entered into, but FERC found that the available capacity has dwindled over time through no fault of the pipeline, thus making service unreliable and triggering pro rata cutbacks.  FERC converted the full requirements service to contract demand service by which the customers are required to pay for additions to capacity caused by growth in their demand. 

The Court rejected arguments that FERC lacked substantial evidence for modifying the agreements of the parties.  The Court found that most of the petitioners had filed a complaint with FERC alleging that customer cutbacks were being experienced due to capacity constraints.  This led the Court to infer that these petitioners are changing positions because they do not like the remedy chosen by FERC rather than because there is no need to fashion a remedy as they now assert.  The Court further held that FERC is not acting to protect the pipeline from its improvident bargain but to protect the broader public interest against a threat posed by the contracts bestowing unrestricted growth rights to customers that the pipeline is incapable of fulfilling.  Finding that FERC has shown a reasonable basis for acting to reform the contracts, the Court concluded (mimeo, p. 7):  “The Mobile-Sierra doctrine permits generalized findings of public interest when intervening circumstances affect a class of customers in the same manner.”

 

http://pacer.cadc.uscourts.gov/docs/common/opinions/200502/03-1206a.pdf

 

PSC of Kentucky v. FERC, 397 F.3d 100 (D.C. Cir. February 18, 2005)

The Court of Appeals affirmed FERC’s choice of a proxy group by which to establish a rate of return on equity (“ROE”) applicable to electric utilities that belong to the Midwest Independent Transmission System Operator, Inc. Regional Transmission Organization (“RTO”), and affirmed FERC’s use of the midpoint of the range of returns from among the members of the proxy group, but reversed the Commission’s sua sponte awarding of a 50 basis point incentive adder to the ROE.

On the use of the proxy group, the Court observed that the electric utilities are not publicly traded as independent entities but are instead owned by publicly traded companies.  For that reason, the Court found that FERC must resort to estimations based upon returns earned by some proxy group of publicly traded companies.  FERC selected a proxy group consisting of the parent companies of the electric utility members of the RTO.  The Court found that this matter is well within the Commission’s expertise and deserves the Court’s deference.  In upholding FERC, the Court (mimeo, p. 8) characterized arguments that the parent proxy group has businesses that extend beyond transmission, and are therefore not representative, as “nibbling at the margins.”

On the use of the midpoint of the range among the proxy group in establishing the ROE, the Court noted that FERC is departing from use of the median or the mean in other cases.  But the Court found that FERC adequately explained this departure because it is setting the ROE for a diverse set of companies rather than for a single entity.  For that reason, the Court deferred to FERC’s reasoning that the midpoint more fully considers the range covered by the entire group by placing the ROE equally between the top and bottom values.  While use of the midpoint in this particular case yielded a higher ROE than would use of the median or mean, the Court noted that this would not always be true.  The Court advised that it expects the Commission to consistently apply the use of the midpoint when setting ROE for a group of utilities within any RTO rather than switch back and forth to whichever choice results in the highest ROE.

On the Commission’s adoption of a 50-point premium on the overall ROE, the Court held that FERC acted without affording due process to the parties.  It pointed out that FERC had declined to consider a request for an incentive adder when the case was filed, and that the administrative law judge refused to consider such proposals at the hearing because they are outside the scope of the proceeding set by FERC.  Declaring that the record contains no evidence on the need for a premium, or its appropriate size, the Court granted the petition on this issue based on both a lack of notice and a lack of substantial evidence.

http://pacer.cadc.uscourts.gov/docs/common/opinions/200502/03-1092b.pdf

 

Entergy Services v. FERC, 400 F.3d 5 (D.C. Cir. March 8, 2005)

The Court of Appeals denied a petition for review of FERC’s orders that a pubic utility must cease following a discriminatory supply allocation methodology and refund charges that it collected under the unlawful methodology.  The utility transmitted power for scheduled transactions supplied by a qualifying facility (“QF”) that also is interconnected with and supplies an industrial customer or “host load.”  By scheduling wholesale sales on the utility’s transmission system, the QF participated in the wholesale market on terms comparable to other sellers in that market.  FERC held that as the utility balances flows of electricity when generators do not produce sufficient energy to meet their schedules, it must allow the QF to choose to allocate its output first to meet the needs of its host load and then obtain generator imbalance energy to meet the shortfall in the scheduled transaction.  Otherwise, FERC determined that the utility would charge the host load with the deficiency in its retail rates at a penalty so high that the risk of incurring it would effectively exclude QFs from participating in the wholesale electric energy market.  FERC held that this treatment differed from that of other generation on the utility’s system.

On appeal, the utility argued that FERC was unlawfully ordering refunds of retail rates over which it has no jurisdiction.  The Court ruled that FERC’s refund ruling has nothing to do with the regulation of retail rates.  Instead, the Court determined that FERC properly required the utility to refund any amount collected in excess of its wholesale tariff because the QF output was first used to supply the host load and no retail service by the utility to the host load ever took place contrary to the appearance given by the utility.  Instead, explained the Court, any QF output deficiency should have been applied to the wholesale sale under the scheduled transaction so that the retail penalty charge would never have been implicated.

The utility also argued that FERC was retroactively imposing a change in rate design.  The Court rejected that argument as well, holding that FERC is enforcing an allocation of supply methodology by requiring the utility to bill customers under existing wholesale rates that comport with that allocation methodology.

http://pacer.cadc.uscourts.gov/docs/common/opinions/200503/03-1271a.pdf

 

Nevada v. DOE, 400 F.3d 9 (D.C. Cir. March 8, 2005)

The Court of Appeals denied a petition for review by the State of Nevada challenging the Department of Energy (“DOE”) determination that it is without authority to provide Nevada with additional financial assistance from the Nuclear Waste Fund for fiscal year 2004 because Congress granted a specific appropriation for Nevada in that year that replaces any other funding.  Nevada requested Nuclear Waste Fund financial assistance from the DOE to fund its participation in a Nuclear Regulatory Commission proceeding concerning the construction of a nuclear waste repository at Yucca Mountain, Nevada.  The Nuclear Waste Fund is a special repository-related fund composed of payments by generators and owners of nuclear waste out of which the DOE is mandated to make grants to Nevada concerning Yucca Mountain siting issues “subject to appropriations” from Congress.

While in some years Congress has enacted legislation directing an appropriation to Nevada from the Nuclear Waste Fund, in fiscal year 2004 Congress made no such appropriation from that funding source but instead appropriated $1 million to Nevada for activities pursuant to the Nuclear Waste Policy Act.   Nevada claimed that it was entitled to an additional $4 million from the Nuclear Waste Fund because it has budgeted $5 million in fiscal year 2004 for such activity.

Without deciding the issue of whether or not deference is owed to the DOE under the Chevron doctrine, the Court independently reached the same conclusion as did the DOE that no further financial assistance was authorized by Congress for the time period involved.  The Court stated that no continuing appropriation is mandated by statute, but rather funding is specifically conditioned upon yearly appropriations.  The Court further ruled that by making an appropriation for a specific purpose, Congress has barred any general funding that might otherwise be applicable in the absence of the specific appropriation.  The Court relied on the general principle of statutory construction under which a specific statute is given precedence over a general one in concluding that the $1 million expressly appropriated to Nevada indicates that Congress intended that amount to be all that Nevada will be appropriated from whatever source during the particular fiscal year.

http://pacer.cadc.uscourts.gov/docs/common/opinions/200503/04-1082a.pdf

 

Tennessee Gas Pipeline Co. v. FERC, 400 F.3d 23 (D.C. Cir. March 11, 2005)

The Court of Appeals denied a petition for review of FERC’s requirement that a pipeline cease collecting full reservation charges from shippers if the pipeline elects to suspend service for failure to maintain creditworthiness requirements.  The Court stated that reservation charges are paid both to reserve capacity and also to have gas moved on the pipeline upon demand.  The Court further explained that when service is suspended, the pipeline continues to reserve the capacity pending the shipper’s compliance with creditworthiness requirements, but it refuses to transport gas for the shipper.  The Court opined that in a future case that may be brought before FERC, some value of service determination might be appropriate whereby some portion of reservation charges should continue to be applicable to suspended service.  However, the Court observed that the pipeline was requesting to continue charging full reservation charges without providing the reciprocal full measure of service, and concluded that FERC was entitled to deference in its determination to disallow that particular request.

http://pacer.cadc.uscourts.gov/docs/common/opinions/200503/03-1452a.pdf

 

UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT

 

Energy Management, Corp. v. City of Shreveport, 397 F.3d 297 (5th Cir. January 13, 2005)

The Court of Appeals reversed the decision of the United States District Court for the Western District of Louisiana in favor of the City of Shreveport, Louisiana’s enforcement of a city ordinance to bar the petitioner from drilling for gas and oil within 1,000 feet of Cross Lake, which provides water supply to the city.  The Court held that the State of Louisiana granted exclusive authority over drilling and mining rights to the Louisiana Office of Conservation by state statute, and therefore the city’s purported exercise of local police powers over this area are preempted by the state.

ftp://opinions.ca5.uscourts.gov/byDate/Jan2005/Jan13/03-30677-CV1.wpd.pdf

 

C & E Land Co. v. Air Products LP, 2005 U.S.App.LEXIS 2019 (5th Cir. February 24, 2005)

The Court of Appeals affirmed the summary judgment ruling of the United States District Court for the Eastern District of Texas, Beaumont, that an easement held by a pipeline giving it the right-of-way “for the transportation of oil, petroleum, gas, the products of each of the same, water, other liquids, and gases, and mixtures of any of the foregoing . . .” by its plain meaning includes hydrogen.  The appellant had sought to introduce extrinsic evidence challenging this interpretation, and had also argued that the absence of any specific reference to “hydrogen” precluded its inclusion in the easement under the doctrine of ejusdem generis.  However, the Court agreed that the easement unambiguously allows for the transportation of hydrogen, and thereby removes any need to address these arguments.

ftp://opinions.ca5.uscourts.gov/byDate/Feb2005/Feb24/04-40603-CV0.wpd.pdf

 

UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT

 

California ex rel. Lockyer v. Mirant, 398 F.3d 1098 (9th Cir. February 10, 2005)

The Court of Appeals vacated the decision of the United States District Court for the Northern District of California entering a discretionary stay of a suit brought by the Attorney General of California seeking divestiture by Mirant of three electrical generating plants as constituting market power in violation of the Clayton Act.  The Court held that, although Mirant is in bankruptcy proceedings, the Bankruptcy Code’s automatic stay against certain legal proceedings that would allow some creditors to gain a pecuniary benefit over others is inapplicable here because the Attorney General is seeking injunctive relief rather than monetary damages against Mirant.

The Court acknowledged that the lower court has discretion to grant stays for purposes of handling its own docket.  However, in this case, the stay was of unlimited duration and was expressly imposed for the purpose of waiting for the bankruptcy proceedings to be concluded due to the possibility that divestiture may result there, thus mooting the Attorney General’s action.  The Court found that this basis for granting a stay is impermissible because it would potentially non-suit the Attorney General and thwart the intent of the lawsuit to protect consumers from exploitative electricity prices.  The Court explained that the bankruptcy proceedings were unlikely to delve into Clayton Act issues, and that the bankruptcy court might well approve the sale of all three generating plants to a single entity in order to provide the highest value to the sale for the benefit of creditors.  If that were to occur, reasoned the Court, the Clayton Act violations would continue and the Attorney General would have to institute a new suit against the new owner, while ratepayers would be continuing to pay exorbitant rates assuming that the allegations are merited.

As the Attorney General is attempting to exercise police or regulatory power in the public interest, the Court ruled that a weighing of interests precludes the

granting of a stay because otherwise severe harm may be visited upon the public while Mirant will merely be required to defend a suit, a consequence that was held to be far less than a hardship or inequity justifying a stay.  For these reasons, the case was remanded to allow the Clayton Act claim to go forward on the merits.

http://www.ca9.uscourts.gov/ca9/newopinions.nsf/Opinions%20by%20date?OpenView&Start=1    &Count=100&Expand=1.3#1.3

 

Skokomish Indian Tribe v. United States, 2005 U.S.App. LEXIS (9th Cir. March 9, 2005)

The Court of Appeals, acting en banc on a rehearing request, affirmed the summary judgment granted by the District Court for the Western District of Washington dismissing claims by an Indian tribe against the United States, a city, and a public utility for an alleged treaty violation.  The tribe sued for damages for alleged harms to the tribe’s fishing rights caused by a hydroelectric project.  The Court held that the alleged violation by the United States of its treaty obligations would not constitute a tort within the jurisdiction of the lower court but instead would be a matter within the exclusive jurisdiction of the Court of Federal Claims under the Tucker and Indian Tucker Acts, and therefore the Court exercised its jurisdiction to transfer the case there.

The Court also held that a Federal Power Act (“FPA”) violation alleged against the United States must be dismissed because the plain language of the FPA exempts the United States from any liability for damages occasioned by a project licensed under the FPA.  The claims against the city and the utility were dismissed on the ground that they are not parties to the Indian treaty and there is no provision in the treaty for the recovery of monetary damages recovered against a non-contracting party.  Instead, the Court held that the treaty constitutes an agreement between two sovereigns and does not give rise to causes of action by private individuals, such as members of the tribe.  Further, the Court held that the primary purpose of the treaty provision at issue is to preserve agricultural rights, not fishing rights.  In addition, the Court found that state-law claims against the city and the utility are all barred by the statute of limitations, and that the continuing violation exception to the statute of limitations for certain trespass claims does not apply here where the costs of remediation exceed the value of the property before the damage was incurred.

An opinion joined in by a minority of the Court concurring in part and dissenting in part disagreed with the ruling that the trespass claims should be summarily dismissed under the statute of limitations on the ground that a factual issue is presented as to whether the harm is continuing despite the excessive remediation costs since a reduction in the nuisance may be sufficient to avoid substantial interference at less cost than a total remediation would entail.

Another minority opinion dissenting in part stated that the individual tribesmen do have a private party right to sue the city and the utility as non-contracting parties for monetary damages caused by interference with fishing rights under the treaty.  This opinion states that municipalities and corporate persons are liable under federal common law protection accorded to Indian property and related rights.  The opinion further states that the majority erred in assuming that there can be only one primary purpose to the applicable treaty clause and that fishing rights must be exclusively reserved to the tribe under the treaty in order to be actionable.  Without passing judgment on the merits of the allegations, the dissenting judges would have allowed the case to proceed to trial.

http://www.ca9.uscourts.gov/ca9/newopinions.nsf/Opinions%20by%20date?OpenView&Start=1&Count=100&Expand=1.2#1.2

 

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MAINE

 

Bangor Hydro-Electric Co. v. Growe, 2005 U.S.Dist.LEXIS 147 (D.Me. January 6, 2005)

The District Court dismissed what it considered to be an impermissible interlocutory appeal by a utility that was barred by the bankruptcy court from seeking approval by FERC of an agreement between it and a debtor-utility.  The agreement releases the appellant from having to reimburse the debtor for benefits resulting from the debtor’s operation of its hydroelectric storage projects.

Specifically, the appellant owns a hydroelectric facility downstream of the debtor’s facilities and gains increased power production by the operation of the debtor’s upstream dams.  These benefits are called “headwater benefits.”  FERC has authority to order reimbursement of these benefits by the downstream operator to the upstream operator.  The agreement, which predates the filing for bankruptcy protection, calls for a relinquishment of any reimbursement rights by the debtor.

However, the trustee claimed that the debtor may be entitled to such reimbursement.  This precipitated the appellant to submit the agreement to FERC for approval of the relinquishment of any such right.  The bankruptcy court agreed with the trustee that the FERC filing violated the automatic stay provision, but deferred ruling on the trustee’s request for a contempt order against the appellant.

Instead, the bankruptcy court invited either the trustee or appellant to file a motion for a declaratory order on whether the agreement is enforceable against the debtor, with the understanding that the bankruptcy court will modify the stay order to allow the appellant to proceed to seek FERC approval of the agreement if such a declaratory order holds that the agreement enforceable.

The Court held that no final order has yet been issued by the bankruptcy court since the stay is subject to being lifted following a ruling on a motion for a declaratory order, and no final relief has been granted since no determination has been made on the questions of contempt, damages, and fees.  Noting that no request for leave to file an appeal of an interlocutory order was filed, the Court dismissed the appeal.

http://www.med.uscourts.gov/opinions/hornby/2005/dbh_01062005_2-04cv192_bangor_hydro_v_great_northern.pdf

 

 Growe v. Bangor Hydro-Electric Co., 2005 U.S.Dist.LEXIS 3190 (D.Me. February 28, 2005)

The District Court denied a motion by a utility to have an adversary proceeding withdrawn from the bankruptcy court made on the ground that issues involving other federal laws regulating organizations and affecting interstate commerce should result in the case being heard by a federal Circuit Court.  The District Court agreed with the bankruptcy court that it does not lack jurisdiction over the adversary proceeding even though withdrawal would be mandatory under the Bankruptcy Code if the motion had been made on a timely basis.

The question was considered by the Court to be a purely procedural one, namely, which of two jurisdictional courts should determine the enforceability of an agreement by which the debtor-in-bankruptcy utility agreed to relinquish headwater benefit rights to a downstream hydroelectric facility operator, a matter that FERC has authority to decide at least in the absence of bankruptcy proceedings.  See above case summary.  The Court held (mimeo, p. 4) that the utility “has long known of the looming issue of FERC’s jurisdiction” at least from the time of the events that transpired giving rise to the appeal of the automatic stay ruling of the bankruptcy court that the Court affirmed in its prior decision   (discussed above).

By not being diligent in moving for a withdrawal of the adversary proceeding, the Court held that the motion failed the timeliness requirement imposed by the statute at 28 U.S.C. § 157(d), and instead (mimeo, p. 6) “encourage[s] uncertainty and additional procedural wrangling and expense.”  Thus, the motion was denied.

http://www.med.uscourts.gov/opinions/hornby/2005/dbh_02282005_1-05mc-03_growe_v_bangor_hydro.pdf

UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA

 

Texas Eastern Transmission v. Perano, 2005 U.S.Dist.LEXIS 1683 (E.D.Pa. February 7, 2005)

The District Court granted a preliminary injunction to prevent owners and operators of a mobile home park from interfering with an interstate natural gas pipeline’s use of a right-of-way across the land owned and operated by the defendants.  The Court found sufficient evidence that two pipeline easements were created in the 1940s by predecessors-in-interest to the land, and that transmission lines have been in place underground of the right-of-way since that time.  The pipeline sought to enforce a 25-foot-wide right-of-way from the centerline of two transmission lines.  The defendants were aware of the pipeline’s claims and proceeded to put a mobile home within the right-of-way despite communications from the pipeline.

The Court applied the four-factor test by which a plaintiff must prove its entitlement to preliminary injunctive relief in reaching the following conclusions: (1) the pipeline is likely to prevail on the merits to maintain the right-of-way because it has established the existence of the easements, and the need to use the 20-foot right-of-way to maintain the transmission lines from rupture, leaks, and explosion; (2) there is immediate irreparable harm that cannot be compensated for by money alone because of major public safety concerns, including the potential for serious injury and loss of life; (3) a balancing of hardships indicates that the defendants will suffer minimal harm by a grant of the preliminary injunction because the pipeline will pay to move the mobile home and also post a $50,000 bond, whereas the hardship on the pipeline will be significant by a denial of the motion because the interference with the right-of-way compromises its ability to maintain the transmission lines safely and efficiently; and (4) a preliminary injunction serves the public interest by minimizing both the risk of serious harm to life and surrounding property, and the risk of the cutoff of natural gas service, particularly in winter months with serious implications.  For these reasons, the Court ordered the defendants to remove the mobile home in dispute and enjoined them from any further interference with the right-of-way pending a final hearing and determination of the underlying case.

http://www.paed.uscourts.gov/documents/opinions/05d0168p.pdf