As the Fourth Department framed it, the question in this case is whether “a corporation can involuntarily expropriate privately-owned land when the underlying public project cannot be lawfully constructed.”
Petitioners obtained a federal certificate of public convenience and necessity from the Federal Energy Regulatory Commission (FERC) to build a natural gas pipeline from Pennsylvania to New York. The federal certificate was conditioned on petitioners’ obtaining appropriate approvals from New York State, including a water quality certification (WQC). The State Department of Environmental Conservation (DEC) denied petitioners’ application for a WQC, and petitioners’ challenge to that denial is pending in federal court.
Petitioners’ proposed pipeline runs through property owned by respondents, and petitioners sought to acquire an easement over that land through eminent domain. The Eminent Domain Procedure Law (EDPL) creates a two-step procedure for petitioners to obtain such an easement. At the first step, petitioners must either follow a public hearing procedure or possess a federal certificate that exempts them from the public hearing procedure. At the second step, petitioners must obtain title to the to-be-condemned property by commencing a vesting proceeding in Supreme Court. In this case, petitioners commenced a vesting proceeding, claiming that they were exempt from the first-step public hearing procedure as a result of their FERC certificate.
Supreme Court agreed with petitioners, but a divided panel of the Fourth Department reversed. The majority concluded that DEC’s denial of a WQC voided the underlying FERC certificate, making the alternate EDPL procedure for federal certificate-holders unavailable to petitioners. The dissenters would have permitted the condemnation. In their view, the conditions in the FERC certificate–including the requirement that petitioners obtain a WQC–were conditions precedent to the construction of the pipeline, not conditions precedent to the issuance of a valid FERC certificate. In the dissenters’ view, petitioners possessed a valid FERC certificate entitling them to the alternate procedures in the EDPL, even if petitioners could not presently construct the pipeline.
Petitioners appealed to the Court of Appeals as a matter of right.
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