As we explained in our case summary, the question in this case was whether a private company could exercise eminent domain power to take privately owned land when a government agency issued a certificate of public convenience and necessity that imposed prerequisites to construction on the acquired land. The Court (Stein, J.) held that the issuance of such a certificate allows for a taking even if the company has not yet satisfied the certificate’s prerequisites.
The case involves National Fuel, a company that sought to build a pipeline across Pennsylvania and New York in order to transport natural gas to Canada. Under federal law, National Fuel had to obtain from the Federal Energy Regulatory Commission (FERC) a certificate of public convenience and necessity before it could build the pipeline. Such a certificate allows a company to use the government’s eminent-domain power to take property that the company cannot acquire through contract. The certificate that FERC issued National Fuel attached conditions, including that National Fuel could not build the pipeline until it obtained state approval for the project under the Clean Water Act.
Acting under its certificate, National Fuel brought a “vesting proceeding” in New York State court against the Schuecklers, landowners in upstate New York. Eminent Domain Procedure Law (EDPL) 206(A) requires the acquirer to hold a public hearing and make findings on the benefits and impacts of the project before bringing a vesting proceeding. The acquirer need not do so, however, if it submits to a government agency findings similar to those that EDPL 206(A) mandates and obtains a certificate of public convenience and necessity or similar approval.
The Court held that National Fuel properly brought its vesting proceeding. National Fuel was exempt from EDPL 206(A) because it had submitted to FERC findings on “the public benefit, use, and need for the proposed pipeline” and obtained a certificate of public convenience and necessity. The Court also rejected the Schuecklers’ argument that National Fuel had to satisfy the certificate’s prerequisites before bringing its vesting proceeding—something it had not yet done, given that New York had denied National Fuel approval under the Clean Water Act. As the Court explained, FERC imposed those conditions as prerequisites to construction, not to the exercise of eminent-domain power. And FERC knew how to condition a recipient’s use of eminent-domain power when it wanted to do so—as FERC had done in at least one other case. Nor, in the Court’s view, was New York’s denial of Clean Water Act approval dispositive, since National Fuel could ask New York to reconsider that decision.
Judge Rivera, joined by Judge Fahey, dissented. In the dissent’s view, the vesting proceeding was premature. The dissent believed that the findings that National Fuel submitted to FERC before obtaining its certificate did not qualify for the exception to EDPL 206(A), because they were not an “adequate substitute” for the hearing-and-findings process that EDPL 206(A) contemplates. For instance, National Fuel, in the dissent’s view, could not satisfy the EDPL’s hearing-and-findings mandate unless it addressed the pipeline’s impact on New York’s water—something it could not do until it received Clean Water Act approval from New York. The dissent would have therefore held that National Fuel could bring a vesting proceeding only after satisfying the certificate’s prerequisites, including obtaining Clean Water Act approval.