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Is the Bell Tolling on FERC’s Tolling Orders?

Screenshot from Subcommittee on Civil Rights and Civil Liberties video on landowner rights and the FERC process.
The Subcommittee on Civil Rights and Civil Libertiesis investigating how the FERC process treats landowners.

After FERC approved Jordan Cove, landowners and several other groups filed “rehearing requests” asking FERC to reconsider its Order. As we wrote about in our last blog post, FERC denied all of the requests from project opponents.

Technically, FERC had 30 days to issue its decision. Many were concerned that FERC might “toll the Order”—in other words, give itself more time to decide on rehearing requests. But in fact, the Commission tolled the order for just one day, and in the end made a timely decision, even if many were unhappy with it.

So why is this a big deal?

Landowners facing eminent domain cannot file suit until FERC issues a decision on the rehearing requests. It has been FERC’s habit to toll orders like these for months. Meanwhile, companies like Pembina can proceed with condemning landowners’ properties and starting construction. FERC’s tolling orders leave landowners’ hands tied, without access to the courts.

Landowners and others who protested FERC’s order on the Mountain Valley Pipeline in Virginia and West Virginia have been waiting for a decision on their rehearing requests for over 200 days. Last fall, the U.S. Supreme Court refused to hear from a group landowners who still had not been compensated for their land. The pipeline is nearly completed.

Landowners on the Mountain Valley Pipeline route. Courtesy Roanoke News.

Eminent domain in the news

The issue of FERC’s tolling orders has become newsworthy as of late, thanks to several developments.

On February 5, 2020, the House Energy and Commerce Committee held a hearing "Modernizing the Natural Gas Act to Ensure It Works For Everyone." Oregon landowners were among those who submitted comments for consideration.

Topics included FERC’s tolling orders, the process by which landowners become intervenors, and a company’s right to use “quick take,” a preliminary injunction which allows companies to seize land before an eminent domain trial takes place where just compensation is determined, and before landowners are compensated for their land.

There are far too many examples of quick take in action. Landowners on the Atlantic Sunrise Pipeline route in Conestoga Township, PA, are living a nightmare scenario similar to those along the Mountain Valley route. Atlantic Sunrise was completed in 2018 and some landowners still have not received compensation.

Later in February, the Subcommittee on Civil Rights and Civil Liberties, chaired by Jamie Raskin (D-MD), opened an investigation into the use of eminent domain for natural gas pipeline projects.

“It’s not a fair process,” said Raskin. “FERC habitually delays its administrative duties to respond to landowner requests so long that those landowners have no opportunity to have their voices heard. By the time they have the chance to speak up, their land has already been invaded and in some cases destroyed.”

The good news for Oregon landowners facing eminent domain for the Pacific Connector pipeline is that FERC’s Order prohibits any construction activity (including tree felling and ground disturbance) until the company acquires all of the necessary permits. So while Pembina can begin the condemnation process, they can’t remove a single tree or spadeful of dirt.

However, if the company finally acquires all the needed permits, and if the courts allow Pembina to use quick take, there’s no guarantee they will be required to compensate landowners before starting construction.

The Atlantic Sunrise Pipeline under construction. Courtesy State Impact Pennsylvania

A landmark case?

On April 27, the D.C. Circuit Court of Appeals heard oral arguments in a case, Allegheny Defense Fund v. FERC, which specifically challenges the lawfulness of FERC’s use of tolling orders to extend the deadline for reviewing rehearing requests.

The D.C. Circuit first heard this case in August 2019. At that time, according to an article that appeared in Utility Dive, “judges raised concerns that landowners were being overlooked, as litigation was stalled until FERC acted on the tolling orders.”

Because the issue is so complex, the Court held an en banc hearing in April—one that was heard by the whole Court, rather than the typical three-judge panel. Over three and a half hours, the 11 judges made points and asked questions of both the landowners and FERC’s attorneys, who argued over whether tolling orders violate landowners’ due process rights and contradict the Natural Gas Act. (If you have absolutely nothing better to do and would like to listen to the session, you can access it here.)

Several judges seemed to agree that the use of tolling orders was unfair to landowners, but struggled to find a solution that would hold FERC to a firm deadline while still allowing the Commission time enough to review complex rehearing requests.

If you’re a landowner, it’s almost guaranteed that your request for rehearing will be denied, so this argument seems beside the point.

Deck stacked against landowners

One day after the hearing, Rep. Raskin released a video summarizing his Subcommittee’s preliminary findings, which showed that FERC’s approval process for pipelines “unjustly tramples on the rights of private landowners.”

Among other things, the report found that

· In the past 20 years, FERC has granted 1,021 certificates, while rejecting only six.

· In the last 12 years, FERC issued a tolling order to every single landowner who requested a rehearing. All requests were eventually denied.

· On average, seven months passed between the date a landowner made a formal request for rehearing and the date FERC ultimately denied it.

The video also includes an interview with Richard Averitt, a landowner who has been fighting the Atlantic Coast Pipeline since 2015. The proposed 42” pipeline is slated to bisect his Virginia property and to cut within 300 feet of his sister’s home.

Richard Averitt and Rep. Jamie Raskin discuss landowner rights.

As Averitt articulates in the video, the process is stacked against landowners, starting with the requirement that they file a formal motion in FERC to become “intervenors”—a task that is completely unfamiliar to most people. If you don’t file a motion during the FERC proceedings, you are denied the right to request rehearing and to seek any judicial review of FERC’s decision.

“To me, the idea that someone can take your land, and that if you don’t expressly opt in to the right to protect that in courts, you lose all rights to [participate] in future processes…is outrageous,” Averitt explains.

Chatterjee defends FERC

FERC Chairman Neil Chatterjee has responded to criticism by saying he's already worked to fix the problem. Last September, he directed the agency's general counsel to prioritize cases that involved landowners facing eminent domain. FERC has also created a helpline and webpage for landowners dealing with natural gas projects.

But do these quick fixes actually address the inequities that undergird the FERC process and favor fossil fuel companies? Commissioner Richard Glick, for one, is skeptical, as he expressed in his dissent on the Jordan Cove Order.

“We’ve heard a lot recently about how the Commission is willing to bend over backwards to accommodate landowners,” he wrote. “Except we never actually see it.

FERC likely wants to show they are actively working to change their process to make it fairer to landowners. Perhaps Chatterjee directed the Commission to act swiftly on the Jordan Cove rehearing requests because the Constitutionality of tolling orders is being questioned right now, and because of the large number of landowners potentially facing eminent domain in this case. But, as Glick points out, the Commission could have demonstrated its support of landowners by not allowing eminent domain until Pembina acquires all of the necessary permits.

“…one would have thought that the Commission would have at least taken into account the considerable uncertainty surrounding the project before enabling the use of eminent domain for a project that may never be built,” Glick wrote. “The absence of any such discussion is hard to square with [FERC’s] purported concern.”

Congressional Support

Finally, Democrats in Congress have introduced legislation that would force FERC to rule on rehearing requests within 90 days. The title of the bill, ‘‘Landowners’ Right to Due Process in Rehearings at FERC Act of 2020’’, doesn’t exactly roll off the tongue, but it has important implications for landowners facing eminent domain.

Introduced by Rep. Tom Malinowski (D-N.J.), H.R. 6982 would impose a firm 90-day timeline by which FERC must rule on a rehearing request.

The court case, the Subcommittee’s work, and the Congressional legislation are all important steps that could make the FERC process more equitable, and they would not be happening without the hard work and persistence of affected landowners.

The work being done in Pennsylvania, Virginia, Oregon, and elsewhere matters. I hope this post underscores the importance of our collective efforts.

Stay safe, Everyone.

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