East Tennessee Natural Gas Co. v. Sage

[2]: 1  Congress amended the NGA in 1947 to authorize companies with a FERC-issued certification of public convenience and necessity the right to exercise eminent domain in order to acquire necessary right-of-ways.

[1]: 819 In December 2002, having failed to negotiate easements for over eighty tracts, East Tennessee Natural Gas sought orders of condemnation in the Western District of Virginia.

[1]: 820 Because the NGA is silent as to the question of immediate possession, the company asked the district court to use its "inherent equitable power" to grant the relief sought.

[1]: 820  For the immediate possession motions, the district court used the preliminary injunction test in a now-overruled Fourth Circuit case, Blackwelder Furniture Co. of Statesville v.

[1]: 820 The landowners appealed to the Fourth Circuit, conceding that the gas company had a legal right to take the easements, but challenging the decision to grant the preliminary injunctions prior to determinations of just compensation.

After looking at Rule 71A's legislative history, the court concluded that it contained no language prohibiting condemnors from pursuing other available procedures to "possession prior to the entry of final judgment.

[1]: 823  This determination, that a property interest "distinct from legal ownership" The court denied the petitioners' argument that general principles of equity were inapplicable "because equitable relief in the form of immediate possession is barred in a condemnation case.

[1]: 823  Further, the court rejected the petitioners' argument that, because statutes granting condemnation powers are to be strictly construed, equity could not be invoked by pointing to prior Fourth Circuit precedent.

And without this mandatory relief, ETNG would face other irreparable harm such as increased construction costs and losses from its breach of gas supply contracts.

[9]: 290 Only the Seventh Circuit, in an opinion predating Sage, has held that courts could not exercise equitable relief to provide gas companies with immediate possession.

[3][9]: 290  On one hand, it has been argued that the Northern Border case set a high bar for what substantive right a NGA condemnor needs to be granted immediate possession.

[3] In 2019, landowners in a case called Mountain Valley Pipeline v. 6.56 Acres argued that the Fourth Circuit should overrule Sage because the Natural Gas Act does not allow for immediate possession.