Opinions of the United
1995 Decisions States Court of Appeals
for the Third Circuit
8-9-1995
Columbia Gas v Tarbuck
Precedential or Non-Precedential:
Docket 94-3643
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Recommended Citation
"Columbia Gas v Tarbuck" (1995). 1995 Decisions. Paper 213.
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UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
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No. 94-3643
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COLUMBIA GAS TRANSMISSION
CORPORATION
v.
MICHAEL D. TARBUCK,
Appellant
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On Appeal from the United States District Court
for the Western District of Pennsylvania
(D.C. Civil No. 93-cv-02112)
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Argued Wednesday, June 28, 1995
BEFORE: HUTCHINSON, ROTH and GARTH, Circuit Judges
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(Opinion filed August 9, l995)
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Sanford S. Finder (Argued)
Finder, Allison & Graham
66 West Wheeling Street
Washington, Pennsylvania 15301
Attorney for Appellant
Harry C. Bruner Jr. Kevin C. Abbott
Columbia Gas Transmission Deborah P. Powell (Argued)
Corp. Carolyn Holtschlag Allen
P.O. Box 1273 Thorp, Reed & Armstrong
Charleston, WV 25325 One Riverfront Center
Pittsburgh, Pennsylvania 15222
1
Attorneys for Appellee
2
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OPINION OF THE COURT
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GARTH, Circuit Judge:
Michael Tarbuck appeals the district court's order of
October 14, 1994, which permanently enjoined Tarbuck from
encroaching on rights of way owned by Columbia Gas Transmission
Corporation. Tarbuck argues that the amount in controversy
between Columbia and himself does not exceed $50,000 as required
by 28 U.S.C. § 1332.
The district court found that Columbia owned two fifty
foot rights of way over Tarbuck's property and that it would cost
Tarbuck $4,000 to remove the overburden which had been placed by
Tarbuck on the rights of way. Tarbuck argues that $4,000 is the
amount in controversy. The Supreme Court's decision in Glenwood
Light Co. v. Mutual Light Co., 239 U.S. 121 (1915), however,
settled that in diversity suits for injunctions the cost of
compliance is not the definitive measure of the amount in
controversy. Rather, we measure the amount in controversy by the
value of the rights which the plaintiff seeks to protect.
Because the value to Columbia of protecting the rights
of way by this action is alleged to be in excess of the
jurisdictional minimum and the actual value to Columbia is not
legally certain to be less than the jurisdictional threshold, we
conclude that federal jurisdiction exists. Accordingly, we will
affirm the district court's judgment in favor of Columbia. In
3
doing so, we hold that the district court had jurisdiction under
28 U.S.C. § 1332 and that Columbia's rights of way are indeed
fifty feet wide.
I.
Michael Tarbuck owns two parcels of land adjacent to
Route 19 in Southwestern Pennsylvania. Pursuant to two separate
deeds, Columbia owns rights of way across the parcels to operate
a twenty inch natural gas pipeline. In December 1993, Columbia
sought a preliminary and a permanent injunction, requiring
Tarbuck to remove the overburden on the rights of way (i.e. the
three to six feet of excess topsoil which Tarbuck placed on
Columbia's rights of way). Columbia also sought an order
preventing Tarbuck from placing any further topsoil on the
easements.
In his answer, Tarbuck denied any encroachment, denied
that Columbia's right of way was fifty feet in width, and claimed
that the district court lacked jurisdiction because the amount in
controversy did not exceed $50,000.
To sustain its claim to diversity
jurisdiction,1Columbia introduced the following evidence which
the district court accepted. Columbia engineers testified that
the overburden placed additional pressure on the pipe which could
result in a possible rupture. Further, the engineers testified
1
For purposes of diversity, Columbia is a citizen of Delaware
and West Virginia. Tarbuck is a citizen of Pennsylvania.
4
that the overburden interfered with instruments used in periodic
federally mandated inspections of the protective coating of the
pipeline. The district court recognized that if the pipeline were
to leak, the escaping gas could migrate to a nearby building or a
nearby road and explode, causing significant personal and
property damage. The district court also concluded that Columbia
was presently violating the applicable federal regulations and
thus could not continue to operate the pipeline under these
conditions indefinitely.
The district court also determined the following. It
would cost approximately $4,000 for Tarbuck to remove the excess
cover. Alternatively, it would cost Columbia $100,000 to raise
the pipe to the appropriate level within the existing right of
way or $1,000,000 to relocate the pipeline to different property.
Neither party presented any evidence as to the value of the
rights of way nor the value of Tarbuck's land whether or not
burdened by the rights of way.
Based on these facts, the district court concluded that
the amount in controversy exceeded $50,000. It further concluded
that Tarbuck had encroached on the rights of way by placing
additional topsoil over the pipeline and entered a permanent
injunction requiring the removal of the overburden.
Turning to the width of the rights of way, the district
court found that Columbia's predecessor in interest obtained the
easements in the 1940s by two deeds. While one deed expressly
provided for a fifty foot right of way, the other deed stated no
width.
5
Columbia introduced evidence that it had regularly
mowed twenty five feet to either side of its pipeline. Further,
it used the whole fifty feet in 1981 to replace part of the pipe.
Finally, Columbia's engineers testified that Columbia needed
fifty feet to maintain or repair the line because occupational
safety regulations required that Columbia slope the excavation
and place equipment safely around the stretch of pipe being
repaired.
Tarbuck was on notice of Columbia's claim to fifty feet
before he acquired the property. Three months before purchasing
the property in April 1991, Tarbuck tacitly acknowledged the
existence of a fifty foot right of way when he sought information
on the building restrictions imposed by the rights of way.
Representatives of Columbia marked the location of the pipeline
with flags for Tarbuck and completed the Location of Gas Lines
form which he signed. The Columbia form Tarbuck signed
explicitly stated that the rights of way were fifty feet in
width.
Based on this evidence, the district court concluded
that each of the rights of way was fifty feet in width.
II.
The principal issue on appeal is whether the amount in
controversy exceeds $50,000. 28 U.S.C. § 1332 provides that:
The district courts shall have original
jurisdiction of all civil actions where the
matter in controversy exceeds the sum or
6
value of $50,000, exclusive of interest and
costs, and is between . . . citizens of
different States . . . .
Tarbuck argues that we must measure the amount in controversy by
reference to the cost ($4,000) of removing the overburden.
Columbia principally contends that the appropriate measure of the
jurisdictional amount is either the cost of the injuries which
could result if the pipeline leaked or the cost of possible
federal fines that could be imposed. At oral argument, Columbia,
citing Glenwood Light Co. v. Mutual Light Co., 239 U.S. 121
(1915), additionally claimed that the value of maintaining its
rights of way without interference from Tarbuck must be
considered in determining the jurisdictional amount in
controversy.
The amount in controversy is measured by reference to
the value of the rights which Columbia possesses by virtue of the
rights of way. We hold that because it is not legally certain
that the value of these rights is less than $50,000, section 1332
was satisfied, thereby meeting federal jurisdictional
requirements.
A party who invokes the jurisdiction of the federal
courts has the burden of demonstrating the court's jurisdiction.
McNutt v. General Motors Acceptance Corp., 298 U.S. 178, 189
(1936). In diversity cases, we generally accept a party's good
faith allegation of the amount in controversy, but where a
defendant or the court challenges the plaintiff's allegations
regarding the amount in question, the plaintiff who seeks the
7
assistance of the federal courts must produce sufficient evidence
to justify its claims. Burns v. Massachusetts Mutual Life
Insurance Co., 820 F.2d 246, 248 (8th Cir. 1987).
The test for determining the amount in controversy in
diversity cases was established by the Supreme Court in St. Paul
Mercury Indemnity Co. v. Red Cab. Co., 303 U.S. 283 (1938).
The rule governing dismissal for want of
jurisdiction in cases brought in the federal
court is that, unless the law gives a
different rule, the sum claimed by the
plaintiff controls if the claim is apparently
made in good faith. It must appear to a
legal certainty that the claim is really for
less than the jurisdictional amount to
justify dismissal. The inability of
plaintiff to recover an amount adequate to
give the court jurisdiction does not show his
bad faith or oust the jurisdiction. Nor does
the fact that the complaint discloses the
existence of a valid defense to the claim.
But if, from the face of the pleadings, it is
apparent, to a legal certainty, that the
plaintiff cannot recover the amount claimed,
or if, from the proofs, the court is
satisfied to a like certainty that the
plaintiff never was entitled to recover that
amount, and that his claim was therefore
colorable for the purpose of conferring
jurisdiction, the suit will be dismissed.
Id. at 288-89 (emphasis added and footnotes omitted). Red Cab
gave rise to two jurisdictional principles. First, dismissal is
appropriate only if the federal court is certain that the
jurisdictional amount cannot be met; the reasonable probability
that the amount exceeds $50,000 suffices to vest the court with
jurisdiction. Second, the ultimate failure to prove damages over
$50,000 does not belatedly divest the federal court of
jurisdiction unless the proofs at trial demonstrate that the
8
plaintiff never had a colorable claim that exceeded $50,000. In
that latter circumstance, the case will be dismissed. Jones v.
Knox Exploration Corp., 2 F.3d 181 (6th Cir. 1993); Ehrenfeld v.
Webber, 499 F. Supp. 1283, 1294 (D. Me. 1980).2
Where the plaintiff in a diversity action seeks
injunctive or declaratory relief, the amount in controversy is
often not readily determinable. Under those circumstances, the
amount in controversy is determined by "the value of the object
of the litigation." Hunt v. Washington Apple Advertising Comm'n,
432 U.S. 333, 347 (1977); McNutt v. General Motors Acceptance
Corp., 298 U.S. 178, 191 (1936). Unfortunately, this phrase has
proven less than clear in its application to the many different
claims for equitable relief that have arisen out of our diversity
jurisdiction. 1 James Wm. Moore, Moore's Federal Practice § 0.95
(2d ed. 1995).
The case which most closely approximates the current
case is Glenwood Light Co. v. Mutual Light Co., 239 U.S. 121
(1915). Glenwood Light sought the removal of Mutual Light's
poles and wires, which had been constructed adjacent to
Glenwood's poles and wires in a manner which endangered the
operation and maintenance of Glenwood's facilities. The district
court found that the removal of the encroaching wires would cost
$500, well below the then $3,000 jurisdictional minimum, and
2
In a substantially different context, we recently held that a
contract which limits liability to $50,000 did not satisfy the
amount in controversy. Valhal Corp. v. Sullivan Associates,
Inc., 44 F.3d 195, 209 (3d Cir. 1995). But see Valhal Corp. v.
Sullivan Associates, Inc., 48 F.3d 760 (3d Cir. 1995) (statement
sur denial of petition for rehearing).
9
dismissed the case for lack of jurisdiction. The Supreme Court
disagreed.
We are unable to discern any sufficient
ground for taking this case out of the rule
applicable generally to suits for injunction
to restrain a nuisance, a continuing
trespass, or the like, viz., that the
jurisdictional amount is to be tested by the
value of the object to be gained by
complainant. The object of the present suit
is not only the abatement of the nuisance,
but (under the prayer for general relief) the
prevention of any recurrence of the like
nuisance in the future. . . .
The District court erred in testing the
jurisdiction by the amount that it would cost
defendant to remove its poles and wires where
they conflict or interfere with those of
complainant, and replacing them in such a
position as to avoid the interference.
Complainant sets up a right to maintain and
operate its plant and conduct its business
free from wrongful interference by defendant.
. . . The relief sought is the protection of
that right, now and in the future, and the
value of that protection is determinative of
jurisdiction.
Id. at 125-26.3
Glenwood Light disposes of Tarbuck's argument that the
cost of removing the overburden is the appropriate measure of the
3
We have previously applied Glenwood Light and found
jurisdiction where discharge from an upstream coal plant created
a nuisance and continuing trespass to downstream property even
though the riparian owner had not yet been injured in excess of
the jurisdictional minimum and the cost of abatement had not been
settled. Kelly v. Leigh Nav. Coal Co., 151 F.2d 743, 745 (3d
Cir. 1945), cert. denied, 327 U.S. 779 (1946). "It is well
settled that in an action of this nature, the jurisdictional
amount is to be calculated on the basis of the property right
which is being injured. If that property right has a value in
excess of $3,000 [the previous jurisdictional threshold] the
Federal Court has jurisdiction of such a diversity suit even
though the plaintiff had not suffered $3,000 damage at the time
suit was instituted." Id. at 746.
10
amount in controversy. In Glenwood Light, the Court rejected
Mutual Light's claims that the $500 cost of removing its
encroaching poles and wires was the amount in controversy. We
similarly reject the argument advanced here by Tarbuck that the
$4,000 cost of removing the overburden is the amount in
controversy in this case.
In Glenwood Light, the defendant had not questioned
that the value of the right identified by the Court -- "a right
to maintain and operate its plant and conduct its business free
from wrongful interference by the defendant" -- exceeded the
jurisdictional minimum. Consequently, the Court concluded that
federal jurisdiction existed without determining the value of
Glenwood Light's rights. Here, however, Tarbuck has argued that,
even if the measure is not his cost of compliance, the value of
the rights of way or the value of obtaining the injunction is
less than $50,000.
III.
The record here discloses the cost of two alternatives
which Columbia might pursue to operate its pipeline without the
removal of the overburden or without a fifty foot wide right of
way. Because Tarbuck had deposited additional soil on the rights
of way, Columbia's pipeline, which should have been approximately
three feet from the surface is now located seven feet beneath the
surface. Thus, as one alternative, Columbia could raise the pipe
to the proper depth within the existing rights of way at a cost
which the district court found to be $100,000. As a second
11
alternative, Columbia could reroute the pipe on different
property at a cost which the district court found to be
$1,000,000.
The cost of either alternative clearly exceeds the
jurisdictional minimum. No feasible lower cost alternative to
obtaining the injunction is presented on this record. Thus,
jurisdiction exists under 28 U.S.C. § 1332.
At oral argument, Tarbuck argued that Columbia could
have entered the right of way and removed the overburden itself.
Because Columbia, in doing so, would have had to remain within
the rights of way (the width of one of which had yet to be
judicially determined when this action commenced) and would have
had to dispose of the topsoil it removed, such an action would
almost certainly cost more than $4,000. However, we cannot say
that Tarbuck was unreasonable in suggesting that the overburden
removal by Columbia might still cost less than $50,000.
Tarbuck's calculations however ignore the full measure
of relief which Columbia seeks. Columbia seeks not only the
removal of the excess topsoil but it also seeks an order
preventing any future encroachment. To paraphrase Glenwood
Light, "The object of the present suit is not only the [removal
of the overburden], but . . . the prevention of any recurrence of
the like [encroachment] in the future. . . . The relief sought is
the protection of that right, now and in the future, and the
value of that protection is determinative of jurisdiction." 239
U.S. at 125-26.
12
Given Tarbuck's vigorous defense of this suit and his
repeated failures to comply with Columbia's requests that he
cease interfering with the rights of way before the suit began,
we do not doubt that the injunction sought by Columbia is an
integral part of the controversy in this case.4
We further note that once Tarbuck denied that
Columbia's rights of way were fifty feet wide, the width of the
rights of way became an essential part of the controversy.
Columbia contends that it cannot properly maintain its lines
without fifty feet in which to make repairs. Any lesser amount
would cause Columbia to be out of compliance with state and
federal occupational safety regulations. Columbia substantiates
its claim by the unchallenged testimony that it used the whole
fifty feet to repair the pipeline in 1981. If the district court
were to have determined that Columbia owned less than fifty feet,
Columbia would apparently have been forced to obtain the
additional footage or reroute its pipeline.
Tarbuck claimed at oral argument that Columbia could
have obtained the necessary additional width by eminent domain
for less than $50,000, but there is no evidence in the record to
substantiate his claim. Nor is there any evidence from which we
could conclude that eminent domain proceedings presented a timely
alternative to Columbia's suit.
4
This does not suggest that a litigant may always meet the
amount in controversy simply by requesting an injunction which
prevents the recurrence of an allegedly impermissible trespass or
nuisance. Such recurrence must not be speculative and the
alternatives to the injunction must still exceed $50,000.
13
Our examination of the record does not disclose any
additional means by which Columbia could operate its lines within
the parameters of the applicable federal regulations.
Consequently, we cannot say to a legal certainty that the cost of
any alternatives available to Columbia is less than $50,000.
Hence, we have federal jurisdiction over Columbia's claims under
28 U.S.C. § 1332.5
We need not reach Columbia's speculative claims that
the damage that might result from a leak or that the fines it
might have to pay in administrative proceedings would exceed
$50,000. These claims present Columbia's conjecture, and we will
not ordinarily consider such speculative arguments in determining
the amount in controversy. See Kheel v. Port of New York Auth.,
457 F.2d 46, 49 (2d Cir.) ("[T]he jurisdictional test is
applicable to that amount that flows directly and with a fair
degree of probability from the litigation, not from collateral or
speculative sources."), cert. denied, 409 U.S. 983 (1972); see
also Healy v. Ratta, 292 U.S. 263, 267 (1934) (refusing to
consider the collateral effects of the judgment on other claims
or other plaintiffs in determining the jurisdictional amount).
IV.
Having determined that we have jurisdiction, we turn to
Tarbuck's claim on the merits that the right of way over one of
his parcels was less than fifty feet in width. Under
5
Because we conclude that we have jurisdiction under § 1332, we
need not consider Columbia's claims that we have jurisdiction
under 28 U.S.C. § 1331 by virtue of the controversy's
relationship to the National Gas Act, 15 U.S.C. § 717-717z.
14
Pennsylvania law, ambiguous easements are construed to provide
the grantee the "`reasonable and necessary' use of the right of
way within the purpose of the easement and the intentions of the
original parties to the grant." Zettlemoyer v. Transcontinental
Gas Pipeline Corp., 657 A.2d 920, 926 (Pa. 1995) (internal
citations omitted). Under this standard, we have little
difficulty affirming the district court's determination that the
deed, which did not expressly state a width, nonetheless granted
Columbia fifty feet.
The original deed expressly stated the purpose of the
grant -- the operation of a pipeline. Columbia introduced
testimony that it could not properly maintain or repair the
pipeline without twenty five feet of work space to either side of
the pipeline. Consistent with this assertion, Columbia has
periodically mowed the full width of fifty feet and used the full
fifty feet, when it was obliged to replace part of the pipe in
1981. Moreover, Tarbuck acknowledged the existence of a fifty
foot right of way in February 1991 when he signed a Columbia form
which listed the restrictions imposed on the use of the property
as a result of the right of way.
This evidence confirms that fifty feet is the
reasonable and necessary width needed to operate a twenty inch
gas pipeline. See Columbia Gas Transmission Corp. v. Large, 619
N.E.2d 1215 (Ohio Misc. 1992) (finding fifty feet to be the
appropriate width); Roebuck v. Columbia Gas Transmission Corp.,
386 N.E.2d 1363 (Ohio. App. 1977) (same). The record fully
supports the district court's conclusion "that the entire right-
15
of-way granted to Columbia is 50 feet wide," App. at 314, whether
considered as a finding of fact, to which we would defer, or as a
mixed question of law or fact, over which we have plenary review.
Zettlemoyer, 657 A.2d at 926. We are satisfied the district
court did not err; hence, we affirm.
V.
Because the cost of the alternatives which would permit
Columbia to continue to operate its business without interference
and without obtaining a permanent injunction exceed $50,000, we
conclude that the amount in controversy satisfies our
jurisdictional requirement. On the merits, we will affirm the
district court's judgment that Columbia's rights of way are both
fifty feet wide.
16