Columbia Gas v. Tarbuck

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Precedential or Non-Precedential: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
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http://digitalcommons.law.villanova.edu/thirdcircuit_1995/213

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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
 ----------

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.

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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.

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 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.

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 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.

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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.

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