State of New York OPINION
Court of Appeals This opinion is uncorrected and subject to revision
before publication in the New York Reports.
No. 29
In the Matter of National Fuel
Gas Supply Corporation,
Appellant,
v.
Joseph A. Schueckler et al.,
Respondents,
et al.,
Respondents.
Eamon P. Joyce, for appellant.
Gary A. Abraham, for respondents.
Niskanen Center, amicus curiae.
STEIN, J.:
In 2017, the Federal Energy Regulatory Commission issued a certificate of public
convenience and necessity to petitioner National Fuel Gas Supply for its proposed
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construction of a 99-mile natural gas pipeline spanning from Pennsylvania to Western New
York. We hold that this certificate of public convenience and necessity—which did not
condition National Fuel’s eminent domain power on receipt of a water quality certification
and which remained valid and operative at all relevant times despite the New York State
Department of Environmental Conservation’s intervening denial of National Fuel’s
application for such a certification—exempted National Fuel from the public notice and
hearing provisions of article 2 of the Eminent Domain Procedure Law (EDPL) in
accordance with EDPL 206 (A). We, therefore, reverse the order of the Appellate Division.
I.
The question before us distills to whether the certificate of public convenience and
necessity issued by the Federal Energy Regulatory Commission (FERC) to National Fuel
satisfies EDPL 206 (A) so as to entitle National Fuel to exercise eminent domain over the
land in dispute without undertaking additional review of the pipeline’s public benefit. If
satisfied, EDPL 206 (A) excuses compliance with various provisions of EDPL article 2
where a proposed condemnor has successfully completed a review of the project’s public
benefit and use before a state, federal, or local agency. Thus, we begin our analysis with a
review of FERC’s authority to issue such certificates under the federal Natural Gas Act, as
well as the requirements of the EDPL.
A. The Natural Gas Act
The Natural Gas Act (NGA) regulates the interstate sale and transport of natural gas
(see 15 USC § 717 [b]) and “confers upon FERC exclusive jurisdiction over the
transportation and sale of natural gas in interstate commerce for resale” (Schneidewind v
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ANR Pipeline Co., 485 US 293, 300-301 [1988]). Prior to “the construction or extension
of any facilities” for the transportation or sale of natural gas, a company must have “in
force . . . a certificate of public convenience and necessity issued by [FERC] authorizing
such acts or operations” (15 USC § 717f [c] [1] [a]; see Schneidewind, 485 US at 302-
303). FERC awards such a certificate when it determines that the applicant “is able and
willing properly to do the acts and to perform the service proposed and to conform to . . .
[federal] regulations” and when “the proposed . . . construction . . . is or will be required
by the present or future public convenience and necessity” (15 USC § 717f [e]). In deciding
whether to issue a certificate of public convenience and necessity, FERC considers “all
factors bearing on the public interest” (Atlantic Refining Co. v Public Serv. Comm’n of
N.Y., 360 US 378, 391 [1959]), including the applicant’s financial resources; public
demand; the expected impact on property values, community development, tax revenue,
and employment; the environmental impacts of the project;1 and any potential adverse
effects (see Certification of New Interstate Natural Gas Pipeline Facilities, 88 FERC ¶
61227 [Sept 15, 1999], clarified 90 FERC ¶ 61128 [Feb 9, 2000], further clarified 92 FERC
¶ 61094 [July 28, 2000]; Minisink Residents for Envtl. Preserv. and Safety v F.E.R.C., 762
F3d 97, 102 [DC Cir 2014]). FERC “will approve an application for a certificate only if
the public benefits from the project outweigh any adverse effects” (88 FERC ¶ 61227,
61750).
1
In connection with applications for certificates of public convenience and necessity under
the NGA, FERC acts as the lead agency “for the purposes of coordinating all applicable
Federal authorizations and for the purposes of complying with the National Environmental
Policy Act” (15 USC § 717n [b] [1]).
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FERC may “attach to the issuance of the certificate and to the exercise of the rights
granted thereunder such reasonable terms and conditions as the public convenience and
necessity may require” (15 USC § 717f [e]). Furthermore, FERC “must ensure that the
proposed pipeline complies with all applicable federal, state, and local regulations”
(Millennium Pipeline Co., L.L.C. v Seggos, 860 F3d 696, 698 [DC Cir 2017]). As relevant
here, the NGA does not abridge the rights of states to establish water quality standards
under the Clean Water Act (see 15 USC § 717b [d] [3]; 33 USC § 1313; Delaware
Riverkeeper Network v Secretary Pennsylvania Dept. of Envtl. Protection, 833 F3d 360,
368 [3d Cir 2016]). Thus, an applicant for a federal certificate of public convenience and
necessity in connection with a project that “may result in any discharge into the navigable
waters,” must provide FERC with “a certification from the State in which the discharge
. . . will originate, . . . [indicating] that any such discharge will comply with the applicable
provisions” of the state water quality standards (33 USC § 1341 [a] [1]).
With regard to eminent domain, the NGA provides that, when a certificate of public
convenience and necessity is granted by FERC and the “holder” thereof “cannot acquire
by contract . . . the necessary right-of-way to construct, operate, and maintain a pipe line
. . . , it may acquire the same by the exercise of the right of eminent domain” (15 USC §
717f [h]). Under the NGA, a certificate holder may commence an eminent domain
proceeding in either the applicable federal district court or a state court, with some
limitations (15 USC § 717f [h]).
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B. The Eminent Domain Procedure Law
In New York State courts, the EDPL provides the “exclusive procedure by which
property shall be acquired by exercise of the power of eminent domain” (EDPL 101).
“Generally, a two-step process is required under the [EDPL] before a condemnor obtains
title to property for public use” (Hargett v Town of Ticonderoga, 13 NY3d 325, 328 [2009];
see Matter of City of New York [Grand Lafayette Props. LLC], 6 NY3d 540, 543 [2006]).
First, the condemnor “makes a determination to condemn the property after invoking the
hearing and findings procedures” of EDPL article 2 (Hargett, 13 NY3d at 328). This entails
various public procedures, including a public hearing “to inform the public and to review
the public use to be served by a proposed public project and the impact on the environment
and residents of the locality” (EDPL 201). The condemnor must then render findings
regarding the project, including, its (1) public use, benefit, or purpose; (2) approximate
location; (3) general effect on the environment and nearby residents; and (4) such other
factors as the condemnor considers relevant (see EDPL 204 [B]). “The principal purpose
of article 2 of the EDPL . . . is to [e]nsure that [a condemnor] does not acquire property
without having made a reasoned determination that the condemnation will serve a valid
public purpose” (Matter of Jackson v New York State Urban Dev. Corp., 67 NY2d 400,
417-418 [1986] [emphasis added]).
“A number of alternative procedures that a condemnor may undertake are outlined
in EDPL 206, any one of which exempts the condemnor from compliance with article 2”
(Grand Lafayette Props. LLC, 6 NY3d at 546-547). In particular, EDPL 206 (A) provides
that:
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“The condemnor shall be exempt from compliance with the
provisions of . . . article [2] when:
(A) pursuant to other state, federal, or local law or regulation
it considers and submits factors similar to those enumerated
in [EDPL 204 (B)], to a state, federal or local governmental
agency, board or commission before proceeding with the
acquisition and obtains a license, a permit, a certificate of
public convenience or necessity or other similar approval
from such agency, board, or commission”
(emphasis added). Thus, under this provision, a condemnor need not duplicate public
benefit review undertaken by a governmental agency, so long as the review considers
factors similar to those relevant to the EDPL eminent domain analysis and results in
approval of the project.
Once the prerequisites of article 2 are satisfied by either compliance with the hearing
procedures or the application of an exemption, “the condemnor must seek the transfer of
title to the property by commencing a judicial proceeding known as a vesting proceeding
pursuant to EDPL article 4” (Hargett, 13 NY3d at 328). In conjunction with the vesting
proceeding, the condemnor must file, among other things, “a statement providing either the
compliance with the requirements of article [2] of th[e] [EDPL], . . . or a statement
providing the basis of exemption from article [2]” (EDPL 402 [B] [3] [a]), an explanation
of the public use, benefit or purpose for which the property is required, and a request that
the court direct entry of an order authorizing the filing of an acquisition map, upon which
title to the property shall vest in the condemnor (see EDPL 402 [B] [3] [d], [B] [3] [e]).
Meanwhile, if a condemnor issues public use findings and a determination under
EDPL 204, an aggrieved party may seek judicial review in the relevant Appellate Division
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Department (see EDPL 207 [a]). Judicial review is limited to whether (1) the proceeding
conformed with the federal and state constitutions; (2) the proposed acquisition is within
the condemnor’s statutory jurisdiction or authority; (3) the condemnor’s determination and
findings were made in accordance with the appropriate statutory procedures; (4) a public
use, benefit or purpose will be served by the proposed condemnation (see EDPL 207 [C]).
Furthermore, such judicial review must be completed “as expeditiously as possible and
with lawful preference over other matters” (EDPL 207 [B]).
II.
Turning to the appeal before us, in 2017, National Fuel commenced this EDPL
vesting proceeding seeking to acquire, by eminent domain, temporary construction
easements and a 50-foot wide permanent easement over certain property owned by
respondent landowners Joseph and Theresa Schueckler in order to facilitate construction
and operation of a natural gas pipeline.2 National Fuel asserted that it had unsuccessfully
attempted to negotiate a purchase of the easement,3 and that compliance with article 2 of
the EDPL was satisfied through the statutory exemption set forth in EDPL 206 (A) based
2
Respondent Joseph Schueckler passed away during the pendency of this appeal.
However, the parties agree that substitution is not necessary inasmuch as the property was
owned by Joseph and Theresa as tenants by the entirety, and Joseph’s property interest
vested in any co-tenants by operation of law upon his death (see CPLR 1015 [b]; Matter of
Estate of Violi, 65 NY2d 392, 395 [1985]; Paterno v CYC, LLC, 46 AD3d 788, 789 [2d
Dept 2007]).
3
At each stage of the EDPL process, the condemnor must “make every reasonable and
expeditious effort to justly compensate [the landowner] . . . by negotiation and agreement”
(EDPL 301; see EDPL 303). Respondent landowners do not claim that National Fuel failed
to negotiate in good faith.
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upon FERC’s issuance of a certificate of public convenience and necessity for the project
under the NGA. National Fuel appended the FERC order issuing the certificate to its
petition.
Respondent landowners contested National Fuel’s EDPL petition, asserting that the
certificate was ineffective because, while it authorized National Fuel to construct and
operate the pipeline, such authority was conditioned upon “compliance with [certain]
environmental conditions,” including the requirement that, “[p]rior to receiving written
authorization . . . to commence construction of any [p]roject facilities, National Fuel shall
file with [FERC] documentation that it has received all applicable authorizations required
under federal law (or evidence of waiver thereof)” (emphasis in original). According to
respondents, this condition was not met—and the FERC certificate was therefore
invalidated—due to the subsequent denial of National Fuel’s application for a water quality
certification by the New York Department of Environmental Conservation (DEC).
In response, National Fuel conceded that DEC had denied its application. However,
National Fuel explained that it was seeking rehearing and clarification of the FERC order,
as well as a ruling that DEC had waived its authority to deny the water quality certification
by failing to timely decide National Fuel’s application within the one-year period the Clean
Water Act provides for review of such applications by state agencies (see 33 USC § 1341
[a] [1]).
Supreme Court granted National Fuel’s EDPL petition, concluding that it had “made
a prima facie showing of entitlement to the easements” based on the FERC certificate,
which “exempt[ed] [National Fuel] from the requirements of [a]rticle 2 of the EDPL.” That
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court rejected the landowners’ claim that the certificate was ineffective for eminent domain
purposes because it was conditional, observing that the certificate conditioned
“construction and operation of the pipeline”—as compared with the “issuance of the
certificate”—on various prerequisites. With regard to DEC’s denial, the court observed
that “the issue is not whether National Fuel has or will be able to obtain the necessary water
quality permits from DEC, but whether it may initiate eminent domain proceedings” and
that “water quality permits may be a precondition to pipeline construction, but not to the
initiation of eminent domain proceedings.” Thus, the court held, National Fuel was exempt
from the requirements of article 2 of the EDPL and was entitled to obtain the easements
through eminent domain.
Upon the landowners’ appeal, the Appellate Division—with two Justices
dissenting—reversed and dismissed National Fuel’s EDPL petition (167 AD3d 128 [4th
Dept 2018]). That Court reasoned that DEC’s denial of National Fuel’s application for a
water quality certification meant that “[National Fuel] no longer holds a qualifying federal
certificate for purposes of the EDPL 206 (A) exemption” (167 AD3d at 136). The
dissenting Justices would have affirmed the granting of National Fuel’s petition, generally
agreeing with Supreme Court’s rationale.4
4
During the pendency of the appeal before the Appellate Division, FERC ruled that DEC
had waived its authority to either grant or deny National Fuel’s application for a water
quality certification by failing to determine it within one year of submission, effectively
invalidating the denial for purposes of the FERC certificate. The Appellate Division
majority acknowledged FERC’s ruling, but declined to consider it because it was dehors
the record and was still subject to appellate review. The dissenting Justices would have
taken judicial notice of the intervening FERC ruling and observed that, even otherwise
accepting the majority’s analysis, the denial of the water quality certification no longer
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National Fuel appealed to this Court (see CPLR 5601 [a]).5
III.
Before this Court, National Fuel argues that the Appellate Division erroneously
concluded that DEC’s denial of its water quality certification application invalidated the
FERC-issued certificate of public convenience and necessity for purposes of EDPL 206
(A). Alternatively, National Fuel contends that the Appellate Division erred by failing to
take judicial notice of the intervening ruling by FERC that DEC waived its authority to
issue or deny a water quality certification. We agree with National Fuel on the first point
and, therefore, have no occasion to reach the second. The Appellate Division’s holding
that the FERC certificate did not demonstrate compliance with EDPL article 2 pursuant to
EDPL 206 (A) contravenes the express language of that provision, undermines the purpose
of the statutory exemption, and overlooks relevant federal case law concerning the effect
of the certificate of public convenience and necessity.
presented any impediment to the effectiveness of the FERC certificate at the time the
Appellate Division’s review was complete.
5
The Court of Appeals for the Second Circuit subsequently vacated DEC’s water quality
certification denial as lacking sufficient rational explanation, and that Court remitted the
matter to DEC for the limited purpose of explaining the basis of the agency’s decision (see
761 Fed Appx 68, 72 [2d Cir 2019]). The Second Circuit also observed that FERC and the
District of Columbia Circuit Court would have exclusive jurisdiction over National Fuel’s
claim that the DEC had waived its authority to issue a water quality certification, and that
National Fuel was “free to present any evidence of waiver to FERC in the first instance”
(id. at 72). According to the parties, upon remittal by the Second Circuit, DEC again denied
National Fuel’s application. Meanwhile, FERC denied requests for rehearing or a stay of
its waiver determination and reiterated that DEC’s failure to decide the application within
one year of its receipt resulted in a “waive[r of the agency’s] authority to issue a water
quality certification” (167 FERC ¶ 61007, ¶ 11 [April 2, 2019]).
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It is well settled that, “‘[w]hen presented with a question of statutory interpretation,
[a court’s] primary consideration is to ascertain and give effect to the intention of the
Legislature’” (Samiento v World Yacht Inc., 10 NY3d 70, 77-78 [2008], quoting Matter of
DaimlerChrysler Corp. v Spitzer, 7 NY3d 653, 660 [2006]). “‘[T]he clearest indicator of
legislative intent is the statutory text, [and] the starting point in any case of interpretation
must always be the language itself, giving effect to the plain meaning thereof’” (Kuzmich
v 50 Murray St. Acquisition LLC, 34 NY3d 84, 91 [2019], quoting Majewski v Broadalbin-
Perth Cent. School Dist., 91 NY2d 577, 583 [1998]). Generally, “courts should construe
unambiguous language to give effect to its plain meaning” (Matter of DaimlerChrysler
Corp., 7 NY3d at 660).
The text of EDPL 206 (A) requires that, in order to obtain the benefit of the statutory
exemption from article 2 procedures, a condemnor must establish that it “consider[ed] and
submit[ted] factors similar to those enumerated in [EDPL 204 (B)], to a state, federal or
local governmental agency, board or commission . . . and obtain[ed] a license, a permit, a
certificate of public convenience or necessity or other similar approval” (EDPL 206 [A]).
Here, National Fuel did exactly as the statute dictates; it submitted materials to FERC
concerning the public benefit, use, and need for the proposed pipeline. While the dissent
may question FERC’s resulting conclusion, it can hardly be disputed that FERC considered
each factor identified in EDPL 204 (B)—i.e., the public use, benefit or purpose to be
served; the approximate location of the project; the general effect of the proposed project
on the environment and residents; and such other relevant factors (see EDPL 204 [B]).
More specifically, FERC considered the positions of numerous stakeholders, including the
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DEC itself, and analyzed whether the pipeline project would have sufficient financial
support, adversely impact existing customers, meet new demand or provide other benefits
to the natural gas market, and whether and how the pipeline would impact landowners,
surrounding communities, and the natural environment. FERC prepared a 199-page
environmental assessment as part of its review, which involved consideration of public
comments and of various potential modifications of the proposal, and which took into
account how the project might affect—among other things—local “geology, soils, water
resources, wetlands, vegetation, fisheries, wildlife, threatened and endangered species,
land use, recreation, visual resources, cultural resources, socioeconomics, air quality,
noise, [and] safety.” FERC concluded that the project did “not constitute a major federal
action significantly affecting the quality of the human environment” and, thus, an
environmental impact statement was not required under the National Environmental Policy
Act.6 Following its lengthy review, FERC determined that the public benefits of the
pipeline project outweighed any adverse impacts and, accordingly, issued a certificate of
public convenience and necessity to National Fuel. This certificate was incontrovertibly
premised upon a meaningful review of substantial information, alternatives, and
viewpoints of various stakeholders, and FERC’s analysis focused largely on the factors
delineated in EDPL 204 (B). Given that FERC made a reasoned determination regarding
6
Approximately 69% of the pipeline will be co-located with existing pipeline and
powerline right-of-ways.
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the public benefit to be served, as envisioned by EDPL 204 (B), the certificate satisfied the
plain language of EDPL 206 (A).7
While it is true that the certificate of public convenience and necessity contains
numerous “conditions”—including, that of obtaining a water quality certificate and other
pre-construction conditions that might affect the ultimate completion of the project—these
conditions cannot reasonably be understood to render the certificate provisional for
purposes of eminent domain, as the dissent suggests (see dissenting op., at 11), inasmuch
as they are not conditions precedent to the validity of the certificate itself. Notably, the
certificate otherwise clearly delineates those circumstances in which FERC sought to
prevent National Fuel from taking a particular act until after some condition was satisfied.
Indeed, some of the “conditions” in the FERC certificate cannot be met without possession
of the land.8 FERC could have conditioned National Fuel’s eminent domain authority on
the completion of some act or obligation (see e.g. Mid Atl. Express, LLC v Baltimore
County, Md., 410 Fed Appx 653, 657 [4th Cir 2011]), but the “condition” that National
Fuel comply with various environmental requirements—including the receipt of a water
quality certification—“[p]rior to receiving written authorization . . . to commence
7
Insofar as we expressly conclude that FERC’s review did, in fact, consider all of the
relevant factors identified by EDPL 204 (B), the dissent’s assertion that our holding can be
read as authorizing a condemnor to obtain title to private land through the “mere issuance
of any government approval” or “by merely acquiring a local permit unrelated to the
environmental impact of the project” finds no support here (dissenting op., at 13).
8
Many of the “conditions” set forth in the certificate, such as the requirement that National
Fuel provide regular project reports to FERC during construction, are simply obligations
placed on National Fuel, not conditions precedent.
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construction” (emphasis added) does not, by its plain terms, curtail National Fuel’s right to
proceed with eminent domain in accordance with the EDPL. Thus, neither the EDPL nor
the terms of the FERC certificate preclude National Fuel from pursuing eminent domain
before all pre-construction conditions have been fulfilled.
Ultimately, since before commencement of the vesting proceeding, and continuing
to the present day, National Fuel has held a valid certificate of public convenience and
necessity issued by FERC—after extensive review of the factors set forth in EDPL 204
(B)—that does not qualify or condition its exercise of eminent domain upon receipt of a
water quality certification. Therefore, under the express terms of EDPL 206 (A), National
Fuel qualified for statutory exemption from EDPL article 2 procedures.
To reach a contrary conclusion, the Appellate Division majority looked beyond the
facial validity of the FERC certificate and analyzed National Fuel’s compliance with the
certificate’s conditions. However, the language of EDPL 206 (A) neither requires nor
authorizes any such analysis under these circumstances, and reasonably so. A requirement
that courts undertake extensive scrutiny of an agency’s public use review and findings—
rather than ascertaining, as the plain text of EDPL 206 (A) dictates, whether the agency
appropriately considered the factors of EDPL 204 (B)—would completely negate the
legislatively-intended benefits of EDPL 206 (A), including the avoidance of duplicative
review, the reduction of costs associated with the development of public works, and
efficient and timely resolution of condemnation claims (cf. EDPL 207 [B]). The objective
of EDPL 206 (A) is not to ensure that a project has “final unconditional approval” or a
“final green light” (dissenting op., at 4, 7) but, rather, to make certain that there has been
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sufficient review of the project’s public purpose and approval thereof by a governmental
agency. Thus, we are not persuaded that a limitation should be read into EDPL 206 (A)
requiring courts to inquire—after a public use determination has been rendered by an
agency—into the likelihood that a project will be completed based on any and all pending
conditions or permit applications.
To be sure, the Appellate Division’s concern that the power of eminent domain
should be exercised only for viable projects is legitimate; both our state and federal
constitutions permit the taking of property by eminent domain only for public use (see NY
Constitution art I, § 7; US Constitution, Fifth Amendment)9 and any exercise of eminent
domain involves a careful balancing of the interests of property owners, the community,
and the public use to be served (see EDPL 101). However, in enacting the statutory
exemption set forth in EDPL 206 (A), the legislature recognized that eminent domain is, at
its core, intended to advance public works and that, in connection with such public projects,
government agencies may often render determinations of public use that typically need not
be replicated. Where, as here, a state or federal agency has determined that a project serves
a public use, duplicative and exacting review of that determination would contravene the
statutory framework prioritizing efficient resolution of condemnation claims for the greater
public good (see EDPL 206 [A]).
Moreover, the legislature was aware of the risk that property might be taken through
the exercise of eminent domain for a public use that ultimately does not come to fruition,
9
Respondent landowners raise no constitutional challenge to the proceedings below.
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and it accounted for such a possibility in the EDPL. For example, if a condemnor abandons
a project for which property was acquired by eminent domain, EDPL 406 provides that
“the condemnor shall not dispose of the property or any portion thereof for private use
within ten years of acquisition without first offering the former fee owner of record . . . a
right of first refusal to purchase the property at the amount of the fair market value” (EDPL
406 [a]; see Bill Jacket, L 1977, ch 839, Letter from Milton Albert [July 5, 1977]). Thus,
the statutory framework provides a safeguard for property owners in the event of an
abandoned public use project, reflecting legislative awareness that an affirmative public
use determination under EDPL article 2 does not guarantee the success of such project.
In addition to reading language into EDPL 206 (A) that contradicts the statutory
text, an affirmance here would require us to adopt the mistaken proposition that DEC’s
denial of the water quality certification negated the FERC certificate of public convenience
and necessity issued to National Fuel. As already noted, although FERC may place
conditions on a certificate holder’s exercise of the eminent domain power (see e.g. Mid
Atl. Express, LLC, 410 Fed Appx at 657), this FERC certificate requires National Fuel to
demonstrate compliance with federal permitting requirements, including the Clean Water
Act, only prior to construction (see e.g. Delaware Riverkeeper Network v Fed. Energy
Regulatory Commn., 857 F3d 388, 398-399 [DC Cir 2017]; Transcontinental Gas Pipe
Line Co., LLC v Permanent Easement for 2.14 Acres, 2017 WL 3624250, *6, 2017 US
Dist LEXIS 134851, *19-*20 [ED Pa Aug. 23, 2017], affd 907 F3d 725 [3d Cir 2018], cert
denied __ US __, 139 S Ct 2639 [2019]; Constitution Pipeline Co., LLC v A Permanent
Easement for 0.67 Acres & Temporary Easement for 0.68 Acres in Summit, Schoharie
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County, N.Y., 2015 WL 1638477, *2, 2015 US Dist LEXIS 50548, *7 [ND NY Feb. 21,
2015]). National Fuel’s failure to satisfy this condition on construction of the pipeline prior
to initiation of the vesting proceeding does not invalidate the certificate of public
convenience and necessity for purposes of EDPL 206 (A) or nullify FERC’s determination
of public use embodied therein.10 A FERC order is final and effective as a matter of federal
law until it is stayed by FERC, itself, or an appropriate reviewing federal court (see 15
USC § 717r [c]; Tennessee Gas Pipeline Co. v Massachusetts Bay Transp. Auth., 2 F Supp
2d 106, 109 [D Mass 1998]) and, generally, compliance with a FERC-issued certificate is,
in the first instance, a question for FERC’s determination. Under the circumstances
presented here, where the certificate does not place a condition precedent on the holder’s
exercise of eminent domain, a collateral attack on the certificate or the condemnor’s
compliance therewith is not properly litigated in an EDPL proceeding (cf. Gas
Transmission Northwest, LLC v 15.83 Acres of Permanent Easement More or Less, located
in Morrow County, 126 F Supp 3d 1192, 1198 [D Or 2015]; Millennium Pipeline Co.,
10
Federal courts addressing similar conditions in FERC certificates of public convenience
and necessity, in connection with eminent domain proceedings commenced in federal
court, have consistently held such conditions may not operate as a shield against the
eminent domain power granted by the NGA (see e.g. PennEast Pipeline Co., LLC v
Permanent Easement of 0.06 Acres in Moore Twp., Northampton County, Pennsylvania,
2019 WL 4447981, *5, 2019 US Dist LEXIS 158149, *18-*20 [ED Pa Sept. 17, 2019];
Sabal Trail Transmission, LLC v 7.72 Acres in Lee County, Alabama, 2016 WL 3248666,
*4, 2016 US Dist LEXIS 77055, *14 [MD Ala June 8, 2016]; Gas Transmission Northwest,
LLC v 15.83 Acres of Permanent Easement More or Less, located in Morrow County, 126
F Supp 3d 1192, 1198 [D Or 2015]; Portland Nat. Gas Transmission Sys. v 4.83 Acres of
Land, 26 F Supp 2d 332, 335-336 [DNH 1998]; Tennessee Gas Pipeline Co. v 104 Acres
of Land More or Less, in Providence County of State of R.I., 749 F Supp 427, 433 [DRI
1990]; see also Millennium Pipeline Co., L.L.C. v Certain Permanent and Temporary
Easements, 777 F Supp 2d 475, 479 [WD NY 2011], affd 552 Fed Appx 37 [2d Cir 2014]).
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L.L.C. v Certain Permanent and Temporary Easements, 777 F Supp 2d 475, 481 [WD NY
2011], affd 552 Fed Appx 37 [2d Cir 2014]). To conclude otherwise would be inconsistent
with the carefully crafted EDPL framework.
Notably, this appeal illustrates the problems that would arise if courts were to begin
determining—independent of FERC and in the absence of a certificate that expressly places
conditions on the right to proceed with eminent domain—when and which conditions of a
FERC certificate of public convenience and necessity (or conditions imposed by other
agencies on construction of public works that have received what is the equivalent of an
affirmative determination of public benefit) must be satisfied prior to the commencement
of an EDPL proceeding. Here, at every level of the state court proceedings, intervening
FERC and federal court decisions have impacted the interplay between DEC’s denial of
the water quality certification and the FERC certificate. Further, it is impractical to litigate
in an EDPL proceeding whether a particular condition will be satisfied within the requisite
time for construction of the project pursuant to the FERC certificate. Although DEC denied
National Fuel’s application, it could have reconsidered if National Fuel had revised and
resubmitted its application, and DEC’s denial was, in any event, subject to federal judicial
review—which ultimately led to its vacatur by the Second Circuit Court of Appeals. Any
conclusion that this FERC certificate was rendered invalid or ineffective, or that the
pipeline project was effectively defeated, by the denial of the water quality certification
would be entirely speculative, as the intervening federal proceedings have demonstrated.
Of course, as the Appellate Division observed, the federal reservation of the right
of states to issue water quality certifications was intended to “continu[e] the authority of
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the State . . . to act to deny a permit and thereby prevent a Federal license or permit from
issuing to a discharge source within such State” (S.D. Warren Co. v Maine Bd. of Envtl.
Protection, 547 US 370, 380 [2006] [internal quotation marks and citation omitted]). Here,
however, while DEC retained authority to grant or deny National Fuel’s application for a
water quality certification (unless deemed waived), such authority did not extend either to
invalidating a previously issued FERC certificate of public convenience and necessity
where FERC placed no such conditions on the certificate’s effectiveness or to blocking
eminent domain that might otherwise properly proceed under the certificate and the EDPL.
It remains within FERC’s purview to determine the effect of the DEC’s denial on National
Fuel’s certificate of public convenience and necessity, and to stay or revoke the certificate
if it deems it appropriate to do so.
IV.
In sum, where, as here, a gas company holds a valid certificate of public
convenience or necessity from FERC for the proposed construction of a pipeline and that
certificate places no relevant conditions on the eminent domain power and has not been
stayed or revoked by FERC or a federal court properly reviewing its issuance, compliance
with article 2 is excused under EDPL 206 (A). In light of our conclusion, we have no
occasion to address whether the Appellate Division erred by declining to take judicial
notice of the FERC waiver determination, and we do not reach that issue. Respondent
landowners’ remaining arguments lack merit. Accordingly, the order of the Appellate
Division should be reversed, with costs, and the order of Supreme Court reinstated.
- 19 -
Matter of National Fuel Gas Supply Corp. v Schueckler
No. 29
RIVERA, J. (dissenting):
Petitioner National Fuel Gas Supply Corp. wants to build a transborder gas pipeline
across dozens of creeks and streams in Western New York, and to that end it sought
easements on land owned by respondents Joseph A. and Theresa F. Schueckler. The
Schuecklers refused to voluntarily sell their possessory use or full ownership rights to the
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-2- No. 29
Corporation. That might have been the end of the story, because if an owner refuses an
offer to purchase, the prospective buyer is generally left out in the cold (see Loretto v
Teleprompter Manhattan CATV Corp., 458 US 419, 435 [1982] [“The power to exclude
has traditionally been considered one of the most treasured strands in an owner’s bundle of
property rights”]; J.E. Penner, The “Bundle of Rights” Picture of Property, 43 UCLA L
Rev 711, 746-750 [1996]; Katrina M. Wyman, In Defense of the Fee Simple, 93 Notre
Dame L Rev 1, 11 [2017]). Not so here.
After the Schuecklers refused to sell part of their homestead land, the Corporation
commenced a proceeding to vest title in itself, invoking New York’s eminent domain
power to condemn private property for public use. However, because New York had not
completed its water quality certification assessment for the pipeline project, as required by
the federal Clean Water Act (see 33 USC § 1341 [a] [1]), amongst other outstanding
environmental impact reviews, the Corporation failed to provide complete information
regarding “the general effects of the proposed project on the environment and residents of
the locality” as required by New York’s Eminent Domain Procedure Law (EDPL
204 [B] [3]). Therefore, the Appellate Division properly held that the proceeding to vest
title was premature.
In concluding that the Corporation may rely on a Federal Energy Regulatory
Commission certificate to satisfy its burden under the EDPL, even though the certificate
expressly conditions the project on completion of additional federal and state mandatory
assessments with the potential to stop the project, the majority measures the certificate by
its title, the equivalent of “judging a book by its cover.” Metaphorically, and as a matter
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-3- No. 29
of law, no good can come from this. Indeed, the majority misinterprets the federal
regulatory process and the EDPL condemnation framework, and in so doing sanctions the
condemnation of private property for development projects that may never gain final
approval. I do not see how the public benefits from the premature taking of private land,
and therefore I dissent.
I.
The Parties and the Proposed Gas Pipeline Project
The Schuecklers, a married couple, resided upon and owned as tenants by the
entirety two hundred acres of forested property in Alleghany County in Western New York
State. National Fuel Gas Supply Corporation (“the Corporation”) is a large fossil fuel
company, and a subsidiary of the publicly traded National Fuel Gas Company. It intends
to build a pipeline (called “Northern Access”) stretching across ninety-nine miles of
Pennsylvania and New York. The pipeline’s capacity is intended to be used by Seneca
Resources, an affiliate of the Corporation, to transport natural gas, largely to Canada.
Construction will entail clear-cutting a seventy-five-foot-wide swath along the length of
the proposed pipeline, including a stretch across the middle of the Schueckler forested
property.
In accordance with the requirements of the National Gas Act (NGA), the
Corporation applied for and obtained a Federal Energy Regulatory Commission (FERC)
certificate of public convenience and necessity for the project (see 15 USC 717f [C]; 18
CFR § 157.1 et seq.). The Corporation then sought to purchase easements on the
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-4- No. 29
Schuecklers’ land. They refused the offer, and so the battle to keep their property from the
Corporation began.
II.
The FERC Certificate and Acquisition of Private Property under New York’s Eminent
Domain Law
To justify the exercise of the state’s power of eminent domain for an ostensibly
private commercial enterprise, the Corporation relied on the FERC certificate. The
majority concludes that this certificate is sufficient under the EDPL to support vesting title
in the Corporation to the Schueckler land. The majority’s analysis is flawed in at least two
respects. First, it assumes that this certificate grants final unconditional approval of a static
project. In fact, the certificate recognizes that the project is subject to additional evaluation
under the Clean Water Act, which grants New York the right to halt the project if it denies
the Corporation a water quality certification (WQC) based on the state’s preconstruction
environmental review. Second, the majority analysis turns on a misreading of the EDPL as
prohibiting judicial consideration of the underlying terms of this FERC certificate to
determine whether FERC granted approval after considering the factors set forth in EDPL
204 (B). That limitation on the court’s review power is in contravention of the legislative
purpose, the exclusive eminent domain condemnation procedure, and the condemnor’s
statutorily-fixed pre-acquisition burden, all of which make clear that a court must confirm
that the applicable statutory factors have been considered and addressed.
A. FERC Certificate of Public Convenience and Necessity
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-5- No. 29
The majority accurately summarizes the NGA and FERC’s statutory authority to
review gas pipeline applications, but fails to account for the fact that issuance of this FERC
certificate of public convenience and necessity is provisional and part of a dynamic
process. Indeed, the FERC certificate at issue here has gone through numerous and varied
pre- and post-filing design changes. As the certificate recounts, the project details were
subject to negotiation, amendment, clarification, and modifications, all in response to
FERC and the concerns of stakeholders. At the end of this stage of the process, FERC
issued a provisional certificate, which approved the Corporation’s application for its
proposed pipeline project, subject to “environmental and other conditions,” some of which
involve preconstruction assessments which, if unfavorable to the Corporation, may prevent
completion of the project.
In part, the changes to the early pipeline design reflect that this is a controversial
project that has garnered substantial opposition. According to the certificate, the pipeline
was opposed by numerous groups and stakeholders, who “question[ed] the need for the
[pipeline] because much of the project’s . . . service will be used to transport gas to
Canada,” such that it would “only . . . benefit [the Corporation’s affiliates’] shareholders,”
and argued “that the project imposes burdens on the U.S. public without providing
proportional benefits to U.S. consumers.”1
1
The numerous stakeholders who commented upon the proposed project during FERC
proceedings included the Allegheny Defense Project; the Town of Pendleton, New York;
the Pennsylvania Alliance for Clean Water and Air; and New York State’s Department of
Environmental Conservation, as well as numerous individuals.
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-6- No. 29
Stakeholders also criticized FERC’s handling of the project application, including,
with particular relevance to this appeal, FERC’s decision to forego preparation of an
Environmental Impact Statement, relying instead on its staff’s environmental assessment.
An “environmental impact statement” is “a detailed statement describing the
environmental impact of the proposed action”; under the National Environmental Policy
Act of 1969, an agency is required to create such a statement “upon proposing a ‘major
federal action’ that will ‘significantly affect the quality of the human environment’”
(Pogliani v U.S. Army Corps of Engineers, 306 F3d 1235, 1237 [2d Cir 2002], quoting 42
USC § 4332 [2] [C]). In contrast, an “environmental assessment” is “a concise public
document . . . that serves to,” among other things, “[b]riefly provide sufficient evidence
and analysis for determining whether to prepare an environmental impact statement or a
finding of no significant impact,” and to “[f]acilitate preparation of a statement when one
is necessary” (40 CFR § 1508.9). Various stakeholders challenged FERC’s decision as
legally incorrect and criticized the environmental assessment as based on incomplete
information.
Despite the objections to the project, FERC issued the certificate to the Corporation,
subject to conditions. Specifically, the Corporation must “file with the Secretary
documentation that it has received all applicable authorizations required under federal law
(or evidence of waiver thereof).” FERC has no discretion to supplant the federal statutory
approvals independent of the FERC certification process because FERC “must ensure that
the project complies with the requirements of all relevant federal laws, including . . . the
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-7- No. 29
Clean Water Act” (Islander E. Pipeline Co., LLC v Connecticut Dept. of Envtl. Prot., 482
F3d 79, 84 [2d Cir 2006]). In turn, the Clean Water Act provides that
“[a]ny applicant for a Federal license or permit to conduct any
activity including, but not limited to, the construction or
operation of facilities, which may result in any discharge into
the navigable waters, shall provide the licensing or permitting
agency a certification from the State in which the discharge
originates or will originate . . . that any such discharge will
comply with the applicable provisions of sections
1311, 1312, 1313, 1316, and 1317 of this title. . . . If the State,
interstate agency, or Administrator, as the case may be, fails or
refuses to act on a request for certification, within a reasonable
period of time (which shall not exceed one year) after receipt
of such request, the certification requirements of this
subsection shall be waived with respect to such Federal
application. No license or permit shall be granted until the
certification required by this section has been obtained or has
been waived as provided in the preceding sentence. No license
or permit shall be granted if certification has been denied by
the State, interstate agency, or the Administrator, as the case
may be” (33 USC § 1341 [a] [1] [emphasis added]).
As is evident from the express language of the Clean Water Act, Congress granted to the
states project-ending authority. FERC’s certificate cannot displace federal law and New
York State’s rights of assessment thereunder.
As the above discussion establishes, the FERC certificate issued to the Corporation
here is not the culmination of a completed approval process but rather a step in a multi-
level review which requires additional approvals in accordance with federal and state laws.
This FERC certificate allows the Corporation to seek the required approvals, but it does
not give a final green light to the proposed project. Indeed, as the Corporation concedes,
it may negotiate and reconfigure the details of the project to acquire the necessary
outstanding administrative approvals. That FERC is the “lead agency” but does not
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-8- No. 29
complete the actual environmental reviews (see Majority Op at 3 n 1) confirms that without
the additional mandatory assessments or legally effective waivers, the project cannot be
realized.
B. EDPL Article Two Requirements
Individual property rights are a central organizing principle of our legal system,
which assiduously protects owners against unwanted interference with their rights of
enjoyment and use (see Lynch v Household Fin. Corp., 405 US 538, 552 [1972] [“That
rights in property are basic civil rights has long been recognized”]; see e.g. RPAPL § 601
[plaintiff in action for recovery of real property may also obtain damages]; People v Kane,
131 NY 111 [1892] [holding that right to exclusive possession may be defended against
trespass by acts constituting destruction of property or even assault and battery]; see also
O. Lee Reed, What Is “Property”?, 41 Am Bus L J 459, 473-475 [2004]). Nevertheless, if
FERC issues a certificate, the NGA allows a gas company to rely on eminent domain to
obtain property necessary for completion of a pipeline project (15 USC § 717f [h]). Under
settled legal principles, regardless of the forum, exercise of the power of eminent domain
is justified so long as the project is for a public use, as determined through consideration
of the project’s benefits to the public and the potential impacts on the environment (see
EDPL 101, 204; Brody v Vill. Of Port Chester, 434 F3d 121, 127, 135 [2d Cir 2005]).2
2
The majority states that “eminent domain is, at its core, intended to advance public works”
(majority op at 15). No doubt. As such, we must be careful when faced with a
condemnation in service of a commercial enterprise with purported public benefits. For
this reason, as explained herein, the EDPL provides a mechanism for our courts to ensure
that private property is acquired for a properly approved purpose.
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-9- No. 29
In New York, the EDPL provides the exclusive procedure for acquisition of private
property for public use by means of the state’s eminent domain power and requires the
condemnor to demonstrate that the project’s benefit to the community-at-large outweighs
the landowner’s interests. Specifically, and in accordance with the statutory purpose, a
condemnor must satisfy a rigorous review process intended to “give due regard to the need
to acquire property for public use as well as the legitimate interests of private property
owners, local communities and the quality of the environment, and to that end to promote
and facilitate recognition and careful consideration of those interests” (EDPL 101).
As set forth in EDPL article two, a condemnor must hold hearings and make
findings that include, but are not limited to,
“(1) the public use, benefit or purpose to be served by the
proposed public project; (2) the approximate location for the
proposed public project and the reasons for the selection of that
location; (3) the general effect of the proposed project on the
environment and residents of the locality; [and] (4) such other
factors as it considers relevant” (EDPL 204 [b]).
A party affected by the findings may challenge them by filing a petition in the Appellate
Division “in the judicial department embracing the county wherein the proposed facility is
located” (EDPL 207 [A]). The Appellate Division is empowered to review the merits of
the “public use, benefit or purpose” findings made by the condemnor, as well as the
condemnor’s statutory authority and procedural compliance, and the constitutionality of
the proceedings (EDPL 207 [C]).
Under section 206, a condemnor may avoid the section 204 hearing and findings
requirement if, inter alia, it has completed a government approval process that requires it
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- 10 - No. 29
to “submit[] factors similar to those enumerated in” EDPL 204 (B) (EDPL 206 [A]).
Section 206 (A) specifically provides that
“[t]he condemnor shall be exempt from the hearing and
findings requirement of EDPL 204 when, . . . pursuant to other
state, federal, or local law or regulation it considers and
submits factors similar to those enumerated in [EDPL 204 (B)],
to a state, federal or local governmental agency, board or
commission before proceeding with the acquisition and obtains
a license, a permit, a certificate of public convenience or
necessity or other similar approval from such agency, board, or
commission.
Thus, the EDPL conditions avoidance of the hearings and findings requirement on the
condemnor’s acquisition of, among other things, a “certificate”—not, as the majority’s
conclusion allows, what practically and effectively is a conditional certificate.
Essentially, the EDPL permits an alternative process comparable to that set forth in
section 204—one that serves the statutory purpose to scrutinize the project to determine
whether it justifies the condemnor’s acquisition of private property through eminent
domain. The framework eliminates the cost and burden associated with section 204
hearings when the condemnor has completed a government assessment that provides for
similar quantitative and qualitative levels of project review. As a result, a certificate or
other permit may or may not satisfy EDPL 206 (A), depending upon whether the agency’s
review process provides an adequate substitute for the consideration of the EDPL 204 (B)
factors through the normal process.3
3
Thus, the majority’s conclusion that the certificate is valid is beside the point. The
question before the Court is whether the certificate complies with the EDPL. For the
reasons discussed infra, the certificate falls short because FERC’s approval of the
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- 11 - No. 29
The Corporation’s reliance on the FERC certificate to satisfy section 206 is
misplaced because, as discussed above, FERC is not authorized to conduct the entire range
of environmental impact review required for the project. Congress through the Clean
Water Act leaves to New York State part of this task (see 33 USC § 1341 [a] [1]). Because
Congress has specifically given New York State authority over major parts of the
environmental review applicable to projects like this one, FERC had no authority to
displace that process by issuance of the certificate here, nor did it purport to do so in this
case.4 Since the Corporation filed its vesting proceeding when its application for a water
quality certification was still pending before New York State’s Department of
Environmental Conservation (DEC), the FERC certificate, although valid for its federal
purpose, could not be used to satisfy the Corporation’s burden as condemnor under the
EDPL.
To be sure, not every matter left for future resolution renders a government approval
invalid for section 206 purposes. For example, post-construction conditions may be
irrelevant to whether the public’s beneficial use is sufficiently compelling to overcome the
private interests, or preconstruction conditions may not effect project feasibility or be of
the type that would affect a determination regarding factors similar to those listed in section
Corporation’s pipeline project is conditioned on the exercise or waiver of New York State’s
rights under the Clean Water Act. Compliance with the Clean Water Act is not a
precondition to the certificate’s validity, but it is a limiting condition on the project’s
completion. It also means that FERC’s environmental assessment is incomplete for
purposes of the EDPL until New York State acts.
4
The FERC certificate acknowledges that its environmental assessment process “is not
intended to replace the Clean Water Act air permitting process.”
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- 12 - No. 29
204. However, where, as here, the FERC certificate is conditioned on New York State’s
federally mandated independent environmental assessment, and that condition is
outstanding at time of filing, the FERC certificate does not satisfy section 206. It bears
stating the obvious that, because the condition attends to pollutant discharge into New
York’s waters, it falls squarely within the interests identified in the EDPL’s statement of
purpose and section 204, both of which reference the quality of the environment as a matter
that must be considered and addressed by the condemnor. Further, the Clean Water Act
assessment conducted by DEC is not a trivial matter or one that has marginal effect on a
project. Instead, as the Corporation tacitly concedes, the project cannot move forward
without a WQC or a valid waiver of the WQC process.
The majority’s conclusion that the section 206 alternative process strips the court of
its authority to consider whether the condemnor has satisfied the requirements of article
two—or, in the words of the majority, it “neither requires nor authorizes . . . courts to
inquire . . . into the likelihood that a project will be completed based on . . . pending
conditions or permit applications” (Majority Op at 14-15)—ignores the simple fact that the
relevant part of section 206 renders compliance with 204 unnecessary only if the
condemnor “considers and submits factors similar to those enumerated in” section 204
(EDPL 206 [A]).5 Thus, a condemnor may only avoid its burden to hold hearings and make
findings in accordance with section 204 through this exception if a government entity does
5
For the same reason, and contrary to the majority’s assertion, EDPL 206 (A) does not
require an agency determination “equivalent [to] an affirmative determination of public
benefit” (majority op at 18). It requires that the agency documentation relied upon by the
condemnor establish that the EDPL factors were considered.
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- 13 - No. 29
the same job and, based on that process, it issues an appropriate documentation of approval.
When the Corporation filed its vesting action, the DEC had not completed its assessment
and no WQC had been granted or denied. An example makes the point even more clearly.
Suppose the Corporation sought to justify acquisition of title by satisfying section 204. It
would have to hold hearings and make findings about the environmental impact of its
project, including matters DEC must consider in assessing a request for a WQC. The
Corporation could not satisfy section 204 unless it considered and addressed those matters
in its findings in support of condemnation. In the same vein, the Corporation cannot rely
on the FERC certificate that has, by law, deferred to New York State’s Clean Water Act
assessment.
Rather than limit the holding on this appeal to the narrow question before us—
namely whether this specific FERC certificate, issued for this unique gas pipeline project,
satisfies the EDPL—the majority unnecessarily and without legal support cabins the power
of judicial review to reach the sweeping conclusion that any government document,
regardless of content, restrictions and limited scope of approval, absolves the condemnor
of the requirements of section 204. If the mere issuance of any government approval
document is sufficient on its face to meet the statutory demands of article two, the
Corporation could acquire title to the Schueckler land by merely acquiring a local permit
unrelated to the environmental impact of the project. That would conflict with the
legislature’s intent that environmental matters be given due consideration before private
property may be acquired for public use (see EDPL 101). Indeed, while the certificate may
be a valid exercise of FERC’s administrative authority, that authority is subordinate to the
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- 14 - No. 29
demands of the Clean Water Act, which requires an additional state-based review of a
factor specifically identified in the EDPL.
The majority disputes my characterization of the effect of its approach, but does so
by doing exactly what it repudiates, namely, inquiring into FERC’s review of the
Corporation’s submissions to determine whether FERC adequately considered the EDPL
206 (B) factors (majority op at 11-13 & n 7). The majority inexplicably criticizes the
Appellate Division majority for conducting the very analysis conducted in the ruling here,
leaving lower courts to wonder whether to do as the Court of Appeals says or as it does
(see id. at 14). In any event, the majority’s discussion of FERC’s consideration of the facts
elides the operative reality in this case: Congress has explicitly assigned the job of
considering the project’s environmental impacts in part to New York State, and neither this
Court nor FERC can override that federal legislative authorization.
Aside from the fact that the majority’s reading undermines the purpose of the EDPL
by allowing for involuntary transfer of title without complete vetting of the issues that
underlie the public use analysis, the majority ignores the plain language of section 206, and
in so doing violates canons of construction that we must give meaning to all the words
chosen by the legislature and interpret a statute to achieve its legislative goals (see Golden
v Koch, 49 NY2d 690, 694 [1980] [stating that under “traditionally accepted standards of
statutory construction,” courts must “read [a statute] as a whole” and consider “each
word”]; McKinney’s Cons Laws of NY, Book 1, Statutes §§ 97, 98). If, as the majority
concludes, courts have no judicial role other than to confirm the existence of a government
document approving something—anything—then the legislature would have no reason to
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include the circumscribing language that the nonexhaustive list of section 204(b) factors
must be “consider[ed] and submit[ted],” leading to the government entity’s approval
(EDPL 206 [A]). Reading that language out of section 206 is not only impermissible, it
also renders this provision ineffective and weakens the protections against condemnations
for proposed projects that fail to adequately address the statutory factors. But the EDPL
protects property owners and the community, not condemnors, who must make a showing
that upon consideration of the private and public interests there exists a public use
justifying acquisition of private property. Put another way, the majority approach fails to
give due regard to the property owner and local community concerns as well as the
project’s impact on the environment—in direct contravention of the statutory purpose “to
promote and facilitate recognition and careful consideration of those interests” (EDPL
101).
The majority’s analysis, taken to its logical end, would mean that the Corporation—
or any party who obtains a document that, no matter its contents or conclusions, is
denominated “certificate” from a single agency for a private commercial enterprise—could
condemn private property and vest title in itself, even without all the necessary government
approvals and even if the project is subsequently disapproved and never completed. The
“book to be judged by its cover” in these situations, according to the majority, is the
government administrative document titled a certificate. That harsh, unprecedented, and
unfair result falls most heavily on a private owner with limited means, who simply wants
to maintain and enjoy their land free of corporate environmental degradation.
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To support its unsupportable conclusion, the majority emphasizes that in issuing the
certificate, FERC did not place restrictions upon the Corporation’s ability to exercise
eminent domain under the NGA. That is true, and as a result, the Corporation became the
unusual type of private entity which could use New York’s eminent domain procedures to
seize privately owned land.6 This fact, however, does not bear at all under the EDPL as
written on whether the Corporation actually complied with those procedures. In other
words, the NGA clearly does not give the Corporation greater status with respect to
exercise of eminent domain than a municipality or the state itself. In any case, the record
does not reveal any reason why the timing of eminent domain, as distinct from the authority
to exercise eminent domain, would be relevant for FERC’s administrative review purposes;
it is patently nonsensical to expect the FERC certificate to address every element of
eminent domain procedure.7 In sum, by creating from whole cloth an apparent rule that
6
Contrary to the majority’s view, my analysis does not question the validity of FERC’s
certificate. In describing the background and challenges to the Corporation’s pipeline
project, I do not consider, as the majority does (see majority op at 11-12), whether FERC’s
decision is reasonable; that determination is beyond this Court’s authority. Nor do I assume
the majority favors the premature taking of private property merely because the majority
extols the scope of FERC’s review (see id.). Our respective focus is on proper application
of our state law, and on that front there can be no dispute that eminent domain may be
exercised to acquire property over an owner’s objection only when there is a public need
that outweighs the private interest (see EDPL 101). The discrete question presented in this
appeal is whether the Corporation may acquire title to the Scheuckler land on the basis that
the Corporation complied with the EDPL’s requirements. For the reasons I discuss supra,
the validity of FERC’s certificate as a provisional federal approval of the project does not
answer that question.
7
The majority’s apples-and-oranges citation to an unpublished federal opinion, Mid Atl.
Express, LLC v Baltimore County, Md. (410 Fed Appx 653 [4th Cir 2011]), does not affect
this analysis. That FERC decided in a particular factual context that it would be appropriate
to impose a limitation upon a company’s exercise of eminent domain sheds no light upon
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- 17 - No. 29
any “certificate of public convenience and necessity” satisfies EDPL 206 (a) unless the
issuing agency explicitly conditions the exercise of eminent domain, the majority ignores
the fundamental principle that courts may not rewrite duly enacted statutes (see
McKinney’s Cons Laws of NY, Book 1, Statutes § 73; Matter of Anonymous, 40 NY2d
96, 102 [1976]).
The majority’s reliance on a different section of the EDPL to shore up its
construction of article two is misplaced. The majority argues that because section 406
grants an owner the right to repurchase property should the project be abandoned, we must
read the EDPL as allowing involuntary title transfers for projects that may eventually fail.
That position misses the mark. First, it is unclear that failure to acquire the necessary
approvals constitutes “abandonment” of a project for purposes of the EDPL. For example,
the project could be redesigned and go forward without the need to condemn the owner’s
property. Second, the property buy-back allowed by section 406 applies only if
condemnation was properly exercised, meaning 406 provides a limited remedy to an owner
where the public use initially justified acquisition of the property, but the condemnor
subsequently deserts the project. Here, the Corporation failed to satisfy the requirements
of EDPL article two: the Corporation did not hold hearings and make findings in
accordance with section 204, nor does the FERC certificate comply with section 206. The
limited remedy of section 406 is simply irrelevant on these facts. Third, the remedy has
limited impact and works best for those who are able financially to buy back their land and
its decision not to do so on these distinct facts, and it certainly has no bearing on the
operative issue of New York state law.
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interested in doing so no matter the changes to the landscape, years after having title taken
away. For example, if the Corporation “abandons” the project after gaining title, clear
cutting the land and commencing construction (and after all, the point of vesting title now
is to move forward with construction; otherwise why the rush to the courthouse?) there is
no certainty that respondent Theresa Schueckler—now widowed—would have the funds
to repurchase that property, even if she wanted it in its changed condition.
And that brings me to a point unaddressed by the majority. The Corporation
concedes, and FERC anticipates, that the project’s details may go through further revision
in order to accommodate and address pre-construction problems. It may be that after taking
title, and clear-cutting the Scheuckler property, the Corporation modifies its plans, perhaps
rendering use of the disputed land unnecessary or requiring an easement to another swath
in a different location. Given this uncertainty, and the potential for project redesign that
affects the public use justification for taking a designated area of land in the first place, it
is nonsensical and unfair to take the Scheuckler property before completing the necessary
state permit process and ensuring that the project will likely move ahead in a form approved
by New York.
The majority’s concern that adherence to the command of the EDPL is unworkable
and involves impermissible scrutiny of federal agencies’ “public use review and findings”
(see majority op at 14) is not borne out by the statute or review of this FERC certificate.
No “extensive,” costly, and time-consuming state scrutiny is required (id.). All that need
be done here is to read the Clean Water Act provision and the condition contained in
Appendix B to the FERC certificate, and compare them to the language of the EDPL.
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Notwithstanding the majority’s disclaimer, it has in fact looked in all the wrong places to
determine compliance with the EDPL, focusing on what FERC did but not what it could
not and did not do.
A majority of this Court has spoken, and it is now for the legislature to consider
whether legislation is necessary to protect owners like the Schuecklers. It would not be the
first time the legislature has stepped in after courts have broadly applied the power of
eminent domain to divest private owners of their land for a private use with uncertain or
unrealized public benefits (see e.g. Kelo v City of New London, Conn., 545 US 469 [2005]
[holding that town could seize homes for private redevelopment project to serve “economic
development” purpose]; Patrick McGeehan, Pfizer to Leave City That Won Land-Use
Case, NY Times, Nov 12, 2009, § A at 1 [discussing aftermath of the Kelo decision, in
which the company for which the land was obtained subsequently abandoned the project
“as a cost-cutting measure”]; see also Matter of Uptown Holdings, LLC v City of New
York, 77 AD3d 434 [1st Dept 2010] [holding that non-blighted area could be seized for
economic development purposes notwithstanding lack of protections such as development
plan to which developer would be bound]). The United States Supreme Court decision in
Kelo v City of New London is perhaps the most infamous; it resulted in a flood of state
legislation to prohibit the economic development grounds approved by the Court, as well
as decisions by various states’ high courts rejecting its rationale on state constitutional
grounds (see e.g. Reading Area Water Auth. v Schuylkill River Greenway Assn., 627 Pa
357, 375, 100 A3d 572, 583 [2014] [holding, under Pennsylvania statute passed in the wake
of Kelo, that private use with incidental public benefits could not support eminent domain
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proceedings]; Norwood v Horney, 110 Ohio St 3d 353, 377, 853 NE2d 1115, 1141 [2006]
[adopting Kelo dissenters’ analysis]; John M. Broder, States Curbing Right to Seize Private
Homes, NY Times, Feb 21, 2006, § A at 1 [“lawmakers in virtually every statehouse across
the country are advancing bills and constitutional amendments to limit use of the
government’s power of eminent domain” in Kelo-type circumstances “in direct response
to” the Supreme Court decision]; see also Charles E. Cohen, Eminent Domain after Kelo
v. City of New London: An Argument for Banning Economic Development Takings, 29
Harv J L & Pub Policy 491, 532 [2006]; Ilya Somin, Controlling the Grasping Hand:
Economic Development Takings After Kelo, 15 Sup Ct Econ Rev 183, 191 [2007] [arguing
that an “‘economic development’ . . . rationale can be used to condemn virtually any
property for transfer to a private commercial enterprise”]; Alberto B. Lopez, Kelo-Style
Failings, 72 Ohio St L J 777 [2011]).
III.
Judicial Notice
In the alternative, the Corporation argues that even if an incomplete WQC process
is grounds for denying vesting of title, that is no barrier to the proceeding here. The
Corporation reasons that because FERC has now determined that DEC’s denial of the
WQC is untimely and thus New York waived its rights under the Clean Water Act, this
Court should consider the FERC certificate as satisfying EDPL 206. It further claims that
the Appellate Division erred when it failed to take judicial notice of the FERC decision as
it should have concluded that “FERC’s waiver order removed the obstacle” to exercise of
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eminent domain through the EDPL 206 (A) alternative process “on which the majority’s
decision depended.”
The procedural history is more complex and less favorable to the Corporation than
its argument suggests. As DEC’s denial letter recites, the Corporation initially agreed with
DEC “that, for the purposes of review under Section 401 of the CWA, the Joint Application
was deemed received by NYSDEC on April 8, 2016, ‘thereby extending the date [by
which] the NYSDEC has to make a final determination on the application until April 7,
2017.’” DEC issued its decision prior to the agreed extended date. When DEC issued a
decision unfavorable to the Corporation, however, the Corporation collaterally attacked the
WQC denial by seeking a waiver order from FERC, on the basis that the parties could not
agree to extend the date, and so, notwithstanding the parties’ agreement, DEC exceeded
the permissible time frame for its Clean Water Act review. FERC agreed with the
Corporation and denied a stay of its order, and an appeal of that order is now pending
before the Second Circuit. Separately, the Second Circuit vacated DEC’s order, stating
that although it was a “close case,” DEC “did not sufficiently articulate the basis for its
conclusions,” and remanded so that DEC could “more clearly articulate its basis for the
denial” (National Fuel Gas Supply Corp. v New York State Dept of Environmental
Conservation, 761 Fed Appx 68, 70-72 [2019]). DEC thereafter reissued its denial,
elaborating upon its reasoning.
Courts may take judicial notice of facts that amount to common knowledge or may
be determined “by resort to easily accessible sources of indisputable accuracy” (Hamilton
v Miller, 23 NY3d 592, 603 [2014], quoting People v Jones, 73 NY2d 427, 431 [1989]).
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Whether to take judicial notice of such a fact is within the discretion of the trial court (see
Hunter v New York, Ontario & W. R.R. Co., 116 NY 615, 621 [1889]; Matter of Crater
Club v Adirondack Park Agency, 86 AD2d 714, 715 [3d Dept 1982], affd for reasons stated
below 57 NY2d 990 [1982]; Sleasman v Sherwood, 212 AD2d 868, 870 [3d Dept 1995]).
Courts decide whether to take judicial notice of a fact “depend[ing] on the nature of the
subject, the issue involved, and the apparent justice of the case” (Hunter, 116 NY at 621;
see Walker v City of New York, 46 AD3d 278, 282 [1st Dept 2007]). While our state
courts are required to take judicial notice of positive law so that they can resolve cases
under those laws (see CPLR 4511), here the Corporation argues that the courts should take
judicial notice of the fact that FERC has deemed DEC to have waived its authority to bar
construction. Judicial notice is not mandatory under such circumstances (see Hamilton, 23
NY3d at 603; Sleasman, 212 AD2d at 870).
Notably, the Corporation argues for judicial notice of only part of the events that
have transpired in this and parallel litigation. It requests that the courts recognize that
FERC has rejected the timeliness of the WQC, but not the existence of pending judicial
challenges to FERC’s determinations and the possibility that the federal courts may hold
that DEC’s denial of the WQC is valid. It is not far-fetched that the federal courts may
side with New York, given the Corporation’s agreement with DEC, as well as the fact that
the Corporation could have simply reapplied for the WQC to restart the one-year statutory
clock after signing off on the agreement. The Corporation chose not to, instead arguing
before FERC and the federal Circuit Courts that DEC’s denial was untimely issued and
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should be ignored.8 Although convenient, this may not be a winning argument, and in any
case that uncertainty is a valid basis to decide this appeal on the record as it existed at the
time the Corporation filed its vesting petition. Under the circumstances, the Appellate
Division did not abuse its discretion as a matter of law by refusing National Fuel’s request
to take judicial notice of the FERC decisions.
IV.
Conclusion
Not to be lost in the legal analysis is the practical effect of the majority’s ruling.
The first page of the FERC certificate establishes the conditional nature of FERC’s
authorization. One of the conditions that would stop progress on the pipeline is the failure
to establish compliance with “all applicable authorizations required under federal law.”
Absent proof of receipt of those authorizations, there could be no pipeline, and absent an
ability on the part of the condemnor to build the structure that the taking here is intended
to accommodate, the courts should not sanction acquisition of the Schueckler property.
It is undisputed that the FERC certificate issued to the Corporation is conditioned
on New York State’s rights under the Clean Water Act, including the right to deny the
Corporation a WQC, preventing construction and derailing the proposed gas pipeline.
Given the nature of the project, and the threat of environmental damage from the pipeline’s
8
Although respondents’ brief discusses the agreement between the Corporation and DEC,
it contains no argument in this Court that the Corporation should be collaterally estopped
from relying on the FERC decision as a consequence of the agreement. As such, I limit
my discussion to whether the Appellate Division abused its discretion not to take judicial
notice in light of the pending federal court challenges to FERC’s determination against the
DEC.
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construction and operation, the WQC process is vitally important. The proposed pipeline
would traverse approximately 97 miles in four Western New York counties, including rural
communities that would be affected by the project as planned. The path drawn for the
pipeline crosses no fewer than 192 State-regulated streams and impacts over 73 acres of
federal and State wetlands.9
Notwithstanding the vital environmental interests, the majority’s reading of the
FERC certificate and our procedural law permits the acquisition of private property absent
approvals ensuring that those wetlands and waterways—some of which drain into the Great
Lakes—would be protected during and after construction of the proposed pipeline. The
law does not mandate such a result. Instead, federal and New York laws and regulations
guard against environmentally impactive pollutant discharges associated with the pipeline
project (see 33 USC § 1341 [a] [1]; EDPL 204 [b] [3]; ECL § 15-0101 et seq.; ECL § 24-
0101 et seq.; 6 NYCRR 621.1-621.11).
Nor does the law support the outcome here in which, based on the title of a FERC
certificate, the property interest of a lone private individual—respondent Theresa F.
Schueckler—is extinguished in furtherance of private economic interests that may never
be realized. The courts should not sanction this involuntary transfer of title with its
attendant harm to the owner. Theresa F. Shueckler should retain her right to use and
9
The degree to which the proposed project would affect waterways and wetlands is noted
in the DEC’s explanation for its denial of petitioner’s application to obtain a water quality
certification for the proposed project.
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dispose of her property freely absent an adequate showing justifying divesting her of title.
A showing the corporation has not made as required by the EDPL.
For the foregoing reasons I dissent.
* * * * * * * * * * * * * * * * *
Order reversed, with costs, and order of Supreme Court, Allegany County, reinstated.
Opinion by Judge Stein. Chief Judge DiFiore and Judges Wilson and Feinman concur.
Judge Rivera dissents and votes to affirm in an opinion, in which Judge Fahey concurs.
Judge Garcia took no part.
Decided June 25, 2020
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