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Repositioning a pipeline, protecting natural resources, and invoking eminent domain. In the appeal of Williams Pipeline Company vs. Soo Line Railroad Company, et al., the Minnesota district court has jurisdiction to consider challenges brought by an affected property owner and a lessee to the exercise of eminent domain power by a common carrier seeking to reroute a pipeline to property outside a Superfund site. Without specific statutory authority, Minnesota law does not permit the use of eminent domain power to interfere with an existing, authorized public use. Because Minnesota has not adopted or recognized the doctrine of "higher use or more necessary" public use, if one entity has established a public use on property, the courts may not weigh the desirability of permitting another entity to exercise eminent domain to establish an inconsistent use on the property.

Minn. Stat. [ss] 116B.03 (1998), which precludes a claim under the Minnesota Environmental Rights Act (MERA) for actions taken "pursuant to" an order or stipulation of the Minnesota Pollution Control Agency (MPCA) does not apply when a consent order allows multiple alternative actions. The choice of one among several alternatives may be challenged in an action brought under MERA.

The appeal arises from two actions, In the Matter of Condemnation by Petitioner, Williams Pipeline Company, a Delaware corporation, of Certain Lands in the City of New Brighton to Permit Relocation of Pipeline, Williams Pipeline Company, petitioner, Respondent, vs. Soo Line Railroad Company, et al., and State of Minnesota, by MT Properties, Inc., Appellant (CI-98-2195), vs. Williams Pipeline Company. The first is a condemnation action brought by Williams to reroute its pipeline through an existing rail yard. The second action is a Minnesota Environmental Rights Act (MERA) suit brought by MT Properties, Inc. (MT) on behalf of the state of Minnesota, claiming that the proposed rerouting would likely cause pollution, impairment, or destruction of protectable natural resources. These actions were consolidated before the district court for hearing.

The district court initially denied the condemnation petition, but then reversed itself, holding that it lacked jurisdiction to consider objections to the petition. The court made extensive findings in January 1998 on the potential environmental, health, and safety impact of the proposed rerouting of the pipeline. In October 1998, the district court dismissed the MERA claim, apparently because it concluded that the claim was barred by Minn. Stat. [ss] 116B.03 (1998). This appeal is taken from the final decision granting condemnation and dismissing the MERA claim.

MT owns and manages the New Brighton rail yard, in which several railroads operate tracks. Since January 1987, MT has leased track to the Minnesota Commercial Railroad Company (MCR), a public service corporation under Minnesota law and a common carrier under federal law. Over ten years ago, subsurface environmental contamination was discovered on property lying immediately to the east and west of the rail yard, and the area was declared a federal Superfund site.

Williams is also a common carrier engaged in the interstate transportation of petroleum products. A section of its pipeline runs below ground through the Superfund site. Under a consent order Williams agreed to remove its pipeline from the Superfund site.

The consent order does not require Williams to construct its pipeline along any particular route. Neither the EPA nor the MPCA can properly exercise jurisdiction under the consent order beyond the Superfund site. Williams may select a route outside the boundaries of the site, without obtaining EPA or MPCA approval under the consent order. Williams could turn off the pipeline to comply with the consent order, and deliver its products through alternative routes. Finally, Williams may propose an acceptable reroute within the site, but any rerouting within the Superfund site must be approved by the EPA and MPCA under the consent order.

Williams elected to seek, through condemnation, an easement to construct, maintain, and operate the rerouted pipeline on MT's property. Williams seeks to take, by eminent domain, two noncontiguous tracts of MT's property leased to MCR. The condemnation proceeding significantly affects the rights of both MT and MCR

Under the consent order, the EPA and MPCA will reimburse Williams for moving the pipeline out of the cleanup area. The consent order, however, does not provide for the compensation of MT, MCR, or any other party affected by the rerouting. Moreover, in connection with rerouting of the pipeline, the consent order releases Williams from any liability for contamination at the site, while it affords no similar protection to MT, MCR, or any other party.

Williams' condemnation petition was initially denied by the district court. After Williams moved for a new trial, the district court reversed itself, concluding that it erred by considering MT's objections to the condemnation petition because MT's rights under state law are superseded by federal law under 42 U.S.C. [ss] 9613(h) (1994). The district court concluded that it lacked jurisdiction to entertain MT's objections to the condemnation petition and it granted the petition. The district court also concluded that MT's MERA claim is barred by Minn. Stat. [ss] 116B.03, subd. 1, because it challenges an action taken pursuant to a consent order with the MPCA.

The issues considered in this appeal were: 1) Did the district court err in concluding that it lacked jurisdiction to consider objections to the condemnation petition? 2) Did the district court err when it concluded that it lacked jurisdiction to consider the MERA claim?

The district court granted the condemnation petition because it concluded that it "lacked jurisdiction" to consider objections. That decision was based solely on 42 U.S.C. [ss] 9613(h), which reads: "No Federal court shall have jurisdiction under Federal law other than under section 1332 of title 28 (relating to diversity of citizenship jurisdiction) or under State law which is applicable or relevant and appropriate under section 9621 of this title (relating to cleanup standards) to review any challenges to removal or remedial action selected under section 9604 of this tide, or to review any order issued under section 9606(a) of this tide."

The district court interpreted section 9613(h) as a bar to all objections to the condemnation petition in state court, reasoning that opposition to condemnation of the property constitutes "a challenge to a remedial action selected under Federal Law." The district court found that "MT's entire objection to the condemnation proceeding was that the route selected for the pipeline was improper and in violation of state law."

The Court of Appeals held that, on its face, section 9613(h) limits the power of the federal courts to entertain certain challenges and review certain orders. The statute does not affect state court jurisdiction over state law claims. As further evidence of the preservation of state claims and jurisdiction, the statute carves out and preserves the jurisdiction of federal courts "under section 1332 of title 28 (relating to diversity of citizenship jurisdiction)" to hear claims arising under state law. The condemnation petition by Williams and MT's objections to that petition arise under state law. The district court erred when it concluded that MT's objections in state court are barred by section 9613(h).

The Court of Appeals concluded that the district court erred in holding that it lacked jurisdiction, and that it erred, as a matter of law, in granting the condemnation petition. Because an authorized public use exists on the property Williams seeks to acquire, and the proposed use of the property is inconsistent with the existing public use, Minnesota law mandates denial of the petition.

Appellants argued that under Minn. Stat. [ss] 117.48 (1998), Williams has no authority to condemn the property because it is already devoted to a public purpose.

Williams argued that it is not prohibited from condemning an existing public use if the proposed use is not substantially inconsistent with the existing use. But the district court made extensive findings that the proposed location of the pipeline is inconsistent with the current use of the property by the railroad.

The district court initially concluded that MT was entitled to prevail on its MERA claim, and the court permanently enjoined Williams' proposed route. The court made findings that the construction of the pipeline along the proposed route would certainly cause shifting, mixing, spreading, and dispersion of the existing contamination. The district court concluded that the rerouting constituted "pollution, impairment, or destruction" of the environment, violating MERA. In its subsequent order, the district court determined that the MERA action could not be maintained because the rerouting was proceeding under the imprimatur of an MPCA consent order, but it did not repudiate the findings of fact on potential harm.

In the Appeals Court's ruling: "Because the consent order allows Williams to choose among several alternatives, its decision to seek this particular easement and rerouting does not constitute an action taken "pursuant to" an order or stipulation of the MPCA, and section 116B.03 is inapplicable.

"Appellants are concerned that the rerouted pipeline could prove hazardous to the environment because it carries toxic materials that would be dangerous if leaked into the surrounding soil and groundwater. They assert that the likelihood that a train may derail and rupture the underlying pipe is enhanced because the pipeline will now be closer to the tracks than is acceptable under railroad industry standards. Both the consent order and the work plan to which Williams agreed require that any rerouting be consistent with standards promulgated by the American Railway Engineering Association (AREA). The district court made a specific finding that there is no evidence that the proposed reroute will comply with AREA standards. The proposed rerouting is not mandated by the consent order and is inconsistent with the district court's initial findings.

MT also alleges that rerouting the pipeline before the cleanup is accomplished will cause additional "pollution, impairment, or destruction" because existing contaminants may flow into the area being excavated for the rerouted pipeline, polluting additional resources and endangering workers.

Respondents argued that appellants failed to establish a prima facie case under MERA, claiming there is no unique protectable natural resource in the area and that polluted land cannot be a protectable area under the law. From the Appeals Court's review of the record, the dismissal appears to be based on the court's conclusion that it lacked jurisdiction to hear any objections to Williams' rerouting of the pipeline under the consent order, and not because it concluded that the January 1998 findings of potential harm were erroneous. Those findings are replete with concern for the environment and they detail a litany of potential disasters if the proposed rerouting is permitted, including contaminated groundwater radiating from the site in all directions. The Appeals Court remanded for consideration of the MERA claim without expressing an opinion on the merits.
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Publication:Public Works
Geographic Code:1USA
Date:May 1, 2000
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