Columbia Gas Transmission, LLC v. 1.01 Acres, More or Less

PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

No. 13-4458

COLUMBIA GAS TRANSMISSION, LLC,

Appellant

v.

1.01 ACRES, MORE OR LESS IN PENN TOWNSHIP,

YORK COUNTY, PENNSYLVANIA, LOCATED ON

TAX ID# 440002800150000000 OWNED BY

DWAYNE P. BROWN AND ANN M. BROWN;

DWAYNE P. BROWN; ANN M. BROWN

No. 13-4459

COLUMBIA GAS TRANSMISSION, LLC,

Appellant

v.

101 ACRES, AND 41,342 SQ. FT MORE OR LESS IN

HEIDELBERG TOWNSHIP,

YORK COUNTY, PENNSYLVANIA, LOCATED ON TAX

ID #30000EE1600000000, OWNED BY BRADLEY E.

HERR AND ELIZABETH M. HERR; BRADLEY E. HERR;

ELIZABETH M. HERR

No. 13-4460

COLUMBIA GAS TRANSMISSION, LLC,

Appellant

v.

1.5561 ACRES, MORE OR LESS IN

HEIDELBERG TOWNSHIP,

YORK COUNTY PENNSYLVANIA, LOCATED ON TAX

ID #30000ED010300000000, OWNED BY MYRON A.

HERR AND MARY JO HERR;

MYRON A. HERR; MARY JO HERR

2

No. 13-4461

COLUMBIA GAS TRANSMISSION, LLC,

Appellant

v.

1.010 ACRES, MORE OR LESS IN PENN TOWNSHIP,

YORK COUNTY PENNSYLVANIA, LOCATED ON TAX

ID #440002800240000000, OWNED BY DOUGLAS W.

HILYARD AND TESSA J. HILYARD; DOUGLAS W.

HILYARD; TESSA J. HILYARD

On Appeal from the United States District Court

for the Middle District of Pennsylvania

(Nos.: 4-13-cv-00778; 4-13-cv-00783;

4-13-cv-00785 and 4-13-cv-00786)

District Judge: Honorable Matthew W. Brann

Argued on July 9, 2014

Before: RENDELL, CHAGARES and JORDAN,

Circuit Judges

(Filed: September 26, 2014)

3

Anastasia P. Cordova, Esquire

Stephen P. Mulligan, Esquire

John D. Wilburn, Esquire (Argued)

McGuire Woods

1750 Tysons Boulevard

Suite 1800

Tysons Corner, VA 22102

Erin N. Fischer, Esquire

McGuire Woods

625 Liberty Avenue

23rd Floor, Dominion Tower

Pittsburgh, PA 15222

Counsel for Appellant

Joshua M. Autry, Esquire (Argued)

Michael F. Faherty, Esquire

Lavery Faherty Patterson

225 Market Street

Suite 304, P. O. Box 1245

Harrisburg, PA 17108

Counsel for Appellees

OPINION

RENDELL, Circuit Judge:

4

The issue before us is straightforward: does Columbia

Gas Transmission, LLC (“Columbia”), have the right of

eminent domain to obtain easements over the land of

objecting landowners, outside of the existing right of way, in

order to replace deteriorating pipeline? The answer is equally

straightforward and clear: yes.

The regulatory authority given to natural gas

companies such as Columbia actually anticipates replacement

outside the existing right of way as we discuss below, and

contains no adjacency requirement. The issue before us, then,

whether Columbia has a right to replace the pipeline outside

of the existing right of way, is actually a non-issue. But, the

District Court put a peculiar “spin” on the regulations in

question, finding them to be ambiguous by adopting its own

definition of “replace” and concluding that a “notice” of

“proposed rulemaking” for “Emergency Reconstruction of

Interstate Natural Gas Facilities” promulgated by the Federal

Energy Regulatory Commission (“FERC”) after 9/11 should

somehow be viewed as resolving this ambiguity in the law.

Our dissenting colleague adopts this argument. However, we

suggest that the statute and regulations are clear and the case

before us is easily resolved.

Columbia, an interstate natural gas company subject to

the jurisdiction of FERC, seeks to replace a portion of a

natural gas pipeline (“Line 1655”) that runs in and around

York County, Pennsylvania. Because the original location of

the pipeline has become heavily populated, the replacement

will not track the original line but instead will be outside the

5

existing right of way. (App. 27.)1 In an effort to obtain

easements necessary to complete construction of the

replacement, in March 2013, Columbia filed Complaints in

Condemnation against four landowning couples (the

“Landowners”) in federal court. In May 2013, Columbia filed

motions for partial summary judgment and for preliminary

injunctions to acquire immediate possession of the easements.

In June 2013, the Landowners also filed motions for summary

judgment. The District Court subsequently denied Columbia’s

motions and granted the Landowners’ motions, holding that

Columbia did not have the right of eminent domain required

to condemn the easements. The District Court’s conclusion

rested on the determination that the relevant FERC regulation,

18 C.F.R. § 157.202(b)(2)(i), was ambiguous. As a result, the

Court looked outside the regulations to a sentence in a notice

of proposed rulemaking that it concluded set forth the agency

interpretation. This was a mistake. The language of the

governing regulations could not be more clear. For the

reasons set forth below, we will reverse the judgments of the

District Court.2

1

The District Court stated that the replacement pipeline

would be one quarter of a mile from the original but the

Landowners counter that the replacement pipeline will be “up

to a mile away.” (App. 15.) The actual distance between the

replacement pipeline and the existing pipeline is not clear

from the record, but because using the greater distance does

not change our position with respect to the appeal, we will

assume that it is correct.

2

Columbia also appeals the judgment of the District Court

with respect to a motion for reconsideration (or a “motion to

alter”) it filed on December 13, 2013. Because we will

reverse the District Court on the motions for summary

6

I. Background

Line 1655 is over fifty years old, and Columbia asserts

that portions of the pipeline must be replaced to meet safety

standards established by the Pipeline and Hazardous

Materials Safety Administration. Columbia has already

replaced 19,000 feet — or 95% — of the pipeline but has

been stalled in replacing the last 1,000 feet because it lacks

the remaining necessary easements — that is, the easements

on and across the Landowners’ properties. Columbia

attempted to obtain these easements through negotiation, as it

had the others it needed, but was unsuccessful.3 Accordingly,

Columbia filed a complaint in the District Court, seeking

condemnation of the remaining easements to which it was

entitled pursuant to the Natural Gas Act, 15 U.S.C. § 717f(h).

Before addressing the District Court’s disposition of the case,

we will set forth the statutory scheme that underpins

Columbia’s entitlement to the easements.

A. Statutory Scheme

The Natural Gas Act provides:

When any holder of a certificate of public

convenience and necessity cannot acquire by

judgment, the appeal of the order concerning the motion for

reconsideration will be moot.

3

The Dissent makes the claim that Columbia “threatened” the

Landowners. (Dissent. Op. at 3.) This is a sensationalist

reading of Columbia’s statement that its offers were higher

than the fair market value of the land, and has no basis in the

record.

7

contract, or is unable to agree with the owner of

property to the compensation to be paid for, the

necessary right-of-way to construct, operate,

and maintain a pipe line or pipe lines for the

transportation of natural gas . . . it may acquire

the same by the exercise of the right of eminent

domain in the district court of the United States

for the district in which such property may be

located, or in the State courts.

15 U.S.C. § 717f(h) (emphasis added). Accordingly, a

certificate of public convenience and necessity gives its

holder the ability to obtain automatically the necessary right

of way through eminent domain, with the only open issue

being the compensation the landowner defendant will receive

in return for the easement. In 1983, FERC issued a blanket

Certificate of Public Convenience and Necessity (the “FERC

Certificate”) to Columbia that covers Line 1655. Columbia’s

FERC Certificate states that Columbia is “authorized to

conduct many routine activities and abandon facilities and

service on a self-implementing basis without further

authorization by the Commission.” (App. 104.) (emphasis

added) In defining “routine activities,” the Certificate

references 18 C.F.R. § 157.203(b). This regulation provides

that blanket certificate holders have automatic authorization

to engage in transactions described in certain other

provisions, including 18 C.F.R. § 157.208(a), which states, in

relevant part:

If the project cost does not exceed the cost

limitations set forth in column 1 of Table I,

under paragraph (d) of this section, or if the

project is required to restore service in an

8

emergency, the certificate holder is authorized

to make miscellaneous rearrangements of any

facility, or acquire, construct, replace, or

operate any eligible facility.

18 C.F.R. § 157.208(a) (emphasis added). Costs limitations

are not an issue in this case.4 Thus, if Columbia is replacing

an “eligible facility,” this constitutes a “routine activity” and

Columbia can conduct this activity on a “self-implementing

basis without further authorization by the Commission.”

(App. 104.)5

4

As relevant here, gas companies holding a certificate,

relying on Section 157, must provide notice to FERC and an

environmental impact statement for any replacement

construction project, unless the costs are less than $11

million. 18 C.F.R. § 157.208(a)-(b), (d). Columbia had

originally budgeted the replacement for Line 1655 at $10.6

million, but encountered additional costs in the form of

condemnation proceedings. (App. 1412-13.) Accordingly,

Columbia requested a waiver of the $11 million cost cap from

FERC. The agency concluded that: “[I]t appears that

Columbia made a good faith effort to construct the

replacement project under the guidelines and cost limits set

forth in section 157.208(d) of the Commission’s blanket

certificate regulations. Based on the specific facts and

circumstances of this project, waiver of cost limitations in this

instance is granted.” (App. 1413.)

5

The Dissent urges that some notice or process should

accompany this type of activity by certificate holders, in order

to avoid constitutional problems. That argument is best made

to Congress – or in the next case. It has not been raised in the

case before us.

9

It is important to note that if Columbia Gas did not

have a blanket certificate, and instead merely possessed a

certificate of public convenience and necessity authorizing

construction of a mainline, for instance, it would be able

nonetheless to construct or extend facilities “which constitute

the replacement of existing facilities that have or will soon

become physically deteriorated or obsolete, to the extent that

replacement is deemed advisable, if . . . [t]he replacement

facilities . . . will be located in the same right-of-way or on

the same site as the facilities being replaced . . . .” 18 C.F.R. §

2.55(b)(1); 15 U.S.C. § 717(f)(c)(1)(A). This provision is an

exemption that relieves natural gas companies from the

requirement of having to obtain a certificate of public

convenience and necessity.

However, with the instant blanket certificate of public

convenience and necessity, authorizing routine activities on a

self-implementing basis, Columbia is not limited to replacing

within the same right of way, pursuant to Section 2.55(b).

Instead, as noted above, it can engage in any routine activity

without further authorization including generally “replac[ing]

. . . any eligible facility.” 18 C.F.R. § 157.208(a). The issue

becomes: is Columbia replacing an “eligible facility”? If so,

it needs no further authorization.

Section 157.202(b)(2)(i) defines an “eligible facility”

as including “main line, lateral, and compressor replacements

that do not qualify under § 2.55(b) of this chapter because

they will result in an incidental increase in the capacity of

main line facilities, or because they will not satisfy the

location or work space requirements of § 2.55(b).” Thus, by

definition, this provision includes the replacement of facilities

that cannot “be located in the same right-of-way or on the

10

same site as the facilities being replaced.” 18 C.F.R. §

2.55(b)(ii). Accordingly, by their terms, Sections 157.203(b)

and 157.208(a) specifically and automatically authorize the

main line replacement at issue here as a routine activity in

connection with an eligible facility that cannot be located in

the same right of way or same site, which Columbia Gas has

the right to “self-implement[]” without further authorization

from FERC. (App. 104.)

Though not disputed here, even the right of blanket

certificate holders to replace eligible facilities is not without

limits. The Dissent points out four such checks: a reporting

requirement, a notice requirement, an environmental-impact-

statement requirement, and monetary restrictions. (Dissent

Op. at 27.)

Other curbs significantly restrict the nature of

replacement projects. Certificate holders may not construct

new “delivery points” under the guise of replacement. 18

C.F.R. § 157.202(b)(2)(ii)(E). Also, in general,

“Replacements for the primary purpose of creating additional

main line capacity are not eligible facilities” under blanket

certificate authority. Id. § 157.202(b)(2)(i). That is,

“Replacements must be done for sound engineering

purposes.” Id. In clarifying this stricture, FERC

“underscore[d]” that “there must be a physical need to replace

facilities,” such that gas companies may not circumvent the

general requirements for new pipeline construction simply by

designating it “replacement.” Revision Of Existing

Regulations Under the Natural Gas Act, 64 Fed. Reg. 54522,

54527 (Sept. 29, 1999) (codified at 18 C.F.R 157). FERC

also encourages the enforcement of such regulations through

the filing of complaints against companies that falsely claim

11

the need to replace pipelines. Id. Again, none of these

limitations are at issue here; Appellees do not challenge, for

instance, that Line 1655 is being replaced for sound

engineering reasons. But the regulations ensure that gas

companies do not possess unfettered discretion in

constructing and siting replacement pipelines.

B. The District Court’s Opinions

In October 2013, the District Court granted the

Landowners’ motions for summary judgment, holding that

Columbia did not have the right of eminent domain. The

Court reached this conclusion by turning to one dictionary

definition of the word “replace,” and using it to read an

adjacency requirement into Part 157. In relevant part, the

Court stated:

Columbia Gas’s contention . . . is that its

certificate automatically authorizes relocation of

replacement Line 1655 literally anywhere on

earth, so long as the replacement “will not

satisfy the location or work space requirements

of § 2.55(b).” But this interpretation of the

regulations puts an excessively expansive gloss

on the common meaning of “replace,” see

Webster’s Third New International Dictionary,

Unabridged, s.v. “replace,” accessed October

23, 2013, http://unabridged.merriam-

webster.com (“1: to place again: restore to a

former place, position, or condition”), a term

that generally does not imply significant

relocation. Moreover, Columbia Gas’s

interpretation is seemingly contrary to the

12

structure of the regulations, which equate the

“relocation of existing facilities” with another

defined term, “miscellaneous rearrangement,”

see 18 C.F.R. § 157.202(b)(6), not with

“replacement[],” see 18 C.F.R. §

157.202(b)(2)(i). The meaning of “replacements

that do not qualify under § 2.55(b),” is, at best,

ambiguous as it relates to Columbia Gas’s

replacement Line 1655.

(App. 32-33.) Having created this ambiguity, the District

Court turned to a notice of proposed rulemaking issued by

FERC in 2003 in connection with emergency construction of

natural gas pipelines after 9/11. The Court viewed the notice

of proposed rulemaking as “a fairly definitive interpretation”

of the replacement provision contained in Part 157. (App. 33.)

The notice was issued in order to “give pipeline

companies greater flexibility to reconstruct pipelines during

emergencies caused by ‘deliberate effort[s] to disrupt the flow

of natural gas.’” (App. 33 (citations omitted).) It states, in

pertinent part:

[P]art 157, Subpart F, permits replacement

construction that uses temporary workspace

beyond the bounds of the temporary workspace

previously used to construct the original

facilities as necessary to install replacement

facilities. These regulations also permit locating

a portion of mainline, lateral, or compressor

replacement facilities outside, but presumably

adjacent to, an existing right-of-way where, for

whatever reason, the new facilities could not be

13

placed entirely within the original facilities’

existing right-of-way. These regulations,

however, do not appear to contemplate mainline

construction over an entirely different route as

may be necessary to circumvent the site of a

disaster if immediate replacement is necessary

before the original site is again available.

Emergency Reconstruction of

Interstate Natural Gas Facilities

Under the Natural Gas Act, 68

Fed. Reg. 4120, 4122 (proposed

Jan. 17, 2003) (to be codified at

18 C.F.R. 157) (emphasis added).6

6

The District Court also commented on other portions of the

2003 notice regarding Part 157:

The agency repeated this general

idea a number of times: “part 157

. . . does not permit the extensive

deviation from an existing right-

of-way that would presumably be

necessary to circumvent a

restricted or quarantined area,”

“[part 157] was broadened

incrementally in 1999 to [allow]

mainline replacements . . . that . . .

did not lie within the original

facilities’ footprint, and

consequently were outside of the

section 2.55(b) replacement

parameters . . . [but] this

14

The District Court read the Notice

as imposing an “adjacency”

requirement onto any replacement

of a pipeline made under Part 157.

The Court then also determined

that since the replacement

pipeline would be “approximately

a quarter-mile distant” from the

existing pipeline and thus, did not

modification in the breadth of

eligible facilities did not

contemplate the more extensive

rerouting that would be required

to reach around a cordoned

accident area,” “[the 1999

broadening of part 157]

recognized the need to grant

natural gas companies the

flexibility to act under blanket

certificate authority to replace

facilities where construction of

new facilities might spill over the

original temporary workspace or

permanent right-of-way . . . [but

did not] envision[] replacement of

facilities outside the existing

right-of-way by the creation of an

entirely new route due to the need

to circumvent an accident site.

(App. 34-35 (citations omitted).)

15

align with its definition of

“replace” that required the same

location, it could not “be properly

characterized as [a]

‘replace[ment]’ of an ‘eligible

facility.’” (App. 36.)

On November 22, 2013, however, FERC issued a Final

Rule implementing changes to certain portions of Part 157 of

Title 18 of the CFR, which governs the instant case.7 The

Final Rule included a footnote in which FERC identified a

fact pattern essentially identical to the one at issue here —

that is, whether a company can rely on its blanket certificate

to replace the capacity of a segment of an obsolete pipeline

with a new pipeline that may need to be located a

considerable distance from the old pipeline. (See App. 1042.)

In it, FERC specifically states that Part 157 allows for such

replacement even where the replacement is not adjacent to an

existing right of way:

“[w]hile the Commission has

indicated previously that it is

contemplated that replacement

facilities constructed under

blanket authority would usually be

located adjacent to, if not within,

an existing right-of-way, sections

157.202(b)(2)(1) and 157.210

permit the construction of non-

7

This Final Rule has nothing to do with the Notice of

Proposed Rulemaking previously discussed that was referred

to by the District Court.

16

main line facilities and main line

facilities, respectively, without

restriction on their location.”8

8

In full, the footnote reads:

We note that in instances where a pipeline

company needs to rely on its Part 157 certificate

to construct auxiliary or replacement facilities

because they do not satisfy the location or work

space limitations of section 2.55, the Part 157

blanket certificate regulations impose no

limitations on the placement of the facilities.

While the Commission has indicated previously

that it is contemplated that replacement

facilities constructed under blanket authority

would usually be located adjacent to, if not

within, an existing right-of-way, sections

157.202(b)(2)(1) and 157.210 permit the

construction of non-main line facilities and

main line facilities, respectively, without

restriction on their location. For example, a

company can rely on its Part 157 blanket

certificate to replace the capacity of a segment

of obsolete pipeline with new pipeline that may

need to be located at considerable distance from

the old pipeline in order to avoid a housing

development constructed since the old pipeline

was installed or to install auxiliary facilities

such as anodes offset from the existing right-of-

way to provide cathodic protection.

17

Revisions to Auxiliary Installations, Replacement Facilities,

and Siting and Maintenance Regulations, 78 Fed. Reg.

72794, 72805 n.78 (Dec. 4, 2013) (to be codified at 18 C.F.R.

§§ 157 & 380) (emphasis added). Effectively, FERC

repudiated the District Court’s interpretation of the regulation

at issue.

On December 13, 2013, Columbia filed Rule 59(e)

Motions to Alter the Judgment of the District Court based on

FERC’s recently issued Final Rule. On May 20, 2014, the

District Court denied Columbia’s Motions to Alter, holding

that the footnote in FERC’s Final Rule was not entitled to

deference under Auer v. Robbins, 519 U.S. 452 (1997)

(holding that deference is owed to an agency’s interpretation

of its own ambiguous regulation). The District Court

described FERC’s Final Rule as an “about-face” (App. 54)

and explained that under Christopher v. SmithKline Beecham

Corporation, it was not entitled to deference because it

Revisions to Auxiliary Installations, Replacement Facilities,

and Siting and Maintenance Regulations, 78 Fed. Reg.

72794, 72805 n.78 (Dec. 4, 2013) (to be codified at 18 C.F.R.

§§ 157 & 380). The Dissent notes the promulgation of this

Final Rule closely following the District Court’s decision as if

this is problematic. To the contrary, we view the Final Rule

as FERC’s specific, reasonable rebuttal to what it viewed as a

total misreading of the regulations governing its operation.

See Christopher v. SmithKline Beecham Corp., 132 S. Ct.

2156, 2166-67 (2012) (noting that “Auer ordinarily calls for

deference to an agency’s interpretation of its own ambiguous

regulation, even when that interpretation is advanced in a

legal brief . . . .”).

18

conflicted with FERC’s prior interpretation of Part 157, as set

forth in the Notice of Proposed Rulemaking, and therefore did

“not reflect the fair and considered judgment of the agency.”

(App. 56); see also Christopher, 132 S. Ct. 2156, 2166 (2012)

(Auer deference does not apply where “there is reason to

suspect that the agency’s interpretation does not reflect the

agency’s fair and considered judgment on the matter in

question,” such as where “the agency’s interpretation

conflicts with a prior interpretation”) (internal quotation

marks omitted). Consequently, the District Court denied the

motion and reaffirmed its prior opinion denying Columbia’s

right of eminent domain.

Columbia challenges the District Court’s orders

relating to the motions for summary judgment, the motions to

alter, and the motions for preliminary injunctions. We address

each matter in turn below.

II. Discussion9

A. The Motions for Summary Judgment

“Our review of the grant or denial of summary

judgment is plenary, and we apply the same standard as the

district court.” Mylan Inc. v. SmithKline Beecham Corp., 723

9

The District Court had jurisdiction under 28 U.S.C. § 1331

and the Natural Gas Act, 15 U.S.C. § 717f(h). We have

jurisdiction pursuant to 28 U.S.C. § 1291.

19

F.3d 413, 418 (3d Cir. 2013) (internal quotation marks

omitted). Summary judgment is appropriate where “drawing

all reasonable inferences in favor of the nonmoving party,

there is no genuine issue as to any material fact and . . . the

moving party is entitled to judgment as a matter of law.”

Lexington Ins. Co. v. W. Pa. Hosp., 423 F.3d 318, 322 n.2 (3d

Cir. 2005) (internal quotation marks omitted). In reviewing

cross-motions for summary judgment, we view the facts

contained in each motion in the light most favorable to the

nonmoving party. Heffner v. Murphy, 745 F.3d 56, 65 (3d

Cir. 2014).

We will reverse the District Court’s orders granting the

Landowners’ motions for summary judgment and denying

Columbia’s motions for partial summary judgment because

the Court erred in reading an adjacency requirement into the

provision regarding replacement pipelines in Part 157 of

FERC’s regulations. The regulations are unambiguous.

Section 157.202(b)(2)(i) defines an “eligible facility” as

including “main line, lateral, and compressor replacements

that do not qualify under § 2.55(b) of this chapter because

they will result in an incidental increase in the capacity of

main line facilities, or because they will not satisfy the

location or work space requirements of § 2.55(b).” Section

2.55(b) covers replacement facilities that “will be located in

the same right of way or on the same site as the facilities

being replaced, and will be constructed using the temporary

work space used to construct the original facility.” Therefore,

a mainline replacement, as in the case of Line 1655, is an

eligible facility under Part 157 and covered under Columbia’s

certificate, by definition, because it involves construction

outside of the existing right of way.

20

The District Court erred in adopting its own definition

of “replace” as meaning putting something back in the same

place. The meaning of “replace,” as commonly understood, is

not so limited. One replaces electrical wiring in a house, for

example, by removing worn out or obsolete wires and putting

in new ones, even if the new wires are routed differently from

the original wires. The District Court, and the Dissent, omit

the most relevant definitions of the word “replace”:

2: to take the place of : serve as a substitute or

successor of : succeed, supplant <the saw and sawmill

rapidly replaced the ax . . .>

...

4: to fill the place of : supply an equivalent for < a

broken toy should not be immediately replaced . . .>

Webster’s Third New International Dictionary 1925 (3d ed.

1993). Put simply, in common parlance, “replace” can mean

to substitute for, or it can mean to literally re-place, to put

back in the same position. Because the regulations here

concern replacing old pipeline, i.e., substituting new for old,

the former definition is the only appropriate one. That

definition of replace, to provide an equivalent or substitute,

contains no inherent adjacency requirement. Accordingly, the

District Court’s and the Dissent’s, reading injects ambiguity

into the regulation where none exists. The District Court

should have ended its analysis by concluding that the

regulations unambiguously permitted Columbia to complete

the replacement of Line 1655 outside the existing right of

way with its existing FERC certificate.

The District Court and our dissenting colleague would

have a replacement not be a replacement, but rather a

21

“relocation” if constructed in a different place than the

original pipeline. But how can this square with Section

157.202(b)(2)(i), which allows for “replacements” outside the

existing right of way, so long as the gas company holds a

blanket certificate of public convenience and necessity?

More importantly, however, the definition of “replace”

put forward by the District Court, and now described as the

“better reading” by our dissenting colleague, (Dissent Op. at

9), is simply incompatible with the statutory scheme and

therefore not a reasonable interpretation of the word’s

meaning in this context. The Dissent agrees with the District

Court in concluding that the word “replace” should be read in

the regulation to mean, to “restore to a former place, position,

or condition.” (Dissent Op. at 8). Finding this definition to be

favorable, the Dissent argues that “[t]he fact that there are at

least two ways of understanding the word ‘replacement’

shows that it is ambiguous . . . .” (Dissent Op. at 11.) In fact

there is no ambiguity because the definition proposed by the

Dissent is inapplicable here for two reasons.

First, as noted above, using the definition of “replace”

supplied by the Dissent would render portions of the statute

nonsensical. Even the Dissent notes that, “sound principles of

interpretation ‘dictate that a regulatory scheme should be read

as a whole, so that effect is given to all its provisions.’”

(Dissent Op. at 7.). (quoting Cumberland Coal Res., LP v.

Fed. Mine Safety & Health Review Comm’n, 515 F.3d 247,

254 (3d Cir. 2008). In determining whether a statute is

ambiguous, we:

account for both the “specific context in which . . .

language is used” and “the broader context of the

22

statute as a whole.” A statutory “provision that may

seem ambiguous in isolation is often clarified by the

remainder of the statutory scheme . . . because only

one of the permissible meanings produces a

substantive effect that is compatible with the rest of the

law.”

Utility Air Regulatory Group v. E.P.A., 134 S. Ct. 2427, 2442

(2014). If “replace” were limited to restoring to a former

place or position, why would Section 2.55(b) specify that it

applies only to replacements “located in the same right-of-

way or on the same site as the facilities being replaced”?

Similarly, Section 157.202(b)(2)(i) defines an “eligible

facility,” inter alia, as a replacement that “will not satisfy the

location or work space requirements of § 2.55(b),” that is, a

replacement that is situated outside the position of the

previous pipeline. This conclusively proves that the plain

meaning of replace in this context is not to restore to a former

place or position.

If we were to apply the Dissent’s suggested definition

of the word “replace” to the regulation, the result would be

absurd–a replacement could never occur under Part 157 in the

situation contemplated. Where a replacement facility cannot

be “located in the same right-of-way or on the same site as

the facilities being replaced,” 18 C.F.R. § 2.55(b), it clearly

cannot take the former place or position of the replaced

facility. Finally, the Dissent’s definition would contravene

Section 157.202(b)(ii)(B), which states that an “Eligible

facility does not include . . . [a]n extension of a main line,

except replacement facilities covered under §

157.202(b)(2)(i).” Thus, far from requiring replacements to

take the place of the old pipeline, the regulations explicitly

23

recognize that replacement pipelines may properly result in

extensions of a main line.10

Second, a clear understanding of the definition adopted

by the District Court and the Dissent shows its inapplicability

to the statutory context here. To “restore” an object to a

“former place,” (Dissent Op. at 8) necessarily implies that the

object previously occupied a certain position, and that same

object is being returned to that position. Another way to

understand this definition is by considering “replace” to mean

literally “re-place,” whereby an object is removed, possibly

modified, and returned to its original location. For instance:

“after dusting the vase, she replaced it on the shelf” 11;

“[r]eplace your boots on your bare feet, and paddle across

waterway with well-protected feet”12; “replaced the card in

the file.”13

10

Perhaps recognizing these points, the Dissent argues that it

is not claiming that the pipeline must be replaced in “exactly

the same spot.” (Dissent Op. at 9.) This contradicts its chosen

definition, however. One cannot both claim that replace

means to restore to the same place or position, and that it

means to install in a different place or position. And once one

acknowledges that a replacement, i.e. substitute, might well

occupy a different location from the thing it has replaced, as

we well agree, there is no inherent limit in the word “replace”

as to where a replacement may be situated.

11

Replace, Cambridge Dictionaries Online,

http://dictionary.cambridge.org/us/dictionary/ american-

english/replace (last visited September 12, 2014).

12

Replace, Oxford English Dictionary,

http://www.oed.com/view/Entry/162819?rskey=

24

In other words, an object is placed back in its former

location.14 One cannot place back something which never

was placed in that position to begin with. Thus, the Dissent’s

definition necessarily allows Columbia only to place the same

pipeline back again in its former location. Accordingly if

Columbia installed a new pipeline as part of a replacement

project, even in the original right of way, it would

automatically be in violation of the certificate, because it

would not be “replacing” a pipeline back to its original site,

i.e., it would not be “restoring” any pipe to its “former”

position. Thus, the definition favored by the District Court

and Dissent is so stringent as to be absurd and cannot govern

here.15

The District Court also erred in relying on FERC’s

post-9/11 notice of proposed rulemaking, as requiring that

BbM3iQ&result=2&isAdvanced=false (last visited

September 12, 2014)).

13

Webster’s Third New International Dictionary 1925 (3rd

ed. 1993).

14

While the Dissent accuses us of “cherry-pick[ing]” these

examples, we cite them simply as representative uses of the

word “replace” when used in the sense of restoring to a

former place. (Dissent Op. at 9 n.6.) If there is another way

of employing the word in this context, we have not

encountered it and the Dissent does not supply it.

15

Instead, “replace” in the broad sense of “to furnish an

equivalent or substitute” controls “especially” in the case

when referring to something that “has been lost, depleted,

worn out, or discharged . . . .” American Heritage Dictionary

of the English Language 1479 (4th ed. 2009).

25

replacements must be adjacent to replaced pipelines. This

notice concerned the previously unaddressed situation of the

restoration of gas service in the aftermath of a disaster. A

close examination of the language of the notice makes

manifest the error of relying on it as imposing or confirming

an “adjacency” requirement in the law. For example, it states

that replacement facilities contemplated under Part 157 would

be “outside, but presumably adjacent to, an existing right of

way.” Emergency Reconstruction of Interstate Natural Gas

Facilities Under the Natural Gas Act, 68 Fed. Reg. at 4122

(emphasis added). There is nothing controversial or new in

this statement. A replacement pipeline would “presumably”

be adjacent to an existing pipeline for a number of practical

reasons – cost, environmental permitting limitations, capacity

requirements, and convenience. This does not mean, however,

that a replacement pipeline is required to be adjacent to an

existing right of way. The other sentence noted by the

Dissent is similarly inconclusive: “[t]hese regulations,

however, do not appear to contemplate mainline construction

over an entirely different route as may be necessary to

circumvent the site of a disaster . . . .” Id. (emphasis added).

Again this is dicta, but even more it states the obvious:

regulations that speak to replacing “physically deteriorated or

obsolete” pipeline indeed might not be viewed as

“contemplating” completely changing the location of a totally

obliterated pipeline to circumvent a disaster.16 Nowhere does

16

The notice dealt specifically with emergencies such as a

“sudden unanticipated loss of natural gas or capacity,” not

deteriorating pipelines. 68 Fed. Reg. at 4120. Presumably

FERC wanted to make clear that whether existing lines were

rendered inoperable or were totally destroyed due to a

disaster, re-routing was permissible. One cannot fault FERC

26

the Notice of Proposed Rulemaking state that replacement

pipelines, in a non-emergency context, must be located

adjacent to the original right of way.17

for wanting to cover all bases in such a situation, lest

someone contend that “replacement” in the existing

regulations applied only to the routine replacement of

pipelines that “have or will soon become physically

deteriorated or obsolete . . . .” 18 C.F.R. § 2.55(b)(1).

17

Indeed, FERC did not impose an adjacency requirement in

adopting that portion of Section 157.202(b)(2)(i) which

allows replacement construction outside the original right of

way. In the relevant Final Rule, several comments had

“argue[d] that replacements not in the same ROW [right of

way] should be covered under the blanket certificate instead

of requiring a separate §7(c) application.” Revision of

Existing Regulations Governing the Filing of Applications for

the Construction and Operation of Facilities To Provide

Service or To Abandon Facilities or Service Under Section 7

of the Natural Gas Act, 64 Fed. Reg. 26572, 26580 (May 14,

1999) (codified at 18 CFR 157). Accordingly, one such

comment proposed the clause that was subsequently codified,

allowing construction outside the previous right of way.

FERC thus agreed with the comments, stating broadly that:

“We intend to allow replacement facilities that do not qualify

under §2.55(b) because of land requirements to be eligible

facilities that can be constructed under §157.208 of the

blanket certificate. Further, to the extent that pipelines require

more ROW than is provided for in appendix A to part 2 for

replacement projects, including those not in the original

footprint, such as river crossings, etc., those replacements

would qualify as eligible facilities under our proposal.” Id.

The only caveats noted by FERC were that such replacements

27

The Notice of Proposed Rulemaking, in any event, is

entirely consistent with the plain text of the regulations,

authorizing replacements by certificate-holders outside the

right of way without any explicit adjacency requirement.

Indeed, the Final Rule established that FERC views its

regulation the same way. Accordingly, we need not even

consider principles of deference where the regulation is

unambiguous. See Christensen v. Harris Cnty., 529 U.S. 576,

588 (2000) (“Auer deference is warranted only when the

language of the regulation is ambiguous.”) The regulation

speaks for itself, such that Columbia is entitled to the

easements necessary to complete the replacement of Line

1655. The District Court erred in concluding otherwise.

For its part, the Dissent contends that (1) the

regulations are ambiguous because of the different possible

meanings of “replace”, (2) the Notice of Proposed

Rulemaking is “plainly in opposition” to the Final Rule, and

(3) therefore the Final Rule is not entitled to Auer deference.

(Dissent Op. at 20); Christopher v. SmithKline Beecham

Corp., 132 S. Ct. 2156, 2166 (2012) (noting that Auer

deference may not be appropriate where an “agency’s

interpretation conflicts with a prior interpretation . . . .”)

Even putting aside the fact that the meaning of “replace” is

unambiguous, as noted above, the caveats, vague language,

and highly specific nature of the situation dealt with in the

Notice of Proposed Rulemaking establish that there is no

conflict with the Final Rule. Further, the Final Rule itself

recognizes, and perfectly harmonizes with, the language of

the previous Notice: “[w]hile the Commission has indicated

were subject to environmental restrictions and landowner

notice provisions.

28

previously that it is contemplated that replacement facilities

constructed under blanket authority would usually be located

adjacent to, if not within, an existing right of way, sections

157.202(b)(2)(1) and 157.210 permit the construction of non-

main line facilities and main line facilities, respectively,

without restriction on their location.” 78 Fed. Reg. at 72805

n.78 (emphasis added).

Even if we were to assume that the regulations are

ambiguous, the interpretation of the Final Rule would still

control. That is because the Final Rule is fully consistent

with the Notice, and, as an agency interpretation of its own

regulation, it is deserving of deference. Decker v. Nw. Envtl.

Def. Ctr., 133 S. Ct. 1326, 1337 (2013) (“It is well established

that an agency’s interpretation need not be the only possible

reading of a regulation—or even the best one—to prevail.

When an agency interprets its own regulation, the Court, as a

general rule, defers to it unless that interpretation is plainly

erroneous or inconsistent with the regulation.”) (internal

quotations omitted). Thus, even if we accepted the Dissent’s

purported ambiguity in the regulations, FERC’s interpretation

in the Final Rule should control, and Columbia would remain

entitled to the sought easements.

The Dissent also claims that the Final Rule is simply a

“post hoc rationalization” on the part of FERC, and therefore

not deserving of Auer deference. (Dissent Op. at 17.) We

acknowledge that Auer deference may not be appropriate

where an interpretation constitutes a “‘post hoc

rationalizatio[n]’ advanced by an agency seeking to defend

past agency action against attack.” Christopher, 132 S. Ct. at

2166 (emphasis added). But in this case, there is no past

agency action that FERC is seeking to defend. Columbia

29

simply replaced its pipeline under its blanket certificate

outside the original right of way, and FERC later made clear

in the Final Rule that Columbia had the authority under the

applicable regulations to do so. FERC is not a party to this

action, nor does it have any reason to favor Columbia’s

interpretation over the Landowners’, but, we submit, only

desires to make clear what the regulations provide. The Final

Rule accordingly should not be read as any type of post-hoc

rationalization.

In the end, the Dissent’s reading appears to be aimed

primarily at avoiding what it perceives to be constitutional

problems, namely “a grant of limitless authority.” (Dissent

Op. at 32.) As set forth above, blanket certificate-holders do

not possess unfettered discretion to replace pipeline. They

are constrained by cost limitations, here waived by FERC

because of Columbia’s good faith attempts at compliance, as

well as notice requirements and environmental impact.18

Further, replacements may not be installed simply because a

company wishes to increase a pipeline’s capacity. Rather,

such projects may only be undertaken for “sound engineering

purposes.” 18 C.F.R. § 157.202(b)(2)(i). Appellees do not

claim that the replacement project was undertaken for

anything other than “sound engineering purposes.” Further,

even if constitutional issues might be implicated in a facial

challenge, that would be an issue for another case, but that is

not this case. We note that this constitutional argument was

18

And, Columbia would appear to be constrained in replacing

outside the existing right of way by the extra costs of doing

so, including costs of negotiation and or litigation with

landowners.

30

never raised by Appellees, has not been briefed, and therefore

is not properly before us.

Lastly, the Landowners argue that the “miscellaneous

rearrangement” provision of Part 157 limits Columbia’s

ability to replace the pipeline. This is incorrect.

“Miscellaneous rearrangement” is defined, in part, as “any

rearrangement of a facility, excluding underground storage

injection/withdrawal wells, that does not result in any change

of service rendered by means of the facilities involved,

including changes in existing field operations or relocation of

existing facilities.” 18 C.F.R. § 157.202(b)(6). The

Landowners claim that such a relocation may only take place

“[o]n the same property.” Id. § 157.202(b)(6)(i). As the

District Court noted, however, Section 157.202(b)(6) lists the

“three characteristics of ‘miscellaneous rearrangements’ in

the disjunctive.” (App. 37.) Thus a relocation may take place

on the same property, or it could occur, inter alia, “[w]hen

required by . . . encroachment of residential, commercial, or

industrial areas.” Id. § 157.202(b)(6)(ii).

But this is beside the point. The fact that the

“miscellaneous rearrangement” provision contemplates a

scenario in which a pipeline must be “relocated” due to

encroaching residential developments actually only goes to

show that this is referring to a relocation, and not a

replacement. Thus, “relocation,” as used here, involves

moving an existing entity to a new location, whereas

“replacement” would involve a substitution of new for old.

Accordingly, Section 157.208(a) treats “miscellaneous

rearrangements” as something different from “replacements”

of eligible facilities. Here, Columbia does not seek to move

the existing pipeline to a new location. Rather, Columbia will

31

construct a new facility to serve in place of the deteriorating

one. Thus, as Columbia argues, it is replacing Line 1655, not

relocating it.19

Under the plain language of FERC’s regulations,

Columbia is automatically authorized to replace Line 1655

according to its proposed plan. Pursuant to its FERC

Certificate, Columbia has the right of eminent domain over

the easements that it seeks from the Landowners.

Accordingly, we will reverse the orders of the District Court

granting the Landowners’ motions for summary judgment and

denying Columbia’s motions for partial summary judgment.20

B. Motions for Immediate Possession

Columbia argues that we should grant it immediate

possession of the easements by entering preliminary

injunctions. It urges that further delay will be harmful to it

and the public. If it is not able to begin replacement of Line

1655 until the determination of just compensation, the timely

completion of the project will be jeopardized. The District

19

The Landowners, in their brief, argued that Columbia seeks

an “extension” of its pipeline requiring it to acquire a new

certificate authorizing the project, pursuant to 15 U.S.C. §

717f(c)(1)(A). (Landowners’ Br. at 11.) At oral argument,

however, the Landowners conceded that Columbia does not

seek an extension of its pipeline. We therefore do not address

this argument.

20

Having determined that the District Court erred in its

disposition of the motions for summary judgment, we will

dismiss the appeal of the Court’s judgment on the motions to

alter as moot.

32

Court’s ruling that Columbia had not established the right to

condemn the necessary easements obviously doomed

Columbia’s request. Given our ruling that recognizes

Columbia’s right of eminent domain, the issue of the

preliminary injunction is properly before us. We believe that

we can easily decide this issue in the first instance, such that

remand, with its attendant delay, is unnecessary. This is not a

“normal” preliminary injunction, where the merits await

another day. In those situations, the probability of success is

not a certainty such that weighing the other factors is

paramount. Here, there is no remaining merits issue; we have

ruled that Columbia has the right to the easements by eminent

domain. The only issue is the amount of compensation—

which will definitely be determined on remand, but the result

of which can have no affect on Columbia’s rights to the

easements. That Columbia’s entitlement to relief comes in the

form of injunctive relief should not dictate that we impose

similar constraints on our grant of that relief in this context.

Nonetheless for the sake of completeness and because the

District Court and Dissent seek to limit Columbia’s

entitlement we will examine the other factors. We believe

they weigh in favor of granting the preliminary injunctions to

which Columbia is entitled.

In determining whether a party is entitled to a

preliminary injunction, we normally consider four factors:

“(1) whether the movant has shown a reasonable probability

of success on the merits; (2) whether the movant will be

irreparably injured by denial of the relief; (3) whether

granting preliminary relief will result in even greater harm to

the nonmoving party; and (4) whether granting preliminary

relief will be in the public interest.” Am. Express Travel

33

Related Servs. v. Sidamon-Eristoff, 669 F.3d 359, 366 (3d Cir.

2012) (internal quotation marks omitted).

Having already determined that Columbia has

succeeded on the merits, we now examine whether Columbia

will suffer irreparable injury if it is denied relief. Columbia

explains that pipeline construction season is relatively short

and late to begin — the weather from November through

February generally makes construction impractical and

expensive.21 Columbia states that if construction on the

properties does not begin by now (actually September 1,

2014), weather events could have a significant disruptive

effect and potentially delay the replacement of the pipeline

until 2015. Columbia explains that there are safety concerns

associated with an aging, unreliable pipeline, and that delay in

possession of the easements will likely cause it to miss the in-

service deadline in time for the beginning of the heating

season on November 1, 2014. If Columbia misses the in-

service deadline, it will lose the right to seek reimbursement

from its customers. Thus the harm to Columbia appears to

involve its safety, reputation, and economic interests.

Columbia points to the Fourth Circuit’s opinion in

East Tennessee Natural Gas Company v. Sage, 361 F.3d 808

21

Columbia has submitted two affidavits in support of its

motions for immediate possession–the affidavit of Doug

Holley (former Manager of Asset Management for Columbia

Gas and current Vice President of Projects for Contract Land

Staff, which was hired by Columbia Gas to assist it in

acquiring the easements for Line 1655) and the affidavit of

Jacob Frederick (Manager of Project Management for

Columbia Gas).

34

(4th Cir. 2004), in arguing that a preliminary injunction is

warranted where a delay in construction of a pipeline would

cause “significant financial harm” to both a gas company and

its customers. Id. at 828-29. The Fourth Circuit explained that

East Tennessee Natural Gas Company would be forced to

breach certain contractual obligations if it were forced to

delay construction in order to hold hearings on just

compensation. Id. The Landowners argue that Sage is

inapposite because Columbia has not shown that it will lose

more than $5 million (which was the estimated loss in Sage).

The Landowners also point to Third Circuit precedent stating

that “a purely economic injury, compensable in money,

cannot satisfy the irreparable injury requirement,” except

where “the potential economic loss is so great as to threaten

the existence of the movant’s business.” Minard Run Oil Co.

v. United States Forest Serv., 670 F.3d 236, 255 (3d Cir.

2011) (internal quotation marks omitted). Although Columbia

has not cited a specific dollar amount for the financial harm it

faces were we to deny relief, the harm alleged is not one of

“purely economic injury.” Here, there are also safety and

potential liability concerns caused by an inability to meet the

heating deadline.

Moreover, the harm to the Landowners that will result

if we grant Columbia’s preliminary injunctions is minimal.

Since we have already determined that Columbia has the right

of eminent domain, it is a certainty that the requested

easements will be granted. The Fifth Amendment also

guarantees that the Landowners will be justly compensated.

The Landowners have not stated any concrete injury other

than the loss of the easements over their land, which will

definitely occur, whether or not we grant Columbia

immediate possession of the easements.

35

Finally, we examine the public interest involved in

Columbia’s obtaining relief – it is this factor that

overwhelmingly weighs in favor of granting Columbia’s

preliminary injunctions. The Landowners state, summarily,

that “while the public does have an interest in the pipeline

being replaced for safety reasons, an additional delay in

replacement of Line 1655 will not result in any substantial

harm to the public.” Landowners’ Br. 35. Columbia has

explained, however, that the safety risks associated with a

delay in the replacement work and acquisition of the

easements will increase daily. In his affidavit, Jacob

Frederick elaborated upon the safety risks: “the Pipeline may

fail, collapse, explode, or leak, causing bodily and property

injury or death and/or leaving the residents of York County

without gas service.” (Frederick Aff. 3.) In addition to these

safety concerns, Columbia has made it clear that the residents

of York County could possibly be without heat the entire

winter if construction of the replacement does not begin soon.

Weighing all of the relevant factors, we conclude that

Columbia is entitled to injunctive relief and therefore will be

granted immediate possession of the easements.

III. Conclusion

In sum, we will reverse the orders of the District Court

(1) granting the Landowners’ motions for summary judgment,

and (2) denying Columbia’s motions for partial summary

judgment and for preliminary injunctions. We will dismiss the

appeal of the order concerning the motions to alter as moot.

Finally, we will remand to the District Court to enter the

preliminary injunctions and conduct further proceedings.

36

JORDAN, Circuit Judge, dissenting

The Majority interprets the pertinent regulations to

unambiguously allow private gas companies to replace a

pipeline anywhere, on anybody’s property, without any type

of formal administrative review. In deciding that the Federal

Energy Regulatory Commission (“FERC”) has extended such

a broad grant of the sovereign power of eminent domain to

private companies, the Majority relies on a definition of

“replacement” not provided in the text of the regulations but

supplied by Columbia, even though it is at odds with what

Columbia admits is the common understanding of what

constitutes a “replacement” and despite the fact that FERC

had never adopted that definition until, in the middle of an

unrelated rulemaking, the agency crafted a footnote in

reaction to the District Court’s decision in this case. In my

view, the Majority’s limitless reading of the regulations is

deeply problematic and renders them constitutionally suspect.

To avoid logical difficulties within the regulations, as well as

to avoid constitutional concerns, some sort of locational

limitation must serve as a constraint on pipeline replacement

outside of an original right-of-way.

I agree with the District Court that the regulations are

ambiguous and therefore resort to FERC interpretations is in

order. But FERC has been inconsistent in its explanations of

the regulations, and the agency’s most recent interpretation

does not warrant deference. FERC’s previous interpretation,

before it issued its footnoted reaction, reasonably indicated

that there is indeed a locational limitation on pipeline

replacements outside of an original right-of-way. Because the

pipeline project at issue here does not adhere to any locational

limitation at all, it is not a “replacement” within the meaning

of that term in the regulations. As a consequence, Columbia

should be required to petition FERC for a new certificate of

public convenience and necessity before being permitted to

condemn easements on property previously unaffected by

Columbia’s pipeline. I therefore respectfully dissent.

I. Background

On January 7, 1983, Columbia obtained a blanket

certificate of public convenience and necessity (the

“Certificate”) that authorized the company to construct and

operate a natural gas pipeline, known as “Line 1655,” at the

location specified in the application. The Certificate

continues to authorize the company to engage in limited,

routine activities with regard to that main-line facility, as

expressly identified in FERC regulations. But, “[f]or other

categories of activities, which may potentially require more

scrutiny and opportunity for public participation,” the

Certificate calls for the company to submit to further

regulatory procedures. (App. at 104 (footnote omitted).)

Columbia now seeks to use its decades-old Certificate to

construct a “replacement” pipeline “up to a mile away” from

the original Line 1655 and on the lawns of the homes of

Dwayne and Ann Brown, Bradley and Elizabeth Herr, Myron

and Mary Jo Herr, and Douglas and Tessa Hilyard

(collectively, the “Landowners”). (Appellee’s Br. at 7.)

Columbia attempted at first to negotiate easements

across the Landowners’ properties but was refused. It warned

the Landowners that the offers it had made “do[] not

represent Columbia’s view of the impact of the project on the

fair market value [of the properties]. To the contrary,

Columbia believes that the impact on fair market value will

2

be much less … .” (App. at 277, 301, 342, 379.) If the

Landowners declined Columbia’s initial offers, it threatened,

“Columbia w[ould] pursue the alternate acquisition process

provided to natural gas companies by the Natural Gas Act.”

(App. at 278, 302, 343, 380.) In other words, interpreting its

thirty-year-old Certificate to be a blank check for land

condemnation, Columbia negotiated with an implicit threat:

take our offers now or forfeit your property rights later, for

considerably less money, in a condemnation proceeding.1

After the Landowners maintained their rejection of

Columbia’s offers, the company sought to make good on that

threat by filing the eminent domain suit now on appeal.

The District Court granted the Landowners’ motions

for summary judgment on the question of Columbia’s

asserted right to the easements. In denying Columbia’s

motion for partial summary judgment on the same issue, the

District Court held that “the project is not automatically

authorized as a ‘replace[ment]’ of an ‘eligible facility’

pursuant to 18 C.F.R. §§ 157.202(b)(2)(i) & 157.208(a).”

(App. at 35.) Columbia petitioned to alter or amend the

judgment, which was denied. The Court observed that

“[Columbia]’s attack does not point to an actual error in

reasoning behind the Court’s judgment. Instead, Columbia

1

The Majority labels this a “sensationalist reading of

Columbia’s statement” that “has no basis in the record.”

(Maj. Op. at 7 n.3) I will leave it to the readers of our

competing opinions in this case to determine who may be

indulging in the more extravagant language. Suffice it to say

here that, in the language quoted above, there is a basis for

the observation that Columbia negotiated with the threat of

condemning the easements for less than the earlier offers.

3

… asserts that the Court should wholly defer to an agency

interpretation that – according to precedent that Columbia …

ignores – is properly due very little deference, if any beyond

its power to persuade.” (App. at 56.) The Court’s reference

to “an agency interpretation” is to FERC’s “about-face” (App.

at 54), discussed below, on whether a locational limitation

restricts where a “replacement” pipeline can be put.

II. Discussion

Until recently, Columbia would not have been able to

construct pipeline on a new route, as they are attempting to do

in the proposed Line 1655 project, without seeking a new

certificate of public convenience and necessity associated

with the new right-of-way. At least not according to FERC.

In 2003, that agency issued a notice entitled Emergency

Reconstruction of Interstate Natural Gas Facilities Under the

Natural Gas Act, 68 Fed. Reg. 4120, 4122 (proposed Jan. 17,

2003) (to be codified at 18 C.F.R. pt. 157) (hereinafter

Emergency Reconstruction Notice or Notice),2 in which it

discussed at length its then-current interpretation of the

regulations now in question, particularly Title 18, Part 157 of

the Code of Federal Regulations, which governs “eligible

facilities,” 18 C.F.R. § 157.202, .208. An eligible facility is a

natural-gas installation, such as a pipeline, eligible for

alteration, such as replacement, under the original certificate

2

Ultimately, FERC promulgated a Final Rule based on

the Emergency Reconstruction Notice. Emergency

Reconstruction of Interstate Natural Gas Facilities Under the

Natural Gas Act, 68 Fed. Reg. 31,596 (May 18, 2003) (to be

codified at 17 C.F.R. pt. 157) (hereinafter Emergency

Reconstruction Final Rule).

4

granted for the development of that facility. 18 C.F.R.

§ 157.202(b)(2).3 FERC apparently saw a shortcoming in the

regulations, namely that they do not allow companies to

effectively respond to an emergency that might require a

pipeline to be moved or new pipeline to be installed on a

route that varies significantly from the right-of-way

contemplated in an already-issued certificate. Id. at 4120-24.

For example, in the Emergency Reconstruction Notice, FERC

indicates that § 2.55 of the regulations,4 which governs

replacement projects within an authorized right-of-way, is

insufficient to address an emergency situation because it does

not allow for construction “outside the footprint of existing

facilities.” Id. at 4123.

The Notice also says that “[P]art 157 . . . provides [a]

vehicle for reconstruction of facilities … but this authority is

… limited.” Id. at 4121. It goes on to explain that, “[a]cting

3

Section 157.202(b)(2)(i) provides, in relevant part,

that “eligible facility includes main line, lateral, and

compressor replacements that do not qualify under § 2.55(b)

of this chapter because they … will not satisfy the location or

work space requirements of § 2.55(b).” 18 C.F.R.

§ 157.202(b)(2)(i).

4

Section 2.55(b)(1) excludes from the definition of

facilities the construction of which requires obtaining a new

certificate those projects “which constitute the replacement of

existing facilities that have or will soon become physically

deteriorated or obsolete, to the extent that replacement is

deemed advisable, if … [t]he replacement facilities … will be

located in the same right-of-way or on the same site as the

facilities being replaced.” 18 C.F.R. § 2.55(b)(1)(ii).

5

under blanket authority, [i.e., the authority under Part 157

conferred by a certificate,] a pipeline may install new

facilities on a new right-of-way, which may be acquired

through the pipeline’s exercise of eminent domain.” Id. That

authority “permit[s] locating a portion of mainline …

replacement facilities outside, but presumably adjacent to, an

existing right-of-way … .” Id. at 4122 (emphasis added).

FERC further recognized this locational limitation on Part

157 authority by saying that “[t]hese regulations … do not

appear to contemplate mainline construction over an entirely

different route as may be necessary to circumvent the site of a

disaster if immediate replacement is necessary before the

original site is again available.” Id. (emphasis added).

I understand that language to mean, as the District

Court did, that Part 157 authorizes “replacements” that may

involve placing a pipeline some minimal distance from its

original right-of-way but that such a project must indeed

involve only a very limited deviation from that route. The

Majority, at Columbia’s urging, sees the matter quite

differently. As Columbia put it in argument before the

District Court, when it comes to replacements, “[u]nder 157

there is no location restriction. There is no proximity

restriction.” (App. at 776.)

What there is, in short, is an ambiguity in the use of

the word “replacement” in the regulations. See In re Phila.

Newspapers, LLC, 599 F.3d 298, 304 (3d Cir. 2010) (stating

that a regulatory provision is ambiguous “where the disputed

language is reasonably susceptible of different

interpretations” (citation and internal quotation marks

omitted)). Despite the Majority’s assertion to the contrary,

the meaning of that term is not clear, and we are left to

6

dispute whether a pipeline “replacement” outside of an

original right-of-way includes a locational limitation or is

instead a concept without physical limits. That ambiguity is

the first of two related problems in this case. The second is

that the alternative interpretations of the ambiguous

regulation are not equally innocuous. The one advocated by

Columbia and adopted by the Majority raises internal

inconsistencies and constitutional issues that can and ought to

be avoided. I discuss both of those problems in turn.

A. Ambiguity & Deference

1. Ambiguity

The Majority concludes that the regulations are

unambiguous primarily by relying on the interplay between

the right-of-way locational limitation in § 2.55(b) and the lack

of an express locational limitation in the definition of

“eligible facility” in § 157.202(b)(2)(i). For two reasons, I

disagree with the conclusion my colleagues draw from that

difference. First, sound principles of interpretation “dictate

that a regulatory scheme should be read as a whole, so that

effect is given to all its provisions.” Cumberland Coal Res.,

LP v. Fed. Mine Safety & Health Review Comm’n, 515 F.3d

247, 254 (3d Cir. 2008) (internal quotation marks omitted).

As described in more detail herein, the Majority’s approach

fails to do that: it conflates “replacement” and “relocation,”

even though each has a specific and unique meaning in the

regulations. Also, by interpreting the term “replacement” so

broadly, it undermines § 2.55(b) because it leaves practically

no limitation for replacement projects outside of an existing

right-of-way. Further, it allows gas companies to circumvent

the important notice and hearing requirements of §§ 157.6

7

and 157.10, which necessitate providing notice to both

directly and indirectly affected property owners and an

opportunity to participate in a regulatory hearing regarding

certificate petitions.5

Second, the phrase “replacements that do not qualify

under § 2.55(b) … because they … will not satisfy the

location or work space requirements of § 2.55(b),” 18 C.F.R.

§ 157.202(b)(2)(i), is ambiguous because Part 157’s use of

“replacement” is reasonably susceptible to at least two

different interpretations. The District Court, relying on the

dictionary, defined “replace” as “to place again: restore to a

former place, position, or condition,” which, as the Court

noted, suggests either no relocation or an insignificant

relocation. (App. at 32.) The Majority, however, disagrees

with that definition and says that, “[p]ut simply, in common

parlance, ‘replace’ can mean to substitute for.” (Maj. Op. at

21.) That is one reading of “replace.” But, although my

colleagues think their selected definition is the only

applicable one, another and better reading in this context,

5

In this same vein, the Majority claims that a

significant check on a natural gas company’s power to

condemn easements under Part 157 for pipeline replacements

is that the company must have within its possession a blanket

certificate. But FERC’s statement that “[a]lmost all interstate

gas pipelines now hold [P]art 157 blanket certificates that

permit the automatic construction … of certain ‘eligible

facilities’” suggests that the Majority’s distinction is in effect

no distinction at all. Emergency Reconstruction Final Rule,

68 Fed. Reg. at 31,598.

8

which involves locational issues, is the one chosen by the

District Court.6

The Majority’s preferred reading of “replace” leads it

to declare that applying a location-focused definition of the

term is “absurd.” (Id. at 24.) It asserts that the position taken

by the District Court and that I am advocating requires the

replacement pipeline to be in exactly the same spot as the

original. That is not so, and ordinary speech is not so rigid, as

one of the Majority’s own examples indicates: “after dusting

the vase, she replaced it on the shelf.” (Id. at 25 (internal

quotation marks omitted).) When the vase makes it back onto

the shelf, it has been replaced there, whether it is an inch or

two to the left or right of where it had been. The location for

the replacement is not a matter of pinpoint accuracy, but there

is a limit. No one would describe the action as “replacing”

the vase if it were put in another room. The Majority’s

certitude cannot mask the fundamental problem with its view.

If the only requirement for a replacement is that it

“substititut[es] new for old” (Maj. Op. at 21, 32), then a gas

company may now replace pipeline originally located in

York, Pennsylvania, anywhere in the United States, from

6

The Majority also claims that I would require

Columbia to use the same pipe in its construction efforts for

those efforts to be categorized as a “replacement.” (Maj. Op.

at 25-26.) The Majority cherry-picks examples from the

dictionary and improperly treats the characteristics of those

suggestions as limitations on the term “replace.” Nothing in

what the District Court said or what I am saying has anything

at all to do with the materials that may be chosen for a

replacement project. This case is about where pipes are going

into the ground, not which pipes are being used.

9

Portland to Poughkeepsie, as long as that original pipeline is

somehow “old” and the replacement pipeline is somehow

“new.” Whatever the interpretation of “replace,” that hardly

seems the correct one, let alone the only plausible one. As

the District Court said, that reading “puts an excessively

expansive gloss on the common meaning of” the word. (App.

at 32.) At the very least, “replacement” is ambiguous in this

context, and so is the regulatory provision of which that term

is a part.

Columbia tries to avoid that conclusion by asserting

that the term “replacement” “has a specific meaning under the

Code of Federal Regulations” (Appellant’s Opening Br. at 24)

that is “entirely different … than in everyday parlance”

(Appellant’s Reply Br. at 7). In other words, Columbia

acknowledges that its proposed definition of replacement is

not the only or even the most common interpretation. One

might expect that, since Columbia and the Majority are

rejecting “everyday parlance,” their very different

understanding of the word “replacement” would be rooted in

some clear language in the Code of Federal Regulations

delineating a specialized meaning. Cf. Rowland v. Cal. Men’s

Colony, 506 U.S. 194, 200 (1993) (“[C]ourts would hardly

need direction where Congress had thought to include an

express, specialized definition for the purpose of a particular

Act … .”). But it is not. The specialized, non-customary

definition they rely on is nowhere to be found in the

regulations themselves; nor is it in any agency interpretation

pre-dating the District Court’s decision. Instead, in deciding

that the word is unambiguous, the Majority relies on

Columbia’s favored definition, which the Majority says is

dictated by “clear understanding.” (Maj. Op. at 24.) Despite

Columbia’s admission about “everyday parlance”

10

(Appellant’s Reply Br. at 7), and despite the Majority’s own

admission that “‘replace’ can mean to substitute for, or it can

mean … to put back in the same position” (Maj. Op. at 21

(emphasis added)), the Majority proclaims that the “only

appropriate” definition is the one “contain[ing] no inherent

adjacency requirement.” (Id. at 21-22.) If assertion were

argument, that might be more persuasive, but declaring that

something is unambiguous does not make it so.

Fortunately, we do not, in this administrative-law

setting, need to choose between different dictionary

definitions. The fact that there are at least two ways of

understanding the word “replacement” shows that it is

ambiguous, which requires us to consider how FERC has

interpreted the word. See Christensen v. Harris Cnty., 529

U.S. 576, 588 (2000) (“Auer deference is warranted only

when the language of the regulation is ambiguous.”). That

effort raises its own choices.

2. Deference

As noted earlier, FERC looked at the issue of

replacement when it considered the Emergency

Reconstruction Notice. Although the Notice is just that – a

notice of proposed rulemaking – it answered the question of

whether an additional limiting principle is necessary for

replacements outside of a right-of-way authorized in a FERC-

granted certificate. FERC published the Notice for the very

reason that there was no authority under Part 157 to replace a

pipeline in a location other than an existing right-of-way or

“outside, but presumably adjacent to, an existing right-of-

way,” even in an emergency. Emergency Reconstruction

Notice, 68 Fed. Reg. at 4122. FERC itself acknowledged the

11

locational limitation on pipeline replacement, saying the

regulation “do[es] not appear to contemplate mainline

construction over an entirely different route as may be

necessary to circumvent the site of a disaster.” Id.

For a decade that was the last word on the matter, but

one should never underestimate the continuing malleability of

words. Despite FERC’s well-grounded and plainly stated

insight about the locational limitations in Part 157, the agency

made a 180-degree turn one week after the District Court

issued its opinion in this case and decided that mainline

construction really is a free-form exercise after all. In a rule

published on November 22, 2013, Revisions to Auxiliary

Installations, Replacement Facilities, and Siting and

Maintenance Regulations, 78 Fed. Reg. 72794, 72804 n.78

(Dec. 4, 2013) (to be codified at 18 C.F.R. pts. 2, 157, 380)

(hereinafter Revisions to Auxiliary Installations), FERC

inserted a footnote designed to “[e]ffectively[] … repudiate[]

the District Court’s interpretation of the regulation at issue”

(Maj. Op. at 18). In that footnote, number 78 to be precise,

FERC gave what amounts to an on-the-fly approval of the

Line 1655 project by stating that “the Part 157 blanket

certificate regulations impose no limitations on the placement

of the facilities.” Revisions to Auxiliary Installations, 78 Fed.

Reg. at 72804 f.78. This new “Footnote Rule,” as I will refer

to it for convenience, is directly contrary to the interpretation

provided in the Emergency Reconstruction Notice. Id. The

question then arises: which FERC interpretation should be

heeded?

A choice has to be made because an agency’s

interpretations of its own ambiguous regulations are, under

Supreme Court precedent, entitled a degree of deference. The

12

direction given in Auer v. Robbins, 519 U.S. 452 (1997), is

that the agency’s interpretation is controlling unless it is

“plainly erroneous or inconsistent with the regulation.”7 Id. at

461 (internal quotation marks omitted). Nevertheless, in

Christopher v. SmithKline Beecham Corp., the Court recently

cautioned that “this general rule [of deference] does not apply

in all cases.” 132 S. Ct. 2156, 2166 (2012); see also Harry T.

Edwards et al., Federal Standards of Review, ch. XIV (“[T]he

deference afforded an agency’s interpretation of its own

regulations is significant, but it is not without limits.”).

Christopher teaches that, once a regulation has been

determined to be ambiguous, two questions should be

considered in deciding whether an agency’s new

interpretation of the ambiguous provision is entitled to Auer

deference: (1) whether the new interpretation is “plainly

erroneous or inconsistent with the regulation,” and (2)

7

It bears mentioning that at least three Supreme Court

justices have indicated an interest in revisiting the holding in

Auer. In Decker v. Northwestern Environmental Defense

Center, 133 S. Ct. 1326 (2013), Chief Justice Roberts, joined

by Justice Alito, concurred in applying deference to an

agency interpretation, but explained that, even though it

would have been improper to reconsider Auer in that case

because the parties did not properly preserve the issue in their

briefs, the Court should be prepared to do so in a subsequent

case. Id. at 1338 (Roberts, C.J., concurring). Justice Scalia,

in dissent, noted his discontent with what Auer has become:

“For decades, and for no good reason, we have been giving

agencies the authority to say what their rules mean, under the

harmless-sounding banner of ‘defer[ring] to an agency’s

interpretation of its own regulations.’” Id. at 1339 (Scalia, J.,

dissenting).

13

whether the interpretation “reflect[s] the agency’s fair and

considered judgment on the matter in question.” Christopher,

132 S. Ct. at 2166 (internal quotation marks omitted). An

interpretation does not reflect fair and considered judgment if,

for example, it “conflicts with a prior interpretation,” or is

“nothing more than a convenient litigating position,” or is “a

post hoc rationalizatio[n] advanced by an agency seeking to

defend past agency action against attack,” or if deference

“would seriously undermine the principle that agencies

should provide regulated parties fair warning of the conduct

[a regulation] prohibits or requires.” Id. at 2166-67

(alterations in original) (citations and internal quotation marks

omitted).

Christopher also expressed a concern that agencies

may take improper advantage of the deference extended to

them under Auer: “Our practice of deferring to an agency’s

interpretation of its own ambiguous regulations undoubtedly

has important advantages, but this practice also creates a risk

that agencies will promulgate vague and open-ended

regulations that they can later interpret as they see fit, thereby

‘frustrat[ing] the notice and predictability purposes of

rulemaking.’” Id. at 2168 (alteration in original) (footnote

omitted) (quoting Talk Am., Inc. v. Mich. Bell Tel. Co., 131 S.

Ct. 2254, 2266 (2011) (Scalia, J., concurring)).

If a court finds that either the “plainly erroneous” or

“fair and considered judgment” factor cuts against the

agency’s interpretation, that interpretation is reviewed not

under Auer, but rather under the Supreme Court’s decision in

Skidmore v. Swift & Co., 323 U.S. 134 (1944). See, e.g.,

Christopher, 132 S. Ct. at 2168-69 (turning to the Skidmore

standard after concluding that “whatever the general merits of

14

Auer deference, it is unwarranted here”). Under Skidmore,

deference is “proper only if the [agency’s view] has the

power to persuade, which ‘depend[s] upon the thoroughness

evident in its consideration, the validity of its reasoning, [and]

its consistency with earlier and later pronouncements.’”

Vance v. Ball State Univ., 133 S. Ct. 2434, 2443 n.4 (2013)

(second and third alterations in original). In short, Skidmore

deference is “a lesser degree of deference” than is given

under Auer because it considers the interpretation as having at

most the power to persuade, not the power to control.

Hagans v. Commn’r of Soc. Sec., 694 F.3d 287, 294-95

(2012).8

With that guidance in mind, I turn to the Emergency

Reconstruction Notice and the Footnote Rule. The

interpretation in the Notice acknowledges a much-needed

constraint on how far a replacement project can stray from an

original right-of-way. The Notice instructs that Part 157 does

not authorize a pipeline replacement that proceeds on an

entirely new route or is beyond what may fairly be

characterized as being on or “adjacent” to the original right-

of-way. If the proposed replacement pipeline does not fall

within those limitations, the gas company must approach

FERC for a new certificate. Nothing about the Notice

8

The requirement to consider under Skidmore an

agency interpretation that has failed the test for Auer

deference shows just how deeply embedded the idea of

deference to agencies has become. If an agency interpretation

has already been determined to be “plainly erroneous” or

something less than the product of “fair and considered

judgment,” it would seem very unlikely to have the power to

persuade, but the Skidmore base must nonetheless be touched.

15

indicates that the interpretation it provides is plainly

erroneous or fails to reflect FERC’s fair and considered

judgment. It would seem, then, to be guidance of the kind

suited for Auer deference.

My colleagues, however, endeavor to downplay the

importance of the Notice. They read its statement that Part

157 “permit[s] locating a portion of mainline[] …

replacement facilities outside, but presumably adjacent to, an

existing right-of-way,” Emergency Reconstruction Notice, 68

Fed. Reg. at 4122, as meaning that, while practical

considerations will generally prompt gas companies to build

on the same or an adjacent route, those utilities need not do

so. The word that the Majority uses to turn language of

limitation upside down is “presumably.” But such heavy

reliance on that word to undo the express limitation in the

Notice is misplaced. In the very next sentence of the Notice,

FERC made clear that the regulations “do not appear to

contemplate mainline construction over an entirely different

route.” Id. The Notice thus states and restates the necessary

principle that should be guiding our instruction to Columbia

today: if you want to take someone else’s property for your

pipeline, stay near your right-of-way and do not construct

along a new route; otherwise, come back for a new certificate.

The Majority deems the advice in the Emergency

Reconstruction Notice to be irrelevant because it “dealt

specifically with emergencies such as a ‘sudden unanticipated

loss of natural gas or capacity,’ not deteriorating pipelines.”

(Maj. Op. at 27 n.16.) Although it is true that the Notice

advocated adoption of certain new regulations focused on

how to better deal with emergency situations, that does not

mean that the interpretation it provides of the existing

16

regulations in Part 157 is of no consequence. The

interpretation provided in the Notice is very relevant indeed,

being, as it is, a FERC statement about the meaning of Part

157 that can rightly be called “just and considered.” It gives

guidance on what Part 157 authorizes and what its restrictions

are, without limiting those restrictions to emergency

situations. See Emergency Reconstruction Notice, 68 Fed.

Reg. at 4122 (“[P]art 157, subpart F, permits replacement

construction that uses temporary workspace beyond the

bounds of the temporary workspace previously used to

construct the original facilities as necessary to install

replacement facilities. These regulations also permit locating

a portion of mainline, lateral, or compressor replacement

facilities outside, but presumably adjacent to, an existing

right-of-way where, for whatever reason, the new facilities

could not be placed entirely within the original facilities’

existing right-of-way.” (emphasis added)). The interpretation

advanced in the Notice is therefore generally applicable here.

The Footnote Rule, by contrast, is a textbook example

of an agency shooting from the hip rather than giving a

question fair and considered judgment. Despite the

Majority’s comments to the contrary, FERC’s creation of

footnote 78 one week after the District Court’s opinion shows

it to be a hastily arrived-at decision, devoid of the hallmarks

of an agency interpretation deserving deference. The timing

reveals the Footnote Rule as a post hoc rationalization meant

to defend a past action, in this case Columbia’s attempt to

obtain property outside of the right-of-way allowed in its

Certificate. Cf. Christopher, 132 S. Ct. at 2166 (noting that

regulatory changes reflecting post hoc rationalization do not

receive Auer deference). Moreover, the insertion of the new

17

interpretation in a footnote in the middle of an unrelated rule9

about auxiliary facilities emphasizes FERC’s eagerness to get

it out as rapidly as possible, with the aim of undoing the

District Court’s decision. Again, that serves to highlight the

interpretation as a post hoc rationalization of Columbia’s

asserted condemnation power. Cf. Martin v. Occupational

Safety & Health Review Comm’n, 499 U.S. 144, 156 (1991)

(declining to defer to “‘post hoc rationalizations’ … advanced

for the first time in the reviewing court”).10

9

Given that footnote 78 has nothing to do with the

subject of the Revisions to Auxiliary Installations – which is

auxiliary facilities, see Revisions to Auxiliary Installations, 78

Fed. Reg. at 72795 (explaining that the purpose of

promulgating the revisions is “to clarify” regulations

governing “auxiliary installations added to existing or

proposed interstate transmission facilities”) – it is ironic that

the Majority endeavors to dismiss as mere dicta FERC’s

comments in the Emergency Reconstruction Notice. Those

comments had the merit of being pertinent to the subject of

the Notice.

10

Columbia rightly points out that the Supreme Court

has deferred to after-the-fact interpretations before,

particularly in an amicus brief filed after the case had reached

that Court. See Decker v. Nw. Envt’l Def. Ctr., 133 S. Ct.

1326, 1337-38 (2013). But the Supreme Court in Decker

looked past the post hoc nature of that brief primarily because

“[t]he agency [in question] has been consistent in its view that

the types of discharges at issue here do not require …

permits.” Id. Here, however, the Footnote Rule contradicts

the Emergency Reconstruction Notice’s prior interpretation of

Part 157.

18

The Majority endeavors to pass off the new

interpretation in the Footnote Rule as “perfectly

harmoni[ous]” with what was previously said in the

Emergency Reconstruction Notice (Maj. Op. at 29), but that

ignores the warning in the Notice that Part 157 does “not

appear to contemplate mainline construction over an entirely

different route as may be necessary to circumvent the site of a

disaster if immediate replacement is necessary before the

original site is again available,” Emergency Reconstruction

Notice, 68 Fed. Reg. at 4122. Because FERC opined that Part

157 does not allow new routing for a “replacement” pipeline

The Majority also says that FERC is not “‘seeking to

defend past agency action against attack’” and thus the

Footnote Rule cannot be read as a post hoc rationalization.

(Maj. Op. at 30 (quoting Christopher, 132 S. Ct. at 2166).)

But FERC is absolutely justifying its failure to require

Columbia to obtain a new certificate of merit for proposed

Line 1655. Moreover, even if there were no agency decision

to defend, the analysis is not so limited. Both the Auer and

Decker Courts permitted relevant federal agencies to submit

after-the-fact interpretations in amicus briefs in support of

another agency’s application of their regulations and not their

own actions. See Decker, 133 S. Ct. at 1337-38 (EPA

defending state decision-maker’s determination); Auer, 519

U.S. at 461 (Secretary of Labor defending members of the St.

Louis Board of Police Commissioners). Despite that

difference, the Supreme Court went on to consider whether

those interpretations were post hoc rationalizations. Decker,

133 S. Ct. at 1337-38; Auer, 519 U.S. at 461. In this case,

one could interpret FERC to be likewise defending another’s

interpretation of its rules; the fact that the interpreter is a

private company is of no moment.

19

even in the event of an emergency, there is precious little

logic and no consistency in saying that new routing is

permitted in the absence of an emergency. It is thus not

harmonious to assert, as the Footnote Rule does, that “Part

157 … regulations impose no limitations on the placement of

[replacement] facilities.” Revisions to Auxiliary Installations,

78 Fed. Reg. at 72804 n.78. FERC at first interpreted Part

157 to include a geographic limitation on replacement

projects. The Footnote Rule, issued with no notice and within

a week of the judicial action to which it was a reaction,

purports to completely do away with that limitation. The two

interpretations are plainly in opposition.

FERC itself tacitly admits as much in footnote 78. It

says, “[w]hile the Commission has indicated previously that it

is contemplated that replacement facilities constructed under

blanket authority[, i.e., pursuant to a FERC-granted

certificate,] would usually be located adjacent to, if not

within, an existing right-of-way, [Part 157] permit[s] the

construction of non-main line facilities and main line

facilities[] … without restriction on their location.” Id. No

one, not even those in the Majority, can claim that what

FERC was doing in that passage was saying how consistent

its newly announced position is with its past statements. The

evident purpose in giving a nod to what was said previously

was to acknowledge but minimize the change in position.

The while-we-previously-said locution hangs a bell on the

difference.

That does not alter my colleagues’ approach, though.

They look to the use of the word “usually” – a replacement

will usually be adjacent to or within an existing right-of-way

– and they conclude that it must mean FERC never really laid

20

down an interpretation that restricts the location of a

replacement pipeline. (See Maj. Op. at 29.) Like the word

“presumably” in the Notice, however, the word “usually” in

the Footnote Rule cannot carry the analytical weight the

Majority puts on it. Rather than showing there is no rule,

“usually” and “presumably” are words indicating that there is

in actuality a standard way of proceeding – a rule, so to speak

– one to which occasional exceptions may be found but a rule

nonetheless. A statement that repudiates what had been the

rule cannot rightly be labeled as being in harmony with the

rule.

There is yet another reason to reject footnote 78 as the

product of fair and considered judgment. In Christopher, the

Supreme Court noted that, “where[] …. an agency’s

announcement of its interpretation is preceded by a very

lengthy period of conspicuous inaction, the potential for

unfair surprise is acute.” 132 S. Ct. at 2168. Here, FERC

issued the Footnote Rule in November 2013, over a decade

after it published the Emergency Construction Notice.

Anyone paying attention would certainly be surprised to find

that what had been, by the agency’s own interpretation, a

presumptive limitation on where a pipeline could be replaced

was suddenly no limitation at all. Deference to the Footnote

Rule under such circumstances serves to foster cynicism and

to subvert the purpose of formal rulemaking.11

11

In addition to not being the product of fair and

considered judgment, the Footnote Rule is plainly erroneous

because the interpretation renders the relevant regulations

internally inconsistent and constitutionally infirm, as I will

discuss further hereafter.

21

FERC’s new interpretation of Part 157 thus ought not

receive the benefit of Auer deference, and it is no more

salvageable under Skidmore. Footnote 78 is unpersuasive for

all of the points already discussed. Cf. Univ. of Tex. Sw. Med.

Ctr. v. Nassar, 133 S. Ct. 2517, 2533 (2013) (noting an

agency’s “explanations lack the persuasive force that is a

necessary precondition to deference under Skidmore”). It

fails to persuade on another ground as well: it is inconsistent

with Part 157 itself. If I understand the Majority correctly,

Columbia’s project can be considered as both a relocation and

a replacement. That at least appears to be what Columbia

believes, as shown in comments before the District Court. At

a single hearing, it referred to the proposed Line 1655

construction interchangeably as a “replacement” and a

“relocation.” (Compare App. at 770 (“The pipeline itself is

an eight inch gas main. The gas main is going to be

relocated.”), and App. at 787 (“We are not rerouting. We are

relocating … .”), with App. at 775 (“We have the right to

construct a replacement main that would not qualify under a

2.55 analysis.”).)

The words “replacement” and “relocation” are not

intrinsically incompatible as synonyms. Part 157, though,

treats them differently, as denoting separate methods of

authorizing pipeline construction, with different requirements

applicable to each. When we examine a statute, “[w]e

generally seek to respect Congress’ decision to use different

terms to describe different categories of people or things.”

Mohamad v. Palestinian Auth., 132 S. Ct. 1702, 1708 (2013).

Our approach in reviewing a regulation should be the same.

Part 157 defines authorized “replacement” projects as

follows: “[E]ligible facility includes main line, lateral, and

compressor replacements that do not qualify under § 2.55(b)

22

[governing work within a certificate-designated right-of-way]

… because they will … not satisfy the location or work space

requirements of § 2.55(b).” 18 C.F.R. § 157.202(b)(2)(i)

(emphasis added). As for a “relocation” project, the

regulation couches it not as a replacement but as a

“miscellaneous rearrangement,” saying, “[m]iscellaneous

rearrangement of any facility means any rearrangement of a

facility … including changes in existing field operations or

relocation of existing facilities … .” Id. § 157.202(b)(6)

(emphasis added). Because “replacement” and “relocation”

are intended to mean different things in Part 157, an

interpretation that allows the concept of the former to absorb

the latter is dubious, but that is what the Majority’s

interpretation does. As noted by the District Court and as

mentioned above, the definition of “replace” advocated by

Columbia – and now adopted by the Majority – “puts an

excessively expansive gloss on the common meaning” of that

word (App. at 32), and thereby improperly allows Columbia

to “replace” pipeline by constructing new pipeline a mile (or,

for that matter, any distance) from the original right-of-way.

When a replacement pipeline can go anywhere, there is no

need to consider it for “relocation,” and the separate provision

for relocation is thus made of no effect.

In sum, the Footnote Rule is entitled to neither Auer

nor Skidmore deference, and the interpretation in the

Emergency Reconstruction Notice remains the best guidance.

The District Court did not err in deciding that, because the

Line 1655 project is neither within nor adjacent to the

existing right-of-way,12 the project is not a “replacement”

12

The District Court noted that this case “does not rise

and fall based on the definition of adjacency” because it is not

23

under Part 157, Emergency Reconstruction Notice, 68 Fed.

Reg. at 4122, and thus cannot proceed without an additional

certificate of public convenience and necessity.

B. Constitutional Concerns13

An additional reason to adopt the Emergency

Reconstruction Notice’s interpretation of Part 157 is that the

Majority’s interpretation would render the regulations

constitutionally infirm. The Majority’s broader interpretation

of “replacement” inappropriately grants to a private company

eminent domain power coextensive with that of the state and

strips future aggrieved landowners of their rights to formal

a close call whether the new route for Line 1655 is adjacent –

the proposed route is “entirely new.” (App. at 53 n.1.)

13

The Majority notes that no constitutional arguments

were raised in this case. That may be so, yet “[w]hen an issue

or claim is properly before the court, the court is not limited

to the particular legal theories advanced by the parties, but

rather retains the independent power to identify and apply the

proper construction of governing law.” Kamen v. Kemper

Fin. Servs., Inc., 500 U.S. 90, 99 (1991). We are attempting

to understand the meaning of the regulation in question, and I

am merely applying the canon of constitutional avoidance.

That canon “is not a method of adjudicating constitutional

questions”; rather, it “is a tool for choosing between

competing plausible interpretations of a statutory [or, in this

case, a regulatory] text.” Clark v. Martinez, 543 U.S. 371,

381 (2005). The aim is to avoid constitutional problems, and

we are not bound by the parties’ arguments in determining

which interpretive tools are relevant and how they bear on the

proper construction of governing law.

24

administrative procedures. An essential canon of

construction is that, if a court is faced with two possible

interpretations of a regulation, “by one of which [the

regulation] would be unconstitutional and by the other valid,

[the court’s] plain duty is to adopt that which will save the

[regulation].” Nat’l Collegiate Athletic Ass’n v. Governor of

N.J., 730 F.3d 208, 226 n.8 (3d Cir. 2013) (quoting NLRB v.

Jones & Laughlin Steel Corp., 301 U.S. 1, 30 (1937))

(internal quotation marks omitted). The more limited

interpretation of “replacement” provided by the Emergency

Reconstruction Notice should accordingly be applied to

preserve §§ 157.202 and 157.208 as they relate to main-line

replacements of eligible facilities.

The Supreme Court has recognized that there are

tighter bounds on the exercise of eminent domain by a utility

company than there are on that power when wielded by the

sovereign. In United States v. Carmack, the Court held that

“[a] distinction exists … in the case of statutes which grant to

others, such as public utilities, a right to exercise the power of

eminent domain on behalf of themselves. These are, in their

very nature, grants of limited powers.” 329 U.S. 230, 243

n.13 (1946) (emphasis added); see also Nat’l R.R. Passenger

Corp. v. Two Parcels of Land, 822 F.2d 1261, 1264-65 (2d

Cir. 1987) (“Amtrak has not been authorized to exercise the

sovereign’s power of eminent domain. It has been granted a

limited power, within the meaning of United States v.

Carmack, to condemn land ‘required [for] intercity rail

passenger service.’” (alteration in original) (citations

omitted)). That conclusion makes sense: when the power of

eminent domain is partially delegated to a private company,

that delegation must be as limited as possible to protect

landowners from abusive takings under the Fifth Amendment.

25

The Majority seems to suggest that a private

company’s self-interest is a satisfactory limitation on the

scope of the delegated power to take other people’s property.

(See Maj. Op. at 26 (“A replacement pipeline would

‘presumably’ be adjacent to an existing pipeline for …

practical reasons – cost … and convenience.”); id. at 30-31

n.18 (“Columbia would appear to be constrained in replacing

outside the existing right of way by the extra costs of doing

so, including costs of negotiation and or litigation with

landowners.”).) I am a great believer in the power of self-

interest, but it does not serve as a constitutional check. We

do not allow the government to condemn people’s land

without layers of procedural protection in place, and we

certainly cannot allow a private company to do so simply on

the assurance that it has reasons to exercise restraint. Yet an

unsupervised condemnation power is exactly what Columbia

claims to have under Part 157. When asked by the District

Court if the interpretation Columbia was proposing meant

that, in pursuing the Line 1655 “replacement” project, the

company “could construct this line in, say, Lincoln,

Nebraska,” Columbia’s counsel responded, “On a theoretical

level you could.” (App. at 776.) Counsel then outlined

“practically” why that would not happen (id.), but that, as I

will explain, amounts to cold comfort. “Trust me” is not a

reassuring response to the question, “What will you do with

the sovereign’s power?”

Although Columbia contends that there are no

locational limitations on replacing a main line under Part 157,

it points to four things that it says, and the Majority agrees,

should mollify concerns about giving to a utility the full

condemnation power of the sovereign without the structural

and procedural checks that limit the government. Those four

26

things are monetary restrictions, a notice requirement, an

environmental-impact-statement requirement, and a reporting

requirement. In this case, none of them function as a

meaningful restraint.

It is true that a “replacement” pipeline can be built

with less FERC supervision if its cost is below a monetary

threshold. In 2013, the year Columbia began work on Line

1655, that threshold was $11,000,000, and staying below it

meant that a gas company could avoid providing any formal

notice or environmental-impact statement to FERC before

identifying the land on which it planned to build. 18 CFR

§ 157.208(a)-(b), (d). Columbia at first projected that its

costs would be below $11,000,000, so the notice and

environmental-impact-statement requirements were made

inapplicable here. The reporting requirement, meanwhile, is

merely an annual “check-in” with FERC in which a gas

company provides some information for each facility

scheduled for completion that year. 18 C.F.R. § 157.208(e).14

Therefore, other than the locational limitation now at issue,

the cost cap was to be the lone constraint on Columbia’s

construction plans.

But, in this case, FERC actually waived even the

$11,000,000 cost cap, thus removing the last restraint on the

14

That information includes a “description of the

facilities,” a listing of the “specific purpose, location, and

beginning and completion date of construction of the facilities

installed,” the “actual installed cost,” and descriptions of

consultations made regarding various environmental

regulations. 18 C.F.R. § 157.208(e)(1)-(4).

27

company’s exercise of eminent domain.15 With that

restriction removed, § 157.208 swallows § 2.55(b), for if a

natural gas company seeks to move its pipeline outside the

original right-of-way and thus outside of § 2.55(b)’s purview,

there is really nothing to prevent it from doing so.

The Majority proffers other “curbs” on replacement

projects, in addition to its misplaced faith in its own

perception of a gas company’s self-interest. (Maj. Op. at 11.)

Those include a requirement that the “ʻprimary purpose’” of

replacements be for sound engineering purposes – in other

words, that “ʻthere must be a physical need to replace

facilities’” and that gas companies may not circumvent

pipeline requirements merely by designating a project as a

“ʻreplacement.’” (Maj. Op. at 11-12 (quoting 18 C.F.R.

§ 157.202(b)(2)(i); Revision of Existing Regulations Under

the Natural Gas Act, 64 Fed. Reg. 54522, 54527 (Sept. 29,

1999) (codified at 18 C.F.R. part 157)).) My colleagues also

say that gas companies may not construct new delivery points

or replace pipeline for the primary purpose of increasing main

15

The fact that Columbia conveniently obtained the

waiver in the middle of the proceedings below suggests that

FERC did not engage in any substantial deliberation before

issuing it. What is more, FERC’s proffered justification for

the waiver was that the landowners pushed back in

negotiations, which caused construction to be delayed. In

essence, the cost limitation was waived for the precise reason

it should not be: because property owners questioned the

exercise of eminent domain. The waiver sets a troubling

precedent that punishes property owners for attempting to

rely on protections afforded them in an eminent domain

process that the agency is supposed to oversee.

28

line capacity. And they point out that, if a landowner has a

problem with a gas company’s use of eminent domain, that

person may file a complaint with FERC. But just as

Columbia’s claimed limitations are insufficient, so are those

proposed by the Majority.

As for the primary-purpose requirement, because

FERC does not review projects that are automatically

authorized, 18 C.F.R. § 157.208(a), as Columbia says is so in

this instance, there is no independent way to determine what

the primary purpose of the replacement is. As for delivery

points, they have nothing to do with the present dispute – they

are not pipelines. As for capacity, I assume my colleagues

are referring to the provision of that regulation which

excludes from the definition of “eligible facility”

“[r]eplacements for the primary purpose of creating additional

main line capacity.” 18 C.F.R. § 157.202(b)(2)(i). That

regulation prohibits gas companies from undertaking a

replacement for the primary purpose of increasing the gas

capacity of the pipeline. Again, though, the regulation as

interpreted by the Majority would permit a gas company to

construct pipelines anywhere outside the original right-of-

way and thus does not preserve constitutional protections for

property owners. And, finally, as for the option landowners

have of filing complaints with FERC, it is perverse to foist

upon the citizenry the obligation of policing those whom the

government, as agents of the citizenry, are already supposed

to be policing.

To repeat, because the cost cap – the only legitimate

control on Columbia’s “automatic authorization” of its

exercise of eminent domain – is waivable by FERC and thus

proves to be an unreliable restraint, the Majority’s

29

interpretation of Part 157 is constitutionally suspect in that it

permits a delegation of power beyond that which can properly

be made to a private company. The District Court

exaggerated only a little in saying that the interpretation

proposed by Columbia and since adopted by the Majority

means that a “certificate automatically authorizes relocation

of replacement Line 1655 literally anywhere on earth, so long

as the replacement ‘will not satisfy the location or work space

requirements of § 2.55(b).’” (App. at 32.) That outcome is

untenable.

The Majority’s ruling presents another constitutional

problem. In Bi-Metallic Investment Co. v. State Board of

Equalization, 239 U.S. 441 (1915), the Supreme Court

distinguished the concerns arising from agency actions that

affect broad swaths of the population and those zeroing in on

a handful of individuals, noting that the latter were more

significant. It made clear that, when agency action affects

“[a] relatively small number of persons,” those individuals are

“exceptionally affected.” Id. at 446. Such action is

adjudicative in nature, and property owners are entitled to

procedural due process above and beyond that which has been

provided by the legislature via the agency’s organic statute.

Id.

Consistent with that safeguard, Congress and FERC

require significant oversight of any construction outside a

FERC-issued certificate’s right-of-way. Specifically, the

Natural Gas Act provides, “[n]o natural-gas company … shall

… undertake the construction or extension of any facilities

therefor … unless there is in force with respect to such

natural-gas company a certificate of public convenience and

necessity issued by the Commission authorizing such acts or

30

operations.” 15 U.S.C. § 717f(c)(1)(A). Thus, the

requirements for obtaining a new certificate apply “in every

case where a natural gas company acquires additional

property, even for operation and maintenance purposes.”16

16

The Majority characterizes § 717f(c)(1)(A) as only

being applicable to extensions of already-existing facilities.

(Maj. Op. at 32 n.19.) But the statute is not so limited, as it

applies to “any proposed construction or extension.” 15

U.S.C. § 717f(c)(1)(A) (emphasis added). There is no dispute

that the project constitutes a “construction”; in fact, FERC in

its Footnote Rule aptly described replacements outside the

original right-of-way as “construction of … main line

facilities … without restriction on their location.” Revisions

to Auxiliary Installations, 78 Fed. Reg. at 72804 n.75.

Columbia likewise refers to its replacement project as a

construction, noting that “[i]f [it] is not able to begin

construction on the properties by September 1, 2014, weather

events could have a significant disruptive effect.”

(Appellant’s Opening Br. at 8, 39.)

In any event, the distinction between an “extension”

and “proposed construction” is meaningless in this case

because the regulatory goal as to both is to place significant

controls over a natural gas company acquiring additional

property, no matter the reason. FERC has promulgated such

controls for construction, expansion, or any other purpose

requiring a FERC certificate, “to ensure that landowners will

be informed of any proposed infringement of their property

rights, and will have an opportunity to contest such proposed

infringements, prior to condemnation proceedings.”

Williston Basin Interstate Pipeline, Co. v. An Exclusive Gas

Storage Leasehold, 524 F.3d 1090, 1097 (9th Cir. 2008)

(emphasis added) (citing 18 C.F.R. §§ 157.6(d)(2)(iv),

31

Williston Basin Interstate Pipeline Co. v. Exclusive Gas

Storage Leasehold, 524 F.3d 1090, 1097 (9th Cir. 2008). A

“key Congressional goal in enacting the NGA [was] to have

FERC balance the competing public interests involved in a

proposed project through the issuance of certificates of public

convenience and necessity.” Id.; see 15 U.S.C. § 717f(e)

(setting forth factors for FERC to consider in deciding

whether to issue a FERC certificate). Notably, FERC has

interpreted that provision to require detailed notice to affected

landowners of their rights as to the proposed project and a

formal hearing where they have an opportunity to intervene

and protest it. 18 C.F.R. §§ 157.6(d)(2), 157.10.

The Majority manages to turn those limiting

regulations into a grant of limitless authority to natural gas

companies for basically the same activity as long as that

activity is labeled a “replacement.” The approach adopted

today allows a gas company to bypass all notice-and-hearing

requirements by tying its proposed project to the originally

authorized pipeline, even if that authorization was provided

decades ago and in an entirely different location. No

consideration is given to the rights of newly affected parties.

That is fundamentally at odds with regulations requiring

notice and an opportunity to participate in certificate hearings.

It is also at odds with what the Supreme Court has said

about the searching review FERC is supposed to undertake

before issuing a certificate:

157.6(d)(3)(v), 157.10 (procedures for obtaining a FERC

certificate)).

32

[A] natural gas company must obtain from

FERC a ‘certificate of public convenience and

necessity’ before it constructs, extends,

acquires, or operates any facility for the

transportation or sale of natural gas in interstate

commerce. FERC will grant the certificate only

if it finds the company able and willing to

undertake the project in compliance with the

rules and regulations of the federal regulatory

scheme.

Schneidewind v. ANR Pipeline Co., 485 U.S. 293, 302 (1988)

(citation omitted). In short, the Supreme Court has read

§ 717f(h) of the Natural Gas Act to require gas companies to

apply for a new certificate prior to engaging in construction

projects like the one here, as the companies are subject to

FERC’s “statutory duty” to carefully review any new project

that “constructs, extends, acquires, or operates any facility for

the transportation” of natural gas.17 Id.

FERC, once upon a time, interpreted its regulations to

require notice and hearings to protect affected landowners’

17

In fact, Columbia concedes that it was free to

petition FERC for another certificate of public convenience

and necessity to authorize its current project, but it chose not

to. Had it done so, much delay and expense would have been

avoided here. But Columbia wants a precedent for the

exercise of power. That is unfortunate because, if everything

is as Columbia claims, the pipeline construction would be

underway and perhaps completed, the Landowners’ rights

would have been addressed, and safety issues, to the extent

there are any, would have been resolved.

33

interests and balance them with the public interest in a safe

and properly functioning supply of natural gas.18 The

Majority’s reading of the regulations, while very convenient

for Columbia and perhaps the public at large, leaves those

procedural, even constitutional, protections for property

owners in tatters.19

18

The Majority implies that I am standing in the way

of safety measures. That is not my position. I am certainly

not suggesting that pipes be left to rot in the ground. A gas

company can maintain or replace its pipeline on or adjacent to

its certificate’s designated right-of-way, but if it strays

beyond that, the regulations and the Constitution bring

procedural protections into play that require a utility to

approach FERC for a new certificate. Notice and an

opportunity to be heard are basic protections for the property

rights of American citizens.

19

The Majority also errs in reversing the District

Court’s denial of Columbia’s request for a preliminary

injunction and immediate possession of the easements.

Because I believe Columbia lacked the authority to condemn

the easements by the power of eminent domain, as discussed

above, I would also conclude that Columbia does not have a

right to immediate possession of the easements. But even

assuming Columbia’s success in this case, the speculative

nature of Columbia’s proffered evidence cuts against an

injunction. The testimony of Doug Holley, a former

employee and current easement-contract negotiator, is

persuasive. At the preliminary-injunction hearing below, he

conceded that he “do[es not] know as an individual [whether

the line could fail soon] because [he] ha[s] not seen the line,

[he] ha[s] done no testing on the line, [and he] can’t speak to

whether there is an immediate danger. [He is just] assuming

34

III. Conclusion

Because the Emergency Reconstruction Notice

provides an interpretation that is not plainly erroneous and

that reflects a fair and considered judgment concerning limits

on where a replacement pipeline may be located, we should

give that interpretation deference. The District Court did not

err in understanding that such a limitation is necessary, nor in

determining that a significant departure from the pipeline’s

original route exceeds that limit. Thus, applying basic

administrative-law principles leads to the conclusion that we

should be affirming the ruling of the District Court. Speaking

more generally, it is disturbing and discouraging that, by

today’s ruling, the Majority endorses a view of delegated

sovereign power so broad that a private gas company, with no

agency oversight or other significant procedural restraint, can

take the property of other citizens far removed from that

company’s original right-of-way. I therefore respectfully

dissent.

there is because [his] company has put into place this

prioritization system [to determine which line to replace

next].” (Preliminary Injunction H’g Trans. at 53:19-24.)

Columbia proffers no evidence indicating that a threat is

imminent. Therefore, based only on the information before

us, a preliminary injunction is not the proper remedy here.

35