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Palmer v. Atlantic Coast Pipeline, LLC

Supreme Court of Virginia

July 13, 2017



          PRESENT: Goodwyn, Mims, McClanahan, Powell, Kelsey, and McCullough, JJ., and Millette, S.J.



         In this appeal, we consider whether a foreign corporation may exercise the entry-for-survey privilege given to natural gas companies by Code § 56-49.01. We also consider whether Code § 56-49.01 infringes upon provisions of the Constitution of Virginia.

         I. Background and Procedural History

         The Atlantic Coast Pipeline, LLC ("ACP") is a public service company organized under the laws of the State of Delaware. It is primarily "engaged in the underground storage and transportation of natural gas in interstate commerce." As such, it is a "natural gas company" as defined by 15 U.S.C. § 717a(6) and is subject to the jurisdiction of the Federal Energy Regulatory Commission ("FERC") under the Natural Gas Act, 15 U.S.C. § 717 et seq. ACP is engaged in FERC's regulatory approval process to build a natural gas transmission line that would extend from West Virginia to North Carolina, passing through the Commonwealth. As part of this process, ACP must conduct surveys, tests, appraisals, and other examinations upon properties located along the pipeline's proposed routes.

         Hazel Palmer owns real property in the Commonwealth along a proposed route. On March 6, 2015, ACP sent Palmer a letter seeking permission to enter her property to conduct preliminary surveys. When Palmer withheld her consent, ACP provided a notice of intent to enter her property pursuant to Code § 56-49.01. The notice explained that Code § 56-49.01 "authorizes certain natural gas companies to enter upon property, without permission, for examinations, tests, hand auger borings, appraisals and surveys for proposed natural gas lines in order to satisfy regulatory requirements and to select the most advantageous route."

         Palmer continued to deny ACP access to her property, and ACP filed a petition for a declaratory judgment in the circuit court requesting a declaration of its rights under Code § 56-49.01. Palmer filed a plea in bar, contending that Code § 56-49.01 only applies to domestic public service companies because it is within Title 56 of the Code of Virginia. She also demurred, arguing that Code § 56-49.01 is unconstitutional under Article I, § 11 of the Constitution of Virginia because it impermissibly burdens a fundamental right.

         The circuit court overruled Palmer's plea in bar and demurrer. Regarding the plea in bar, it found that the applicability of Code § 56-49.01 "turns upon a definition borrowed from [11 U.S.C. § 717a] rather than an implied definition suggested by its placement within the Code of Virginia." Regarding the demurrer, the circuit court noted that the "legal challenges to the validity of [statutes like Code § 56-49.01 across the country] on the basis that they [e]ffect a taking without just compensation have been consistently rejected." (quoting Charlottesville Division v. Dominion Transmission, Inc., 138 F.Supp.3d 673, 690 (W.D. Va. 2015)). Accordingly, it concluded that "[a] landowner has no constitutionally protected property right to exclude an authorized utility from entering his property for survey purposes." We granted Palmer this appeal.

         II. Analysis

         A. Applicability of Code § 56-49.01 to Foreign Corporations

         Palmer contends that ACP cannot exercise the entry-for-survey power of Code § 56-49.01 for two reasons. First, she argues that a "natural reading" of the statute "dictates that [it] only applies to Virginia public service companies." Second, she argues that the statute must be interpreted to avoid conflicting with Article IX, § 5 of the Constitution of Virginia. These arguments present "purely legal questions of statutory and constitutional interpretation which we review de novo." L.F. v. Breit, 285 Va. 163, 176, 736 S.E.2d 711, 718 (2013).

         1. Unambiguous Language of Code § 56-49.01

         In analyzing a statute, the Court's primary objective is "to ascertain and give effect to legislative intent." Conger v. Barrett, 280 Va. 627, 630, 702 S.E.2d 117, 118 (2010) (quoting Turner v. Commonwealth, 226 Va. 456, 459, 309 S.E.2d 337, 338 (1983)). "That intention is initially found in the words of the statute itself, and if those words are clear and unambiguous, we do not rely on rules of statutory construction." Crown Cent. Petroleum Corp. v. Hill, 254 Va. 88, 91, 488 S.E.2d 345, 346 (1997).

         Code § 56-49.01 provides, in relevant part, that

A. Any firm, corporation, company, or partnership, organized for the bona fide purpose of operating as a natural gas company as defined in 15 U.S.C. § 717a, as amended, may make such examinations, tests, hand auger borings, appraisals, and surveys for its proposed line or location of its works as are necessary (i) to satisfy any regulatory requirements and (ii) for the selection of the most advantageous location or route, . . . [and] may enter upon any property without the written permission of its owner . . . .

         On appeal, Palmer argues that Code § 56-49.01 only applies to domestic natural gas companies because it is located within Title 56 of the Virginia Code, which governs "Public Service Companies." She suggests that if the statute was intended to apply to "any" natural gas company, "it would have been placed in ...

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