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Atlantic Coast Pipeline v. Nelson Co. Board of Supervisors

United States District Court, W.D. Virginia, Charlottesville Division

June 21, 2019

Atlantic Coast Pipeline, Plaintiff,
Nelson Co. Board of Supervisors, ET AL., Defendants



         This matter is before the Court upon Defendants Nelson County Board of Supervisors and Nelson County's (collectively, “Nelson County”) motions to dismiss pursuant to Fed.R.Civ.P. 12(b)(1) and 12(b)(6). (Dkts. 7, 9). In December 2018, the Nelson County Board of Zoning Appeals (BZA) denied four applications for variances submitted by Plaintiff Atlantic Coast Pipeline (ACP) pursuant to amendments to the Nelson County Floodplain Regulations (“Floodplain Regulations”) prohibiting construction of “critical facilities”-including facilities involving ‘hazardous materials or fuel storage” such as structures that transport natural gas-in the county's Special Flood Hazard Areas. ACP seeks a declaratory judgment that the Natural Gas Act preempts the Floodplain Regulations, as well as injunctions preventing Nelson County from enforcing the Floodplain Regulations or any similar zoning ordinance.

         Nelson County moves to dismiss on two grounds. First, Nelson County argues pursuant to Rule 12(b)(1) this case is not ripe for adjudication under Article III. Second, Nelson County argues under Rule 12(b)(6) that ACP's preemption claim necessarily fails because the Floodplain Regulation amendments were adopted pursuant to the National Flood Insurance Act (a federal statute) and thus cannot be preempted by the Natural Gas Act (another federal statute). Both arguments are without merit, and the motions to dismiss will be denied.

         I. Legal Standards & The Declaratory Judgment Act

         A. Legal Standards

         A motion to dismiss pursuant to Fed.R.Civ.P. 12(b)(1) tests a district court's subject matter jurisdiction. “The doctrine of constitutional standing arises from the case or controversy requirement of Article III, and is a jurisdictional inquiry regarding the power of the courts to adjudicate a litigant's claim.” L-3 Communications Corp. v. Serco, Inc., 673 Fed.Appx. 284, 288 (4th Cir. 2016) (citing Lujan v. Defenders of Wildlife, 504 U.S. 555, 559 (1992)). The doctrine of ripeness is a component of Article III's case or controversy requirement and “presents a threshold question of justiciability.” Scoggins v. Lee's Crossing Homeowner's Ass'n, 718 F.3d 262, 269 (4th Cir. 2013) (internal quotations omitted).

         A case is generally ripe and “fit for judicial decision when the issues are purely legal and when the action in controversy is final and not dependent on future uncertainties.” Doe v. Va. Dep't of State Police, 713 F.3d 745, 758 (4th Cir. 2013). A claim should generally be dismissed for lack of ripeness “if the plaintiff has not yet suffered injury and any future impact remains wholly speculative.” Id. “Stated alternatively, ‘[a] claim is not ripe for adjudication if it rests upon contingent future events that may not occur as anticipated, or indeed may not occur at all.” Scoggins, 718 F.3d at 270 (quoting Texas v. Untied States, 523 U.S. 296, 300 (1998)). In assessing ripeness, a court must “balance the fitness of the issues for judicial decision with the hardship to the parties of withholding court consideration.” Doe, 713 F.3d at 758.

         Declaratory actions must satisfy Article III's ripeness requirement. MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118, 127 (2007). A declaratory action is ripe if the dispute it presents is “definite and concrete, touching the legal relations of parties having adverse legal interests.” Id. “[T]he question in each case is whether the facts alleged under all the circumstances, show that there is a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment.” Id.

         A motion to dismiss pursuant to Fed R. Civ. P. 12(b)(6) tests the legal sufficiency of a complaint to determine whether a plaintiff has properly stated a claim; it “does not resolve contests surrounding the facts, the merits of a claim, or the applicability of defenses.” Republican Party of N.C. v. Martin, 980 F.2d 943, 952 (4th Cir. 1992). The Court must take all facts and reasonable inferences in favor of the plaintiff, disregard any legal conclusions, and not credit any formulaic recitations of the elements. Iqbal v. Ashcroft, 556 U.S. 662, 678 (2009); Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 557 (2007).

         B. The Declaratory Judgment Act

         The Declaratory Judgment Act provides that in cases within a district court's jurisdiction, the court “may declare the rights and other legal relations of any interested party seeking such declaration, whether or not further relief is or could be sought.” 28 U.S.C. § 2201(a). Federal courts can exercise jurisdiction in declaratory actions “when three essentials are met: (1) the complaint alleges an actual controversy between the parties of sufficient immediacy and reality to warrant issuance of a declaratory judgment; (2) the court possesses an independent basis for jurisdiction over the parties (e.g., federal question or diversity jurisdiction); and (3) the court does not abuse its discretion in its exercise of jurisdiction.” Volvo Const. Equipment N. Am., Inc. v. CLM Equipment Co., Inc., 386 F.3d 581, 592 (4th Cir. 2004) (internal quotations omitted). However, even if a district court possesses jurisdiction, “it may nonetheless, in the exercise of its discretion, decline to entertain the action.” Id. at 594. See also Hopeman Bros., Inc. v. Cont'l Cas. Co., 307 F.Supp.3d 433, 441 (E.D. Va. 2018) (noting that district courts have “unique and substantial discretion in deciding whether to declare the rights of litigants” in declaratory suits). But a district court may only refuse to entertain a declaratory action “for good cause.” Nautilus Ins. Co. v. Winchester Homes, Inc., 15 F.3d 371, 375 (4th Cir. 1994).

         In considering whether to issue a declaratory judgment, a district court should consider (1) whether “the judgment will serve a useful purpose in clarifying and settling the legal relations in issue, ” and (2) whether the judgment “will terminate and afford relief from the uncertainty, insecurity, and controversy giving rise to the proceeding.” Travelers Indem. Co. v. Miller Bldg. Corp., 221 Fed.Appx. 265, 267 (4th Cir. 2007) (quoting Centennial Life Ins. Co. v. Poston, 88 F.3d 255, 256 (4th Cir. 1996)). A declaratory judgment is generally not warranted “where it is used to try a controversy by piecemeal, or to try particular issues without settling the entire controversy.” Centennial Life Ins. Co., 88 F.3d at 256.

         II. Facts As Alleged

         Approximately 27 miles of the Atlantic Coast Pipeline (ACP) project will pass through Nelson County, Virginia. (Complaint ¶ 8). On October 13, 2017, ACP received a Certificate from the Federal Energy Regulatory Commission (FERC) authorizing the construction and operation of the project, pursuant to FERC's authority under Section 7 of the Natural Gas Act (NGA). (Id. ¶ 13; dkt. 1-1). The FERC Certificate contains the following language: “Any state or local permits issued with respect to the jurisdictional facilities authorized herein must be consistent with the conditions of this certificate. [FERC] encourages cooperation between interstate pipelines and local authorities. However, this does not mean that state and local ...

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