PUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

No. 15-2348

RICHARD A. PRESSL; THERESA PRESSL,

Plaintiffs - Appellants,

v.

APPALACHIAN POWER COMPANY,

Defendant - Appellee.

Appeal from the United States District Court for the Western

District of Virginia, at Roanoke. Norman K. Moon, Senior

District Judge. (7:15-cv-00343-NKM-RSB)

Argued: October 26, 2016 Decided: November 21, 2016 

Before MOTZ, TRAXLER, and FLOYD, Circuit Judges.

Vacated and remanded by published opinion. Judge Motz wrote the 

opinion, in which Judge Traxler and Judge Floyd joined.

ARGUED: James Frederick Watson, CASKIE & FROST, P.C., Lynchburg, 

Virginia, for Appellants. Frank Kenneth Friedman, Matthew 

Patrick Warren Pritts, WOODS ROGERS, PLC, Roanoke, Virginia, for 

Appellee. ON BRIEF: Pavlina B. Dirom, CASKIE & FROST, P.C., 

Lynchburg, Virginia, for Appellants. C. Carter Lee, WOODS 

ROGERS, PLC, Roanoke, Virginia, for Appellee.
2

DIANA GRIBBON MOTZ, Circuit Judge:

Landowners brought this action in state court seeking a 

declaration of their rights to build a dock on property subject 

to a flowage easement. After the power company, which owns the 

easement, removed the case to federal court, the landowners

sought to remand the case to state court. The district court 

denied the motion to remand and then dismissed the landowners’ 

complaint. Because the district court lacked subject matter 

jurisdiction, we must vacate and remand.

I.

Richard A. Pressl and Theresa Pressl own property adjacent 

to Smith Mountain Lake in Franklin County, Virginia. They own 

about two and a half acres of land sitting more than 800 feet 

above median sea level. The Pressls also own half an acre of 

adjoining land below the 800-foot elevation contour. They

acquired the property subject to a flowage easement that the 

Pressls’ predecessors in interest granted in 1960 to Appalachian 

Power Company (“APCO”).

The flowage easement recites APCO’s intention to construct 

a dam and operate a hydroelectric power station at Smith 

Mountain. It provides that the elevation of the impounded 

waters the dam creates generally would not exceed 800 feet. The 

easement grants APCO the right to:
3

overflow and/or affect so much of said premises as may 

be overflowed and/or affected, continuously or from 

time to time in any manner whatsoever, as the result 

of the construction, existence, operation and/or 

maintenance of the aforesaid dam and/or power station, 

the impounding of the waters of [Roanoke] river and 

tributaries and/or the varying of the level of the so 

impounded waters by reason of the operation of said 

power station, including any pumping as part of such 

operation.

The easement also gives APCO the right to:

enter upon said premises at any time and from time to 

time and, at Appalachian’s discretion, to cut, burn 

and/or remove therefrom any and all buildings, 

structures, improvements, trees, bushes, driftwood and 

other objects and debris of any and every kind or 

description which are or may hereafter be located on 

the portion of said premises below the contour the 

elevation of which is 800 feet.

The easement provides that the landowners retain the right to 

“possess and use said premises in any manner not inconsistent 

with” APCO’s flowage easement, including crossing the land for 

recreational purposes.

After acquiring the property, the Pressls sought to 

construct a dock below the 800-foot elevation contour. APCO 

advised the Pressls that, as a condition for building the dock, 

they had to execute an Occupancy and Use Permit and agree to 

abide by its restrictions.

Balking at this requirement, the Pressls filed suit in 

Virginia state court, seeking a declaratory judgment that APCO’s 

demands violated the flowage easement. The complaint asks the 

court to declare “that APCO has no regulatory authority over the 
4

plaintiffs’ property which lies below the 800 foot contour 

beyond those rights defined by the flowage easement, the 

contemporaneous expressions of the parties, and vested rights to 

build and own structures to access Smith Mountain Lake for 

recreational purposes.” It further requests the court to hold 

that the Pressls “be allowed to use their property in any manner 

not inconsistent with the maintenance of a dam and hydroelectric power generation plant operated by APCO at Smith 

Mountain.”

APCO removed the case to the United States District Court 

for the Western District of Virginia. APCO asserted that the 

federal district court had subject matter jurisdiction because 

the Pressls’ property lies within the project boundary for 

APCO’s Smith Mountain hydroelectric project, which APCO operates 

under a license issued by the Federal Energy Regulatory 

Commission (“FERC”).

The district court agreed. It concluded that it had 

jurisdiction under both 28 U.S.C. § 1331 and 16 U.S.C. § 825p. 

The court then granted APCO’s motion to dismiss, analyzing the 

easement under Virginia law. The court held that the plain 

language of the flowage easement gave APCO the right to remove 

any dock built below the 800-foot elevation contour and that 

APCO’s exercise of that right would be in furtherance of the 

original purpose of the easement -- to allow APCO to operate its 
5

hydroelectric project. The district court also held that the 

Pressls needed to raise any complaints about APCO’s actions with

FERC prior to filing suit. The Pressls timely noted this

appeal.

Before us, the Pressls renew their argument that the 

federal district court lacked subject matter jurisdiction.1 We 

review questions as to subject matter jurisdiction de novo. 

Dixon v. Coburg Dairy, Inc., 369 F.3d 811, 815-16 (4th Cir. 

2004) (en banc). The party seeking to remove a case to federal 

court has the burden of demonstrating federal jurisdiction. Id.

at 816. “If federal jurisdiction is doubtful, a remand is 

necessary.” Mulcahey v. Columbia Organic Chems. Co., Inc., 29 

F.3d 148, 151 (4th Cir. 1994). APCO argues that jurisdiction 

lies under 18 U.S.C. § 1331 and 16 U.S.C. § 825p. We consider 

each statute in turn.

II.

To determine whether a case “arises under” federal law for 

the purposes of establishing federal question jurisdiction under 

28 U.S.C. § 1331, we follow the well-pleaded complaint rule. 

Jurisdiction exists “only when a federal question is presented 

 1 The Pressls also challenge the district court’s dismissal 

of their complaint on the merits. Because we hold that the 

court did not have subject matter jurisdiction, we do not reach 

that contention.
6

on the face of the plaintiff’s properly pleaded complaint.” 

Caterpillar Inc. v. Williams, 482 U.S. 386, 392 (1987). It is 

not enough that there may be a defense grounded in federal law 

or that the complaint anticipates and rebuts such a defense. 

Id. at 392-93.

In an action for declaratory judgment, however, “the 

federal right litigated may belong to the declaratory judgment 

defendant rather than the declaratory judgment plaintiff.” 

Columbia Gas Transmission Corp. v. Drain, 237 F.3d 366, 370 (4th 

Cir. 2001). Under this “coercive action doctrine,” although the 

declaratory judgment plaintiff does not assert a claim arising 

under federal law, federal question jurisdiction exists if “the 

complaint alleges a claim arising under federal law that the 

declaratory judgment defendant could affirmatively bring against 

the declaratory judgment plaintiff.” Id. See generally 13D 

Charles Alan Wright, et al., Federal Practice and Procedure

§ 3566 (3d ed.), Westlaw (database updated April 2016).

In this case, the Pressls seek a declaratory judgment that 

APCO does not possess rights under the flowage easement to 

prevent or regulate construction of a dock on their property.

APCO maintains that federal question jurisdiction lies because 

its hypothetical coercive suit, seeking a declaration as to its 

rights to prevent or regulate construction or an injunction to 

enforce those rights, would arise under federal law.
7

“[T]he vast majority” of cases arising under federal law 

“are those in which federal law creates the cause of action.” 

Merrell Dow Pharm. Inc. v. Thompson, 478 U.S. 804, 808 (1986). 

Cases may also arise under federal law, however, when “the 

vindication of a right under state law necessarily turn[s] on 

some construction of federal law.” Id. (quoting Franchise Tax 

Bd. v. Constr. Laborers Vacation Tr., 463 U.S. 1, 9 (1983)).

APCO admits that neither the Pressls’ complaint nor APCO’s 

hypothetical coercive suit alleges a federal cause of action. 

APCO contends that federal jurisdiction nonetheless exists 

because its rights under state law necessarily turn on the 

construction of its federal license. For a federal court to 

have jurisdiction in these circumstances, the federal issue must 

be “(1) necessarily raised, (2) actually disputed, (3) 

substantial, and (4) capable of resolution in federal court 

without disrupting the federal-state balance approved by 

Congress.” Gunn v. Minton, 133 S. Ct. 1059, 1065 (2013); see 

also Grable & Sons Metal Prods., Inc. v. Darue Eng’g & Mfg., 545 

U.S. 308, 312-14 (2005). Federal jurisdiction will lie only if 

a case meets all four requirements. Gunn, 133 S. Ct. at 1065.

A.

i.

We first address whether this case necessarily raises a 

federal question. APCO emphasizes that the property subject to 
8

the flowage easement lies within the project boundary for the 

Smith Mountain Hydroelectric Project that APCO operates. FERC 

imposes certain duties on APCO for managing development and 

construction within the project boundary -- including managing 

the construction of docks. APCO argues that the Pressls’ 

complaint necessarily raises federal issues because it seeks a 

declaration that APCO does not have authority to regulate 

construction of a dock. According to APCO, a court must examine

APCO’s authority under its federal license to adjudicate the 

issue. Appellee Br. at 13-15, 20-21, 25-26.

In proffering this argument, APCO misreads the Pressls’ 

complaint. The Pressls do not challenge APCO’s substantial

duties to FERC. Nor do they dispute the extent of APCO’s 

authority over the property in the event the flowage easement 

provides APCO with sufficient property rights.

The Pressls maintain only that APCO has not acquired the 

property right to constrain the Pressls’ construction of a dock. 

Because neither the Federal Power Act nor APCO’s FERC license 

provides APCO with the property rights necessary to operate the 

hydroelectric project, see, e.g., Appalachian Power Co., 153 

FERC ¶ 61299, at ¶ 29 (Dec. 17, 2015), APCO must acquire these 

rights either through condemnation or contract. APCO has not 

(yet) condemned any of the Pressls’ land, and the Pressls 

maintain that the contract provision at issue here -- the 
9

flowage easement -- does not provide APCO with sufficient 

property rights. In accord with this theory, the Pressls’

complaint asserts that the “controversy between the parties 

regard[s] the rights granted . . . pursuant to the . . . flowage 

easement” and “aver[s] that the flowage easement does not give 

APCO the right to regulate any use which [the Pressls] may make 

of their property.” This controversy does not necessarily raise

a federal question.

ii.

Alternatively, APCO maintains that a federal question 

necessarily arises in interpreting the scope of the flowage 

easement. It argues that its right to prevent the Pressls from 

building a dock derives from two easement provisions: the

provision allowing APCO to “overflow and/or affect” the property 

“by reason of the operation of [the Smith Mountain] power 

station” and the provision allowing APCO to remove “any and 

all . . . structures.” APCO asserts that, under Virginia law, a 

reasonableness inquiry based on the original purpose of the 

easement limits these broad powers. Because the purpose of the 

easement was to allow it to construct and operate a dam and 

power station, APCO contends that a court must interpret its

FERC license to determine the reasonable limit of its rights 

under the easement. Appellee Br. at 21-22.
10

But a claim “necessarily depends on a question of federal 

law only when every legal theory supporting the claim requires 

the resolution of a federal issue.” Flying Pigs, LLC v. RRAJ 

Franchising, LLC, 757 F.3d 177, 182 (4th Cir. 2014)(quoting 

Dixon, 369 F.3d at 816). Accordingly, if even one theory for 

interpreting the flowage easement does not involve 

interpretation of federal law, the claim does not “arise under” 

federal law. Dixon, 369 F.3d at 817.

Because of this requirement, we have rejected a similar 

contention that interpretation of an easement necessarily 

depends on a question of federal law. See Columbia Gas 

Transmission Corp. v. Drain, 191 F.3d 552, 559 (4th Cir. 1999). 

There, a company regulated by FERC under the Natural Gas Act

brought an action in federal court to enforce an easement for 

operation of a gas line. Id. at 554. Because the easement did 

not explicitly specify the width of the right of way, the court 

needed to determine what width was “reasonably necessary” under 

state law. Id. at 557. We explained that the determination of 

that question is often reached without reference to federal law 

or regulations. Id. at 558. Accordingly, we held that the 

state law easement claim did not necessarily raise issues of 

federal law. Id. at 559; see also Columbia Gas Transmission, 

LLC v. Singh, 707 F.3d 583, 589-90 (6th Cir. 2013)(holding that 

interpretation of an easement owned by an entity subject to FERC 
11

regulation did not necessarily raise a federal question because 

the obligation created by the federal regulation was just one of 

many factors considered in the state law inquiry).2

The same analysis applies in this case. Under Virginia 

law, the most important factor in interpreting an easement is 

the language of the easement itself. Pyramid Dev., L.L.C. v. 

D&J Assocs., 553 S.E.2d 725, 728 (Va. 2001) (“[W]hen the 

language of a deed is ‘clear, unambiguous, and explicit,’ a 

court interpreting it ‘should look no further than the four 

corners of the instrument under review.’” (quoting Langman v. 

Alumni Ass’n of Univ. of Virginia, 442 S.E.2d 669, 674 (Va. 

1994)). Indeed, in holding that the easement at issue here gave 

APCO the right to remove any structure below the 800-foot 

elevation contour, the district court relied primarily on the 

easement’s text. It did not need to analyze the meaning of 

APCO’s license to determine the reasonable limits of the 

easement. The court simply noted that the original purpose of 

 2 VA Timberline, L.L.C. v. Appalachian Power Co., 343 F. 

App’x 915 (4th Cir. 2009) (per curiam), an unpublished opinion 

on which APCO relies, offers the company little assistance. 

There we upheld the grant of summary judgment to APCO on a claim 

involving an easement owner’s right to build a dock. But the 

conveyances at issue in Timberline were explicitly made subject 

to APCO’s FERC license “and any amendments thereof or 

supplements thereto.” Id. at 916. Because the plaintiff’s 

easement only gave it the right to construct docks that complied

with APCO’s license, interpreting the license was necessary to 

resolve the case.
12

the easement was to allow APCO to operate a hydroelectric 

project regulated by FERC. Such tangential reference to federal 

law does not suffice to create “arising under” jurisdiction.

In sum, this case does not necessarily raise any federal 

issue.

B.

Moreover, no federal question in this case is actually 

disputed. There is no dispute over the validity of APCO’s 

federal license. Nor is there any dispute as to APCO’s 

obligations to FERC. The Pressls challenge only whether the 

flowage easement by its terms allows APCO to prevent them from 

building a dock. This seems a simple enough dispute, which the 

district court may well have properly resolved -- had it arisen 

under federal law. But, of course, it did not. Rather, this 

case presents solely a dispute as to state property law.

C.

Finally, we believe that any federal interest in 

interpreting the flowage easement is not substantial and that 

asserting federal jurisdiction over cases like this would

disrupt the congressionally approved federal-state balance. 

State courts are just as able (perhaps more able) to interpret 

and enforce the property rights conveyed through instruments 

governed by state law.
13

Undoubtedly, there is a federal interest in ensuring the 

effective operation of hydroelectric projects. But resolving 

property disputes in state court does not undermine that 

interest. After all, if a state court ultimately holds that

APCO did not acquire all of the property rights it needs to 

operate the project in compliance with its license, APCO can 

obtain those rights through contract or through eminent domain. 

16 U.S.C. § 814. Thus, a ruling against APCO in this case could

not substantially affect federal interests. The interpretation 

of a state conveyance is a quintessential question of state 

property law, and Congress has limited our jurisdiction over 

such cases. Accordingly, we conclude that 28 U.S.C. § 1331 

provides no basis for federal jurisdiction over this case.

III.

Finally, we turn to the question of whether the exclusive 

jurisdiction provision in the Federal Power Act, 16 U.S.C. 

§ 825p, provides a basis for jurisdiction. Section 825p grants 

federal district courts exclusive jurisdiction over “all suits 

in equity and actions at law brought to enforce any liability or 

duty created by, or to enjoin any violation of, [the Federal 

Power Act] or any rule, regulation, or order thereunder.” 16 

U.S.C. § 825p.
14

Neither the Pressls’ suit seeking to define the scope of 

the flowage easement nor APCO’s hypothetical coercive action 

would be brought to “enjoin any violation of” the Federal Power 

Act. As discussed above, the Pressls seek only to determine 

APCO’s property rights. They do not allege that APCO violated 

its license or its duties to FERC. And, since FERC regulates 

only APCO, the Pressls themselves could not violate the Federal 

Power Act by constructing a dock.

APCO nevertheless maintains that § 825p provides a basis 

for federal jurisdiction here. APCO notes that it has a duty 

under the Federal Power Act to manage property within the 

project boundary in compliance with its license. The company 

contends that its hypothetical suit seeking a declaratory 

judgment that APCO has sufficient property rights to meet its 

federal obligations -- or a suit to enjoin the Pressls from 

constructing a dock -- would thus be “brought to enforce [a] 

liability or duty created by” the Federal Power Act. The

Supreme Court’s recent decision in Merrill Lynch, Pierce, Fenner 

& Smith Inc. v. Manning, 136 S. Ct. 1562 (2016), dooms this 

argument.

In Merrill Lynch, the Court interpreted the nearly 

identical “brought to enforce” language in the exclusive 

jurisdiction provision of § 27 of the Securities Exchange Act of 

1934. The Court held that the jurisdictional test established 
15

by § 27 of the Exchange Act is the “same as the one used to 

decide if a case ‘arises under’ a federal law” under 28 U.S.C. 

§ 1331. Id. at 1566. In doing so, the Court rejected the 

argument that the “brought to enforce” language provides broad 

jurisdiction over complaints that simply mention a duty 

established by the federal law. Id. at 1568-69. Rather, claims 

are “brought to enforce” such a duty only if their “very success 

depends on giving effect to a federal requirement.” Id. at 

1570. The Court further explained that this interpretation of 

the “brought to enforce” language best comports with its

precedents, preserves the balance between federal and state 

courts, and provides a judicially administrable rule. Id. at 

1567-68; see also Pan Am. Petroleum Corp. v. Superior Court of 

Del. In & For New Castle Cty., 366 U.S. 656, 664 (1961).

Of particular import here, the Merrill Lynch Court 

expressly noted that the “brought to enforce” language in the 

statute before it -- § 27 of the Exchange Act -- was materially 

indistinguishable from § 825p in the Federal Power Act, the 

statute on which APCO relies. The Supreme Court specifically 

identified § 825p as a provision with “[m]uch the same wording” 

as § 27 of the Exchange Act and suggested that the two 

provisions should be interpreted in the same way. See Merrill 

Lynch, 136 S. Ct. at 1568 & n.3, 1572, 1575.
16

Because we have held that this case does not “arise under” 

federal law for purposes of federal question jurisdiction under 

28 U.S.C. § 1331, we must also hold that there is no basis for 

exclusive jurisdiction under 16 U.S.C. § 825p.

IV.

For the foregoing reasons, we vacate the judgment of the 

district court and remand the case.

VACATED AND REMANDED