Court Opinion

ID: 201764
Source: CourtListenerOpinion
Date Created: 2011-02-07 05:33:48+00
Date Added: 2024-06-11T17:27:21.045637
License: Public Domain

Not For Publication in West's Federal Reporter
                Citation Limited Pursuant to 1st Cir. Loc. R. 32.3

           United States Court of Appeals
                        For the First Circuit

No. 04-1371

              MARITIMES & NORTHEAST PIPELINE, L.L.C.,

                          Plaintiff, Appellee,

                                       v.

    NICHOLAS J. DECOULOS, as Trustee of Willowdale Realty Trust,

                          Defendant, Appellant,

    1.55 ACRES OF LAND, MORE OR LESS, IN PEABODY, MASSACHUSETTS;
         DANVERS SAVINGS BANK; MATTRESS GIANT CORPORATION;
             CELLCO PARTNERSHIP, d/b/a VERIZON WIRELESS,

                                 Defendants.

            APPEAL FROM THE UNITED STATES DISTRICT COURT
                  FOR THE DISTRICT OF MASSACHUSETTS

              [Hon. Rya W. Zobel, U.S. District Judge]

                                    Before

                Torruella and Lipez, Circuit Judges,
                   and Barbadoro,* District Judge.

     Nicholas J. Decoulos, for appellant.
     James T. Finnigan, with whom Rich May, P.C., was on brief, for
appellee.

                              August 16, 2005

*
    Of the District of New Hampshire, sitting by designation.
            Per Curiam.         This appeal arises out of an action for

condemnation of land pursuant to the Natural Gas Act ("NGA"),                   15

U.S.C. § 717f(h). The NGA grants private natural gas companies the

federal power of eminent domain in the event that they hold a

Certificate of Public Convenience and Necessity ("CPCN") from the

Federal Energy Regulatory Commission ("FERC") and either cannot

acquire property by contract, or are unable to agree with the owner

of the property on the amount of compensation to be paid for a

necessary right of way for the transportation of gas.                  Id.

            Appellee      Maritimes     &     Northeast     Pipeline,        L.L.C.

("Maritimes"), a natural gas company as defined in the NGA, 15

U.S.C. § 717a(6), and the holder of a CPCN authorizing the building

and operation of a 25-mile, 30-inch gas pipeline from Methuen to

Salem, Massachusetts, filed the present action to take temporary

and permanent easements on 1.55 acres of land located in Peabody,

Massachusetts.      The purpose of the easements is to construct and

operate an underground natural gas pipeline along the approved

alignment    of     the   CPCN.        The    temporary     easement     requires

approximately 0.14 acres of the property, while the permanent

easement needs 0.25 acres.         The land is owned by Willowdale Realty

Trust, of which appellant Nicholas J. Decoulos is the trustee.                   A

building    on    the   trust   land   is    leased   to   the   Mattress     Giant

Corporation and Celico Partnership d/b/a Verizon Wireless.

                                       -2-
            Maritimes attempted to purchase the easement rights over

the course of several months of negotiations and discussions,

during which time an agent of Maritimes met with or attempted to

meet with Decoulos on several occasions. Having failed to reach an

agreement, Maritimes dispatched a "final offer letter" on May 20,

2002, in which Maritimes made its final bid based on an appraisal

performed by an independent, licenced Massachusetts real estate

appraiser.     According to this communication, the easement was

appraised at $93,894.       Nevertheless, Maritimes made a final offer

of $237,400.    Upon rejection of this offer by Decoulos, Maritimes

proceeded to file this suit.

            Thereafter, Maritimes filed a motion for partial summary

judgment and/or immediate entry, seeking an order from the district

court to gain easement title to the required property by eminent

domain.      Notwithstanding Decoulos' opposition, the motion was

granted, allowing Maritimes to enter the property to install the

pipeline.      On   April   9,   2003,   the   district   court      entered   an

additional    order   authorizing    Maritimes     to   take   the    requested

permanent right of way and easement.           The matter then proceeded to

trial for the purpose of determining the damages to be paid by

Maritimes for the takings in question.

            The case was tried before a jury, which entered a verdict

determining the value of the permanent easement to be the amount of

$68,063.     This appeal followed, in which Decoulos raises four

                                     -3-
issues: (1) whether the district court erred in allowing Maritimes

to proceed based on a complaint which allegedly failed to identify

"the   interest   to   be   taken"   as    required   by   Fed.   R.   Civ.   P.

71A(c)(2), (2) whether Maritimes was required to conduct its

negotiations with Decoulos in "good faith," (3) whether Maritimes'

actions deprive appellant of due process under the Fifth Amendment,

and (4) whether the district court erred in refusing to give an

instruction requested by Decoulos regarding an alleged element of

damages.   We discuss these seriatim and find them without legal

merit.

           Decoulos argues that Fed. R. Civ. P. 71A(c)(2)'s language

to the effect that "[t]he complaint shall contain a short and plain

statement . . . [of] the interests to be acquired," made defective

Maritimes' complaint because it was "devoid of any statement as to

the interest to be acquired," and thus appellant "was subjected to

the conundrum of speculating the extent of the servitude."

           This court has held that Rule 71A(c)(2) "is consistent

with the notice theory of pleading embodied in the Federal Rules,"

id., under which we "do not require a claimant to set out in detail

the facts upon which he bases his claim . . . [because of] the

liberal opportunity for discovery and the other pretrial procedures

. . . to disclose more precisely the basis of both claim and

defense and to define more narrowly the disputed facts and issues,"

id. (quoting Conley v. Gibson, 355 U.S. 41, 47-48 (1957)).                    The

                                     -4-
complaint at issue more than sufficiently notified Decoulos of the

substance of the action sought by Maritimes.       See Southern Natural

Gas Co. v. Land, Cullman County, 197 F.3d 1368, 1375 (11th Cir.

1999); East Tenn. Natural Gas Co. v. Sage, 361 F.3d 808, 830 (4th

Cir. 2004).

             After deciding the partial summary judgment in favor of

Maritimes, and before trial, the district court also decided

Maritimes' motion in limine to the effect that Decoulos would not

be allowed to introduce any evidence of Maritimes' alleged bad

faith negotiations because, as ruled upon by the court, bad faith

was irrelevant to the issue of just compensation.

             It is unclear to what Decoulos anchors his claim that

good faith negotiations must precede the filing of the condemnation

action, as the NGA contains no specific language to this effect.

See Lamie v. United States Trustee, 540 U.S. 526, 534-35 (2004)

(inquiry begins with the statutory text, and ends there as well if

the   text   is   unambiguous).   The   relevant   section   of   the   NGA

provides:

             When any holder of a certificate of public
             convenience and necessity cannot acquire by
             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,
             and the necessary land or other property, in
             addition to right-of-way, . . .        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

                                  -5-
          property   may   be   located,   or   in   the   State
          courts.

15 U.S.C. § 717f(h).

          Once a CPCN is issued by the FERC, and the gas company is

unable to acquire the needed land by contract or agreement with the

owner, the only issue before the district court in the ensuing

eminent domain proceeding is the amount to be paid to the property

owner as just compensation for the taking.       See Guardian Pipeline,

L.L.C. v. 329.42 Acres of Land, 210 F. Supp. 2d 971, 974 (N.D. Ill.

2002); Tennessee Gas Pipeline Co. v. Mass. Bay Transp. Auth., 2 F.

Supp. 2d 106, 110 (D. Mass. 1998).      Absent any credible authority

making good faith negotiation a requirement precedent to the

condemnation action, see Kansas Pipeline Co. v. 200 Foot by 250

Foot Piece of Land, 210 F. Supp. 2d 1253, 1257 (D. Kan. 2002) ("The

plain language of the NGA does not impose an obligation on a holder

of a FERC certificate to negotiate in good faith before acquiring

land by exercise of eminent domain . . . ."), cf. National R.R.

Passenger Corp, v. Boston and Maine Corp., 503 U.S. 407, 423 (1992)

(refusing to interpret statutory language referring to parties

being "unable to agree" to require Amtrak to engage in good faith

negotiations before it could invoke its condemnation powers under

the Rail Passenger Service Act), but see USG Pipeline Co. v. 174

Acres, 1 F. Supp. 2d 816, 822 (E.D. Tenn. 1998) (noting that

"[c]ourts . . . have imposed a requirement that the holder of the

FERC Certificate negotiate in good faith with the owners to acquire

                                  -6-
the property"), we decline the invitation to create one in this

case.   Furthermore, we do not imply that the negotiations at issue

here were not in good faith.

           Appellant's due process argument is intermingled with his

"good faith" issue, and results in a similar outcome.       Decoulos

claims that "Maritimes, by acting in bad faith and arbitrarily

. . . deprived The Trust of its property rights."       The district

court rejected an offer of proof by appellant to the effect that

there was lack of uniformity in Maritimes' exercise of the power of

condemnation as between the various property owners.    The district

court was undoubtedly correct in ruling that this matter was

outside the scope of the only triable issue: the value of the

property condemned.

           The last question raised by appellant regards a claimed

error by the district court in its failure to give a requested

instruction dealing with severance and stigma damages.     There are

several reasons why this contention should not prosper.       First,

Decoulos failed to properly preserve this claim in accordance with

Rule 51(c).   Fed. R. Civ. P. 51(c).      A party who objects to the

court's failure to give a requested instruction must do so on the

record before the jury retires to deliberate. See, e.g., Faigin v.

Kelly, 184 F.3d 67, 87 (1st Cir. 1999).    Second, Decoulos points to

nothing in the record that justifies an instruction for severance

or stigma damages.    See, e.g., United States v. 760.807 Acres of

                                -7-
Land, 731 F. 2d 1443, 1448 (9th Cir. 1984) ("Severance damages are

compensable only if the landowner incurs a direct loss reflected in

the marketplace that results from the taking.   Since the landowner

has the burden of proof in establishing severance damages, the

landowner must demonstrate that the taking caused the severance

damages.")   (internal    quotations   and   citations    omitted).

Nevertheless, the district court gave an appropriate instruction

("you may add any damages, including stigma damages, as to the

remainder of the property, the part that was not taken, but which

may have been damaged by the taking and that is called severance

damages"), and Decoulos fails to explain why this instruction was

inappropriate.

          We have considered all other arguments and issues raised

by appellant and find them as frivolous and lacking in merit as the

rest of this appeal.

          Affirmed.    Appellant is granted 10 days within which to

show cause why double costs should not be imposed against him.

                                 -8-