Court Opinion

ID: 859070
Source: CourtListenerOpinion
Date Created: 2013-04-25 15:25:09.358719+00
Date Added: 2024-06-11T13:22:08.921336
License: Public Domain

United States Court of Appeals
                            For the Eighth Circuit
                        ___________________________

                                No. 12-2755
                        ___________________________

                             Laclede Gas Company

                            lllllllllllllllllllll Appellee

                                          v.

                          St. Charles County, Missouri

                            lllllllllllllllllllll Appellant
                                   ____________

                  Appeal from the United States District Court
                      for the Eastern District of Missouri
                                ____________

                          Submitted: January 17, 2013
                             Filed: April 25, 2013
                                  [Published]
                                ____________

Before BYE and MELLOY, Circuit Judges, and KOPF,1 District Judge.
                            ____________

KOPF, District Judge.

     This dispute involves the rights of a local government, St. Charles County,
Missouri (“County”), and the rights of a public utility, Laclede Gas Company

      1
      The Honorable Richard G. Kopf, United States District Judge for the District
of Nebraska, sitting by designation.
(“Laclede”), in shared easements. The County takes the position that Laclede must
alter or relocate its gas lines without compensation if the County so demands. Laclede
disagrees and, so far, has been successful in the state courts. Despite this success, the
County, according to Laclede, persists in its efforts to interfere with Laclede’s gas
lines. Among other things, Laclede claims that the County’s threatened actions
endanger the public safety.

       This appeal stems from the district court’s2 grant of Laclede’s motion for
preliminary injunction. Because we conclude the district court had jurisdiction to
grant the injunction, and did not abuse its discretion in doing so, we affirm.

I. BACKGROUND

      Laclede is a publicly regulated utility company that provides natural gas service
throughout the St. Louis, Missouri, area. Using non-exclusive easements that it shares
with the County, Laclede maintains gas lines along Pitman Hill Road (“PHR”) and
Ehlmann Road (“ER”). In 2007, the County was planning projects along PHR and ER
and asked Laclede to relocate its gas lines to accommodate the projects. Laclede
responded that it was willing to do so if the County agreed to reimburse Laclede for
the costs associated with relocating the lines.

        In 2008, the County filed an action in state court seeking a declaratory judgment
that it had no obligation to pay Laclede’s relocation costs along PHR. However, on
August 30, 2011, the Missouri Supreme Court held that Laclede could not be
compelled to relocate its lines without reimbursement from the County. St. Charles
Cnty. v. Laclede Gas Co., 356 S.W.3d 137, 139-40 (Mo. 2011).

       2
       The Honorable Henry E. Autrey, United States District Judge for the Eastern
District of Missouri.
                                     -2-
      On October 11, 2011, Laclede filed this case against the County and L.F. Krupp
Construction, Inc. (“L.F. Krupp”). L.F. Krupp was the County’s contractor on the
road projects. In the complaint, Laclede alleged three claims against the County: a
§ 1983 claim, a nuisance claim, and a claim seeking declaratory judgment that the
County’s attempted enforcement of Mo. Rev. Stat. § 229.360 would be
unconstitutional. Laclede also alleged a negligence claim against L.F. Krupp. In
response, the County and L.F. Krupp both filed motions to dismiss for lack of subject
matter jurisdiction. On December 6, 2011, Laclede filed a motion for preliminary
injunction. That same day, the County filed a motion to stay any proceedings on the
motion for preliminary injunction while the motions to dismiss for lack of subject
matter jurisdiction were still pending.

       On January 18, 2012, the County moved to supplement to its memorandum in
support of its motion to dismiss. The supplement was a petition filed against Laclede
in the 11th Judicial Circuit Court, in St. Charles County, Missouri (“ER Proceeding”).
In the ER Proceeding, the County sought to compel Laclede to alter its facilities on ER
that were in conflict with ongoing County projects.

       On February 6, 2012, Laclede filed a motion for leave to file an amended
complaint, seeking to add a claim against the County based on the Natural Gas
Pipeline Safety Act (“PSA”), 49 U.S.C. §§ 60101-60137. Laclede attached a copy of
the proposed amended complaint to the motion. On March 7, 2012, the district court
granted Laclede’s motion to amend and the amended complaint was filed on that date.3
Over the next two days, the district court held a preliminary injunction hearing. At the
hearing, the court discussed the status of the case with the parties and the County
informed the district court that it did not believe the amended complaint fixed the

       3
       Laclede was required to obtain leave of the court to file an amended complaint
under Federal Rule of Civil Procedure 15(a)(2) because the time for filing an
amendment as a matter of course had run under Federal Rule of Civil Procedure
15(a)(1).
                                        -3-
jurisdictional issues. The County subsequently moved to dismiss the amended
complaint for lack of jurisdiction and for failure to state a claim.

       On July 2, 2012, the district court entered an order granting, in part, Laclede’s
motion for preliminary injunction. The order enjoins the County from (1) constructing
any additional portion of retaining wall on top of gas lines on the Pitman easement;
(2) removing, or hiring another entity—aside from Laclede—to remove any portion
of the PHR gas lines located on the Pitman easement; and (3) removing any portion
of the gas lines from the Ehlmann Road easement. The order also directs the County
to convey a substitute easement to Laclede to allow access to the gas main under
Retaining Wall #3 on the Pitman Hill tract. In a footnote, the court acknowledged that
the County’s motion to dismiss for lack of jurisdiction was still pending and stated that
a subsequent ruling on the motion would issue in the near future.

       On appeal, the County argues that the district court erred in issuing the
preliminary injunction without addressing the County’s motion to dismiss and, further,
that the district court lacked subject matter jurisdiction. The County also argues the
district court erred in issuing the preliminary injunction because erroneous conclusions
of law and fact tainted its analysis under the factors set forth in Dataphase Sys., Inc.
v. C L Sys., Inc., 640 F.2d 109, 114 (8th Cir. 1981).

       At oral argument, the County conceded that a 11th Judicial Circuit Court, in St.
Charles County, Missouri, had recently ruled in favor of Laclede in the ER
Proceeding. That decision was rendered during the first week of January 2013. As
a defendant, Laclede obtained no injunctive relief as a result of that ruling, and save
for the federal injunction, there is no ruling explicitly prohibiting the County from
interfering with the gas lines that are the subject of this action.

                                          -4-
II. DISCUSSION

      We have reviewed the multitude of arguments advanced by the County for
reversal of the preliminary injunction order. We are not persuaded by any of them.
That said, there are two primary arguments that warrant further discussion.

A. Jurisdiction

        Initially, the County asserts that the district court erred, and automatic reversal
is required, because the district did not rule on the County’s motion to dismiss on
jurisdictional grounds. The County would have us adopt a categorical rule that when
dealing with a preliminary injunction motion (and, presumably, a motion for a
temporary restraining order) district courts must always rule upon an opposing party’s
assertion that the court lacks jurisdiction. There is no precedent for such a proposition
in this Circuit, although the Fifth Circuit may have adopted such a rule. See Enter.
Int’l, Inc. v. Corporacion Estatal Petrolera Ecuatoriana, 762 F.2d 464, 471 & n.22
(5th Cir. 1985) (concluding the district court erred in granting a preliminary injunction
while deferring decision on the defendant’s assertion that the court lacked subject
matter and personal jurisdiction under the Foreign Sovereign Immunities Act). We
decline to adopt the categorical imperative urged by the County. While we agree that
it is preferable to resolve assertions of lack of jurisdiction when ruling upon a motion
for a preliminary injunction or a motion for a temporary restraining order, the district
court’s failure to do so, by itself, does not require reversal.

      We turn then to the County’s primary argument, that is, that the district court
lacked subject matter jurisdiction to enter the preliminary injunction order. We review
questions of subject matter jurisdiction de novo. Cmty. Fin. Grp., Inc. v. Republic of
Kenya, 663 F.3d 977, 980 (8th Cir. 2011).

                                           -5-
       As discussed above, Laclede amended its complaint on March 7, 2012, to add
a claim against the County based on the PSA. The PSA provides that “[a] person may
bring a civil action in an appropriate district court of the United States for an
injunction against another person . . . for a violation of this chapter.” 49 U.S.C. §
60121(a)(1). Section 60123(b) states that “[a] person knowingly and willfully
damaging or destroying an interstate gas pipeline facility . . . that is used in interstate
or foreign commerce or in any activity affecting interstate or foreign commerce, or
attempting or conspiring to do such an act, shall be fined under title 18, imprisoned
for not more than 20 years, or both, and, if death results to any person, shall be
imprisoned for any term of years or for life.” 49 U.S.C. § 60123(b). However, a PSA
action cannot be filed until 60 days after proper notice is given to the Secretary of
Transportation, or to the appropriate state agency, and to the person alleged to have
committed the violation. See 49 U.S.C. § 60121(a)(1)-(2); see also Hallstrom v.
Tillamook Cnty., 493 U.S. 20, 23 & n.1 (1989) (noting that the 60-day notice
requirement of the PSA was patterned after § 304 of the Clean Air Amendments;
holding that similar 60-day notice requirement was a mandatory condition precedent
to commencing suit and failure to meet requirement required dismissal).

       In a letter dated January 4, 2012, Laclede gave notice to the Missouri Public
Service Commission (“MPSC”)4 that the County had threatened to tamper with
Laclede’s gas lines. The County was copied on the letter, which asked the MPSC to
take enforcement action to prevent interference with Laclede’s gas lines. The letter
also notified the MPSC that Laclede intended to file a PSA claim if the MPSC failed
to bring an enforcement action against the County. On January 30, 2012, the MPSC
advised Laclede that it would not bring an action against the County and that it
intended to step aside so that Laclede could pursue whatever action it felt appropriate

       4
        The County does not dispute that the MPSC is the appropriate state authority
certified under section 60105 of the PSA.
                                        -6-
under state or federal law. On March 7, 2012, more than 60 days after the January 4,
2012, letter, Laclede filed its amended complaint seeking to enjoin the County from
damaging or destroying its active gas lines pursuant to section 60123(b) of the PSA.

        The County argues that Laclede’s PSA claim is not properly before the court
because Laclede did not comply with the PSA’s notice requirements before filing suit.
More specifically, the County argues that Laclede’s amended complaint relates back
to its original complaint under Federal Rule of Civil Procedure 15(c), and therefore,
violates the 60-day notice requirement. This argument lacks merit.

       Where, as here, a PSA claim appears for the first time in an amended complaint,
courts should look to the date of the filing of the amended complaint rather than the
original complaint to determine when the PSA claim was brought for purposes of
determining whether notice was given as required by the statute. See College Park
Holdings, LLC v. Racetrac Petroleum, Inc., 239 F. Supp. 2d 1322, 1330 (N.D. Ga.
2002) (looking to amended complaint, rather than original complaint, to determine
when Resource Conversation and Recovery Act claim was commenced for purposes
of the 60-day notice requirement under 42 U.S.C. § 6972(b)(1)); Williams Pipe Line
Co. v. City of Mounds View, 651 F. Supp. 551, 564 (D. Minn. 1987) (holding amended
complaint under the Hazardous Liquid Pipeline Safety Act, 49 U.S.C.A. § 2014(b)(1),
filed more than 60 days after detailed notice of alleged violations had been given to
the Department of Transportation, cured any defects in initial compliance with the
Act’s notice requirements). Cf. Central Laborers’ Pension Fund v. SIRVA, Inc., No.
04 C 7644, 2006 WL 2787520, at *10 (N.D. Ill. Sept. 22, 2006) (stating, in a case
brought under the Public Securities Litigation Reform Act, 15 U.S.C. § 78u-4, that
“defendants ask the Court to use the [relation back] doctrine to defeat plaintiff’s
claims. Defendants have not cited, and the Court has not found, any case in which the
relation-back doctrine was used to bar claims”) (emphasis in original).

                                         -7-
       In summary, there is nothing in the PSA, including the notice requirements, that
bars amended complaints from stating a PSA claim.5 And, more precisely, the
“relation back” provisions of Rule 15(c) of the Federal Rules of Civil Procedure
cannot properly be read to trump the substantive provisions of federal statutes such as
the PSA.

        The County also argues that the court lacks jurisdiction over Laclede’s PSA
claim because it is really just a “quintessential state law claim” under Columbia Gas
Transmission Corp. v. Drain, 191 F.3d 552, 554-55 (4th Cir. 1999). In Drain, the
Fourth Circuit concluded that the PSA did not create jurisdiction over a claim that a
private landowner’s building encroached upon a gas company’s easement. Id. Unlike
Drain, which involved little more than determining the boundary of an easement, this
matter involves an ongoing threat by the County to remove and relocate Laclede’s gas
lines, thereby threatening physical damage to the pipeline and as well as threatening
the public safety. Such an ongoing and active threat is squarely within the wheelhouse
of the PSA’s injunctive relief provision—a provision that is obviously intended to
enforce the federal prohibition against the knowing and willful infliction of damage
to a regulated pipeline. In sum, an imminent threat of physical damage to a pipeline
with the concomitant endangerment of the public, such as the one presented here, is
sufficient to provide a federal district court with jurisdiction under PSA sections
60121(a)(1) and 60123(b) for the purposes of injunctive relief. The fact that the threat
may find its genesis in a state law dispute does not defeat the federal question.

      We next examine the County’s argument that the district court should have
abstained under the authority of Aaron v. Target Corp., 357 F.3d 768, 779 (8th Cir.

       5
         However, had the original complaint contained an imperfect PSA claim that
failed to comply with the notice requirements, we doubt an amended complaint would
cure the failure to give proper advance notice. See Hallstrom, 493 U.S. at 23. But
that is not the situation we face in this case, as the amended complaint was filed more
than 60 days following service of the required notice.
                                            -8-
2004) (applying abstention principles from Younger v. Harris, 401 U.S. 37, 91 (1971),
and stating that “[i]n the circumstances of this case it was an abuse of discretion for
the district court not to abstain and permit a state eminent domain action to go
forward”). We follow the counsel of Aaron and examine “what was actually taking
place in both settings to decide whether” abstention was required. Id. at 775.

       After the examination suggested by Aaron, we conclude that the district court
did not abuse its discretion in proceeding despite the pending state ER Proceeding.
Among other reasons, this is because (1) the state ER Proceeding, which is the
predicate for the County’s abstention argument, was brought two months after this
federal suit was commenced and much had already occurred in the federal litigation
by that time; (2) in the prior state PHR proceeding, the Missouri Supreme Court
addressed a nearly identical issue and had ruled in favor of Laclede, but the County
was unwilling to follow the Missouri Supreme Court’s decision and instead
commenced the state ER Proceeding (which it has now lost); (3) the injunctive relief
sought by Laclede in federal court maintained the status quo and did not threaten to
interfere with the state ER Proceeding; and (4) Laclede’s federal PSA claim, involving
serious public safety issues, was not at issue in the state ER Proceeding. To sum up,
the equitable relief sought by Laclede in this federal suit was not likely to interfere
with the pending state ER Proceeding in a way that offends principles of comity and
federalism.

      Overall, because Laclede provided notice and more than 60 days passed before
the amended complaint was filed, the PSA claim was properly before the district court
and the district court had subject matter jurisdiction to issue a preliminary injunction.

B. Preliminary Injunction

       In addition to its jurisdiction argument, the County argues, on the merits, that
the district court erred in issuing the preliminary injunction order. We review the

                                          -9-
issuance of a preliminary injunction for an abuse of discretion, “which occurs when
the district court rests its conclusion on clearly erroneous factual findings or erroneous
legal conclusions.” S.J.W. ex rel. Wilson v. Lee’s Summit R-7 School Dist., 696 F.3d
771, 776 (8th Cir. 2012) (quoting Phelps-Roper v. Troutman, 662 F.3d 485, 488 (8th
Cir. 2011) (internal quotation omitted)). “We review the district court’s legal
conclusions de novo.” Id. (quoting Child Evangelism Fellowship of Minn. v.
Minneapolis Special Sch. Dist. No. 1, 690 F.3d 996, 1000 (8th Cir. 2012)). “Whether
a preliminary injunction should issue involves consideration of (1) the threat of
irreparable harm to the movant; (2) the state of balance between this harm and the
injury that granting the injunction will inflict on other parties litigant; (3) the
probability that movant will succeed on the merits; and (4) the public interest.”
Dataphase, 640 F.2d at 113.

       We have reviewed the record and the parties’ arguments on the merits of the
preliminary injunction order. We conclude that the district court did not abuse its
discretion in issuing the preliminary injunction and, in particular, we conclude that the
judge properly balanced the four relevant factors. In short, we do not find any of the
County’s arguments persuasive. The County’s “probability of success on the merits”
and “public interest” arguments are the only ones that warrant slightly more
discussion.

      1. Probability of Success on the Merits

       “In deciding whether to grant a preliminary injunction, ‘likelihood of success
on the merits is most significant.’” Minn. Ass’n of Nurse Anesthetists v. Unity Hosp.,
59 F.3d 80, 83 (8th Cir. 1995) (quoting S & M Constructors, Inc. v. Foley Co., 959
F.2d 97, 98 (8th Cir. 1992)). In addressing this factor, the district court relied on St.
Charles County v. Laclede Gas Co., where the parties previously raised arguments
similar to those in this case. In that case, the Missouri Supreme Court relied upon
United States Supreme Court precedent to conclude that “when a utility’s right to

                                          -10-
construct and maintain its utility equipment is premised upon an easement, the utility
is not responsible for the costs of relocating its equipment.” 356 S.W.3d at 140 (citing
Panhandle E. Pipe Line Co. v. State Highway Comm’n, 294 U.S. 613, 617-18 (1935)).
With this principle in mind, and in light of the Missouri Supreme Court’s ruling, the
district court determined the probability-of-success factor convincingly weighed in
favor of Laclede. In doing so, the district court noted that the Missouri Supreme Court
opinion only addressed PHR, and not ER. However, because the operative language
in the PHR and ER easements was remarkably similar, the district court decided to use
the Missouri Supreme Court’s rationale as guidance.

       The County asserts that the district court failed to recognize the proper scope
of the public’s rights in its own roads, and therefore, its analysis under Dataphase was
tainted. In making this assertion, the County rehashes several of the arguments
previously rejected by the Missouri Supreme Court’s opinion. The County persists in
making these arguments even though it acknowledges that this court is bound by the
Missouri Supreme Court’s interpretation of Missouri law. See Missouri v. City of
Glasgow, 152 F.3d 802, 805-06 (8th Cir. 1998). Plainly put, the County’s odd
argument—essentially, that the Missouri Supreme Court’s opinion was either wrong
or need not be followed—has no legal support. This is especially true given the
County’s concession, at oral argument, that Laclede has prevailed in the state ER
Proceeding brought by the County.

      2. Public Interest

       The district court also determined that the “public interest” factor weighed in
favor of Laclede. In making this determination, the district court found that Laclede’s
PHR and ER gas lines served numerous customers in the St. Charles area, a 200-foot
retaining wall and six to eight feet of fill were directly over Laclede’s Pitman Hill
easement, the County had proposed to construct two more retaining walls on the
Pitman Hill easement, and the County was planning to remove gas lines along PHR

                                         -11-
and ER without Laclede’s assistance. Moreover, and very importantly, we agree that
the removal of gas lines along PHR and ER without the assistance of Laclede, as
proposed by the County, enhances the risk of a potential explosion or leak and
endangers the public safety. Indeed, at oral argument, the County conceded that
neither the County nor its contractor had any experience removing pipelines. In sum,
these factual findings are not clearly erroneous.

III. CONCLUSION

        To protect the public safety, and for other reasons, the district court stepped in
when the County refused to adhere to the opinion of the Missouri Supreme Court in
litigation it brought against Laclede. The district court had jurisdiction under the PSA,
a federal statute that specifically authorized the district court to enjoin threats to
damage pipelines. The issuance of a preliminary injunction in those circumstances
was not error. Accordingly, the decision below is affirmed.

BYE, Circuit Judge, concurring.

       Because I believe the district court could properly have exercised jurisdiction
under the Pipeline Safety Act ("PSA"), I concur in affirming its issuance of a
preliminary injunction. I write separately, however, to underscore the procedural
infirmity of the district court's proceedings. Presented with several potential bases for
subject matter jurisdiction and equally weighty arguments for a lack thereof, the
district court circumvented the issue of jurisdiction entirely and proceeded directly to
a consideration of the merits for injunctive relief. While I agree with the majority's
rejection of a categorical rule requiring district courts to rule on jurisdictional issues
prior to considering motions for injunctive relief, I find the district court's shortcut in
this case problematic.

                                           -12-
       Presumably, the district court expected that amongst the many proffered
grounds for jurisdiction, one would likely prevail. As the majority concludes, this
proved true; Laclede's PSA claim would appear to provide a valid basis for subject
matter jurisdiction. However, upon examining the district court's order granting
Laclede's request for injunctive relief, I find no evidence to suggest the district court
premised its injunction on that claim or, for that matter, even considered the PSA in
weighing the Dataphase factors. Not only is there no mention of the PSA in the
district court's order, but the court's discussion regarding Laclede's probability of
success on the merits revolves solely around Laclede's takings claim—a claim which,
by my estimation, is unripe. See Williamson Cnty. Reg'l Planning Comm'n v.
Hamilton Bank, 473 U.S. 172, 195 (1985) ("[I]f a State provides an adequate
procedure for seeking just compensation, the property owner cannot claim a violation
of the Just Compensation Clause until it has used the procedure and been denied just
compensation.").

        As a general matter, the exercise of supplemental jurisdiction over an unripe
claim is troublesome. A party should not be permitted to bypass mandatory procedural
hurdles merely by offering a separate jurisdictional anchor whose requirements are
more easily met. In this case, Laclede filed a complaint on October 11, 2011, setting
forth various takings claims against the County. On October 18, 2011, the County
filed a motion to dismiss for lack of jurisdiction, arguing Laclede's takings claims were
unripe as Laclede had not yet sought and been denied just compensation for the
relocation of its gas lines. Nearly four months later—in the absence of any
jurisdictional ruling by the district court—Laclede sought leave to file an amended
complaint, adding a claim under the PSA. At this point, the district court
acknowledged the still pending jurisdictional challenge but moved forward with
Laclede's request for injunctive relief.

       Two problems arise from the district court's decision to bypass the County's
jurisdictional challenge and to nevertheless address Laclede's takings claims: (1) the

                                          -13-
district court implicitly endorsed Laclede's failure to exhaust available state remedies
for that claim, and (2) by focusing its analysis on the unripe takings claim, the district
court failed to analyze the claim over which it could legitimately exercise jurisdiction,
the PSA claim. Accordingly, the district court issued an injunction devoid of
meaningful analysis of the claim we ought to review.

       Despite significant concerns with respect to these errors, I believe remanding
the case to the district court for reconsideration of Laclede's request for injunctive
relief based on the PSA claim rather than the takings claim would prove inefficient
and, ultimately, redundant. The harms the PSA is aimed to remedy (i.e., danger to life
and property), see 49 U.S.C. § 60102(a)(1), are generally encompassed by the "public
interest" factor a district court is obligated to weigh when ruling on a motion for
preliminary injunction. See Dataphase Sys., Inc. v. C L Sys., Inc., 640 F.2d 109, 114
(8th Cir. 1981). Here, though focused on Laclede's constitutional rights and ability
to maintain its easements, the district court did consider the public's access to utility
service and safety under the final prong of the Dataphase analysis. There is, thus, no
reason to conclude that a narrower analysis on remand, dedicated solely to the PSA
claim, would yield different results.

      For the foregoing reasons, I concur in the majority's ultimate judgment but
caution against continued tolerance of similar jurisdictional sidestepping by lower
courts. The modest overlap in subject matter between Laclede's takings claim and its
PSA claim provided an avenue for affirmance on these facts, but it is the rare case in
which an injunction inappropriately addressing one claim can be upheld on the basis
of another.
                       ______________________________

                                          -14-