PHILADELPHIA – The U.S. Court of Appeals for the Third Circuit said Tuesday that a religious order who alleged its rights to practice its faith were being infringed through construction of a natural gas pipeline and lost in federal court for lack of jurisdiction, have lost its appeal and will not receive financial compensation.
Transcontinental Gas Pipe Line Company is involved in a project to construct and operate a natural gas pipeline known as the Atlantic Sunrise Pipeline running through five states, including a portion of Lancaster County, Pennsylvania. The pipeline route crosses a piece of property owned by the Adorers of the Blood of Christ, and has been in operation for nearly four years.
The complaint alleged that the Adorers of the Blood of Christ is a “vowed religious order of Roman Catholic women whose religious practice includes protecting and preserving creation, which they believe is a revelation of God, the sacredness of which must be honored and protected for future generations” and that “the individually named plaintiffs are all Sisters of the Adorers.”
The plaintiffs claimed the construction and operation of the pipeline through land they own in Columbia, Pennsylvania would violate their free exercise of religion protected by Religious Freedom Restoration Act.
On March 31, 2015, Transco had filed an application with the Federal Energy Regulatory Commission under section 7(c) of the Natural Gas Act, 15 U.S.C. 717f(c), for authorization to construct and operate the pipeline.
On Feb. 3, 2017, FERC issued a “Certificate of Public Convenience and Necessity” authorizing Transco’s proposed route for the pipeline that would require use of the Adorers’ property. The FERC order granted Transco the right to take private property along the route of the pipeline by eminent domain if landowners such as the Adorers would not agree to voluntarily convey their land.
The Adorers refused to voluntarily convey their land, but lost that fight against Transco via a court order on Aug. 23, 2017, which granted possession of the Adorers’ property to Transco.
Schmehl also outlined the history of extensive litigation between Transco and the Adorers, both in the condemnation action related to the Adorers’ property and in a previous action brought by the Adorers seeking injunctive relief for alleged violations of the RFRA.
The Court previously dismissed the Adorers initial RFRA claim, finding it lacked jurisdiction to hear the Adorers’ claims because they should have been brought in front of FERC.
The U.S. Court of Appeals for the Third Circuit affirmed the Court’s ruling in a precedential decision in which it concluded that the NGA contained a “highly reticulated” review process that required the Adorers to exhaust their remedies before FERC and then seek review in a federal court of appeals, which would have “exclusive” jurisdiction to “affirm, modify, or set aside” the FERC certificate of public necessity (“Adorers I”). The Adorers sought review of the Third Circuit’s decision, and the Supreme Court declined to grant them a writ of certiorari.
The Adorers then filed the instant action, in which they again claim violations of the RFRA, alleging that FERC’s decision to approve the project route through their property violated their religious beliefs because it “forced them to use their own land, which they hold in sacred trust as God’s creation, to facilitate the extraction, transportation and use of fossil fuels…”
The instant action was nearly identical to the previous action filed by the Adorers for alleged RFRA violations and dismissed by this Court, except that the Adorers now sought monetary damages as opposed to injunctive relief.
U.S. District Court for the Eastern District of Pennsylvania Judge Jeffrey L. Schmehl issued the ruling dismissing the plaintiff’s case on Sept. 30, 2021.
Per Schmehl, the RFRA provides that: “Government shall not substantially burden a person’s exercise of religion even if the burden results from a rule of general applicability, except…government may substantially burden a person’s exercise of religion only if it demonstrates that application of the burden to the person – (1) is in furtherance of a compelling governmental interest; and (2) is the least restrictive means of furthering that compelling governmental interest.”
In its motion to dismiss for lack of subject matter jurisdiction, Transco again argued that under the NGA, this Court lacked subject matter jurisdiction over the Adorers’ RFRA claims. Schmehl agreed.
“As in Adorers I, the Adorers do not dispute that they not only failed to apply for a rehearing before FERC but failed to present their RFRA claims in any manner to the FERC, and ultimately to the appropriate Court of Appeals, which would be the D.C. Circuit. This holding from our Court of Appeals would seem to foreclose any RFRA claim on the part of the Adorers. However, plaintiffs here argue that because they are seeking monetary damages in the instant action (as opposed to the injunctive relief they sought in Adorers I) and that money damages are not available through FERC’s administrative process, this Court has subject matter jurisdiction over this case,” Schmehl stated.
“I find that simply seeking money damages as opposed to injunctive relief does not cure the jurisdictional defect in this matter. First, as set forth in Adorers I, ‘FERC may hear any claim raised before it – even potential violations of federal law.’ There is nothing to prevent FERC from hearing a claim for money damages under the RFRA if said claim was properly raised by an affected party. In fact, FERC has required a pipeline company to pay money damages in the past.”
Schmehl said that FERC never had an opportunity to make the determination of whether or not to award RFRA damages, because plaintiffs completely failed to participate in the NGA’s process – and that the RFRA does not guarantee an award of monetary damages if a violation is found.
According to Schmehl, if the plaintiffs had properly challenged the FERC order and been successful, it could have led to a re-route of the pipeline around plaintiffs’ property and that such an action “would have been the more appropriate relief for plaintiffs’ religious objections to the project than the receipt of money damages.”
Schmehl labeled the complaint’s allegations as “a collateral attack on the decisions made by FERC in issuing the FERC order, and the plaintiffs’ challenge remains subject to the exclusive jurisdiction scheme set forth in the NGA, no matter what type of relief they are seeking.”
“Here, allowing a suit for monetary damages under RFRA based on the claim that the route of the pipeline – which plaintiffs did not challenge despite multiple opportunities to do so – should entitle plaintiffs to money damages in addition to the just compensation they received in the condemnation action is inconsistent with the process Congress enacted in passing the NGA,” Schmehl said.
“Accordingly, plaintiffs’ RFRA claim is a collateral attack on the FERC order and must be dismissed. For all the foregoing reasons, I find this Court lacks jurisdiction over plaintiffs’ complaint. Therefore, defendant’s motion to dismiss will be granted, and plaintiffs’ complaint will be dismissed with prejudice.”
The plaintiffs announced their intention to appeal Schmehl’s ruling to the Third Circuit on Oct. 13, 2021.
UPDATE
More than one year later, Third Circuit judges Cheryl Ann Krause, Stephanos Bibas and Marjorie O. Rendell issued their decision to uphold Schmehl’s ruling and deny the appeal of the Adorers.
Rendell authored the Court’s Nov. 8 opinion, which ruled the religious order waited too long to make its case and the effect of granting them financial damages would have a detrimental effect on the operation of the pipeline.
“In this case, we conclude the Adorers’ RFRA claim is an impermissible collateral attack on the FERC, certificate because the claim could and should have been raised before FERC. Their RFRA claim raises issues inhering in the controversy, namely the route, construction and operation of the pipeline through the Adorers’ property. The Adorers allege that ‘Transco’s action in placing the Pipeline into service using the Adorers’ land caused a substantial burden to the religious exercise of the Adorers in violation of RFRA,” Rendell said.
“They also allege that it was Transco’s ‘use of their private property…to install and operate a natural gas pipeline that…’damaged the Adorers.’ These allegations make plain that their RFRA claim is ‘anchored in [the] pipeline and inescapably intertwined’ with the pipeline’s route, construction and operation. And the ‘heart of the claim’ challenges the operation of the pipeline, which was authorized after extensive, public proceedings before FERC as required by the NGA and FERC regulations,” Rendell stated.
According to Rendell and her colleagues, a victory for the plaintiffs would “betray the collateral nature of their RFRA damages suit”, leading a damages award to potentially “affect, among other things, the price of gas flowing to Transco’s customers, the gas flow rate, and the general fiscal and economic impact of operating the pipeline.”
“Such a result would no doubt impermissibly, ‘directly imperil’ the FERC certificate and would otherwise undermine the certification procedure Congress created in enacting the NGA. Furthermore, it would cause potential contractors to think twice before embarking on a costly project only to later face claims for damages caused by the pipeline. Thus, the Adorers’ claim is…an impermissible collateral attack,” Rendell stated.
Rendell and her colleagues also addressed three contentions on behalf of the Adorers, prior to dismissing their case.
“First, they urge that because FERC cannot award money damages, this suit was properly brought in District Court. But this argument makes little sense. Had they proceeded with an objection before FERC, and convinced the Commission of a violation, no doubt the Commission would have provided relief – by re-routing the pipeline or otherwise attaching some condition upon the permit as it did in countless other instances – and if it did not, the Adorers would have had recourse to an appeal to an appropriate court of appeals. If their claim was valid, they would have suffered no harm. Moreover, any claim for damages would not have been cognizable as no damage had yet occurred. Whether FERC can or cannot award damages is irrelevant,” Rendell explained.
“Second, the Adorers essentially repeat the argument they made in Adorers I, that their claim was not ripe at the time FERC issued the certificate, but rather, the claim began to accrue only once Transco ‘placed the Pipeline into service,’ thereby, placing a burden upon their religious exercise. In addition to the reason we previously rejected this claim, we note that were we to adopt the Adorers’ suggestion that they were under no obligation to present their RFRA claim to FERC because the claim was not ripe, the court would effectively exempt all claims against a new pipeline’s construction and operation from the NGA’s review scheme. Such a rule would entirely upend Congress’s intent.”
Lastly, while the Adorers urged that because Transco knew of their objection to the pipeline and neither it nor FERC brought them into the administrative proceeding to resolve it, they should somehow be permitted to proceed in federal court.
This was a contention that the Third Circuit rejected.
“It is not up to the pipeline contractor or FERC to seek out potential objectors at its peril. To the contrary, objectors who sit on their hands and do not raise their concerns in the administrative process do so at their peril. To permit a party to reserve a claim, the success of which would directly imperil a FERC decision to certify an interstate pipeline, by remaining silent during the FERC proceedings only to raise the claim in de novo litigation in a different forum of its own choosing would contravene Congress’ decision to channel all such claims through the NGA’s exclusive review framework,” Rendell said.
U.S. Court of Appeals for the Third Circuit case 21-2898
U.S. District Court for the Eastern District of Pennsylvania case 5:20-cv-05627
From the Pennsylvania Record: Reach Courts Reporter Nicholas Malfitano at nick.malfitano@therecordinc.com