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NATIONAL FUEL GAS SUPPLY CORPORATION v. 138 ACRES OF LAND

September 27, 2001

NATIONAL FUEL GAS SUPPLY CORPORATION, PLAINTIFF,
v.
138 ACRES OF LAND IN THE VILLAGE OF SPRINGVILLE, COUNTY OF ERIE, STATE OF NEW YORK; MATHEW MAHL; ARDENT RESOURCES, INC.; U.S. ENERGY DEVELOPMENT CORPORATION; ROBERT DZARA; MARIA DZARA; AND UNKOWN OTHERS, DEFENDANTS. ROBERT DZARA AND MARIA DZARA, PLAINTIFFS, V. U.S. ENERGY DEVELOPMENT CORPORATION, AND NATIONAL FUEL GAS SUPPLY CORPORATION, DEFENDANTS. JOSEPH ANZULEWICZ AND PATRICIA ANZULEWICZ, JOHN H. BAKER, ANDREW J. BERGER AND CAROL ANN SOLDO-BERGER, RUTH M. BERGER, GARY T. BLAKELY AND MARY E. BLAKELY, DAVID M. BROOKS AND DARRYLE BROOKS, DANIEL CAPPOLA AND ELIZABETH CAPPOLA, CYNTHIA CARY FOWLER, WILLIAM CARY FOWLER, ELMER CISZAK AND LORETTA CISZAK, WILLIAM H. CRANSTON AND MARY A. CRANSTON, GEORGE A. DONHAUSER, ROBERT DZARA AND MARIA DZARA, NEAL EAGAN AND JULIA EAGAN, KEN GAINES, ROBERT L. GEBHARD, THOMAS J. GEELAN, CECIL GOODREMOTE, JR., GEORGE GOODREMOTE, GERARD GOODREMOTE, JOSEPH GOODREMOTE, LEONE GOODREMOTE, ALLEN HAURI AND DEBORAH HAURI, BRIAN HAUSRATH, HAROLD E. HILL, JR. AND CAROLYN R. HILL, DENNIS R. HOPKINS AND DONNA M. HOPKINS, HARRY HORNER, JR., PETER L. HUNTER AND SHARON L. HUNTER, ROBERT V. JANIGA, DANIEL G. KESSLER AND JEANNE KESSLER, RANDY D. KROLL AND JENNIFER LACKIE-KROLL, DANIEL C. KWAIZER, DAVID J. LEARN AND JANET M. LEARN, JOHN LIPINCZYK AND ANN MARGARET FERGUSON, WILLIAM L. LUTZ AND PAULA K. LUTZ, MATTHEW MAHL AND ELIZABETH MAHL, DAVID MCCANN AND MARILYN MCCANN, JOSEPH P. MCCARTHY AND KAREN L. MCCARTHY, DENNIS E. MEYERS AND MARLENE H. MEYERS, JOHN J. MIHALIK AND NORA MURPHY MIHALIK, CAROL NASON, IRMA R. NUNWEILER, JAMES P. ORNDORFF, LAWRENCE P. PAJAK AND LINDA L. PAJAK, ROBERT J. RABER, MICHAEL REILLY, MAUREEN A. REJEWSKI, LINDA REPP, JOSEPH P. RYCHLIK, EDMUND C. SALZLER, WILLIAM R. SALZLER, HELMUT SCHUETZE AND MONICA SCHUETZE, ROBERT SCHUNKE AND DIANE SCHUNKE, DONALD L. SKOWRONSKI AND CHRISTINE SKOWRONSKI, LADONNA SNYDER, SALVATORE SORRENTO, HARRY STEFF AND MARY STEFF, DANIEL A. STEVENS AND LUANN STEVENS, ALEXANDER TUTTLE, DAVID WEBSTER, JUDITH WRIGHT, PHILLIP R. WRIGHT AND LINDA WRIGHT, ERIC ZACCARDO, AND DONALD ZITTEL, PLAINTIFFS, V. NATIONAL FUEL GAS SUPPLY CORPORATION, DEFENDANT.



The opinion of the court was delivered by: John T. Curtin, United States District Judge

INTRODUCTION

Initially, this court had jurisdiction of five actions involving National Fuel: National Fuel Gas Supply Corp. v. 138 Acres of Land, 99-CV-602; Dzara v. U.S. Energy Development Corp., 99-CV-603; Anzulewicz v. National Fuel Gas Supply Corp., 00-CV-791; National Fuel Supply Corp. v. Stevens, 00-CV-486; and National Fuel Gas Supply Corp. v. Mahl, 00-CV-616. 138 Acres, Dzara, and Anzulewicz are still before this court, while Stevens and Mahl were remanded to New York State Supreme Court based on defects in the landowner-plaintiffs' removal petitions. Stevens, Item 28; Mahl, Item 15. The court subsequently denied the Stevens and Mahl motion for reconsideration. Stevens, Item 37; Mahl, Item 24.

Litigation in the remaining cases has continued, and presently before the court are four motions related to these "National Fuel" cases: (1) a motion to extend the time to serve the complaint in Anzulewicz; (2) a motion to extend the time for permission to move for class certification in Anzulewicz; (3) a motion for a Case Management Order to coordinate discovery in the state and federal court cases; and (4) a motion for a preliminary injunction based on the All Writs Act to remove to federal court the Stevens and Mahl actions currently being litigated in state court.

During oral argument on July 18, 2001, the court granted the plaintiffs' motion to extend the time to serve the complaint and the motion to extend the time for permission to move for class certification in Anzulewicz, as there was no opposition to these motions. Plaintiffs shall serve the Anzulewicz complaint by October 26, 2001. Plaintiffs shall also move for class certification in Anzulewicz by October 26, 2001.

Also during oral argument, one of the National Fuel attorneys, Richard Griffin, suggested that the motion for adoption of the proposed Case Management Order would best be decided after the court ruled on the All Writs Act motion submitted by attorneys Henry Killeen and John Kolaga on behalf of their landowner clients. The court agreed. However, based upon the decision reached below on the All Writs Act motion and the fact that the New York State Supreme Court has denied the landowners' motion for discovery, the landowners' application for a Case Management Order is denied. Dzara, Item 28.

FACTS

In December 2000, this court remanded the Mahl and Stevens actions to state court, finding that defects in the landowner parties' petitions precluded removal. Stevens, Item 28; Mahl, Item 15. In the Mahl action, counsel argued that this court's August 24, 2000 decision in 138 Acres provided the necessary authority for this court to retain jurisdiction of the case under the All Writs Act. 138 Acres, Item 32. The court rejected that argument, holding that "This case does not present the sort of exceptional circumstances envisioned by the All Writs Act." Mahl, Item 15, p. 6, n. 2. Landowner counsel then filed a motion for reconsideration on January 3, 2001, which this court denied by orders dated March 24, 2001 and April 3, 2001, noting that it was divested of jurisdiction in both cases and could not review the remand order. Stevens, Item 37; Mahl, Item 24.

However, following a telephone conference between counsel on January 29, 2001, the court issued an order dated February 5, 2001, allowing counsel for the landowners to file an appropriate motion based on the All Writs Act concerning the cases pending in both state and federal court. Stevens, Item 33, p. 2.

On March 30, 2001, landowner counsel filed a joint motion for a preliminary injunction. They seek an injunction against the maintenance of certain proceedings involving National Fuel and the landowners in the New York State Supreme Court. Specifically, the landowners seek the following relief: (1) an order removing to federal court the National Fuel-landowner actions currently in state court; (2) an order directing that National Fuel litigate in federal court any claims it may have against landowners arising out of conduct in the Zoar Field or under the 1999 Federal Energy Regulatory Commission ("FERC") order; (3) an order enjoining National Fuel from litigating any claims against moving parties arising out of conduct in the Zoar field or under 1999 FERC order, in any other forum. Anzulewicz, Item 8, p. 3. As authority for the preliminary injunction, landowners cite the All Writs Act and the Minnich v. Gargano decision of Judge Harold Baer of the Southern District of New York, 2001 WL 46989 (S.D.N.Y. Jan. 18, 2001). The Minnich court granted preliminary injunctive relief against the maintenance of certain proceedings in the New York State Supreme Court under the New York Eminent Domain Procedure Law on the ground that such proceedings violated the due process rights of the landowners.

National Fuel submitted a memorandum of law in opposition to the landowners' motion for a preliminary injunction, 138 Acres, Item 46, and the landowners submitted a reply. 138 Acres, Item 53. Oral argument was held on July 18, 2001. Mr. Killeen provided the court with an extensive factual background underlying the numerous proceedings, which generally concern storage of natural gas approximately 1,700 feet below ground under 210 parcels of land in the Springville area. At oral argument, National Fuel contended that the various facts to which Mr. Killeen made reference concerned administrative issues that should properly be taken up before FERC. Further, National Fuel maintained that the Second Circuit's interpretation of the All Writs Act, which was the gravamen for the landowners' preliminary injunction motion, did not provide a basis for the relief the landowners were seeking.

Counsel then submitted a number of post-argument letters. Dzara, Items 41-46, 138 Acres, Item 65. Attached to the August 3, 2001 letter of Richard Griffin, Esq. was the decision of New York State Supreme Court Justice Eugene Fahey. Dzara, Item 46. Judge Fahey denied the landowners' motions for dismissal or stay of the proceedings, discovery, and vacated the notices of pendency relating to the proceedings. National Fuel's motions and petitions were granted, resulting in acquisition of title to the subsurface natural gas storage easements. Id. p. 3. The State Court held that the underground taking was de minimus, that the procedural requirements of the New York Eminent Domain Procedure Law ("EDPL") had been complied with, that the proceeding did not violate the landowners' due process rights, and that the landowners' loss is compensatory in nature and can be addressed by Article 5 of the EDPL. Id. p. 6.

DISCUSSION

I. Preliminary ...


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