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National Fuel Gas Supply Corp. v. Town of Wales

United States District Court, W.D. New York

October 23, 2012

TOWN OF WALES and the Town Board of the Town of Wales, Defendants.

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[Copyrighted Material Omitted]

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Richard T. Tucker, Phillips Lytle, LLP, Rochester, NY, John G. Schmidt, Jr., Phillips Lytle, LLP, Buffalo, NY, for Plaintiff.

Jeremy A. Colby, Webster Szanyi, LLP, Buffalo, NY, for Defendants.




Plaintiff, National Fuel Gas Supply Corporation, brings this action against Defendant,

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the Town of Wales, alleging that the Town and its board interfered with National Fuel's federal rights regarding construction of a natural gas compressor station in the Town.

National Fuel seeks a declaratory judgment and injunctive relief; it also asserts that the Town's actions constitute a regulatory taking and a deprivation of National Fuel's due process rights. The Town presently moves to dismiss all claims against the Town Board and the two constitutional claims as against the Town. (Docket No. 10.) For the following reasons, the Town's motion is granted in full.


A. Facts[1]

In furtherance of its " Northern Access Project," National Fuel planned to build a compressor station in the Town of Wales, New York.[2] (Am. Compl. ¶ 7; Docket No. 6.) To that end, in March of 2011, National Fuel filed an application with the Federal Energy and Regulatory Commission (" FERC" ) for a Certificate of Public Convenience (" Certificate" ). ( Id. ) Under the Natural Gas Act, such a certificate is a prerequisite to construction. See 15 U.S.C. § 717f(c)(1)(A). The compressor station, which ensures that gas remains pressurized as it travels through interstate pipelines, was to be constructed adjacent to an existing meter station.[3] (Am Compl., ¶ 10; Docket No. 6.)

Around July of 2011, however, the Town informed National Fuel that it would require a Special Use Permit (" Permit" ) before it would allow National Fuel to begin construction. ( Id., ¶ 11.) According to National Fuel, " immediately thereafter, as a matter of cooperation, and in attempt to accommodate the local zoning process," it began the Permit application process. ( Id., ¶ 12.)

As part of that process, National Fuel submitted an Environmental Assessment Form, released an Environmental Assessment for public review, conducted a noise survey, and discussed the compressor station at various town board meetings. In the meantime, on October 20, 2011, the FERC issued the Certificate. ( Id., ¶ 30.) It included the following noise limitation:

If the noise attributable to the operation of the East Aurora Compressor Station at full load exceeds an Ldn of 55 dBA at any nearby NSAs,[4] National Fuel shall file a report on what changes are needed and shall install additional noise controls to meet the level within one year of the in-service date.

( Id., ¶ 31.)

The FERC Certificate also instructs:

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National Fuel shall make all reasonable efforts to ensure its predicted noise levels form the East Aurora Compressor Station are not exceeded at nearby NSAs and file a noise survey showing this with the Secretary no later than 60 days after placing the East Aurora Compressor Station in service.

( Id. )

Finally, it provides:

Any state or local permits issued with respect to the jurisdictional facilities authorized herein must be consistent with the conditions of this certificate. The Commission encourages cooperation between interstate pipelines and local authorities. However, this does not mean that state and local agencies may prohibit or unreasonably delay the construction or operation of facilities approved by this Commission.

( Id., ¶ 32.)

After issuance of the Certificate, National Fuel continued to work with the Town regarding the Permit: its representatives attended meetings, provided a tour of the site, and allowed an inspection of a similar compression station in Pennsylvania. ( Id., ¶¶ 36-42.) At this inspection, on December 8, 2011, the Town representatives agreed that the noise from the station was not excessive. ( Id., ¶ 43.)

Eventually the Town issued a preliminary Permit, but it was inconsistent with the Certificate. ( Id., ¶ 45.) For example, Special Condition No. 3 of the proposed Permit required that the " noise related to the compressor unit venting shall be at a maximum of 45 dBA at the nearest NSA to the compressor station." ( Id., ¶ 46.) This imposed a stricter requirement than Certificate's 55 dBA level. ( Id. ) Further, Special Condition No. 4 of the proposed Permit stated that " predicted noise levels from the compressor station shall not be exceeded at nearby NSAs." According to National Fuel, this is significantly more stringent than the Certificate's requirement that National Fuel " shall make all reasonable efforts" to ensure that the predicted noise levels are not exceeded at the nearby NSAs. ( Id., ¶ 47.)

Negotiations continued, and on December 9, 2011, National Fuel proposed several changes to the Permit. ( Id., ¶ 48.) Three days later the Town advised National Fuel that it was unwilling to (1) eliminate the Special Condition No. 3 requirement that the total sound level at the nearest NSA be no more than 45 dBA, or (2) revise Special Condition No. 4 to state that " all reasonable efforts" would be used to achieve the predicted noise levels from the Compressor Station. ( Id., ¶ 49.)

On December 22, 2011, the Town issued the final Permit; it retained the objected-to requirements and also mandated that " [n]oise related to the compressor operation shall not exceed 3 dBA over background ambient noise." ( Id., ¶ 51.)

The Town further required that National Fuel execute an " acknowledgment" regarding a waiver of National Fuel's right to challenge the conditions contained in the Permit. ( Id., ¶ 53.) After negotiating, the Town Board approved a revised acknowledgment, without the waiver, and signed the Permit on January 10, 2012.[5] ( Id., ¶ 55.)

In the months following, the FERC granted National Fuel permission to begin construction of the compressor station, and the Town issued a building permit, which ...

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