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Enbridge Pipelines LLC v. Burris

August 3, 2010


The opinion of the court was delivered by: Herndon, Chief Judge


I. Introduction

Before the Court is plaintiff Enbridge Pipelines (Illinois), LLC's ("Enbridge") Motion for Summary Judgment (Doc. 41) against defendants Theodore L. Hortenstine, Annetta M. Hortenstine, Andrea M. Workman, Richard C. Hortenstine, Andrew J. Hortenstine and Jennifer A. Grohler ("Defendants" or "Hortenstine defendants"). Defendants have filed an opposing Response (Doc. 46), to which Plaintiff has filed its Reply (Doc. 54). In further support of its motion, Plaintiff was granted leave to file/cite additional authority (see Doc. 56) for the Court's consideration.

In its April 30, 2009 order (Doc. 34), the Court granted in part Defendants' Motion to Consolidate Cases (Doc. 17), whereby the following two cases, Enbridge v. Portz, No. 08-cv-841-DRH-DGW and Enbridge v. Hortenstein, No. 08-cv-842-DRH-PMF, were consolidated into Enbridge v. Burris, No. 08-cv-697-DRH-CJP, (with Burris becoming the lead case). The Court found all three cases involved the requisite "common question of law or fact" to warrant consolidation.*fn1 The Court additionally ordered that all filings were to thereafter be made in Enbridge v. Burris, No. 08-cv-697-DRH-CJP. As such, Plaintiff has filed three separate motions for summary judgment against the three separate sets of Defendants. This Order involves only Plaintiff's arguments regarding its complaint for declaratory judgment against the Hortenstine defendants, as originally filed in Enbridge v. Hortenstine, No. 08-cv-842-DRH, prior to the consolidation of the three aforementioned cases.

Plaintiff has brought a declaratory judgment action (Case No. 08-cv-842-DRH, Doc. 2) against the Hortenstine defendants on the basis of diversity jurisdiction. 28 U.S.C. § 1332. In particular, Plaintiff seeks a declaration that a certain pipeline rights-of-way ("easements") are valid and enforceable according to their terms. Defendants contest the current validity of the easements, arguing, among other things, abandonment and expiration.

II. Background

This matter centers around right-of-way easements running across two separate tracts of land (Tracts 12-003 and 12-004) currently owned by Defendants (Doc. 42, ¶ 3; Doc. 46, ¶ 3). The easements were originally recorded with the Fayette County Recorder on August 9, 1939, reflecting the right-of-way granted by the title holders (who preceded Defendants in title) to The Texas-Empire Pipe Line Company (Doc. 42, ¶ 4, Ex. 1 - Affidavit of Norm Henenberg, ¶¶ 5-7 & Exs. A & B; see also Case No. 08-cv-842, Doc. 2 - Comp., Group Ex. A). The easements (hereinafter "the Hortenstine easements") granted and conveyed "the right to lay, operate and maintain a pipe line for the transportation of oil, gas, gasoline and/or other fluids," as well as "the right to lay, operate and maintain, adjacent to and parallel with the first, a second pipe line . . ." (Id.). The Hortenstine easements also granted certain ingress/egress and maintenance rights (Id.). Further, the Hortenstine easements were to pass to the grantee's "successors and assigns so long as such pipe lines or other structures are maintained . . ." (Id.).

Plaintiff has submitted various documents to establish its claim of ownership over the Hortenstine easements. First is a certified copy of an Assignment, executed on September 22, 1983 and recorded with the Fayette County Recorder, from Texaco-Cities Service Pipe Line Company (which indicates it was formerly known as The Texas-Empire Pipe Line Company) to Williams Pipe Line Company, assigning the former's interests in the Hortenstine easements (Doc. 42, ¶ 7, citing Ex. 1 - Henenberg Aff., ¶ 8, Ex. C). Second is a certified copy of an Assignment of Easement, executed on June 23, 2004 and also recorded with the Fayette County Recorder, from Magellan Pipeline Company, LLC (indicating it was formerly known as Williams Pipe Line Company, LLC and Williams Pipe Line Company) to Central Illinois Pipeline Company, LLC, again assigning the former's interests in the Hortenstine easements (Id. at ¶ 8, citing Henenberg Aff., ¶ 9, Ex. D). The assignee, Central Illinois Pipeline Company, LLC, thereafter merged into Enbridge, with Enbridge as the surviving entity (Id. at ¶ 9, citing Henenberg Aff., ¶ 10, Ex. E). Plaintiff has also submitted authentic copies of the Certificates of Merger, filed on December 15, 2006 with the Secretaries of State of Delaware and Oklahoma, to substantiate its assertion that it owns the Hortenstine easements, as the current successor-in-interest to the original grantee (Id. at ¶¶ 9 - 10, citing Henenberg Aff., ¶¶ 10-11).

At present, Plaintiff is engaged in what it describes as "a multimillion dollar pipeline project that will cross portions of Central and Southern Illinois" (Id. at ¶ 2, citing Henenberg Aff., ¶ 1). Plaintiff intends to incorporate portions of an existing pipeline right-of-way acquired as part of its merger with the former Central Illinois Pipeline Company, which includes the two tracks of land now owned by Defendants (Id. at ¶¶ 2-3). The matter is ultimately before the Court because Defendants have contested Plaintiff's assertion of rights granted by the Hortenstine easements.

III. Subject Matter Jurisdiction

As an initial inquiry, the Court must resolve the issue of whether it has proper subject matter jurisdiction over Plaintiff's suit before it proceeds to the merits. Defendant opposes Plaintiff's assertion that diversity jurisdiction exists under 28 U.S.C. § 1332. Section 1332 requires that the parties be completely diverse and the matter in controversy exceed $75,000, exclusive of interest and costs. LM Ins. Corp. v. Spaulding Enterprises Inc., 533 F.3d 542, 547 (7th Cir. 2008). Defendant concedes that there is proper diversity of citizenship between Parties, but contests that the amount in controversy exceeds $75,000 (Doc. 45, pp. 2 & 4).

"Without jurisdiction the court cannot proceed at all in any cause. Jurisdiction is power to declare the law, and when it ceases to exist, the only function remaining to the court is that of announcing the fact and dismissing the cause." Ex parte McCardle, 7 Wall. 506, 514 19 L.Ed. 264 (1868); Steel Co. v. Citizens for Better Environment, 523 U.S. 83, 94 (1998). When challenged, the party invoking federal jurisdiction bears the burden of demonstrating that the jurisdictional requirements have been met. Chase v. Shop 'N Save Warehouse Foods, Inc., 110 F.3d 424, 427 (7th Cir. 1997). As the Seventh Circuit clarified in Meridian Security Insurance Co. v. Sadowski, if the material allegations regarding the amount in controversy are contested, the party seeking federal forum must prove the relevant jurisdictional facts "by a preponderance of the evidence."

If that party is thereafter able to establish the jurisdictional facts, dismissal (or remand) upon the basis of lack of subject matter jurisdiction is appropriate only if the district court finds it "legally certain" that either "the recovery (from plaintiff's perspective) or cost of complying with the judgment (from defendant's) will be less than the jurisdictional floor . . . ." LM Ins. Corp. v. Spaulding Enter., Inc., 533 F.3d 542, 547 (7th Cir. 2008) (quoting Meridian Security, 441 F.3d 536, 543 (7th Cir. 2006)).

Here, Defendants believe Plaintiff's conclusory allegation that "the pecuniary result of the declaratory judgment . . . exceeds the sum or value of $75,000.00" is inadequate to establish the amount in controversy (Doc. 46, pp. 2 & 4). Moreover, Defendants argue that the portion of the Henenberg Affidavit (Doc. 42, ¶ 1, Ex. 1 - Henenberg Aff., ¶ 2), cited by Plaintiff in support of its assertion that the amount in controversy has been met, is also wholly conclusory and merely parrots Plaintiff's allegation. Instead, Defendants point out the fact that the Hortenstine easements are only of nominal value (the grant of the easements were each conveyed for $80.00 back in 1939, see Doc. 42, Ex. 1- Henenberg Aff., Ex. A). Aside from the insignificant face value of the Hortenstine easements, Defendants oppose the notion that Plaintiff sets forth any further allegations establishing that the amount in controversy exceeds the jurisdictional amount.

As the proponent of federal jurisdiction, it is now Plaintiff's burden to show by a preponderance of the evidence that the amount in controversy likely exceeds the jurisdictional threshold amount of $75,000. Plaintiff addresses this issue in its Reply (Doc. 54, p. 5, n.3). In support of its assertion that the amount in controversy exceeds $75,000 should the Hortenstine easements be declared invalid, Plaintiff submits an excerpt from the deposition of Norm Henenberg, in which he explains that if the various pipeline easement(s) cannot be used, Plaintiff will need to find a new way around each tract of land, thereby incurring additional costs to acquire land for the new pipeline route. Henenberg opines that this effort will also incorporate further costs for additional materials, construction engineering work, as well project delay costs (Doc. 54, p. 5, n.3, Ex. 2). Specifically, Henenberg claims that the additional pipe needed, if a longer route is required to go around Defendants' tracts of land, costs approximately $100 to $200 per foot. Because an alternate path is yet unknown (as additional easements have not been acquired because Plaintiff believes it maintains the right to use the Hortenstine easements), Plaintiff has no way of specifically calculating the length of additional pipeline needed or the corresponding costs for the additional materials, construction and engineering. However, Henenberg opined that the costs would likely exceed $75,000 (Id.).

Under the standard set forth by the Seventh Circuit in Meridian Security, the Court finds Plaintiff has established the facts regarding the amount in controversy by a preponderance of the evidence. Defendants offer no argument or evidence to show otherwise. Therefore, because the Court cannot determine with legal certainty that Plaintiff's pecuniary damages incurred would not exceed $75,000 if the Court declares the Hortenstine easements invalid, it finds diversity jurisdiction exists. As such, the Court can now address the merits of Plaintiff's summary judgment motion.

IV. Discussion

A. Summary ...

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