Federal Court Rules that a West Virginia County Cannot Deny a Request to Re-Zone Property to Allow for Construction of a Natural Gas Compressor Station
August 30, 2018
A federal district court in West Virginia ruled on Wednesday that Fayette County’s zoning code is preempted by the Natural Gas Act as it applies to Mountain Valley Pipeline’s FERC-approved activities in connection with a compressor station to be constructed in that county. See Mountain Valley Pipeline, LLC v. Wender, et al., No. 2:17-cv-4377 (S.D.W.Va. Aug. 29, 2018), ECF No. 34. MVP obtained a certificate of convenience and necessity from the Federal Energy Regulatory Commission on October 13, 2017, authorizing the construction of a 303.5-mile natural gas pipeline through West Virginia and Virginia. The certificate is conditioned on MVP completing the pipeline and placing it into service within three years. In addition, the certificate contains a standard provision (called the “rule of reason”) directing MVP to engage in “bona fide attempts to comply with state and local requirements.” However, the certificate also mandates that “[a]ny state or local permits issued with respect to the jurisdictional facilities authorized [by the certificate] must be consistent with the conditions of th[e] certificate.”
The FERC certificate specifically authorizes MVP to construct the Stallworth Compressor Station on MVP-owned property located in Fayette County, West Virginia. The property is currently zoned as “rural-residential,” so MVP submitted an application to the Fayette County Commission to re-zone the property as “heavy industrial” to allow for construction of the compressor station. The Commission denied the request on November 17, 2017. On the same day, MVP filed a declaratory judgment action in federal district court requesting a permanent injunction prohibiting the County from enforcing its zoning code so as to prevent construction of the compressor station.
The district court held that the County’s zoning code is preempted by the Natural Gas Act through both field preemption and conflict preemption. First, the court ruled that any state or local law that purports to target the field of siting a facility within FERC’s exclusive jurisdiction is preempted. Order, p. 18. Since Fayette County’s zoning code “unquestionably aims at regulating the location of jurisdictional facilities—the field occupied by the NGA and FERC”—the zoning code is unconstitutional as applied to MVP’s FERC-approved activities in connection with the compressor station. Order, pp. 20, 24-25.
Second, the court ruled that the County’s zoning code, as applied to construction of the compressor station, “conflicts with the congressional purposes and objectives outlined in the NGA and by FERC[,]” and is therefore preempted based on conflict preemption. Order, p. 29. The County argued that there was no real conflict between its zoning code and the Natural Gas Act because the code itself did not expressly prohibit re-zoning from rural-residential to heavy industrial. Order, pp. 27-29. The court explained that conflict preemption arises when it is impossible for a party to comply with both state and federal requirements or when state law “stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.” Order, p. 25. The court found that by issuing the certificate authorizing construction of the compressor station, FERC concluded that public convenience and necessity require construction of the compressor station on the Stallworth property. The County’s decision to deny MVP’s request to re-zone the property to allow for construction of the compressor station is therefore preempted. Order, p. 29.
Based on these rulings, the court concluded that MVP is entitled to a permanent injunction prohibiting the County from enforcing the zoning code as applied to MVP’s FERC-approved activities in connection with the Stallworth Compressor Station. A future order imposing injunctive relief will be forthcoming from the court.