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Mountain Valley Pipeline, LLC v. 8.37 Acres of Land, No. 23-1532 (4th Cir. May 14, 2024)
Mountain Valley Pipeline, LLC v. 8.37 Acres of Land, No. 23-1532 (4th Cir. May 14, 2024)
PUBLISHED
No. 23-1532
Plaintiff – Appellee,
v.
Defendant – Appellant,
and
Defendant.
Appeal from the United States District Court for the Western District of Virginia, at
Roanoke. Elizabeth Kay Dillon, District Judge. (7:20-cv-00134-EKD)
Reversed, vacated, and remanded by published opinion. Judge Thacker wrote the
opinion, in which Judge Gregory and Judge Wynn joined.
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pipeline. Through condemnation actions pursuant to the Natural Gas Act, Appellee
acquired easements on properties along the pipeline’s route. Property owned by Frank
Terry, John Coles Terry, and Elizabeth Terry (“Appellants”) was one such property,
which was encumbered by temporary and permanent easements on 8.37 acres. After the
district court granted Appellee immediate possession of the easements, the case
proceeded to a jury trial to determine the amount of just compensation owed by Appellee
At trial, various appraisers testified as to the land’s value before and after the
easements. Ultimately, the jury rendered a $523,327 verdict. Appellee moved for
judgment as a matter of law. It argued that the verdict resulted from the jury improperly
mixing expert testimony. After this appeal was docketed, the district court agreed with
Appellee and granted judgment as a matter of law. The court vacated the $523,327 jury
verdict, entered a judgment for $261,033, and conditionally granted a new trial with the
option of remittitur.
without mixing different land use valuations, as the district court assumed, we reverse the
district court’s judgment as a matter of law and remand with instructions to reinstate the
Additionally, Appellants moved for attorney’s fees and costs pursuant to federal
law. On that motion, the district court held that federal law did not entitle Appellants to
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attorney’s fees. Appellants filed a second motion for attorney’s fees, which asserted that
Virginia law applied. The district court denied the second motion, holding that federal
law, as opposed to state law, applied. However, because the district court lacked
jurisdiction at the point that it ruled on the second motion, we vacate and remand.
I.
A.
property along the pipeline’s route. It needed temporary easements to access property
during the pipeline’s construction and permanent easements for the pipeline itself.
Appellee acquired these easements through condemnation acts pursuant to the Natural
Appellants’ property comprises 560 acres in Roanoke County, Virginia. The land
dwelling, a garage, and storage sheds. The district court granted Appellee immediate
possession of the easements on Appellants’ property. Because the parties could not agree
on a just compensation amount for the easements, the case proceeded to a jury trial.
Before trial, both sides engaged appraisers to value Appellants’ property before
and after the easements in order to measure the just compensation amount that Appellee
would owe Appellants. The appraisers were each deemed expert witnesses by the district
court.
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1.
best use of the subject property. The highest and best use of the property is the most
profitable use for the land and can include commercial uses even if the land is currently
used for residential purposes. Then, utilizing the highest and best use of the land,
appraisers value the land before and after the taking. The difference between the before
value and the after value is the amount of just compensation due for the taking.
One of Appellants’ experts, Dennis Gruelle, opined in a report before trial that the
highest and best use of Appellants’ land was as a wind farm. Initially, Gruelle concluded
that a wind farm would be incompatible with the pipeline project. But Appellee’s
appraiser concluded that a wind farm was in fact compatible with the pipeline project.
Gruelle then filed a supplemental report and changed his opinion on the land’s highest
and best use. Instead of solely a wind farm, Gruelle concluded that the property had two
separate highest and best uses, including as a family subdivision and a wind farm. That
said, Gruelle also admitted that the wind farm was compatible with the pipeline
easements.
Appellee moved to exclude Gruelle’s second report, arguing that it was untimely
and not supplemental. The district court granted the motion and excluded Gruelle’s
second report because it contained “several opinions that [were] entirely new and
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different from his first report.” J.A. 337. 1 Thus, the district court determined that
2.
Four appraisers testified at trial, three of which are relevant here. Gruelle and
of Appellee.
a.
Gruelle’s Testimony
takings: (1) the sales comparison approach, which uses similar sales to value the subject
property; (2) the income approach, which looks at the property’s potential to generate
income; and (3) the cost approach, used with unique properties, which accounts for
special features on the property. Gruelle’s report utilized the sales comparison approach -
- comparing Appellants’ property to four similar sales. One comparative sale had an
adjusted value of $2,594 per acre, and the other three ranged from $2,993–4,604 per acre.
Gruelle concluded that the maximally productive use of the land was as a wind farm. On
cross-examination, Gruelle admitted that the pipeline project would not impact the land’s
use as a wind farm. And when used as a wind farm, Gruelle concluded that the before
1
Citations to the “J.A.” refer to the Joint Appendix filed by the parties in this
appeal.
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taking value of the land was $2,900 per acre, which was informed by his comparative
sales. Thus, Gruelle valued Appellants’ 560 acres at $1,624,000 (560 x $2,900).
concluded that the improvements were worth $281,400. Adding the value of the
improvements to his valuation of the land and rounding down, Gruelle concluded that the
total before value of the land with improvements was $1.9 million.
Appellee moved to exclude Gruelle’s testimony on the land’s value after the
easements. Appellee argued that Gruelle’s conclusions in his first report regarding the
land’s value after the easements was invalid. The district court granted the motion, and it
prevented Gruelle from testifying to the value of the land after the easements. Thus, the
only testimony from Gruelle that the court permitted was regarding the land’s before
b.
Schweitzer’s Testimony
testified that the highest and best use for Appellants’ land was residential. Schweitzer
explained that the property was damaged by the pipeline because the easements reduced
Appellants’ property interest in the land. Schweitzer concluded that Appellants’ property
was worth 30% less after the permanent easements. This 30% figure is also referred to as
a damage percentage, since it measures the percentage difference between the land before
and after the taking. On cross-examination, Schweitzer testified that, in his estimation,
Appellants’ land, before the taking, was worth $850,000. This $850,000 valuation was
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based on the land’s deed acreage -- 400 acres -- rather than the county’s geographical
information system map, which estimates the land as 560 acres. According to
Schweitzer, applying his 30% damage percentage, the after easements value of the
property was $590,932, resulting in $259,068 in just compensation for the permanent
by measuring the rental value of accessing the land during the pipeline’s construction, he
concluded that rental value was $1,965. This resulted in a total just compensation value
c.
Thompson’s Testimony
Thompson opined that the highest and best use for the land was residential. He valued
the land at $1.2 million before the permanent easements and $1.05 million after, resulting
in a damage percentage of 12%. Thus, Thompson’s just compensation figure for the
easements, Thompson testified that the annual rental value was $623.40, which totaled
$3,117 for five years of temporary use ($623.40 x 5). Thompson’s total just
d.
In sum, the experts at trial gave the following estimates of the land’s value before
and after the taking, resultant diminution in value, and estimated just compensation:
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Temporary
Before Easement Total Just
Expert Value After Value Diminution Rental Value Compensation
Gruelle $1.9 million Excluded Excluded Excluded Excluded
Schweitzer $850,000 $590,932 $259,068 $1,965 $261,033
($259,068 +
$1,965)
Thompson $1.2 million $1.05 million $150,000 $3,117 $153,117
($150,000 +
$3,117)
In addition to the expert testimony, the district court permitted the jury to visit the site.
3.
At the close of Appellants’ case, Appellee moved for judgment as a matter of law.
Appellee argued that the maximum amount the jury could award was Schweitzer’s
$261,033 just compensation award. Appellee argued that in order to reach a higher
verdict, the jury would have to give credence to Gruelle’s wind farm valuation mixed
with Schweitzer’s residential diminution value. And Appellee argued this calculation
would be erroneous because the jury would need to mix Gruelle’s and Schweitzer’s
figures inasmuchas they used different highest and best uses, and that mix would be
legally impermissible. Specifically, Gruelle’s figure was based on the land’s use as a
wind farm, a commercial use, but Schweitzer’s figure was based on a residential use.
Appellants opposed the motion, arguing that the jury was not required to adopt the
opinion of any single expert witness in order to arrive at its verdict. The district court
denied judgment as a matter of law because it determined that there were still issues of
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$570,000 verdict, calculated by taking Gruelle’s $1.9 million before taking value and
improper, as Gruelle’s $1.9 million value was based on valuing the property as a wind
4.
a.
Twenty-six days after the jury’s verdict, Appellee moved the district court to enter
judgment as a matter of law in the amount of $261,033, or to grant a new trial. Appellee
argued that the jury’s $523,327 verdict was against the clear weight of the evidence and
should be set aside because the only way the jury could have reached that verdict was by
improperly mixing expert testimony. Appellants opposed the motion, asserting that the
The district court granted Appellee’s motion for judgment as a matter of law. The
district court held that the jury’s $523,327 verdict was not within the range of credited
testimony. It reasoned that to reach that amount, the jury must have combined Gruelle’s
valuation of the property prior to the taking with another expert’s diminution percentage.
And because Gruelle valued the land as a wind farm, applying any other expert’s
diminution percentage, which were each based on a residential use, was improper.
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Looking to state cases from Colorado, Wyoming, and Wisconsin, 2 the court held that a
“jury cannot take a pre-take commercial or industrial highest and best use fair market
value,” such as a wind farm, and “then use a residential diminution in value and
residential post-take fair market value to determine just compensation under the
circumstances of this case.” J.A. 1266. Thus, the district court granted judgment as a
matter of law, vacated the $523,327 jury verdict, and entered judgment for $261,033.
To reach that amount, the district court took Schweitzer’s $850,000 before taking
value and subtracted his $590,932 after taking value, resulting in $259,068 for the
permanent easements. The court then added Schweitzer’s temporary easement value,
$1,965, in order to reach $261,033. The district court also granted Appellee’s motion for
b.
Thirteen days after the jury’s verdict, Appellants moved for attorney’s fees and
costs. Appellants argued that federal law, specifically the Equal Access to Justice Act
(“Act”), 28 U.S.C. § 2412, applied to determine attorney’s fees and costs. The Act
provides fees to claimants who are prevailing parties in civil actions brought by or against
the United States. 28 U.S.C. § 2412(d)(1)(A). Appellee opposed the motion, arguing
that Appellants were not entitled to fees and costs because Appellee was not the United
2
Jagow v. E-470 Pub. Highway Auth., 49 P.3d 1151 (Colo. 2002); Energy Transp.
Sys., Inc. v. Mackey, 674 P.2d 744 (Wyo. 1984); Genge v. City of Baraboo, 241 N.W.2d
183 (Wis. 1976).
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States or a government agency and, therefore, the Act did not apply. After the district
court held a hearing on the motion, Appellants filed a notice of supplemental authorities.
With these supplemental authorities, Appellants argued, for the first time, that they were
entitled to costs and fees pursuant to Virginia state law, rather than federal law.
Specifically, Appellants argued that because state substantive law governed the measure
of just compensation under the Natural Gas Act, Virginia law entitled them to attorney’s
fees and costs. Appellee moved to strike Appellants’ supplemental authorities because it
was not supplemental, but, rather, raised new authorities for a different claim that
Almost a year after the jury verdict, the district court struck Appellants’
supplemental authorities and denied their first amotion for attorney’s fees based on
federal law. That same day, Appellants filed a second motion for fees and costs, arguing
that Virginia law applied. The parties fully briefed that motion, and it was submitted to
the district court. And on March 29, 2024, while this appeal was pending, 3 the district
court purported to rule on the second motion for attorney’s fees. The district court held
that federal law, not state law, governs the amount of just compensation, including
attorney’s fees and costs, for condemnations pursuant to the Natural Gas Act. Thus, the
district court denied Appellants’ motion and concluded that Appellants were not entitled
3
Oral argument on this appeal was on March 21, 2024.
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II.
“We review de novo the district court’s grant of a post-trial motion for judgment
as a matter of law under Federal Rule of Civil Procedure 50(b).” Humbert v. Mayor &
City Council of Baltimore City, 866 F.3d 546, 554 (4th Cir. 2017). In conducting this
review, we view “the evidence in the light most favorable to the prevailing party.” Hicks
v. Ferreyra, 64 F.4th 156, 164 (4th Cir. 2023) (quoting FDIC v. Bakkebo, 506 F.3d 286,
The decision to grant or deny a motion for a new trial is within the sound
discretion of the district court and will not be disturbed absent an abuse of discretion.
Hicks, 64 F.4th at 174. “When considering a motion for a new trial under Rule 59, ‘a
trial judge may weigh the evidence and consider the credibility of the witnesses.’” Id. at
175 (quoting Poynter ex rel. Poynter v. Ratcliff, 874 F.2d 219, 223 (4th Cir. 1989)). A
court “abuses its discretion when it acts arbitrarily or irrationally, fails to consider
factual or legal premises, or commits an error of law.” United States v. Dillard, 891 F.3d
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III.
A.
testimony.” 4 United States v. Smoot Sand & Gravel Co., 248 F.2d 822, 829 (4th Cir.
1957). For an award to be within the range of credited testimony, it must be based on the
evidence presented at trial, including expert testimony. E. Tenn. Nat. Gas Co. v. 7.74
Acres, Va., 228 F. App’x 323, 330 (4th Cir. 2007). Appellants argue that the jury’s
$523,327 award meets that standard and that, therefore, the district court erred in
concluding the award went beyond credited testimony. Appellee contends that the jury’s
award reflects that it improperly mixed testimony from Gruelle, who valued the land as a
wind farm, with testimony from either Schweitzer or Thompson, who each valued the
land as residential use. Thus, according to Appellee, the award was outside the range of
But the jury may accept or reject any part of an expert’s testimony and remain
within the range of credited testimony even if it does not adopt any one expert’s
4
We acknowledge the open question of whether state law or federal law governs
the substantive determination of just compensation in condemnation actions brought by
private entities under the Natural Gas Act. See Tenn. Gas Pipeline Co., LLC v.
Permanent Easement for 7.053 Acres, 931 F.3d 237 (3d Cir. 2019); Sabal Trail
Transmission, LLC v. 18.27 Acres of Land, 59 F.4th 1158 (11th Cir. 2023); Columbia
Gas Transmission Corp. v. Exclusive Nat. Gas Storage Easement, 962 F.2d 1192 (6th
Cir. 1992); see also Bison Pipeline, LLC v. 102.84 Acres of Land, 560 F. App’x 690 (10th
Cir. 2013). But we decline to decide that question at this juncture. Because Virginia
state law would uphold a verdict supported by sufficient evidence, State Highway
Comm’r v. Frazier, 203 S.E.2d 350, 351–52 (Va. 1974), we see no conflict between state
and federal law here.
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testimony wholesale. Smoot, 248 F.2d at 829. Moreover, when a jury views a property
itself, as it did here, it has “a wide latitude” to apply its own judgment of the property’s
value. Id. And, significantly, although Appellee argues that the jury here could not have
come up with the award that it did without improperly mixing commercial and residential
valuations, Appellants explain that the verdict can, in fact, be calculated without doing
so.
At oral argument, Appellants suggested that the jury’s verdict is supported by the
following calculation. Instead of crediting any single expert’s before taking valuation of
the land, the jury looked to the comparison sales that Gruelle identified -- which were
residential land sales near Appellants’ property. The jury then credited Gruelle’s first
comparison sale, at $2,594 per acre. Using that comparison sale multiplied by the 560
acres of Appellants’ property, the jury would have concluded that the land was worth
$1,452,640. Then, the jury could have added Gruelle’s $281,400 improvement value to
arrive at a before taking value of $1,724,040. This before taking value is rooted in
testimony in the record that values the land for residential use because Gruelle’s
comparison sales and his improvements both were based on a residential use. Then, the
jury could have credited Schweitzer’s 30% diminution for the permanent easements -- a
percentage based upon loss of residential value. Taking the property’s before taking
value of $1,724,040 and multiplying it by 30% equals $520,212. And finally, Appellants
argue the jury could have credited Thompson’s temporary easement value of $3,117.
Adding the above calculated just compensation for the permanent easements ($520,212)
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and the temporary easements ($3,117) equals $523,329 -- a mere two dollars above the
We agree with Appellants that the jury clearly could have reached its verdict using
residential values alone without the need to venture beyond the credited testimony. And
in doing so, the jury could accept or reject any part of each expert’s testimony -- its
verdict did not have to conform to the just compensation of any one witness. Because the
jury’s verdict can be supported using residential values alone, it is unnecessary for us to
decide whether it is improper for a jury to mix commercial and residential valuations in
just compensation cases. Thus, we hold that the $523,327 verdict is within the range of
B.
Upon determining that the jury improperly mixed expert testimony as to different
land uses and valuations, the district court conditionally granted a new trial, relying on
the same reasoning that it granted judgment as a matter of law. Appellants argue that this
was an abuse of discretion. Because the district court relied on an erroneous factual
premise -- that the jury’s award resulted from improperly mixing expert testimony -- we
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hold that it abused its discretion in granting a new trial. See James v. Jacobson, 6 F.3d
233, 239 (4th Cir. 1993) (“[D]iscretion may be abused by an exercise that is flawed by
erroneous factual or legal premises.”). Therefore, we reverse the district court’s grant of
a new trial.
C.
1.
Appellants argue that they are entitled to attorney’s fees and costs pursuant to
Virginia law. But Appellants did not properly raise this argument before the district
court. In their first motion for attorney’s fees, Appellants solely argued that federal law,
the Equal Access to Justice Act, 28 U.S.C. § 2412, applied. Appellants did not raise
Virginia law until they filed their supplemental authorities, which was after the district
court held a hearing on the first motion for attorney’s fees. The district court struck those
supplemental authorities because Appellants advanced new arguments that could have
been presented previously. Thus, the district court denied Appellants attorney’s fees
motion on the sole ground Appellants raised in their first motion -- federal law. Looking
to federal law, the district court concluded that the Act did not entitle Appellants to
Absent exceptional circumstances, parties may not raise new arguments on appeal
that were not first presented to the district court. Richardson v. Clarke, 52 F.4th 614, 625
(4th Cir. 2022). Appellants have not shown exceptional circumstances here. Thus,
Appellants waived their Virginia law argument before us by not properly raising it below.
And on appeal, Appellants do not argue that federal law entitles them to attorney’s fees.
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2.
On the same day the district court struck Appellants’ supplemental authorities and
held that federal law did not entitle them to attorney’s fees, Appellants filed a second
motion for attorney’s fees. The district court purported to rule on the second motion on
March 29, 2024, while this appeal was pending -- indeed, the district court ruled on the
second motion eight days after oral argument in this appeal. The district court held that
federal law, not state law, governs the amount of just compensation for condemnations
pursuant to the Natural Gas Act, including attorney’s fees and costs. Therefore, the
But the filing of a timely and sufficient notice of appeal immediately transfers
jurisdiction of “all matters relating to the appeal from the district court to the court of
appeals.” Grand Jury Proc. Under Seal v. United States, 947 F.2d 1188, 1190 (4th Cir.
1991). Put differently, a notice of appeal divests the district court of “its control over
those aspects of the case involved in the appeal.” Griggs v. Provident Consumer Disc.
Co., 459 U.S. 56, 58 (1982). Nonetheless, we have held that a district court retains
jurisdiction to decide an attorney’s fees motion if the issue of attorney’s fees is separate
from the merits of the appeal. Langham-Hill Petroleum, Inc. v. S. Fuels Co., 813 F.2d
1327, 1331 (4th Cir. 1987). Here, the district court’s opinion dealt squarely with an
“aspect of the case” on appeal -- whether Appellants are entitled to attorney’s fees. Thus,
the district court lacked jurisdiction to modify its attorney’s fees decision or decide the
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As a result, we vacate and remand the district court’s March 29, 2024 order as to
the second motion for attorney’s fees. We express no opinion on whether the second
motion is permitted or timely, nor whether Virginia law or federal law applies. We leave
these issues for the district court to consider in the first instance.
IV.
As a result, we also reverse the district court’s grant of a new trial with the option of
remittitur. We remand for the district court to reinstate the jury’s $523,327 verdict. We
vacate the district court’s order denying Appellants’ second motion for attorney’s fees
and remand for the district court to consider Appellants’ second motion for attorney’s
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