Judge admonished by appeals court panel in gas pipeline cases
WILLIAMSPORT — A federal appeals court panel says U.S. Middle District Judge Matthew W. Brann abused his discretion in determining the compensation for giving a natural gas pipeline easements over two properties. Brann’s territory covers Clinton and Centre counties.
The panel of the U.S. 3rd Circuit Court of Appeals Tuesday criticized Brann for relying on expert testimony that was speculative and not good science and for ignoring the clear mandate of a court rule.
The opinion authored by Judge Paul B. Matey states Brann abused his discretion in admitting and relying on the testimony of Don Paul Shearer, the expert witness for two property owners.
In non-jury trials as these, the judge acts as a gatekeeper to ensure expert testimony or evidence is not only relevant but reliable, Matey wrote.
Brann failed to conduct any form of assessment of the testimony before permitting Shearer to testify over the objection of Sunbury UGI, the opinion states.
The two cases involved the effect temporary construction and permanent easements had on the value of the Limestone Township farm of David W. Beachel Jr. and the Shamokin Dam commercial property of Donald D. and Georgia A. Pontius.
Sunbury UGI sued to obtain the easements for a 34.4-mile-long pipeline that was placed in service in 2017 to transport Marcellus Shale gas from the Lairdsville area of Lycoming County to a Panda Power generating plant in Shamokin Dam.
Brann approved UGI’s request for condemnation and in non-jury trials set the compensation at $126,932 for Beachel and $254,228 for Pontius.
UGI appealed, although the court awards were less than Shearer’s conclusion that Beachel should get $386,000 and the Pontius $456,000.
Shearer relied on his own “damaged goods” model to determine post-taking property values, Matey wrote.
The model included the impact that Three Mile Island nuclear incident in 1979, the Exxon Valdez Alaskan oil spill in 1989 and assorted leaking underground storage tanks had on property values, the opinion noted.
His testimony lacked reliability in that it was unsupported by “good grounds,” the panel found.
Shearer, using his theory, concluded the pipeline reduced the value of the Beachel property by 40 percent and the Pontius property by 60 percent.
When at one of the trials he was asked how he valued the depreciation, he replied the pipeline necessarily attaches a stigma so future buyers are simple “going to pay less. How much less? Who knows.”
UGI’s substantial rights were affected by Brann agreeing at least in part with Shearer’s faulty testimony, the panel found.
The opinion cites Brann saying he was inclined to agree with Shearer that some form of “stigma” attaches to the property as a whole.
While Brann provided factual findings and legal conclusions, the compensation awards “were conclusory, rather than clear, and lacked factual foundations,” Matey said.
The two cases were remanded to Brann with instruction to allow the parties a reasonable opportunity if requested to produce new valuation evidence.