                                     PRECEDENTIAL

       UNITED STATES COURT OF APPEALS
            FOR THE THIRD CIRCUIT
                 _____________

                    No. 17-3700
                   _____________

    TENNESSEE GAS PIPELINE COMPANY, LLC

                          v.

     PERMANENT EASEMENT FOR 7.053 ACRES,
         PERMANENT OVERLAY EASEMENT
         FOR 1.709 ACRES AND TEMPORARY
     EASEMENTS FOR 8.551 ACRES IN MILFORD
    AND WESTFALL TOWNSHIPS, PIKE COUNTY,
     PENNSYLVANIA, TAX PARCEL NUMBERS;
    KING ARTHUR ESTATES, A Limited Partnership;
   RIOTHAMUS CORP, General Partner of King Estates
c/o Ernest Bertuzzi President; ALL UNKNOWN OWNERS
              AND INTERESTED PARTIES

  King Arthur Estates, L.P. and Riothamus Corporation,
                                             Appellants
                    ______________

  APPEAL FROM THE UNITED STATES DISTRICT
     COURT FOR THE MIDDLE DISTRICT OF
                  PENNSYLVANIA
              (D.C. No. 3-12-cv-01477)
       District Judge: Hon. A. Richard Caputo
                     ______________

                         Argued
                    November 28, 2018
                     ______________

 Before: AMBRO, CHAGARES, and GREENAWAY, JR.,
                  Circuit Judges.

               (Opinion Filed: July 23, 2019)

Albert F. Moran
Patrick F. Nugent
Sean T. O’Neill
John F. Stoviak
Saul Ewing Arnstein & Lehr
1500 Market Street
Centre Square West, 38th Floor
Philadelphia, PA 19102

Elizabeth U. Witmer [Argued]
Saul Ewing Arnstein & Lehr
1200 Liberty Ridge Drive
Suite 200
Wayne, PA 19087
       Counsel for Appellee

John T. Stieh [Argued]
Levy Stieh Gaughan & Baron
542 Routes 6 & 209
P.O. Box D
Milford, PA 18337
      Counsel for Appellants




                               2
                       ______________

                          OPINION
                       ______________


GREENAWAY, JR., Circuit Judge.

       The Natural Gas Act of 1938 (“NGA”), 15 U.S.C.
§§ 717–717z, allows natural gas companies to acquire private
property by eminent domain to construct, operate, and
maintain natural gas pipelines. Id. § 717f(h). Here, Tennessee
Gas Pipeline Company, LLC (“Tennessee Gas”) commenced a
condemnation action under the NGA to acquire easements on
property owned by King Arthur Estates, LP (“King Arthur”).
On interlocutory appeal, this case now presents us with a single
legal issue: whether state law or federal law governs the
substantive determination of just compensation in
condemnation actions brought by private entities under the
NGA. Because federal law does not supply a rule of decision
on this precise issue, we must fill the void with a common law
remedy. In doing so, we opt to incorporate state law as the
federal standard. Accordingly, we will reverse the District
Court’s order reaching the opposite result.

                     I. BACKGROUND

        As required by the NGA, Tennessee Gas holds a
certificate of public convenience and necessity from the
Federal Energy Regulatory Commission (“FERC”)
authorizing it, inter alia, to construct natural gas pipelines in
New Jersey and Pennsylvania to augment its natural gas
delivery capacity in the region. As part of this project,
Tennessee Gas seeks to obtain easements over a 975-acre tract




                               3
of land in Pike County, Pennsylvania owned by King Arthur.
Upon unsuccessfully attempting to purchase the requisite
easements from King Arthur, Tennessee Gas filed the instant
condemnation action under Federal Rule of Civil Procedure
71.1 (“Rule 71.1”).

        After the parties stipulated that Tennessee Gas could
access and possess the easements, they engaged in discovery
pertinent to determining the appropriate compensation for the
condemnation. Both parties retained various experts to
appraise, inter alia, the value of the land before and after the
taking, the value of the timber removed from the land,
professional fees, development costs, and timber replacement
and reforestation costs. Following the close of this discovery,
Tennessee Gas moved for summary judgment on various
issues, including that of compensation.

       As to the issue of compensation, the District Court
granted in part Tennessee Gas’ motion. Relying entirely on a
prior opinion deciding the same issue, 1 the District Court ruled
that federal law governs the substantive determination of just
compensation in this dispute. The District Court hence

       1
          That case also concerned a condemnation action
brought by Tennessee Gas under the NGA. Tennessee Gas
Pipeline Co. v. Permanent Easement for 1.7320 Acres and
Temporary Easements for 5.4130 Acres in Shohola Twp., Pike
Cty., Pa., No. 11-028, 2014 WL 690700, at *1 (M.D. Pa. Feb.
24, 2014). There, the District Court noted the lack of binding
authority on the substantive determination of compensation,
discussed persuasive case law on the issue, reviewed the
parties’ extended arguments on both sides, and, upon doing so,
determined that federal law applies. Id. at *6–10.




                               4
determined that, although King Arthur could recover
consequential damages for professional fees and development
costs under Pennsylvania law, it could not do so under federal
law. Together, the consequential damages at issue total just
under $1 million.

        A few weeks later, King Arthur filed a motion to certify
the District Court’s order for interlocutory appeal, which the
District Court granted. Another Panel of our Court then
granted King Arthur’s petition for interlocutory appeal. We
are now faced with the purely legal question of whether state
law or federal law governs the substantive determination of just
compensation in condemnation actions brought by private
entities under the NGA.

  II. JURISDICTION AND STANDARD OF REVIEW

        The District Court had subject matter jurisdiction under
28 U.S.C. § 1331 and 15 U.S.C. § 717f(h). We have appellate
jurisdiction under 28 U.S.C. § 1292(b) and review the legal
issue presented in this appeal de novo. Geness v. Cox, 902 F.3d
344, 354 (3d Cir. 2018) (citation omitted); United States v.
Hendricks, 395 F.3d 173, 176–77 (3d Cir. 2005) (citations
omitted).

                      III. DISCUSSION

                      A. Relevant Law

       Before we delve into the merits of the instant issue, we
pause to consider the legal landscape in which this dispute
arises. In particular, we discuss the background legal
principles relevant to (1) the NGA, (2) just compensation,




                               5
(3) federal common lawmaking, and (4) persuasive case law
on this subject.

                         1. The NGA

        It is well-established that the federal government wields
the authority to exercise eminent domain. See Kohl v. United
States, 91 U.S. 367, 370 (1875) (“The right of eminent domain
is an ‘inseparable incident of sovereignty.’” (citations
omitted)). But that is not all. Rather, because “the power of
eminent domain is merely the means to the end,” the federal
government also has the authority to delegate its eminent
domain power to private entities. Berman v. Parker, 348 U.S.
26, 33 (1954). Indeed, Congress has done so in a number of
legislative settings, including the District of Columbia
Redevelopment Act of 1945, D.C. Code §§ 5-701 to -737; the
Federal Power Act (“FPA”), 16 U.S.C. §§ 824–824w; and, of
course, the NGA.

       In 1938, Congress enacted the NGA based on its
recognition that “the business of transporting and selling
natural gas for ultimate distribution to the public is affected
with a public interest.” 15 U.S.C. § 717(a). Acknowledging
that “[f]ederal regulation in matters relating to the
transportation of natural gas and the sale thereof in interstate
and foreign commerce is necessary in the public interest,”
Congress ensured that the NGA delegated regulatory authority
to an appropriate body. Id. Decades later, this body became
FERC. 42 U.S.C. § 7171.

       As relevant here, the NGA allows gas companies to
acquire private property by eminent domain to construct,
operate, and maintain natural gas pipelines. 15 U.S.C.
§ 717f(h). To do so, however, a natural gas company must first




                               6
successfully obtain a certificate of public convenience and
necessity from FERC and unsuccessfully attempt to purchase
the required property from its owner. Id. More fully, the NGA
provides:

       When any holder of a certificate of public
       convenience and necessity cannot acquire by
       contract, or is unable to agree with the owner of
       property to the compensation to be paid for, the
       necessary right-of-way to construct, operate, and
       maintain a pipe line or pipe lines for the
       transportation of natural gas, and the necessary
       land or other property, in addition to right-of-
       way, for the location of compressor stations,
       pressure apparatus, or other stations or
       equipment necessary to the proper operation of
       such pipe line or pipe lines, it may acquire the
       same by the exercise of the right of eminent
       domain in the district court of the United States
       for the district in which such property may be
       located, or in the State courts. The practice and
       procedure in any action or proceeding for that
       purpose in the district court of the United States
       shall conform as nearly as may be with the
       practice and procedure in similar action or
       proceeding in the courts of the State where the
       property is situated: Provided, That the United
       States district courts shall only have jurisdiction
       of cases when the amount claimed by the owner
       of the property to be condemned exceeds $3,000.

Id. (emphasis in original).




                               7
       The statute’s reference to state “practice and
procedure,” however, does not mean that it incorporates state
law for the substantive determination of compensation. Id.
Although some courts have concluded otherwise, see, e.g.,
Miss. River Transmission Corp. v. Tabor, 757 F.2d 662, 665
n.3 (5th Cir. 1985), “this language require[s] conformity in
procedural matters only.” United States v. 93.970 Acres of
Land, 360 U.S. 328, 333 n.7 (1959) (citations omitted). In any
event, that language has been superseded by Rule 71.1, which
establishes its own procedures applicable to all condemnation
cases in federal court. See Fed. R. Civ. P. 71.1, Advisory
Committee Notes (1951) (explaining that the new rule “affords
a uniform procedure for all cases of condemnation invoking
the national power of eminent domain, and . . . supplants all
statutes prescribing a different procedure”); see also Alliance
Pipeline LP v. 4.360 Acres of Land, 746 F.3d 362, 367 (8th Cir.
2014) (collecting cases).

       As a result, the NGA is silent regarding the applicability
of state law in condemnation proceedings under the statute.
Indeed, the NGA is generally silent on the remedies available
in the condemnation proceedings it allows. For example, it
does not even expressly require that just compensation be
provided.

                     2. Just Compensation

       That concept of just compensation originates from the
Fifth Amendment: although the federal government has “the
authority to take private property for public use by eminent
domain . . . [it] is obliged by the Fifth Amendment to provide
‘just compensation’ to the owner” of the property. Kirby
Forest Indus., Inc. v. United States, 467 U.S. 1, 9 (1984) (citing
Kohl, 91 U.S. at 371). Under the Fifth Amendment, just




                                8
compensation generally means “the fair market value of the
property on the date it is appropriated” and nothing more. Id.
at 10; see also United States v. Miller, 317 U.S. 369, 374–76
(1943). In other words, in such contexts, “the Constitution has
never been construed as requiring payment of consequential
damages” like lost profits or development costs. Miller, 317
U.S. at 376. This is because “the sovereign need only pay for
what it actually takes rather than for all that the owner has lost.”
Air Pegasus of D.C., Inc. v. United States, 424 F.3d 1206, 1215
(Fed. Cir. 2005) (quoting Klein v. United States, 375 F.2d 825,
829 (Ct. Cl. 1967)).

        Thus, in cases involving partial takings, as here, the
standard is “the difference between the market value of the
entire holding immediately before the taking and the remaining
market value immediately thereafter of the portion of property
rights not taken.” United States v. 68.94 Acres of Land, 918
F.2d 389, 393 n.3 (3d Cir. 1990). “If the value of the remaining
land, on a unit basis, diminishes when the condemned parcel is
removed from the larger whole, the landowner is entitled to
compensation ‘both for that which is physically appropriated
and for the diminution in value to the non-condemned
property.’” United States v. 4.0 Acres of Land, 175 F.3d 1133,
1139 (9th Cir. 1999) (quoting United States v. 33.5 Acres of
Land, 789 F.2d 1396, 1398 (9th Cir. 1986)); see also Miller,
317 U.S. at 376 (“If only a portion of a single tract is taken[,]
the owner’s compensation for that taking includes any element
of value arising out of the relation of the part taken to the entire
tract.”). But, if the taking somehow benefits the value of the
remaining land, “the benefit may be set off against the value of
the land taken.” Miller, 317 U.S. at 376.

      By contrast, Pennsylvania has enacted its own remedial
scheme that is applicable to condemnation proceedings that




                                 9
take place within the state.      Similar to federal law,
Pennsylvania law defines just compensation as consisting of
“the difference between the fair market value of the
condemnee’s entire property interest immediately before the
condemnation and as unaffected by the condemnation and the
fair market value of the property interest remaining
immediately after the condemnation and as affected by the
condemnation.” 26 Pa. Cons. Stat. § 702(a).

       But fair market value appears to be a more inclusive
concept under Pennsylvania law. In contrast to the federal rule
regarding partial takings, the recoverable market value under
Pennsylvania law appears to include any benefits to the value
of the remaining property as a result of the taking. See id.
§ 706(a).

        Further, although Pennsylvania law generally defines
fair market value as “the price which would be agreed to by a
willing and informed seller and buyer,” it allows consideration
of certain consequential damages within the concept. Id. § 703.
For example, the relevant law provides that one of the factors
for determining fair market value is the “cost of adjustments
and alterations to any remaining property made necessary or
reasonably required by the condemnation.” Id. § 1105(2)(v);
see also id. § 703(4) (stating that considerations for fair market
value include factors regarding what evidence may be
proffered pursuant to §§ 1101–06).

       Pennsylvania law also permits recovery of professional
fees such as appraisal, attorney, and engineering fees. Id.
§ 710. The default rule limits such recovery to $4,000. Id.
§ 710(a). But a property owner is entitled to complete
reimbursement for those professional fees when the
“condemnor attempts to avoid the payment of monetary just




                               10
compensation to which the [owner] otherwise would be
entitled by use of a substitute for monetary compensation and
the [owner] incurs expenses” as a result. Id. § 716. On the
whole, then, Pennsylvania law allows private property owners
within the state to obtain more money from condemnors than
they could under federal law.

                   3. Federal Common Law

        “Federal common law refers to the development of
legally binding federal rules articulated by a federal court
which cannot be easily found on the face of a constitutional or
statutory provision.” McGurl v. Trucking Emps. of N. Jersey
Welfare Fund, Inc., 124 F.3d 471, 480 (3d Cir. 1997) (citations
omitted). The need for common lawmaking “stems from the
inability of legislators to anticipate every possible contingency
and the impracticability of judges[’] returning all unanswered
questions to the legislature.” Id. at 481 (citation omitted).
Justice Jackson once explained that federal common law
“implements the federal Constitution and statutes[] and is
conditioned by them. Within these limits, federal courts are
free to apply the traditional common-law technique of decision
and to draw upon all the sources of the common law.”
D’Oench, Duhme & Co. v. FDIC, 315 U.S. 447, 472 (1942)
(Jackson, J., concurring) (citing Bd. of Comm’rs v. United
States, 308 U.S. 343, 350 (1939)).

        Thus, “when Congress has not spoken ‘in an area
comprising issues substantially related to an established
program of government operation,’” United States v. Kimbell
Foods, Inc., 440 U.S. 715, 727 (1979) (quoting United States
v. Little Lake Misere Land Co., 412 U.S. 580, 593 (1973)), the
Supreme Court has “direct[ed] federal courts to fill the
interstices of federal legislation ‘according to their own




                               11
standards,’” id. (quoting Clearfield Trust Co. v. United States,
318 U.S. 363, 367 (1943)).

        In crafting such federal common law, however, courts
need not “inevitably . . . resort to uniform federal rules.” Id. at
727–28 (citations omitted). Instead, “[w]hether to adopt state
law or to fashion a nationwide federal rule is a matter of
judicial policy ‘dependent upon a variety of considerations
always relevant to the nature of the specific governmental
interests and to the effects upon them of applying state law.’”
Id. at 728 (quoting United States v. Standard Oil Co., 332 U.S.
301, 310 (1947)).

        In Kimbell Foods, the Supreme Court addressed the
propriety of applying state law under an ambiguous or
incomplete federal statute. Id. at 718, 723. There, the issue
was whether, lacking an express statutory directive, a certain
federal loans program needed a uniform federal rule of lien
priorities. Id. at 718. The Supreme Court answered this
question in the negative, holding that state law governed the
priority of the liens. Id. at 740. In incorporating state law as
the federal rule, the Supreme Court employed a three-factor
test, considering (1) whether the federal program, by its very
nature, required uniformity; (2) whether application of state
law would frustrate specific objectives of the federal program;
and (3) whether application of uniform federal law would
disrupt existing commercial relationships predicated on state
law. Id. at 728–29.

       In light of Kimbell Foods and its progeny, where federal
law governs a controversy but there is no federal rule of
decision on a particular matter, a federal court must fill the void
through common lawmaking, either by fashioning a uniform,
national rule or by incorporating state law as the federal




                                12
standard. Deciding which route to take turns on application of
the Kimbell Foods factors outlined above.

                    4. Persuasive Case Law

        The precise issue before us now is whether state law or
federal law governs the measure of just compensation in
condemnation proceedings brought by a private entity under
the NGA. Although this is the first time we have considered
this issue precedentially, 2 ample other courts have opined on
it. Despite an array of district court decisions on the matter,
we focus our attention on seminal opinions from two of our
sister circuits: the Fifth Circuit and the Sixth Circuit.

        In Georgia Power Company v. Sanders, the Fifth
Circuit, sitting en banc, encountered the same core issue, albeit
in an analogous FPA context. 617 F.2d 1112, 1113 (5th Cir.
1980). The FPA, employing language substantially similar to
that in the NGA, allows private entities to use eminent domain
to condemn private property in efforts to develop waterways.

       2
         Another Panel of our Court recently remarked on this
issue in a footnote of an unpublished opinion. See Columbia
Gas Transmission, LLC v. Easement in Washington Cty., 745
F. App’x 446, 449 n.4 (3d Cir. 2018) (“Federal law governs the
measure of just compensation owed to landowners in
condemnation actions under the [NGA].” (citing United States
v. Certain Parcels of Land in Phila., 144 F.2d 626, 628–30 (3d
Cir. 1944)). We are not bound by our unpublished decisions
and neither party here has cited the case. In any event, the
statement was not necessary to the Court’s decision affirming
the exclusion of “speculative” expert testimony regarding the
“future profitability” of a condemned property. Id. at 450.




                               13
Id. at 1114 (quoting 16 U.S.C. § 797(e)). But, like the NGA,
it does not prescribe a rule of decision as to the appropriate
compensation owed to condemnees. Id. at 1115.

        Accordingly, the Georgia Power court undertook the
federal common lawmaking analysis described above. As a
threshold matter, because the condemnation at issue arose
under the FPA, a federal statute, the court determined that the
measure of compensation should also derive from a federal
source. Id. Given the statutory gap, the court then turned to
Kimbell Foods to decide whether to fashion a uniform common
law or incorporate state law as the applicable federal rule. Id.
(citations omitted).

        At the outset, the court noted that “[b]asic
considerations of federalism,” id., create a “presumption
favoring adoption of state law as the federal rule,” id. at 1116
n.6, “unless it is shown that legislative intent or other sufficient
reasons exist to displace state law,” id. at 1118. But the court
found neither. Id. Hence, upon determining that the balance
of Kimbell Foods factors weighed in favor of incorporating
state law, the court concluded that “the law of the state where
the condemned property is located is to be adopted as the
appropriate federal rule for determining the measure of
compensation when a licensee exercises the power of eminent
domain” under the FPA. Id. at 1124.

       The Sixth Circuit reached the same conclusion in
Columbia Gas Transmission Corporation v. Exclusive Natural
Gas Storage Easement, 962 F.2d 1192, 1199 (6th Cir. 1992).
There, as here, a natural gas company sought to condemn
private property under the NGA, giving rise to the issue of
whether state law somehow applies in measuring the
appropriate compensation. Id. at 1193–94. As to the threshold




                                14
inquiry, the court concluded with “no hesitation” that, since the
NGA is a federal statute, its interpretation is a matter of federal
law. Id. at 1196. Thus, given the NGA’s void in prescribing
the appropriate compensation, the court turned to Kimbell
Foods. Id. In applying its factors, the court determined that
(1) it is unnecessary to fashion a nationally uniform rule of
compensation for private parties condemning land under the
NGA, (2) incorporating state law as the federal standard would
not frustrate the specific objectives of the NGA, and
(3) property rights have traditionally been defined by state law.
Id. at 1198–99. Therefore, the court adopted state law as the
federal standard to govern compensation determinations under
the NGA. Id. at 1199.

                         B. Application

        Having established the basic legal principles relevant to
this dispute, we turn to applying them to the specific facts of
this case. As an initial matter, we declare without hesitation
that defining the contours of the compensation owed here is an
issue of federal law. Indeed, the NGA is a federal statute
implementing a nationwide federal program. Id. at 1196. As
a result, its interpretation is naturally a matter of federal law.

                1. Kimbell Foods Applies Here

        Given that conclusion, in order to resort to the Kimbell
Foods analysis, we must also determine that there exists a gap
in the statutory scheme. Here, we do so because (i) Miller does
not resolve this case, (ii) the NGA does not answer the question
at issue, and (iii) the existence of related common law in this
domain is of no moment. We explain each in turn.




                                15
             i. Miller Does Not Resolve This Case

       Tennessee Gas’ chief argument on appeal is that Miller
dispositively resolves this case. In ruling in Tennessee Gas’
favor at summary judgment, the District Court agreed. We,
however, disagree.

        In Miller, the Supreme Court considered “questions
respecting standards for valuing property taken for public use”
in relation to the federal government’s condemnation of land
for the purpose of building railroad tracks. 317 U.S. at 370.
Noting that the “measure of compensation” is a “question[] of
substantive right . . . grounded upon the Constitution,” the
Supreme Court rejected the argument that state substantive law
should apply to the determination of compensation in that
dispute because the federal statutes at issue there only required
adoption of state procedural law. Id. at 379–80 (citations
omitted). The Supreme Court thus held, as relevant here, that
federal law—not state law—governs the determination of
compensation in eminent domain actions brought by the
federal government. Id. at 380 (citations omitted).

       Over time, Miller and its progeny have added content to
the federal common law of just compensation. See, e.g., id. at
373 (explaining that the condemnee is to be “put in as good
position pecuniarily as he would have occupied if his property
had not been taken” (citations omitted)); id. at 373–74
(defining just compensation to mean the fair market value of
the property on the date of the taking); id. at 375 (excluding the
condemned property’s “special value to the condemnor” from
the measure of just compensation (citations omitted)); id. at
376 (including “severance damage” in the measure of just
compensation but excluding “consequential damages” such as
the change in value of “separate tracts adjoining that affected




                               16
by the taking” (citations omitted)); see also United States v.
Bodcaw Co., 440 U.S. 202, 203 (1979) (per curiam) (excluding
appraisal and attorneys’ fees); United States v. Petty Motor
Co., 327 U.S. 372, 377–78 (1946) (excluding “loss of profits,
damage to good will, the expense of relocation and other such
consequential losses” from the measure of just compensation
(citations omitted)).

       But nothing in Miller or its progeny expands its reach to
condemnations by private entities. Indeed, Miller itself only
concerned a condemnation by the federal government. 317
U.S. at 370. We have explicitly recognized this limitation,
previously noting that Miller announced the standard for
determining only “the amount of compensation due an owner
of land condemned by the United States.” Certain Parcels of
Land in Phila., 144 F.2d at 629 (emphasis added). Other courts
have similarly constrained Miller to “condemnation
proceedings brought by the federal government.” 33.5 Acres
of Land, 789 F.2d at 1400 (emphasis added); see Ga. Power,
617 F.2d at 1119 & n.10 (“[W]e do not deem [Miller]
controlling[.]”).

        Further, Tennessee Gas is unable to muster any binding
authority for the proposition that Miller applies beyond
instances where the federal government is the condemnor.
Although it contends that we have “applied federal law in every
case involving the determination of compensation in a
condemnation pursuant to the federal power of eminent
domain,” it can only cite cases in which the condemnor was the
federal government. Appellee’s Br. 16 (emphasis omitted)
(citing, inter alia, United States v. 27.93 Acres of Land, 924
F.2d 506 (3d Cir. 1991); United States v. 412.93 Acres of Land,
455 F.2d 1242 (3d Cir. 1972); and United States v. 60.14 Acres
of Land, 362 F.2d 660, 662, 665 (3d Cir. 1966)). This is also




                              17
true for the cases from our sister circuits that it cites, allegedly
for the broad proposition that these other courts “similarly
follow[] Miller for federal condemnations.” Id. at 17–18
(citing U.S. ex rel. Tenn. Valley Auth. v. 1.72 Acres of Land,
821 F.3d 742 (6th Cir. 2016); United States v. 2,560.00 Acres
of Land, More or Less, 836 F.2d 498 (10th Cir. 1988); 33.5
Acres of Land, 789 F.2d 1396; United States v. 320.0 Acres of
Land, More or Less, 605 F.2d 762 (5th Cir. 1979); United
States v. Certain Prop. Located in Borough of Manhattan, 344
F.2d 142 (2d Cir. 1965); United States v. Certain Interests in
Prop. in Champaign Cty., 271 F.2d 379 (7th Cir. 1959); and
United States v. Mahowald, 209 F.2d 751 (8th Cir. 1954)).
But, again, none of these cases relying on Miller involved a
private entity as the condemnor.

       That is because no such binding case exists. This makes
sense, of course, because the powerful federal interest at play
when the federal government is the condemnor is considerably
weakened when a private entity is the condemnor. Two
independent reasons support our view on this matter.

        First, the development of natural gas pipelines is not an
“essential governmental function[].” 93.970 Acres of Land,
360 U.S. at 332 (citation omitted).             Long ago, in a
condemnation action brought by the federal government to
create a post office, the Supreme Court noted that it is
“essential” to the federal government’s “independent existence
and perpetuity” that it be able to “perform its proper functions.”
Kohl, 91 U.S. at 368, 371. Nearly a century later, the Supreme
Court reaffirmed that concern, this time ruling that, because the
federal government’s condemnation of land for naval aviation
activities involved “essential governmental functions,” federal
law, not state law, determined the appropriate remedies for the
condemnation. 93.970 Acres of Land, 360 U.S. at 332–33




                                18
(citing Kohl, 91 U.S. at 371). Here, by contrast, developing
natural gas pipelines is not a function—much less an essential
function—of the federal government. Accordingly, the federal
interest at play here is materially less than if the federal
government were pursuing condemnation for an important
governmental function.

        Second, where the federal government is the
condemnor, there exists a significant concern about the
spending of federal dollars, one that does not exist when a
private entity is the condemnor.            Indeed, the federal
government has a strong interest in reducing the costs of its
own exercises of eminent domain and being subject to different
states’ compensation regimes may defeat that. Cf. Edelman v.
Jordan, 415 U.S. 651, 677 (1974) (considering the impact of
available relief, albeit in the sovereign immunity context, on
government treasuries). However, that concern is not at all in
play where, as here, the condemnor is a private entity pursuing
the condemnation “for purposes of profit.” Pub. Util. Dist. No.
1 of Pend Oreille Cty. v. City of Seattle, 382 F.2d 666, 670 (9th
Cir. 1967). Because of these two distinct reasons, Miller is
distinguishable and therefore does not resolve this case. 3




       3
          That said, we recognize that Miller articulates
principles for compensation “grounded upon the Constitution.”
317 U.S. at 380. Those principles are thus more properly
understood as a constitutional baseline upon which states may
allow for more, but not less, compensation for condemnees.
Such additional protections by states arise in an array of legal
contexts. See Gregg v. Georgia, 428 U.S. 153, 187 (1976)
(holding that the death penalty is not per se unconstitutional);




                               19
         ii. The NGA Does Not Answer the Question

        Miller aside, the NGA also does not provide a federal
rule of decision as to the appropriate compensation owed to
condemnees under the statute. As mentioned previously, the
NGA does provide that the “practice and procedure” in
condemnation actions under the statute must “conform as
nearly as may be with the practice and procedure in similar
action or proceeding in the courts of the State where the
property is situated.” 15 U.S.C. § 717f(h). Some courts have
concluded that this statutory directive mandates that state law
govern the measure of just compensation. See, e.g., Tabor, 757
F.2d at 665 n.3. Other courts have read this clause as “raising
a strong presumption that state law does provide the proper
measure for such determination.” Columbia Gas, 962 F.2d at
1197. For two reasons, however, this clause is inapplicable
here, rendering the NGA silent on the issue of compensation.

       First, the clause has been superseded by Rule 71.1,
which now “govern[s] proceedings to condemn real and
personal property by eminent domain.” Fed. R. Civ. P. 71.1(a).
As a “law[] in conflict with” a rule of civil procedure, the
clause has “no further force or effect.” 28 U.S.C. § 2072(b).
“As several other courts have observed,” then, “Rule 71.1
displaces state procedural law in this condemnation
proceeding.” Alliance Pipeline, 746 F.3d at 367 (collecting
cases); see also S. Nat. Gas Co. v. Land, Cullman Cty., 197
F.3d 1368, 1374 (11th Cir. 1999). Several decades ago, the
Supreme Court itself determined that analogous language in
another federal statute was “clearly repealed” by a precursor to

see also N.J. Stat. Ann. § 2C:11-3b (indicating that New Jersey
banned the death penalty in 2007).




                              20
Rule 71.1. 93.970 Acres of Land, 360 U.S. at 333 n.7 (1959)
(citing 50 U.S.C. § 171).

        Second, even if the clause was still in force, it would
determine only procedural rules and nothing more. Faced with
a similar statutory instruction to try condemnation cases
according to “the forms and methods of procedure” provided
by state law, Miller held that the federal substantive measure
of just compensation was unchanged. 317 U.S. at 380 (citing
40 U.S.C. § 258 (1940)). For good reason, then, the First
Circuit has expressed “surpris[e]” that “several circuits have
read the phrase ‘practice and procedure’ to encompass state
substantive law as well as formal practice.” Portland Nat. Gas
Transmission Sys. v. 19.2 Acres of Land, 318 F.3d 279, 282 n.1
(1st Cir. 2003). Even the Sixth Circuit, which ultimately
applied state law to determine just compensation under the
NGA, expressed that the effect of the clause on the substantive
measure of just compensation was “arguably open to
question.” Columbia Gas, 962 F.2d at 1197. Accordingly, the
NGA does not speak to the appropriate measure of
compensation in proceedings under the statute.

           iii. That There Exists a Body of Related
                Common Law Does Not Matter

        Tennessee Gas asserts as a secondary argument that
Kimbell Foods applies only when no federal common law
exists. But we have previously applied the Kimbell Foods
framework to choose between incorporating state law and
applying preexisting federal common law. See In re Columbia
Gas Sys. Inc., 997 F.2d 1039, 1056 (3d Cir. 1993) (“[T]his
court already has developed federal common law concerning
trusts.”). Consistent with this approach, the Georgia Power




                              21
court applied Kimbell Foods to decide between state rules of
just compensation and the “established body of federal law on
the issue.” 617 F.2d at 1123 n.17; cf. Cal. ex rel. State Lands
Comm’n v. United States, 457 U.S. 273, 283–84 (1982) (noting
that federal common law of land accretion already existed in
the course of deciding that federal common law, rather than
state law, would supply a rule of decision). The Kimbell Foods
framework is thus not reserved for situations in which federal
common law has yet to be fashioned. As a result, we now turn
to Kimbell Foods to resolve this case.

2. State Law Should Be Incorporated as the Federal Standard

        Because the source of eminent domain power at issue
here is federal, as embodied in the NGA, but neither the statute
nor binding precedent specifies a rule of decision in this
particular context, the task of “interstitial federal lawmaking”
falls upon us. Ga. Power, 617 F.2d at 1115 (citing Little Lake
Misere Land, 412 U.S. at 593). We must now determine
whether, in developing a federal standard for just
compensation in condemnation proceedings brought by private
entities under the NGA, we should fashion a uniform federal
rule or instead incorporate state law as the applicable federal
rule.

       We start with the presumption that state law should be
incorporated unless there is an expression of legislative intent
to the contrary or a showing that state law significantly
conflicts with the federal interest present. See Kimbell Foods,
440 U.S. at 739 (“Thus, the prudent course is to adopt the
ready[-]made body of state law as the federal rule of decision
until Congress strikes a different accommodation.” (citations
omitted)); Kamen v. Kemper Fin. Servs., Inc., 500 U.S. 90, 98
(1991) (“The presumption that state law should be




                              22
incorporated into federal common law is particularly strong in
areas in which private parties have entered legal relationships
with the expectation that their rights and obligations would be
governed by state-law standards.” (citing, inter alia, Kimbell
Foods, 440 U.S. at 728–29, 39–40)). Here, as explained below,
there is neither. We thus presume that state law should be
incorporated in this case.

       But, even without such a starting presumption, we
choose to incorporate state law as the federal rule in this
context because the balance of Kimbell Foods factors weighs
in favor of that. In particular, (i) fashioning a nationally
uniform rule is unnecessary, (ii) incorporating state law does
not frustrate the NGA’s objectives, and (iii) application of a
uniform federal rule would upset commercial relationships.
We address each factor in turn.

  i. Fashioning a Nationally Uniform Rule is Unnecessary

       For five principal reasons, this case does not require a
nationally uniform rule. First, the United States is not a party
here—or in NGA condemnation proceedings generally—so
the federal interest in a nationally uniform rule is relatively
weak. The Fifth Circuit, for example, has noted that “the
nature of the federal interests involved [where a private entity
is the condemnor] differs markedly from the nature of the
federal interests involved where the United States is the
condemnor.” Ga. Power, 617 F.2d at 1119–20. So has the
Ninth Circuit, recognizing that “[b]y issuance of a license the
United States is not acting in the national interest through the
licensee to the same extent as it would if it undertook the
project itself.” City of Seattle, 382 F.2d at 669.




                              23
        The Supreme Court has also suggested that whether the
federal government is present in a case is important in deciding
between state law and federal law. See Kimbell Foods, 440
U.S. at 726 (“This Court has consistently held that federal law
governs questions involving the rights of the United States
arising under nationwide federal programs.” (emphasis
added)).     More specifically, the Supreme Court has
distinguished between, on the one hand, cases involving the
federal government that “generate immediate interests” and
therefore warrant federal law and, on the other hand, cases
“purely between private parties” that “do[] not touch the rights
and duties of the United States” and are thus “far too
speculative, far too remote . . . to justify the application of
federal law to transactions essentially of local concern.” Bank
of Am. Nat’l Tr. & Sav. Ass’n v. Parnell, 352 U.S. 29, 33–34
(1956); see also Ga. Power, 617 F.2d at 1117 (citing Parnell
for the proposition that federal interests are weaker in
condemnation actions to which the federal government is not a
party).

        Second, because property rights are traditionally an area
of state concern, the federal interest in a nationally uniform rule
for property valuation is especially weak. See id. at 1123. A
court fashioning a uniform rule of just compensation would not
be writing on a blank slate: “far from offering an analytically
distinct and self-contained analysis,” such a rule “would at best
merely superimpose a layer of property right allocation onto
the already well-developed state property regime.” Columbia
Gas, 962 F.2d at 1198. Instead of achieving nationwide
uniformity, introducing a federal standard for compensation
here risks muddying elaborate state property rules.




                                24
        Third, the NGA contemplates state participation in
multiple ways, further undermining the case for a nationally
uniform rule of compensation in such actions. Most notably,
the statute allows licensees to bring condemnation proceedings
in state court. 15 U.S.C. § 717f(h) (articulating that private
entities may bring condemnation proceedings “in the district
court of the United States for the district in which such property
may be located, or in the State courts” (emphasis added)).
Indeed, the NGA requires that the proceedings take place in
state court if the amount claimed by the property owner does
not exceed $3,000. See id. Both the statutory option and
mandate to proceed in state court suggest that incorporating
state law would not upset any important interest in national
uniformity.

        But that is not the extent of the NGA’s involving states.
As another example, the NGA explicitly exempts from its
coverage any entities or facilities that receive natural gas for
distribution “within or at the boundary of a State if all the
natural gas so received is ultimately consumed within such
State, . . . provided that the rates and service of such [entities]
and facilities [are] subject to regulation by a State
commission.” Id. § 717(c). Moreover, the NGA does not
prohibit states from regulating natural gas companies involved
in interstate activities covered by the statute. We recently held
that the “NGA leaves untouched the [states’] internal
[environmental] administrative review process[es]” applicable
to natural gas facilities, “which may continue to operate as
[they] would in the ordinary course under state law,” even
though the facilities at issue might be part of a larger interstate
project. Twp. of Bordentown, N.J. v. FERC, 903 F.3d 234, 268
(3d Cir. 2018); see Del. Riverkeeper Network v. Sec’y Pa.
Dep’t of Envtl. Prot., 833 F.3d 360, 368 (3d Cir. 2016) (citing




                                25
15 U.S.C. § 717b(d)). Collectively, these instances of the
NGA’s explicitly allowing state involvement militate against
the need for a nationally uniform rule.

       Fourth, to the extent that some nationwide uniformity is
needed in NGA condemnation actions, Rule 71.1 provides a
sufficient amount of that. Indeed, Rule 71.1 was promulgated
precisely “to provide a unified and coherent set of rules and
procedures to be used in deciding federal eminent domain
actions.” Land, Cullman Cty., 197 F.3d at 1375. Further
uniformity in substantive property valuation is unnecessary
where there is already uniformity in procedure.

        Fifth, Tennessee Gas’ primary argument in favor of
uniformity misses the mark. In particular, Tennessee Gas avers
that applying various states’ rules on compensation will lead to
landowners in different states receiving different payouts from
the same pipeline project. But how inequitable this may be is
unfortunately of no moment in this analysis. The first Kimbell
Foods factor is not whether a nationally uniform law would be
fairer. Rather, it is whether proper “administration of the
federal program[]” requires uniformity. See Kimbell Foods,
440 U.S. at 730. Here, that is not the case. As a result, this
factor weighs in favor of incorporating state law as the federal
rule of decision.

            ii. Incorporating State Law Does Not
                Frustrate the NGA’s Objectives

       The second Kimbell Foods factor calls for considering
whether the incorporation of state law would frustrate specific
objectives of the federal program at issue. “[C]onsiderations
of federalism militate in favor of adopting state law as the




                              26
federal rule of decision” unless “state law conflicts
significantly with any federal interests or policies.” Nat’l R.R.
Passenger Corp. v. Two Parcels of Land, 822 F.2d 1261, 1266
(2d Cir. 1987) (citing Ga. Power, 617 F.2d at 1116); see Wallis
v. Pan Am. Petroleum Corp., 384 U.S. 63, 68 (1966). Because
state law would not frustrate the NGA’s goals, this factor
weighs in favor of incorporating state law as the federal rule of
decision.

        To begin, we must identify the federal objectives
potentially at risk. The NGA declares that the federal interest
is in regulating “matters relating to the transportation of natural
gas and the sale thereof.” 15 U.S.C. § 717(a). Nothing in the
NGA suggests that Congress was particularly concerned with
protecting natural gas companies from the additional costs that
varying state laws may impose, or even with making natural
gas companies’ transactions streamlined or efficient. Rather,
the Supreme Court has articulated that, in enacting the NGA,
Congress was instead concerned with protecting the interests
of the public, including consumers and property owners. See
Sunray Mid-Continent Oil Co. v. Fed. Power Comm’n, 364
U.S. 137, 147 (1960) (“[T]he primary aim of the [NGA is] to
protect consumers against exploitation at the hands of natural
gas companies.” (quotations omitted)).

       Here, applying Pennsylvania law on just compensation
would require Tennessee Gas to pay approximately $1 million
more than it is required to pay under federal law. In other
words, “[t]he only conceivable effect that adopting state law as
the measure of compensation might have” is that “condemnors
proceeding under the [NGA] might be required to pay more . . .
than under an alternative federal common-law rule.” Columbia
Gas, 962 F.2d at 1198. But we have already identified




                                27
condemnors’ having to pay more than they would otherwise
pay under federal law as merely being an “ancillary issue.” In
re Columbia Gas, 997 F.2d at 1058.

       That said, a state could theoretically have a
compensation law so far out of step with federal law as to
create a significant conflict. At oral argument, counsel for
Tennessee Gas was only able to muster one case in support of
that proposition. See Nat’l R.R. Passenger, 822 F.2d at 1265–
68. But that case is easily distinguishable from this case.

        In National Railroad Passenger, the Second Circuit
considered, as relevant here, whether to fashion a uniform
federal rule or incorporate state law as the rule of decision in
determining the appropriate compensation due to a property
owner whose land the National Railroad Passenger
Corporation (“Amtrak”) had condemned. Id. at 1262, 1265–
66. Applying the Georgia Power analysis, which it deemed
“sound,” id. at 1266, the court nonetheless reached a different
result: upon concluding that the application of state law would
“seriously interfer[e]” with the federal objectives of the
intercity rail passenger service program, id. at 1266–67, the
court opted to fashion a uniform federal rule in lieu of
incorporating state law, id. at 1266. But the court itself noted
a major distinction between the two cases that thus counseled
the different result. Id. at 1267. In particular, the court
explained:

       In Georgia Power, moreover, resolving the
       question of compensation according to state law
       resulted solely in higher condemnation costs to
       FPA licensees. That would not be the case here.
       Under [state] law, a partial taking rendering




                              28
      excess property nonconforming under local
      zoning laws requires the condemnor to apply for
      a variance prior to the taking; failing that, the
      condemnor is to reimburse the owner for the
      entire parcel and take title in fee simple thereto.
      We agree with [Amtrak] that application of the
      state rule of compensation here would place
      Amtrak in the unenviable position of having
      either to enmesh itself in the variance procedures
      of each locality in [the state] where property is
      sought to be condemned, or to pay for entire
      parcels irrespective of the nexus between the
      property so taken and the project necessitating
      condemnation.         Inasmuch as Amtrak is
      authorized only to condemn property required
      for intercity rail passenger service, see 45 U.S.C.
      § 545(d)(1)(B), the latter alternative under [state]
      law conflicts with an express statutory limit on
      Amtrak’s eminent domain power.

Nat’l R.R. Passenger, 822 F.2d at 1267.

       Here, those considerations are simply not at play. Like
the condemnor in Georgia Power, Tennessee Gas would only
be subject to higher condemnation costs if subjected to state
laws on compensation. Pennsylvania compensation law does
not entail a complicated variance requirement in which
Tennessee Gas would have to “enmesh itself.” Id. National
Railroad Passenger is thus inapposite.

       Pressed at length for other examples of “crazy state
laws,” counsel for Tennessee Gas could not produce any. Oral
Arg. Audio 36:03–38:23 (mentioning Sabal Trail




                              29
Transmission, LLC v. Real Estate, No. 16-CV-063, 2017 WL
2783995 (N.D. Fla. June 27, 2017), which also only involved
potentially higher condemnation costs). In the absence of any
further, concrete examples of significantly divergent state laws
that could frustrate the NGA’s purpose of protecting the public
interest, we are unpersuaded by the theoretical possibility that
some others may exist. Consequently, this factor also weighs
in favor of incorporating state law as the federal rule of
decision.

          iii. Application of a Uniform Federal Rule
           Would Upset Commercial Relationships

       The third Kimbell Foods factor calls for us to consider
whether application of a uniform federal rule would upset
commercial expectations founded on state law. On the one
hand, because there already exists “an established body of
federal law on the issue of just compensation” in general,
parties that conduct business in this industry are already on
notice of the potential application of federal law. Ga. Power,
617 F.2d at 1123 n.17 (citation omitted).

       On the other hand, “property rights have traditionally
been, and to a large degree are still, defined in substantial part
by state law.” Columbia Gas, 962 F.2d at 1198 (citation
omitted). Thus, were we to fashion a uniform federal rule, “far
from offering an analytically distinct and self-contained
analysis,” the rule would “merely superimpose a layer of
property right allocation onto the already well-developed state
property regime.” Id. Indeed, “when dealing with those
powers left to the states, the courts should tread gingerly” in
attempting to create a uniform common law. Ga. Power, 617
F.2d at 1125 (Fay, J., concurring); see Nat’l R.R. Passenger,




                               30
822 F.2d at 1267 (“[S]ince state law usually governs the
question of what constitutes property, the value of property
rights is ordinarily best determined according to state law as
well.” (internal quotation marks and citation omitted)).

        Though the balance is close, we conclude that
fashioning a uniform federal common law to determine just
compensation in condemnation actions by private entities
under the NGA would risk “upsetting the parties’ commercial
expectations” based upon “the already well-developed state
property regime.” Columbia Gas, 962 F.2d at 1198. Hence,
this factor also militates in favor of incorporating state law as
the federal rule of decision.

                             ***

       In sum, we determine that, at the threshold, federal law
is the interpretive basis to determine just compensation in
condemnation proceedings arising out of the NGA. But,
because neither Miller nor any other binding authority provides
a federal rule of decision as to what constitutes just
compensation precisely where a private entity condemns
private property under the statute, we turn to Kimbell Foods.
That case and its progeny reflect a presumption in favor of state
law, one not rebutted here. Even without that presumption,
however, the Kimbell Foods factors collectively weigh in favor
of state law because, for the reasons explained previously,
(1) fashioning a nationally uniform rule is unnecessary,
(2) incorporating state law does not frustrate the NGA’s
objectives, and (3) application of a uniform federal rule would
upset commercial relationships. In light of this analysis, we
decide to incorporate state substantive law as the federal
standard of measuring just compensation in condemnation




                               31
proceedings by private entities acting under the authority of the
NGA.

                     IV. CONCLUSION

       For the foregoing reasons, we will reverse the District
Court’s order and remand this case for further proceedings
consistent with this opinion.




                               32
       Tennessee Gas Pipeline Company, LLC v. Permanent
    Easement for 7.053 Acres, Permanent Overlay Easement for
      1.709 Acres and Temporary Easements for 8.551 Acres
                          No. 17-3700

CHAGARES, Circuit Judge, dissenting.

       The United States has delegated its eminent domain
power under the Fifth Amendment to natural gas companies in
certain instances pursuant to the Natural Gas Act (the “NGA”
or the “Act”), 15 U.S.C. §§ 717–717z. The Supreme Court in
United States v. Miller, 317 U.S. 369 (1943), held that federal
substantive law applies to determine just compensation for an
exercise of the eminent domain power under the Fifth
Amendment. However, Miller featured the Government and
not a private party exercising the Fifth Amendment eminent
domain power. My learned colleagues cogently explain why
that makes all the difference. The Supreme Court may well
agree when it considers this legal issue. Indeed, other courts’
holdings support my colleagues’ position.

        In my view, however, resolution of the question here
presented begins and ends with the Miller decision. I believe
that the standard by which we measure just compensation due
for an exercise of the Fifth Amendment eminent domain power
is the same regardless of whether it is the Government or a
Government-delegatee that exercises that power. 1 Because I

1
  Indeed, the only time this Court has passed on the precise
issue presented here, the panel unanimously held that federal
substantive law applies — albeit in a non-precedential
decision. See Columbia Gas Transmission, LLC v. An
Easement to Construct Operate & Maintain a 20 Inch Gas




                               1
believe that the Supreme Court’s Miller decision controls here
and that federal substantive law applies to determine just
compensation under the Fifth Amendment, I respectfully
dissent.

                                I.

                               A.

       The Fifth Amendment assures that private property
shall not “be taken for public use, without just compensation.”
U.S. Const. amend. V. The eminent domain power belongs to
the federal government, but Congress may “delegate[ it] to
private corporations, to be exercised by them in the execution
of works in which the public is interested.” Boom Co. v.
Patterson, 98 U.S. 403, 406 (1878). As noted by the majority,
Congress did just that in the NGA. See E. Tenn. Nat. Gas Co.
v. Sage, 361 F.3d 808, 821 (4th Cir. 2004); S. Nat. Gas Co. v.
Land, Cullman Cty., 197 F.3d 1368, 1372 (11th Cir. 1999).

       The NGA recognizes that “the business of transporting
and selling natural gas for ultimate distribution to the public is
affected with a public interest, and that Federal regulation in
matters relating to the transportation of natural gas and the sale
thereof in interstate and foreign commerce is necessary in the
public interest.” 15 U.S.C. § 717(a). The Act, under certain
conditions, authorizes a natural gas company to acquire “by the
exercise of the right of eminent domain” property rights


Transmission Pipeline Across Props., 745 F. App’x 446, 449
n.4 (3d Cir. 2018) (“Federal law governs the measure of just
compensation owed to landowners in condemnation actions
under the Natural Gas Act.”).




                                2
necessary “to construct, operate, and maintain a pipe line . . .
for the transportation of natural gas.” Id. § 717f(h). One of
those conditions is that the company hold a certificate of public
convenience and necessity, id., which the Federal Energy
Regulatory Commission (“FERC”) issues when the project “is
or will be required by the present or future public convenience
and necessity,” id. § 717f(e). In other words, the NGA
delegates — as here — federal eminent domain power to a
natural gas company to promote the construction of a gas
pipeline that FERC has determined to be required by public
convenience and necessity.

                               B.

        The Supreme Court long ago established that exercises
of the federal eminent domain power require the application of
federal substantive law regarding just compensation. See
Miller, 317 U.S. at 379–80. The Court in Miller addressed
issues concerning the just compensation due as a result of the
federal government’s condemnation of property in California,
including whether any increase in value to the land taken due
to the Government’s proposed action is properly included in
the measure of compensation. Id. at 370, 375. Under federal
substantive law, the answer was no, but under California law,
the answer was yes. Id. at 376–79.

        The landowners urged the Court to apply state law by
arguing that “Congress ha[d] adopted the local rule followed
in the state where the federal court” sat. Id. at 379. The Court
declined the invitation, determining that the pertinent statutes
required only the adoption of state “forms and methods of
procedure,” and “d[id] not, and could not, affect questions of
substantive right—such as the measure of compensation—




                               3
grounded upon the Constitution of the United States.” Id. at
379–80 (emphasis added). That is, the Supreme Court in
Miller held that when the right to compensation is based in the
federal Constitution, federal substantive law applies to
determine just compensation. Id.

       We followed Miller’s lead in United States v. Certain
Parcels of Land, 144 F.2d 626, 627 (3d Cir. 1944), where we
considered whether a pre-taking contract for the sale of
property condemned by the United States was admissible to
prove the property’s market value. The trial court applied
Pennsylvania law, which considered the contract inadmissible,
and excluded the document. Id. But we held that, according
to federal law, the contract should have been admitted because
it spoke to “just compensation, affecting the appellant’s
substantive right, and its relevancy is therefore a federal
question to be determined unfettered by any local rule.” Id. at
629–30. We have reaffirmed that federal law controls how we
measure the federal substantive right of just compensation.
See United States v. 13,255.53 Acres of Land, 158 F.2d 874,
876 (3d Cir. 1946) (“This question of substantive right,
namely, the measure of compensation, is grounded on the
Constitution of the United States and federal law controls.”);
Kinter v. United States, 156 F.2d 5, 6 (3d Cir. 1946) (“The
matter in controversy being the right of compensation of a
landowner under the Fifth Amendment, the answers to the
questions involved do not depend upon local law.”); United
States v. Certain Parcels of Land, 145 F.2d 374, 375 (3d Cir.
1944). 2


2
  As the majority recognizes, a body of federal law regarding
just compensation already exists. Maj. Op. 21.




                              4
                               C.

       Miller and our cases interpreting it are clear that when
the substantive right to just compensation derives from the
Constitution, such compensation is measured according to
federal substantive law. One’s right to just compensation
under the Fifth Amendment is certainly triggered by an
exercise of the federal eminent domain power. See, e.g., Kirby
Forest Indus., Inc. v. United States, 467 U.S. 1, 9 (1984). And
Congress may delegate that power to private entities. See
Boom Co., 98 U.S. at 406.

       These principles lead to the following conclusion:
because Congress has authorized natural gas companies to
invoke the federal eminent domain power under the NGA, and
because exercise of that power entitles a landowner to just
compensation under the Fifth Amendment, the question of just
compensation in an NGA condemnation action is a question of
federal substantive right to which federal substantive law
applies.

       The landowner (“King Arthur”) and the majority
disagree, cabining Miller’s scope to condemnation actions by
the federal government only and adopting the view that the law
properly applicable to determining just compensation depends
on who is exercising the federal power to condemn property.
But the right to just compensation “grounded upon the
Constitution of the United States” is a federal substantive right,
Miller, 317 U.S. at 380, that is triggered by an exercise of the
federal eminent domain power, not necessarily the
Government’s exercise of that power. And although the
Supreme Court in Miller did not explicitly expound that its
holding applies to a private party’s exercise of the federal




                                5
power, it did not explicitly limit its reach to the Government’s
exercise, either. 3 Its focus was on the condemnee’s federal
right to compensation. Miller, 317 U.S. at 379–80.

        To carve out a separate set of rules for private parties
exercising federal eminent domain power for a federal public
purpose under 15 U.S.C. § 717f(h) would create “an artificial
wedge between federal condemnations brought by the United
States and federal condemnations brought by private entities
acting pursuant to congressionally delegated authority.” Tenn.
Gas Br. 10; see also Ga. Power Co. v. Sanders, 617 F.2d 1112,
1129 (5th Cir. 1980) (en banc) (Rubin, J., dissenting)
(observing that there is no “sound reason to distinguish
between condemnation proceedings brought by the United
States and those in which it authorizes its power to be used by
its statutory licensee for a federal public purpose”). 4 In either

3
  The majority reads Certain Parcels of Land as recognizing
that Miller applies only to condemnation actions by the
Government. But our statement that Miller “set forth . . . the
standard by which the amount of compensation due an owner
of land condemned by the United States is to be determined” is
merely an acknowledgement that Miller provided law for the
same situation we addressed in that case. Certain Parcels of
Land, 144 F.2d at 629.
4
  The majority notes that two other Courts of Appeals have
opined on the issue before us. I do not consider the opinions
from those courts to be persuasive. In reverse chronological
order, the Court of Appeals for the Sixth Circuit in Columbia
Gas Transmission Corp. v. Exclusive Natural Gas Storage
Easement, 962 F.2d 1192, 1195 n.4 (6th Cir. 1992), reached its
conclusion notwithstanding that the parties apparently agreed
that federal common law applied and that neither party




                                6
action, the federal eminent domain power is exercised and
triggers the constitutional right to compensation.

       My colleagues rest their acceptance of this distinction
(and Miller’s inapplicability) on the conclusion that “the
powerful federal interest at play when the federal government
is the condemnor is considerably weakened when a private
entity is the condemnor.” Maj. Op. 17–18. This is so,
according to the majority, because “the development of natural
gas pipelines is not an ‘essential governmental function[,]’”
Maj. Op. 18 (quoting United States v. 93.970 Acres of Land,
360 U.S. 328, 332 (1959)), and the “significant concern about
the spending of federal dollars” by the Government-


addressed the issue. In addition, the court did not even mention
the Supreme Court’s Miller decision in its opinion. Similarly,
the Court of Appeals for the Fifth Circuit in Mississippi River
Transmission Corp. v. Tabor, 757 F.2d 662, 665 n.3 (5th Cir.
1985), also failed to mention Miller in what the Court of
Appeals for the Sixth Circuit correctly noted was a “summary
treatment of th[e] issue.” Columbia Gas, 962 F.2d at 1197.
Indeed, the analysis was limited to two sentences in a footnote.
The holding of the Tabor court is also problematic in that the
court relied solely on the “practice and procedure” clause of 15
U.S.C. § 717f(h) to reach its conclusion — an approach both
my colleagues in the majority and I reject. Maj. Op. 19–21.
Finally, the Court of Appeals for the Fifth Circuit in Georgia
Power, 617 F.2d at 1124, noted how the issue of which law to
apply was “a close one” and relied upon (as does the majority)
United States v. Kimbell Foods, Inc., 440 U.S. 715 (1979).
Insofar as I believe the Supreme Court’s decision in Miller
controls, we need not conduct the inquiry prescribed by the
Kimbell Foods decision.




                               7
condemnor is missing in eminent domain actions brought by a
private party, Maj. Op. 18. 5 But these concerns are not
determinative, in my view. The Supreme Court’s holding in
Miller — at least as pertinent to this appeal — did not turn on
either concern, but instead on the fact that the substantive right
of just compensation was grounded on the United States
Constitution. Miller, 317 U.S. at 380. In other words, federal
law applies to determine the just compensation owed upon an
exercise of the federal eminent domain power because the right
to just compensation is a federal substantive right, regardless
of whether the taking is for an “essential governmental
function” or requires the spending of federal dollars.

       The majority’s final argument to distinguish Miller is
likewise unpersuasive. My colleagues contend that Miller
merely sets a constitutional floor for just compensation and that
states may, through their own laws, provide for greater
compensation for landowners. Assuming that that observation
is correct, it still does not explain why Miller does not apply
here, a federal condemnation proceeding. That states may
provide landowners more generous compensation (under state
law) is immaterial.

       Because I view the Supreme Court’s decision in Miller
as controlling, I would affirm the District Court’s application
of federal substantive law to determine just compensation
under the Fifth Amendment.


5
  King Arthur also argues that Miller is inapplicable because
there, unlike here, private property was taken for a public use.
The majority does not appear to accept King Arthur’s assertion
that its land was not taken for a public use, and neither do I.




                                8
                       II.

For the above reasons, I respectfully dissent.




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