Georgia officials are asking the judge hearing the Palmetto Pipeline case to throw out the company’s appeal on a technicality.
In a motion filed Monday in Fulton County Superior Court, attorneys for the Georgia Department of Transportation argue Palmetto Pipeline Co. LLC is not a pipeline company as defined by Georgia law.
Only pipeline companies can apply for and receive the certificate in question, which is needed to condemn property.
The Pipeline Act defines a “pipeline company” as a corporation, but Palmetto Pipeline is a limited liability company. Georgia law specifically distinguishes between the two, Attorney General Sam Olens, Deputy Attorney General W. Wright Banks Jr. and Senior Assistant Attorney General Mary Jo Volkert argue in the 14-page brief supporting the motion.
“If the General Assembly had meant to provide limited liability companies with the power of eminent domain, it could have used the term ‘entity,’ which specifically includes corporations, limited liability companies and foreign limited liability companies,” they write.
The last term refers to LLCs formed under the laws of another state, as is the case with Palmetto Pipeline LLC, which was formed under Delaware law.
The proposed Palmetto Pipeline would transport up to seven million gallons a day of gasoline, diesel and ethanol from an existing pipeline in Belton, S.C., through eastern Georgia to Jacksonville, Fla.
Texas-based pipeline giant Kinder Morgan developed the project and created Palmetto Products Pipe Line LLC, which applied in February for a Certificate of Public Necessity and Convenience from the Georgia DOT, the first step in getting the authority to condemn the property of any of the estimated 400 Georgia landowners on the route.
In May, DOT Commissioner Russell McMurry denied the company’s request, indicating it had not demonstrated a public need for the project. Palmetto Pipeline appealed, and a hearing is expected in Fulton County Superior Court in November.
Kinder Morgan is reviewing the filing and preparing a formal response, spokeswoman Melissa Ruiz wrote in an e-mail.
“Kinder Morgan will also be responding to the Department’s motion to dismiss, which mistakenly asserts that a limited liability company does not have the legal rights of a corporation,” she wrote. “Kinder Morgan continues to strongly believe that the Palmetto Pipeline is good for consumers in the state of Georgia and the Southeast region, and we are committed to bringing this project to market.”
A spokesman for the Attorney General’s office, Nicholas Genesi, declined to comment on the filing. So did Joshua Gunnemann of Atlanta-based Rogers & Hardin LLP, counsel for Colonial Oil Industries, the Savannah company that already supplies gasoline to southeast Georgia and which has sought to intervene.
Steve Caley, a senior attorney at GreenLaw, which has represented environmental groups opposed to the pipeline, called the motion “meritorious” and said his clients support it.
“We hope the court will give serious consideration to it,” he said.
Hugh McNatt, an attorney with Vidalia, Ga.-based McNatt, Greene and Peterson, agreed. He represents a third group of potential intervenors, landowners that include Millhaven Co. and Mills Tract, companies owned by the family of William S. Morris III, who also owns Morris Publishing Group LLC, operator of The Augusta Chronicle, The Savannah Morning News and the Florida Times-Union.
“I thought it was a good brief; I agree with it,” McNatt said. “But I’m not having that fight; they are.”
Along with the motion to dismiss, the Attorney General’s office also filed its response to Palmetto’s arguments. Olens, Banks and Volkert rebut Palmetto point by point, defending Department of Transportation procedure and the rejection of the certificate.
The attorneys note that Palmetto based its argument for a future need for increased supply in the Savannah area on a discredited study.
They also point out that the potential for fuel prices decreasing with a new pipeline was countered by Palmetto’s own submissions.
“In fact, Palmetto notes in its May 6, 2015, Second Supplement to Its Application that the pipeline will have no influence over prices,” they write.
The brief takes an exasperated tone in addressing an argument GDOT finds irrelevant: the fact that 90 percent of the proposed pipeline’s capacity has been secured by binding commitments from petroleum suppliers.
“Essentially, Palmetto asks GDOT and Georgia’s courts to find that a benefit to Palmetto’s suppliers guarantees a benefit to the consumers who ultimately buy petroleum products, “ they write. “GDOT asks, respectfully, what is wrong with this picture?”