Construction Law Insights

Pole Green Dev. Co., LLC v. Columbia Gas Transmission, LLC, 785 Fed. Appx. 106 (4th Cir. Oct. 29, 2019)

Pole Green Development Company, LLC (“Pole Green”) sued Columbia Gas Transmission, LLC (“Columbia Gas”) after Pole Green’s prospective agreement to purchase property for residential development fell through because of a pipeline easement held by Columbia Gas. In its amended complaint Pole Green asserted inverse condemnation, unlawful taking, breach of contract, and intentional interference. The district court dismissed the case and Pole Green appealed.

The Fourth Circuit Court of Appeals affirmed the district court. When a private entity exercises some power delegated to it by the State which is traditionally associated with sovereignty, such as eminent domain, the entity becomes a state actor subject to liability under 42 U.S.C. § 1983. Pole Green alleged that Columbia Gas, by virtue of Va. Code § 56-49, had the ability to take land through eminent domain. However, Va. Code § 56-49 contains conditions to the right to exercise eminent domain on a public service corporation’s satisfaction of three requirements. Because the amended complaint was silent on these requirements, Pole Green failed to adequately allege that Columbia Gas had the power to take land through eminent domain, dooming its inverse condemnation claim. Because Pole Green neglected to identify any legally enforceable obligation that Columbia Gas failed to satisfy, Pole Green failed to state claim for breach of contract. Finally, to state a claim for tortious interference with contract rights, a plaintiff must allege: (i) the existence of a valid contractual relationship or business expectancy; (ii) knowledge of the relationship or expectancy on the part of the interferer; (iii) intentional interference inducing or causing a breach or termination of the relationship or expectancy; and (iv) resultant damage to the party whose relationship or expectancy has been disrupted. Where a contract is terminable at will, the plaintiff must also plead improper methods, i.e. the defendant employed methods of interference that are illegal or independently tortious. Pole Green’s amended complaint identified no allegation accusing Columbia Gas of fabricating the maintenance costs to exploit Pole Green’s desire to purchase the land.

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