Erie Co Riseberg Pipeline legal evil fails to settle in court-ordered mediation in U.S. District Court leaving hundreds of landowners hanging with massive liens

Hundreds of liens for millions of dollars remain as mediation fails in Erie County gas pipeline case, With no settlement, more litigation on way in federal case over cost of Erie-to-Ohio natural gas pipeline. Hundreds of property owners in western Erie County still hit with liens over rights-of-way by Ed Palatella and Jim Martin, Erie Times-News, July 18, 2021

Highlights:

  • In 2019, Risberg Pipeline started carrying natural gas through western Erie County and Ashtabula County, Ohio
  • In 2020, builder of pipeline sued owner, claiming underpayment, and builder attached liens of $19M on rights-of-way
  • Case failed to end in mediation; lawyers gathering more evidence as litigation resumes in federal court in Erie

A federal lawsuit is keeping uncertainty in place for hundreds of property owners who sold rights-of-way for a natural gas pipeline in western Erie County.

The suit over the 28.3-mile Risberg Pipeline has failed to settle in U.S. District Court in Erie, and both sides in the case are asking for more time to gather evidence as they prepare for trial.

As the case advances slowly in court, a far-reaching aspect of the dispute is staying intact: mechanic’s liens of $18,946,185 each are still attached to pipeline work on hundreds of swaths of land near Albion in Erie County.

The liens are an outgrowth of the federal suit that the builder of the pipeline, the Wood Group USA Inc., of Houston, Texas, filed in August against the Erie-based RH Energytrans, which owns the $86 million project. The pipeline, which opened in 2019, is made up of 15 miles of 12-inch steel pipe in Elk Creek Township in Erie County and about 13 miles of pipe in Ashtabula County, Ohio, where the project ends in North Kinsgsville.

The Wood Group claims that RH Energytrans owes it more than $35 million, with $18,946,185 of that due on the work the Wood Group said it completed in Erie County. RH Energytrans is claiming it has paid the Wood Group everything due under the terms of the contract. The case is in federal court because the Wood Group and RH Energytrans are located in different states.

In a companion action to the federal suit, the Wood Group in December filed the mechanic’s liens at the Erie County Courthouse in an attempt to recoup the money that it claims RH Energytrans owes it. The Wood Group in December also filed similar mechanic’s liens against hundreds of other property owners in Ashtabula County.

Though the total of all the liens are for nearly $19 million, that amount is spread out across all the swaths of property, all of which are the parcels where the pipeline runs underground. None of the properties with liens include houses or farms, but the liens have still created confusion and left property owners with the possibility that a small part of their property could be encumbered with massive debt.

If the Wood Group were able to execute on the liens, according to the court records, it would be able to take over whatever leases or other interests RH Energytrans has in the pipeline. The Wood Group would be expected to remove the liens if it loses in federal court or ends the case by reaching a settlement with RH Energytrans.

No resolution

The prospects of a settlement diminished on April 26, when a neutral arbitrator reported that a court-mandated mediation session on April 22-23 failed to produce a resolution, according to court records.

With the mediation over, lawyers for the Wood Group and RH Energytrans went back to engaging in what is known as discovery, the process by which plaintiffs and defendants gather evidence and exchange evidence as they get ready for trial.

U.S. District Judge Susan Paradise Baxter, who is assigned the case, had set the discovery deadline for Sept. 30. But the lawyers for the Wood Group and RH Energytrans filed a joint motion on Monday asking Baxter to grant a 45-day extension “due to the magnitude” of the information, according to the filing.

If Baxter grants the request, as expected, it will extend the other deadlines she had set for the case, including the deposition of experts, now set for March 11. Baxter has not scheduled a trial date.

A lawyer for the Wood Group, Neal Devlin, of Erie, was out of the office and unavailable for comment, though he said previously that the Wood Group does not comment on ongoing litigation.

Dennis Holbrook, a spokesman for RH Energytrans, had expressed hope in January that RH Energytrans and the Wood Group could resolve the case through mediation.

“We did the mediation, but it didn’t really get us anywhere,” Holbrook said Friday. “We had a good mediator and I think we made a good-faith effort. I was disappointed with Wood’s efforts. It takes two sides to reach a successful conclusion and we just didn’t have that.”

Holbrook said he is more hopeful that there might be a speedy resolution to the companion legal case unfolding in Ashtabula County, Ohio.

“We are trying to get the mechanic’s liens lifted in Ohio,” Holbrook said, adding that his company believes there is a state statute that could allow for a quicker resolution because “we think they did not timely file their case in Ohio.”

Chances for a quick resolution in Pennsylvania don’t seem as good, he said.

“It’s going to take a while,” Holbrook said, adding that depositions in the case are being scheduled into the fall and possibly into next year, as Baxter’s March 2022 deadline for experts’ deposition shows.

Holbrook, who has described it as unfortunate that liens were placed against property owners, thanked them again Friday for their patience and cooperation.

“If there is a way to resolve this sooner, we are going to make every effort to do that,” Holbrook said. “Our intent is to be a good neighbor for a long time.”

Need for natural gas

The Risberg Pipeline is part of a network. The Erie County end of the pipeline connects to an existing distribution line owned by EmKey Energy, a sister company to RH Energytrans.

That pipeline connects near Meadville to the Tennessee Gas distribution system that originates on the Gulf Coast.

The natural gas started flowing through the new Risberg Pipeline in December 2019, providing Dominion Energy Ohio with up to 40 million cubic feet of natural gas a day — enough to meet the daily needs of about 150,000 households.

The pipeline is also expected to provide the natural gas needs of a $474 million pig iron plant that has been proposed for Ashtabula, Ohio.

Contact Ed Palattella at 814-870-1813 or at email hidden; JavaScript is required. Follow him on Twitter @ETNpalattella.

Contact Jim Martin at 814-870-1668 or at [email protected]Follow him on Twitter at @ETNmartin.

Refer also to:

Ohio: Erie Co Riseberg Pipeline delivers legal evil. Hits families that granted rights-of-way with mechanic liens of $18,946,185.00. Moral of the horrendous story: Never say yes to oil and gas.

The Rule of Gag: Alberta Rules of Court Amendment Regulation (AR 36/2020) *confidential* dispute resolution (ADR) for civil actions. USA: “Lighting strike more likely than forced arbitration win.” Of 60 million employees *forced* into arbitration, only 282 awarded damages. “The U.S. Supreme Court drew a road map to give immunity to these corporations.”

This entry was posted in Global Frac News, Other Legal. Bookmark the permalink.