Federal Eminent Domain Blog : Eminent Domain & Condemnation Lawyer & Attorney : Ackerman Ackerman & Dynkowski : Michigan, Ohio, and Washington, DC

TransCanada is having a difficult time obtaining a right-of-way for its Keystone XL pipeline, which will bring oil from Alberta to the Texas Gulf Coast. The Kelso family and their attorney, Harlan Hentges, were prepared to fight a long and arduous eminent domain battle to keep the pipeline off their property. However, TransCanada decided to negotiate with neighbors willing to place the pipeline on their land. Sometimes, a feint is better than a direct attack. This is the kind of compromise utility companies should seek in acquiring rights-of-way. Minor route adjustments can avoid long, difficult court battles.

No doubt, this blog will write more about the Keystone XL Pipeline because of the sheer scale and the issues of federal and state law involved.

Huffington Post

"They apparently decided to run the pipeline around the property," Hentges said, "through land belonging to someone willing to make a deal."

In an e-mail message, TransCanada spokesman Terry Cunha said route adjustments are a common part of the negotiation process. "Occasionally we make the decision to adjust the route in such a way that it involves other landowners," he said. The decision to change the route involving the property belonging to Kelso and her siblings was such a situation.

"In short, we found a better route option with a nearby landowner," Cunha said.

The decision comes as controversy over the pipeline approaches a fever pitch. Hundreds of protesters opposing the pipeline have been arrested outside the White House amid acts of civil disobedience. They have been calling on President Obama to scuttle plans for the pipeline, which, among other things, would invigorate the development of vast oil sands deposits in northwestern Canada.

These so-called tar sands -- a gooey mixture of sand, clay, and oil -- require extensive processing, including large amounts of water and energy, to produce marketable hydrocarbons. Full-scale exploitation of the tar sands would add copious amounts of new greenhouse gases to the atmosphere, and some climate experts have suggested that doing so would essentially condemn the planet to runaway global warming. 

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Upstream from the privatization currents sweeping the country, municipal governments are attempting to put water companies in public hands, through condemnation.

Five Illinois communities now have authority from the state to acquire the Illinois American Water company, a private entity that supplies water to residents. The company correctly states that eminent domain will be a hugely expensive, non-productive battle for both sides.

These communities should make a serious attempt to negotiate with Illinois American to avoid the uncertain costs of litigation. Otherwise, they risk losing any alleged benefits from this “publicization” of water service.

Romeoville Patch

Bolingbrook and four neighboring communities, including Romeoville, will create the Northern Will County Joint Action Water Agency thanks to legislation that Illinois Governor Pat Quinn signed into law Friday.

Those five communities will now likely look to take action against Illinois American Water and overtake the pipeline that carries Lake Michigan water from Bedford Park to the west suburbs via eminent domain.

The bill—Senate Bill 83—allows Bolingbrook, Homer Glen, Lemont, Romeoville and Woodridge to create the agency, which Bolingbrook Mayor Roger Claar said would meet soon after Quinn took action.

Claar says the agency would lower residents' water bill. Illinois American Water says Bolingbrook can't prove that and in the meantime, will be racking up lawyer bills while using eminent domain.

"History has shown using eminent domain to acquire a utility system is extremely expensive, risky and a divisive endeavor that will increase the costs to the public," said IAW President Karla Olson Teasley in a statement.

The creation of the agency will have little effect on Romeoville consumers, at least in the near future. Only 24 connections, all industrial, are on the Illinois American Water pipeline in the village. The remaining connections, including all residential customers, receive their water from the village. 

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The commentary in the article below leads one to believe that the airport authority bought this property, rezoned it, and sold it as a profit to “prevent uses incompatible with the airport.” Does this mean before the airport purchased the property, when it was zoned as residential, that the airport expected the owner to construct a skyscraper that would interfere with landings?

It is more likely that airport bureaucrats had a warm and cozy relationship with the private company that purchased this property from the airport, after it rezoned and upgraded the infrastructure. When government assumes the role of private investor, the public pays in the end. To buy a piece of property, which is residential, rezone it as industrial, and sell it to a profit is not part of the supply-demand process contemplated by Adam Smith, and certainly not part of airport management.

The Journal Gazette

Profit from a recent land deal between the Fort Wayne-Allen County Airport Authority and Franklin Electric will be used to buy other nearby land as it becomes available, the airport authority’s executive director said.

“It does not necessarily make a difference if we make or lose money,” Richardson said. “Regardless of the outcome, we have very stringent guidelines and regulations we must follow and adhere to with both state and federal guidelines.”

The airport authority bought the Coverdale Road site from Prakash D. Patel for $660,000 on Oct. 8, four months after the property was declared an economic development area by the Allen County Redevelopment Commission.

At that time, the land’s zoning was changed from residential to industrial to prevent use incompatible with the neighboring airport.

The deal has not yet closed, but Richardson estimates the airport will make an overall profit of about $150,000. That money will go to support the airport’s property acquisition program, he said.

Sometimes the airport authority buys property to use for airport-related facilities or businesses, Richardson said, but often it buys sites so it can control what happens on the property and make sure it remains compatible with airport operations. 

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Former California State Assemblyman Chuck DeVore wants critics from the right and left to lay off Texas Governor Rick Perry, who proposed Trans-Texas Corridor, a 4000-mile north to south development with toll roads, rail corridors, and utility lines.

Texas’ growth has exploded in recent years, and it is likely to continue as shipping between Mexico, the United States, and Canada increases. The state needs this infrastructure development badly to support its own growth and increasing international trade.

While critics decry this as an exercise in big government, in reality this project would be privately funded and managed, without relying on tax increases or government budget cuts. Some also criticize Perry because the Corridor would require eminent domain. But as DeVore points out, roads and railways are quintessential public uses. The Constitution has always contemplated takings for infrastructure projects like the Trans-Texas Corridor and the (hopefully soon to be built) Detroit International River Crossing. Whether condemning agencies treat property owners fairly is, of course, another issue altogether. Regardless, these sorts of infrastructure projects will be necessary to support growth in the United States.

BigGovernment.com

Texas’ low taxes and light regulatory burden have driven growth at more than double the national average.  The Lone Star State added 4.3 million residents from 2000 to 2010 – Perry became governor in late 2000.  This massive growth, combined with Texas’ status as the number one manufacturing state, has clogged Texas roads with people and commerce (which is far better than the alternative).

To address these needs, Gov. Perry launched the Trans-Texas Corridor, a $184 billion effort to construct a 4,000 miles of toll ways, rail corridors and utility lines.  The environmental left attacked the plan as did conservatives who somehow saw the road as a building block on the way to integrating Canada and Mexico with the U.S.  Opposition was strong enough that Perry had to abandon the plan in 2005.

But, as candidate Perry said a few days ago in a radio interview, aside from raising the money privately to build the needed infrastructure, “…the alternatives would be to raise taxes, ask Washington for money or wait for ‘the asphalt fairy’ to get needed roads built.”

Populists have scored Gov. Perry over the proposed used of eminent domain to build the Trans-Texas Corridor.  But, when hasn’t eminent domain been used to build infrastructure?  Unless land is already owned by the government, eminent domain is the proper Constitutional tool to use – Article I, Section 8 foresees eminent domain’s use, and Amendment 5 assures American citizens that they will be justly compensated for their land, rather than the government simply seizing it.  Without eminent domain, virtually none of today’s current interstate system could have been built.  Constitution-believing conservatives can’t have it both ways – eminent domain power is clearly part of the Constitution.. 

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Enbridge Energy’s purchase of Tonbridge Power may benefit owners fighting condemnations in the Montana Alberta Tie Line (MATL) saga. The power line project has been stalled numerous times as property owners fought Tonbridge’s underhanded conduct.

Enbridge, a major utility company, has experience dealing with owners in eminent domain. Hopefully, the company will attempt to work things out one owner at a time, offering each a fair price for their property. The fact that Enbridge presents a fresh face at the negotiating table may also help quell some of the hostility Tonbridge created.

On the other hand, Enbridge is a business, and unless owners succeed in their constitutional challenge to a 2010 law delegating eminent domain to utilities, Enbridge may use its superior position to force owners to settle for less than they deserve. Only time will tell.

Great Falls Tribune

Calgary-based Enbridge Inc., a leading energy delivery company operating the longest crude oil pipeline in North America, announced Tuesday its intent to purchase Tonbridge Power Co. and take over construction of its stalled power transmission line from Great Falls to Lethbridge.

Enbridge said it plans to complete the line, which will have a capacity to carry 300 megawatts, and then expand it to 550 to 600 megawatts, with its investment for both phases being $300 million.

Tonbridge and Montana landowners have clashed in the courts and the Legislature over the electricity pipeline's corridor and the use of eminent domain, but Varey said the company "knows how to develop energy infrastructure projects."

"We have a lot of experience as a company developing projects and working with landowners," Varey said.

Condemnation claims involving 49 property owners are pending in Teton, Pondera and Cascade counties.

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The Owners Counsel of America  has named superb eminent domain and trial attorney Randall A. Smith as its representative in Louisiana. The Owners Counsel is a nationwide network of attorneys representing property owners in condemnation actions. Mr. Smith joins Darius Dynkowski of Ackerman Dynkowski, who is the Owners Counsel’s Michigan representative.

Among Mr. Smith’s accomplishments are graduating from Yale Law School, clerking for a federal judge, serving as adjunct professor at Loyola University Law School, and obtaining multi-million dollar awards for his clients. He is truly a decent person and an outstanding lawyer.

PRWeb

The Owners’ Counsel of America is pleased to announce that Randall A. Smith of Smith & Fawer, LLC in New Orleans, Louisiana, has joined the Owners’ Counsel as the Louisiana member-attorney dedicated to representing landowners in eminent domain litigation. Mr. Smith’s practice focuses upon takings and eminent domain litigation, as well as other property and business litigation.Smith & Fawer, LLC has established itself as a successful boutique litigation firm with offices in downtown New Orleans and in Jackson, Mississippi.

Mr. Smith is a Phi Beta Kappa graduate of Amherst College and Yale Law School. Following law school, he clerked for the Honorable Charles Schwartz, Jr., United States District Court for the Eastern District of Louisiana.

Mr. Smith has taught as an Adjunct Professor of Law at Loyola University's School of Law since 1989. Currently, he serves as the President of the Canal Street Development Corporation, a public benefit corporation dedicated to the revitalization of Canal Street.

Throughout his career, Mr. Smith has secured many multi-million dollar awards for landowners against taking authorities, such as a $10.5 million verdict against the New Orleans Convention Center Authority when only $1 million was initially offered.

“We are delighted to welcome Randy Smith, a highly skilled eminent domain trial attorney, as the Louisiana Member of our national network,” said Cathy Newman, Owners’ Counsel of America Executive Director. “As cities, states and utilities expand infrastructure and undertake redevelopment projects, it is essential that property owners nationwide are able to locate experienced condemnation counsel. The Owners’ Counsel looks forward to being a resource to Randy as he continues to protect the private property rights of Louisiana landowners.”

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On December 9, 2010 this blog posted an article discussing the overwhelming power of natural gas companies in obtaining eminent domain power from the Federal Energy Regulatory Commission (FERC) and how New Jersey officials were unable to stop gas companies from exercising eminent domain. 

New Jersey residents are now dealing with the Tennessee Gas Company’s pipeline project. Gas pipeline construction can cause substantial damage. Tennessee Gas' pipeline has already led to a mudslide in the town of Vernon, New Jersey.

The most surprising aspect of this article is that New Jersey is only receiving $7 million in compensation for substantial damage to its parkland. This is definitely not a victory for the State. Unfortunately, because of the superiority of the FERC, New Jersey’s hands are bound. 

New Jersey Herald

Judeth Yeany, the chief lawyer for the DEP Legal Services and Stewardship Division, said the Tennessee Gas Co. has eminent domain powers over all landowners along the proposed path of its pipeline expansion project, including the state, which owns the park.

"The state does have to take into account that (Tennessee Gas) has condemnation powers over landowners," Yeany said at a public meeting at the Montague Municipal Building.

The best the state can do is negotiate a better deal for the state that would include between $7 million and $8 million in lease payments and the purchase of 120 acres of replacement land for the state's Green Acre rolls and the planting of trees.

"FERC is in the process of reviewing our environmental impact statement before they issue their final ruling," Gredvig said.

However, the federal government would have little legal ground to stand on in denying the permit for the High Point pipeline expansion when it has already issued permits for the Tennessee Gas 300 pipeline project, which runs 25 feet away from the proposed expansion pipeline in Vernon.

That project began in March, and has been criticized by residents of Vernon, who are still digging out from a mudslide that washed down from the pipeline construction sites onto township roadways during the rain storm last week.

"I want people to know what they are getting. Our town is destroyed, it looks like hell and they don't care," said Beth Budds, of Vernon. "How do you put a price on this? Once it is gone we can't get it back." 

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Frank Beckmann, who hosts the Frank Beckmann Show on Michigan talk and news radio WJR 760 AM, interviewed Alan Ackerman of Ackerman Dynkowski regarding Detroit Mayor Dave Bing’s plan to consolidate neighborhoods in Detroit and eliminate vacant housing.

Although the lengthy 12-minute interview aired on February 25, this issue is still very relevant as Mayor Bing’s relocation plan is still in its nascent stages. Alan discusses how a 2006 amendment to the Michigan Constitution, which banned takings for private development, may thwart the Mayor’s plan to condemn property in mostly vacant and deteriorating neighborhoods.

While the consolidation plan is essential to Detroit’s future, the City must ensure it compensates displaced residents fairly. Hopefully, the City can convince most residents to leave these dilapidated neighborhoods voluntarily. But there will always be holdouts. How the courts interpret the 2006 amendment could become a central issue. 

WJR 760 AM

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In the Wauneta Breeze article below, Ed Howard notes that other states have outlawed gas and oil pipelines without permission from the federal government. In Nebraska, however, state legislators have been reluctant to exert any authority over TransCanada’s proposed Keystone XL oil pipeline. It may be that procedural difficulties prevent legislators from organizing a committee to investigate the issue. Or legislators may be reluctant to interfere with anything that could create jobs.

Whatever the case, this blog doubts whether state action could inhibit pipeline development if it is approved by the Federal Energy Regulatory Commission or the U.S. Department of State. While the Congressional Research Service said that states have primary responsibility for pipeline citing, in Nebraska there is no law to this effect, unlike South Dakota and Montana. Most likely, federal approval will mean this pipeline will be built, regardless of what the state legislature does.

Wauneta Breeze  

The question from here: Why do you suppose most state senators have shown virtually no interest in using whatever authority the Legislature has — and the Congressional Research Service says it has primary authority — to investigate and influence the pipeline route?

The CRS study said states can establish the primary siting authority for the Keystone XL pipeline. It noted South Dakota and Montana have laws requiring that proposed pipelines receive approval from state agencies.

The only law on Nebraska’s books, however, gives the power of eminent domain to oil pipeline companies if they can’t talk owners of private property into giving the companies right of way.

TransCanada has been criticized several times by property owners who say they have been threatened with eminent domain proceedings.

The U.S. Department of State has said it will decide by year’s end whether to grant a permit for the pipeline.

The House of Representatives recently passed a meaningless statute that called for the State Department to decide the issue by Nov. 1. 

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I sure like the Bloomfield Patch! It is locally focused enough to write about our kids. The article below details the experience of one Daniel Ackerman, a high school senior who spent this summer in Washington as a member of the congressional page program.

Bloomfield-Bloomfield Hills Patch

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Eric J. Epstein, co-founder of Harrisburg, PA based Rock The Capital, explains in the op-ed below his strong opposition to forced pooling as “corporate socialism.” Because natural gas reserves span thousands of acres underground, it is often necessary to get the consent of dozens if not hundreds of landowners before mining the gas. After all, each landowner who has gas beneath his or her property has mineral rights. All too frequently, gas companies sign leases with a majority of landowners, but a handful hold out, refusing to allow drilling on their land. The Pennsylvania Legislature is considering a solution to this conundrum; a forced pooling statute would force holdouts to give leases to gas companies, provided a majority of their neighbors do so voluntarily.

In reality, forced pooling is not always “corporate socialism.” Governments often determine that it is in the community’s best interest to allow removal of minerals like natural gas. This process is common in many states with oil reserves. It is key, however, that the public benefit (and private profit to gas companies) from forced pooling is balanced against property owners’ right to just compensation. Leases need to deliver market rate compensation to holdouts compelled to cede their rights under forced pooling.

The York Dispatch

The new barons on the block are packing fear, a former governor and a writ of habeas nonsense to pull off the heist of the century. The great gas grab -- known as "forced pooling" -- allows the taking of mineral rights against the wishes of a property owner so that gas companies and opportunistic neighbors can harvest profits stored under your home.

The gateway to contemporary takings was established by the rail, coal and transportation industries, and a blighted neighborhood in Connecticut. But the key to your home lies under a legislative welcome mat rolled out in 2010. The Conservation Pooling Act, sponsored by state Reps. Marc Gergely, D-Allegheny County, and Garth Everett, R-Lycoming, proposed to create a state office to oversee compensation for unpatriotic landowners who refuse to play ball with the gas industry.

The fact of the matter is that there is no "public use" component to justify "forced pooling." This power grab is corporate socialism. Where's the outrage? Where's the Tea Party? Don't tell me they're out of gas.

"Forced pooling" or "unitization" can only be signed into law after Pennsylvanians read Gov. Corbett's lips.

On April 26, 2010, candidate Corbett told his backers at the Appalachian Basin Oil and Gas Seminar: "It's (forced pooling) private eminent domain. I don't think that's right. I was made aware that it's on the industry's wish list, but I don't agree. If I see a bill that contains forced pooling, I won't sign it." 

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Generally, a county cannot defeat a state environmental department’s approved plan for construction of transmission lines or other utility structures. However, the Constitution’s guarantee of due process mandates that the state should provide reasonable notice and a chance to be heard to affected parties and municipal governments. It is quite possible the Montana Supreme Court will send this issue back to the Montana Department of Environmental Quality (DEQ) to allow Jefferson County and other interested parties to give their input on the environmental impact study (EIS) that approved construction of power transmission lines. After all, there is no due process where agencies make crucial decisions behind closed doors.

NBC Montana

The Montana Supreme Court tackled Eminent Domain and the right of the county this morning in Helena.

Jefferson County Commissioners wants to have more input on the project in the early stages ideally before the environmental impact study or the EIS is drafted.

EIS is a requirement on a project that may have an effect on communities.

DEQ attorney Edward Hayes said consulting with counties before an EIS is drafted would be inefficient and difficult due to the time constraints issued by state law.

"The DEQ and other state agencies are only given 6 months to prepare and complete a final EIS," Hayes said.

Jefferson County would like to be involved in the plans process before the draft is of the EIS is complete.

They believe if they are consulted after the draft is made it will be too late and the decisions will already be set in stone. 

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The press release below states that the U.S. Department of Justice has filed a civil rights action against the City of Joliet, for its attempt to condemn a public housing complex. The Department alleges Joliet is racially discriminating against residents of the complex, who are majority black. Many communities have HUD-subsidized housing projects that are simply no longer economically viable and often unsafe. On the other hand, some communities may want to get rid of public housing because of bias against the poor or minorities. Whatever the case, the preeminent position of the federal government may give HUD priority here. The Supremacy Clause of the Constitution may give victory to the Justice Department, whether discrimination is intentional, accidental, or imagined.

U.S. Department of Justice

The complaint, filed today in the U.S. District Court for the Northern District of Illinois, alleges that the city of Joliet violated the Fair Housing Act when it took actions to condemn the Evergreen Terrace apartment complex, which provides 356 units of affordable housing in Joliet.  Due to the lack of affordable housing in and around Joliet, and because the city has failed to produce a meaningful plan to counteract the effect of eliminating 356 units of affordable housing, many of the residents would be left with nowhere in the city to live if the condemnation action is successful.

The complaint alleges that the effect of the city’s actions and proposed actions is “to limit or reduce the number of Black or African-American residents residing within the city of Joliet.  Such actions, if carried out, would have a disproportionate adverse impact on African-Americans and operate to perpetuate segregation in Joliet.”

Although the city contended that the property was blighted, HUD’s contractors determined that the city’s objections lacked merit and that there was a critical need for affordable housing in Joliet that would not be met if the restructuring for Evergreen Terrace was not approved.   Based on these conclusions, HUD approved the restructuring in 2005.  In response, the city filed an action to take Evergreen Terrace by eminent domain.

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All too often, acquiring agencies insist that they cannot change the routes of planned pipes or electricity transmission lines. These utilities argue that it is simply “too difficult” or “impossible,” especially in light of Department of Energy and other regulations that require amendments or new certificates to be filed. Of course, these companies exaggerate such claims.

Tonbridge Energy, however, has acquiesced to some landowners’ requests to adjust the route of its proposed international Montana Alberta Tie Line. Recognizing it was in landowners’ and its own best interest, Tonbridge applied to state and federal authorities to move a mile of its route away from historic sites, wetlands, and an oil and gas well. Tonbridge only needed to expend minimal effort to amend its certificate. The process turned out to be relatively fast, with state approval easily obtained. The owners of this property and Tonbridge are both happy to have avoided a court battle.

A little effort on behalf of a utility to meet a  property owner’s needs goes a long way. Hopefully, more condemning agencies will follow this model in the future.

Great Falls Tribune

A key route shift in a major power transmission line involving a small piece of property that set off a big fight over eminent domain in Montana has the support of both the developer and the landowner.

The change, involving less than a mile of the 214-mile Montana Alberta Tie Line 1.5 miles southeast of Cut Bank, was approved Thursday by the Montana Department of Environmental Quality.

The amendment for the route change on the Salois property, which was approved by DEQ Director Richard Opper, will allow Tonbridge to move the poles two-tenths of a mile to the east, onto cultivated land, so they do not impact historic tepee rings, wetlands, and an oil and gas well, said Tom Ring of the DEQ's Major Facilities Siting Office. 

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