» Blog http://www.condemnation-law.com Nationwide eminent domain law firm that exclusively represents property owners Wed, 22 Oct 2014 18:12:18 +0000 en-US hourly 1 Northeastern Illinois University Expansion Project http://www.condemnation-law.com/northeastern-illinois-university-expansion-project/ http://www.condemnation-law.com/northeastern-illinois-university-expansion-project/#comments Wed, 27 Aug 2014 19:16:45 +0000 http://www.condemnation-law.com/?p=7044 Northeastern Illinois University plans to develop new dormitories and apartments to draw greater attendance of students. Currently, NEIU is a commuter school and enrollment rates have been declining for the last three years. As part of the new development plan, NEIU will be expanding its campus on the corner of Bryn Mawr and Kimball Avenues. Continue Reading

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Northeastern Illinois University plans to develop new dormitories and apartments to draw greater attendance of students. Currently, NEIU is a commuter school and enrollment rates have been declining for the last three years. As part of the new development plan, NEIU will be expanding its campus on the corner of Bryn Mawr and Kimball Avenues. The expansion plans are opposed by neighboring residents and business owners. NEIU has notified property owners of plans to acquire property, and if agreement cannot be reached, will invoke eminent domain condemnation.

This project affects six small businesses properties. NEIU has started initial negotiations by sending first offers to the property owners. Property owners are strongly opposing the expansion as it affects their businesses and livelihoods. Another point of protest of the project expanding on Bryn Mawr is that the university already owns property on its campus that would be suitable for developing into housing. NEIU, however, will go ahead with the expansion on Bryn Mawr as the university feels that it is critical to revitalize the neighborhood not only to make the school more attractive to students, but also for the good of the neighborhood.  NEIU has already sent out initial offers to property owners in order to begin negotiation of the taking. Property owners have stated that the offers come nowhere close to the income the properties generate, and will be challenging NEIU’s right to eminent domain in court.

Dan Biersdorf discussed the project with Tony Sarabia on WBEZ 91.5 Chicago NPR News. In order for a government entity to acquire property under eminent domain, two requirements have to fulfilled: the project needs to be for public use (public purpose) and the government must pay owners of condemned property just compensation (fair market value). This means that since NEIU is a government-funded, public university, it will be able to exercise eminent domain. While property owners are trying to challenge the right-to-take, historically the courts have ruled against such a challenge. The next part of the litigation would be determining just compensation for the properties to be condemned. This would involve appraisal of properties. Property owners should realize that the government is like any other buyer and it will want to acquire the property as cheaply as possible. Even though there may be an appraisal of the property to determine fair market value, property owners should also be aware that appraisals can vary and NEIU’s appraisal and subsequent offer may be a low one.

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Rails to Trails Supreme Court Decision http://www.condemnation-law.com/rails-to-trails-supreme-court-decision/ http://www.condemnation-law.com/rails-to-trails-supreme-court-decision/#comments Mon, 07 Apr 2014 15:10:25 +0000 http://www.condemnation-law.com/test1/?p=6464 A Wyoming man has won a Supreme Court case fighting efforts to route the Medicine Bow Rail Trail through his family’s property. On Monday the Supreme Court decided in favor of the landowner ruling abandoned rail road tracks are not under the federal government’s control. Last year we discussed in a blog the Supreme Court’s acceptance of Continue Reading

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A Wyoming man has won a Supreme Court case fighting efforts to route the Medicine Bow Rail Trail through his family’s property. On Monday the Supreme Court decided in favor of the landowner ruling abandoned rail road tracks are not under the federal government’s control.

Last year we discussed in a blog the Supreme Court’s acceptance of the Marvin Brandt Revocable Trust v. United States for review. At issue was the disagreement over who retained the ownership of a railway after abandonment. The government claimed that it retained exclusive possession of the right-of-way. The landowner, Brandt, contended that he owned the right-of-way without any rights reserved to the United States.

Brandt brought a lawsuit when the Forest Service moved to convert a portion of abandoned rail road tracks through the Brandt property into a bike trail. Before the lawsuit reached the Supreme Court, district and appeals courts had ruled in favor of the government concluding that the United States possessed an “implied” ownership interest in the abandoned right-of-way. These rulings subjected Brandt to an easement that was arguably found nowhere in any deed or declaration on the property.

The Supreme Court overruling the decisions by the lower courts could have vast implications in other rail to trail projects being planned throughout the nation. The wider impact is hard to estimate in part because the U.S. government doesn’t have a central database of the land it owns under railroad easement that has since been abandoned. Currently there are about 80 similar cases where this decision could mean that the landowner will walk away victorious.

We will continue to monitor this decision and its effect on landowners and property rights.

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Regulatory Takings Revisited http://www.condemnation-law.com/regulatory-takings-revisited/ http://www.condemnation-law.com/regulatory-takings-revisited/#comments Thu, 27 Mar 2014 15:09:04 +0000 http://www.condemnation-law.com/test1/?p=6462 When the condemning authority exercises its power of eminent domain it is commonly referred to as a “taking”.  A “taking” is any sort of publicly inflicted private injury for which the Constitution requires payment of compensation.  Our general perception of a “taking” involves a physical invasion of private property by a condemning power which results Continue Reading

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When the condemning authority exercises its power of eminent domain it is commonly referred to as a “taking”.  A “taking” is any sort of publicly inflicted private injury for which the Constitution requires payment of compensation.  Our general perception of a “taking” involves a physical invasion of private property by a condemning power which results in the payment of compensation to the landowner and the transfer of ownership of the subject property  from the landowner to the condemning authority.

It’s important to understand that not all “takings” involve a physical invasion and transfer in ownership of private property.  One such taking has been termed a “regulatory taking”.    Many courts have defined a regulatory taking as an inverse condemnation claim based on land use restrictions.  Generally, regulatory takings actions have been brought on the following grounds:

  1. Denial of a permit or license
  2. Zoning, rezoning and other land use regulations

While more traditional eminent domain cases are initiated by the government, regulatory takings are generally initiated by the landowner as an inverse condemnation claim.  Learn more about inverse condemnation claims.  Before you initiate a regulatory takings case, it’s important to know what type of claim you have.  Generally, these types of cases fall under three categories:

  1. A regulation that will necessarily affect the physical invasion of unspecified private property
  2. A regulation that substantially causes property to lose all economic utility, and
  3. A regulation that substantially interferes with a property’s economic utility.

Physical Invasion-Loretto

In some instances, a regulation may contemplate a physical invasion.  In Loretto v. Teleprompter Manhattan CATV Corp., the City of New York required landlords to allow cable television companies to install wiring on the sides of residential buildings.  458. U.S. 419, 102 S. Ct. 3164, 73 L. Ed. 2d 868 (1982).  The regulation did not appropriate any property in particular, but did give cable companies the right to place cable in the exterior physical space previously under the exclusive domain of the landlord.  The Supreme Court held that this regulation, which necessarily caused a physical invasion, was a taking that required compensation.  To obtain relief under this claim, the landowner must establish that the regulation necessarily causes a physical invasion of his private property.

Total Loss of Value – Lucas

In rare circumstances, the interference with the landowner’s property rights may be so sever as to trigger this “categorical” taking even without a physical invasion.  This occurs only when the regulation “denies all economically beneficial or productive use of land.” Lucas, 505 U.S. at 105.  As an illustration, in Lucas, the landowner, David Lucas, purchased two residential lots on the Isle of Palms off the coast of South Carolina in 1986.  Lucas intended to build two single family homes on the lots.  In 1988, the South Carolina Legislature enacted the “Beachfront Management Act” that prohibited Lucas from building these homes or any other structure.  The trial court held that this restriction left Lucas’ property “valueless” and ordered just compensation be paid.  The Supreme Court agreed: where a regulation deprives an owner of all economic utility, it is a taking under the First Amendment.

Substantial Interference with Economic Utility – Penn Central

Although an act that deprives the owner of all economic utility is categorically a taking, the regulation need not completely eliminate the economic use of a property to give rise to a regulatory takings claim.

So, how far is too far?  The issue then moves to what specific facts are necessary to show that a regulation has gone “too far?”  For those regulatory takings cases that involve economic interference with property rights but fall short of Lucas’ total deprivation of value, courts rely on what is known colloquially as the “Penn Central Test”.

The Lucas or Loretto cases are rare.  Much more common is the case that requires application of the Penn Central factors.  In Penn Central, New York City applied a landmark historical preservation law to Grand Central Terminal.  In 1968, the owner of the Terminal, Penn Central, entered into a lease with UGP Properties to construct a multistory office building above the Terminal.  UGP and Penn Central presented two proposals to the historic preservation commission, both of which contemplated office towers of 50-stories or more.  The commission denied both proposals noting in part that the 50-story structures did not harmonize with the look and feel of the historic terminal.

UGP and Penn then “sought a declaratory judgment, injunctive relief barring the city from using the Landmarks Law to impede the construction of any structure that might otherwise lawfully be constructed on the Terminal site…” Penn Cent., 438 U.S. at 119, 98 S. Ct. at 2656.  UGP and Penn Central argued that application of the landmark designation affected a “taking” of the Terminal.

Although the Court found against UGP and Penn Central, the Court nevertheless ushered in a new era of regulatory takings.  The Court suggested that a substantial interference could potentially affect a taking (even if in Penn Central it did not).  The Court enumerated the factors to be considered by the courts for this claims as follows:

  1. The character of the government action;
  2. The economic impact of the regulation on the claimant,
  3. The extent to which the regulation has interfered with reasonable investment-backed expectations.

The Supreme Court failed to articulate exactly how these factors should be applied (or even exactly what they mean) and in practice, courts around the country seem to either ignore 2 of the factors, or analyze them all under this paramount factor: the extent to which the regulation has interfered with reasonable investment-backed expectations.

One of the issues then becomes: what expectations by the landowner is reasonable?  How far is too far?  We’ve analyzed this question in Land Owner Expectations vs. Land Use Regulations.

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Dan Biersdorf Selected to the 2014 Super Lawyers List http://www.condemnation-law.com/dan-biersdorf-selected-to-the-2014-super-lawyers-list/ http://www.condemnation-law.com/dan-biersdorf-selected-to-the-2014-super-lawyers-list/#comments Fri, 14 Mar 2014 15:05:40 +0000 http://www.condemnation-law.com/test1/?p=6460 We are pleased to announce that lead attorney Dan Biersdorf of Biersdorf & Associates has been selected to the 2014 Super Lawyers List.   This is an exclusive list, recognizing no more than five percent of attorneys in the state. Super Lawyers, a Thomson Reuters business, is a research-driven, peer influenced rating service of outstanding lawyers Continue Reading

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We are pleased to announce that lead attorney Dan Biersdorf of Biersdorf & Associates has been selected to the 2014 Super Lawyers List.   This is an exclusive list, recognizing no more than five percent of attorneys in the state.

Super Lawyers, a Thomson Reuters business, is a research-driven, peer influenced rating service of outstanding lawyers who have attained a high degree of peer recognition and professional achievement. Attorneys are selected from more than 70 practice areas and all firm sizes, assuring a credible and relevant annual list.

The annual selections are made using a patented multiphase process that includes:

  • Peer nominations
  • Independent research by Super Lawyers
  • Evaluations from a highly credentialed panel of attorneys

The objective of Super Lawyers is to create a credible, comprehensive and diverse listing of exceptional attorneys to be used as a resource for both referring attorneys and consumers seeking legal counsel.

The Super Lawyers lists are published nationwide in Super Lawyers Magazines and in leading city and regional magazines and newspapers across the country, as well as the Minnesota Super Lawyers Digital Magazine.

Please join us in congratulating Dan Biersdorf on his selection.

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Public Meetings for Property Owners Affected by the Ohio Pipeline (OPEN) Project http://www.condemnation-law.com/public-meetings-for-property-owners-affected-by-the-ohio-pipeline-open-project/ http://www.condemnation-law.com/public-meetings-for-property-owners-affected-by-the-ohio-pipeline-open-project/#comments Thu, 20 Feb 2014 15:04:36 +0000 http://www.condemnation-law.com/test1/?p=6458 Two public meetings for property owners affected by the Ohio Pipeline Energy Network Project (OPEN) being constructed by Spectra Energy will be held on Saturday, March 1st. The meetings will be facilitated by our local attorneys in Ohio, Phil Sever and George Padgitt. Anyone interested in hearing more about the project and learning about your Continue Reading

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Two public meetings for property owners affected by the Ohio Pipeline Energy Network Project (OPEN) being constructed by Spectra Energy will be held on Saturday, March 1st. The meetings will be facilitated by our local attorneys in Ohio, Phil Sever and George Padgitt. Anyone interested in hearing more about the project and learning about your rights as a property owner is welcome and encouraged to attend.

Meeting Details:

Meeting 1:
Time: 10:30 AM

Location: Schiappa Library
4141 Mall Drive
Steubenville, OH 43952

Meeting 2:
Time: 2:00 PM

Location: Ohio County Library
Downstairs – Auditorium
52 16th Street
Wheeling WV 26003

If you have any immediate questions regarding the project and how it might affect your property, don’t hesitate to call us at 866-339-7242.

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Ohio Pipeline Energy Network (“OPEN”) Project http://www.condemnation-law.com/ohio-pipeline-energy-network-open-project/ http://www.condemnation-law.com/ohio-pipeline-energy-network-open-project/#comments Tue, 07 Jan 2014 15:02:36 +0000 http://www.condemnation-law.com/test1/?p=6456 The Project The Ohio Pipeline Energy Network (“OPEN”) Project will consist of approximately 73 miles of new 30-inch diameter mainline pipeline and associated pipeline support facilities in Ohio, including a new compressor station.  The pipeline will extend through Columbiana, Carroll, Jefferson, Belmont, & Monroe counties and is designed to provide pipeline transportation capacity to deliver Continue Reading

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The Project

The Ohio Pipeline Energy Network (“OPEN”) Project will consist of approximately 73 miles of new 30-inch diameter mainline pipeline and associated pipeline support facilities in Ohio, including a new compressor station.  The pipeline will extend through Columbiana, Carroll, Jefferson, Belmont, & Monroe counties and is designed to provide pipeline transportation capacity to deliver new production from the emerging Utica Shale and Marcellus Shale plays to the markets in the Midwest, Southeast and Gulf Coast.

Project Timeline

The project is facilitated by Spectra Energy and Texas Eastern and regulated by the Federal Energy Regulatory Commission (FERC).  Texas Eastern initiated the pre-filing process with FERC in June 2013, and they plan on submitting the certificate application by the Environmental Assessment (EA)  by FERC, followed by a comment period and public hearings.   The Commission will consider the findings in the EA together with non-environmental information before making its decision about whether or not to approve the project.

Texas Eastern is expecting FERC approval by December 2014.  However, before a project of this caliber can be constructed, it must obtain approval from various cooperating agencies in addition to FERC.   They must also secure the necessary ROW for the project.  Many landowners will choose not to sell their property willingly, which will force Texas Eastern to invoke their eminent domain authority (if the project is approved by FERC).   For most landowners, condemnation will be their only legal remedy for securing just compensation for their loss.  In condemnation, landowners can show that their easement and severance damages are worth more than what is being offered.

What does this mean for landowners?

The proposed Project will impact approximately 255 landowners or 382 tracts along the pipeline. In April 2013, Texas Eastern hosted 3 informational meetings for stakeholders in Ohio in the vicinity of the proposed facilities. Alignment sheets identifying impacted tracts by landowner were set up on posters to allow for site specific discussion between right-of-way agents and interested stakeholders.

If your property lies within the pipeline’s path, you will be approached about the purchase of an easement across your land.  It is important for property owners affected by the project to know that utility companies are like any buyer, they will want to purchase your property as cheaply as they can.

Utility companies determine the value of easements by analyzing the impact to the surface of land with the easement in place.  This analysis invariably leads to low levels of compensation.    They consistently fail to compensate property owners for the value of the easement itself.  When determining just compensation for utility and pipeline easements, the largest value typically doesn’t come from the impact to the surface of the property; it comes from the value of the easement.

If you’re a property owner affected by the OPEN Project, you should know that you have time to determine how best to proceed, and you have rights if you choose to assert them.  Do NOT feel pressured into accepting their offer without first contacting an eminent domain lawyer.

If you have questions regarding the value of your easement and your rights in the eminent domain process, don’t hesitate to contact us.January 2014 in order to begin construction by April 2015.   Once the application is filed, the next major milestone is the issuance of

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Landowner Expectations vs. Land Use Regulations http://www.condemnation-law.com/landowner-expectations-vs-land-use-regulations/ http://www.condemnation-law.com/landowner-expectations-vs-land-use-regulations/#comments Fri, 20 Dec 2013 14:59:12 +0000 http://www.condemnation-law.com/test1/?p=6454 The U.S. Supreme Court has long held that land use regulations (e.g. zoning ordinances) can go “too far” and cause a “taking” of property for which just compensation must be paid under the fifth amendment of the Constitution.   These cases are known as “regulatory takings.”  Less clear is how to establish how far is “too Continue Reading

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The U.S. Supreme Court has long held that land use regulations (e.g. zoning ordinances) can go “too far” and cause a “taking” of property for which just compensation must be paid under the fifth amendment of the Constitution.   These cases are known as “regulatory takings.”  Less clear is how to establish how far is “too far.”

In one of the leading cases on regulatory takings, Penn Central, the Court set out 3 factors to determine if a regulatory taking had occurred.  In practice however, courts around the country seem to either ignore 2 of the factors, or analyze them all under this paramount factor: the extent to which the regulation has interfered with reasonable investment-backed expectations.

One of the issues then becomes: what expectations by the landowner are reasonable?  In many cases, state courts have ruled that if the land use regulation was in effect at the time the landowner took possession of the property, then any expectations inconsistent with that regulation are unreasonable.  The Supreme Court has phrased this argument as such: “The theory underlying the argument that postenactment purchasers cannot challenge a regulation under the Takings Clause seems to run on these lines: Property rights are created by the State. So, the argument goes, by prospective legislation the State can shape and define property rights and reasonable investment-backed expectations, and subsequent owners cannot claim any injury from lost value. After all, they purchased or took title with notice of the limitation.”  Once determining that the landowner’s expectations are unreasonable, the courts have then dismissed the regulatory takings claim.

In an Oregon case decided in 1993 (Dodd), the landowners (the Dodds) purchased 40 acres in Hood River County’s forest zone in 1983.  The owners intended to construct a retirement home on the property.  At the time of purchase, the zoning allowed construction on a dwelling, but the County was then in the process of revising its comprehensive plan to bring the plan into compliance with statewide planning goals.  After the zoning was amended, the ordinance prohibited the construction of a dwelling unless necessary for a forest use.  When, in 1990, the Dodds applied to construct a dwelling, the County denied the permit.  After an administrative appeal, the Dodds pursued a takings claim.  The Oregon Supreme Court denied the Dodds’ claim, noting that the property could still be used productively for timber, and that the Dodds plans to build a dwelling were not reasonable because they had “constructive notice as to the pending zoning limitations.”

In 2001, however, the U.S. Supreme Court decided Palazzolo v. Rhode Island.  In Palazzolo, the majority held that unreasonable regulations “do not become less so through passage of time or title.”  The Supreme Court held that taking title with notice of regulations does not exempt their challenge under the takings clause and noted that “[f]uture generations, too, have a right to challenge unreasonable limitations on the use and value of land.”

Although Palazzolo seemed to discourage courts from using notice of a regulation as a total bar to a takings claim, state courts have nevertheless applied a Dodd analysis.  The confusion may stem from the nature of the Palazzolo majority.  Three justices seemed to agree that notice of the regulation was irrelevant to a determination of investment-backed expectations.  Justice Scalia, concurring with the majority, stated explicitly that the existence of a regulation at the time the purchaser took title “should have no bearing upon the determination of whether the restriction is so substantial as to constitute a taking,” and  that investment-backed expectations “do not include the assumed validity of a restriction that in fact deprives property of so much of its value as to be unconstitutional.” Palazzolo, 533 U.S. at 637, 121 S. Ct. at 2468.

Justice O’Conner, however, stated that the holding of Palazzolo “does not mean that the timing of the regulation’s enactment relative to the acquisition of title is immaterial to the Penn Central analysis.”  Indeed, O’Connor went on to state that “the regulatory regime in place at the time the claimant acquires the property at issue helps to shape the reasonableness of those expectations.”  O’Connor concluded by saying that pre-acquisition notice of a regulation is a single non-dispositive factor in a Penn Central analysis.  Palazzolo, 533 U.S. at 635-36, 121 S. Ct. at 2467.

Nevertheless, when Penn Central applies, “state courts have continued to find the claimant’s investment-backed expectations unreasonable and the claim without merit if the owner was on notice of regulation at the time of property acquisition.”  J. David Breemer, Playing the Expectations Game: When Are Investment-Backed Land Use Expectations (Un)reasonable in State Courts?, The Urban Lawyer, Vol.   38 No. 1, Winter 2006.  In other words, despite the implicit holding of three Supreme Court Justices and explicit holding of another, state courts are considering pre-acquisition notice as a factor in determining the reasonableness of investment-backed expectations.  Not only that, but, seemingly also ignoring Justice O’Connor, state courts are continuing to use pre-acquisition notice of a regulation as a categorical bar to a Penn Central takings claim.  Before pursuing any regulatory takings claim, be certain to know how your state treats notice of regulations before acquisition of your property.

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Pacific Connector Gas Pipeline Project Update http://www.condemnation-law.com/pacific-connector-gas-pipeline-project-update/ http://www.condemnation-law.com/pacific-connector-gas-pipeline-project-update/#comments Thu, 12 Dec 2013 14:40:00 +0000 http://www.condemnation-law.com/test1/?p=6452 Representatives from the proposed Pacific Connector Gas Pipeline Project (PCGP) have indicated that construction could begin by early 2015, barring any delays in the FERC approval process.  The proposed pipeline will deliver natural gas from Wyoming via the Ruby Pipeline and Canadian natural gas from Alberta through the existing Gas Transmission Northwest line to the Continue Reading

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Representatives from the proposed Pacific Connector Gas Pipeline Project (PCGP) have indicated that construction could begin by early 2015, barring any delays in the FERC approval process.  The proposed pipeline will deliver natural gas from Wyoming via the Ruby Pipeline and Canadian natural gas from Alberta through the existing Gas Transmission Northwest line to the Port of Coos Bay where it will be converted to LNG for export.

The Final Environmental Impact Statement (FEIS) is expected to be released in the third quarter of 2014, which could allow construction to begin as early as 2015.  The proposed pipeline will extend approximately 230 miles from Malin to Coos Bay and cross through private property in Klamath, Jackson, Douglas and Coos Counties.

However, before a project of this caliber can be constructed, it must obtain approval from various cooperating agencies, including FERC.   They must also secure the necessary ROW for the project.  Many landowners will choose not to sell their property willingly, which will force Williams to invoke their eminent domain authority.   For most landowners, condemnation will be their only legal remedy for securing just compensation for their loss.  In condemnation, landowners can show that their easement and severance damages are worth more than what is being offered by PCGP.  Because Williams will likely have the authority to use eminent domain to secure easements, they will have little incentive to negotiate honestly with land owners.

PCGP Modified Blue Ridge 2013 Alternative

Several property owners impacted by the proposed PCGP have worked tirelessly to move the proposed PCGP further to the East from the South side of the crossing of the Coos River (T25S, R12W Section 29) to approximately MP 21.6 West of Fairview, Oregon (T27S, R12W Section 22) in order to minimize the impact to landowners and the environment.

This proposed route was submitted to FERC for review and In October 2013, FERC released a document stating: “The FERC staff believes that the PCGP Modified Blue Ridge 2013 Route is environmentally preferable to the June 2013 application route between MPs 11.3 and 21.8, because it is shorter, would affect fewer landowners, and would cross less waterbodies…”  If FERC selects the Modified Blue Ridge 2013 Alternative as preferred in their EIS, then PCGP will likely adopt this route into their preferred alternative.   Learn more about the PCGP Modified Blue Ridge Alternative.

Next Steps

In a Project-Update-Brochure released in November, FERC discusses the issuance of the draft EIS, which is the next major step in the approval process.   When the draft EIS is completed, FERC will issue a Notice of Availability that will also appear in the Federal Register.  There will be a 90-day period to review and comment on the document.  During the review period FERC staff will hold public meetings at various locations in southern Oregon to take verbal comments on the draft EIS.

At the close of the comment period, they will review and consider all comments submitted and revise the EIS as necessary to create the Final EIS.  The Commission will consider the findings in the FEIS, together with non-environmental information, before making its decision about whether or not to approve the projects.

What does this mean for landowners?

We have reviewed some offers made to landowners by the PCGP, and in our opinion, they don’t come close to fully compensating landowners for the value of their easement and damages to their remainder parcel.  Before settling in this matter, please call us for a consultation.   You have rights in this matter if you choose to assert them.  Most landowners will only obtain just compensation by allowing condemnation to occur.

For questions regarding the value of your easement, don’t hesitate to call us at 866-339-7242.

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Wyoming eminent domain attorney fee recovery statute http://www.condemnation-law.com/wyoming-eminent-domain-attorney-fee-recovery-statute/ http://www.condemnation-law.com/wyoming-eminent-domain-attorney-fee-recovery-statute/#comments Wed, 04 Dec 2013 14:34:17 +0000 http://www.condemnation-law.com/test1/?p=6450 In 2013, two states passed legislation requiring the condemning authority to pay a property owner’s attorneys fees if the amount of just compensation determined by the courts is greater than the amount offered by the government or condemning authority. Arkansas was the first state in 2013 to pass this type of legislative reform and Wyoming was the Continue Reading

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In 2013, two states passed legislation requiring the condemning authority to pay a property owner’s attorneys fees if the amount of just compensation determined by the courts is greater than the amount offered by the government or condemning authority.

Arkansas was the first state in 2013 to pass this type of legislative reform and Wyoming was the second state.  For Wyoming landowners, Wyo. Stat. Ann. § 1-26-509 now states that if the court or jury finds that the amount of just compensation exceeds the condemning authority’s offer by 15% or more, then the government or condemning authority shall reimburse the landowners for their litigation expenses.

We’ve said it before and we’ll say it again.  The most blatant eminent domain abuse occurs when the condemning authority makes “low ball” offers.  This scenario invariably requires the property owner to hire an attorney to pursue a claim on their behalf.  Although a property owner might be successful at pursuing an additional damages claim, they are not entirely happy when a portion of that claim must be paid to the attorney.

This legislation should motivate the condemning authority in Wyoming to negotiate honestly with property owners and their attorneys, and even avoid low ball offers to begin with, because they can now be liable for the attorney’s fees incurred by the property owner.  Additionally, Wyoming’s legislation doesn’t appear prejudicial against small claimants, so land owners pursuing significantly more than the offer (100% or more) with relatively small dollar amounts should be able to secure quality legal representation in order to obtain just compensation.

Although the statute identifies a specific threshold that must be met in order to trigger the reimbursement of fees, the courts have yet to interpret the statute.  Will property owners be able to recovery fees on both an hourly and contingent fee basis?  Will the courts limit the attorney’s hourly rate for recovery?  How will they define ‘litigation expenses’?  Will that include all costs incurred?

Wymoning would go a long way in leveling the playing field between property owners and the government if they interpreted the statute liberally in favor of property owners.  The US Supreme Court has consistently held in condemnation cases, that the government’s obligation is to “put the owner in as good a position pecuniary as if the use of their property had not been taken” Monongahela Nav. Co. v United States, 148 U.S. 312 (1893); Phelps v. United States, 274 U.S. 341 (1927); Olson v. United States, 292 U.S. 296 (1934).   That is, property owners should receive fair and just compensation and not be at any financial loss resulting from the government’s action to seize their property.

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Western North Dakota Truck Bypass Projects http://www.condemnation-law.com/western-north-dakota-truck-bypass-projects/ http://www.condemnation-law.com/western-north-dakota-truck-bypass-projects/#comments Wed, 20 Nov 2013 14:29:43 +0000 http://www.condemnation-law.com/test1/?p=6447 The oil boom in western North Dakota has transformed quiet small towns into industry magnets for oil and gas companies, banks, insurance agents, attorneys and real estate developers.  Unemployment rates are well below average and population has increased significantly over the past several years. But, progress comes with a price.  Residents have dealt with housing Continue Reading

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The oil boom in western North Dakota has transformed quiet small towns into industry magnets for oil and gas companies, banks, insurance agents, attorneys and real estate developers.  Unemployment rates are well below average and population has increased significantly over the past several years.

But, progress comes with a price.  Residents have dealt with housing shortages, loss of land rights and mineral rights, harmful explosions, and an overextended road and highway system.   Small arterial highways leading in and out of towns such as Williston, Watford City, Newtown, Alexander and Dickinson are over capacity, and for some, a visit to the dentist sounds more appealing than dealing with truck traffic along I-94.

In order to help alleviate transportation issues in Western North Dakota, the North Dakota Department of Transportation is planning the construction of 5 truck bypass projects in the near future around Williston, Watford City, Alexander, New Town and Dickinson.

Williston Truck Bypass Project:

The proposed project will bypass Williston starting at US 2/85 north of town and extending west and south for approximately 13 miles to reconnect with US 2/85 west of town.   The project will require the acquisition of private property, and NDDOT is currently contacting affected property owners and conducting some property appraisals.  Construction is scheduled to begin in 2014.

Watford City Truck Bypass Project:

The proposed project will bypass Watford starting from Highway 23 east of town and extending southwest to intersect with Highway 85 and then continuing in a westward direction before turning north to reconnect with Highway 85 west of town.  The project will require the acquisition of private property, and most of the property for the Highway 85 section west of town has been acquired, and construction will begin shortly.  Property acquisition for the Highway 23 portion of the project east of town has not yet begun.  Construction is scheduled to begin in 2014 for the east portion of the project.

Alexander Truck Bypass Project:

The proposed project will bypass Alexander starting at Highway 85 east of town and extending north and west to terminate with Highway 85 west of town.  Property acquisition is almost complete and construction is scheduled to begin in 2014.

New Town Truck Bypass Project:

The proposed project will bypass New Town starting at Highway 23 east of town and extending north and west to terminate at highway 1804.  Property acquisition is almost complete and construction will begin shortly.

Dickinson Bypass Project:

The ultimate bypass project will start at a new interchange with I-94 and 116th Avenue west of town and extend north and east to terminate at highway 22 north of town.  The interim build bypass project was developed as a temporary solution before the ultimate bypass project is built.  The interim bypass project begins in the area of I-94 & 113th Avenue SW, just north of the west Dickinson interchange (Exit 59) and will progress north approximately three miles to 33rd Street SW. The route will then continue east along 33rd Street SW for approximately two miles where it will tie into ND Hwy 22.  Property acquisition is complete and construction is underway.

The NDDOT, in conjunction with the city of Dickinson and Stark County, is also working on the first phase of the ultimate Dickinson Bypass Project. This phase consists of building a new interchange west of Dickinson where the permanent bypass will tie into Interstate 94. Construction of this phase consists only of the interchange and its tie-in points back to 116th Avenue SW. Property acquisition for this project is getting underway. They are currently in the collection of sales, development of preliminary plats and appraisal development process. They anticipate right of way negotiations for this phase to begin late November 2013.

What does this mean for property owners?

Property owners affected by the project should know that the government is like any buyer, it will want to purchase your property as cheaply as it can.  When the government makes you an offer, it will tell you that it represents full market value.   It may even show you an appraisal.  But be aware, appraisals can vary and the governments’ may be a low one.

The government is required by law to pay you just compensation for your property.  Typically, an owner will only receive just compensation by allowing condemnation to occur. In condemnation an owner can show that the rules for highest and best use will produce a higher price than the amount offered by the government.  If you’re instincts tell you the offer is too low, it probably is.  Do not feel pressured to accept a lesser amount by the threat of eminent domain.  Also North Dakota law directs the government to pay the property owner’s attorneys fees if the final recovery is greater than the amount offered by the government.  Learn more about the North Dakota attorney fee recovery statute.

 

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Bankruptcy and eminent domain http://www.condemnation-law.com/bankruptcy-and-eminent-domain/ http://www.condemnation-law.com/bankruptcy-and-eminent-domain/#comments Tue, 12 Nov 2013 14:29:02 +0000 http://www.condemnation-law.com/test1/?p=6445 When a property owner files for bankruptcy, all proceedings against them are stayed to allow time to reorganize assets and, in some instances, repay creditors.  However, bankruptcy courts across the country have held that there are certain situations where actions against a debtor will not be stayed, including those initiated by the government.   When a Continue Reading

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When a property owner files for bankruptcy, all proceedings against them are stayed to allow time to reorganize assets and, in some instances, repay creditors.  However, bankruptcy courts across the country have held that there are certain situations where actions against a debtor will not be stayed, including those initiated by the government.   When a property owner is confronted by eminent domain and files for bankruptcy (or vice versa) the eminent domain action will usually proceed.

If bankruptcy occurs before the eminent domain taking, the eminent domain award becomes property of the bankruptcy estate, unless the property is removed from the estate.  If a property owner is in chapter 11, then the owner will normally be the debtor in possession and they will control the litigation of the eminent domain matter.  If the owner is in chapter 7, then the entity controlling the matter will be the chapter 7 trustee that’s been appointed by the bankruptcy court.  In either instance, the eminent domain lawyer’s fee agreement must be approved by the bankruptcy court.

If bankruptcy occurs after the taking, the eminent domain claim will still be an asset of the estate, but now the eminent domain attorney will need to ensure their fee agreement is approved by the bankruptcy court.  If the agreement was hourly, any fee not paid might be listed as an unsecured claim.

If the property is subject to a mortgage, it could be removed from the bankruptcy estate if there is no equity.  In this instance, the eminent domain attorney must be retained by the lender, even if they were initially retained by the property owner.  The proceeds of the eminent domain claim will be applied to any claims of the mortgagee, and whether any balance is returned to the bankruptcy estate could depend upon the agreement between the lender and the bankruptcy trustee; or the matter could be litigated.  If the property remained in the bankruptcy estate, any proceeds of the eminent domain claim will be an asset of the bankruptcy estate subject to any claims of mortgagees.

If you’re a property owner confronted with both eminent domain and bankruptcy, you need to know if you’re in chapter 11 or 7, whether the eminent domain taking occurred before or after the bankruptcy proceedings were initiated, and if you have equity in the property.  From here, consult with your eminent domain lawyer and get them in touch with your bankruptcy lawyer.

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Rails to Trails or Simply Railroaded? http://www.condemnation-law.com/rails-to-trails-or-simply-railroaded/ http://www.condemnation-law.com/rails-to-trails-or-simply-railroaded/#comments Wed, 30 Oct 2013 14:24:35 +0000 http://www.condemnation-law.com/test1/?p=6443 The U.S. Supreme Court recently accepted a case for review that will affect how courts will construe the ownership of land under abandoned railway lines.  The Wyoming-Colorado Railroad Company (WCRC) owned approximately 66 miles of right-of-way and two-hundred feet wide stretching from Laramie, Wyoming into Colorado.  The construction of the railroad on that right-of-way was Continue Reading

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The U.S. Supreme Court recently accepted a case for review that will affect how courts will construe the ownership of land under abandoned railway lines.  The Wyoming-Colorado Railroad Company (WCRC) owned approximately 66 miles of right-of-way and two-hundred feet wide stretching from Laramie, Wyoming into Colorado.  The construction of the railroad on that right-of-way was completed in 1911.  In 2001, WCRC began the official process of abandoning this right-of-way.  WCRC completed abandonment in 2004.

The landowner, Brandt, and the federal government disagreed on who owned the right-of-way following the abandonment.  The government claimed that it retained exclusive possession of the right-of-way.  Brandt contended that he owned the right-of-way without any rights reserved to the United States.  The lower courts concluded that the United States possessed an “implied” ownership interest in the abandoned right-of-way, thereby subjecting Brandt to an easement that was arguably found nowhere in any deed or declaration on the property.

The lower court rulings are counter to decisions by the Seventh Circuit Court of Appeals, the Federal Circuit Court of Appeals, and the U.S. Court of Claims, who all concluded that the United States possessed no interest in the abandoned railways.  The Supreme Court has elected to weigh in on this split between the courts, which may have implications for many of the rails-to-trails projects around the country.  Stay tuned to see whether the Supreme Court sides with the rights of property owners or the rights of the government.

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Common carriers, pipeline easements and eminent domain in Texas http://www.condemnation-law.com/common-carriers-pipeline-easements-eminent-domain-texas/ http://www.condemnation-law.com/common-carriers-pipeline-easements-eminent-domain-texas/#comments Wed, 16 Oct 2013 17:30:12 +0000 http://www.condemnation-law.com/?p=3667 The debate around the Keystone XL pipeline is still going strong on many fronts: environmental, economical, and perhaps least talked about, constitutional.  On the constitutional front, there is considerable concern that the eminent domain powers granted to private companies have expanded out of control.  In Texas, on September 6th, the State Supreme Court declined to Continue Reading

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The debate around the Keystone XL pipeline is still going strong on many fronts: environmental, economical, and perhaps least talked about, constitutional.  On the constitutional front, there is considerable concern that the eminent domain powers granted to private companies have expanded out of control.  In Texas, on September 6th, the State Supreme Court declined to hear a case that would clarify the eminent domain powers available to common carriers.   The case in question, In re Texas Rice Land Partners, Ltd. raised one question: whether TransCanada, the company seeking to install the pipeline, possessed eminent domain power – the power to take private property for public use.  By declining to hear the case, the Texas Supreme Court let the ruling of the lower court stand, that TransCanada had the authority to take possession of the land owned by the Texas Rice Land Partners.

Background of the case

TransCanada was granted common carrier status by the Railroad Commission of Texas, granting them eminent domain power for the purpose of constructing the Keystone XL pipeline, extending the current pipeline from Cushing, Oklahoma to the Gulf Coast.  The planned construction will cross the property of many landowners’ in Texas.  Texas has enacted eminent domain reforms such that, for the good of the oil industry, pipeline companies are granted eminent domain authority as common carriers – those who transport oil, gas or coal for the public.  As a common carrier, TransCanada has eminent domain power in Texas for the purpose of building the Keystone XL pipeline throughout the state.

However, the real question is not whether TransCanada can take possession of the land, but when.  Eminent domain powers are traditionally reserved for state governments, and allow the taking of private land only for the purpose of a public use.  Over the past decades, Texas has expanded the ability to grant eminent domain power beyond government agencies.  Now, by filling out a form and submitting it to the Railroad Commission, an energy company can obtain the title Common Carrier, which comes with the ability to use eminent domain power to construct new pipelines on private property.  The State Supreme Court, by declining to hear the case, let stand the ruling of the Court of Appeals, which required TransCanada to make a showing that it was a true common carrier and, thus, entitled to eminent domain authority, instead of what had been the status quo –taking immediate possession based on a permit granted by the Railroad Commission.

Becoming a common carrier in Texas

§81.051 of the Texas Natural Resources Code, jurisdiction over common carriers goes to the Railroad Commission.  A pipeline company must apply for status as a common carrier and obtain a permit.  The two requirements the commission looks to for granting a permit are (1) the reduction of waste and (2) operation in compliance with laws and regulations.  The operator must also classify the pipeline as a common carrier or private pipeline.  Additionally, the pipeline company must agree to be subject to the duties and obligations of the Code.  Once granted, the common carrier status is generally not reviewable by courts.

Under the Texas Natural Resources Code §111.109(b), a common carrier has the ability to enter on and condemn land, rights-of-way, easements, and property “of any person or corporation necessary for the construction, maintenance or operation of the common carrier pipeline.”

Effect on property owners

Traditionally, a state must prove that the taking of private property using eminent domain power is limited in that the government must prove that the taking is for the public good.  In Texas, common carrier status is granted based on a form submitted to the Railroad Commission with no further investigation.  This shifts the burden from the state to the landowner, who must now challenge a pipeline company in court to protect their property.  Additionally, the ‘public use’ requirement has eroded over time, allowing pipeline companies more and more leeway to use eminent domain authority to take or use private land.

Landowners in Texas do have a bill of rights regarding their property, including a condemnation procedure explained in the Texas Property Code.  A landowner has the right to notice of acquisition, a good faith effort at negotiation with the condemnor, an assessment of damages and, most importantly, a hearing on the assessment of damages and an appeal process.

In the last case to go to the Texas Supreme Court on this issue, the court ruled that filing a permit alone was not enough to conclusively establish common carrier status – only a legislative grant is conclusive, and then only when accompanied by strict compliance with existing laws and rules.  Companies, the court said, could not gain common carrier status through self-declaration alone.  The court continued that the commission’s determination should be given deference, but a court must determine whether a use is for the public, and a pipeline company must produce this evidence to be considered a common carrier.  This created considerable uncertainty about what companies are common carriers, and at what point they need to prove it.  By choosing not to weigh in on the process, the Texas Supreme Court has missed an opportunity to clarify the status of landowner property rights in Texas by leaving the current permit system in place.  Read the Texas-Rice appellate court decision.

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Determining Fair Market Value in a Recession http://www.condemnation-law.com/determining-fair-market-value-in-a-recession/ http://www.condemnation-law.com/determining-fair-market-value-in-a-recession/#comments Tue, 01 Oct 2013 19:48:46 +0000 http://www.condemnation-law.com/?p=3277 The Great Recession from 2009-11 wreaked havoc on all areas of the economy, particularly the real estate market.  Land values plummeted, foreclosures ran rampant in many areas, and property owners who managed to stay “afloat” were in fact “underwater”.  Although the real estate market is improving, land values remain depressed in many areas around the Continue Reading

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The Great Recession from 2009-11 wreaked havoc on all areas of the economy, particularly the real estate market.  Land values plummeted, foreclosures ran rampant in many areas, and property owners who managed to stay “afloat” were in fact “underwater”.  Although the real estate market is improving, land values remain depressed in many areas around the country.

Property owners affected by eminent domain are acutely aware of the impact of a recession when the “fair market value” of their property doesn’t come close to covering their mortgage.  Generally, the date of taking is the date of valuation in condemnation cases. When the date of taking falls within a sharp, brief economic downturn, what options are available to property owners?

First, make sure the facts are correct. The fact that there was a black cloud over the nation’s real estate market does not necessarily mean that your property was impacted by the down market. For example, while many residential markets took a hit, commercial properties remained level, some even increased in value. So whether your property was impacted by the market may depend on the highest and best use of your property.

Second, your local market may not be representative of the national market. Some smaller markets fared much better than nationwide. Many appraisers simply use the nationwide understanding of the recession to reduce comparable sales from this time period. However, a closer examination of the trends in the local market may show that values did not fall significantly during 2009-11. Checking trends in the local market is more prudent than simply relying on nationwide trends.

Finally, if the facts are unfavorable to you, there is case law that defends the position that property owners should not be punished by a sharp downturn in the market merely because their property was taken during this brief period.

In Board of Water Supply of the City of New York, 227 N.Y. 452, 14 N.E.2d 789 (1938), the City of New York condemned property on July 24, 1936. At trial, evidence of value as of October 1930, prior to the Depression, was considered.  The Court of Appeals confirmed the general rule that property is to be valued as of the date of taking.  See 277 N.Y. at 456, 14 N.E.3d at 791.  In holding that pre-Depression market data was properly considered, the court stated:

“Fair market value” means neither panic value, auction value, speculative value, nor a value fixed by depressed or inflated prices.  A fair market value is not established by sales where prices offered are so small that only sellers forced to sell will accept them.  The mere absence of competitive buyers does not establish lack of a real market.  But a market in fact may be established only where there are willing buyers and sellers in substantial numbers.  When there is no real market as of a particular date, some indication of the intrinsic economic and commercial value of the property to the owner and of his loss from the appropriation as of that date may be shown by evidence of the “fair market value” of the property, if in substantially the same condition, at the nearest earlier date when there was a fair market.  “Fair market value” of property actually taken as of the date of appropriation resides in an estimate and a determination of what is the fair, economic, just and equitable value under normal conditions. (Howell v. State Highway Department, 167 S.C. 217).  All elements of value that inhere in the property should be considered (Olson v. United States, 292 U.S. 246, 255,256).

277 N.Y. at 459, 14 NE.2d at 792 (citation omitted).  Therefore, the court held that evidence of the value of the acquired property as of 1930 was proper “in connection with the other evidence in the case, on the question as to what was the just and equitable compensation that must be made to the owner under the constitutional mandate and under the statutory requirement…for property taken from him for public use.” 277 N.Y. at 460, 14 N.E.2d at 793.

Other courts have found that predate of taking market data was relevant when the acquisition occurred during the Depression.  In Howell v. State Highway Department, 167 S.C. 217, 223, 166 S.E. 129, 131 (1932), the Supreme Court of South Carolina affirmed a condemnation verdict of a jury where the judge “defined the market value as that which prevailed in ‘normal times,’” not values in 1931.  The court held: “It would be manifestly unfair to the owner if the taking of the property be during a period of deep depression to fix the value as of that exact date.”  See 167 S.C. at 223, 166 S.E. at 131.  See also Kornegay v. City of Richmond, 185 Va. 1013, 1016, 41 S.E.2d 45 (1947) (“[N]either an inflated nor a depressed market is the proper criterion of fair market value.  The one is unfair to the condemnor and the other is unfair to the property owner.”).

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Just compensation-the floor, but not the ceiling http://www.condemnation-law.com/just-compensation-the-floor-but-not-the-ceiling/ http://www.condemnation-law.com/just-compensation-the-floor-but-not-the-ceiling/#comments Wed, 18 Sep 2013 14:29:02 +0000 http://www.condemnation-law.com/?p=3258 The U.S. Constitution requires that “just compensation” be paid when the government exercises its power of eminent domain to take private property.  The state constitutions generally provide the same.  In two recent state supreme court decisions, however, it has been held that while “just compensation” may be the minimum owed to the property owner, lawmakers Continue Reading

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The U.S. Constitution requires that “just compensation” be paid when the government exercises its power of eminent domain to take private property.  The state constitutions generally provide the same.  In two recent state supreme court decisions, however, it has been held that while “just compensation” may be the minimum owed to the property owner, lawmakers may compel condemning authorities to pay compensation above this constitutional floor.

In City of Moorhead v. Red River Valley Co-op., the City of Moorhead annexed additional land.  The City sought to extend municipal electric utility services to the residents living in the annexed area.  These annexed residents were formerly provided electricity by Red River Valley Co-op.  (RRVC).  As part of providing service to its new residents, the City would be utilizing property (e.g. electric lines) that formerly belonged to RRVC.  RRVC and the City could not agree on the amount owed from the City to RRVC as compensation for RRVC property that served the annexed area.  The City then moved to condemn RRVC’s property located in the annexed area.

RRVC argued that it was owed compensation pursuant to a statutory formula that exceeded the fair market value of the property.  The City argued that providing compensation greater than market value offended basic concepts of fairness.  The City essentially attempted to argue that “just compensation” and “market value” were always synonymous, and condemnors could never be required to pay more than market value.  The Minnesota Supreme Court rejected the City’s argument, holding that “the Legislature may require that municipalities pay property owners more than the constitutional minimum, and therefore the City had no authority to ignore the statute and instead pay what it believed to be the minimum constitutional requirement.”

In St. Louis County v. River Bend Estates, the condemnor challenged a recent Missouri law known as the “heritage value statute.”  The heritage value statute required an award of 50% over market value where a property owned by a family for more than 50 years was taken by condemnation.  The County argued that the Legislature had redefined just compensation and that the heritage value statute conferred an unconstitutional private benefit.  The Missouri Supreme Court rejected the County’s arguments, holding that “just compensation”  “serves as a constitutional floor below which the legislature cannot descend,” but noted that the Legislature could provide “additional benefits to certain property owners whose real property is taken for public use.”

Both cases emphasize that while “just compensation” is the minimum possible payment owed to property owners affected by condemnation, legislatures are free to require condemnors to pay more.  The holdings appear to build on a string of cases dating back to at least 1984, when the U.S. Supreme Court noted that Congress had the power to mandate compensation above the constitutional minimum.  The Supreme Court of California has noted the same, at least as far back as 2000.

This growing consensus among courts is encouraging for property owners.  If the legislature provides remedies to property owners that result in payments above fair market value, those remedies are binding on condemning authorities, and property owners are entitled to the resulting benefits.  While just compensation might be the floor, it is not the ceiling.

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Constitution Pipeline Project in upstate New York http://www.condemnation-law.com/constitution-pipeline-project-in-upstate-new-york/ http://www.condemnation-law.com/constitution-pipeline-project-in-upstate-new-york/#comments Wed, 11 Sep 2013 17:49:17 +0000 http://www.condemnation-law.com/?p=3247 The Project The Constitution Pipeline Project is a proposed 124 mile natural gas pipeline that is being designed to transport natural gas that has already been produced in Pennsylvania.  The pipeline will extend from Susquehanna County, PA, into New York through Broome County, NY, Chenango County NY, Delaware County, NY and will terminate in Schoharie Continue Reading

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The Project

The Constitution Pipeline Project is a proposed 124 mile natural gas pipeline that is being designed to transport natural gas that has already been produced in Pennsylvania.  The pipeline will extend from Susquehanna County, PA, into New York through Broome County, NY, Chenango County NY, Delaware County, NY and will terminate in Schoharie County, NY.  The pipeline is already fully contracted with long-term commitments from established natural gas producers currently operating in Pennsylvania.

Williams Company has partnered with Cabot Oil & Gas, Piedmont Natural Gas, and WGL Holding to construct the project in 2015.  Before construction can begin, Constitution Pipeline must obtain a Certificate of Public Convenience and Necessity (CPCN), which they hope to obtain by April 2014.

Maps of the proposed pipeline location by county:

Overall-Pipeline-Map

Property Acquisition

Constitution Pipeline Project will require the acquisition of private property and offers have already been extended to many property owners impacted by the proposed pipeline.   Although Constitution Pipeline would prefer to obtain the necessary land through negotiations, utility companies do reserve the right to use eminent domain when negotiations with property owners fail.

What does this mean for property owners?

If your property lies within the pipeline’s path, you will be approached about the purchase of an easement across your land.  It is important for property owners affected by the project to know that utility companies are like any buyer, they will want to purchase your property as cheaply as they can.

Pipeline companies generally use the before and after rule when valuing easements in pipeline projects because it allows them to secure easements for a fraction of what they sell them for in the open market, and this methodology is generally accepted by the courts.  Although we utilize the before and after rule in many of our eminent domain cases, we find it prejudicial to landowners in pipeline eminent domain cases because compensation is strictly tied to land values.  The utility company profits significantly from the transaction and the landowner is given next to nothing and left with the threat of harmful explosions and ambiguous easement terms.

On rare occasions, a pipeline company won’t have eminent domain authority to acquire easements for their project.  When this tool is not available, the true market value of these easements arises.  Transactional data from the New York 33-mile Laser Northeast Pipeline Project shows that pipeline companies are willing to pay as much as 45 times more for easements when forced to purchase them in the open market (when property owners are not threatened with eminent domain).  The imbalance in purchase price between the two demonstrates that the value of easements is guided by economics and not strictly tied to land values.

If you’re a property owner affected by the Constitution Pipeline Project, you should know that you have time to determine how best to proceed, and you have rights if you choose to assert them.  Do NOT feel pressured into accepting their offer without first contacting an eminent domain lawyer.

If you have questions regarding the value of your easement and your rights in the eminent domain process, don’t hesitate to contact us.  Also, learn more about New York eminent domain.

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North Dakota eminent domain attorney fee recovery http://www.condemnation-law.com/north-dakota-eminent-domain-attorney-fee-recovery/ http://www.condemnation-law.com/north-dakota-eminent-domain-attorney-fee-recovery/#comments Thu, 05 Sep 2013 20:10:16 +0000 http://www.condemnation-law.com/?p=3243 We place significant emphasis on discussing and promoting eminent domain reform legislation, particularly in the area of attorney fee recovery for property owners who successfully pursue a just compensation eminent domain claim.  Why?  Because the most blatant eminent domain abuse occurs when the condemning authority makes “low ball” offers.  This scenario invariably requires the property Continue Reading

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We place significant emphasis on discussing and promoting eminent domain reform legislation, particularly in the area of attorney fee recovery for property owners who successfully pursue a just compensation eminent domain claim.  Why?  Because the most blatant eminent domain abuse occurs when the condemning authority makes “low ball” offers.  This scenario invariably requires the property owner to hire an attorney to pursue a claim on their behalf.  Although a property owner might be successful at pursuing an additional damages claim, they are not entirely happy when a portion of that claim must be paid to the attorney.

Some states have remedied this situation by passing legislation that forces the government or condemning authority to reimburse property owners for their attorney’s fees and costs incurred while pursuing their claim.  North Dakota is one of the minority of states that award attorneys fees and costs to successful claimants.

In North Dakota, two statutes dictate the recovery of costs and fees for landowners: ND Chapter 38-11.1, which addresses compensation for oil and gas acquisitions, and N.D. Cent. Code Ann. § 32-15-32, which applies to eminent domain generally.  Property owners who suffer property damage from oil and gas activities are protected by ND 38-11.1-09, which allows the court to award attorney’s fees and costs if the amount of compensation awarded by the court is greater than that which was offered by the mineral developer.

Under NDCC 32-15-32, the court awards attorney’s fees at their own discretion.  Generally, the courts have interpreted NDCC 32-15-32 liberally in favor of property owners. Once the recovery is greater than the amount offered, reasonable attorney’s fees are usually recoverable.  When awarding fees in an eminent domain proceeding, the reasonableness of the fee controls the amount recoverable, not necessarily the agreement between attorney and client.  For example, a reasonable fee might be more than the standard one-third contingent fee arrangement between attorney and client, or it may be less.

Contact us  if you have questions regarding an eminent domain case in North Dakota.

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Minnesota Buy the Farm meets Minimum Compensation, Supreme Court rules in favor of landowners http://www.condemnation-law.com/minnesota-buy-the-farm-meets-minimum-compensation-supreme-court-rules-in-favor-of-landowners/ http://www.condemnation-law.com/minnesota-buy-the-farm-meets-minimum-compensation-supreme-court-rules-in-favor-of-landowners/#comments Thu, 22 Aug 2013 19:57:28 +0000 http://www.condemnation-law.com/?p=3239 As many of our readers already know, MN passed the ‘Buy the Farm’ act in 1973 which allows landowners to force utility companies to buy their entire property rather than forcing them to live beneath a high voltage transmission power line.  This is an excellent legal remedy for some owners, but it’s not the best Continue Reading

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As many of our readers already know, MN passed the ‘Buy the Farm’ act in 1973 which allows landowners to force utility companies to buy their entire property rather than forcing them to live beneath a high voltage transmission power line.  This is an excellent legal remedy for some owners, but it’s not the best option for everyone.  Read more about our position on Buy the Farm.

We also regularly discuss the Minnesota Minimum Compensation Statute, which was passed in 2006 and directs the condemning authority to pay damages sufficient for an owner to purchase a comparable property in the community, when the owner must relocate as a result of an eminent domain taking.

The Minnesota Supreme issued a decision in May that was favorable for property owners on a case that involved both Buy the Farm and Minimum Compensation.  Read the decision here.   This was a huge win for landowners in the state of Minnesota.   The case presented the question of whether property owners who elect to require a utility to condemn their entire property under Buy the Farm are entitled to Minimum Compensation under Minn. Stat. 117 § 187 and relocation assistance under Minn. Stat. 117.52.

In this case, the district court concluded that these benefits are available, reasoning that the Legislature did not specifically exclude landowners making an election under buy the farm from receiving minimum compensation or relocation assistance.  However, the district court did not address whether the property owners satisfied the specific requirements for obtaining minimum compensation or relocation assistance.  The utility company appealed the decision, and the court of appeals subsequently overturned the district court’s decision explaining that minimum compensation is only available when an owner “must relocate”.  Property owners in this case had the option to remain on their property, but instead chose to expand condemnation under Buy the Farm, and consequently are not entitled to damages under Minimum Compensation.  Similarly, they explained that relocation benefits under Minn. Stat . 117.52 are for owners who are “displaced”, and in making an election to pursue Buy the Farm, the owners made a decision to relocate and therefore, are not entitled to relocation assistance.

The Minnesota Supreme Court heard the case and reversed the court of appeals decision. They explained that under Buy the Farm, if the owner requires the utility to condemn the entire property, “the easement interest over and adjacent to the lands designated by the owner….shall automatically be converted to a fee taking”.  Furthermore, the statute provides that eminent domain utility proceedings “shall be conducted in the manner prescribed in chapter 117”-the eminent domain chapter.  The Minnesota Supreme Court has consistently held that compensation in eminent domain takings under chapter 117 is determined at the time of taking and not the date the condemnation proceedings commence.  Because Minimum Compensation is a form of compensation provided under chapter 117, entitlement to Minimum Compensation should be determined at the time of taking, not the date at which the utility files to commence condemnation.    Because property owners have made an election under Buy the Farm by the date of taking, the property owners “must relocate”.  They also conclude that property owners are able to obtain relocation benefits because they satisfy the 2 requirements of the federal statute which applies under Minn. Stat 117.52: they were required to move from their property as a direct result of the utility company’s acquisition of their property in fee, and the acquisition of their property was for a project undertaken by the utility company.

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Minnesota Southwest Light-rail Corridor: Green Line Extension http://www.condemnation-law.com/minnesota-southwest-light-rail-corridor-green-line-extension/ http://www.condemnation-law.com/minnesota-southwest-light-rail-corridor-green-line-extension/#comments Mon, 12 Aug 2013 15:39:15 +0000 http://www.condemnation-law.com/?p=3232 The Project The Southwest LRT/Green Line Extension Project is the proposed light-rail project to connect the rapidly growing southwest suburbs with downtown Minneapolis. As currently proposed, the line would be 15.8 miles long with 17 new stations. The line would connect near Target Field with the Blue Line (Hiawatha LRT, in service since 2004) and Continue Reading

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The Project

The Southwest LRT/Green Line Extension Project is the proposed light-rail project to connect the rapidly growing southwest suburbs with downtown Minneapolis. As currently proposed, the line would be 15.8 miles long with 17 new stations. The line would connect near Target Field with the Blue Line (Hiawatha LRT, in service since 2004) and the Green Line (Central Corridor LRT, entering service in 2014), as well as the Northstar commuter rail line. The current estimated cost of the project is $1.25 billion and will be a mixture of funding from federal, state and local sources. Construction on the light-rail project is scheduled to begin in 2015 and be functional by 2018.

Southwest Light Rail Transit MapProject Status

Planners for the Southwest Light-rail project are currently in the preliminary engineering phase and are on the verge of making a decision about the alignment. One factor contributing to the alignment debate amongst residents and planners for the SW Light-rail Corridor is where to move the existing freight train line. The Metropolitan Council, the agency in charge of the project is currently looking at eight different route options to accommodate the light-rail and freight lines in the Kenilworth area of Minneapolis.

Private property will need to be acquired for this project, but this process will not begin until the Record of Decision (ROD) has been issued, and they don’t anticipate this to occur until the fall of 2014.

Questions Surrounding Alternatives

There are options within options that are causing debate. Residents in the Kenilworth neighborhood are worried that moving the freight trains so that they would cut through St. Louis Park High School would dramatically reduce their property values. On the other hand, hikers and bicyclists who frequent the wooded Kenilworth area of Minneapolis feel that running the light-rail project next to the freight lines would have a negative affect on their green space. One alternative calls for the freight trains to  be elevated and another plans for the light-rail to be put on beams above the existing rail line creating something more along the lines of the “El” in Chicago. The city of Minneapolis has already rejected several alternatives that call for the light-rail, freight trains, walking and bike paths to be next to each other and on ground level. Minneapolis also seems hesitant to throw its weight behind a plan that would bury the light-rail in a deep tunnel below the freight train lines (a plan that is supported by members of residents in the Kenilworth area) citing the costs of constructing tunnels.

While the Metropolitan Council can find ways around moving the project forward without local consent, the law does require that Met Council initially seek consent for the project from Minneapolis, St. Louis Park, Minnetonka, Hopkins and Eden Prairie to run the Green Line Extension through their communities. The freight question could influence the decisions from Minneapolis and St. Louis Park especially. The Federal government has told the Metropolitan Council in order to receive federal funding (half the price tag of the project); the freight line location must first be resolved. The Met Council has said it will soon release the costs of each alternative being studied which could help the council and local governments make the alignment decision.

Property Acquisition

There may be many questions surrounding the exact location of the light-rail expansion, but one thing is certain; this project will require the acquisition of property to complete. Wherever the freight and light-rail project goes, the local government will likely need to buy dozens of homes and businesses prior to construction. For example, if the plan to relocate the freight line to St. Louis Park is approved approved, it would require the government to buy 46 or 32 properties from mostly small businesses.

Government entities have the ability to use eminent domain to seize property if negotiations with property owners cannot be met. Generally after a preferred alternative is selected, property acquisition begins shortly afterwards. The Metropolitan Council has suggested they will likely approve an alignment this summer to stay on track with construction beginning in 2015.
Property owners affected by the project should know that the government is like any buyer, it will want to purchase your property as cheaply as it can.  When the government makes you an offer, it will tell you that it represents full market value.   It may even show you an appraisal.  But be aware, appraisals can vary and the governments’ may be a low one.

Learn more about eminent domain in Minnesota or contact us for additional project information.

 

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When businesses are separate legal entities than the fee owner, do they qualify for a Minimum Compensation claim? http://www.condemnation-law.com/court-of-appeals-minimum-compensation/ http://www.condemnation-law.com/court-of-appeals-minimum-compensation/#comments Thu, 01 Aug 2013 15:41:14 +0000 http://www.condemnation-law.com/?p=3220 Statutory protection is crucial for property owners affected by eminent domain.  However, without clear rulings and interpretations by the judicial system, protection remains unclear.  An example of this is Minn. Stat. § 117.187, aka the Minimum Compensation Statute, which was enacted in 2006 and provides greater protection to landowners who are forced to relocate as Continue Reading

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Statutory protection is crucial for property owners affected by eminent domain.  However, without clear rulings and interpretations by the judicial system, protection remains unclear.  An example of this is Minn. Stat. § 117.187, aka the Minimum Compensation Statute, which was enacted in 2006 and provides greater protection to landowners who are forced to relocate as a result of an eminent domain taking.  Although property owners and their attorneys applaud the legislature for passing this law, the actual protection it affords remains unclear until the judicial system interprets its meaning through case law.

The Court of Appeals recently issued an opinion in one of our Minimum Compensation cases, City of St. Paul vs. Yermolenko LLC (YLLC).  Under Minn. Stat. § 117.187, when an owner must relocate, the amount of damages payable, at a minimum, must be sufficient for an owner to purchase a comparable property in the community.  “Owner” is defined as the person or entity that holds fee title to the property.  In this case, YLLC held fee title to the property, and the business associated with the property was Capitol Car Company – both businesses are owned and operated by the same individual.  One of the underlying issues in this case is whether an owner qualifies for a Minimum Compensation claim when the fee owner of the property is not the same as the business occupying the property.

We contend that where the fee owner of the condemned real estate is an LLC or other legal entity and the owner of the business operating on the condemned real estate is a different legal entity, the ‘fee owner’ requirement for [Minn. Stat. § 117.187] is satisfied if the real estate entity and the business entity are related parties with common ownership.  Normal business considerations, including regard for federal tax consequences, generally indicate that separating assets such as property from business under multiple legal entities is more desirable and sensible than ownership by a single entity.  A property owner shouldn’t be forced to choose between prudent business planning and condemnation remedy.  Furthermore, an owner can’t reasonably plan for condemnation because it can happen at any time, anywhere.  Property owners and businesses should be afforded protection under Minimum Compensation when the real estate entity and the business entity are related parties with common ownership.

The court of appeals issued an opinion stating in part, “the legislature unambiguously limited the definition of owner under the minimum-compensation statute to fee-title holders. And because the definition is unambiguous, this court is not permitted to engage in statutory construction—we must apply the plain meaning of the statutory language… Because it is undisputed that YLLC—and only YLLC—held legal title to the taken property, the district court correctly limited its minimum-compensation ruling to YLLC.”  We feel this decision undermines the true intent of the statute.

The opinions issued at the appellate court regarding Minimum compensation have been a mixed bag thus far. Although Yermolenko is not favorable for land and business owners, the Minnesota Supreme Court recently issued an opinion in favor of the property owner in Northern States Power Company (d/b/a Xcel Energy), by its Board of Directors; et al., Appellants, vs. Roger A. Aleckson, et al., District court respondents, Robert T. Pudas, et al., Respondents, Brett R. Hanson, et al., Respondentsstating that landowners who elect ‘buy the farm’ in utility eminent domain cases are entitled to relocation benefits under Minimum Compensation.  Additionally, the MN Supreme Court should issue a decision shortly in County of Dakota vs. Cameron.

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