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WI Lawmakers Attempt at Legitimizing Eminent Domain Abuse Must Be Stopped!

Legalizing Eminent Domain Abuse

Wisconsin courts have traditionally interpreted their eminent domain laws liberally in favor of property owners.  This is a good thing considering the Wisconsin Department of Transportation’s (WisDOT) history of paying land owners inadequately for their property the first time around.  Low offers of compensation made to WI property owners ultimately increases acquisition costs because the  state must pay the legal fees incurred by the property owner in their pursuit of just compensation .   In WI, the condemning authority must pay the property owners attorney’s fees and costs in eminent domain cases if the final award is 15% higher than the last offer made by the condemning authority.

A proposal was recently inserted into the state budget, which would limit property rights in eminent domain cases if these changes become law.  The WisDOT and the American Transmission Co (ATC), which builds power-lines and condemns property to do so, claim this proposal is an attempt at minimizing tax payer’s burden of property acquisition costs  in eminent domain cases.  In reality, this is a weak attempt at legitimizing eminent domain abuse in Wisconsin.

Let’s take a closer look at what they’re proposing and our response:

1. Limit attorney fee recovery to one-third of the difference between the amount awarded by the condemnation commission or jury verdict and the acquiring authority’s rejected jurisdictional offer or highest written offer prior to the jurisdictional offer.

Our Response:

This change will effectively bar small claimants from equal access to justice to determine compensation for their taking’s claims.

Earlier this decade, we worked on a an eminent domain case that went to the Wisconsin Supreme Court. We based the property owner’s claim on a new methodology that the DOT refused to recognize. We were told: “The DOT has never done it that way.” In a decision that had no previous precedence anywhere in the country, the trial court agreed with our position. The DOT appealed and ultimately we prevailed before the Wisconsin Supreme Court. The decision enhanced property rights for property owners and is now known as the Spiegelberg Rule after the elderly property owner who has since passed away. Because the damages were small in this case, $85,000, if we were limited to 1/3 of the recovery, our fees would have been limited to about $27,000, which does not cover the costs incurred when taking a case to the Supreme Court.

This example illustrates two important points. First, the proposed amendment will preclude small claimants from retaining skilled counsel to pursue their claims. Second, an important groundbreaking decision enhancing owner rights would never have been able to be presented to the courts for determination. Thus, I believe the real motive for this proposal is to shut the door for eminent domain justice to all claimants where dollar amounts are not large. From our experience this is well over half of all legitimate claims that can be made.

2.  Eliminate a current law provision that gives a property owner the right to file an appeal with the county condemnation commission or circuit court over the amount of an award for property acquisition and relocation or other related expenses in cases where the property conveyance occurred as the result of a negotiated settlement.

Our Response:

This issue was recently ruled upon by the Wisconsin Supreme Court in KLEMM v. AMERICAN TRANSMISSION CO., 794 N.W.2d 899 (2011), and the court interpreted it to be against eminent domain’s statutory scheme  which discourages condemnors from making low-ball (below market value) offers and  forces the condemnor to indemnify condemnee for attorney fees incurred by an appeal.

3. Limit the appraisals introduced by either party in an appeal to those submitted by either party prior to the date of service or mailing of jurisdictional offer.

Our Response:

This is the most high handed eminent domain abuse imaginable and is probably unconstitutional.  This proposed change violates eminent domain statutes because these appraisals are not valuing the property as of the date of taking; they’re evaluating the property before the taking occurs.  Property owners are not in a position to determine property values and negotiate a settlement before they know what’s being taken from them.  This proposed change is forcing property owners to react to a taking that hasn’t even occurred and then limiting their ability to pursue just compensation after the taking.

Additionally, the first appraiser hired to evaluate the property before the taking occurs does not have the advantage of working with experienced counsel who understands condemnation issues that relate to the determination of  just compensation in eminent domain; for example, the Project Rule or Spiegelberg Rule.  Oftentimes, condemnation issues that relate to just compensation are not fully realized until the taking has occurred.  It is at this time that the appraiser is able to determine the full complement of damages resulting from the taking.

These proposed changes merely violate property owner’s Fifth Amendment right to just compensation in eminent domain cases, and help protect the “dumb and the dishonest”.  The dumb condemnor employees and appraisers who screw up property valuation, and the dishonest ones that purposefully low-ball property owners.  Perhaps a more prudent way for Wisconsin to minimize acquisition costs would be to compensate property owners fairly to begin with!

E. Kelly Keady


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