National Eminent Domain

National Eminent Domain

Eminent Domain and Condemnation

Attack on Pennsylvania Fracking Continues

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In a recent blog article, a writer on Pennsylvania health and development issues wrote about the Commonwealth Court decision finding that the PUC was subservient to local ordinances on oil and gas administration.

The Court held the clause in the statute providing decision making to the PUC was an improper exercise of state authority in power for a local ordinance.

One should read the opinion carefully because, as noted in the commentary of blogger Raichel, many other portions of the Act have been upheld.


One of the largest issues decided was whether—as Act 13 originally envisioned—the PUC would retain the ability to review local zoning ordinances for consistency with the Oil and Gas Act and other state law now that the “statewide zoning ordinance” provisions of Act 13 have been declared unconstitutional.

These PUC advisory opinions would have been no joke for municipalities.  If the PUC determined that a local law “violated” other state law, that opinion could serve as a basis for expensive lawsuits against the municipality or denial of state “impact fee” funds that towns with fracking activity desperately need to repair the local damage caused by industrial fracking operations.

Thankfully, the Commonwealth Court tossed the provisions of Act 13 giving the PUC this authority as not “severable” from the unconstitutional statewide zoning provisions.  In other words, because Act 13 envisioned the PUC’s role as mainly reviewing local laws for consistency with unconstitutional state law, that role could not be separated from the unconstitutional zoning provisions. Accordingly, like moldy food, this authority needed to be thrown out with those unconstitutional provisions (moldy food, of course, should be composted).

Not all of the news from the opinion is good, however.  The court also upheld other challenged elements of Act 13.  This includes the infamous medical “gag rule,” DEP’s liberty not to notify small private drinking water users of a contamination incident, and the ability of oil and gas companies recognized as “public utilities” to use the power of eminent domain to build gas storage facilities. However, it is important to note that even though the court did not find these provisions unconstitutional, it did not approve of their wisdom either.  To the contrary, with respect to the contamination notification provisions, the court noted that DEP should take all actions to notify affected water users and that “drilling companies should make similar undertakings as good corporate citizens, not to mention that it is their actions that necessitate the warning.”

Is California Applying The Minority Rule On Association Interest in Eminent Domain?

Posted in National Eminent Domain

In a well written article about motions in limine being used in eminent domain proceedings, Brad Kuhn of Nossaman reviews the recently unpublished decision of Verizon v Carrick. Maybe we are better off that the decision was unpublished. This is because a local association was excluded from the appraisal process while each individual owner in the association was included.

Possibly, the association having a common area interest can claim that there are individual harms to the properties. Realistically, each property does tie to the common area. Yet, the association itself may have different and specific damages.

California Eminent Domain Report

After Verizon obtained CPUC approval, the case moved forward to a valuation trial. Verizon filed a motion in limined to exclude the association’s valuation appraiser, Chris Pedersen, on the grounds that the association did not own a compensable interest in the property being condemned. The trial court conducted a hearing pursuant to Evidence Code section 402, and concluded that the association could not participate in the condemnation action because it did not own any interest in real property. The appraiser was then limited to testify as to damages suffered by the individual property owners as a result of the condemnation (to whom the appraiser allocated 100% of the damages). After the valuation trial, the association appealed, arguing that an in limine motion was not a proper procedure to determine the association’s standing to bring a claim.

The association made one last attempt to assert a claim through “associational standing,” which applies where an association is seeking relief which would inure to the benefit of the organization’s members. The Court also rejected this claim, concluding that associational standing is inappropriate where the harm is suffered by the organization’s members and requires the participation in the individual members in the lawsuit.

Pennsylvania Takes A Different Path On Local Control Of Fracking

Posted in National Eminent Domain

A recent Commonwealth Court ruling held that the Public Utility Commission does not have the authority to review local zoning ordinances.

This is contrary to the constitutional and statutory framework in most jurisdictions. Most jurisdictions allow the State Public Service Commission, often called Public Utility Commission, to override local ordinances in order to provide uniformity of decisions in the State. However, this generally applies to those situations in which there is a State granted franchise involved.

Apparently perceiving fracking to be something akin to a State franchise, such as an electric or pipeline company, the Commonwealth Court has determined that the Pennsylvania Public Utility Commission does not have the authority to control local zoning restrictions for fracking.

In December, the state Supreme Court found that some portions of Act 13 dealing with restrictions on local zoning for natural gas development violated Pennsylvania’s constitution. Given the higher court ruling, the Commonwealth Court says any challenges to local ordinances cannot bypass local zoning boards, effectively removing the role Act 13 set up for the PUC.

Act 13 originally gave the PUC and the Commonwealth Court power to withhold a municipality’s share of the Marcellus Shale impact fee if a local ordinance was found to be in violation of the law.

Plaintiff’s attorney Jordan Yeager praised today’s decision.

The Use Of Eminent Domain By Universities

Posted in National Eminent Domain

The Northeastern Illinois University expansion will occur at universities throughout the country.

Urban universities feel the need for expanded residential development in order to maintain the status and respect for their universities.

Realistically, now that some universities are demanding dormitories near the university, we can foresee this demand at more and more universities.

Some of us think of a university as a place that you “go away to” meaning to some other town 40, 60 or 100 miles from home. However, there are still many urban universities that are important and strong and attractive to students. Traditionally, these universities maintain a student body living at their homes or in their own choice of apartments near the university. Now, universities want more of a college feel, and are seeking out land for dormitory development.

Some of the universities, such as Northeastern Illinois University, have space available that could otherwise be used. However, if the university utilizes the vacant land now owned for dormitories, one may find that there is nowhere for the university to expand its classroom and research facilities.

Eminent domain is the right of a government to take private property for its own use. It has to offer those property owners compensation. But Boudouvas, Tong, and other property owners say NEIU’s offer was pitiful. And they all want to know the same thing: Why won’t the university build on property it already owns?

“I think it is a really good question,” said Dr. Sharon Hahs, President of NEIU. Hahs said a 2008 student housing feasibility study identified a second site for student housing, in addition to the block on Bryn Mawr Ave. It sits on Foster Ave., on the south end of the campus, by the athletic fields.

“The answer lies somewhat in what is the most help to the community sooner,” said Hahs.

The university is planning two large multi- use buildings — one on each side of Bryn Mawr. The ground floor would feature new retail and restaurants. Above those, enough dorm rooms would be built to fit 500 beds. Hahs hopes the project will set off a domino effect of revitalization, extending east down Bryn Mawr.

The Missoula PR Blitz Continues

Posted in National Eminent Domain

In the most recent article of the, another attack is waged on the allegedly rich and greedy Carlyle Company.

Realistically, water rates are increasing without regard to who owns these facilities. The national Clean Water Act requires maintenance of the water systems.

No one should think that “going public” is the perfect antidote. Each community must look carefully at whether the water being supplied is safe and economically reasonable. That, and that alone, is what should be considered.

Engen said residents of Apple Valley are facing a 35 percent increase in their water rates and bills, exceeding $300 a month. Their system is currently owned by Apple Valley Ranchos Water Co.

Ranchos Water is owned by Park Water Co., which is owned by Western Water Holdings. That company is wholly owned by Carlyle Infrastructure Partners, a division of the Carlyle Group – one of the largest equity firms in the world.

Park Water also owns Mountain Water Co. in Missoula.

“We’re disconcerted when we hear about a proposed 35 percent increase in Apple Valley’s water rates and bills higher than $300 a month for residential services,” Engen said. “We reached out to them three weeks ago, and we’re going to continue to talk and our lawyers will continue to talk.”

Apple Valley city manager Frank Robison said his city is equally committed to acquiring its water utility in the face of rate hikes and the lack of local control. Both cities issued news releases Thursday announcing their collaboration.

“Both of us are having the same issue,” Robinson said. “It really got on fire here when Rancho asked for a 35 percent increase. We had 800 citizens show up to the public hearing, and we decided we needed to act.”


The Boulder Condemnation of Xcel Begins

Posted in National Eminent Domain

Boulder has filed an eminent domain action against the Xcel property.

In all likelihood, the approval of the Public Utility Commission is a necessary part of this process. If Boulder thinks it is going to “save” money, it needs to perform an accurate analysis and assessment of the value of the system, the cost to maintain the system and the costs going forward. One would hope that this has already been done, but the City PR machine has not communicated the economics of the condemnation.

Boulder County Business Report

An Xcel representative did not immediately comment on the petition. Xcel sued the city in June, contending that Boulder illegally formed a light and power utility. Boulder has asked a judge to dismiss the lawsuit.

Boulder contends that the state Constitution gives cities authority to condemn property both inside and outside city limits to provide public power to residents and businesses. Property owners have the right to due process and just compensation for the taking of their property.  The city has conducted “good faith negotiations” with Xcel since January, but those negotiations have failed. If Xcel is willing, there are opportunities to discuss settlement during the condemnation process, according to the city.

In cases where the parties do not reach a negotiated settlement, a city may file a condemnation case in court. The 43-page condemnation petition filed by Boulder on Thursday seeks to acquire all or portions of nine substations that serve Boulder as well as a transmission loop serving the city, related facilities, equipment and lines.

Michigan Township Develops Without Eminent Domain

Posted in Michigan Eminent Domain, National Eminent Domain

Harrison Township envisions a bustling waterfront. At the same time, Township officials know that a Downtown Development Authority or some kind of other economic spur may be required. Yet, the officials assume that if people see the best use of their property to be a more intensive use than the present one, individuals will use common sense and redevelop.

One hopes the Township representatives are correct in their assumptions. Having a community spur redevelopment without eminent domain, all premised upon the highest and best use of a property, always makes the most sense.

Detroit Free Press

The proposed development would improve home values and bring in tax dollars that could be used for other services, he said.

But no plan is without concerns. Officials said residents mostly have focused on whether existing housing would be replaced. Santoro said the township wouldn’t rely on eminent domain to acquire land, though owners could look at whether there are better uses for their properties.

There has been at least one public meeting on the issue, with another planned in late summer or early fall, officials said.

Santoro said one idea that came up at a May meeting was developing a water ferry or taxi service that could shuttle people from the Harrison Township spot to other locales, such as New Baltimore, whose historic downtown near Anchor Bay is being revitalized with restaurants, shops, a bakery and yoga shelter, new parking, streetscape, benches, planters and transient docks that are bringing in more boaters.

A Thoughtful Commentary About Urban Disengagement

Posted in Michigan Eminent Domain, National Eminent Domain

Gideon Kanner, a Professor of Law Emeritus at Loyola Law School in Los Angeles, is probably the pre-eminent thinker on eminent domain and land use issues.

Gideon is a friend of mine, and one who frequently bashes our Detroit activities. Part of the reason is based upon the less than fun experience of being a freshman law student in Detroit. But he is outspoken and brilliant.

Gideon’s article, DETROIT AND THE DECLINE OF URBAN AMERICA, offers an interesting perspective about how our national policies worked to destroy to urban communities. The analysis provides exceptional reading.

Detroit and the Decline of Urban America

The Downside of Anti-Energy Measures

Posted in National Eminent Domain

The Colorado Springs Gazette was correct in opining concerns with anti-energy measures.  The opinion skews against a wealthy congressman who has a summer home near a proposed oil production site.  But the article also notes the dissenting Chief Justice of the Colorado Supreme Court properly understood that the ballot proposal may not be constitutional.  The proposal states that the acts will not be a taking of property and no just compensation is to be paid.  This creates an interesting prospective that if the property is taken, it may be argued that the Colorado Constitution offers no just compensation protection.  This results in a substantial enigma for the voter.  While one may want to limit energy production, it must also be understood that individuals have the right to energy production on their individual properties.

The Gazette

The proposals are backed by U.S. Rep. Jared Polis. The Boulder Democrat has sold multiple companies for hundreds of millions of dollars and ranks among the three richest members of Congress. The congressman’s support for more energy regulation began after he was bothered by temporary sights and sounds of middle-class oil and gas workers across the road from his Weld County vacation home.

The proposed amendments are an assault on the livelihoods of working-class Coloradans, businesses and other energy consumers. If successful, they would run thousands of high-wage jobs out of the state. But the pain wouldn’t stop with oil riggers. The loss of energy and gas production would ripple through all segments of the economy, possibly igniting a statewide recession.

In a dissenting opinion, Chief Justice Nancy Rice argued the measures would grant “expansive powers” to local governments that would eventually “surprise voters” by eroding private property rights.

She also said her colleagues were wrong to find the measures in compliance with the Colorado Constitution’s single subject rule. Each, she argued, vests “local governments with expansive authority to regulate oil and gas development.” Additionally, the chief justice argued, each partially divests “property owners of the right to just compensation for the taking of private property.” “The purposes of these two distinct subjects are not dependent upon or connected with each other. As such, the Proposed Initiatives violate the single subject rule,” she wrote.

Rice said the amendments “unfairly mislead voters” with titles that are inconsistent with subsequent texts.

Rice criticized several of the measures for declaring they are “not a taking of private property” and do not require the payment of “just compensation.”


Concerns of Value Will Not Affect Public Service Commissions

Posted in National Eminent Domain

The Illinois Commerce Commission’s decision granting Ameren Transmissions authority to acquire property through the eminent domain process is certainly not unexpected. The notion of individual owners with just compensation issues to be handled at the ICC simply will not work. Public Service Commissions are in place to determine whether a project is necessary under the administrative mandate provided by the Legislature.

The Illinois Commerce Commission has also previously approved eminent domain on properties along the route running east from Quincy and though Pike County. So far, no eminent domain requests appear to have been made for a route running south from Meredosia and east into Sangamon County — a route currently under challenge in appeals court.

The decision issued by the Illinois Commerce Commission states that one of the only landowners to appear at an evidentiary hearing on the eminent domain request was Aaron Stock, a farmer in Cass County.

Stock told the commission he did not accept the compensation offered for an easement because he felt his farm was not property assessed for its actual value. Part of this complaint stated the appraisal did not account for the fact that he grows a “premium crop that generates more revenue than typical farms growing standard commercial crops,” or that one of his parcels has drainage tiles installed.

He also said that land appraisers were not legally allowed to conduct land appraisals under state law. The commission concluded that these concerns were not valid and that Ameren Transmissions had reasonably pursued easements from landowners.