National Eminent Domain

National Eminent Domain

Eminent Domain and Condemnation

Mortgage Bailout – Taking or Regulation?

Posted in National Eminent Domain

Pershing Square’s initiation of an action against the United States government for the stripping of profits from Fannie Mae provides the issue of whether Fannie Mae and its sister entities are effectively government agencies or really for-profit corporations.

Those who invested in these companies thought they were buying something that did not exist.  If the government cannot regulate the funds of government controlled entities, what can investors expect?  At the same time, when investors buy into corporations, they take the risk that the corporation may not be profitable.  Here, the investors probably thought that the profitability was a “guarantee” because of the government’s involvement.

Today Online

“The net worth sweeps make plaintiffs – and all of the other common shareholders – ‘shareholders’ in name only,” according to the complaint, which three retirees who own Fannie Mae stock have joined as plaintiffs.

Pershing accused the government of violating the Fifth Amendment of the U.S. Constitution by taking private property for public use without just compensation. It seeks damages and other remedies.

The Treasury Department declined to comment. The Federal Housing Finance Agency, which is Fannie’s and Freddie’s conservator, did not immediately respond to a similar request.

Pershing’s lawsuit adds to public battles being waged by Ackman, including a bid with Valeant Pharmaceuticals International Inc for Botox maker Allergan Inc , and a campaign against nutrition company Herbalife Ltd , which he calls a pyramid scheme, a characterization the company denies.

A Promise Made, A Promise Never Made

Posted in National Eminent Domain

After reading the Columbus CEO article describing the recent Montgomery County Common Pleas decision, one would think that if the City promised that it would not condemn in the future, the promise would be binding.

To the contrary, when it comes to eminent domain, a negotiated promise not to acquire in the future does not necessarily prohibit later governmental administrations from seeking an acquisition through the condemnation process.

Columbus CEO

The company contends the city is improperly using eminent domain to reclaim the road, which would breach the terms of its agreement. The city has argued that it maintains the right-of-way, and merely wants to re-establish a public road.

Judge Michael Tucker ruled the city has not exercised eminent domain and the court cannot grant injunctions for hypothetical actions that have not taken place.

But Tucker noted the city did not forfeit its right to use eminent domain when it agreed to the easement, and eminent domain when properly exercised takes precedence over all private rights.

“The city’s execution of the easement was implicitly conditioned on its right to exercise the power of eminent domain, and (Dayton Office Properties’) … are presumed to have known and recognized as much,” he wrote.

The Railroad Commission Places Its Toe In The Water On Pipeline Permits

Posted in Uncategorized

The Railroad Commission of Texas is what most States call “Public Utility” or “Public Service Commissions”.  The regulation by the Railroad Commission is tantamount to absolute control of a use through the court system.

The question of whether a proper and necessary license with real issues raised is still festering in the Railroad Commission.  The Denbury decision has created certainty that the delegation is required.

The New York Times

The Railroad Commission of Texas — which regulates the state’s 426,000-mile network of natural gas, hazardous liquid and other pipelines — has offered rules aimed at clarifying when pipelines qualify as “common carriers,” a status indicating availability for public use and enabling companies to seize private land using eminent domain. The agency is accepting comments on the proposal until late August.

The proposal would require companies to submit documentation supporting a common carrier claim and give the commission 45 days to review an application. Currently, companies seeking common carrier status need only to mark a line on a permit application — an honor system that has spurred legal battles over eminent domain claims.

How To Sell Property To A Developer

Posted in National Eminent Domain

The real estate advisor for Fox Business provides an interesting question and answer about how one should try to sell a property to a party who seeking to assemble properties for a redevelopment.

The article currently maintains that trying to sell quickly and early to a developer is not necessarily the best way to proceed.

With a reversal of Poletown in Michigan, the proposition that one may sell for a “profit” to a developer is now available since developers can no longer see the local politician to acquire the land through the eminent domain process.

Fox Business

But do not — and I repeat — do not try selling directly to a developer/builder. These folks, when dealing directly with a property seller, will base their typically lowball offers on a “fair market value” determined by appraisers they hire, who are typically agenda-led cronies. Such offers will almost certainly not take into account the recent increase in land values that all this upscale multi-tenant development is creating.

Valuation of Mineral Rights In California

Posted in Uncategorized

In a well written article penned by Alexander Suarez of Nossaman LLP, a discussion of the valuation of mineral rights in California is presented.

Each State follows its own standards for the compensation of mineral rights taken.

The Federal government also has a standard.  The calculation is somewhat akin to the calculations by the Federal courts in the Temporary Takings Calculation of Damages article.

Central Ohio Inundated With Pipelines

Posted in National Eminent Domain

The fracking availability has made central Ohio a key area for pipeline construction.  The area is where almost everyone has to go to transport gas and oil from the new fracking areas to the refineries in Chicago, Detroit and Canada.  Todd Hill of The Mansfield Ohio News Journal has written a concise compilation of the pipelines.

Mansfield News Journal

For the past few years now, counties across north central Ohio have been waiting to see how the energy boom in the Marcellus and Utica shale gas plays to our east would impact this region.

Although the actual horizontal drilling, or fracking, has so far largely been limited to areas east of the Interstate 77 corridor, several pipelines slated to carry that natural gas to market are in the planning stages — and they will cross this area to get there.

Energy Transfer’s Rover pipeline will run from east to west across the middle of Ashland and Richland counties, then veer west-northwest through Crawford County. Meanwhile, TransCanada is planning to extend its ANR pipeline from southeastern Ohio north-northeast through Knox, Morrow and Crawford counties, while possibly crossing into Richland and Marion counties.

The specific routes the pipelines will follow have yet to be determined, although the Rover pipeline appears to be further along in making that determination, with surveyors in the field. And these two projects are probably just the tip of the iceberg.

“Another three in that corridor are being evaluated. All of them will basically start in western Pennsylvania and go through north central Ohio. You’re going to see a lot more development with pipelines,” Dale Arnold, director of energy policy for the Ohio Farm Bureau, said.

“With interstate, intrastate and other local utility infrastructure, we’re looking at 38,000 miles of new pipelines between now and the middle of the next decade. Farmers could be approached on any of these projects.”

Michigan State Extension Article Misses The Mark

Posted in National Eminent Domain

Recent Michigan State Extension articles have discussed the Michigan Crude Oil and Petroleum Act amendments.  To date, the articles have been informative and much appreciated.

The most recent article is something closer to a dream. Clearly, owners desire to have the pipelines go along the edge of the property or in the farm road.  However, the notion that an owner can talk to a utility once the utility has its permit falls far from the mark.  Utilities will do what they want, when they want once they receive Public Service Commission permits to acquire through eminent domain.

Michigan State University Extension

As with other contract offers, negotiation of some of the terms and conditions is possible. Right of way width, need for and payment rate for temporary work space and route location modification are but just a few of the terms and conditions that should be considered. For example, many landowners prefer a pipeline along the edge of the property or down an existing farm road. Even though a project may have eminent domain authority, it does not preclude suggestions from the landowner to make these types of modifications. Michigan State University Extension created the document Right of Way Information for Landowners that discusses the right of way process.

Why The Montana PSC Intervened

Posted in National Eminent Domain

Public Service Commissions are generally granted the authority to control the regulation of public utilities within the respective State jurisdictions.  Appropriately, the Montana Public Service Commission intervened in the City of Missoula’s attempt to acquire its privately owned water company.

The action is best presented with PSC engagement.

This standard of review and involvement applies to all of the different regulatory commissions, from the PSC to the Surface Transportation Board.  The boards are arguably the best decision makers.

Earlier this month, the Montana Public Service Commission voted unanimously to protect its jurisdictional authority and intervene in the city of Missoula’s attempt to condemn the privately held Mountain Water Company through eminent domain. Contrary to certain reports, this action was taken after being publicly noticed the week before our regularly scheduled work session.

This attempt to intervene is not a presupposition on the merits of the case, but rather an effort to assert our jurisdictional right to oversee any transfer of Mountain Water, which is currently regulated by the Public Service Commission. Our motion would merely allow the PSC to have a seat at the table as these important issues are being addressed by the court.

Up until very recently, PSC oversight concerning any transfer of Mountain Water was something that the city of Missoula’s attorney and mayor actually desired and requested. In fact, when the Carlyle Group purchased the water utility three years ago, Mayor John Engen and City Attorney Jim Nugent insisted that any future transfer would have to be approved by the Public Service Commission. When the PSC approved that sale, the city’s request was included in the final order. Their abrupt reversal of position is a case of coincidental timing to say the least.

Rails to Trails Litigation Meeting

Posted in National Eminent Domain

A Kansas City lawyer working for a Washington based law firm is holding a public meeting in West Michigan, seeking out potential clients maintaining properties adjacent to the areas now being converted from railroad easements to trails.  Many of the cases have little value.  Many other ones are substantial.

Having a lawyer from out-of-state come in to talk to a group generally bodes ill for property owners.  However, in this specific instance, the cases will be filed in the United States Court of Federal Claims, a specialized court designed to protect property owners from the loss of their interests created by Federal activity.  The lawyer, Thor Hearne is simply an outstanding attorney who is well suited to representation of those being acquired for trails.

The meeting is supposed to help residents decide whether they should join the lawsuit.

The lawsuit centers on railways converted into recreational trails, or “rail trails.” Hearne said that government easements of private property are no longer valid once the railroad goes away.

“The value of the property in some cases can be very significant,” he said.

According to a release from the firm, landowners are arguing “the creation of a new easement for a railroad corridor by the Mid-Michigan Railroad and the Michigan Department of Natural Resources is a taking of property for which the Fifth Amendment requires the United States to pay ‘just compensation.’”

Hearne said that the case is different than a class action lawsuit in that landowners need to make their claims ahead of time in order to collect.

“Each owner has to decide to participate,” he said.

Alexandria Boat Club Settles Up

Posted in National Eminent Domain

The historic Old Dominion Boat Club of Alexandria, Virginia, has finally settled with the City.  This dispute has been ongoing for over five years.

The last paragraph of the article is so interesting because it talks about the Club’s plans for special use permits and historical architectural board approvals.  Underlying the settlement process is likely a specific agreement that the Club will receive the necessary permits.

The Washington Post

Public opinion on the city’s plan has been divided, with residents at a hearing last year speaking on both sides of the issue.

The club hopes to have special use permits and historic architectural board approvals completed by early spring, in order to start rebuilding the dilapidated Beachcombers building into its new club house by early next summer. The club has up to five years from now to vacate its current property, Banchoff said, but “once we get a certificate of occupancy,” it will move.