National Eminent Domain Blog : Eminent Domain Lawyer & Attorney : Ackerman Ackerman & Dynkowski : Michigan and Washington, DC

TriCities

Every month, a bank in Roanoke receives checks for thousands of dollars belonging to people who might never cash them.

The checks are royalty payments for people whose mineral rights the state of Virginia has leased – against their will or without their knowledge – to private energy corporations. These payments represent the financial crumbs of natural gas production in Southwest Virginia – a multibillion-dollar industry that in 2008 produced enough gas every second to heat the average home for 16 days.

But instead of reaching the pockets of mineral owners, the money is funneled into an opaque state-run escrow fund, where it has accumulated with scant oversight for nearly 20 years. As of October, the fund held more than $24 million – and that isn’t everything it should hold.

The outstanding research done by Daniel Gilbert illustrates the problem of having quickie state legislation of major decisions.  Here, people have lost the valuable property interest, in their mineral rights below the ground.  This benefits private entities without the least real or full obligation.  Further, the opportunity to expect and calculate the correct amount of mineral rights removed was not even taken into consideration.

But for the too speedy legislation of the state house, placing basic rights of the individuals in a quasi-judicial process, this never would have happened.  There are all sorts of issues as to whether there was knowledge or lack of knowledge in the owners, potentially barring them from the opportunity to be fully compensated because of unconstitutional public policy decisions.  This will likely receive recompense by the judiciary.

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TriCities

On today’s front page, we launched an ambitious and complex eight-day series that involves millions of dollars and affects thousands of Southwest Virginia property owners. Between unmasking other forms of malfeasance, corruption and outrage, investigative reporter Daniel Gilbert has spent portions of 13 months – so far – delving into an issue that affects many thousands of residents and absentee landowners from across the country. Nearly 20 years ago, gas corporations and the commonwealth of Virginia figured out that below the surface of seven Southwest Virginia counties lies vaporous gold – pools of methane gas worth billions of dollars. The legislature crafted a law that allows these companies to extract the gas without the knowledge or consent of private property owners – a subterranean form of eminent domain. Those companies are getting rich. The moms and pops who own the land are getting screwed. That’s because the state created a system whereby coal companies, who were deeded the coal a century ago by landowners, are fighting with those landowners’ heirs over a paltry portion of the gas royalties.

Closely akin to the gas storage field cases is the issue of gas removal.  Daniel Gilbert, of the Bristol Herald Courier, outlined in the first of an 8 day series of articles, the outrageous conduct by which a legislative body has enabled producers to divest many Southwest, Va property owners of their valuable rights.  This series is described by J. Todd Foster, editor of the Bristol Herald Courier in the editorial.

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LoHud.com

PORT CHESTER - The village apologized to a property owner today for improperly seizing his land a decade ago and officially signed an agreement that will pay him $475,002 and name a street after him.

"The village acknowledges the importance of this litigation and regrets the hardship it has caused Mr. Brody for the years he has had to fight to vindicate his rights," Mayor Dennis Pilla read from a statement at Village Hall.

The public apology was part of a settlement that will give William Brody $475,002 and name the corner of North Main Street and East William Street "William Brody Plaza."

"I'm glad everything came to a close," Brody said after the news conference.

Dana Berliner, his attorney with the Institute for Justice, acknowledged that the terms of the agreement were unusual, but noted that Brody's case led to a landmark change in state eminent-domain law.

This recent, Lower Hudson Journal News, article hits on something that places similar to Freeport, Texas should look at; a simple apology by a condemning agency for taking away an individual’s right to maintain and own property.

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GJ Sentinel

The Colorado Court of Appeals is considering a lawsuit questioning whether the state owns mineral rights beneath land it condemned for construction of Interstate 70 east of Rifle.

Gypsum Ranch Co. LLC appealed the case after Ninth Judicial District Judge James Boyd issued a summary judgment in January in favor of the Colorado Department of Transportation.

At issue are leases for oil and gas beneath about 70 acres the state acquired from Agnes Hunt. Although the state took over the land in 1975 through condemnation, it took more than a decade for the state and Hunt to reach a settlement over fair payment for the property. The state paid $110,000.

Gypsum Ranch contends that when it later bought the Hunt estate, it became owner of the mineral rights beneath the condemned right of way. It maintains that eminent domain includes only the subsurface estate needed for support of highway features built on the right of way.

Gypsum Ranch also has sued Antero Resources, which has been drilling for natural gas between Silt and Rifle. Antero land man Bill Pierini previously has said the company executed leases with both Gypsum Ranch and CDOT, to ensure it didn’t proceed with drilling only to find out later it didn’t have a proper lease. Antero suspends lease payments in such cases until the dispute is resolved.

Pierini said that as a general rule, CDOT doesn’t own the mineral rights beneath the highway where Antero is drilling.

However, Boyd wrote in his judgment that CDOT employees said in affidavits that the agency commonly obtained both surface and mineral estates in the 1970s and 1980s, except where prior owners expressly reserved the mineral estates.

Boyd found that nothing in the Hunt condemnation order or record of proceedings distinguished between the surface and mineral estate.

More recently, mineral rights have received more careful attention and become far more valuable in western Garfield County, thanks to the arrival of widespread natural gas development.

The Hunt condemnation proceedings included a substantial dispute over the value of gravel deposits, and Hunt’s contention that they must be considered as part of the condemnation, Boyd wrote. Those deposits are part of the mineral estate, he wrote.

Each State has an individual statutory framework dealing with ownership rights retained by the condemnee when property is taken for right of way. It may be argued that the mineral rights are not needed for the right of way, therefore they are retained by the owner losing surface rights for the roadway. Therefore, most States maintain a statutory framework delineating what is being take and what, if anything, is being retained.

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Weekly Almanac, Editorial

Some Wayne County landowners, particularly in the northern part of the county, have the opportunity to make royalties off their land by singing leases with natural gas companies that have been looking to acquire drilling rights here. Residents have been advised to find out as much as possible about the process before signing anything.

The companies’ interests will take precedence over the interests of the landowners.

Landowners were advised to join together, pool their acreage and hire a lawyer or agent to negotiate for them as a group.

-This editorial is one of the brightest and well written editorials that could be provided to the owners. The editorial realistically advises owners that they should look to what rights they have and pool their acreage. In most States, there is a State statute which allows pooling, thereby allowing the individual owners to maximize their values.  This will likely result in the highest possible royalty percentage.

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