January 13, 2015
Nebraska Supreme Court Rules (or Maybe Not) on the Validity of the TransCanada XL Pipeline Route Approval Through Nebraska -- By William G. Blake
Probably no appeal to the Nebraska Supreme Court has been watched more closely by more people than the challenge to the statutory routing process for the proposed TransCanada XL Pipeline.
On January 9, 2015, the Nebraska Supreme Court issued its decision, or lack thereof, in a sixty-four page opinion. By state constitution, the Nebraska Public Service Commission has plenary power over all common carriers. However, the Legislature adopted a process in 2012 to specifically address the route of the proposed XL Pipeline through Nebraska. The Legislature allowed the Governor, after input from the Nebraska Department of Environmental Quality, to approve the route. The proposed route was studied and the Governor issued approval. A group of citizens then challenged the process, claiming that approval was unconstitutionally taken away from the Public Service Commission and delegated to the Governor. They made their challenge on the basis of their standing as taxpayer citizens, claiming the approval process was an unlawful expenditure of public funds. Their standing was challenged, but the trial court found they had standing as taxpayers, that the XL Pipeline would be a common carrier, and that the statutory approval process was unconstitutional. The decision was immediately appealed to the Nebraska Supreme Court. The Court's hearing process was expedited, but many weeks went by without a decision being issued. We now know the reason for the delay. Unfortunately, we learn little else from the decision. It raises more substantive and procedural questions than it answers, exhibiting an unprecedented amount of acrimony among our Nebraska Supreme Court Judges.
Pursuant to the Nebraska Constitution, a statutory enactment cannot be declared unconstitutional without five of our seven judges so ruling. However, in the challenge to the XL routing process, four of the judges agreed that the plaintiffs had standing and that the courts therefore had jurisdiction to hear the case. The four also agreed that the statutory approval process was unconstitutional. However, the other three judges dissented on the question of standing and refused to address the merits of the case. While no judge stated a vote in favor of the constitutionality of the process, the four member majority was not enough to declare the process unconstitutional. Therefore, the legislation and the proposed route of the pipeline through Nebraska would appear to be approved by default. The three member dissent accused the other four members of reaching an absurd result, but the four members were quite clear that they thought the dissenting members had shirked their judicial duty and forced an absurd result. The two camps could not even agree on whether to refer to the four members as a majority or a plurality.
For condemnation lawyers, the most important part of the opinion is that the four members fairly clearly ruled that eminent domain cannot be exercised by just any company that owns a pipeline. Prior case law in Nebraska, as well as our statute authorizing eminent domain for pipelines, had made it appear that privately owned pipeline companies could exercise eminent domain for private use pipelines, and in fact case law had approved condemnation proceedings for such pipelines. However, the court carefully considered the history of pipeline regulation in the state and recognized that the prior decisions allowing private pipeline companies to exercise the power had been issued at a time when it was thought that the federal government had preempted state regulation of interstate pipelines. The court, referring to a prior opinion, stated that:
"[the] argument that a private carrier could exercise the right of eminent domain in this state for a non-public purpose....is simply wrong....[T]he reason common carriers can exercise the right of eminent domain lies in their quasi-public vocation of transporting passengers or commodities for others. A citizen's property may not be taken against his or her will, except through the sovereign powers of taxation and eminent domain, both of which must be for a public purpose. Eminent domain is the State's inherent power to take property for a public use." (Court's italics).
The court then clarified what is meant by the term "common carrier", finding assistance from Texas case law and stating that statutes authorizing use of eminent domain power by common carriers do not include the owner of a pipeline built for that owner's exclusive use. "Under the Nebraska Constitution's limitation on the power of eminent domain, pipeline carriers can take private property only for a public use. That minimally means that a pipeline carrier must be providing a public service by offering to transport the commodities of others, who could use its service, even if they are limited in number."
The Court did not appear to be comfortable with the conclusion that the XL Pipeline would be a common carrier, but the district court had so concluded, and the parties did not contest the issue.
Given the rather perplexing result and the nature of the matter, this will likely not be the end of the litigation. News services were quick to declare Nebraska's approval of the XL, and proponents urged Congress and/or the President to do the same. However, opponents were just as fast in arguing that they are not ready to give up. TransCanada still needs easements through more than 100 properties in Nebraska, and must file condemnation before its routing permit expires. The permit will expire on January 22, 2015. Any effort to condemn can be expected to be challenged by somebody who has standing as a property owner in the path of the proposed route. Would such challenge gain the fifth court vote to declare the siting unconstitutional? Can the Governor extend the siting permit to avoid the two-year window of opportunity? How will this affect the political battle in Washington, D.C. over Federal approval of the pipeline?
As Yogi said: "It ain't over 'til it's over."
William G. Blake
Baylor, Evnen Law Firm
 Thompson v Heineman, 289 Neb. 798 (2015) https://supremecourt.nebraska.gov
 Nebraska Constitution, Article IV, Section 20.
 Nebraska Unicameral, L.B. 1161 (2012).
 City of Bayard v North Central Gas Co., 164 Neb. 819, 83 N.W.2d 861 (1957).
 Thompson v Heineman, at 843.
 Id. at 845.
April 30, 2014
The Saga of the Keystone Pipelines in Nebraska: Unconstitutional Regulation, and Lessons on How to Acquire Property and How Not to Acquire Property -- By William G. Blake
Members of Owner's Counsel of America, who regularly represent property owners in condemnation situations, tend to be naturally very protective of private property rights. We enjoy events that shed light on this dark corner of the law, especially when they help to shape public opinion in favor of property rights. A recent Keystone XL decision by a Lincoln Nebraska trial judge is being cast in that mold, but in the process, the decision is being greatly and widely misunderstood, and the practical lessons for lawyers are being ignored. It is not an eminent domain case and it is not a property rights case. Eminent domain is only a side effect, and really not much of a side effect. The driving issue in the case has always been how to regulate pipelines to protect the environment. Is the XL pipeline going to be dependably safe enough to let it go through the fragile Nebraska Sandhills and over the Ogallala Aquifer? Of course, the coalition of XL opponents includes those who are opposed to any pipeline anywhere that carries any petroleum product, as well as those who oppose allowing any private entity to use the power of eminent domain, particularly a foreign entity. The latter is likely the reason for the widespread misunderstanding of the litigation.
The original Keystone pipeline was constructed through eastern Nebraska in 2008, following a relatively short period of informational meetings and negotiations. There was little time for opposition to the Keystone project to organize and the opposition was quickly crushed when a representative of the Department of State announced at an informational meeting that the President wanted the Keystone pipeline built. The pipeline was an international project, so the permitting process ran through the State Department. There was no oversight of the routing of such pipelines in Nebraska, and the Nebraska statutes at the time simply stated that any person or company organized for the purpose of conveying petroleum products through the state of Nebraska could acquire right of way for a pipeline by use of eminent domain.
The Keystone project resulted in very little actual use of eminent domain, but of course the threat was always present. TransCanada commenced negotiations with property owners by asking for signatures on an easement document that should have been summarily rejected by every property owner. Hopefully, those owners who signed quickly in order to receive TransCanada's generous compensation and crop damage payments will not someday be sorry for their cooperation. The initial document included the right to construct undisclosed above ground appurtenances and an unspecified number of additional pipelines. TransCanada would be responsible for the 'commercially reasonable' costs of cleanup following a leak and the location of the pipeline(s) on a property could be moved without additional compensation. The contractor would have an unlimited right of access across the property.
Many owners wisely recognized that the terms of the easement were even more important than the dollars. By joining forces and negotiating as a group, they were able to settle on an easement agreement that could work for both sides. TransCanada was receptive to property owners' concerns and was quick to make accommodations to meet those concerns. TransCanada did not quibble over crop damage or cost to cure, and didn't look for sales that could justify low land values. A few negotiators for TransCanada resorted to somewhat unethical tactics and false statements, but those negotiators were quickly pulled from the project.
The Keystone pipeline route was through eastern Nebraska, missing the Sandhills region. Before the Keystone trench was opened, TransCanada announced the Keystone XL and its proposed route through the Nebraska Sandhills. The Sandhills region is a rich and beautiful grassland of 20,000 square miles, a perfect but fragile habitat for cattle and an abundance of wildlife. It is an almost endless sea of rolling hills with few or no trees and enchanting river valleys. The sandy hills, up to four hundred feet in height, sit on the heart of the vast Ogallala aquifer, which contains one billion acre feet of water, and runs through the Great Plains from South Dakota to Texas.
Nebraskans started asking for regulation and say in the routing process. The cry for state oversight was greatly enhanced when TransCanada began issuing letters threatening property owners with condemnation if they did not sign an easement within thirty days. Of course, at the time, TransCanada did not have approval from the Department of State, and Nebraska law requires a Petition to Condemn filed in county court to state that all required approvals have been obtained. When confronted with this requirement, TransCanada asserted that it did not apply, but no plausible explanation was given. TransCanada merely backed away from its threat, only to reissue it a few months later and to then back away again. The threat achieved the opposite of what TransCanada hoped for. The Nebraska farmers and ranchers who inhabit the area are not easily intimated. Opposition solidified and received help from the Nebraska Legislature.
The issue our legislature (the Unicameral) dealt with was whether to regulate the routing of pipelines through our state, and if so, how should it be done. There was some discussion of whether a foreign pipeline should have eminent domain authority, but that issue gained little traction with the Nebraska lawmakers. Interstate commerce and Federal supremacy quickly posed a problem. The Unicameral passed the Major Oil Pipeline Siting Act in 2011, requiring major pipelines to apply for approval to the Nebraska Public Service Commission, a five member elected body with authority to regulate common carriers. The Commission's authority is granted in the Nebraska Constitution. Right of way could not be acquired by eminent domain unless the Commission granted approval of the pipeline. The Act specifically did not relate to safety, but only routing. The Act also did not apply to any pipeline for which an application had already been submitted to the Department of State, which meant that it did not apply to the catalyst XL pipeline.
When the President announced the route through the Sandhills was rejected, rerouting and the regulatory process immediately became the hot topic of the day. No longer was there a pending application exempting the XL from the regulatory process, and a new application would need to be filed for a new route, subjecting TransCanada to the Public Service Commission process. TransCanada had lost a battle but was far from defeated. New routes were already considered and the two sides undertook massive advertising campaigns. Every politician was either for energy independence and an increased tax base, or for protecting the environment.
Another new regulatory process was quickly added by the Unicameral in 2012, ordering major pipeline routes to be studied by the Nebraska Department of Environmental Quality, with authority to approve or reject the route given to the Governor. If the Governor rejected the proposed route, then the pipeline company could apply to the Public Service Commission. Again, eliminating eminent domain authority was briefly discussed, but it was never a serious issue.
When the reroute around the eastern edge of the Sandhills was approved by the Governor, several affected landowners filed suit to have the new regulatory process declared to violate the Nebraska Constitution and to therefore be unlawful. Pipeline opponents continued to cry for an end to the seizure of American land by foreign corporations and called for a profit-sharing measure of just compensation when the condemning authority is a private corporation, these issues were not involved in the litigation. The controlling issue in the litigation has been whether TransCanada will build the XL pipeline as a 'common carrier'. If so, any state regulatory effort regarding the route (not whether it can be built) through the State of Nebraska must be either directly by the Unicameral or by our Public Service Commission. It is not clear whether a pipeline that just goes through Nebraska and does not pick up or deliver any product in Nebraska is a "common carrier", and it was not clear at the outset whether the XL would pick up any petroleum product in Nebraska. The opinion by the trial judge was a carefully written effort (50 pages and almost 250 footnotes) to simply say that the XL pipeline will be a common carrier under the meaning of the Nebraska Constitution.
The appeal to the Nebraska Court of Appeals was filed immediately and was almost immediately moved to the Nebraska Supreme Court's advanced docket. In the meantime, there is another set of statutes allowing the matter to go to the Public Service Commission, but there has been no evidence of an effort in that direction. The offending statutes do not give TransCanada the power to condemn, and the alternative regulatory scheme does not grant that power. It has been there all along. The final effect of the ruling in the litigation could be that the process will now have to go through the Public Service Commission under the original 2011 Act, but that is only one possibility. All foreseeable outcomes of the litigation will leave the power of eminent domain in place.
This author has handled the negotiations with TransCanada on behalf of over fifty clients for the two Keystone projects, and the concerns of the owners have always been primarily routing, safety, permanent property damage, temporary inconvenience, and money, usually in that order. At the time of this article, easements have been signed and the money paid for far more than a majority of the route through Nebraska, and TransCanada is still actively negotiating for the remainder of the route. This is after the Company has already lost millions on one route that it was required to abandon.
The recent litigation might have some small effect on public awareness and opinion regarding the questions of who should have the power of eminent domain, and when the entity is a profit centered corporation, should 'just compensation' be measured by something other than fair market value, but the issues in that litigation will likely remain focused on the regulatory process regarding siting. The advertising campaigns will no doubt continue full throttle and the politicians will continue to support either the economy or the environment. TransCanada will likely continue to attempt to obtain one-sided, almost unconscionable easements and will seem a little bewildered when confronted by well informed property owners and organized opposition.
Baylor Evnen Law Firm
1. See Order dated February 19, 2014, Thompson v Heineman, District Court of Lancaster County, Nebraska, No. 12-2060 (2012).
2. See Executive Order 13337, 65 Fed. Reg. 25299 (Ap. 30, 2004).
3. Neb. Rev. Stat.§57-1101 (Reissue, 2010).
4. Neb. Rev. Stat.§76-704.01 (Reissue, 2009).
5. L.B. 1, 102nd Legislature, 1st Special Session (Neb. 2011).
6. Nebraska Constitution, Art. IV §20.
7. White House Press Release, January 18, 2012.
8. L.B. 1161, 102nd Legislature, 2nd Session (Neb. 2012), codified at Neb. Rev. Stat. §57-1501, et. seq. (2012 Cum. Supp.).
9. See, Thompson v Heineman, Lancaster County, Nebraska District Court, Case No. 12-2060 (2012).
10. Nebraska Constitution, Art.IV §20.
11. Thompson v. Heineman, Appeal No. 14-158, Nebraska Supreme Court.
12. Neb. Rev. Stat. §57-1401, et. seq. (2012 Cum. Supp.), as adopted by L.B. 1, 102nd Legislature, 1st Special Session (Neb. 2011).
13. Neb. Rev. Stat. §57-1101 (Reissue 2010).
14. Verified by the author on February 27, 2014 in conversation with one of TransCanada's right-of-way agents.
Property Rights Attorney Michael Berger To Receive the 2014 Brigham-Kanner Property Rights Prize
April 14, 2014 -- William & Mary Law School and the William & Mary Property Rights Project announced that appellate and property rights lawyer, scholar, and teacher Michael M. Berger will receive the 2014 Brigham-Kanner Property Rights Prize October 30-31, 2014 at the 11th Annual Brigham-Kanner Property Rights Conference in Williamsburg, Virginia.
The Brigham-Kanner Property Rights Conference is sponsored by the William & Mary Property Rights Project which seeks to promote the exchange of ideas between scholars and members of the property rights bar through lectures, this annual conference and the Brigham-Kanner Conference Journal. The Conference is named in recognition of the lifetime contributions of Toby Prince Brigham, Florida attorney, and Gideon Kanner, appellate attorney and professor of law emeritus at Loyola Law School.
Each year the Property Rights Project presents the Brigham-Kanner Property Rights Prize to an individual whose work affirms that property rights are fundamental to protecting and preserving individual liberty. Mike Berger is the first practicing lawyer to receive the prize.
Berger is a partner with Manatt, Phelps & Phillips, LLP in Los Angeles and is co-chair of Manatt's Appellate Practice Group. He is not only one of the country's preeminent appellate lawyers, but also one of the nation's top condemnation and land use attorneys. Mike has argued before numerous appellate courts, including throughout California, the federal courts of appeal, other state supreme courts and the United States Supreme Court. He has appeared as counsel of record arguing on behalf of property owners before the U.S. Supreme Court on four occasions in these well-known property rights cases: Tahoe-Sierra Preservation Council v. Tahoe Regional Planning Agency (2002), City of Monterey v. Del Monte Dunes at Monterey, Ltd. (1999), Preseault v. ICC (1990) and First English Evangelical Lutheran Church v. County of Los Angeles (1987).
In addition to his many scholarly publications on takings and property rights, Mike has authored amicus briefs in some of the landmark property rights cases of our time, including Kelo v. City of New London (2005), Lingle v. Chevron USA, Inc. (2005), San Remo Hotel v. City & County of San Francisco, 545 U.S. 323 (2005), Lucas v. South Carolina Coastal Council (1992) and Nollan v. California Coastal Commission (1987).
For information about the conference and how to participate, please contact the William & Mary Property Rights Project at firstname.lastname@example.org or call (757) 221-3796.
Amici Brief Filed With U.S. Supreme Court Seeks to Block the Government's Efforts to Derail Rails-to-Trails Takings Cases
November 21, 2013 -- The Owners' Counsel of America and National Federation of Independent Business (NFIB) Small Business Legal Center have jointly filed an amici curiae brief in support of the landowner in Brandt v. United States, No. 12-1173 (cert. granted October 1, 2013) urging the United States Supreme Court to reverse a Tenth Circuit Court of Appeals decision which held that the United States retained an implied reversionary interest in railroad rights of way.
This case involves the conversion of an abandoned railway line transgressing private property to a public recreational trail under the National Trails System Act, 16 U.S.C. § 1241. The Brandt family property in Albany County, Wyoming is bisected by a railroad right of way granted under the General Railroad Right-of-Way Act of 1875 ("1875 Act"), 43 U.S.C. §§ 934-939. The railroad abandoned the easement in 2003. In 2005 under the National Trails System Act, the U.S. Forest Service issued a notice of intent to convert the abandoned railway crossing the Brandt property into a national trail.
The United States then sought to acquire ownership of the land underlying the railway easement by filing a complaint for declaratory judgment of abandonment and quiet title to the right of way (D.Wyo., No. 06cv184) asserting that it owns the land beneath the easement. In United States v. Brandt, 2012 WL 3935613 (C.A.10 (Wyo.)), the Tenth Circuit, held that the U.S. retained an implied reversionary interest in the right of way and acquired ownership of the underlying land upon abandonment by the railroad. The Tenth Circuit acknowledged a "circuit split" in its opinion, noting a divergence from decisions in the Seventh Circuit, Federal Circuit and Court of Federal Claims which held that the United States did not hold a reversionary interest in railroad right of way when parcels of land had been conveyed by the Federal Government to private owners by land grant.
"Over the last decade, the government has unsuccessfully argued a number of legal theories in rails-to-trails takings cases in both the Federal Circuit and Court of Federal Claims," explained Robert H. Thomas. Thomas, a Director with Damon Key Leong Kupchak Hastert in Honolulu and the Hawaii attorney-member of OCA, prepared the brief on behalf of OCA and the NFIB Legal Center. "The Government's position in this case appears to be a new strategy that is nothing more than a backdoor way to avoid paying just compensation in takings cases that it keeps losing."
The brief filed by OCA and the NFIB Legal Center makes two distinct points. First, if the Tenth Circuit's decision is accepted and applied nationwide as the Federal Government has urged in its brief in the case, an entire class of takings claims will be eliminated. Second, the Supreme Court's decision in Great Northern Ry. Co. v. United States, 315 U.S. 262 (1942) is supported by the common law definition of right of way prevailing at the time of the 1875 Act. In Great Northern, the Court held that railroad rights of way granted by Congress under the 1875 Act are easements for the limited purpose of railroad use. In the absence of an express indication by Congress of contrary intent, statutory terms used by Congress should be interpreted as having the meaning commonly assigned to them at the time.
"This case presents the Court with the opportunity to provide definitive guidance that terms in a federal statute that are not expressly defined by Congress, but which have a commonly understood meaning, are not wholly malleable," said Thomas. "If the Tenth Circuit's decision is allowed to stand, the Government's strategy to redefine the property rights of landowners owning land subject to the 1875 Act will become the law of the land, wiping out an entire class of takings claims without justification."
Owners' Counsel of America and the NFIB Legal Center request the Supreme Court reverse the Tenth Circuit's decision and find that railroad rights of way under the 1875 Act are easements that become extinguished upon abandonment entitling the reversionary landowners to continue pursuing claims for just compensation when their private property is taken for public use.
"We are pleased that the Court has agreed to review this extremely important property rights case, the result of which may affect thousands of property and business owners nationwide," said Luke A. Wake, an attorney with the NFIB Legal Center. "If the Government can redefine the common law meaning of 'right of way' in this case, landowners across the country will lose their constitutional guarantee to just compensation under the Fifth Amendment."
About The NFIB Small Business Legal Center:
The NFIB Small Business Legal Center is a 501(c)(3) organization created to protect the rights of America's small business owners by providing advisory material on legal issues and by ensuring that the voice of small business is heard in the nation's courts. The National Federation of Independent Business is the nation's leading small business association, with offices in Washington, D.C. and all 50 state capitals. Visit www.NFIB.com for more information.
Missouri Supreme Court Unanimously Upholds $2.1 Million Eminent Domain Judgment for Property Owned by Family for 106 Years
September 12, 2013 -- Yesterday, in St. Louis Cnty v River Bend Estates Homeowners' Ass'n, No. SC92470 (Sep. 10, 2013), the Missouri Supreme Court unanimously upheld the constitutionality of Missouri's Heritage Value Statute,§§ 523.001(2) and 523.061 RSMo, that awards certain property owners a 50% increase over the fair market value of their property when the property is taken by eminent domain.
"This is an important day for property owners in the State of Missouri," said Robert Denlow, the attorney for the property owners and the Missouri Owners' Counsel of America representive. "In 2006, the Missouri Legislature reacted against the infamous Kelo decision by protecting owners that have held on to their property for at least 50 years. The [Missouri] Supreme Court today backed the Legislature's protection for property owners."
This case arose from a jury trial held in St. Louis County in December 2011 that resulted in a judgment awarding the Novel family $2.1 million as damages for the taking of their property through eminent domain. The Novel family had owned their 15 acres of land on the eastern edge of Chesterfield since it was purchased by the family patriarch, Arthur Novel, in 1904. The property served as the family home and farm until Mr. Novel passed away in the late 1960's and has remained under the family's ownership.
St. Louis County acquired the property using its power of eminent domain for the purpose of constructing a portion of the Highway 141 extension known as the "Page-Olive Connector." After negotiations with the owners failed, the County initiated condemnation proceedings and took possession of the property in March 2010.
At the trial, the County presented a range of evidence that the property was worth from $208,000 to $238,000. The County contended that the property's value was due to the fact that most of it was located in a flood plain, contained wetlands and access issues. The property owners asked the jury to value the property at $1.3 million based upon a history of development in the area that overcame similar flood plain issues. On December 15, 2011, the jury returned its verdict valuing the property at $1.3 million.
Following the jury trial, the property owners requested the trial judge to award them "heritage value" for the property. Heritage Value was established by the Missouri Legislature in 2006. It awards an additional 50% in condemnation cases when the property has been owned by the same family for over 50 years. In this case, the amount of heritage value amounted to $650,000. The owners also asked the court to award them interest of over $150,000 for the time that had lapsed between the physical taking of their property in March of 2010 and the trial in December 2011. The court granted the owners' requests, and entered judgment for the jury verdict of $1.3 million plus $650,000 heritage value and $150,000 in interest for a verdict totaling $2.1 million.
"The jury saw through the issues to award what was fair in this case. It was one of the more difficult condemnation trials, because we had to educate the jury to almost make them experts in flood plain issues and to explain the process of taking raw land and turning it into developable property," explained Denlow after the trial. "The family who owned the property never intended to sell it and simply wanted to hold it as a tribute to their grandfather. They understood that progress required that the County needed their property, and they never fought that. They merely wanted a fair price. Thankfully, the jury did its part to ensure that the Novel family will receive just compensation as required by the Constitution."
The County appealed the jury verdict to the Missouri Supreme Court claiming the trial court committed errors in ruling on certain evidence and that the Heritage Value Statute violated various provisions of the Missouri Constitution. The Supreme Court rejected the County's appeal issuing an opinion September 10, 2013. The decision by the Supreme Court was unanimous, though Judge Wilson did not participate as he was not yet on the Court when the appeal was argued in November 2012.
Owners' Counsel of America Files Amicus Brief in Support of Georgia Landowner in Eminent Domain Case on Appeal to the Supreme Court of Georgia
September 3, 2013 -- The Owners' Counsel of America has filed an amicus curiae brief in support of the landowner in Dillard Land Investments, LLC v. Fulton County, Georgia (No. S13C1582) urging the Supreme Court of the State of Georgia to grant certiorari review and correct the decision by the Georgia Court of Appeals, which permits an improper use of eminent domain power and is grossly unfair to Georgia landowners. OCA believes there are important considerations regarding policy and equity in condemnation proceedings which stand to have serious adverse effects upon the rights of Georgia's private property owners.
This case involves the taking of private property by the County of Fulton under Georgia's special master method for condemnation proceedings pursuant to O.C.G.A. § 22-2-2. Under this method, a special master is appointed to hear testimony relating to the value of the property taken by eminent domain and determines the amount of just compensation to award a property owner for the property acquired.
In the Dillard case, the special master filed an award with the trial court which then entered a judgment adopting the award. Fulton County filed a voluntary dismissal of the condemnation petition two days after the entry of the judgment. Dillard responded with an emergency motion to vacate and set aside the voluntary dismissal, which the trial court granted. On interlocutory appeal by Fulton County, the appellate court reversed the trial court's order setting aside the voluntarily dismissal. If allowed to stand, the appellate court's decision will permit Fulton County and any other condemning authority in Georgia to unilaterally dismiss a condemnation action after the entry of an award of just compensation and to refile the condemnation at a later date in hopes of obtaining a more favorable result.
Charles L. Ruffin, shareholder in the Atlanta and Macon offices of Baker, Donelson, Bearman, Caldwell & Berkowitz, PC and the Georgia representative of the Owners' Counsel of America, prepared and filed the brief on behalf of OCA. "Uncertainty as to whether property will be condemned negatively affects a property's marketability and an owner's ability to confidently invest in that property or comfortably enjoy the use of it," explained Ruffin. "Additionally, as a matter of policy, if this appellate decision is allowed to stand, a condemnor may assess, at no risk to itself and at the owner's expense, whether taking private property is economically feasible. This is an improper use of eminent domain power and grossly unfair to Georgia's property owners."
OCA's amicus brief argues that the Georgia Court of Appeals erred in its decision in this case and that this decision unfairly disadvantages property owners in condemnation proceedings. The brief contends that neither Georgia statutes nor case law precedent support the dismissal of a condemnation proceeding at any time prior to the payment of a special master's award, as the appellate court has held in this case. Further, the brief argues that the Court of Appeals erred in disregarding condemnation case precedent under the assessor method as inapplicable to this case. Under the assessor method, a condemnor may not dismiss condemnation proceedings following the entry of the assessor's award. OCA's brief asserts that special master awards closely resemble assessor awards, have similarly independent legal significance and that case law decided in assessor cases should apply in special master proceedings.
"Should the rule as set forth in the appellate decision in this case be allowed to stand, condemnors will effectively be allowed two shots at trying their case," said Ruffin. "If a condemnor disagrees with a special master's award, it can dismiss and refile the case, with the advantage of having knowledge of the case a property owner will present. The condemnor is effectively given a 'do-over' and permitted an opportunity to refile in hopes of achieving a more favorable award in a different action."
Owners' Counsel of America urges the Supreme Court of Georgia to grant certiorari review of this case to correct the erroneous decision of the appellate court below and to safeguard the rights of Georgia's private property owners.
OCA Files Amicus Brief in "Rails to Trails" Takings Case Seeking Review by the U.S. Supreme Court
April 25, 2013 -- The Owners' Counsel of America (OCA) has filed an amicus brief in support of the landowner in Brandt v. United States (12-1173) urging the United States Supreme Court to review the decision of the Tenth Circuit Court of Appeal and resolve a "circuit split" concerning whether the United States has a reversionary interest in railroad rights of way crossing privately-owned lands under a 1875 Congressional Act.
The Tenth Circuit acknowledged a "circuit split" in its opinion in United States v. Brandt, 2012 WL 3935613 (C.A.10 (Wyo.), noting a divergence from decisions in the Seventh Circuit, Federal Circuit and Court of Federal Claims which have held that the United States did not have a reversionary interest in railroad right of way when the underlying land had been conveyed to private owners. The Tenth Circuit's decision held that the United States retained an implied reversionary interest in railroad right of way and that the Federal Government, rather than the private landowner owning the adjacent patented lands, acquired ownership of the land when the railroad abandoned the easement.
"If the Tenth Circuit's decision is allowed to stand, similarly-situated landowners across the country will be subjected to varying federal rules, based solely on where their land is located." said Robert H. Thomas. Thomas, a Director with Damon Key Leong Kupchak Hastert in Honolulu and the Hawaii attorney-member of OCA, prepared the brief.
In 1875, Congress passed the General Railroad Right-of-Way Act of 1875 ("1875 Act"), 43 U.S.C. §§ 934-939. The 1875 Act allowed Congress to grant railroads right of way access through publicly owned lands. Congress later passed the Act of March 8, 1922, 43 U.S.C. § 912, which permitted the conveyance of title to the land under these railroad rights of way to homesteaders whom the adjacent property had been granted by land patent. The Act of March 8 provided that upon abandonment by the railroad, ownership of the right of way transferred to the private landowner. In Great Northern Ry. Co. v. United States, 315 U.S. 262 (1942), the Supreme Court clarified that the rights of way granted under the 1875 Act were easements for the limited purpose of railroad use. In Great Northern and subsequent cases, however, the Court failed to provide a specific definition of the term "easement" in the context of the 1875 Act opening the door to the current litigation.
The Brandt family acquired 83 acres in Albany County, Wyoming by land patent from the U.S. Forest Service in 1976. The land was bisected by an 1875 Act right of way, later abandoned by the railroad in 2003. In 2005 under the National Trails System Act, 16 U.S.C. § 1241, the Forest Service issued a notice of intent to convert the abandoned railway crossing Brandt's and neighboring properties into a national trail. The United States then sought to acquire ownership of the railway easement by filing a complaint for declaratory judgment of abandonment and quiet title to the right-of-way (D.Wyo., No. 06cv184) on July 14, 2006. The Government has asserted that it owns the land beneath the abandoned railroad easement crossing Brandt's land. Brandt, through his attorneys at Mountain States Legal Foundation, has fought against that argument.
"In Brandt, it appears that the Government instituted a quiet title action as part of a new strategy to wipe out an entire class of rails-to-trails cases by securing a ruling that owners of land subject to the 1875 Act rights of way do not actually own the property under the right of way and, therefore, do not have a claim," said Thomas.
"Over the last decade, the Government has been unsuccessful in a number of theories argued in rails-to-trails takings cases in the Federal Circuit and Court of Federal Claims," explained Mark M. Murakami, Thomas's partner at Damon Key Leong Kupchak Hastert and co-author of the brief. "Perhaps, the U.S. decided to switch tracks in Brandt in hopes of finally prevailing."
OCA's brief contends that if the Government's strategy to redefine the property rights of landowners owning land subject to the 1875 Act is successful, the Government will eliminate an entire class of takings claims without justification. The brief further argues that the Tenth Circuit's conclusion that the term "right of way" as used in the 1875 Act signified the conveyance of a fee interest to the railroads with an implied right of reversion to the United States not only conflicts with the Supreme Court's ruling in Great Northern, but also strays greatly from the common law meaning of the term. For the U.S. to advocate a departure from the common law understanding of "right of way" with regard to the 1875 Act, it must demonstrate that Congress intended to change the common law meaning. Yet, the legislative history surrounding the enactment of the 1875 Act suggests Congress had no such intent.
"The high court's review is extremely important in this case, as it may affect thousands of property owners nationwide," said Bethany C.K. Ace, who joined Thomas and Murakami on the brief. "If the Federal Government is allowed to redefine the common law meaning of right of way in Brandt without impunity, it will no longer be liable to pay just compensation to those landowners."
Brigham-Kanner Property Rights Conference Celebrates A Decade of Success in Promoting Exchange Between Legal Scholars and Members of the Bar
April 22, 2013 -- The 2013 Brigham-Kanner Conference will take place October 17-18 at William & Mary School of Law in Williamsburg, Virginia. The 2013 Conference marks ten years that members of the bench, bar and academia have come together to explore recent developments in takings and property law and discuss the importance property rights plays in American society.
William & Mary recently announced that Columbia Law School Professor Thomas W. Merrill will receive the 2013 Brigham-Kanner Property Rights Prize. Professor Merrill is among the nation's leading scholars of property, administrative, and environmental law, and is the Charles Evans Hughes Professor at Columbia Law School. His books include Property: Takings (with David A. Dana) (Foundation Press, 2002), Property: Principles and Policies (2d ed., with Henry E. Smith) (Foundation Press, 2012), and The Oxford Introductions to U.S. Law (with Henry E. Smith) (Oxford University Press, 2010). His many articles have appeared in publications such as Harvard Law Review, New York University Law Review, University of Pennsylvania Law Review, and Yale Law Journal. Merrill holds a B.A., with honors in history, from Grinnell College, and a B.A., with first-class honors in philosophy, politics, and economics, from Oxford University, where he was a Rhodes Scholar.
After earning his J.D. at the University of Chicago, he clerked for Judge David L. Bazelon of the U.S. Court of Appeals for the D.C. Circuit and then for U.S. Supreme Court Justice Harry A. Blackmun. After clerking, Merrill practiced at Sidley, Austin, Brown & Wood in Chicago and then served as deputy solicitor general in the Department of Justice, a role in which he supervised Supreme Court litigation. Merrill was the John Paul Stevens Professor of Law at Northwestern University before joining the Columbia University faculty in 2003.
The Conference schedule and speaker's have yet to be finalized, however, the anticipated topics for discussion include:
- The Impact of a Leading Property Scholar: Defining the Essence of Property;
- Promoting Government Forbearance;
- The Implications of the Court's Recent Takings Cases; and
- Property Rights in Times of Transition.
The Brigham-Kanner Property Rights Conference is sponsored by the William & Mary Property Rights Project which seeks to promote the exchange of ideas between scholars and members of the property rights bar through lectures, the annual Brigham-Kanner conference and the Brigham-Kanner Conference Journal. The Conference, Prize and Journal are named in recognition of the lifetime contributions of property rights lawyers and OCA Members Toby Prince Brigham and Gideon Kanner. The Brigham-Kanner Prize has been presented annually since 2004 to an individual whose scholarly work and accomplishments affirm that property rights are fundamental to protecting individual and civil rights.
Virginia OCA Member, Joseph T. Waldo, Conference Co-Chair and a 1978 graduate of William and Mary School of Law, said the annual conference provides a vital and unique forum in which members of the practicing bar and members of the academy can meet and exchange viewpoints in a constructive environment. "The conference's upcoming tenth year anniversary gives us cause to celebrate past advancements while continuing to focus on how the security of property rights is changing our world," he said.
More details about the conference schedule and speakers will be updated here as it becomes available. To attend the conference and/or awards ceremony, contact the William & Mary Property Rights Project at email@example.com or call (757) 221-3796.
OCA Joins Coalition of Property Rights Advocates as Amicus in Support of Property Owner Seeking Supreme Court Review in Kelo-like Eminent Domain Case
January 7, 2013 -- A coalition of property rights advocates including the Owners' Counsel of America, National Federation of Independent Business Small Business Legal Center, CATO Instiutute, and noted law professors James Ely, David Callies, Todd Zywicki, Randy Barnett, Eric Claeys, and D. Benjamin Barros, has filed an amicus curiae brief in support of the Petition for Certiorari filed by the Pacific Legal Foundation in Ilagan v. Ungacta, No. 12-723 (cert. petition filed Dec. 7, 2012).
The brief, authored by George Mason law professor, Ilya Somin, argues:
This case presents an opportunity for this Court to clarify the definition of a "pretextual taking" under the Public Use Clause of the Fifth Amendment. In Kelo v. City of New London, 545 U.S. 469 (2005), the Court ruled that "economic development" is a public use justifying the use of eminent domain. But the Court also emphasized that government may not "take property under the mere pretext of a public purpose, when its actual purpose was to bestow a private benefit." ... Unfortunately, Kelo provided only limited guidance on what counts as a pretextual taking.
This case arises out of the U.S. Territory of Guam. Mr. Ilagan owned an apartment complex in Agana, Guam. Mr. Ungacta, who was then the Mayor of Agana, owned a neighboring residential lot. In 1981, the Ungacta property did not have access to a road. Ungacta appraised a part of the Ilagan property that had access, and which was used for parking for Ilagan's tenants. Soon after, the Guam government condemned the appraised area, paying for it with compensation supplied by Ungacta, and transferred it to Ungacta.
Guam asserted that the taking was for "economic development" occurring under the "Agana Plan," a post-WWII redevelopment plan enacted to reconfigure irregular lot lines, but which had not been used for seven years prior to the Ilagan taking. No other lots were taken under purported authority of the Plan at the time of the Ilagan taking. In the 30 years since, the Plan has never been used to take any property.
Although the Guam trial court held the taking unconstitutional, the Guam Supreme Court reversed. At the urging of Ungacta (the Guam government did not appeal), that court applied a standard of "judicial deference" under Kelo, and held the taking served a valid public purpose.