Real Stories of Eminent Domain Abuse

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Success Stories: Building Energy Infrastructure without Eminent Domain Abuse

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The Case for Free Market Negotiations

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The Case for Collocation

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Landowner Stories: Atlantic Coast Pipeline

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Eminent domain is the power to take private property from its owner using the force of law. It was originally intended only for “public use” projects – meaning projects the entire public would benefit from (i.e. roads, military defenses, and airports). While this power was originally granted only to elected bodies of government in order to avoid its abuse, over time those elected bodies transferred the power of eminent domain to other governmental, quasi-governmental, and even private entities that are completely unaccountable to the public, such as Dominion Power. As a result, the exercise of “eminent domain for profit” against property owners who cannot defend themselves is now common practice for private corporations that want to purchase property for less than it is worth.
While it has some necessary uses, eminent domain should always be a last resort and should need to be approved by an elected body. We do believe that eminent domain may be required in certain instances to construct smaller-scale service projects, which do not enjoy flexibility in their chosen route, such as roads or electric distribution lines.
This is a false comparison. The ACP and other mass-transmission projects (MTPs), such as high-voltage transmission lines or telecommunications utilities, differ from smaller-scale service projects (SSSPs) in several key ways. Firstly, SSSPs such as electric distribution, phone, and gas lines truly are “public use” because they directly benefit the same individual who is subject to eminent domain by providing service to that home or business. Secondly, SSSPs generally require less intrusion onto the owner’s property for maintenance and inspection because these distribution lines typically run adjacent to property borders and can be accessed from adjacent roads.

Thirdly, SSSPs are significantly smaller and less invasive than the industrial-sized footprint of MTPs, reducing the burdens, physical destruction, and functional loss imposed on the landowner by construction. Fourthly, SSSPs often increase the value of a tract of land because they bring integral services that landowners desire, whereas MTPs significantly decrease the value of land remaining after an eminent domain taking and bring a host of limitations, annoyances, and risks that landowners do not want. Finally, providing services to people’s homes by building SSSPs requires the use of specific properties; however, MTPs have at their disposal a host of potential routing options because their sole purpose is to  transport their product from one point to another rather than provide service to specific homes and businesses along the way.

The problem of “hold outs” is overstated; there is much precedent for companies acquiring large infrastructure easements without the use of eminent domain. Companies have many tools at their disposal including collocation with existing easements and rights-of-way (a common industry practice), using public lands, purchasing options contracts to reduce financial risk, providing royalties or lease payments to entice willing landowners, and extreme flexibility to route their project around unwilling landowners. Read more HERE about major infrastructure projects that were built without using eminent domain.
The ACP, which is a for-profit project being built by a private corporation, does not need to pass a “public use” or “public good” test in order for Dominion to use eminent domain against landowners. With the exception of the ACP’s ultimate destinations in Virginia and North Carolina, it will provide no service to the counties along the route. In fact, if any county, business, or landowner along the route wants access to gas transported by the ACP, they would have to pay the cost of building a $1.5 million access point. Dominion is not willing to finance local residents or businesses’ access to the gas. While the specifications for all interstate pipelines must be reviewed by the Federal Energy Regulatory Commission (FERC), Congress has unconditionally declared all interstate pipelines to be for the public good, regardless of the pipelines use or impact on landowners.  Click HERE to read about how Dominion could use free-market negotiations to build the ACP without eminent domain.
No. There are many successful examples of for-profit companies building mass-transmission energy infrastructure projects without the use of eminent domain (learn more HERE). Any additional costs incurred by negotiating easements with willing sellers is offset by the savings realized from avoiding the many lawsuits eminent domain is sure to produce. Requiring companies to negotiate easements with landowners would also provide a much-needed incentive for those same companies to collocate their projects on existing easements and rights-of-way when possible; currently, no such incentive exists for these companies, which list rights-of-way they acquire through eminent domain as saleable asset on their balance sheet. Even if free-market negotiations would require a company to increase its budget for such a project, eminent domain does not lower the real costs of the project; it simply hides the project’s real cost by shifting it onto landowners in the form of unjust compensation. Read HERE about how eminent domain incentivizes companies’ abuse of landowners.
Eminent domain is extremely abusive to landowners in a number of ways; here are just a few associated specifically with the Atlantic Coast Pipeline:

  • Property Devaluation: Local realtors already see depressed prices and buyers cancelling contracts due to the pipeline.
  • Low-Ball Offers: Condemning authorities normally offer a fraction of “just compensation” outside of court. There are many cases where offers are less than half of the property’s true value as determined by a court.
  • Taxation without Rights: Owners will lose their property rights indefinitely, but still must pay property taxes on the easement.
  • Utility Corridor: Almost without exception, pipeline companies seek rights to install an unlimited number of pipelines on easements they take. Even if they sign an agreement promising not to install future pipelines, they can easily break the agreement in the future by exercising eminent domain again.
  • “Quick Take” Power: Land can be taken before landowners receive payment or have their case heard by a judge.
  • No Jury Trial: While Virginia’s constitution guarantees jury trials for eminent domain cases, Dominion filing in federal courts skirts this protection, making it almost impossible to obtain “just compensation.”
  • Business Losses: If a farm or business loses future income, the landowner will not be compensated for his loss.
  • Legal Fees: Victims of eminent domain can only contest low-ball offers from Dominion by hiring expensive lawyers and going to court. However, even if landowners are able to prove in court that they were not offered fair market value, the courts will not allow them to recover their legal expenses from the condemnor, so a favorite tactic of condemnors is to drag out legal proceedings for years causing landowners to incur hundreds of thousands or even millions of dollars in unrecoverable legal expenses.
  • Restrictions after Construction: Not only will Dominion take almost all rights to land it confiscates for the easement, it will also attempt to control landowners’ remaining, surrounding property. For example:
    • Before any construction “in the vicinity” of the easement–as much as 100 feet on either side–landowners must obtain Dominion’s permission and pay Dominion for any studies or fieldwork it mandates.
    • Dominion can require landowners to purchase a $1 million liability policy, minimum, for construction on the landowners’ own land.
    • Dominion can destroy paved driveways and “will have no responsibility for the restoration of the pavement […] or any other associated costs.”
    • Any road crossing built after installation will require very costly reinforced concrete slabs and other protection “at no expense to [Dominion].” This is especially important for farmers who require reinforced crossings for heavy equipment due to weight restrictions.

Click HERE to read a real-life story of how Duke Energy used eminent domain to abuse a landowner in Southwest Virginia.

Although the law requires payment of “fair market value” for eminent domain takings, there are a number of factors that make it practically impossible for landowners to obtain “just compensation.” The reason eminent domain is such an appealing option for companies seeking to obtain land is because all the cards are stacked in their favor. For instance:

  • Many studies have shown that eminent domain appraisers, who often do business for the same clients time after time, have a strong incentive to undervalue land that is being taken in hopes of receiving future business.
  • Calculations of Fair Market Value only include losses that can be proven and measured financially. Unfortunately, much of the value associated with properties, such as multi-generational family farms or homes with scenic vistas, is intangible and unmeasurable.
  • Landowners cannot recover future loses from business.
  • Federal law does not provide for jury trials to determine damages.
  • Both federal law and Virginia state law allow “quick take” power to be used against landowners – meaning they can be evicted, their property taken, and construction begun before they are paid and before their cases are heard in court.
  • The law in most states does not require the condemnor to negotiate on any level with the landowner.
  • Landowners can only defend themselves in court, but both federal and state law do not allow landowners to recover legal costs from condemnors, even if the landowners prove that the contemnor’s offer was excessively low.
  • Condemnors will often use legal mechanisms to delay payment to landowners for years.
  • Although landowners will lose rights to their property indefinitely, they will only receive a one-time, lump-sum payment which is subject to taxation.
  • In the case of the Atlantic Coast Pipeline, specifically, landowners will continue to be liable for paying property taxes on the easement, although they will lose rights to the easement indefinitely.
  • Many states also do not even allow landowners to admit offers from the condemnor into evidence to establish the value of the property, meaning companies often try to pay landowners even less if they do go to court.

Click HERE for the story of a landowner in Southwest Virginia who was abused by both the energy company seeking to take his property for a pipeline and the courts from whom he sought redress.