Following a recent Texas Supreme Court decision that limited the ability of pipeline owners to condemn property under certain circumstances, a group of property owners in Texas lost their fight to keep a Canadian oil company, TransCanada Keystone Pipeline, from taking their property as part of a 4,000 mile pipeline project.  The landowners are fighting to keep TransCanada from immediately entering their properties and starting construction before lawyers and lawmakers have explored what the ruling means.

TransCanada argued that it has the right under an 1899 Texas statute to start construction without obtaining writs of possession through condemnation proceedings, but the company filed the appropriate paperwork and posted the required bonds instead to prevent a landowner from blocking access to the property.  However, the judge scheduled a hearing to consider whether TransCanada properly posted bonds for damage to properties if it ultimately loses the right to the land in later legal proceedings. Additionally, the judge will determine if Keystone must send out new legal notices to property owners not included in previous value-setting.

This firm first discussed this project over a year ago on Fox News Channel, where McKirdy & Riskin’s Anthony Della Pelle provided commentary – watch the video here.  Since that time, the project has received considerable attention in the media and has involved debate in political, legal and environmental forums.

For more on this story, please see the following blog posts and news articles:

Keystone Pipeline Project Chugging Along – New Jersey Condemnation Law

Pipeline Protests Reach the White House – New Jersey Condemnation Law

Can a foreign corporation use eminent domain on U.S. Land? – New Jersey Condemnation Law

Judge: Keystone can use eminent domain for pipeline – Amarillo Globe-News

TransCanada Faces Texas Landowners in Court Over Pipeline – Bloomberg BusinessWeek

Landowner plans to appeal eminent-doman ruling on Keystone XL pipeline – Star-Telegram

Photo Courtesy of Cara Townsend/The Daily Record

The article covers the history of the litigation from the Township adopting ordinances which denied him the ability to install a well despite having permits from the New Jersey Department of Environmental Protection, the entry and dismissal of several injunctions to deny him access to the well, to a recent finding by a New Jersey Superior Court judge that the Township had exceeded its authority and interfered with Mr. Kuehm’s property rights.  The Township later filed an appeal with the New Jersey Appellate Division to challenge the court ruling.

Mr. Kuehm’s story was also recently the subject of Fox News Channel’s “It’s Your Land” series.   The video, featuring McKirdy and Riskin’s Anthony F. Della Pelle, may be viewed here.  Shortly after the TV segment, the Montville Patch also published its own story.

The matter is currently pending on appeal.

For more blog posts on property owners challenging a government’s use of eminent domain, please see the following:

Eminent Domain Abuse Sign is Protected Speech

Jury Awards Double NJ Transit’s Offer for Property Taken by Eminent Domain

Mt Holly Gardens Residents Live to Fight Another Day

Lotta Lettuce J.T.S. Farms, LLC is represented by McKirdy & Riskin, PA as the family’s condemnation counsel.

Photo courtesy of CNN.com

The controversy surrounding the Keystone Pipeline project has escalated to the point where protesters surrounded the White House yesterday to demand that the project be stopped.

Read CNN’s coverage of the recent event here.

We previously covered this story in our New Jersey Condemnation Law Blog (story available here), and first discussed this project a year ago on Fox News Channel, where McKirdy & Riskin’s Anthony Della Pelle provided commentary – watch the video here. 

Fox News video coverage of Keystone Pipeline

The recent protests have politicized this project to the point where some have suggested that it will be a relevant topic in upcoming elections, pitting property rights advocates with environmental conservation forces against energy lobby and interests and those who contend that the project will help support the economy by providing thousands of high paying construction jobs.

This one does not seem destined to end any time in the near future, so we expect to be back for more soon.

Related articles

• Green Blog: Thousands Protest Keystone XL Pipeline Project (green.blogs.nytimes.com)
• Protesters Opposed to Keystone Oil Pipeline Circle White House (usnews.com)
• Thousands protest at the White House over Keystone XL pipeline (guardian.co.uk)
• WATCH: Mini-Documentary On The Thousands Who Surrounded The White House In Protest (huffingtonpost.com)
• Biggest Washington rally so far targets Keystone pipeline (calgaryherald.com)

This project was the subject of a recent story on Fox News Channel, where McKirdy & Riskin’s Anthony Della Pelle provided commentary – watch the video here.

The first leg of the pipeline began moving oil this past summer through Canada into the US.  There is now a phase which will complete the route to the Gulf Coast refineries.  Since the pipeline crosses international borders, the U.S. State Dept. has authority over its approval and specifications.  Various other federal agencies, including the EPA, are also involved and will review the environmental impacts, pipeline safety and spill response capabilities.

The oil traveling through the pipeline is heated and pressurized — environmental groups refer to it as toxic tar sands.  They refer to the Gulf oil spill earlier this year as an example of the potential impacts of an oil pipeline project, and other opponents suggest that it  is an ecological disaster waiting to happen.

TransCanada has stated that this pipeline is safe, and will bring energy and jobs to the U.S. areas where it is located.  Opponents include landowners facing eminent domain which may ultimately be used by TransCanada to obtain property rights it needs for the project. 

Utility companies like gas, electric and oil companies typically have a limited right to eminent domain and their right to use this power must normally be approved by separate government agencies.   Those regulatory procedures are supposed to provide the public with protection to properly use the power.

What makes this project somewhat unusual is the fact that the utility company is a foreign company doing business in the U.S., which would be cloaked with eminent domain power if it obtains authorizations from all necessary federal and state agencies.   Approvals for the second phase are now under consideration by the federal government.  Stay tuned for more.

Related Articles

See recent coverage of this project on CNN.com

• Public Attitudes Towards Eminent Domain (reason.com)
• Wyo. wind task force favors eminent domain limits (seattletimes.nwsource.com)

 The trial court’s opinion extensively outlined both the procedural history and substantive law.  The court first concluded that the State failed to engage in bona fide negotiations because it failed to consider the impact of a temporary easement on the established commercial businesses.  It then discussed how the State relied on defective appraisals because they failed to clearly provide how access to the properties would be provided.  Thereafter, the court noted that dismissal on the basis of permitting access over private property to a third-party was not proper under existing case law.  After deciding that the complaints should be dismissed, the court stated that access issues pending on appeal under a separate docket number were not binding on this court because the issue related solely to compensation, and that injunctive relief was not necessary because the complaints were dismissed.

The court also denied the State’s motion for reconsideration, available here, because the State failed to address why the court erred in its July 21, 2010 opinion.  In a third opinion, available here, the court addressed a separate motion that had been filed for consolidation of the two matters, ordering the State to file a recordation of judgment, and awarding attorneys’ fees.  There, the court suggested that a motion to consolidate was more appropriately filed with the Appellate Division where the access action was still pending.  However, the court agreed that the judgment should be filed by the State, and awarded the property owners’ attorney fees for his efforts beginning August 28, 2008 because the State’s complaints had been dismissed.

The trial court’s opinion in State v. The General’s Group. L.L.C., BER-L-4853-10 and BER-L-4854-10 (Law Div. July 21, 2010), may be found here.

The trial court relied on State v. Arifee in its July 21, 2010 opinion.  The property owners in State v. Arifee, Mohammed and Jawed Arifee and the Palace Car Wash, were represented by McKirdy & Riskin’s Edward McKirdy, Anthony Della Pelle and Joseph Grather at trial and on the appeal.  The Appellate Division’s opinion can be read here , while more can be read about the case on our New Jersey Condemnation Law Blog here.

The author wishes to acknowledge the assistance of Cory K. Kestner, Esq., of McKirdy & Riskin, PA, in the preparation of this article.

The court distinguished awarding fees at an earlier date in this case from the previous holding of the New Jersey Supreme Court in Twp. of West Orange v. 769 Assocs., LLC, 198 N.J. 529 (2009).  In 769 Assocs., an ordinance targeted a property for condemnation and litigation ensued, including a prerogative writ to challenge a planning board decision.  The court found the property owner was entitled to fees under N.J.S.A. 20:3-26(b) from the commencement of its action because they were a direct response to an eminent domain proceeding.  Both decisions refine the reasoning in Essex County Imp. Auth. v. RAR Devel. Assocs., 323 N.J. Super. 505 (Law Div. 1999), in which a trial court denied attorneys’ fees after a condemnation action had been abandoned but had “not progressed far enough.”  (The property in RAR was represented by McKirdy & Riskin’s  Anthony F. Della Pelle, Esq.

A copy of the court’s opinion in NJ Capital Partners, LLC, v. Oakland Planning Board can be found here.   The matter was remanded to the trial court so the award attorneys’ fees could be established and calculated in accord with the Appellate Division’s opinion.

The author wishes to acknowledge the assistance of Cory K. Kestner, Esq., of McKirdy & Riskin, PA, in the preparation of this article.

 This week the United States Supreme Court denied certiorari review in City of Milwaukee Post No. 2874 Veterans of Foreign Wars of the United States v. Redevelopment Agency of the City of Milwaukee, No. 09-1204 (cert. petition filed Apr. 2, 2010).  The VFW, the previous owners of the subject property, sought just compensation as a long-term tenant in a building with a nominal rent ($1 rent per year).  Relying on the “undivided fee rule”, the Wisconsin Supreme Court found that the VFW’s long-term lease had no value, despite the extremely favorable terms, and even though both parties agreed that the lease had significant value, because the remainder of the building where the VFW was located was underutilized and allegedly required asbestos abatement and demolition, which made the property’s overall fair market value zero dollars. 

 As a result of the ruling by the Wisconsin Supreme Court, which the U.S. Supreme Court has now refused to hear on appeal, the VFW was actually required to pay back several hundreds of thousands of dollars which had been awarded as the value of its lease interest by a lower court in Wisconsin.

McKirdy & Riskin’s Anthony F. Della Pelle, Esq., was interviewed recently on the Fox News Channel to provide commentary about this case.  The video can be viewed here.  

The full text of the VFW’s brief can be found here. 

Not all states apply the “undivided fee rule”, but like Wisconsin, New Jersey courts generally apply this doctrine in eminent domain valuation cases.  Whether the result reached in the VFW case would be reached in any New Jersey eminent domain case, however, will ultimately depend upon the particular circumstances involved.

The author wishes to acknowledge the assistance of Cory K. Kestner, Esq., of McKirdy & Riskin, PA, in the preparation of this article.

The video may also be accessed directly on the Fox News website by clicking here.