WHAT LAW SHOULD APPLY IN A CONDEMNATION BY A PRIVATE ENTITY EXERCISING FEDERAL EMINENT DOMAIN AUTHORITY – FEDERAL OR STATE?

An interesting decision was won by our Florida Owner’s Counsel of America colleague, Andrew Prince Brigham.  The case, Sabal Trail Transmission, LLC v Real Estate, et. al., was decided by Honorable Mark E. Walker in the Northern District of Florida, United States District Court on June 5, 2017, Case No. 1:16-CV-063 MW-GRJ.

Sabal Transmission proposes to construct a 516.2 mile pipeline in Alabama, Georgia and Florida.  After initiating an eminent domain condemnation action against multiple private owners, it filed a motion for partial summary judgment asserting that the Fifth Amendment to the United States Constitution’s “just compensation” measure does not include the property owner’s litigation expenses.  The property owners disagreed and argued that the Florida Constitution’s “full compensation” measure – which includes reasonable attorney’s fees and expenses – governs.

The District Court stated, “whether to adopt state law or to fashion a national federal rule is a matter of judicial policy dependent upon a variety of considerations always relevant to the nature of the specific government interests and to the effects upon them of applying state law.”  (Citations omitted.)

In the scenario, courts must first start “with the premise that state law should supply the federal rule unless there is an expression of legislative intent to the contrary, or, failing that, a showing that state law conflicts significantly with any federal interests or policies…”  (Citation omitted.)

It held, The Natural Gas Act makes its guiding light explicit: to further the public interest “in matters relating to the transportation of natural gas and the sale thereof in interstate and foreign commerce…” 15 U.S.C. § 717(a).  Adopting state law as the measure of compensation will not significantly conflict with that goal; it simply means that The Natural Gas Act condemnors may have to pay more than would be required under a federal rule.  But that pea-sized conflict – if a conflict at all – is not enough to “preclude adoption of state law as the federal rule.”  (Citations omitted.)  In any event, “property rights have traditionally been, and to a large degree are still, defined in substantial part by the state law.”

In short, courts conducting such proceedings must apply the Law of the State in which the condemned property is located in determining the amount of compensation due.  The Court also denied the transmission company’s attempt to have the claims determined by reference to a commission.  Holding that commissions unduly prolong the proceedings.  The Court added, it would also run counter to the general rule of trying a compensation issue to a jury.

The decision contains some wonderful language applicable to any eminent domain matter.  Judge Walker begins his decision by noting, “[T]he dichotomy between personal liberties and property rights is a false one.  Property does not have rights.  People have rights [, such as t]he right to enjoy property without unlawful deprivation….That rights in property are basic civil rights has been recognized.”  Lynch v Household Fin. Corp., 405 U.S. 538, 552 (1972) (citations omitted).  Those basic civil rights also dictate that private property owners must be compensated when their property is taken for public use.

The Court also stated, but at an even more basic level, property rights have long been recognized as sacred and fundamental.  Arthur Lee, a Virginia delegate to the Continental Congress, once declared that “[t]he right of property…is the guardian of every other right, and to deprive a people of this, is in fact to deprive them of liberty.”  James W. Ely Jr., The Guardian of Every Other Right: A Constitutional History of Property Rights 26 (2d ed. 1998).  And that statement was no accident – the Supreme Court has also stressed that property rights are just as fundamental as others – including, again, the right to liberty.  See Zinermon v Burch, 494 U.S. 113, 132 (1990).

Posted in Choice of Law, Property Rights, Transmission Lines
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