Public use and private profit: U.S. landowners question forced purchases

by Carey L. Biron | @clbtea | Thomson Reuters Foundation
Tuesday, 5 February 2019 08:00 GMT

A section of pipeline to be assembled for the Mountain Valley natural gas pipeline sits in Boones Mill, Virginia, USA, in June 2018. Handout picture courtesy of: Anne Way Bernard

Image Caption and Rights Information
The use of eminent domain for private projects that are said to fulfill some public good remains relatively new, but legal experts say it has resulted in a spate of legal battles

By Carey L. Biron

WASHINGTON, Feb 5 (Thomson Reuters Foundation) - The Jones farm in Giles County, Virginia, has been in the family for 250 years. But a natural gas pipeline could soon cut a corridor through the property, despite the family's attempts to thwart it.

A pipeline company was able to take a strip of the Jones' land with government deployment of a legal tool known as eminent domain, a constitutional mechanism reserved for use in the public good.

The tool received public attention last month when President Donald Trump threatened to use "the military version of eminent domain" to build a wall along the U.S. border with Mexico.

Meanwhile, the use of eminent domain for private projects that are said to fulfill some public good remains relatively new, but legal experts say it has resulted in a spate of legal battles such as the Joneses'.

"Dad does not want to sell his family land at any price for any reason," Donald Wayne Jones, the son of property owner George Lee Jones, told the Thomson Reuters Foundation.

"He understands that eminent domain can sometimes be used to provide for the common good of the public."

"But he doesn't understand how a profit-seeking, out-of-state company can be handed this privilege of taking privately owned land from U.S. citizens — an action he feels will only obtain profit for a private company and its shareholders."

The U.S. Constitution allows governments at all levels to take private property for "public use", and eminent domain was a key mechanism to build, for instance, the railroad networks that crisscross the country.

Eminent domain requires the government to pay "just compensation" to the forced seller, though it can be difficult to agree on what should be considered a fair price.

A 2005 Supreme Court decision, however, opened up a more complex legal area: the government's ability to take private land and give it to another private entity, such as a corporation.

That is the concern for the Joneses and others along the 303-mile planned route of the Mountain Valley Pipeline, a $4.6 billion natural gas pipeline that would run from West Virginia to Virginia, according to Mia Yugo, an attorney representing the Joneses and 11 others in a lawsuit.

"The meaning of 'public use' since the 2005 decision is what we're challenging here," she said.

Construction equipment stands next to a house in Boones Mill, Virginia, USA, along the route of the Mountain Valley natural gas pipeline, August 2018. Handout picture courtesy of: Anne Way Bernard

PUBLIC GOOD

Construction along the Mountain Valley path is currently underway, and according to the lawsuit it will ruin businesses, take over access roads and come within a few dozen feet of houses.

Others cite concerns about the potential for changed water patterns and the effects of heavy machinery on wells and springs.

Yugo emphasised that the legal action is not anti-pipeline in general and that it does not contend the company has done anything outside of the law.

Rather, the suit takes issue with how eminent domain has been interpreted by the Federal Energy Regulatory Commission (FERC), which makes decisions on interstate natural gas pipelines and facilities.

The gas to be shipped via Mountain Valley is not for use by those in West Virginia or Virginia, said Yugo, but rather for the country's southeast.

Thus, she said, "you have land that's being taken in Virginia and West Virginia that's not being taken for public use in this region — it's going through people's private property for export somewhere else."

FERC attorneys noted in a 2018 filing that the commission "evaluated the need for the project and determined that the Mountain Valley pipeline would 'make reliable natural gas service available to end-use customers and the market'."

It also noted that a final approvals process was ongoing.

Bill and Lynn Limpert stand next to a centuries-old maple tree that they worry would be lost to construction of the Atlantic Coast Pipeline. Bath County, Virginia, April 2018. Handout picture courtesy of: Cat McCue/Appalachian Voices

'MESSIER' LEGAL SITUATION

In January the Supreme Court declined to take up the Mountain Valley case, one of three pipeline-related suits that have requested intervention from the high court in recent months.

Legal observers point to rising public frustration fuelled by the impacts of the 2005 court decision, known as Kelo v. City of New London, as well as the more recent growth of natural gas drilling in the United States.

"Eminent domain cases have always been messy, but the 2005 opinion upended the situation and made it messier," said Tyler Broker, a legal commentator.

"Before, you could at least point to a beautiful park that everyone has access to, but now it's the government taking private property and giving it to a private entity. That seems to rub people more the wrong way," he said.

And while landowners are supposed to be compensated at market rates for the land they lose, Broker and others said this rarely happens.

Eminent domain, he said, has "deviated so far from its original purpose that it's not attached any more — it's a tool for cronyism. And that's where the increase in resentment comes in."

Since the Kelo decision, states have passed laws limiting the use of eminent domain in this way — including Virginia, according to Yugo.

But the permitting of cross-state pipelines goes through the federal government, and thus is not subject to state law.

Perhaps as a result, pipeline companies have increasingly been looking to do interstate projects, thus going around the states to appeal directly to the federal government, said Chris Johns, an attorney who represents landowners affected by the Mountain Valley and Atlantic Coast, another pipeline.

Atlantic Coast, which was approved in October 2017 and would run for 600 miles from West Virginia through Virginia into North Carolina, has also run into legal troubles.

"The problem is how FERC makes the decision that a pipeline is necessary," said Greg Buppert, senior attorney with the Southern Environmental Law Center, which is part of several legal challenges to the project.

The commission relies on just one piece of evidence to make that decision, he said: whether a contract exists with a company that wants to use the future pipeline to transport oil or gas.

Yet companies have multiple incentives to build a pipeline regardless of whether market analysis says it is a good idea, Buppert said.

"There's mounting evidence that those contacts don't reflect the market. But FERC ignores that, and that decision puts landowners right in the cross-hairs," he said.

Buppert said the case could be argued this spring. A FERC spokeswoman declined to comment, citing the pending litigation.

Even as lawsuits drag on, however, landowners are already dealing with the ramifications of these projects.

Back in Giles County, Donald Wayne Jones said his father fought on behalf of the U.S. government in the Korean War, more than a half-century ago.

"Yet here at home, he feels that same government now threatens to deprive him of his own rights over his own land." (Reporting by Carey L. Biron, Editing by Jason Fields and Zoe Tabary. Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers humanitarian news, women's and LGBT+ rights, human trafficking, property rights and climate change. Visit http://news.trust.org)

Our Standards: The Thomson Reuters Trust Principles.