Mike Faherty recently began representation of multiple property owners whose land was condemned by an out of state company building a natural gas pipeline in the marcellus shale play in Northern Pennsylvania. Mike argued in Sullivan County that the security was inadequate, based on Central New York Oil & Gas appraisal documents description of what is known as a “strip” appraisal. The Pennsylvania Eminent Domain Code requires before and after appraisals of the owners’ entire property interest.
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The following was an editorial posted in The Patriot News by Amanda M. Olejarski. The editorial raises legitimate concerns about the use of eminent domain by private companies. The natural gas pipeline in Lycoming, Sullivan and Bradford Counties is now under construction as authorized by the Federal Energy Regulatory Comission. Property owners should be aware that the out of state oil and gas company has no obligation of good faith negotiations or fair dealings.
In fact, the condemnor submitted to the Sullivan County court misleading appraisal documents which valued only the strips of land condemned. Fortunately, the Eminent Domain Code provides protection for property owners to be paid just compensation based on the reduced value of the entire property interest. The reprehensible tactics of the condemnor compels property owners to obtain the constitutionally guaranteed just compensation.
Eminent domain? It’s an imminent problem for PennsylvaniaPublished: Friday, February 24, 2012, 5:00 AM
“Eminent domain” is probably the most- feared phrase that a property owner can hear — besides, of course, foreclosure. But what is eminent domain? It’s also known as a “taking” because eminent domain is the governmental power to take private property.
Some natural gas pipeline companies are applying for eminent domain status in Pennsylvania.
The U.S. Constitution limits the takings power in the Fifth Amendment: “Nor shall private property be taken for public use, without just compensation.” Here’s the problem: “Public use” hasn’t meant use for a long time. As far back as 1896, the Supreme Court ruled that public use doesn’t mean that the public can use the property after it’s been taken by eminent domain.
Fast-forward to 2005 when the Supreme Court ruled that economic development met the public use requirement of the Constitution in the “Kelo case.” This was the landmark case in which the city of New London, Conn., used eminent domain, in part, to construct a research facility for Pfizer after it came out with Viagra.
For all of the opportunities (and potential problems) that Marcellus Shale brings to Pennsylvania residents, eminent domain is being overlooked. It’s an imminent problem for property owners in the Keystone State. Presently, much of the focus is on laying pipes to transport the shale gas across the state and beyond. Last month, a story surfaced up in Laporte (100 miles north of Harrisburg) about a pipeline operator using eminent domain to gain access, or easement, to 150 properties in Bradford, Lycoming and Sullivan counties.
In Pennsylvania, Title 26 of the state code allows public utility companies to use eminent domain. Public utility companies can then delegate the takings power to pipeline operators. Yes, you read that correctly: Private pipeline operators can be granted the governmental power of eminent domain.
This is just the beginning of a slippery slope. Once those two magic words, “eminent domain,” are said, everyone’s hands are tied. The entity initiating takings proceedings, the pipeline operator, must pay just compensation. Just compensation is based on the market value of the property. But the property owner’s hands are tied, too, because the only recourse is a legal appeal. The bottom line is when eminent domain is invoked, negotiations outside of the court system are over. This is the real problem with the shale gas in Pennsylvania.
It’s a slippery slope to allow partial takings that don’t affect the property owner’s ability to enjoy the full range of benefits of the property, such as in Laporte. Residents there aren’t so much fighting the easement to put in the pipeline, they are fighting for their ability to negotiate in good faith on the compensation they would be paid.
But what’s coming down the slope is allowing complete takings of private property. Negotiating compensation between the property owner and the government (or pipeline operators) is the first step. No one wants to use eminent domain unless property owners aren’t negotiating in good faith. That’s why the government has the power of eminent domain — to ensure that public projects move forward, even when property owners hold out.
Eminent domain is how states and local governments build roads, bridges and schools. It can be an effective tool for governments to use to improve communities. But there is a problem when eminent domain is given to private pipeline operators and other entities in Pennsylvania without governmental protection and oversight.
Private firms aren’t accountable to the public, and citizens can’t vote them out of office. State and local governments are managed by elected officials and professional public administrators whose first responsibility is upholding the public interest. None of that exists with private organizations whose first responsibility is upholding profit.
Eminent domain is a powerful tool — with great power comes great responsibility. Our government is responsible for protecting its property owners.
Amanda M. Olejarski is an assistant professor of public administration at Shippensburg University.