TransCanada in Eminent Domain Fight Over Pipeline

Randy Thompson, a cattle buyer in Nebraska, was informed that if he did not grant pipeline access to 80 of the 400 acres left to him by his mother along the Platte River, “Keystone will use eminent domain to acquire the easement.” Sue Kelso and her large extended family in Oklahoma were sued in the local district court by TransCanada, the pipeline company, after she and her siblings refused to allow the pipeline to cross their pasture.

“Their land agent told us the very first day she met with us, you either take the money or they’re going to condemn the land,” Mrs. Kelso said. By its own count, the company currently has 34 eminent domain actions against landowners in Texas and an additional 22 in South Dakota.

In addition to enraging those along the proposed pipeline’s 1,700-mile path, the tactics have many people questioning whether a foreign company can pressure landowners without a permit from the State Department — the agency charged with determining whether the project is in the “national interest.” A decision is expected by year’s end on the pipeline, which would carry crude oil from Alberta to American refineries.

A government official with knowledge of the permitting process who would address the issue only on condition of anonymity said, “It is presumptuous for the company to take on eminent domain cases before there is any decision made.”

Landowners have begun joining forces and challenging the company’s assumption that it can legally seize land.

“With so many unanswered questions about the safety of this project, perhaps it’s time for the U.S. to hit the brake pedal,” Mr. Thompson wrote in testimony for a House Energy and Commerce Committee hearing in May. “And perhaps it’s time that our government starts placing the concerns of American citizens over and above those of a foreign corporation.”

Mr. Thompson said he intends to fight to keep the pipeline, 36 inches in diameter, off his land. Eminent domain laws generally allow for the confiscation of private property if taking it is judged to serve a larger public good. These kinds of laws differ slightly from state to state as do the processes by which pipelines are approved and licensed. As a result, there is both debate and confusion over whether TransCanada has the right to use the courts to demand easements from property owners in advance of final approval for the project.

A TransCanada spokesman, Shawn Howard, says the company does not have to wait for a license from the State Department to begin securing land. He said the company has tried to obtain voluntary agreements, but when that fails the company has the right to force lease agreements upon landowners in all six states the pipeline would pass through.  All of TransCanada’s permit applications, he said, have been made through its subsidiary in Omaha, Keystone Pipeline.

“We have been given the legal advice that we can do this in parallel to the process going on in Washington,” Mr. Howard said. “If we didn’t think we had the authority or ability to do this, we wouldn’t be doing it.”

A senior State Department official, who asked not to be identified because the permit process is continuing, said TransCanada had not sought federal approval to invoke eminent domain. He said the department had no authority on the issue and that it was up to state law and the courts to determine appropriate use of eminent domain laws.

Landowners and their lawyers are pushing local courts to do just that. While it is impossible to say how many cases are working their way through the legal system, in addition to the 56 Texas and South Dakota cases, TransCanada acknowledges it has sent “Dear Owner” letters to dozens of families in Nebraska.

Timothy Sandefur, a lawyer with the Pacific Legal Foundation, a nonprofit advocate for property rights issues, said that if the project is approved, the company will be on firmer ground. As unfair as the laws might seem, he said, the right of way of pipelines and railroads as public goods has been well established, regardless of whether they are foreign-owned. “Property owners almost never win these suits,” he said.

But lawyers for the landowners, particularly in Nebraska, Oklahoma and Texas, argue that TransCanada has not met the requirements to invoke eminent domain under those states’ laws. In South Dakota, however, a judge has already ruled that TransCanada could use eminent domain to secure land for a previous pipeline project.

David A. Domina, a Nebraska lawyer whose firm represents 45 landowners, said there was “no way” that TransCanada has eminent domain powers under Nebraska law, and that the company was “acting in bad faith.”

In East Texas, where residents are used to having cordial dealings with oil companies, landowners said they had never seen a company behave as aggressively as has TransCanada.

Article source: http://www.nytimes.com/2011/10/18/us/transcanada-in-eminent-domain-fight-over-pipeline.html?partner=rss&emc=rss