Wednesday, October 19, 2011

No one cares about you -- Eminent domain for the rural

If a Canadian oil company, TransCanada, has its way, the mid-West could be home to a new, enlarged oil pipeline, the Keystone XL. The Keystone XL will pass through rural areas and while TransCanada has offered to buy easements from land owners, they have also threatened litigation to get what the want. TransCanada has left many rural land owners with an ultimatum: take our final offer or fight an eminent domain suit in court.

As a recent NY Times article explains, this is exactly the position of Nebraskan cattle-buyer Randy Thompson. In their attempts to purchase the rights to use of his land they have made this final offer: take the offer or fight us in court. And so Thompson is backed into a corner, because as it turns out the current state of eminent domain law does not favor him kindly.

In interviewing a lawyer from the Pacific Legal Foundation, a non-profit advocate group for property rights issues, the Times got an answer that sums up the current state of eminent domain law, "Property owners almost never win these suits." But when we think about it, he didn't mean property owners generally. Eminent domain law is different for rural land owners.

Eminent domain is rooted in the law of necessity. It is a right a sovereign has over the land under their control, it comes just by virtue of being a government. Its exercise is limited only by the U.S. Constitution and through mandatory strict-compliance with relevant state statutes. But t
he Fifth Amendment does not prohibit the government from taking property; rather, it stops the government from taking property without paying for it. It is designed to secure compensation, not to limit governmental interference with property rights. The general rule is, however, that property can only be taken for public use.

The problem is that there is no single, precise definition of what constitutes public use. In a way, a definition is impossible: public use is determined by the current conditions of society. Generally, courts use two approaches: 1) actual use by the public; and 2) public advantage or benefit. And pipelines such as Keystone XL have a lot of case support. Cases such as Walker v. Gateway Pipeline Co., Loesch v. Oasis Pipeline Co., and Johnston v. Alabama Public Services Commission all indicate that pipelines and their benefits are one of those structures which can justify as public use for an eminent domain taking.

Many social scientists talk about the rural attachment to the land. And while rural persons might resist eminent domain actions with more fervor, that doesn't say anything about the law. Instead, we need to consider: how useful is the remainder of the land to the rural person? Is it different than the remainder for the urban person? What does the rural person do with her compensation?

Let's quickly consider a hypothetical, consider a farmer whose land is now cut in half by a pipeline. At the most basic level there are two options: sell the farm, take the compensation, and move to a different farm (or stop farming altogether); or continue farming on the particular farm. Both options present a lot of difficulty for her.

Were she to continue farming on that particular farm she would have to make many infrastructure changes. Depending on what she is farming she might need to re-engineer her watering plans to account for the division. If the pipeline is above-ground she might need new equipment because it isn't practical to drive her tractors, plows, etc around the pipeline. While none of this effects her actual property value, it fundamentally changes her farm. And these are worries that urban people just do not have to put up with.

And if she were to sell the farm she'd face the costs of starting a brand new farm. These are costs that the urban who takes the compensation doesn't have to deal with. And if she were to stop farming altogether, well it's not like urban people have to give up their livelihood.


Anonymous said...

I wonder how the law could be altered to give more deference to the concerns of rural people when it comes to eminent domain. Could courts adopt a policy of giving more weight to the interests of people who live in sparsely populated areas? It is too bad Randy Thompson's cattle cannot rise up in opposition in the same way residents in an apartment complex would.

I wonder if courts would take into consideration the public benefits of safe and efficient food production in rural areas. Arguably an oil pipeline would interrupt food production in the affected rural area. Would this public benefit be enough to outweigh the public benefit of an oil pipeline? I doubt it would be enough if the oil industry gets involved.

Anonymous said...
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Anonymous said...

Another interesting thing about eminent domain and ag areas is the tenant about just compensation. In my hometown, just compensation for agricultural land can be about $20,000-$30,000 an acre. However, if this land were to be developed for a Walmart(in Kelo v. New London they found an increase in tax dollars can constitute as public use) then the price per acre would be significantly higher. Perhaps if we are to better define what public use is, it would also be beneficial to better define just compensation.