Eminent Domain Abuse

In any eminent domain proceeding, there is a question of what amount is “just compensation” for the property being taken.  In my experience, there can be significant differences in how developers arrive at a compensation offer.  There is a serious need for clarification and amendments to the law in North Dakota to address the appropriate methodologies for determining “just compensation.”  Other states, such as Wyoming, are decades ahead of North Dakota on this issue.  That said, landowners should not balk at challenging an offer they believe is low.  Landowners sued in an eminent domain proceeding (in North Dakota) are usually able to recover their attorneys’ fees, even if they do not get more than the initial offer.

Perhaps more important than compensation is the realization that the right to use eminent domain is not automatic, merely because it is granted by the legislature.  There are laws that state that certain entities (such as water resource districts) or uses (such as interstate pipelines) have the power to use eminent domain, but this is not the end of the discussion.  In Square Butte Elec. Co-op. v. Hilken, the Supreme Court of North Dakota said where “the existence or nonexistence of a public use is placed in issue, the determination, dependent as it is upon the facts and circumstances of the matter, is properly a judicial one.”  To translate the legalese, to exercise the power of eminent domain, the proposed use must be a “public use,” meaning it benefits the public of North Dakota.  If there is a question of whether a use is actually a “public use,” it is not enough that the legislature has passed a law stating, for example, that interstate pipelines are a public use.  The landowner still has the right to have a court decide if the pipeline at issue is a public use.  When out-of-state corporations appear to be the only benefactor of a project, landowners should question whether they should actually have the power of eminent domain.

Additionally, landowners should not be intimidated by strong-arm tactics.  For example, the Western Area Water Supply Authority has an offensive policy that states:  “For any property owner who does not voluntarily grant an easement or sell property to WAWSA, where condemnation is initiated, WAWSA will likely not consider any requests for project water from the owner of the condemned property. If water service is instead provided by a WAWSA member system, the WAWSA board will likely recommend that the member deny any requests for service from that property owner.”  It is highly dubious that a supposed “public” entity can make a claim such as this.

While we wait for the North Dakota legislature to take a hard look at eminent domain laws in the state, I encourage landowners to stand up for their rights.  Right now, landowners may be the last line of defense against government (and private) abuse of eminent domain powers.  I also recommend that landowners contact their legislative representatives and demand eminent domain reform – reform that is not heavily influenced by the industries and entities that use eminent domain.

(Posted by Derrick Braaten)

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