Pipeline Eminent Domain Condemnation

15 Apr

Pipeline Eminent Domain Condemnation

Action on this issue is needed immediately.    Most of the amicable settlements between Sunoco Pipeline, L.P., and property owners over right of way agreements related to the Mariner East pipelines are on the books.  The Atlantic Sunrise line is now two years in acquisition and in a similar posture.  For those that did not reach an agreement, the sheriff will be by with a Declaration of Taking. If it is your intent to fight, once you are served with the papers, the clock begins to run.

What is a Declaration of Taking?

SUNOCO      When Sunoco Pipeline, L.P. exercises its Eminent Domain powers (I know, there are a lot of people who think they don’t have that power.  The simple fact is that the Commonwealth Court recently ruled, stating Sunoco does have the power. We can talk about that issue later), it files a document in the county court called a Declaration of Taking.  It will be a 60 to 70 paragraph document with a caption that reads like this:  IN RE: CONDEMNATION BY SUNOCO PIPELINE, L.P. OF A PERMANENT RIGHT OF WAY FOR THE TRANSPORTATION OF ETHANE, PROPANE, LIQUID PETROLEUM GAS, AND OTHER PETROLEUM PRODUCTS IN   XYZ TOWNSHIP,   ABC COUNTY, PENNSYLVANIA, OVER THE LANDS OF JOHN AND MARY SMITH.

WILLIAMS   When Williams takes this same action, the issue of power to condemn is not available. Preliminary Objections will have to address one or more of the other four permitted issues set forth in the Eminent Domain Code.

Back to the procedure……   Getting served with a Declaration of Taking is no different than being sued. The pipeline company is asking the court to set the amount of compensation to which you are entitled because of their taking. I know that sounds strange. Most people think the pipeline company is asking for the right to take part of your property. The fact is, when they file the declaration of taking, they have by that action taken your property. If you don’t think they have any rights to do so, there are filings which must be made. If you want to agree on a number, you need to move quickly and have a lawyer that understands condemnation, and also understands the business side of all of this. The more you wait the worst things will get.

When Sunoco, or Williams were negotiating for an amicable agreement they were willing to pay a premium over the fair market price. Once things go to condemnation, or eminent domain, many property owners are shocked to find they are now negotiating for significantly less money. (The moral of the story is the best time to negotiate is before they decide to turn the matter over to the lawyers for condemnation.)

If you disagree with the money you’re being offered after the Declaration of Taking, your remedy is to ask for a Board of View. A Board of View generally consists of one lawyer and two non-lawyers, appointed by the court to conduct view of the property and hear testimony from competing appraisers as to the value of that which was taken. When this kind of testimony is given, it is immediately clear that there are appraisers, and there are eminent domain, or condemnation appraisers. There is a wide gulf between the appraiser that provides a report to your mortgage company, and the appraiser that gets you the most money when someone takes part of your property.

If you get one of these Declarations of Taking, it is time to take immediate action.  We are finding that in some cases we are able to drag the case out of legal status and back into the ability to negotiate a favorable settlement.

When you consider the financial value of what you will get from having part of your property taken, the most money is obtained by negotiation before the pipeline company turns the case over to lawyers for eminent domain proceedings. Immediately after the filing, the settlement value of the landowners’ claim drops significantly. If you have to actually go to trial, the settlement value will be at the lowest point. This seems counter-intuitive. After all, in the case of automobile accidents, sometimes the best settlements are made on the steps of the courthouse. In pipeline condemnation cases that rule does not apply.

THE MOST IMPORT THING TO REMEMBER:    I’ve talked about money.  In a year, the money will be gone, but the easement will be around forever.  If you choose to fight the right to build the pipeline to the death, or if you simply let things go to condemnation, you will be stuck with the standard easement agreement.  Recognize that if you do chose to negotiate,  the revisions to the standard easement agreement will prove to be more important than the money.  In five years or ten years, those terms will still be around.  No one should ever settle for the standard terms.

If you need help with this, we are able to represent landowners on pipeline issues anywhere in the state.