By Jon Cassidy | Watchdog.org
COLUMBUS – Landowners who don’t want an energy company seizing their property through eminent domain for a pipeline may get their day in court.
Lawyer Maurice Thompson, executive director of the 1851 Center for Constitutional Law, is offering free legal representation to landowners menaced by construction of the ATEX Express pipeline, which will run from Appalachia to Texas.
The pipeline is being built by Enterprise Liquids Pipeline LLC, which has been asserting eminent domain authority under a 60-year-old Ohio law that grants the state’s land-expropriation authority to various energy and water companies.
In a formal notice Nov. 27 to farmer Dave Bonifant of Hanover, Enterprise wrote that it “will exercise its eminent domain authority through a court proceeding if you and it are unable to reach an agreement.” The company offered $5,500 for a pipeline easement running the breadth of the 83-acre property.
Representing Bonifant, Thompson told Enterprise to back off.
“Our conclusion is that (Enterprise) lacks authority to take, for the purposes of the ATEX pipeline, Ohioans’ private property through eminent domain proceedings,” he wrote.
“In response to this analysis, Enterprise has refrained from following through with the threatened legal action against Licking County property owners,” Thompson said in an email Wednesday. “Instead, Enterprise responded by first offering Mr. Bonifant a six-figure dollar amount for his ‘$5,500’ property before altering the route to avoid Mr. Bonifant’s property altogether, as he had consistently requested.”
Fighting back is not the advice landowners have been hearing from other legal experts, who say that the best one can do is drive a hard bargain before relenting.
The firm of Goldman & Braunstein LLP, which bills itself as the state’s top law firm on eminent domain, has held a series of seminars around the state offering advice and drumming up business.
“Canceling the pipeline is not going to happen,” partner Michael Braunstein told one seminar. “It will be built when Enterprise decides to build it. What you can do is correct the easement and negotiate the easement agreement.”
On another occasion, his partner’s message was, “To the extent that we can’t stop it, we want to make sure people get fair compensation for their easements and the damage it may cause.”
Their advice is based on a 1953 law that handed state police power to private corporations. It reads: “If a company is organized for the purpose of … transporting natural or artificial gas, petroleum, coal or its derivatives … through tubing, pipes, or conduits … then such company may enter upon any private land … and may appropriate so much of such land … as is deemed necessary for the laying down or building of such tubing, conduits, (or) pipes …”
Thompson’s argument is that the ATEX pipeline doesn’t fit the legal definition, since it will be carrying ethane, not natural gas. Ethane, propane, and butane — known as natural gas liquids — are separated from natural gas in the field and transported in distinct pipelines.
Enterprise has represented itself as a “public utility” with eminent domain rights, Thompson said, despite the fact that Senate Bill 315, passed in June 2012, specifically excludes pipeline companies carrying natural gas liquids out of state from the definition of public utility.
Since Enterprise will be taking its natural gas liquids out of state to sell for private profit, Thompson argues that the pipeline doesn’t qualify as a “public use,” as required by the state Constitution.
He cites several state Supreme Court rulings on eminent domain holding “that an economic or financial benefit alone is insufficient to satisfy the public-use requirement,” that “the use must always be a public use, and the land or the interest therein must be taken by the public,” and that the court has “never found economic benefits alone to be a sufficient public use for a valid taking.”
An attorney for Enterprise did not respond to a Watchdog.org request for comment on Thompson’s arguments.
Regardless of how courts interpret the law, the 1953 law should be repealed, Thompson said.
“The entire purpose of a Constitution is to prevent government from taking private property from the politically weak and transferring it to well-connected special interests,” he said. “Yet thathis precisely what this statute enables. The abuse along the ATEX is a prime example of what can happen to Ohio property owners when such a statute remains on the books.”
It’s hard for landowners to get unbiased advice, Thompson said, because most eminent domain lawyers only get paid if their clients agree to a compensation deal with the pipeline company, which creates a perverse incentive.
Contact Jon Cassidy firstname.lastname@example.org