EMINENT DOMAIN IN WYOMING. November 15, 2012

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1 EMINENT DOMAIN IN WYOMING November 15, 2012

2 WHAT IS EMINENT DOMAIN? Eminent domain is the power of the government to acquire private property for public purposes. Eminent domain is authorized by Article I of the U.S. Constitution and limited by the Fifth and Fourteenth Amendments. The Fifth Amendment, which applies to the federal government, states that private property (shall not) be taken for public use, without just compensation. The Fourteenth Amendment extends this limitation to state governments.

3 ELEMENTS OF EMINENT DOMAIN Private Property Taking Public Use Just Compensation

4 HISTORY OF EMINENT DOMAIN Latter half of 19 th Century, courts in some states, applied a narrow concept of public use in order to preserve rights of property owners by allowing a taking that would benefit a private party only if the project would actually be open to use by the public. Early 20 th Century courts returned to a broad construction of public use defining it as any public purpose 1890 Wyoming Constitution declares private property may be taken for private uses Many speculate that state and federal deference to economic and natural resource development guided the next 100 years of eminent domain case law

5 CORONADO OIL COMPANY V. GRIEVES Court found plain beyond any doubt that purpose of statute and constitution was to facilitate the development of our state s resources Great public interest in an imminent need for energy

6 RECENT HAPPENINGS IN EMINENT DOMAIN 2005: Kelo v. City of New London Issue of what constitutes a public use for purposes of eminent domain City of New London planned to redevelop a waterfront area to increase tax and other revenues and to revitalize an economically distressed city Proposed $300 million research facility for Pfizer New corporate headquarters to create jobs and help rejuvenate the area City was unable to negotiate purchase agreements with all the petitioner home owners in development area, so used statutory authority to initiate a condemnation proceeding.

7 KELO CONT. United States Supreme Court Review: Determined whether A city s decision to take property for the purpose of economic development satisfies the public use requirement of the Fifth Amendment 5-4 decision: constitutional public use No bright line rule comes from this decision Justice Stephens emphasized, nothing in the opinion precluded any state from placing further restrictions on its exercise of the takings power

8 EMINENT DOMAIN AND THE WYOMING CONSTITUTION: Article 1, Section 32. Eminent domain. Private property shall not be taken for private use unless by consent of the owner, except for private ways of necessity, and for reservoirs, drains, flumes or ditches on or across the lands of others for agricultural, mining, milling, domestic or sanitary purposes, nor in any case without due compensation. Article 1, Section 33. Compensation for property taken. Private property shall not be taken or damaged for public or private use without just compensation.

9 2007 REFORMS MADE TO THE EMINENT DOMAIN ACT IN RESPONSE TO KELO Section : Improved good faith negotiations to require a three part negotiation system. Section Heightened accountability in the condemnor, requiring payment of legal fees if responsibilities to condemnee are not met. Section Improved compensation through a changed definition of fair market value

10 WYOMING EMINENT DOMAIN ACT Wyo. Stat to Definitions. (a) As used in this act: (i) "Condemn" means to take property under the power of eminent domain; (ii) "Condemnee" means a person who has or claims an interest in property that is the subject of a prospective or pending condemnation action; (iii) "Condemnor" means a person empowered to condemn

11 REQUIREMENTS TO EXERCISE EMINENT DOMAIN. (a) Except as otherwise provided by law, the power of eminent domain may be exercised to acquire property for a proposed use only if all of the following are established: (i) The public interest and necessity require the project or the use of eminent domain is authorized by the Wyoming Constitution; (ii) The project is planned or located in the manner that will be most compatible with the greatest public good and the least private injury; and (iii) The property sought to be acquired is necessary for the project.

12 (C) NOTICE PROVISION (c)when a public entity determines that there is a reasonable probability of locating a particular public project on specifically identifiable private property and that the project is expected to be completed within two (2) years of that determination, the public entity shall provide written notice of the intention to consider the location and construction of the project to the owner as shown on the records of the county assessor.

13 ENTRY PRIOR TO CONDEMNATION ACTION. (a) A condemnor and its agents and employees may enter upon real property and make surveys, examinations, photographs, tests, soundings, borings and samplings, or engage in other activities for the purpose of appraising the property or determining whether it is suitable and within the power of the condemnor to condemn if the entry is: (i) Preceded by prior notice to the condemnee specifying the particular activity to be undertaken and the proposed use and potential recipient of the data thereby obtained and the condemnee has been given fifteen (15) days to grant written authorization; (ii) Undertaken during reasonable hours, normally during daylight; (iii) Accomplished peaceably and without inflicting substantial injury to land, crops, improvements, livestock or current business operations. (b) The entry and activities authorized by this section do not constitute a trespass. (c) The condemnor is liable under W.S for damages resulting from activities authorized by this section.

14 Negotiations; scope of efforts to purchase. - (b): Definition of Good Faith Negotiation - (c) (h): The Good Faith Road Map

15 ARTICLE Preliminary efforts to purchase Purchase efforts waived or excused Deposit at commencement of action Interest taken; due compensation Abandonment, nonuse or new use.

16 ACTION FOR INVERSE CONDEMNATION. When a person possessing the power of condemnation takes possession of or damages land in which he has no interest, or substantially diminishes the use or value of land, due to activities on adjoining land without the authorization of the owner of the land or before filing an action of condemnation, the owner of the land may file an action in district court seeking damages for the taking or damage and shall be granted litigation expenses if damages are awarded to the owner.

17 WHAT IS INVERSE CONDEMNATION? Property Owner initiates the action The owner alleges that the government has acquired an interest in his or her property without giving compensation, such as when the government floods a farmer's field or pollutes a stream crossing private land. An inverse condemnation proceeding is often brought by a property owner when it appears that the taker of the property does not intend to bring eminent domain proceedings.

18 WHEN IS THIS ACTION NECESSARY? Regulatory Takings: The Federal or State Government may create a regulation limiting use, access or enjoyment to a parcel of property. If the regulation deprives land of ALL economically beneficial uses it is a per se taking unless the government is acting to prevent a common law nuisance (offends the public at large). A regulation that destroys all economic value for only a limited time does not result in a per se taking. A suit for compensation usually proceeds by way of an action in INVERSE CONDEMENATION. For regulatory takings, the government may be liable for interim and permanent damages. If regulation is unconstitutional it is void.

19 ARTICLE 7 COMPENSATION STANDARDS Compensation standards. (a) An owner of property or an interest in property taken by eminent domain is entitled to compensation determined under the standards prescribed by W.S through (b) Unless otherwise provided by law, the right to compensation accrues upon the date of possession by the condemnor. (c) Except as specifically provided by W.S through , compensation, damages, or other relief to which a person is otherwise entitled under this act or other law are not affected, but duplication of payment is not permitted.

20 COMPENSATION FOR TAKING. (a) Except as provided in subsection (b) of this section, the measure of compensation for a taking of property is its fair market value determined under W.S as of the date of valuation. (b) If there is a partial taking of property, the measure of compensation is the greater of the value of the property rights taken or the amount by which the fair market value of the entire property immediately before the taking exceeds the fair market value of the remainder immediately after the taking Date of valuation. The date of valuation is the date upon which the condemnation action was commenced.

21 FAIR MARKET VALUE DEFINED. (a)except as provided in subsection (b) of this section: (i)the fair market value of property for which there is a relevant market is the price which would be agreed to by an informed seller who is willing but not obligated to sell, and an informed buyer who is willing but not obligated to buy; (ii)the fair market value of property for which there is no relevant market is its value as determined by any method of valuation that is just and equitable;

22 FAIR MARKET VALUE DEFINED. (iii)the determination of fair market value shall use generally accepted appraisal techniques and may include: (A)The value determined by appraisal of the property performed by a certified appraiser; (B)The price paid for other comparable easements or leases of comparable type, size and location on the same or similar property; (C)Values paid for transactions of comparable type, size and location by other companies in arms length transactions for comparable transactions on the same or similar property.

23 ARTICLE 8: POWER OF EMINENT DOMAIN GRANTED W.S : grants the right of eminent domain to any state, county, municipal organization or public utility. W.S : grants the right of eminent domain to railroads and limits rights of way to 200 feet. Section 812 requires railroads to construct and maintain crossings. W.S : grants the right of eminent domain to petroleum and other pipeline companies.

24 W.S : Provides for a broad right of Condemnation: Any person, association, company or corporation authorized to do business in this state may appropriate by condemnation a way of necessity over, across or on so much of the lands or other real property of others as necessary for the location, construction, maintenance and use of reservoirs, drains, flumes, ditches including return flow and wastewater ditches, underground water pipelines, pumping stations and other necessary appurtenances, canals, electric power transmission lines, railroad trackage, sidings, spur tracks, tramways, roads or mine truck haul roads required in the course of their business for agricultural, mining, exploration drilling and production of oil and gas, milling, electric power transmission and distribution, domestic, municipal or sanitary purposes, or for the transportation of coal from any coal mine or railroad line or for the transportation of oil and gas from any well.

25 PRIVATE ROADS PRIVATE ROAD STATUTES WY's private road statutes provide a mechanism by which a landowner may petition to exercise the state's eminent domain power to condemn a private road across another's property in order to establish access between his own landlocked property and a public road. "NO OUTLET" Requirement: Any owner of land HAVING NO OULET TO OR CONNECTION WITH A PUBLIC ROAD may file an application with the board of county commissioners in the county where his land is located to obtain access across the lands of another. Access to property via leased adjacent land or an illogical, uneconomic, and unproductive road is NOT an 'outlet to or connection with' a convenient public road.

26 ENERGY DEVELOPMENT AND EMINENT DOMAIN Energy: mining, oil and gas, wind and other state natural resources fall into a Kelo type economic development taking Statutes create a right to displace private property interests in the name of economic development that ultimately benefits the public at large by facilitating the operations of private firms. Land condemned by an energy company is not subject to public access or use, but rather is public in the sense that the resource development will add to overall growth of state economy

27 WIND ENERGY Moratorium expires in June 2013 Currently: private wind energy developers do not have the authority to condemn private land for wind turbines, wind farms, or wind energy collector systems; private wind energy developers do have the authority to condemn private property for interstate transmission lines and energy distribution systems. Landowners still have the power at the bargaining table with wind energy developers and can negotiate freely with them for the lease of their lands for wind farms and collector systems without the threat of condemnation.

28 PROPOSED LEGISLATION Seismic Exploration Create more compensation for landowners Will increase bond to be posted with the WOGCC Current bond is $2,000 minimum Eminent Domain- Wind Energy Collector Systems Requirement of 85% of landowners involved or landowners owning 85% of land owned in agreement to proceed Trying to enhance landowner negotiation possibilities Extends Moratorium till 2015 Working to define wind energy parameters in an eminent domain context

29 HOW TO PROTECT YOURSELF Know your rights Negotiate with confidence Advocate for protecting your private property ownership rights

30 THANK YOU Stacia Berry Hageman & Brighton, P.C. 222 East 21 st Street Cheyenne, Wyoming Telephone: