WHAT IS EMINENT DOMAIN?

Eminent domain is a complex legal area that allows the authority of the government to seize someone’s private property for public use. Examples of “public use” include projects such as building or expanding a road or highway, bridges, transmission lines, mass transit rails, and any construction project deemed economically beneficial to a community.

Under the Natural Gas Act, common carriers—such as pipeline companies that transport crude oil, coal, and carbon dioxide or hydrogen—have eminent domain privileges, along with natural gas pipelines. Condemning authorities such as these are required to provide compensation but, in many cases, the pay isn’t just. Compensation is subjective and determined by a team of appraisers, engineers, and attorneys that have planned the taking for years. Because of this, those affected are encouraged to seek legal counsel.

CAN AN OIL OR GAS COMPANY SEIZE PRIVATE LAND TO BUILD A PIPELINE?

The Natural Gas Act (NGA) grants regulatory power over the transport and sale of natural gas used “in interstate and foreign commerce” to the U.S. government. The NGA also permits eminent domain—or the right of the government to seize private land for public use with just compensation—for the construction of pipelines to transport natural gas. This means that oil and gas companies can seize your private land to build pipelines in certain circumstances.

To lawfully expropriate private property, the oil or gas company must:

• Prove that the land will be used for public use
• Justly compensate the landowner

Additionally, the oil or gas company must obtain a “certificate of public convenience and necessity” from the Federal Energy Regulatory Commission (FERC) before utilizing eminent domain. Once the entity has obtained the certificate, it can declare that it is unable to acquire the land in question by contract or through an agreement with the landowner on compensation. If this is the case, and the value of the land or property is more than $3,000, the oil or gas company may establish a right to condemn the land/property.

WHAT TO EXPECT DURING THE EMINENT DOMAIN OR CONDEMNATION PROCESS

The eminent domain/condemnation process can be lengthy and complicated. You will likely be required to provide various forms of documentation and communicate with the condemning authority and other parties.

Generally speaking, you can anticipate the following:

• A request for survey letters
• Agents for the condemning authority asking permission to talk to you
• Appraisals from the condemning authority
• An initial offer letter (usually requiring you to respond within 30 days)

Note that you do not have to accept the condemning authority’s first offer. In fact, we strongly recommend that you contact an oil and gas eminent domain attorney before agreeing to any offer. At Potts Law Firm, we can review the initial offer letter and advise you on your best options. Our goal is to protect your rights and ensure your best interests are preserved throughout the process.

WHAT DAMAGES ARE NOT COMPENSABLE IN AN EMINENT DOMAIN CASE?

When you pursue an eminent domain case, you can seek compensation for certain damages related to the seizure or condemnation of your property. However, not all damages are considered compensable.

Examples of non-compensable damages in eminent domain cases include:

• Noise and nuisance
• Offers to purchase the property that do not end up in a sale
• Other offers to purchase other properties in the area
• Project influence
• Circuity of traffic
• Dust and debris
• Business income (there are very limited exclusions to this)
• Tax valuations
• Future value of the property

If you are unsure what types of damages you may be entitled to be compensated for, we strongly recommend that you reach out to the experienced attorneys at Potts Law Firm. We can review your potential case during a free, no-obligation consultation and provide detailed information specific to your situation. Our team has extensive experience in this complex area of law, as well as the necessary resources to aggressively pursue these cases.