Search



Not a CBA Member? Join Now!
Find A Lawyer Directory
Find A Lawyer Directory
STRATUM
Find A Lawyer Directory
Know Your Judge

Eminent Domain Summer 2012

Summer 2012
From the Colorado Bar Association
Eminent Domain Committee
If you have trouble viewing this page in your e-mail application, you may view it online.
In this issue...

 

Eminent Domain Committee Contacts
Rich Rodriguez Duncan Ostrander & Dingess, P.C. 303-779-0200 rrodriguez@dodpc.com
Larry Tannenbaum Office of the Attorney General 303-866-5019 larry.tannenbaum@state.co.us
Amanda Bradley Hale Westfall, LLP 720-904-6010 abradley@halewestfall.com

 

Continuing Efforts to Restrict the Use of Eminent Domain for Utility & Economic Development Purposes
By Thomas J. Dougherty, Esq., Rothgerber Johnson & Lyons LLP

Nearly seven years ago the United States Supreme Court held in Kelo v. City of New London that the exercise of state eminent domain power to acquire private property for economic development purposes is a “public purpose” within the meaning of the Fifth Amendment to the U.S. Constitution. The ripples from that decision, which was generally not well-received by private property rights advocates, continue to wash ashore in legislatures across the country.

On March 5, 2012, New Hampshire Governor John Lynch signed into law House Bill 648 which restricts a public utility’s ability to request condemnation authority from the New Hampshire Public Utilities Commission (PUC). The law prohibits public utilities from requesting such authority unless the electric transmission project at issue is eligible for regional cost allocation. Various stakeholders supported the legislation as a response in opposition to the proposed Northern Pass Transmission Project – a $1.1 billion, 140 mile long, 300 kV DC transmission line intended to import as much as 1,200 MW of hydroelectricity from Quebec to southern New Hampshire. New Hampshire legislators, however, explained that the bill was needed to make the state’s eminent domain laws consistent with the 2006 amendment to the New Hampshire constitution that prohibited the taking of private property “for the purpose of private development or other private use of the property.” While the Northern Pass developers have stated publically that they do not expect the new law to adversely impact their ability to acquire the remaining right-of-way, it is clear that the New Hampshire PUC and landowners will be taking a closer look at transmission projects proposed by for-profit electric utilities as well as other takings that are arguably for a private, rather than public, purpose.

At the same time, the “Private Property Rights Protection Act of 2012” (H.R. 1433) continues to work its way through the U.S. Congress. Introduced by Representative James Sensenbrenner (R-WI) in April, 2011, the Act takes a different approach to the use of eminent domain for economic development purposes. The Act prohibits the use of eminent domain to acquire private property for economic development purposes any time within seven years of such taking. The Act defines economic development as the taking of private property from one private person to convey it to another “for commercial enterprise carried on for profit, or to increase tax revenue, tax base, employment, or general economic health.” Of particular interest to public utilities, the Act does not prohibit the taking of private property for use by electric, natural gas, telecommunications, water, and wastewater utilities. The Act applies to the federal government, to states that receive federal economic development funds, and to entities to whom such states have delegated eminent domain power. The Act creates a federal cause of action for prohibited takings and authorizes private lawsuits brought by landowners or tenants of property that is subject to taking for alleged economic development purposes. A violation of the Act would render the state ineligible to receive federal economic development funds for two years and would require the state to return or reimburse the federal government for funds previously received and used in violation of the Act. In February, 2012, the Act passed in the House and was introduced in the Senate.

New Hampshire’s legislation and H.R. 1433 demonstrate that the repercussions from the 2005 Kelo decision continue to be felt around the country. It is likely that there will be continued scrutiny of private property takings by for-profit utilities and by states and other entities involved in economic development projects.

While no similar eminent domain reform legislation has yet been introduced in the Colorado General Assembly this session, we will continue to closely monitor this issue for further developments in Colorado or elsewhere in the Rocky Mountain West. For more information on this and other eminent domain issues, please contact Tom Dougherty at 303-628-9524.

Thomas J. Dougherty, Esq., is the lawyer responsible for the content of this article. He can be reached at 303-623-9000 or by email at tdougherty@rothgerber.com.

This article was published March 14, 2012. Reprinted with permission of the author and Rothgerber Johnson & Lyons LLP.

Recent Developments

Summary of Larson v. Sinclair Transportation Company Decision

In Larson v. Sinclair Transportation Company, 2012WL1925229, ____ P.3d ____ (May 21, 2012) (en banc), the Colorado Supreme Court, reversing the Colorado Court of Appeals, held that section 38-5-105, C.R.S., does not grant, either expressly or by clear implication, the power of eminent domain to companies for construction of petroleum pipelines. The relevant portion of the authorizing statute reads: “Such telegraph, telephone, electric light power, gas, or pipeline company or such city or town is vested with the power of eminent domain, and authorized to proceed to obtain rights-of-way for poles, wires, pipes, regulator stations, substations, and systems for such purposes by means thereof.” C.R.S. § 38-5-105. In the 4–3 decision, written by Justice Rice, the Court reasoned that the term “such . . . company” in subsection -105 refers to companies described in subsections -101 and -102 of the same statute, and, because neither the words petroleum nor oil are found anywhere in Article 5 of Title 38, the statute does not expressly grant condemnation authority to a company to construct pipelines conveying petroleum. Further, the Court held that reading Article 5 as a whole, the legislature intended to confer condemnation authority for electric power infrastructure, not petroleum products, and therefore no such authority is implied.

Submitted by Jody Harper Alderman, Esq., and Jessica Kosares, Esq., of Alderman Bernstein LLC, 720-931-2086, www.aldermanbernstein.com, jha@ablawcolorado.com.

FasTracks Update

On June 28 2012, RTD broke ground on the first segment of the Northwest Rail Line from downtown Denver (Union Station) to Westminster (71st Ave. and Lowell Blvd.). The segment, which has already been funded as part of the Eagle P3 project, is 6.2 miles and scheduled for completion in 2016.

Trial Court’s Ruling on Commissioner Qualifications

In a recent Order in case number 2011 CV2546, Regional Transportation District v. 750 West 48th Ave, LLC, on a motion filed by RTD to disqualify a commissioner before trial, Judge Frick of the Denver District Court held that disqualifying a commissioner requires a demonstration that the commissioner no longer meets the standard of “disinterested and impartial freeholder,” as provided in C.R.S. § 38-1-105(1). The trial court rejected RTD’s argument that the relevant question when deciding whether to disqualify a commissioner is whether there is a “potential appearance of partiality” (ethical standard applicable to judges), and concluded that the relevant question is whether a commissioner is in fact a “disinterested and impartial freeholder.”

Submitted by Jody Harper Alderman, Esq., and Jessica Kosares, Esq., of Alderman Bernstein LLC, 720-931-2086, www.aldermanbernstein.com, jha@ablawcolorado.com.

Consider This

Recovering Attorney Fees

Even if a property owner recovers an award in a condemnation action that is more than 130 percent of the last written offer given to the property owner prior to the filing of the condemnation action, not all of the property owner’s reasonable attorney fees may be recoverable. In Town of Telluride v. San Miguel Valley Corp., 197 P.3d 261 (Colo. App. 2008), the Colorado Court of Appeals held that under C.R.S. § 38-1-122(1.5), a property owner’s reimbursement for attorney fees is limited to the fees incurred in obtaining a fair valuation, and does not include fees incurred for unsuccessfully contesting the government’s legal authority to take the property. See Id. at 263; But See C.R.S. § 38-1-122(1) (authorizing reasonable attorney fees if property owner successfully challenges the government’s legal authority to take the property).

Submitted by Michael R. McCormick, Esq., Montgomery Little & Soran, PC, 303-779-2721, mmccormick@montgomerylittle.com.

The Benefits of an Alternate Commissioner

Lawyers, judges, and parties in eminent domain proceedings, in which a three-person commission determines just compensation, may want to consider appointing an alternate commissioner to the commission. Commissioners sometimes resign from the commission prior to the valuation hearing because of health issues, scheduling issues, conflicts of interest or no longer owning real property in the state. In addition, a commissioner may be disqualified prior to trial if it is determined that s/he is no longer “disinterested and impartial,” pursuant to section 38-1-105(1), C.R.S. Without an alternate commissioner, the parties risk delaying the valuation hearing by months or years.

Submitted by Carrie S. Bernstein, Esq., Alderman Bernstein LLC, 720-931-2086, www.aldermanbernstein.com, csb@ablawcolorado.com.

Calendar

30th Annual Real Estate Symposium—July 19–21

What began in 1982 as a Saturday program in Denver has grown into the definitive annual gathering place for members of the Colorado real estate community old and new. More than a CLE conference, this annual event brings together the most outstanding speakers and timely topics, all with the spectacular backdrop that is Steamboat Springs. Join the conversation and share your stories and experiences in the various sessions, during coffee breaks, at the wine tasting, on the tee, or at the trailhead. Click here to read more.

Eminent Domain 17th Annual Conference—Aug. 2–3
Grand Hyatt Hotel, Denver

Join the Eminent Domain Institute for the Eminent Domain 17th Annual Conference, which will feature all points of view and the latest developments in Eminent Domain. Views from the Bench: Appellate Judge’s Views on Condemnation Cases, one of the conference’s panel discussions, will feature Judge Robert M. Russel, Judge Jerry N. Jones, and Judge Terry Fox from the Colorado Court of Appeals. Earn up to 12 Hours MCLE Credit, including one ethics, 15 hours real estate credit, and 12 hours apprasier credit. Click here for more information and to register.

Eminent Domain Committee Meeting—Wednesday, Oct. 31

The next Eminent Domain Committee meeting will be on Oct. 31 at a location and time TBD. Stay tuned for more information.

 

Stay up-to-date with the Eminent Domain Committee by visiting the CBA Real Estate Section website.

Contributions for future newsletters are welcome –
Contact Jody Harper Alderman or Michael McCormick.

This newsletter is for information only and does not provide legal advice.

Follow CBA on

TO UNSUBSCRIBE: Please email mhaywood@cobar.org if you no longer wish to receive this email update. Thank you.