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The quagmire of eminent domain and pipelines

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We all know the opening lines of the Declaration of Independence with its resounding proclamation that all men are created equal and possess the “unalienable Rights” of “life, liberty and the pursuit of Happiness.” But in early drafts on the Declaration, Thomas Jefferson leaned more explicitly on the writings of political and economic philosopher John Locke, declaring we all possessed the “unalienable” rights of “life, liberty and property.”

Which may explain why Americans view private property rights almost as an article of faith today.

Two major infrastructure projects in Virginia — the Mountain Valley and the Atlantic Coast pipelines — have brought the issue of private property rights into sharp focus as the giant energy companies pushing construction of these natural gas pipelines have turned to the weapon of last resort to obtain the easements and rights of way needed before construction can begin: eminent domain. In plain English, the governmental power to take private property, with “just compensation,” for a public purpose.

The Mountain Valley Pipeline (MVP) would begin in Mobley, W.Va., travel south and then southeast into Virginia before terminating in Chatham, where it would connect to existing natural gas pipelines. The designated path of the Atlantic Coast Pipeline (ACP), the larger of the two, begins in northern West Virginia, travels southeast to and through Virginia to Brunswick County, where it turns south into North Carolina, terminating near Lumberton.

Late last month, Dominion Energy, the lead partner in the ACP, filed an eminent domain lawsuit in Nelson County against Will and Lilia Fenton’s Fenton Family Holdings to gain access to land the couple owns that’s in the path of the pipeline. The couple operates a bed and breakfast inn on Virginia 664, near Wintergreen Resort and the Blue Ridge Parkway. Negotiations between the parties over compensation for both permanent and temporary easements broke down, precipitating the federal suit.

That eminent domain suit was quickly followed by another, targeting the Wintergreen Property Owners Association, which represents some 3,700 property owners at the Nelson County resort. The ACP would emerge from a mountain and pass along a ridge directly adjacent to the resort; Dominion wants access to about 7½ acres of land for permanent easements.

Mountain Valley Pipeline LLC, which obtained Federal Energy Regulatory Commission approval in October, filed a federal eminent domain suit soon afterward against close to 300 Southwest Virginia property owners who had failed to reach easement agreements with the pipeline.

Virginia law allows for the state’s eminent domain powers to be exercised by private companies, such as Dominion or Mountain Valley Pipeline LLC., for a project deemed to be in the public interest. And federal law brings into play the Natural Gas Act once a project has gained FERC approval. Both the federal and state laws have been challenged in court by opponents of the pipelines, but those challenges have failed as courts have ruled it is constitutional for government — whether federal or state — to “loan” its eminent domain powers to a private entity for projects in the public interest.

Tensions between property owners in paths of both pipelines and the companies are already high, with Floyd and Nelson counties being the centers of opposition to the two projects. Some of the property owners sued by MVP LLC refused even to acknowledge developers’ efforts to contact them to begin the negotiation process. Others, such as the Fentons in Nelson County, negotiated back and forth for months over what was “fair and just” compensation for their property.

In June 2005 in Kelso v. New London, Conn., the U.S. Supreme Court ruled 5-4 that a state entity could constitutionally exercise its eminent domain power to take private property from one private owner and give it to another private owner as a “public use” without violating the Takings Clause of the Fifth Amendment.

Almost 13 years later, Kelso remains a flashpoint in the public policy battle over proper use of government’s eminent domain powers. It’s one thing, for example, for a state to exercise eminent domain to take private land for needed highway safety improvements. It’s quite another for a state to allow a private, for-profit company to exercise that power against private property owners. Is it legal? Yes. Is it ethical or good for a company’s image? That’s debatable. Is it good public policy? That, too, is up for debate.

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