State Con Law Case of the Week: Reading the “Despotic Power” Narrowly

Anthony Sanders · May 21, 2021

This week’s state constitutional law case isn’t strictly speaking about an interpretation of a state constitution, but the state’s fundamental document—and some general principles about property rights—definitely are looming in the background.

Most states have an equivalent to the U.S. Constitution’s Takings Clause, which says “nor shall private property be taken for public use, without just compensation.” Some states have pretty-verbatim copies of that language, but some add more precision, including—after the Supreme Court’s terrible ruling in Kelo v. New London—explicit protection against takings for economic development. For example, Michigan’s constitution goes on and defines “public use” to “not include the taking of private property for transfer to a private entity for the purpose of economic development or enhancement of tax revenues.”

Wyoming’s doesn’t have that, but it does have additional language of a different kind. This is Article I, Section 32 of the state’s constitution:

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.

Having driven across Wyoming a couple times, I can vouch that it’s a place with a lot of land and also a lot of minerals. Which is what that language is driving at. Prospectors often purchase mineral rights under land that they don’t own. You’d hope that the owner of the land on the surface and the mineral owner can come to an arrangement to allow exploration and mining of the minerals without disruption and in a mutually beneficial way. But it doesn’t always happen like that. Which sometimes leads to the “private ways of necessity” the state constitution mentions. Those are rights to access the surface above the minerals, even if the surface owner doesn’t allow it. Without getting into the separate question of whether this has concerns under a proper interpretation of the U.S. Constitution’s Takings Clause (it very well could!), this language came up in a case the Wyoming Supreme Court ruled on last week, EME Wyoming, LLC v. BRW East, LLC.

There, a mineral company asserted that it had leases and “agreements” to oil and gas rights under a ranch’s land. It wouldn’t divulge who its “agreements” were with, and was pretty cagy about what parts of the ranch’s land they covered, but they seemed to have been options to lease oil and gas rights if the company determined that oil or gas might actually be under the ground in the area in question. The ranch didn’t take kindly to the company’s requests to access the land. But, under Wyoming statutes, and the state constitution, a mineral owner can actually have the power to initiate eminent domain in a case like this, and the mineral company thus went to court.

Under an expansive reading of the relevant statute, the company argued that it had the power of condemnation simply because it was a mineral company. Thus, it had the right to access the land to collect data as to where it could potentially drill, and then, if oil or gas was found, to actually drill. The court said, no that’s not what the law says. Invoking the thankfully common maxim that “condemnation statutes must be construed narrowly,” the court interpreted the state’s Eminent Domain Act to only allow that power when a mineral company actually is landlocked out of its mineral ownership, not just if it wants to acquire mineral ownership, such as through the option contracts. And in this case the company hadn’t proved that. What’s more, because it was so secretive about exactly where its mineral rights were, the court said it hadn’t done its part to prove those rights with enough specificity.

Sometimes state constitutional law can protect property rights through explicit protections, like Michigan and many other states added in the wake of Kelo. But sometimes it can happen more subtly. Let’s hope more ranchers out there are able to stand up to private parties cloaked with the “despotic power” (as Justice William Paterson called it in 1795) of eminent domain.

Anthony Sanders is the Director of the Center for Judicial Engagement at the Institute for Justice.