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U.S. Supreme Court Appeal Takes on Powerful Pipeline Company That Abuses Eminent Domain

Pipeline Companies Unlawfully Take Land Now And Pay (Much) Later

Arlington, Va.—Should private pipeline companies be able to use the government’s power of eminent domain to take land immediately while denying the landowners any compensation for months or even years?

That is the question raised by a cert petition filed today (March 13, 2019) by the Institute for Justice with the U.S. Supreme Court on behalf of property owners in rural Lancaster County, Pennsylvania. The case challenges the widespread practice of private pipeline companies (which by law have been delegated a limited version of the eminent domain power) persuading federal courts to give them immediate possession of other people’s land and pay for it later . . . often much later.

In the process, not only are people’s properties being destroyed, but so are the dreams they worked so hard to turn into a reality.

All of this is playing out in Conestoga, Pennsylvania, in a case with national implications as more natural gas pipelines are constructed and crisscross our country.

Gary and Michelle Erb purchased a 72-acre tract of land in Conestoga in 2008, and built their dream home there. Their hope was to have their three sons build homes on the land as well, so they could all enjoy the hiking and hunting that is readily available in the beautiful rural setting.

But the Erbs’ dream was destroyed when the Transcontinental Gas Pipe Line Company (Transco) applied to the Federal Energy Regulatory Commission (FERC) for authorization to build its Atlantic Sunrise Project—a natural gas pipeline running through Pennsylvania, Maryland, Virginia and the Carolinas—a pipeline with a 900-foot blast radius that now sits 400 feet from the Erbs’ dream home. Not satisfied by assurances that such a blast is unlikely, the Erbs have already purchased a new home and are in the process of leaving behind their hard-won dream.

The Erbs tell their story in this short video:  https://www.youtube.com/watch?v=kiUPH8-4_s8.

When FERC gives a company a permit to build a pipeline, that permit comes with the ordinary power of eminent domain: The government (or in this case, the pipeline company) goes to court to take someone’s land for a specific project, the court sets “just compensation” for the land, and the government then chooses whether to pay that court-fixed price or dismiss the case. The government does not have to pay the price. But it has no right to the property unless it does so; the right vests with the government only after it buys the land. In delegating power to private companies like Transco, Congress gave them the authority to bring precisely this kind of straight-condemnation proceeding.

Yet pipeline companies like Transco consistently use a far more drastic power of eminent domain—a power that Congress never granted them—to take immediate possession of a piece of property and then put in their pipeline. These companies consistently and predictably abuse this power because the courts are simply rubber-stamping their actions, refusing to force the pipeline companies to operate within the limited powers Congress granted them when it created FERC in the first place.

“If Congress never gave the pipeline companies the power to take immediate possession of a piece of property, no one else may grant them that power,” said Robert McNamara, a senior attorney with the Institute for Justice, which is representing the Erbs and their neighbors in their U.S. Supreme Court appeal.

Now, two years later, Transco’s pipeline is in place and is pumping natural gas, but the Erbs and their neighbors have yet to receive a dime of compensation.

“The pipeline companies accelerate the parts of eminent domain they like—installing pipelines on other people’s land—while slowing down the part they are less enthusiastic about, specifically, paying the property owners,” McNamara explained.

“There are important laws in place here that are designed to protect ordinary Americans from the inevitable abuses we are seeing in Pennsylvania,” said IJ Attorney Sam Gedge. “Private companies exercising this power can’t be trusted to police themselves, and so it is up to the courts to ensure they don’t abuse this power by taking and using property that does not belong to them without first compensating the rightful owner.”

Transco continues to abuse its privilege by coming onto the Erbs’ property unannounced and without the Erbs’ permission. Michelle said, “They act like they own the easement area, but they don’t own it. They don’t pay taxes on that land; we do. They have taken away our sense of privacy and a sense of security. It is scary when people walk on your property out here in the country and you have no idea who they are.”

Gary added, “Transco is taking advantage of a broken system with the lower courts rubber-stamping what the pipeline companies are doing. The only ones who can stop this are the justices of the U.S. Supreme Court. This kind of abuse is happening to a lot of people, and it is going to happen to more and more people with these pipelines that are now being created all across the country. What Transco is doing isn’t right. It’s not the law. And they must be stopped. We’re trying to follow the law. I feel Transco should be made to follow the law, too. The system as it stands right now is unfair and unethical; it is un-American.”

“The U.S. Supreme Court has repeatedly called for judicial engagement when courts are scrutinizing the use of eminent domain by private entities, like Transco,” said Institute for Justice President and General Counsel Scott Bullock. “But instead, the opposite is happening in the lower courts; they are not reining in the abusive actions of these pipeline companies. In fact, the courts are letting these companies get away with whatever the companies say is necessary to get their project completed. That is the opposite of what judges are supposed to do. Unlawful takings like this by pipelines are happening all across the United States and it is past time for the U.S. Supreme Court to step in and put a stop to them.”

The Institute for Justice has spent decades fighting eminent domain abuse nationwide. IJ’s victories have saved homes and businesses, including: the home of an elderly widow from Atlantic City who successfully fought then-developer Donald Trump’s abuse of eminent domain; an Atlantic City piano tuner’s home; a small auto repair shop in Arizona; 17 homes and business in Lakewood, Ohio; and a boxing gym for inner city youth in National City, California, among other examples.

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[NOTETo arrange interviews on this subject, journalists may call John Kramer, IJ’s vice president for communications, at (703) 682-9320 ext. 205. More information on the case is available at:  https://ij.org/case/pennsylvania-pipeline-eminent-domain/.]

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