The Supreme Court might hear a case that could have major consequences for the power of eminent domain.
This dramatic and often-used power is relatively familiar to the public. But the general public, and even many attorneys, have no idea how different the eminent domain rules can be for natural gas pipeline projects.
Eminent domain as we know it
You may know that federal, state and local governments can seek to condemn your property and take it for a public use.
If you challenge the move, the government may have to demonstrate need in court. If it prevails, you’re entitled to compensation for the market value of the land and the “taking” can then proceed.
It can get much more complicated, but that’s the basic outline of a typical eminent domain action. But with many pipeline projects, things have gotten strange.
Special rules for certain private companies
Congress has delegated the power to condemn your land to private natural gas companies that have a Federal Energy Regulatory Commission “certificate of public convenience and necessity.” Such companies can buy your land by force.
However, Congress did not authorize these companies to use a more aggressive kind of eminent domain in which the government uses “immediate possession.” Here, your land is taken immediately, and the government compensates you immediately.
Even so, despite the lack of Congressional authorization, companies routinely go to court to get, and routinely receive, immediate possession.
You might expect this to be the overreach that has the Supreme Court ing about taking the case.
But there’s more. The companies taking immediate possession often do not provided immediate compensation for immediate possession. The land is taken, survey and construction work begin, and compensation of some sort is promised at some point in the hazy future.
The federal circuit courts, except one, have upheld this "take-first-pay-later" approach, raising anticipation for what the Supreme Courts may decide, and for whether it will hear the case at all.
Either way, the Court’s next move will be consequential. A recent study from the Interstate Natural Gas Association of America Foundation predicts that about 1,400 miles of natural gas pipeline, per year, will be built for the next 16 years.