Virginia, Not Feds, Should Call Shots

Landowners facing the use of eminent domain by Dominion Resources and its partners in the construction of the proposed Atlantic Coast Pipeline should have their cases heard in Virginia courts, not federal courts, argues prominent Virginia attorney Henry Howell. Virginia courts afford landowners much better opportunities to acquire just compensation than they would ever receive in federal courts, according to Mr. Howell’s analysis:


In 1938 the Federal Government enacted and implemented the Natural Gas Act giving the Federal Power Commission, later to become the Federal Energy Regulatory Commission, power to regulate the wholesale rates of interstate natural gas companies and the construction and placement of their pipelines. The United States Supreme Court had ruled that states could not regulate these interstate gas companies without violating the Interstate Commerce Clause of the United States Constitution.

The Natural Gas Act gives some respect to States Rights by requiring interstate natural gas companies to use state condemnation procedures to the greatest extent possible when condemning property for pipelines and other infrastructure:

The practice and procedure in any action or proceeding for that purpose in the district court of the United States shall conform as nearly as may be with the practice and procedure in similar action or proceeding in the courts of the State where the property is situated: Provided, That the United States district courts shall only have jurisdiction of cases when the amount claimed by the owner of the property to be condemned exceeds $3,000.
15 U.S.C Section 717f(h).

State condemnation procedures and evidentiary rules are always more favorable to property owners than federal procedures and rules of evidence.

Unfortunately for property owners having their property taken for interstate pipelines, the Federal Circuit Courts beginning in 2003 have ruled that, in the interest of uniform procedures for federal court condemnations, the federal rules of condemnation apply to all condemnations under the Natural Gas Act. This judicial fiat judicially repealed the Act’s requirement that the federal courts use state procedures as much as possible. Among the rights that the federal courts took from property owners was the right to a jury trial.

The Act further provides that “the practice and procedure in any action or proceeding for that purpose … shall conform … with the practice and procedure in similar action or proceeding in the courts of the State where the property is situated.” Id. Courts, including the district court here, agree that this state procedure requirement has been superseded by Rule 71A. E. Tenn. Nat. Gas Co. v. Sage, 361 F.3d 808 (4th Cir. 2004), cert. denied, 543 U.S. 978 (2004)

In sharp contrast to federal condemnation procedures that deny owners the right to a jury trial to determine just compensation, Virginia condemnation procedures give an owner the right to a condemnation commission comprised of local property owners whom the owner participates in selecting for the trial on just compensation. If a United States District Court judge uses his discretion to allow an owner a jury trial on just compensation, the jury of six must decide on just compensation unanimously, and even then, the federal judge may take the jury verdict away from the owner and order a second trial or a third one until the judge is satisfied with the verdict. The owner cannot appeal until he or she goes through the new trials. Under Virginia condemnation procedures, five condemnation commissioners decide on just compensation by a majority vote; three out of five is all the owner needs to obtain just compensation as property owners who are his or her neighbors determine. Federal juries are drawn from wide ranging areas outside of an owner’s locality and are often unfamiliar with real estate markets particular to an owner’s county.

The Natural Gas Act does not allow interstate gas companies to enter on owner’s property to construct pipelines until the owner has a just compensation trial and receives just compensation from the company. In 2005 the Fourth Circuit Court of Appeals that governs federal courts in Virginia ruled, that despite the language in the Natural Gas Act, a federal district court has the power to order owners to allow construction of pipelines on their property before receiving just compensation. The federal courts will send federal marshals to arrest any owner resisting the court’s order to allow the pipeline companies on their property.

Federal courts do not require interstate gas companies to make a bona fide effort to acquire the property through negotiations. Virginia law prohibits state courts from having jurisdiction over a condemnation until the condemning authority provides an owner with an appraisal and engages in good faith efforts to buy the property without condemnation.

Atlantic Coast Pipeline, LLC has the option to file any necessary condemnation procedures in Virginia courts and not federal courts:

In addition to right-of-way, for the location of compressor stations, pressure apparatus, or other stations or equipment necessary to the proper operation of such pipe line or pipe lines, it may acquire the same by the exercise of the right of eminent domain in the district court of the United States for the district in which such property may be located, or in the State courts. 15 U.S.C Section 717f(h).

If the Atlantic Coast Pipeline, LLC is serious when it says that it respects owners and their property, it should prove it by filing any necessary condemnation in Virginia circuit courts in the counties where it is taking property for profit and not the United States District Courts in Virginia.

Henry E. Howell, III
Benjamin L. Perdue
The Eminent Domain Litigation Group, PLC

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