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Luke Ellis interviewed on Fox News: Border wall faces legal battles over eminent domain in Texas
12 Wednesday Apr 2017
Category Archives: Landowner Rights
Texas Supreme Court Pipeline Ruling Sets back Texas Land Owner Rights
03 Friday Feb 2017
Tags
Appellate Court, Common Carrier, Common Carrier Test, common-carrier status, Denbury, Denbury Green Pipeline, landowner rights, Landowners, Opinion, politics, property rights, Public Benefit, Public Use, supreme court of texas, Texas, texas property rights, Texas Rice Land Partners, Third Party Contract
According to the Fifth Amendment of the U.S. Constitution and Article I, Section 17 of the Texas Constitution, applications of the eminent-domain power must be for public use. Jurisdictions have developed legal and administrative structures which allow private interests limited uses of the power. For Texas pipelines, the granting of eminent-domain authority can only take place when a project fulfills certain requirements. Chief among these is the ability to prove that the pipeline has a public use, meaning it is not being built exclusively for and used only by the entity condemning the land. Statewide, the common-carrier definition, and the derivative test determining whether the definition can describe a given pipeline, is used to establish and enforce the public use requirement.
In the recently decided Denbury Green Pipeline – Texas, LLC v. Texas Rice Land Partners, Ltd., the Texas Supreme Court clarified the access conditions for common-carrier status. In 2015, an appellate court established two additional barriers to common-carrier status. First, it held that a pipeline’s common carrier status must result from an examination of the intent of the constructing party to use the pipeline for public benefit at the onset of the project’s contemplation. Second, the pipeline’s use must serve a “substantial” public interest. The Supreme Court decision reversed these two holdings, the first on the grounds that it misinterpreted case law, and the second because it proceeded beyond the limits of precedent. The Supreme Court also held that Denbury’s post-construction product transportation contracts with third parties, and the fact that certain third parties would retain product title, was sufficient to evidence public use and therefore common-carrier status after the pipeline is built. This opinion is a significant blow to Texas landowner rights.
How the Badgers can “Hook the Horns” and Gig the Aggies
26 Friday Aug 2016
Posted in Landowner Rights, Property Rights, Supreme Court
Tags
adjacent parcels, Department of Natural Resources, Eminent Domain, Football, Joseph P. Murr, Regulatory Takings, St. Croix County Land Ordinance, Supreme Court, Supreme Court of Wisconsin, taking, Texas landowners, Wisconsin, Wisconsin Court of Appeals, Wisconsin Land Ordinances
Typically, Wisconsin happenings impact Texas most greatly in the area of football. However, a recent Wisconsin legal development, now before the Supreme Court, may well have implications for Texas landowners in the area of regulatory takings. Regulatory takings occur when a government regulation limits the potential uses of a property to such a degree that the property is effectively stripped of all economic value. In Joseph P. Murr et al v. Wisconsin, et al., the Murrs, siblings Joseph, Michael, Donna, and Peggy, argued that by prohibiting certain transactions, particular Wisconsin land ordinances had so deprived their property of value that a regulatory taking been inflicted.
In 1960, the Murr’s parents purchased Lot F and constructed a cabin on it. They purchased the adjacent Lot E three years later as an investment for development or sale. Lot E remains undeveloped to this day. In 1994, the Murr’s parents transferred ownership of Lot F to the siblings, followed by Lot E in 1995. As the parcels were adjacent, less than one acre in size, respectively, and now under common ownership, the title transfer triggered a St. Croix County land ordinance which merged the two lots. The same Ordinance also prohibits the sale or individual development of adjacent lots under common ownership unless an individual lot has an area of at least one acre. Several years later, the Murrs attempted to sell Lot E, and sought a variance to use or sell their lots separately. The Department of Natural Resources and county zoning administrators challenged the application, which was formally denied by the St. Croix County Board of Adjustment. The Murrs sought review and the trial court affirmed the Board’s decision. On appeal, the Wisconsin Court of Appeals affirmed the lower court’s decision.
The Murrs then brought action against the State and County, alleging that the Ordinance caused an uncompensated regulatory taking of their property. They argued that by restricting any sale of the parcels to a combination of the parcels only, the Ordinance deprived the Murrs of any value that Lot E might have possessed as an individual parcel. The Court determined that the effect of the Ordinance must be examined on the Murr’s property as a whole. The Court held that taken as a whole, the land still retained significant value even under the Ordinance, and that therefore, the Murrs did not suffer a compensable taking as a matter of law, which the Wisconsin Court of Appeals affirmed. The Supreme Court of Wisconsin declined to hear the Murr’s appeal of the Appellate Court’s decision.
The case has since then been granted review by the United States Supreme Court, and may have a direct impact on Texas landowners who have been denied use of their property by a City or County Ordinance.
Mitigation Credits as “Highest and Best Use”
22 Friday Jul 2016
Tags
California Tiger Salamander, condemnor, County of Santa Barbara, Double H Properties, Eminent Domain, entitlements, environmental impact, financially feasible, Highest and Best Use, King County WA, Landowner Compensation, legally permissible, maximally productive, mitigation bank, mitigation credit theory, mitigation credits, physically possible, rural farmland, sensitive or protected habitat
In Eminent Domain cases, the acquiring entity or condemnor, must compensate the landowner for the property they are taking. Fulfilling this requirement typically raises two questions:
1) How much should the landowner receive for their land?
2) How should we determine that amount?
Under Texas law, a landowner is entitled to compensation for an amount to be determined by an application of the “Highest and Best Use” (HBU) principle. The principle requires that the value of the land be established, not merely by evaluating the current use, but by analyzing four factors. Thus, a landowner may receive an amount derived from a potential highest and best use, rather than the current one. Therefore, an application of the HBU principle must operate within the boundaries established by these four limiting conditions. The purported HBU must be:
1) Legally permissible
2) Physically possible
3) Financially feasible
4) Maximally productive
In short, the HBU attempts to hold the condemnor responsible for the greatest compensation amount that can be sustained by an objective analysis of a respective property.
An interesting application of the principle was attempted recently in the California case of County of Santa Barbara (Plaintiff and Respondent) v. Double H Properties, LLC (Defendant and Appellant). This case was initiated by the County for the purposes of obtaining an easement to serve as a habitat for the endangered California Tiger Salamander. In valuing the land, the owner’s appraiser submitted two theories, one which analyzed the property as rural farmland, and one which calculated the value of the property when used for mitigation credits.
Mitigation credits are a way that a developer can obtain entitlements when a project is likely to impact an environmentally sensitive or protected habitat. To earn these entitlements, the developer can purchase mitigation credits with a mitigation bank. The bank then purchases and preserves another property to offset the environmental impact of the original construction.
The owner’s appraiser argued that, only when the land was valued as mitigation credits, did it fulfill its highest and best use, and obtain the greatest value. Their assessment also exceeded in value the one put forth by the County’s appraiser, who valued the property as farmland. The County moved to exclude the landowner’s valuation, a motion which the Trial Court granted.
The owner took the case on appeal. In reviewing the Trial Court’s dismissal of the owner’s mitigation credit theory, it became apparent to the Appeals Court that the appraiser had never provided any evidence that the land could be entitled for mitigation credits. In other words, the appraiser had failed to show that the use of the land for mitigation credits was affirmatively permissible in the law. The Appellate Court held that the Trial Court did not abuse its discretion in excluding the mitigation credit appraisal.
This will likely not be the last time we see this argument made in regards to a highest and best use analysis in California or elsewhere.
“That’ll Be the Day” – The Accommodation Doctrine and Landowner Dispute Resolution
15 Friday Jul 2016
Posted in Landowner Rights
Tags
accommodation doctrine, American Property Law, bailey county, Buddy Holly, city of lubbock, coyote lake ranch llc, dominant estate, exploratory drilling, groundwater rights, landowner dispute resolution, mineral rights, ogallala aquifer, supreme court of texas, surface rights, that'll be the day, water table
“You say you’re gonna leave, you know it’s a lie,
‘Cause that’ll be the day when I die.”
– Lyrics from “That’ll Be the Day,”by Buddy Holly.
In American property law, an ownership distinction can be made between the holders of the surface rights and the mineral rights of a particularly property. In other words, it is possible for the surface of a property and its subsurface, to have separate owners. Predictably, the ability of the law to make this distinction has led to legal conflict. These clashes, over time, have produced what is known as the Accommodation Doctrine, a principle which seeks to govern the relationship between surface interests and mineral interests. It attempts to balance the interests of both parties in a just and proportional manner.
One formulation of the Accommodation Doctrine states that “an oil-and-gas lessee has the implied right to use the land as reasonably necessary to produce and remove the minerals but must exercise that right with due regard for the landowner’s rights.” (Getty Oil Co. v. Jones) Under this principle, the mineral estate is understood in the law to be dominant. Because a mineral estate would be worthless were it inaccessible, and because surface alterations may be required to ensure access, the mineral estate receives the right to use the surface estate. Therefore, the mineral estate is considered dominant. It is for the same reason that the surface estate is considered servient.
The Texas Supreme Court recently considered the accommodation doctrine in Coyote Lake Ranch, LLC v. The City of Lubbock, in the Supreme Court of Texas. The Coyote Lake Ranch, located in Bailey County, sits atop the Ogallala Aquifer, a water table stretching across multiple states. Over 60 years ago, during a severe drought, the City of Lubbock, Texas purchased the Ranch’s groundwater to provide water to its residents. The deed preserved certain amounts of groundwater for the Ranch to use for domestic purposes, ranching operations, oil and gas production, and irrigation. The deed also granted the City of Lubbock tremendous latitudes to extract water and conduct exploratory drilling operations.
In 2012, the City indicated that it was interested in developing new wells, in addition to the eighteen that it had established since purchasing the groundwater rights. Specifically, the City expressed an intent to drill as many as eighty new wells, and argued that its rights, granted by the deed, permitted these activities. Understandably, the Ranch’s management did not respond with enthusiasm, and attempted to work with the City to find an alternative. Unable to reach an agreement, the City began clearing vegetation from the Ranch to create pathways to potential drilling sites. In response, the Ranch sued the City, successfully in the trial court, to enjoin their actions.
Application of the Accommodation Doctrine seemed the surest way to resolve the conflict of interest between the City and the Ranch. However, uncertainty arose from the fact that the Doctrine had never been applied to cases involving groundwater estates. Upon its examination of the issue, the trial court found that groundwater interests were sufficiently similar to mineral interests, and held the Doctrine applicable.
In light of this finding, the Court ruled that the City had a right to the reasonable use of the surface insofar as the use of the surface was necessary to access and recover the groundwater. The Court found that, by barring the City from damaging the surface vegetation, the trial court’s injunction effectively precluded any possibility for recovery of the groundwater. For these reasons, the Supreme Court upheld the Court of Appeals’ judgment reversing the trial court’s injunction and remanding the case for further proceedings.
As the study of cases like Coyote Lake Ranch, LLC v. The City of Lubbock may suggest, applications of the Accommodation Doctrine rarely produce satisfactory results for all parties. Often, the Doctrine is applied to situations where contract language is unclear or absent on such issues. Perhaps there will one day be a more effective method of resolving these disagreements to the satisfaction of all parties involved, but it seems clear that such a remedy has not yet been found. As Buddy Holly used to say, “That’ll Be the Day…”
New TxDOT Plan “CityMAP” Presents New Alternatives to Reduce Congestion
24 Friday Jun 2016
Tags
CityMAP, Congestion, Dallas, Dallas Master Assessment Plan, economic development, highway development, Landowner's Bill of Rights, Texas Property Code, traffic efficiency
The Texas Department of Transportation (TxDOT) recently announced a new plan called CityMAP which outlines the department’s initiatives to address Dallas’ current and future transportation issues. CityMAP, short for Dallas City Master Assessment Plan, constitutes a change in direction for TxDOT, which has a long tradition of attempting to resolve congestion issues by funding road-expansion projects. After years of mixed results, the department has decided a change in methodology was required.
A major finding emphasized by the report was the fact that many Dallas highways currently function as physical barriers that isolate neighborhoods, making them nearly inaccessible, and severely limiting economic opportunities. The report suggested that removing highways or highway sections, or applying modifications such as lowering highway might help improve access, which could in turn spur economic development.
The study projects that at its current growth rate, the number of drivers will surpass the capacity of the highway system by 2040, despite a number of active highway-expansion projects. Such research, combined with a new focus on urban development, has led to a shift from highway traffic, to city, or urban related traffic. The thought is that making the city more suitable for cyclists or pedestrians would cause citizens to walk or bike with greater frequency, which would decrease the overall number of cars on the road and improve traffic efficiency.
But how will complete abandonment of these highways impact the landowners who lost their property to the original highway construction? Subchapter E of the Texas Property Code may have the solution.
To view the Texas Landowner’s Bill of Rights, click here.
Houston Churches Face Goliath in Eminent-Domain Battle
21 Friday Aug 2015
Tags
Attorneys, Austin, Austin condemnation, Austin eminent domain lawyer, Blog, Church, Condemnation, Condemnation claims, Eminent Domain, Houston, Houston condemnation, Houston eminent domain lawyer, property rights, Texas, Texas condemnation lawyer, texas eminent domain, Texas eminent domain lawyer
He and the church have helped congregants through drug addictions and gang violence, establishing a youth center and food pantry as part of the church’s mission, but they may have encountered a problem they cannot overcome: the power of eminent domain.
Bishop Roy Lee Kossie has been preaching at Latter Day Deliverance Revival Church in Houston’s Fifth Ward for 50 years, starting his work in 1965 when the area had gained notoriety as one of the city’s most dangerous neighborhoods.
At that time, the Fifth Ward became known as the “Bloody Nickel.” But, decades before the spur of its neighborhood violence, locals simply called it the “Nickel.” The neighborhood had served as a hub for minority-owned businesses and development during an era of redlining and de facto segregation. Congressman Mickey Leland and Congresswoman Barbara Jordan are products of the Fifth Ward, both attending Phillis Wheatley High School on Lyons Avenue, one of the nation’s largest black schools before desegregation.
The neighborhood, once flourishing with the hustle-and-bustle of local businesses, began to change in the 60s, according to the Texas State Historical Association, when upwardly mobile residents moved out to seek broader opportunities that stemmed from integration. Some attribute the neighborhood’s economic and social fall to Highway 59’s exclusion of Lyons Avenue and Jensen Drive – two of the Fifth’s busiest streets at the time – as exits on the major roadway, according to Houston History Magazine.
“The decline was slow,” Patricia Pando wrote in the Houston History Magazine. “Businesses did not disappear overnight. Nevertheless, by the late 1960s, the Lyons Avenue and Jensen Drive intersection was all but abandoned except for the still booming nightclub activity.”
The area’s decline did not, however, scare Bishop Kossie away from his church on Lyons Avenue. The church worked to acquire property, including the lots of two neighboring nightclubs, for its ministry.
“People shot first and asked questions later,” he said in a news release from the Liberty Institute. “But, we love this community. This is where the Lord called us and this is where we want to stay.”
He and the church have helped congregants through drug addictions and gang violence, establishing a youth center and food pantry as part of the church’s mission, but they may have encountered a problem they cannot overcome: the power of eminent domain.
The Houston Housing Authority (“HHA”) has made offers to purchase three of the church’s properties and has threatened to use eminent domain if those offers are not accepted, according to a lawsuit filed August 3 by Latter Day Deliverance Revival Church (“Latter Day”) and Christian Fellowship Missionary Baptist Church (“Christian Fellowship”). Liberty Institute is representing the churches and stated that the HHA was also seeking property owned by Christian Fellowship, a church that has been in the neighborhood for nearly 40 years.
The two churches in Houston’s Fifth Ward assert that the HHA’s use of eminent domain for a redevelopment project infringes upon the churches’ right to practice religion freely as the entity is seeking to take an “undeveloped” plot that Latter Day currently uses for parking and for its outdoor ministry in addition to other properties owned by the churches.
The HHA was seeking a total of four parcels from the two churches, three from Latter Day and one from Christian Fellowship, according to the Houston Chronicle. Christian Fellowship resides on one of those parcels, and the HHA planned to demolish the church to build a library, according to a lawyer for the Liberty Institute quoted in the Houston Chronicle Aug. 4.
The HHA initiated a redevelopment project in the Houston neighborhood in partnership with the Fifth Ward Community Redevelopment Corporation (“FWCRC”), an organization dedicated to revitalizing the historic Houston neighborhood through various development projects. The project, however, has come under public scrutiny since the lawsuit was filed. The HHA and the FWCRC altered their initial plan in response to the criticism, and their new plan would allow Pastor Quinton Smith to continue his 20-year career at Christian Fellowship.
“Toward ensuring [Pastor Smith’s] congregation continues its important presence in this community, I have asked our authority’s president, Tory Gunsolley, to work with our consultants to create an alternate development plan that does not include the property of First Christian Fellowship Missionary Baptist Church,” Chairman of the Houston Housing Authority Board of Commissioners Lance Gilliam said. “Unfortunately, that alternate plan will not allow us to include a new library. We recognize, however, that this sacrifice is balanced by the very real impact Pastor Smith and his congregation will have on the lives of existing and future residents of the Fifth Ward.”
Despite this alteration, the HHA and the FWCRC still plan to acquire Latter Day’s property to build a private health clinic.
“Although I applaud Bishop Kossie’s and his congregation’s impact on the quality of life in the Fifth Ward, I cannot provide him any comfort regarding our disagreement,” Gusnolley said.
The court has granted the churches a temporary restraining order to keep the housing authority off their properties but has not yet decided on whether the potential HHA taking violates the Texas Religious Freedom Restoration Act.
The HHA and the FWCRC may have noble intentions for the Fifth Ward as the FWCRC has a history of involvement in the community that includes the building of more than 300 homes in an effort to revitalize the Nickel. But, if we have learned anything since Kelo, it is that economic growth and development should not be cause enough to infringe upon someone’s constitutionally-protected property rights. Latter Day purchased its parcels of land with a vision in mind, and the HHA should not come between the church and that vision without having a compelling reason vested in the public interest to do so.
Co-authored by Justin Hodge and Ayla Syed.
If you have any questions about this blog, please feel free to contact Justin Hodge (jhodge@jmehlaw.com).
College Station, Texas – Property Owner and Landowner Rights Conference
07 Friday Aug 2015
Tags
Austin condemnation, Austin Eminent Domain Attorney, Austin eminent domain lawyer, College Station Eminent Domain, Houston condemnation, Houston Condemnation Lawyer, Houston Eminent Domain Attorney, Houston eminent domain lawyer, landowner rights, property rights, Texas Condemnation, Texas condemnation lawyer, texas eminent domain, Texas eminent domain lawyer, Texas Lawyer
College Station has been a hub for growth in recent years, and this growth has triggered the development of several large-scale infrastructure projects that will require the use of eminent-domain to reach fruition. In an effort to help educate local landowners of their rights in these proceedings, Johns Marrs Ellis & Hodge hosted the Property Owner and Land Owner Rights Conference on May 9 in College Station.
Tiffany Lashmet
Tiffany Dowell Lashmet, Assistant Professor and Extension Specialist who focuses on Agricultural Law at Texas A&M Agrilife Extension, spoke to those in attendance about easement negotiations and rights. Lashmet writes and maintains the Texas Agriculture Law blog for A&M, a site that has been regarded as one of the top legal blogs in the nation.
“Condemnation proceedings have very different procedures than other civil cases,” she wrote in one blog. “It is important for landowners to understand the condemnation process in case they ever find themselves faced with a condemnation suit.”
JMEH partners Luke Ellis and Justin Hodge also presented at the conference and provided a summary of Texas Senate and House bills pertaining to eminent domain. Most of the bills discussed did not make their way into legislation at the close of Texas’ 84th Legislative Session. The two also went over what the landowners affected by nearby projects could expect in an eminent-domain lawsuit.
“There were dozens of concerned landowners in attendance who are deeply impacted by these projects,” Hodge said.
The conference also included discussions about land valuation, typical valuation disputes in condemnation cases, and information about what to look for when obtaining an appraiser.
If you have any questions regarding this seminar or any other projects, please feel free to contact Luke Ellis (lellis@jmehlaw.com) or Justin Hodge (jhodge@jmehlaw.com).