Greater Flexibility in Challenging Pipeline Takings

by Clark Hill PLC
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The standards contained in the Uniform Condemnation Procedures Act allow greater flexibility to trial judges when evaluating the necessity of a pipeline taking than other takings.

Since initially writing this post, as a result of the proliferation of pipeline takings, I prepared a new post  discussing the special standards applicable to a pipeline takings.

The Uniform Condemnation Procedures Act (UCPA) provides the legal procedures that are implemented in a condemnation in Michigan. The UCPA provides different standards for challenges to the necessity of takings in different situations.  (Please note that this blog post describes these issues generally). The standards applicable to a pipeline taking implemented by a for-profit or “private agency” are easier to meet than other standards.

If the taking is implemented by a “public agency,” “the determination of public necessity by that agency is binding on the court in the absence of a showing of fraud, error of law, or abuse of discretion.” This is the hardest standard to meet. This makes sense, since a public agency is defined as “a governmental unit, officer, or subdivision authorized by law to condemn property.” A public agency is not a for-profit entity and is responsible to the voters, making greater deference to its decisions sensible.

A “private agency” is defined as “a person, partnership, association, corporation, or entity, other than a public agency, authorized by law to condemn property.” This most commonly means a utility company or a railroad.  These entities may be more regulated than other businesses, but they are still for-profit entities that care more about their stockholders than the public. 

The deference given to a public agency does not exist. “The court at the hearing shall determine the public necessity of the acquisition of the particular parcel.” However, that determination is tempered if the public agency has followed other processes overseen by regulatory agencies. 

For a pipeline company, the “granting of a permanent or temporary certificate by the public service commission or by a federal agency authorized by federal law to make determinations of public convenience and necessity as to condemnation constitutes a prima facie case that the project in furtherance of which the particular parcel would be acquired is required by the public convenience and necessity.” A prima facie case is a presumption that an owner can rebut, it is not something that a Court must defer to. Therefore, the standards to challenge necessity for a pipeline company are definitely easier to meet than when challenging a taking by a public agency.

There are multiple pipeline projects that are currently underway.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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