Substantial Justice in Eminent Domain Proceedings: The New Date of Valuation for Privately-Owned, Public Utility Companies By: Michael C. McCabe, Jr.

Butler Snow LLP

Originally published in the Mississippi Bar Litigation Section Newsletter - May 2012.

In 2011, amid much fanfare, Mississippi voters overwhelmingly approved an initiative to amend the Mississippi Constitution to prohibit state and local government from taking private property by eminent domain and then conveying it to private interests in the name of public interest economic development for a period of ten years after the acquisition. Earlier that same year, the Mississippi Supreme Court quietly rendered its own reformation of Mississippi eminent domain law when it handed down its decision in Dedeaux Util. Co., Inc. v. City of Gulfport, in which it held that Section 11-27-19 of the Mississippi Code, which sets the date of valuation of property subject to eminent domain as the date of filing of the complaint, is unconstitutional as applied to privately-owned, public utility companies. This article discusses the Dedeaux opinion and how the Court reached its conclusion.

I. Background

Dedeaux Utility Company, Inc. (“Dedeaux”), was the holder of Certificates of Public Convenience and Necessity for certain water and sewer services in Harrison County, Mississippi, and had operated as a local utility company since 1971. In the early 1990s, the City of Gulfport, Mississippi (“Gulfport”), annexed the area served by Dedeaux and, on December 3, 1996, filed a complaint of eminent domain against Dedeaux, Cause Number 96- 01102, in the Special Court of Eminent Domain, Harrison County, Mississippi, First Judicial District. In addition to condemning those assets which existed on the date of filing, the Complaint also sought to condemn any later additions, extensions and/or supplements.

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