CHAPTER 9 ACQUISITION OF RIGHTS-OF-WAY BY CONDEMNATION

• Jurisdiction: United States

Rights-of-Way How Right is Your Right-of-Way?
(May 1998)
CHAPTER 9
ACQUISITION OF RIGHTS-OF-WAY BY CONDEMNATION
Patricia J. Winmill ¹
PARSONS BEHLE & LATIMER
201 South Main Street, Suite 1800
Salt Lake City, Utah 84111
(801) 532-1234

In many of the western states, the legislatures have delegated eminent domain powers to private individuals and private entities for an assortment of purposes, including the acquisition of various types of rights-of-way.² This paper addresses the more significant of the issues that can arise in a condemnation action brought by a private party for right-of-way purposes. Certain issues that are equally common to public and private condemnation actions, such as the compensation to be paid to the condemnee³ and the procedures applicable to a condemnation action,⁴ are not addressed.

This paper focuses on issues relating to the condemnation of private rights-of-way in the Intermountain states.⁵ By its nature, however, the law relating to private condemnations is uniquely local. It poses an array of important and complex questions of public policy, allocation of resources and the respective roles of governmental power and private property rights. With varying histories, people and circumstances, each of the states considered herein has answered these questions in different ways. Thus, it is not possible to provide a compendium of the

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condemnation laws of each these states, and no attempt has been made to do so. Instead, this paper provides an overview of some of the more important issues that commonly arise in these states and discusses some of the resolutions that have been reached.

I. THE ELEMENTS OF A CONDEMNATION LAWSUIT

While the details of state condemnation statutes and constitutional provisions vary considerably, a condemnor will succeed in condemning a parcel of property only if it can establish each of the following four elements:

1. The taking falls within the constitutional parameters established by the United States Supreme Court and the state Supreme Court;

2. The condemnor's proposed use of the property is a "public use" (i.e., the legislature has delegated power to condemn for this purpose);

3. The property is "necessary" to such public use; and

4. If the property is already appropriated to some other public use, the proposed taking fits within one of the recognized exceptions to the "prior public use doctrine."

II. CONSTITUTIONAL CONSIDERATIONS—THE PUBLIC USE QUESTION

In most of the western states, private entities and individuals are given the power to condemn land for a variety of purposes that are ordinarily considered to be purely private pursuits — such as certain mining and oil and gas activities, irrigation and other water uses, and various types of road access uses. These are extraordinary powers to place in the hands of private entities, and such grants have few parallels in the eminent domain statutes of the eastern states. To the newcomer, the first and most obvious question is: can this possibly be constitutional? The answer, depending on the jurisdiction, is yes or a qualified yes.

The power of eminent domain is an inherent attribute of the state's sovereignty.⁶ The state may delegate its eminent domain power to its agents and political subdivisions and to private entities. The delegation must be expressly stated or implied by necessity, and a court will not find that a state has delegated its eminent domain power unless the state does so through a constitutional or statutory provision.⁷

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The provisions of the state and federal constitutions do not grant eminent domain power to the state but rather serve to limit the state's inherent condemnation powers.⁸ The due process clause of the federal constitution⁹ and similar clauses in state constitutions¹⁰ require payment of just compensation for a taking, impose procedural protections on the taking and require that the taking be made only for a public use.¹¹ In a condemnation action brought by a private party, the obvious constitutional question is whether the taking is for a public use.

Typically, a delegation of condemnation power to private entities is accompanied by a legislative or constitutional declaration that the use for which the power has been bestowed is "public." Most of the western states have expressly declared in one fashion or another that certain kinds of mining, water, and oil and gas uses, as well as various access rights, are public uses.¹²

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The courts, however, insist that the final determination of whether a use is "public" is a judicial question.¹³ While insisting that they are the final arbiters of the issue, most courts do concede that their review role is limited¹⁴ and will typically defer to state legislative determinations of what constitutes a "public use."¹⁵ Thus, the court begins its review by presuming the constitutionality of the statute or constitutional provision declaring a particular use to be "public."¹⁶ The court will only invalidate the statute's or constitution's public use declaration if the court cannot find any reasonable interpretation that conforms to the state and federal constitutional limitations.¹⁷

Although courts are not bound by any rigid rule when determining whether a use is public,¹⁸ they have developed two different frameworks within which to make such a determination. The first framework applies a more orthodox view requiring direct public use and enjoyment of the property to be condemned.¹⁹ In states adopting this approach, condemnation for private rights-of-way is not possible.

The second framework, which courts in most of the western states have adopted,²⁰ applies the more liberal "public benefit doctrine."²¹ According to one court, the public benefit doctrine endorses as public any use that:

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tends to enlarge the resources, increase the industrial energies, and promote the productive power of any considerable number of the inhabitants of a section of the state, or which leads to the growth of towns and the creation of new sources for the employment of private capital and labor, [or] indirectly contributes to the general welfare and to the prosperity of the whole community.²²

The fact that the use will directly involve or benefit private interests (e.g., by bringing about private profit) does not necessarily mean that the use is private.²³ Likewise, the number of people who will actually use the property is not material to the determination of whether the use

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is public.²⁴ What is material is whether the activity can be viewed as providing a significant benefit to society as a whole.

In upholding delegations of private condemnation rights under the public benefit doctrine, the courts have offered three rationales for their conclusion. First, courts look to the conditions peculiar to the state to justify a declaration that a given use is public. According to the United States Supreme Court,

[W]hether a statute of a state permitting condemnation by an individual ... for [irrigation uses] or mining should be held to be a condemnation for a public use, and, therefore, a valid enactment, may depend upon a number of considerations relating to the situation of the state and its possibilities for land cultivation, or the successful prosecution of its mining or other industries."²⁵

Courts in the west, noting the conditions that are unique to the western United States, have voiced common reasons for adopting the "public benefit" doctrine. For example, many western courts recognized, at an early date, that mining was one of the most important, if not the most important, industries in their states: "Mining is the greatest of the industrial pursuits in this state. All other interests are subservient to it.... The present prosperity of the state is entirely due to the mining developments already made...."²⁶ Similarly, in the arid west, early courts observed that "the future growth, prosperity, upbuilding, and industrial expansion of the state" depend on the ability to store and transport water to the places where it can be put to beneficial use.²⁷ Accordingly, these early courts had no difficulty determining that mining and irrigation uses were public uses.

The courts' second rationale for upholding delegations of private condemnation authority to companies in the natural resource industries is based on the nature of those industries. For example, courts have recognized the limitations imposed on mining and oil and gas companies, which are required to set up operations wherever the resources are located, and on water users who are limited to taking water where it can be found. The courts have reasoned that, given the fixed location of the resources in areas often difficult to access, the legislature could reasonably

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conclude that there is a significant public benefit in granting condemnation rights to these kinds of private enterprises. The power to condemn rights-of-way necessary to access and exploit the resources ensures that these industries will not be held hostage by adjacent landowners and, accordingly, that the state's natural resources can be exploited.²⁸

The third rationale for upholding delegations of private condemnation rights is based on concepts of judicial restraint and deference. Courts have been hesitant to second guess policies set by the legislature's declaration of certain uses as public, because policy making is the domain of the legislature. "[I]t is not the public or private character of the use to which the property is to be devoted that authorizes its taking, but rather the public policy as announced in the Constitution, or, in the absence of constitutional limitation, as announced by the legislative body."²⁹

In the main, this three-prong analysis has withstood the test of time. It is true that circumstances in the western United States have changed dramatically since the time of the early mining cases, and few modern courts...