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Special Status May Make Keystone Pipeline Impervious to Lawsuits

TransCanada has qualified as a 'common carrier' in the states along Keystone XL, a designation that has stumped some attorneys, advocates and observers

By Elizabeth McGowan

Mar 2, 2011
Welcome to South Dakota highway sign

TransCanada expects to complete negotiations with the remaining Texas landowners in the coming weeks and months, he said.

"If we cannot reach an agreement, then the state of Texas has established an independent hearing process to determine fair compensation," Cunha said, "and we support this approach."

Though Republican Gov. Rick Perry is evidently fast-tracking a bill that on its surface appears to bump up protections for landowners, Ryan Rittenhouse, an organizer with , said that isn’t the case.

Instead of offering protection from the threat of eminent domain, he said, the legislation — known as in the House and in the Senate — offers an olive branch of sorts to landowners already in condemnation court. Most landowners can't afford to even fight the threat of condemnation in court, he added.

"The laws don't have teeth," Rittenhouse said. "Even if a non-profit attorney was willing to help, these condemnation cases are too expensive to fight in court. Sadly, what we're seeing is that these landowners are on their own."

To give anti-pipeline Texans a more united front, advocates are looking to create what state law refers to as "391 commissions" along the Keystone XL corridor. It allows communities within the same planning regions to band together and gain the legal status to oppose proposed development on a number of fronts.

Though TransCanada has already garnered most of the necessary state permits, Rittenhouse is one of several advocates exploring how 391 commissions might be able to challenge the Texas Railroad Commission, the and other authorities.  

'Dark Corner' of Eminent Domain

Implemented judiciously on development projects, such as sidewalks, roadways, electricity transmission and distribution lines, water lines — and yes, even oil pipelines — eminent domain can be a tool that contributes to the public good, attorneys and other specialists interviewed for this article agreed.

In the United States, the power of eminent domain lies with the legislative branch. While the U.S. Constitution requires a taking to be for public use, the taker doesn't have to be a public or an American-based entity as long those involved are adequately compensated as required in the Fifth Amendment. 

"Not many people would argue that eminent domain should be scrapped all together, but it has gone too far in a lot of instances," Doug Hayes, a project attorney with the in Boulder, Colo., told SolveClimate News in an interview.

"I guess it's really just a question of how broadly you look at this public use requirement," Hayes said. "Landowners opposed to Keystone XL are saying this isn't benefiting us, and a lot of state courts have agreed with that by saying that you can't condemn land that wouldn't be open to the public."

"But it's a tricky subject," he continued. "TransCanada could argue that it will benefit the public good because it's supplying a secure source of fuel that isn't from the Middle East."

For good reason, California attorney Gideon Kanner refers to eminent domain as "the dark corner of the law." He borrowed that definition from lawyer Lewis Orgel, who wrote a book about the topic in the 1950s.

"When it comes to … eminent domain law, judges are all over the freaking lot," said Kanner, a professor emeritus at Loyola Law School with 40-plus years of experience in the subject. "Read enough cases and you'll see that judges can find justification for any ruling. But generalist judges don’t know diddly-squat about eminent domain."

Eminent domain laws are as different as state topographies, he said in an interview, and some are substantive and others aren't.

The only reason TransCanada

The only reason TransCanada has reached easement agreements with 98.99% of the landowners is by using the threat of eminent domain. No one in their right mind would agree that a one time payment in perpetuity with no inflation factor is fair. Also in the easement agreements TransCanada asks for the right to put one or more pipelines in the same easement with no additional compensation. In Nebraska TransCanada hired the company Universa Field Services. The land agents from Universal broke Nebraska law—they did not hold Nebraska real estate licenses. Cease and desist orders were issued against representatives and the UFS president. Now it is up to landowners to determine the validity of signed agreements. TransCanada representative denied taking responsibility saying, ” That is not the way we do business. The company we hired did that.” And Transcanada did this using the threat of eminent domain without the Presidential Permit.

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