Lawyers say North Carolina bill removes ‘stumbling block’ for pipeline

By striking the phrase “originating in North Carolina” from the state’s eminent domain law, a bill approved by the North Carolina House could remove a key legal obstacle for the 600-mile Atlantic Coast Pipeline.

Eliminating those four words would give the interstate pipeline clear authority under state law to force property owners to allow surveys and sell easements on their land, say experts. Otherwise, the words are “a significant stumbling block,” said eminent domain attorney Jason Campbell.

The bill’s sponsor, Rep. Chuck McGrady (R-Henderson), is a former president of the national Sierra Club with a lifetime score of 60 percent from the N.C. League of Conservation Voters. He voted against legalizing hydraulic fracturing and horizontal drilling in North Carolina in 2012 and again in 2013.

And though this is the first time he’s proposed to cross out “originating in North Carolina” from the law, the revision is part of a broader bill to limit the use of eminent domain by private developers that he’s sponsored three times before.

So he had some credibility last Thursday when he sought to assure lawmakers and members of the public that the change was only a “conforming” one.

“I’m not looking for any expansion [of eminent domain authority] here,” said McGrady on the floor of the House. “I’ve heard the argument that we’re trying to promote fracking and promote a natural gas line. I’m just going to stand my ground and say ‘no.’ We’re just trying to clean the language up.”

Though it drew only nine dissenting votes, McGrady’s bill has uncertain prospects for becoming law; his previous measures have cleared the House but languished in the state Senate.

But many say the legislation’s removal of the phrase is more than merely technical. And its introduction has helped spark debate in county courts, where the pipeline company has sued owners of 21 North Carolina properties, invoking eminent domain powers it may not actually have.

Questions over allowing surveys

The eminent domain or “takings” clause of the Fifth Amendment is usually associated with local or state governments, which can forcibly “take” private property to fulfill a public purpose – such as a road, park or school – as long as they provide “just compensation.”

The pipeline’s power to use this clause vexes landowners like Francine Stephenson. “I am sickened that my land is possibly going to be taken through eminent domain for a purpose that I think is to line the pockets of shareholders of a private company,” she said.

Yet over the years, courts have broadly defined public use to encompass a number of for-profit objectives – including the purchase of easements for utilities to run transmission lines and pipelines – if they prove their public worth by gaining approval from a regulating entity.

Atlantic Coast Pipeline, LLC – a project of Dominion Resources, Duke Energy and Southern Company – does not yet have such approval, and hasn’t yet attempted to get a court to force sales of easements.

But it has sought to survey private land to help inform its permit application to federal regulators. This “pre-condemnation entry” has already ignited court and legislative battles in West Virginia and Virginia – and could be poised to do the same in North Carolina.

In 2014, the pipeline began mailing some 1,000 North Carolina landowners along its proposed route, explaining, “the first step in a new project is to conduct surveys and environmental studies along a potential route corridor.”

The letter continues, “conducting these surveys and environmental studies is required as part of the permitting process for a project of this nature. The laws of North Carolina recognize the importance of access for these surveys and studies in planning for key infrastructure projects…”

Most property owners who received the letter either actively allowed surveyors onto their property or took no action, some assuming they had no power to stop them.

“I haven’t had any [North Carolina] property owner push back on the survey entry, because every one of my clients tells me either they didn’t know they had a choice in the matter or they didn’t pay much attention to it,” said Attorney Chuck Lollar, whose firm is representing landowners against the pipeline.

Stephenson heads a group of pipeline opponents in Johnston County and owns a small plot of land inherited from her father along the project’s route. She said she “signed a paper” to allow the surveying, despite her objections.

But dozens of landowners in Halifax, Cumberland, Johnston, Nash and Robeson counties resisted.

Some say the surveying activity itself will cause harm, such as the construction of a new road not far from a stream, or the removal of arrowheads and other artifacts from the property. Others object to any activity that paves the way for a pipeline to cross their land.

“It’s farmland. It’s our home place. To us, it’s sacred,” said Normandy Blackman, who was born and raised on a 15-acre farm in Enfield, North Carolina, which she inherited from her parents and now owns along with other family members. “There’s no need to survey for the pipeline, because I don’t want a pipeline on our land.”

‘Originating in North Carolina’

After trying to persuade Blackman and other landowners to relent, Atlantic Coast Pipeline filed identical complaints against them, seeking court orders to compel landowners to “permit its agents to enter upon defendant’s property for the purposes set forth in NC. Gen. Stat 40A-11,” a reference to the provision of law that allows entities with eminent domain powers to survey land.

“Atlantic is vested with the power of eminent domain under N.C. Gen. Stat 40A-3 and 62-190(a), and it is authorized to exercise that power as may be necessary to serve the public,” read the company’s filings, most of which were made last year.

Yet 40A-3 contains the phrase that appears to undercut, not support, the pipeline’s case. The private entities that can use eminent domain, called “condemnors,” include “pipelines or mains originating in North Carolina for the transportation of petroleum products, coal, gas limestone or minerals.”

Unless McGrady’s legislation, which strikes ”originating in North Carolina” from this section, becomes law, “there may not be legal basis for [the complaints], because Atlantic Coast Pipeline is not a condemnor under 40A-3 or 40A-11,” said Lollar.

Tim Wilson, a Rocky Mount attorney representing several Cumberland County landowners in land survey cases, drew a similar conclusion after McGrady introduced his bill.

“There is nothing in North Carolina General Statute 40A-11 or any other law of this State that permits Plaintiff to go onto her property, as Plaintiff has stated in its Complaint that the pipeline it seeks to build is not one ‘originating in North Carolina,’” Wilson claimed in a Feb. 1 motion to dismiss a complaint against one of his clients.

Many legal experts say the pipeline, if it gets its “certificate of public convenience and necessity” from federal regulators, will ultimately have eminent domain powers under federal law, which would supersede state law.

But, said Wilson, “there is a legitimate question as to whether [the pipeline] is entitled to conduct this survey work before the certificate is granted, if it is granted.”

‘Not just a legal technicality’

So far, eight of the 21 North Carolina cases filed by the pipeline have gone against landowners. Though most were settled long before McGrady’s bill helped inspire a potential new legal strategy, there is one exception: on Feb. 13 a Halifax County judge ordered Normandy Blackman to allow land surveyors on her family farm.

Despite this defeat, lawyers maintain the words “originating in North Carolina” in the current statute are grounds for “a very significant legal argument.”

“The courts wouldn’t try to stretch the facts to make the statute work. They would be more likely to strike down the power of eminent domain,” said Campbell, the attorney. “It really does cast the inspections to do the survey work in a different light.”

Matthew Quinn, the environmental lawyer representing Blackman, and others say requiring a pipeline to begin within the state serves an important purpose: ensuring a project will benefit the people of North Carolina.

“It’s not just a legal technicality,” said Quinn, who’s evaluating an appeal of Blackman’s case and plans to take on the pipeline for other clients.

“We care passionately about the environment, and about property rights. Those are some reasons we object so vigorously to the pipeline,” he said. So while the phrase “originating in North Carolina” “is not the most exhilarating argument to lead with, it’s a highly important argument.”

Editor’s note: This article has been updated to clarify a quote from Francine Stephenson.

Comments are closed.