Answering Common Questions Relating to Utility Takings

This post answers commonly asked questions. The links within this post connect to more detailed posts discussing issues raised in the answers. 

Should I deal directly with the right-of-way agency? 

No. Right-of-way agents are professionals trained to obtain property rights on terms favorable to the acquiring entity. Their professional obligations differ from the ethical standards that apply to attorneys.  In my experience, right-of-way agents sometimes take positions that property owners may wish to evaluate independently. For example, they may advise property owners that retaining an attorney could be prohibitively expensive. That may not reflect the arrangements available, since property owners who retain attorneys generally work on a contingent fee, with no cost for retention, as will be explained. Right-of-way agents may also make representations about how acquired rights will be used that should be reviewed against the governing documents and Michigan law, as will also be explained. Would you bet on yourself to beat a NASCAR driver in a race?

Must utilities apply with eminent domain clause when negotiating informally property owners? 

No. Michigan condemnation law does not prohibit agencies from negotiating rights outside eminent domain.  Agencies employ right-of-way agents to pursue negotiated acquisitions, which in many ways can be favorable to property owners. For example, utilities sometimes seek property rights broader than those required to construct the project being immediately implemented. The concept of necessity limits the rights that may be acquired through eminent domain. Recently, DTE pursued such rights for a pipeline near the Petoskey area, and METC did so for electrical transmission projects. In those matters, DTE’s and METC’s offers did not include certain claimed damages to the remainder, which affected the property owners’ assessment of whether the offers reflected just compensation.   

Do you have experience representing property owners in utility takings? 

Yes, 30 years. For example, I have handled more cases against METC and ITC than any other lawyer in Michigan and currently represent approximately 150 parcels in METC’s Oneida and Helix projects, both Consumer’s Power pipelines and transmission lines, and DTE. I have also represented owners in multiple utility acquisitions initiated by municipalities and drain commissions. 

Can you share your results? 

My ability to share results is limited because utility companies universally include confidentiality provisions in settlement agreements executed by my clients and I must respect those requirements. I can share results of a project by Ann Arbor. I represented ten residential property owners impacted by a new sewer line easement imposed in their backyards. The City’s total aggregate offers were approximately $50,000 or $5,000 a piece. The total settlements on the ten cases were just under $2,000,000 or $200,000 a piece, including increased just compensation, interest, reimbursement of the entire contingent fee incurred by my clients (meaning that they paid no attorney fee whatsoever from their own pocket) and all expert witness fees. 

Do your past clients recommend you? 

Yes. My website, michigancondemnationlaw.com, includes testimonials from a wide variety of clients ranging from homeowners to farmers, to developers and in-house attorneys of major companies. 

What does it cost to hire you and what is your attorney fee? 

Because I contemplate working on a contingent basis, I do not require a retainer to hire me.  It costs nothing to engage my services at the outset. 

I almost always charge on contingent fee basis, taking 1/3 of the amount that I obtained over and above the initial Agency offer and I also seek reimbursement from the Agency. 

In some limited situations, I charge on an hourly basis to provide additional services. This occurs when property owners request that I negotiate modification of the acquisition to reduce the impact on their property. For example, the owner of vacant, freeway exit developed his land happily paid an additional fee above 1/3 contingency when I negotiated alterations to a utility easement that restored their ability to construct a hotel along with a gas station and convenience store. 

How do reimbursements work? 

Michigan law contemplates agencies reimbursing the 1/3 contingent fee. While past results are not a promise of future performance, in many cases, agencies reimburse my contingent fee without controversy or debate.

Additionally, agencies are obligated to reimburse reasonable expert expenses. Essentially, Michigan recognized that owners are entitled to their own independent evaluation of just compensation at the reasonable expense of the agency. While an agency could challenge whether the expense was reasonable, while past results were again not a promise of future performance, agencies often reimbursed reasonable expert fees by owners. This occurs in part because I frequently represent the greatest number of property owners in projects that I am able to leverage that representation in a way that creates economies of scale reducing expert expenses on a per case basis. 

Is it wise for property owners to delay or avoid retaining experienced property owner eminent domain counsel? 

No. Property owners represented by counsel in utility takings are frequently paid more just compensation for conveying fewer property rights. In the Ann Arbor project, unrepresented owners typically received less. There are many instances of utility companies acquiring far fewer property rights from my clients.   

Are there advantages to retaining Clark Hill compared to other firms? 

Yes. I am primary attorney for every eminent domain case that I handle.  I am readily accessible.  I provide direct, personal service. On the other hand, Clark Hill is one of the largest law firms in the nation. If an issue arises implicating other area of law, I have colleagues that I can consult. I also have a team of administrative assistants to help track and handle the volume of paperwork generated through mass representation. Clark Hill has offices in Detroit, Lansing, Grand Rapids, and Birmingham and a presence throughout Michigan. 

This publication is intended for general informational purposes only and does not constitute legal advice or a solicitation to provide legal services. The information in this publication is not intended to create, and receipt of it does not constitute, a lawyer-client relationship. Readers should not act upon this information without seeking professional legal counsel. The views and opinions expressed herein represent those of the individual author only and are not necessarily the views of Clark Hill PLC. Although we attempt to ensure that postings on our website are complete, accurate, and up to date, we assume no responsibility for their completeness, accuracy, or timeliness.