Issues Facing Owners Potentially Impacted by DTE’s Emmet County Pipeline Project

Here are key issues for consideration.

Should I retain eminent domain counsel now? Is it expensive?

Early retention of counsel is beneficial. I charge a contingent fee that is 1/3 of the additional money obtained above DTE’s good faith offer. MCL 213.66 generally requires agencies like DTE to “reimburse in whole or in part to the owner by the agency of the owner's reasonable attorney's fees, but not in excess of 1/3 of the amount by which the ultimate award exceeds the agency's written offer.” My contingent fee matches this statute. While past results are not a promise of future performance, I have handled hundreds of cases against DTE and ITC where they have voluntarily reimbursed those attorney fees. 

Having counsel immediately available to guide you through these processes and buffer you from right of way agents who will not take your rights into consideration. Counsel will simplify these processes for you while helping to avoid mistakes that could harm future just compensation claims.

Are there benefits to groups of owners hiring the same attorney?

Yes. In addition to requiring reimbursement of attorney fees, MCL 213.66 requires DTE to pay “expert witness fees” that are “reasonably necessary.” An attorney working with experts preparing multiple reports allows for economies of scale that reduce the fees for each parcel, making payment by DTE easier to obtain. This also applies to other expenses. Additionally, an attorney representing more clients will have greater knowledge about real estate issues in your community, the project, and its impacts. I learn from my clients, and joint representation of multiple clients means there will be shared information and positions amongst the clients, tackling common issues and potentially strengthening my clients’ overall legal position. Finally, while each case must receive individual attention, there are benefits to negotiating simultaneously for multiple clients.

Can I challenge the taking in court?

There are different reasons why a taking can be challenged. These include whether the taking is a public purpose or if DTE seeks to acquire property rights in excess of those needed to implement the project.

The easement DTE seeks apparently includes the right to “to construct, test, reconstruct, renew, operate, maintain, inspect, alter, repair and remove a pipeline or pipelines for the transportation of gas, oil or other substances which can be transported through a pipeline or pipelines.” As such, it does not limit the size of pipelines, the number of pipelines, or the substances transmitted through the pipeline. During initial negotiations, it is common for utilities to ask owners to give away more property rights than are required for the specific project. I have successfully challenged the acquisition of excessive rights involving similar language in pipeline easements. Further, my presence has often resulted in agencies removing such broad language. I would advocate that the easement be limited to a single pipeline of a defined size transmitting only the material at issue in this project.

What are some of the things you consider when seeking more just compensation?

A case involving acquisition of an easement is called a partial taking. The property rights retained by the owner are called the remainder. Michigan’s jury instruction relating to partial takings summarizes some of the key issues raised in partial taking cases:

This case involves what is known as a “partial taking”; that is to say, the property being acquired by the condemning authority is part of a larger parcel under the control of the owner.

When only part of a larger parcel is taken, as is the case here, the owner is entitled to recover not only for the property taken, but also for any loss in the value to his or her remaining property.

The measure of compensation is the difference between (1) the market value of the entire parcel before the taking and (2) the market value of what is left of the parcel after the taking.

In valuing the property that is left after the taking, you should take into account various factors, which may include: (1) its reduced size, (2) its altered shape, (3) reduced access, (4) any change in utility or desirability of what is left after the taking, (5) the effect of the applicable zoning ordinances on the remaining property, and (6) the use which the condemning authority intends to make of the property it is acquiring and the effect of that use upon the owner’s remaining property.

Further, in valuing what is left after the taking, you must assume that the condemning authority will use its newly acquired property rights to the full extent allowed by the law.

The bold language is critical to understanding the just compensation issues arising from a partial taking. If DTE acquires rights in an easement, they must pay for those rights even if they lack a present intention to fully implement them.

Homes may suffer negative aesthetics; impacts from tree removal like loss of privacy, shade, and buffering from noise or wind; and limitations on the ability to add or expand structures. Wind issues are often pronounced in agricultural areas. Removal of trees close to a home may require additional air conditioning or irrigation for yards. 

DTE’s easement that I reviewed prohibits any new construction in a swath of property on either side of their poles. Some property may enjoy a highest and best use for future development that must be included, even if the owner does not intend to do so. Utility easements that limit construction of buildings or planting of trees limits development. Easements can reduce density and increase site costs for development parcels. I have handled numerous matters where civil engineers have prepared before and after site plans demonstrating that less could be developed and that the impact is greater on a percentage basis than the amount of land subjected to the easement. Further, building around the easement was more costly on a per unit basis. This project impacts property that is in close proximity to highly developed areas, where the values likely include acknowledgment of the potential for future development.

Farm fields face different types of impacts. The easement that I reviewed includes the right to install above ground facilities, including “drips, valves, regulators, fittings, meters and other equipment and appurtenances as may be necessary or convenient for its operations.”

Pipeline construction can involve open trenching. This can result in soil mixing and all types of construction can involve compaction, which impacts farming. The easement that I reviewed does not require DTE to bore the pipeline.

Just compensation is owed for temporary construction areas, which can also suffer compaction and soil mixing. 

The easement is silent about how access is obtained. Regardless of where DTE gains access, this can cause crop damage.

The loss of woodlands can reduce value. The easement’s general restoration provision does not address how things like cut trees and stumps will be addressed.

Michigan allows recovery of future costs incurred to avoid business interruption. This would include projected expenses to restore yields in impacted fields by taking steps like planting cover crops or engaging in extra tilling.