Eminent domain use for hazardous liquids pipeline challenged

The claim by developers of a proposed hazardous liquids pipeline that they have the power of eminent domain was challenged today in Franklin Circuit Court.

The action was taken by Kentuckians United to Restrain Eminent Domain (KURE), a new nonprofit organization formed “to protect Kentuckians from the threat of and attempts to exercise eminent domain by entities not in public service to Kentuckians.”

“The purpose of the lawsuit is to clarify as to whether a private company has the right to condemn land, to force someone to sell them an easement if they don’t want to,” said Penny Greathouse, a Franklin County landowner and founding KURE board member.

"Kentucky families' and farmers' homes and land represent the most important investment in their lives and are the legacy we want to leave to our children,” said Corlia Logsdon, a Woodford County landowner who also has been approached by pipeline developers. “Citizens deserve protection from the threat of condemnation from private companies that are not in service to Kentuckians."

"The guy who talked to me said they did have eminent domain … It’s almost like a bullying tactic.”

Although pipeline developers have not yet tried to condemn any property, landowners say their claim that they have the power under Kentucky law puts unwarranted pressure on them to sell easements.

“I don’t want to be put in a position where I have to make a decision because I’m afraid they are going to take my land,” explained Greathouse, who has a 700-acre cattle farm. “I want to be able to deal with them without that hanging over my head.

“They first called us in April and they said it was a natural gas pipeline. When we found out about the natural gas liquids, we rescinded permission to survey,” Greathouse added. “They still have come back and talked to us four or five times.

“The guy who talked to me said they did have eminent domain. All the public meetings we’ve been to that Bluegrass Pipeline has been involved with, they definitely said they have eminent domain power,” she continued. “We went door to door to talk to our neighbors, and people said they believe the company has eminent domain and can come anyway. It’s almost like a bullying tactic.”

Several lawyers familiar with eminent domain laws in Kentucky, including Attorney General Jack Conway, believe the proposed pipeline project does not qualify for eminent domain authority under Kentucky law. But there has been no definitive ruling by Kentucky courts to clarify state statutes.

The lawsuit asks the court to make such a ruling.

Specifically, the plaintiffs ask the court to, “Determine and declare that Bluegrass Pipeline LLC does not possess any power or authority under the laws of the Commonwealth of Kentucky to utilize eminent domain in support of the proposed Bluegrass NGL Pipeline project …”

“Declaratory relief is appropriate in this case … since the requested declaration of rights will terminate the uncertainty and controversy that exists in this situation,” the lawsuit states. “[A] declaration of rights would afford ‘relief from uncertainty and insecurity with respect to rights, duties and relations’ as between KURE and its members, and Bluegrass Pipeline Company LLC.”

“Many Kentuckians report they are being misled and feel threatened. Some have sold easements at less than what they are worth because of this,” said Logsdon, also a founding KURE board member. “Kentuckians need and deserve protection now because we are facing threats now."

KURE argues that the hazardous liquids pipeline does not qualify for eminent domain because it “is not a public utility regulated by the Kentucky Public Service Commission pursuant to KRS Chapter 278, and thus is not ‘in public service,’” as required in state law.

Additionally, the project would not meet the “public use” and “public consumption” requirements defined in state law.

“The Bluegrass Pipeline project will not be receiving, transporting, or delivering oil or natural gas ‘for public consumption’ as that term is used in the statute, since the transportation of the natural gas liquids is for a limited customer base to which the natural gas liquids will be delivered or sold after being processed by the joint venture in Louisiana, and because the unfractionated natural gas liquids would be transported through the Commonwealth and are not intended to serve or be used by Kentucky consumers,” according to the court filing.

“There is no source of authority under Kentucky law granting eminent domain authority to the Bluegrass Pipeline Company LLC for the proposed Bluegrass NGL Pipeline project.”

KURE is represented by Tom FitzGerald with the Kentucky Resources Council.