Fracking Company Targets Tribal Lands in NC

Members of the Saponi Nation are concerned not only about the construction of the mammoth Mountain Valley Pipeline Southgate Extension, but also about its effect on their ancestral lands.

After it received permission from the Federal Energy Regulatory Commission in 2018, MVP began buying chunks of land along the pipeline’s proposed route. Over the last three years, some tribal leaders have led a quiet protest. “We want to bring people together and let them know that it is OK to fight back and speak out against these things,” one remarked. They point to environmental issues with a similar natural gas pipeline in Virginia and claim the same thing could happen to their ancestral lands. Indeed, North Carolina’s Environmental Quality Department has twice refused to issue permits.

The latest controversy involves a potential burial mound along the pipeline’s route. Although company officials said the mound was just a “pile of rocks,” MVP nevertheless agreed to modify the route.

Normally, land condemnation affects an entire piece of property. The state constitution gives the state the power to take property if it pays just compensation. Condemnation for road and bridge projects is by far the most common use.

Utility companies, which are normally state agencies, also have condemnation power. However, they normally do not seize entire tracts. Instead, they use utility easements to get the land they need to build pipelines, power lines, or other infrastructure. This easement gives the utility company the right to use the land for such purposes. The right exists whether or not the infrastructure is built. Occasionally, utility companies release these liens if their plans change. But that does not happen often.

Once a utility company or other state agency starts the eminent domain process, it is impossible to stop it. However, the seizing entity must pay fair compensation. The amount of compensation is often a sore spot in utility easement matters.

Usually, the easement only covers a fraction of the property. So, the company only offers a fraction of the property’s value.

However, “fair compensation” is not the amount of money the company offers. It is the amount the market dictates. A utility easement significantly affects property value. Potential buyers are understandably concerned about utility liens. These easements restrict land use. Furthermore, there is the possibility of additional easements. Projects usually get bigger as the population expands. If a utility company has a small easement, they will most likely seek a larger one later.

“Fair compensation” does not just take current market conditions into account. The utility company must pay fair compensation based on the land’s highest and best use.

HBU value is often exponentially higher than current fair market value. If a utility company is laying infrastructure, it obviously expects the area’s population to increase significantly. As a result, the land’s value could increase exponentially, especially if someone develops it. Usually, a Charlotte land condemnation lawyer partners with real estate appraisers and other professionals to determine HBU value.

In whole land condemnation procedures, sales price negotiations usually begin at this point. But utility easement cases are different. As mentioned, the easement, and potential easement, affect the sale price. Potential buyers, as opposed to the utility company, determine this effect. So, the utility company must not simply pay a fraction of the current fair market value. The company must pay the diminished HBU value.

The law in this area is rather complex. Tribal land is not quite private property and not quite government property. Usually due to multiple treaties, not all of which are legally valid, the land is somewhere in between.

If the tribe owns the property outright or occupies it as a trustee of the federal government, state sovereign immunity power does not apply. However, a utility company can still take all or part of the land, if the federal government gives the company an allotment. So, instead of negotiating a price with a state government, a Charlotte land condemnation attorney must negotiate with the federal government. Then, the feds give the state permission to obtain an easement.

There are a couple of other moving parts. Both the tribal government and the Bureau of Indian Affairs must consent to the taking. If they do not, the taking might be illegal, no matter how much the utility company offers.

The government cannot take private property for any purpose without paying just compensation. For a confidential consultation with an experienced land condemnation attorney in Charlotte, contact Arnold & Smith, PLLC.