Franklin County judge rules pipeline company lacks eminent domain power

Judge: Company can only acquire land from property owners willing to sell

By Kevin Wheatley Published:

Bluegrass Pipeline does not have the power to claim land easements through eminent domain, Franklin Circuit Judge Phillip Shepherd ruled Tuesday.

The summary judgment in favor of Kentuckians United to Restrain Eminent Domain states that without a clear mandate from the legislature, Bluegrass Pipeline does not have the power to seize land for construction of a proposed natural gas liquids pipeline to the Gulf Coast.

“Bluegrass remains free to build its pipeline by acquiring easements from willing property owners,” Shepherd wrote in his ruling. “However, Bluegrass cannot invoke the sovereign power of eminent domain to threaten or intimidate, or even suggest to landowners who have no desire to sell, that Bluegrass has the right to take their property without their consent.

“Landowners who do not wish to sell, but who may be unable to finance a legal challenge, are entitled to know that the law does not support Bluegrass’ assertion of the power of eminent domain.”

Tom Droege, spokesman for Bluegrass Pipeline, said the joint venture between Williams and Boardwalk Pipeline Partners would continue negotiating easements for the project as the courts settle the eminent domain question. 

Bluegrass Pipeline has maintained its right to seize property because the natural gas liquids transported will serve the public, possibly through Kentucky manufacturers and producers, according to the court order.

“While we disagree with today’s ruling by the Franklin Circuit Court and plan to immediately appeal the decision, we continue to purchase easements through face-to-face negotiations with individual landowners, a successful process whereby we’ve acquired nearly 70 percent of the route needed in Kentucky,” Droege said in a statement.

Franklin County resident Penny Greathouse prompted the court action after a representative of Bluegrass Pipeline told her the company had the right to exercise eminent domain while attempting to secure an easement through her Woodlake Road property, which had been in the proposed pipeline’s path initially. The design was later rerouted to a neighboring property, according to Shepherd’s ruling.

Greathouse said she appreciated the judge’s order, as she didn’t expect such a swift resolution to KURED’s request for summary judgment. 

“Politics always seem to find a way into everything,” Greathouse said after mentioning Bluegrass Pipeline’s efforts at lobbying the General Assembly on eminent domain.

While Greathouse will savor Tuesday’s court victory, she conceded the ruling comes “very late in the game.”

In his order, Shepherd noted the court action would have “immediate effect on bargaining power” during negotiations for land rights. But a number of property owners have granted property easements with the threat of eminent domain looming over negotiations, Greathouse said.

“That’s the way that this whole thing is — it’s like when they approach you and they say this, then you’re thinking, ‘I need to stay on their good side; I don’t want to portray that I don’t want it until I can find out something,’” she said. 

“… A lot of people just didn’t want to hang on. The money was so good that it was just really hard for them to say no, and I totally understand that because the money is good. It’s unbelievable what they can throw out there at you.”

She could not recall a dollar amount Tuesday, but The State Journal previously reported that Greathouse refused a $350,000 offer from the company in October.

The debate on Bluegrass Pipeline’s ability to invoke eminent domain has also captured the attention of lawmakers. House Bill 31, which would clarify that “oil or gas” and “oil or gas products” provisions in current eminent domain law do not apply to natural gas liquids, passed the House 75-16 Friday.

HB 31 is currently awaiting action in the Senate.

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  • Phil Shepherd and Tom FitzGerald are both smart fellows.  We're lucky to have both in KY.

  • There's precedent for private company eminent domain in Florida real estate development law. However, it is established by that state's legilslature, not by the chairman of the board who inexplicably must regard interstate pipeline projects by default makes Florida's law apply in all state's of the southeast. Judge Shepherd is completely correct to free Kentucky from this hoax.

  • I wonder why anyone ever thought that Bluegrass did have the sovereign power of emiment domain?