State Law Held to Apply in Federal Court Pipeline Taking

by: Anthony F. Della Pelle
19 Jun 2017

A Florida Federal District Court judge court recently held that Florida’s state eminent domain laws should be applied to a taking by a private pipeline company which relied upon the Natural Gas Act, federal law which allows private companies to use eminent domain in the federal courts “in matters relating to the transportation of natural gas and the sale thereof in interstate and foreign commerce…” 15 U.S.C. § 717(a).  The project involved an interstate natural gas pipeline.  See Sabal Trail Transmission, LLC v Real Estate, et. al., decided by Honorable Mark E. Walker in the Northern District of Florida, United States District Court on June 5, 2017, Case No. 1:16-CV-063 MW-GRJ.

While the federal court acknowledged jurisdiction under this legislation, and applied federal law to the process in administering the case, it reasoned that property rights are traditionally defined and construed pursuant to state law.  As such, the federal court held that Florida substantive property rights and eminent domain law, not federal law, applied, and this decision entitled the property owner to additional compensation, including attorneys’ fees and costs not ordinarily recoverable in a federal takings case.

This decision could be of import to analogous cases in New Jersey, where federal courts have been and are being used to litigate eminent domain matters involving takings under the Natural Gas Act and other similar federal legislation.  While New Jersey substantive law does not ordinarily provide that a condemnee is entitled to recover counsel fees and other related costs, any other  protections provided by New Jersey substantive eminent domain law may be available should a federal court in New Jersey follow its sister court from Florida.

Congratulations to our Owners Counsel of America colleague, Andrew Brigham, on this important victory for his clients and for property rights!

Also, some further excellent reading on the case is available from our other Owners Counsel Colleagues, Mike Rikon (New York) and Robert Thomas (Hawaii) on their blogs:

What Law Should Apply in a Condemnation by a Private Entity Exercising Federal Eminent Domain Authority – Federal or State?

Florida’s Full Compensation Rule (Attorneys Fees!) Governs in Federal Natural Gas Act Taking by Private Pipeline