Articles

Public Use of Private Property

The following is that part of the successful landowners’ brief on public use in a case where they successfully blocked BNSF’s Petition for Injunction to come on their property to do necessary investigations and tests to set the stage for a condemnation thereby permitting it to relocate a railroad line around Angora Hill alleviating the need for helper engines and crew to push those trains up the hill. The landowners successfully argued that the project as contemplated was not a public purpose and Judge Randall Lippstreu in Morrill County, Nebraska agreed. You can click on "what’s new" for more detail. Howard Olsen collaborated with Tom Oliver from Bridgeport on this brief.

Public Use

III. The power of eminent domain is constitutionally limited to acquisition of property for public use.

Private property rights are very important in Nebraska. "The right to full and free use and enjoyment of one’s property in a manner and for such purposes as the owner may choose, so long as it is not for the maintenance of a nuisance or injurious to others, is a privilege protected by law, and one of which a property owner may not be deprived without due process of law." Eckstein v. City of Lincoln, 202 Neb. 742 at 744, 277 N.W.2d 91 (1979).

The Court has also said:

Every citizen has the constitutional right to acquire, own, possess, and enjoy property. Art. I, 25, Constitution of Nebraska. A citizen not only may acquire property, but he may sell it at such price as he can obtain in fair barter. (Citation omitted). His property may not be taken from him against his will except by the sovereign powers of eminent domain and taxation, both of which must be for a public purpose. The improper exercise of the power of eminent domain is an infringement upon a citizen’s constitutional right to own and possess property. It is essential therefore that the exercise of the power of eminent domain be in strict accordance with its essential elements in order to protect the constitutional right of the citizen to own and possess property against an unlawful perversion of such right. The authorities are in agreement that a taking of property under the power of eminent domain must be for a public purpose and that it may not be taken for a private one. Burger v. City of Beatrice, 181 Neb. 213, 219-220, 147 N.W.2d 784 (1967).

The Supreme Court of Nebraska recognized "that a citizen’s private property rights are cherished under our state Constitution". State v. Champoux, 252 Neb. 769, 566 N.W.2d 763 at 779 (1997). Thus, private property rights are not to be taken lightly nor should entry for surveying or any other intrusion be granted without a thorough investigation of the purpose for the intrusion.

The court in Burger also provides the fundamental law on eminent domain:

The power of eminent domain is a sovereign power which exists independent of the Constitution f Nebraska. The Constitution of Nebraska and legislative enactments pursuant thereto are in no sense a grant of power, but are and should be treated a limitation of the power of eminent domain. Consumers Public Power Dist. v. Eldred. (Citation omitted). The Legislature may limit the sovereign power of eminent domain but it lacks the power to extend it. The absolute power of the sovereign authority to take private property for a public use has been limited by the Constitution of Nebraska by subjecting the taking to the payment of compensation for the land taken and the damages to property not taken. Art. I, 21, Constitution of Nebraska. But it is essential that a use under the power of eminent domain must be a public use, and whether or not the use is public or private is a judicial question and not a legislative one. Supra at 217.

This limitation of the power of eminent domain applies also to the railroad. As early as 1926, the Supreme Court of Nebraska stated, "[i]t is not within the power of a railway company to take, by condemnation proceedings, the right of possession of a private owner of lands for any other purpose than for a public use . . ." Edholm v. Missouri Pacific Railroad Corporation, 114 Neb. 845, 847, 211 N.W. 206, at 208 (1926).

This, then, is the backdrop for examining the position of BNSF. BNSF essentially presents two legal arguments and one factual argument. BNSF contends that the right of a condemner to survey is independent of the limitations of eminent domain, and the railroad is a public use by definition. Both of these arguments fly in the face of established Nebraska law and the private property rights which we cherish. BNSF then asserts a factual argument that the Prinz Project is a public use. The evidence demonstrates otherwise.

V. A railroad project is not public use merely by definition.

BNSF would have us believe that because they are a railroad, any construction project they propose will constitute public use per se. Nebraska has not dealt with this particular issue for railroads but other courts have, albeit many years ago. In Pittsburg, W. & K. R. Co. v. Benwood Iron-Works et al., 2 L.R. 680, 31 W.Va. 710 (1888), the railroad petitioned the court to condemn land so that it might build a track to a steel company which only the steel company would use. The court denied the petition stating, "[t]he property of railroad corporations, in so far as concerns the ownership thereof, and the profit or gain to be made from their use, is to all intents and purposes private property, although applied to a use in which the public have an interest." (Publication page references unavailable.) The court went on to state:

[a]s far as the public is concerned, when what they need is for ‘public use’, they have a right to invoke the exercise of eminent domain; but in so far as that which concerns them, as to their private interest, their profits and gains, are concerned, they stand as individuals, or as merely private corporations in which the public has no concern, and for such private purposes cannot call into exercise the power of eminent domain. (Publication page references unavailable.)

The Nebraska Court has stated this principle in a different way, although the case did not involve a railroad. In Chimney Rock Irrigation District v. Fawcus Springs Irrigation District, 218 Neb. 777, 359 N.W.2d 100 (1984), the court stated: "[i]f in the end the property is devoted to a public use, the mere agency or instrumentality through which that result is accomplished is a matter of no concern." It then stated, "[c]onversely, if in the end the property taken is devoted to a private use, the same rationales applies." Id. at 103. The mere fact that it is the railroad proposing the project is of no consequence. It is the end use which determines whether eminent domain may be exercised.

Appellant’s confidence in Gustin v. Scheele, 250 Neb. 269, 549 N.W.2d 135 (1995) is misplaced. BNSF would interpret this case to stand for the proposition that a railroad is a public highway, therefore any rail line proposed is inherently public use. The facts in Gustin involved a dispute between adjoining landowners over land which had previously been a railroad right of way. The meaning of public highway from the context is property to which all people have equal access. Yet common sense tells us that we can not board a BNSF coal train in Scottsbluff and travel in it to Lincoln. Nor can we place our own vehicle on the tracks of BNSF and ride the rails. The "public highway" designation merely means that all shippers have equal access who are willing to pay the tariff and abide by the regulations for minimal loads.

Interestingly, Colorado considered the meaning of "public highway" in the context of eminent domain in an 1888 case. The court stated:

the constitution of Colorado, Art. 15, §4, declaring all railroads to be public highways, does not prevent the raising of the question as to the character of a railroad in a proceeding by it to condemn land. Article 2, §15, providing that, ‘whenever an attempt is made to take private property for a use alleged to be public, the question whether the contemplated use be really public shall be a judicial question, and determined as such without regard to any legislative assertion that the use is public’. The inquiry is not as to what the company was organized for, or whether it will be a private or public corporation, but what the road will be . . . Coal C. v. Railroad Co., 34 Red. Rep. 386, 33 Amer. & Eng. R. Cas. 104 (1888).

The purpose is compelling, not the entity. Upon examining the facts of the case before us, one quickly comes to the realization that the principal purpose of railroads has changed. As the United States developed, the railroad was instrumental in moving troops and mail across the country. These "public uses" certainly supported the necessity for railroads to have the power of eminent domain. However, BNSF no longer fulfills these functions. Railroads are now just one of several means of transporting commercial products, no different than entities which transport by truck or airplane. The railroad’s raison d’etre is the pursuit of profit.

The mere fact that an entity is a railroad no longer results in a conclusion that its purpose is public. Furthermore, Nebraska law states that it is not the entity which determines the use, it is the purpose for which private property is taken which determines the use.

VI. The principal purpose for the Prinz Project is to reduce the costs for BNSF, and that is not a public use.

In its original Petition, Plaintiff showed its hand with regard to the real reason for the Prinz Project. It alleged at paragraph 3, the following:

That in order to more efficiently operate its railroad, BNSF needs to explore the public necessity and the costs of adding an additional track and redirecting its trains which would eliminate travel over a significant incline that currently requires that additional locomotives assist trains over the include.

All Defendants demurred. The court sustained the demurrers.

An Amended Petition was filed. Paragraph 3 of the initial Petition became paragraph 4 of the Amended Petition, with the following additional allegation: "The proposed new route would also provide additional means of assessing BNSF mainline through Alliance, Nebraska, and promote competition for the transportation of goods between BNSF and its competitors." New allegations were made in paragraphs 5 and 6 regarding transportation of coal and providing an additional gateway. All Defendants again demurred. The court sustained the demurrers.

BNSF filed a Second Amended Petition which survived the demurrers filed by all Defendants. In preparation for "papering up" in its Second Amended Petition to enable it to survive the demurrers, Plaintiff hired Robert Patton, to cover itself with a litany of public uses. Mr. Patton was a long-time BNSF employee and is now a consultant with MLM Management Company. He was asked to contact the law department of BNSF to support the value of the line change. He was asked to specifically address the issues of public use and circulated his April report among BNSF employees and other consultants with instructions to provide their input to Trev Peterson for the purposes of the Second Amended Petition. It was not until the Second Amended Petition that Plaintiff made any reference to congestion. It now argues that the real reasons for the project were contained in Exhibit 12 which was a report generated by a task force chaired by Robert Patton. They overlook, however, Exhibit 13 which is an update of Exhibit 12 and clearly sets forth the purpose of the project was a need to build this route to avoid the helpers. The testimony showed that use of helpers involves additional equipment and labor that would reduce the cost to BNSF if eliminated.