How Are For-Profit Pipelines Fair Use of Eminent Domain?

One of the many sharp—and welcome—arguments among the GOP presidential candidates of late has been over what constitutes reasonable use of eminent domain.

Sen. Ted Cruz (Texas) has called Donald Trump out, for instance, for having used eminent domain to try to demolish the home of an elderly widow in Atlantic City so he could build a parking lot for casino-bound limousines. That was a clear abuse of eminent domain, Cruz and others have rightfully said, arguing that such takings, as a rule, should be limited to cases that can be shown to be reasonable “public use.”

Trump—apparently the odds-on favorite at this point to become the Republican nominee—has responded forcefully by singing the broader praises of eminent domain. He asserts in particular that no oil pipeline, for example, would ever have been built without it, which is probably true.

One thing everybody can agree on is that eminent domain can create understandable resentment among those most directly affected by it. The process is painful and blunt. It allows a government to take property without the consent of the owner, and while governments are supposed to provide just compensation in return for eminent-domain takings, there can be great controversy over exactly what constitutes just compensation. Moreover, money alone will not always account for the emotional, historical and cultural costs of eminent domain. That’s why the issue is so controversial and why allegations of eminent domain abuse have such resonance.

Courts have generally deferred to government agencies on what meets eminent-domain fair use, meaning that whatever a government agency says often goes.

Most reasonable people—whatever they think of eminent domain—will concede the logic of allowing democratically elected officials to decide when and if a government can or should take private property for a legitimate public use. Eminent domain has been used reasonably to take land for roads and public buildings, and there may even be a rationale for letting a public utility use eminent domain to claim a right-of-way for electricity-transmission lines.

EMINENT-DOMAIN PROTOCOLS AROUND OIL PIPELINES HAVE NO SUCH PUBLIC-INTEREST TRADITION, HOWEVER, and often proceed with little or no public accountability. In many states, a pipeline company can act as if it—the pipeline company—is the government, once it receives construction approvals. That was the build-out plan behind the Keystone XL pipeline before the Obama administration blocked its construction, and that is the build-out plan now for oil pipeline proposals in Minnesota and Iowa.

Such projects get right at the heart of the fair-use debate around eminent-domain doctrine.  What public interest is being served by allowing a private company like Enbridge to take land so that it can turn a dollar off moving a commodity from one place to another?  How is it in the public interest? What honest “public use” argument comes into play?

It’s seems as bad an exercise of eminent domain as throwing a widow out of her house in Atlantic City to make way for more asphalt. At the very least it’s an issue worthy of further public discussion.

Larry Shapiro is associate director for program development of the Rockefeller Family Fund and board president of IEEFA.

[The commentary first appeared on The Hill’s Congress Blog.]