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Eminent Domain, Easement And Private Development

Synopsis

In Pennsylvania, a governmental entity may not use eminent domain to take private property if, after the taking, that property is to be used for private enterprise. An easement is a property right that falls with that prohibition.

Discussion

Eminent Domain is a power of the Commonwealth of Pennsylvania to take private property for public use upon payment of just compensation.  The size of the condemned property may not exceed what is reasonably necessary for such public use.  An easement is the right to use the property of another for a particular purpose.  Eminent Domain can be used to create an easement.  An example is the use of Eminent Domain to obtain an easement through private property for installation and maintenance of public subsurface water and sewer pipes.  When litigation results, the issue being litigated is usually the adequacy of the sum paid as just compensation rather than the fact of the taking.  However, when the taking itself is challenged, then the issue may be whether the property has been taken for a public use.

In 2005 the United States Supreme Court approved the use of eminent domain power to obtain land for economic development by private commercial interests (Kelo v. City of New London, Connecticut, 545 U.S. 469, 125 S. Ct. 2655 (2005)).  A five judge majority held that economic development can qualify as a public use so as to permit the exercise of eminent domain even when that development is ultimately undertaken by non-public entities.  The holding was limited in that the Court made clear that the United States Constitution did not allow eminent domain to be used to take land to give a private benefit to a particular private party.

In response to the perceived judicial expansion of the scope of eminent domain established in Kelo, supra., the Pennsylvania legislature enacted the Property Rights Protection Act (the "PRPA") as part of the Eminent Domain Code.  The PRPA limits the eminent domain power of the Commonwealth of Pennsylvania, a Commonwealth Agency, a political subdivision, an agency or authority of a political subdivision, a public utility, or an electrical cooperative corporation.  Section 204(a) of the Act simply states that "(e)xcept as set forth in subsection (b), the exercise by any condemnor of the power of eminent domain to take private property in order to use it for private enterprise is prohibited."  Section 204(b) of the Act identifies all of the entities and circumstances excluded from the reach of the Act, including 204(b)(ii), which states :(s)ubsection (a) does not apply if. . . the condemnee does not file or does not prevail on preliminary objection filed to a declaration of taking for the acquisition of condemnee's property."  In other words, the failure of the party whose property is being taken to properly and timely object to the taking on the ground of violation of the PRPA acts as a waiver of the protection of the Act.  The burden is on the party whose property is being taken.

In the event of a PRPA challenge to the taking of private property, two issues which may be considered by the Court are whether after the taking the property is to be used for private enterprise, and if so, whether the taking falls within one of the exceptions to the prohibition of the Act listed in section 204(b).  If the Court makes the determination that after the taking the property is to be used for a public purpose, rather than for private enterprise, then the Act does not apply and the challenge to the taking will fail.  If the taking is for private enterprise, and is not excepted from the PRPA, then the eminent domain proceeding will be dismissed.

In Reading Area Water Authority v. Schuylkill River Green Assoc., No. 62 MAP 2013(Sept. 24, 2014), the Supreme Court of Pennsylvania recently considered whether a taking of land in an eminent domain proceeding was for private enterprise, and therefore barred by the PRPA.  A private real estate developer wished to build houses on land adjacent to property owned by Schuylkill River Green Assoc. For the project to proceed, it was necessary for the Reading Area Water Authority to extend a water pipe across  the Schuylkill River Green Assoc. property.  A drainage pipe also had to be placed across the Schuylkill River Green Assoc. property to carry discharge from a private waste water treatment plant located on the private developer's property.  The water pipe was to be owned and maintained by the Water Authority, while the drainage pipe was to be owned and maintained by the private developer.  The Water Authority filed an eminent domain action against Schuylkill River Green Assoc. to obtain an easement for the placement of both the water and drainage pipes.  Schuylkill River Green Assoc. filed preliminary objections as to the taking of the drainage line only, raising the PRPA as a defense.

The Court ruled that as the Water Authority had condemned the drainage easement in order to allow the private developer to construct the discharge pipe the PRPA barred the condemnation.  The fact that the drainage pipe also served a public purpose, drainage of treated waste water from the housing development, was irrelevant, since the condemned property was to be used by private enterprise.

The literal application of the prohibition contained in the PRPA was made easy by the admission in the record that the eminent domain action had been filed to permit the construction of the private residential development, the very perceived abuse that the PRPA was enacted to prevent.

The Court's treatment of the water line easement is more informative as to the scope of the PRPA prohibition.  As previously noted, Schuylkill River Green Assoc. did not file preliminary objections to the taking of the easement for installation of the water line by the Water Authority.  Under section 204(b)(1) of the PRPA, by failing to object to the taking of the easement for installation of the water line, Schuylkill River Green Assoc. waived a defense under the PRPA as to that use.  Therefore, the Court could not rely on the PRPA as a basis to dismiss the eminent domain action as it applied to the water line.  Instead, the Court achieved the same result by reasoning that since the original easement had been taken to accommodate both the water line and the drainage line, the easement was in excess of that necessary to construct the water line alone, and therefore was larger than was reasonably necessary.  The entire condemnation was therefore overturned.  By going beyond the boundaries of the appeal actually before it to deny the water line easement, the Court may have been suggesting that ownership of the water line easement and water line,by a public entity, the Water Authority, would not have been enough to overcome the prohibition contained in section 204(a) of the PRPA had preliminary objections also been filed as to that part of the eminent domain action.

It should be noted that the PRPA does not apply to property taken by, or leased to transferred to, a public utility, railroad, or common carrier; is to be used for any road or to provide access to a public road for property that would otherwise be inaccessible; or for ingress, egress or parking for motor vehicles.  There are also exceptions for abandoned property, property taken for removal of urban blight and development of low income and mixed-income housing projects, all as defined by the PRPA.  Regardless of whether the PRPA applies, all eminent domain actions are subject to the requirements of the Pennsylvania Eminent Domain Code, as well as the Constitutions of the Commonwealth of Pennsylvania and United States.

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