Landowners Seek Ruling On Oil Firm's Eminent Domain Powers

A group of Arkansas landowners has a filed a petition in Johnson County Circuit Court asking a judge to find that Plains All American Pipeline can't use eminent domain to obtain easements for its planned, $900 million crude oil pipeline.

Edward Lee Brinks, Brett Collins, Turner Whitson, Sarah V. Williams Gorrell, Leroy Gorrell and Danielson Farms LP filed the petition Thursday. 

An attorney for the landowners, Joshua Carson of Fort Smith, declined comment. A spokesman for Plains All American Pipeline didn't immediately return messages for comment.

In the petition, the landowners said Diamond Pipeline and its representatives "made numerous claims" that the company could condemn private property to obtain easements if the property owners did not voluntarily grant them. The landowners argue that the company does not have that power, and they are asking a judge for a declaratory judgment saying so.

"An actual controversy exists between the parties in that the Defendant has asserted that it has the right to condemn private property of the Petitioners in order to obtain easements for the pipeline if the Petitioners do not voluntarily grant an easement to Defendant," the petition said. "The Petitioners dispute this right."

Publicly traded Plains All American (NYSE: PAA) announced in August that it will build a 440-mile crude oil pipeline to connect its Plains Cushing, Oklahoma, terminal to the Valero Memphis Refinery. 

A map on Plains All American's website shows the line’s proposed route, which the Houston company cautioned is subject to change. It shows the pipeline entering Arkansas just south of Fort Smith and cutting across the north-central part of the state on its way to Memphis.

The company said that, during construction, the pipeline will support about 1,500 contract construction jobs in Oklahoma and Arkansas. Once complete, it will support 15 permanent jobs and generate an estimated $11 million per year in taxes for communities along the pipeline route. The company said 20-inch pipeline will be able to carry up to 200,000 barrels per day of domestic sweet crude.

Plains All American wants the pipeline to be complete by late 2016.

In their petition, the landowners said the company has cited the right to eminent domain under Arkansas law, specifically Ark. Code Ann. S 23-15-101, which states that, "All pipeline companies operating in the state are given the right of eminent domain and are declared to be common carriers, except pipelines operated for conveying natural gas for public utility service."

But attorneys for the landowners said the Diamond Pipeline is not a "common carrier" as defined by Arkansas law. They also argued that the Arkansas Supreme Court has found that "the power of eminent domain be invoked for public use," adding that there is no public use case for the pipeline in Arkansas. 

"There is absolutely no public use offered or received by any public citizen of the State of Arkansas from the pipeline and the proposed pipeline exists solely for private economic development," the petition said. "… As a result, there is no source of authority under Arkansas law granting the power of eminent domain to a pipeline company such as the Defendant …"