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Sabal Trail Transmission LLC v. Real Estate

United States District Court, M.D. Georgia, Columbus Division

May 21, 2018

SABAL TRAIL TRANSMISSION, LLC, Plaintiff,
v.
REAL ESTATE, et al., Defendants.

          ORDER

          CLAY D. LAND CHIEF U.S. DISTRICT COURT JUDGE

         These five Natural Gas Act condemnation actions are ready for trial on the issue of just compensation. Presently pending before the Court are the motions in limine and motions to exclude filed by Plaintiff Sabal Trail Transmission, LLC. Resolution of these motions requires an understanding of the proper measure of just compensation, so that is where the Court will begin.

         I. Measure of Just Compensation

         The parties do not agree on whether federal or state law governs the measure of just compensation. Defendants assert, without citing any authority, that Georgia law applies to the issue of just compensation. Sabal Trail contends that just compensation is a matter of federal law, but it did not cite any binding authority on this issue.[1]

         In this Circuit, “the law of the state where the condemned property is located is to be adopted as the appropriate federal rule for determining the measure of compensation when a licensee exercises the power of eminent domain pursuant to Section 21 of the Federal Power Act.” Ga. Power Co. v. Sanders, 617 F.2d 1112, 1124 (5th Cir. 1980) (en banc).[2] Under the rationale of Sanders, the Court finds that Georgia law should be adopted as the federal rule to determine the measure of just compensation in this Natural Gas Act condemnation proceeding. See Sabal Trail Transmission, LLC v. Real Estate, No. 1:16-CV-063-MW-GRJ, 2017 WL 2783995, at *2-*6 (N.D. Fla. June 27, 2017) (providing a detailed analysis and concluding, under Sanders, that “state substantive law governs the compensation measure in eminent-domain condemnation proceedings” under the Natural Gas Act).

         Under Georgia law, just compensation means “the fair market value of the property at the time of the taking.” Dep't of Transp. v. Mendel, 517 S.E.2d 365, 367 (Ga.Ct.App. 1999). If “there is a partial taking of property by condemnation, just and adequate compensation is the sum of the market value of the property that is taken and the consequential damage, if any, to the property that remains, both measured as of the time of the taking.” Gwinnett Cty. v. Ascot Inv. Co., 726 S.E.2d 130, 132 (Ga.Ct.App. 2012). “The consequential damage to the property that remains is the difference between its fair market value before the taking and its fair market value after the taking.” Id.

         “Just compensation must be based on the value of the rights taken, without regard to the owner's personal relationship to the property taken.” Mendel, 517 S.E.2d at 367. In general, the cost to cure damage to property caused by the taking “may be considered a factor in establishing the reduced fair market value of the remaining property after the taking.” Steele v. Dep't of Transp., 671 S.E.2d 275, 278 (Ga.Ct.App. 2008) (quoting Dep't of Transp. v. Ogburn Hardware & Supply, Inc., 614 S.E.2d 108, 110 (Ga.Ct.App. 2005)). Although cost to cure “may be an important factor used by an appraiser in determining the value of the remainder [of property after a partial taking], it is not recoverable as a separate element of damage.” Id.

         II. The Burden of Proof

         The parties also do not agree on which side has the burden of proof. Defendants argue that under Georgia law, Sabal Trail as the condemnor has the burden to prove just compensation. Sabal Trail asserts that under federal law, the landowners have the burden of proof.

         The federal cases generally state that in condemnation cases, the landowner has the burden to prove fair market value of the land taken, including severance damages (damages to the remaining land in a partial taking). See, e.g., U.S. ex rel. Tenn. Valley Auth. v. Powelson, 319 U.S. 266, 273 (1943) (“The burden of establishing the value of the lands sought to be condemned was on [the landowner].”); United States v. Smith, 355 F.2d 807, 809 (5th Cir. 1966) (stating that the land owners have the “burden of proving” fair market value of the land taken and severance damages). Both Powelson and Smith were concerned chiefly with whether some of the landowners' evidence should have been excluded in determining the fair market value of the property taken, and both cases were remanded for further proceedings without that evidence. The implication of these cases is clear: if the landowner contends that he is entitled to a larger just compensation award than the Government's evidence shows, the landowner must present valid evidence to prove that amount.

         Georgia courts have concluded that since the condemnor must pay before taking private property for public use, the condemnor has the burden of proving fair market value of the property taken. Glover v. Dep't of Transp., 304 S.E.2d 567, 568 (Ga. Ct. 1983).[3]But that burden is met “as soon as” the condemnor introduces evidence of value. Id. And, if “the condemnee contends that the value or the amount of the damage is greater than is shown by the condemnor's proof and seeks a verdict for some greater amount he must introduce evidence that will itself or together with other evidence in the case support the verdict, else if a verdict is returned for an amount greater than is authorized under the condemnor's evidence it will fall because unsupported.” Id. (quoting Lewis v. State Highway Dep't, 140 S.E.2d 109, 110 (Ga.Ct.App. 1964)). Nonetheless, the Georgia courts have stated that it would be error to instruct a jury that the condemnee has the burden to prove fair market value. Id.; accord Gen. Lighting Distrib., Inc. v. Cobb Cty., 538 S.E.2d 807, 809 (Ga.Ct.App. 2000) (“In the usual condemnation case, where the measure of damages is the fair market value of the property, the condemnor bears the burden of proving that value, and the burden of proof does not shift to the condemnee even if the condemnee disputes the figures offered by the condemnor.”).

         The Court finds no actual conflict between the federal rule and the Georgia rule. Under both federal law and Georgia law, a landowner who contends that the just compensation award should be greater than what the condemnor's evidence shows has the burden to present evidence supporting the larger just compensation award. Failure to do so renders any excess jury verdict invalid as unsupported. So, even though the Georgia courts deny that landowners have a burden of proof on fair market value, landowners actually do have the burden to show fair market value in excess of the condemnor's valuation. The Court therefore plans to instruct the jury that Defendants have the burden to prove just compensation in excess of Sabal Trail's valuation evidence.

         III. Common Motion in Limine

         Sabal Trail filed nearly identical motions in limine on five issues in these five actions, and Defendants filed nearly identical responses. The Court will address all of the common motions in limine together.

         A. Amounts Sabal Trail Paid Other Landowners

         Sabal Trail moved to exclude evidence of how much it paid other landowners for easements along the pipeline's route. This motion is granted. “Fair market value is defined as the price that a seller who desires but is not required to sell and a buyer who desires but is not required to buy would agree is a fair price after due consideration of all the elements reasonably affecting value.” Thornton v. Dep't of Transp., 620 S.E.2d 621, 624 (Ga.Ct.App. 2005) (quoting Dep't of Transp. v. Old Nat'l Inn, 345 S.E.2d 853, 856 (Ga.Ct.App. 1986)). Defendants argue that evidence of the amounts Sabal Trail paid other landowners before resorting to condemnation proceedings is the best evidence of the value of the easements. Defendants did not cite any condemnation cases adopting this view. The Court is not convinced that sales made under threat of condemnation proceedings are voluntary or that they accurately reflect the fair market value of the property. See, e.g., U.S. ex rel. Tenn. Valley Auth. v. Reynolds, 115 F.2d 294, 296 (5th Cir. 1940) (“We think it too clear to require citation of authorities, that neither the award made to [the landowner's sister] nor the amounts paid by the government for other tracts acquired by it for the project, was admissible in evidence in this proceeding[.]”). Evidence of the amounts Sabal Trail paid other landowners is excluded.

         B. Amounts Sabal Trail Offered to Defendants

         Sabal Trail moved to exclude evidence of pre-suit offers to Defendants. This motion is granted. Before Sabal Trail initiated these eminent domain actions, it made offers to purchase the easements from Defendants. Several courts have concluded that such offers are offers of compromise that must be excluded under Federal Rule of Evidence 408. Defendants agree that they should not be permitted to introduce these offers to prove or disprove the validity or amount of a disputed claim. They do ask that the evidence be allowed if it is introduced for another purpose, as permitted under Federal Rule of Evidence 408(b). If any Defendant wishes to introduce evidence regarding the pre-suit offers from Sabal Trail, the Defendant should first raise the issue to the Court outside the presence of the jury.

         C. Evidence of Alleged Pipeline Dangers

         Sabal Trail anticipates that Defendants will try to testify that they are afraid the pipeline may be dangerous, and Sabal Trail moved to exclude this testimony. This motion is granted. Some courts do permit lay witnesses to provide evidence on how fear in the marketplace affects the value of property. See, e.g., Ryan v. Kan. Power & Light Co., 815 P.2d 528, 534 (Kan. 1991). But see Dixie Textile Waste Co. v. Oglethorpe Power Corp., 447 S.E.2d 328, 330 (Ga.Ct.App. 1994) (affirming exclusion of testimony regarding general, public fear of electric power lines and their impact on property values because it was speculative). Even under Defendants' cases, a witness cannot use his own personal fear as a basis for testifying about fear in the marketplace. See Ryan, 815 P.2d at 534 (“[N]o witness . . . may use his or her personal fear as a basis for testifying about fear in the marketplace.”). The Court thus excludes Defendants' testimony regarding their subjective fears about the pipeline.

         D. Cost of the Pipeline Project

         Sabal Trail moved to exclude evidence regarding the cost of the pipeline project. This motion is granted because the cost of the pipeline project is not relevant to the matter that the jury must decide: the measure of just compensation for the easements on Defendants' property. Defendants argue that the cost of the project is important to show that Sabal Trail's pipeline is not a government-funded project. Defendants shall not be prohibited from pointing out that Sabal Trail is a private company, but they shall not be permitted to introduce the cost of the project.

         E. Other Litigation between Sabal Trail and Defendants

         Sabal Trail moved to exclude evidence of other litigation between it and Defendants. This motion is granted. None of the prior litigation is relevant to the issue that the jury must decide: just compensation in these condemnation actions. Evidence of other litigation is excluded.

         IV. Motions to Exclude in the ...


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