I have been contacted by a property owner from whom International Transmission Company (“ITC”) is seeking to acquire new property rights along an existing transmission line. This blog post responds to the owners’ questions about why ITC is seeking to expand its rights and summarizes the blog posts most relevant to an owner approached by ITC.
Why Is ITC Seeking an Expanded Easement?
ITC acquired many of its transmission lines from Detroit Edison (“DTE”) and Consumers Power. Those transmission lines are frequently governed by easements acquired decades earlier, some as early as the 1920s. Those historical easements are often called “Original Grants” by ITC. They authorized the original construction of the transmission lines and generally allow ITC as a successor to DTE or Consumers to trim trees within twelve to fifteen feet of the transmission lines.
Most people will recall the major blackout that occurred in 2004. ITC has asserted in many court filings that the blackout was caused by one fast-growing tree in Ohio that had been recently trimmed by the utility company. After that blackout, new federal regulations were implemented. Those regulations require transmission companies like ITC to create plans to secure their right-of-ways from blackouts caused by contact with vegetation. Transmission companies became subjected to significant fines if they allowed vegetation to cause future blackouts.
As a result of those new regulations, ITC must obtain additional rights from tens of thousands of property owners throughout the state. These are typically referred to as “Veg Cases,” meaning that ITC’s primary focus is the removal of vegetation. I have handled the vast majority of Veg Cases filed by ITC to date. ITC started filing these lawsuits in Washtenaw County. I handled approximately 25 of these cases, with several attorneys who attempted to handle a single case referring their matters to me. ITC filed more cases along the same line in Oakland County and I handled virtually all of them. ITC has filed scores of cases in Wayne County and, once again, I handled most of them. I represented about 80% of the owners in a Lapeer County project and about 70% of the owners in a Kalamazoo County project involving construction of a line. Currently I am representing owners in Oakland and Macomb County sued for multiple lines.
What Is ITC Attempting to Do?
ITC is dramatically expanding its property rights. Most notably, ITC seeks the right to clear cut swaths of property 75 to 85 feet from each side of the centerline of the power lines. Prior to my involvement in litigation with ITC, it would leave properties looking like war zones by refusing to clean up after themselves based on the questionable and convenient theory that the actual trees were the personal property of the landowners and could not be removed (even if the owners wanted them removed). To ITC’s credit, since I have been litigating against them, the number of property owner complaints have been reduced because ITC generally cleans up the remaining trees in accord with instructions from the owners. However, ITC generally does not remove stumps, although this might be changing.
In some instances, ITC acquires the right to use the entire remainder of the property for access to the lines. This means that ITC could cross over any part of the owners’ properties, at any time, without notice. This issue is problematic for owners relying on septic systems or wells.
In some instances, ITC prevents the construction of improvements like buildings or fences in the easement areas.
Which Past Blog Posts Are Most Relevant to ITC Takings?
Some property owners are outraged at the prospect of granting (or being forced to grant) an easement to ITC. Some owners acknowledge that acquisition of certain rights are reasonable but find the proposed acquisition by ITC to be excessive. These owners want to know what can be done to stop or limit the taking. In some instances, owners can challenge the rights being acquired by ITC. This post describes this legal issue.
Owners are often scared to hire a lawyer, fearing the costs that would be associated by such a retention. This post describes a number of benefits that owners enjoy. The last two items, which discuss reimbursement of the standard contingent fee that I charge to represent owners and payment of the owners’ appraisal costs, are most relevant in an ITC Veg Case. It is critical for owners to realize that my fee is based on obtaining an increase in just compensation over and above ITC’s good faith offer. I charge 1/3 of the increased compensation. I do not take a percentage of ITC’s good faith offer. If I do not benefit you by increasing your compensation above the good faith offer, I do not earn an attorney fee.
This post describes the procedures surrounding the issuance of a good faith offer, which is a prerequisite to initiating a condemnation lawsuit and is the basis for calculating the contingent attorney fee that I charge.
Many posts focus on just compensation issues.
A case involving acquisition of an easement is called a partial taking. The property rights retained by the owner are called the remainder. Michigan’s jury instruction relating to partial takings summarizes some of the key issues raised in partial taking cases:
This case involves what is known as a “partial taking”; that is to say, the property being acquired by the condemning authority is part of a larger parcel under the control of the owner.
When only part of a larger parcel is taken, as is the case here, the owner is entitled to recover not only for the property taken, but also for any loss in the value to his or her remaining property.
The measure of compensation is the difference between (1) the market value of the entire parcel before the taking and (2) the market value of what is left of the parcel after the taking.
In valuing the property that is left after the taking, you should take into account various factors, which may include: (1) its reduced size, (2) its altered shape, (3) reduced access, (4) any change in utility or desirability of what is left after the taking, (5) the effect of the applicable zoning ordinances on the remaining property, and (6) the use which the condemning authority intends to make of the property it is acquiring and the effect of that use upon the owner’s remaining property.
Further, in valuing what is left after the taking, you must assume that the condemning authority will use its newly acquired property rights to the full extent allowed by the law.
The bold language is critical to understanding the just compensation issues arising from a partial taking. A post that I wrote describing a court ruling that I obtained against ITC enforcing this rule of law can be found here. A more detailed article that I wrote for the International Right of Way Association Magazine can be found here.
This blog post discusses the use of herbicides in utility corridors without provision of notice to property owners. It is an example of the type of issues that must be considered when assuming that ITC will use its newly acquired property rights to the fullest extent allowed by law.
An owner with multiple properties that might be impacted by a taking is entitled to just compensation for all of them, even if an easement is imposed against only one property. Examples include reduction of access to one property impacting a neighboring property or disturbance of farming drainage tiles that service multiple fields. A detailed blog post can be found here.
Finally, this article that I co-authored with a number of appraisal specialists summarizes just compensation issues that may arise in an ITC Veg Case.
I hope that this summary is helpful to property owners facing the specter of an ITC acquisition. More importantly, I hope that owners in that situation realize the benefits of obtaining the specialized legal services that I can provide. Please do not hesitate to contact me.