FRANKFORT — A Kentucky Court of Appeals panel heard arguments Tuesday on whether a circuit court judge was correct when he ruled last year that Bluegrass Pipeline cannot use eminent domain to take private property for construction of a natural gas liquids pipeline.
About two dozen people listened to lawyers for both sides give their oral arguments to the three-judge panel.
Presiding Judge Janet L. Stumbo said she and Judges James H. Lambert and Jeff S. Taylor would render a decision in about 60 days.
Bluegrass Pipeline wanted to build a line to carry natural gas liquids across 13 Kentucky counties, but many citizens opposed the project in 2013, saying the flammable liquids posed environmental and safety concerns.
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A year ago, the two companies proposing to build Bluegrass Pipeline halted the project and suspended investment into it because they said it had not received the necessary customer commitments to move forward.
Nevertheless, eminent domain remains an issue because not all the Bluegrass Pipeline land options have been released to property owners, said Tom FitzGerald, the lawyer who argued Tuesday that Bluegrass cannot invoke eminent domain. Those options would have another two years left before they expire.
In addition, eminent domain is still a question in Tennessee Gas Pipeline's separate project to convert its existing natural gas pipeline into a conveyance for natural gas liquids. That line crosses 18 Kentucky counties, from Greenup County in the north to Simpson County on the Tennessee line.
Some property owners have received letters from Tennessee Gas Pipeline in which the company says it "may initiate eminent domain proceedings in state or federal court to acquire an interest in your property."
In Tuesday's oral arguments, Chadwick McTighe, the lawyer for Bluegrass Pipeline, said neither property owner Penny Greathouse of Franklin County nor a group representing her called Kentuckians United to Restrain Eminent Domain Inc., or KURED, had "standing," or a real stake in whether eminent domain was used.
Without determining whether Greathouse and the group had a real interest, "nothing else ends up mattering," McTighe said.
When Greathouse declined to grant an easement to Bluegrass Pipeline, the company revised its route for the line and did not seek an easement. With no condemnation proceedings started against her, Greathouse had no "concrete interest" in what happened with the pipeline, McTighe said.
"Bluegrass Pipeline moved on, disclaimed any interest in the property, and made clear it was never going back to that property," McTighe said. "...You don't have a preemptive attack on the right of eminent domain just because someone, someday may want to use it."
KURED also had no stake in the issue because it is not a property owner, pipeline attorneys argued in their written brief to the court.
FitzGerald countered that pipeline representatives had contacted Greathouse four times seeking to secure an easement across her property. Greathouse was uncertain about her rights, he said.
"This had an immediate effect on her desire to negotiate or her willingness to negotiate with this specter of the possibility of being brought into court and having the property condemned," FitzGerald said. "She wanted to know whether that was on the table ... ."
Furthermore, the route of the pipeline was in a constant state of flux, and Bluegrass could have changed its mind at any time and rerouted the pipeline back through the Greathouse property.
FitzGerald noted that Bluegrass Pipeline also had claimed the power of eminent domain in a letter to the Franklin County judge-executive.
Stumbo asked McTighe about that letter during his rebuttal when he said Bluegrass Pipeline never raised the subject of eminent domain.
"That was sent in response to inquiries being made," McTighe said. "And so the county judge-executive wanted an answer on that, and so the company stated the best position it could, which was to say 'Yes, we believe we have the power, but we don't want to use it.' It was a response to a specific question."