Energy and Environment Monitor
VIOLATING THE CONSTITUTION IN THE NAME OF THE ENVIRONMENT
June 3, 2019
By: M. Shane Harvey
The Misguided Approach to Condemnation by WVDOT
The Fifth Amendment to the United States Constitution provides that no private property shall be taken for public use, without “just compensation.” West Virginia’s Constitution contains a similar prohibition.
But the West Virginia Department of Transportation (WVDOT) has felt compelled to violate this most basic right. And, strangely, it has used environmental laws to do so.
Frequently, WVDOT takes property from citizens by eminent domain in order to build new roads.
The process is designed to be fast and efficient. By statute, WVDOT can petition for immediate possession of a property so long as WVDOT pays the citizen what WVDOT’s appraisers believe the property is worth. If the citizen disagrees with the amount, the dispute over what is “just compensation” is resolved later.
In 2014, WVDOT condemned a Sonic restaurant building in Beckley order to construct the East Beckley Bypass. There was little dispute about the value of the building under normal conditions. The building was relatively new and in a high-traffic area. Appraisals by both the owner and the WVDOT placed the value of such a building at around $1 million.
But WVDOT refused to pay that much. Or even half that amount. Instead, it argued that a large deduction in compensation was justified because there had previously been a gasoline leak on the property.
Now, you might initially think that sounds reasonable.Contamination can devalue property. Indeed, in this very case, at least one Justice on the West Virginia Supreme Court suggested that contamination should be a relevant factor in determining the amount of “just compensation” paid to a property owner. See http://www.courtswv.gov/supreme-court/docs/spring2016/15-1112c-ketchum.pdf
But there’s more to the story.
The Rest of the Story
As it turns out, there was absolutely no evidence that the property was devalued as the result of the historic petroleum contamination.
Indeed, WVDOT’s own appraiser refused to testify that the property was devalued. It is clear why. The contamination was relatively insignificant and manageable. And more importantly, cleanup was the responsibility of the property’s prior owner, who had the resources to conduct the cleanup.
Under such circumstances, appraisers have found that there should be little to no devaluation for environmental contamination. One author has expressed the rationale for this approach as follows:
Nevertheless, WVDOT ignored these factors because it needed to build its road, which was already behind schedule. It could not afford to wait for the responsible party to clean up the contamination. Indeed, the responsible party would likely recover the contamination through recovery wells or some other process that could take years.
So, WVDOT performed the remediation itself by digging a large hole and removing the contaminated soil. And it did so with an eye toward the construction of its road. It dug an extra-large hole, to remove all the clay, which is a bad base for building roads. It then filled up the hole with expensive shot rock, because roads cannot be built on ordinary dirt and gravel. And it did all this work with its federal highway contractor, which was paid at prevailing wage.
All told, WVDOT spent $484,000 digging a hole and filling it with road building material. It then proposed to recover these costs by deducting that amount from the compensation paid to the owner – meaning the owner would get receive less than half the value for its $1 million site.
Fortunately, the owner did not accept this result. Under West Virginia law, if the State and landowner cannot agree on fair market value, the issue is decided by “condemnation commissioners” appointed by the county circuit court. In this case, a full day hearing was held before the condemnation commissioners in Beckley. Not surprisingly, the condemnation commissioners fully rejected the State’s efforts to pass off its costs onto the owner.
The case subsequently settled for an amount much higher than initially offered by the State. But, unfortunately, the owner of the property had to suffer significant attorney fees to ensure that it was treated fairly.
The Need for Change
It is unclear if WVDOT ever learned any lesson from this episode. During the case, there were indications that WVDOT has treated other property owners in a similar fashion and that it will continue to do so in the future.
This needs to stop. West Virginians expect the WVDOT to spend tax dollars wisely and to not overpay for property acquired through eminent domain. But basic rights granted by the Constitution should not be violated. No property owner should have its property taken without receiving fair compensation.
The views expressed in this article are solely those of the author.