Private utilities often receive franchises from a state, however these franchises can be acquired by public bodies through eminent domain. Public utilities traditionally argue it is in the greater good for a community for a public agency to seize property owned by a private utility, and then transfer that land to a public utility. These cases provide complicated, serious constitutional challenges which require expertise in this demanding niche of eminent domain law.
Grosse Ile Bridge Company: The Grosse Ile Bridge Company is considered to be a private utility under the constitutional structure of Michigan. As such, the Bridge Company was under the authority of the court. The Township of Grosse Ile attempted to acquire the utility with a $4,000,000 initial offer. Separate and apart that the offer was a fraction of the utility’s value, the Township was found to have no authority under the Constitution and State legislative delegations to acquire the portion of the bridge outside Township limits. After five years of litigation led by Ackerman & Ackerman, the Michigan Supreme Court rejected the Township’s attempt to utilize eminent domain to acquire this private bridge company as detailed in the citation of this case.
Water Private Utility Case – Genesse County, Michigan: In most jurisdictions, privately owned utility companies serving the public are treated as public utilities. As such, courts frequently treat the private utility companies as subject to the local Public Utility Commission/Public Service Commission jurisdiction, or as part of the jurisdiction of the courts in order to make sure that the customer base is fairly treated.
In the representation of Lake Park Water Company in Genesee County, Michigan, local officials attempted to enforce a transfer of the utility, so that it would become part of the Keregondi/Flint water system. The County tried to prove that Lake Park was not licensed to provide water to the community. Ackerman & Ackerman prevented the transfer of the utility by successfully demonstrating the merits of Lake Park as a beneficial distributor of water in Genesee County.
Washington 10: In many jurisdictions, there is a lack of natural gas storage capacity, because of concerns that pipelines can break, especially during the high-demand winter season. This was well illustrated by the energy cutoff to the Northeast U.S. during a winter in the late 1970’s. For this reason, utility companies in the Midwest have acquired land for gas storage facilities.
Ackerman & Ackerman was retained as counsel by the private owner of a once-active 300-acre natural gas field after Washington 10 Gas Company filed suit to condemn the property to convert the site into a gas storage field. We approached this case with the understanding that there are a large number of nuanced and complicated issues in calculating just compensation of natural gas storage fields. Although these industry-specific issues can be legally and technically complex, Ackerman & Ackerman has a long track record of coming up with effective ways to resolve evaluation discrepancies and establish fair compensation for the property owner.
Washington 10 Gas made an initial compensation offer of approximately $1,000/acre for a total of $386,000 for the land. Experienced counsel, expert testimony, and knowledgeable appraisals were key in resolving this case. We made a compelling case for a higher value for the land as a storage facility with broad appeal to major pipelines and markets. Ackerman & Ackerman secured a final resolution of $5,386,000 for the property owner.