2018 IL App (4th) 150519
Ill. App. Ct.2018Background
- IEPC (formerly Enbridge Energy (Illinois), L.L.C.) obtained ICC authority to build the Southern Access Extension (SAX) oil pipeline and commenced eminent-domain condemnation against the Kuerth landowners in 2014. Marathon contracted for ~2/3 of pipeline capacity.
- Trial court initially denied landowners' traverse and discovery motions, barred certain testimony, and entered judgment allowing IEPC to acquire easements and build the pipeline.
- On the first appeal (Kuerth I) this court reversed in part, holding landowners were entitled to a traverse hearing to attempt to rebut presumptions arising from the Commission's finding of public convenience and necessity; the case was remanded for that limited hearing.
- On remand landowners sought discovery about actual shippers and usage on the SAX pipeline; the trial court denied that discovery as irrelevant to the limited traverse issues and conducted the traverse hearing.
- At the traverse hearing the court found landowners failed to rebut by clear and convincing evidence (1) presumptions that the taking was primarily for public benefit/use/enjoyment and (2) the Commission’s good-faith negotiation finding; the court also denied sanctions against landowners’ counsel.
- This appeal followed; the appellate court affirmed the trial court on all issues, holding (inter alia) that (a) “primarily” is not a literal percentage test, (b) Marathon’s contractual capacity was not dispositive or relevant to the statutory presumption, and (c) the denial of discovery and sanctions rulings were not erroneous.
Issues
| Issue | Plaintiff's Argument (Landowners) | Defendant's Argument (IEPC) | Held |
|---|---|---|---|
| Whether landowners rebutted the statutory presumptions (public use & necessity) at the traverse hearing | Landowners: Marathon’s control of >50% capacity shows pipeline primarily benefits a private party, so public is not the primary beneficiary | IEPC: Presumption from ICC certificate stands; ownership/shipper identity not dispositive; the public can primarily benefit even if private entities use it | Held: Trial court not against manifest weight; landowners failed to present relevant clear-and-convincing evidence to rebut presumptions |
| Meaning of “primarily” in 735 ILCS 30/5-5-5(c) | Landowners: “Primarily” should be read as a quantitative percentage test (>50%) | IEPC: “Primarily” means chiefly/principally (ordinary meaning), not a strict percentage; statutory presumption controls | Held: “Primarily” means chiefly/principally (not a numeric test); trial court’s interpretation correct |
| Relevance of discovery seeking identities, volumes, and terms of SAX shippers | Landowners: Discovery necessary to show who uses pipeline and thus whether public is primary beneficiary | IEPC: Discovery irrelevant to the narrow traverse issues; would cause delay and confusion | Held: Discovery denial proper; shipper information not required for traverse focused on rebutting statutory presumptions |
| Whether sanctions (trial court and appellate Rule 375(b)) were warranted against landowners’ counsel | Landowners: remand required further argument; counsel acted within remand scope | IEPC: Arguments were frivolous/repetitive and sanctionable | Held: No abuse of discretion denying sanctions; appeal not frivolous given unsettled law; no Rule 375(b) sanctions imposed |
Key Cases Cited
- Pliura Intervenors v. Illinois Commerce Comm'n, 405 Ill. App. 3d 199 (Ill. App. Ct. 2010) (rejected argument that Commission erred in finding public need for pipeline)
- Lakehead Pipeline Co. v. Illinois Commerce Comm'n, 296 Ill. App. 3d 942 (Ill. App. Ct. 1998) (examples of evidence to rebut that public is primary beneficiary)
- Southwestern Illinois Development Authority v. National City Environmental, L.L.C., 199 Ill. 2d 225 (Ill. 2002) (taking constitutional if public is primary beneficiary; courts look to motives and independent public use planning)
- People ex rel. City of Urbana v. Paley, 68 Ill. 2d 62 (Ill. 1977) (incidental private benefit does not defeat public use when primary benefit is public)
- Midland Smelting Co. v. City of Chicago, 385 Ill. App. 3d 945 (Ill. App. Ct. 2008) (discusses traverse hearing scope and public-benefit inquiry)
- Olsen v. Staniak, 260 Ill. App. 3d 856 (Ill. App. Ct. 1994) (trial court’s sanctions decisions reviewed for abuse of discretion)