*1
GSS, LLC, Appellant ENERGY
CENTERPOINT GAS COMPANY,
TRANSMISSION
Appellee.
No. CV-12-1011.
Supreme of Arkansas. Court
April 2014. *2 petition
filed a to condemn the 19, 2010, February alleging that it was Convey- authorized underits “Certificate of Necessity” ance and issued the Federal acquire Power Commission *3 domain, at issue eminent it as necessary operation to the construction or Benton, Butler, PLLC, by: Huffman of its business. CenterPoint further al- Huffman, Bryan appellant. R. leged just that determination of com- Stone, PLLC, A. by: Phillip & Smart likely pensation materially to GSS was to Stone, appellee. prejudice progress and retard the of the and asked to desig- construction the court HOOFMAN, Justice. CLIFF money deposited nate an amount of to be case, registry into the of the CenterPoint appellant this condemnation bin (“GSS”) GSS, purpose ascertaining court for the of such appeals from LLC $64,000 compensation posses- and for an order of just awarding verdict com- sion, it to allowing posses- enter and take pensation pipeline-easement taking for a subject property proceed sion of the to Energy Gas by appellee CenterPoint (“CenterPoint”). pipeline. with the construction of the Cen- ap- Transmission On Co. (1) filed a Taking, terPoint also Declaration of argues GSS that the circuit court peal, an affidavit in of order support and of excluding abused its discretion in evidence (2) land; possession, in which it that averred contiguous parcel of value of a right-of-way value of the easement was granting the circuit court erred in that $64,000. to description estimated be The summary judgment favor of Center- property of the attached to Point on GSS’s counterclaim because CenterPoint’s Cen- proposed documents showed that the ease- wholly or proceeded par- terPoint under a (3) statute; twenty-foot-wide right- ment consisted of a tially and preempted of-way, directly adjacent was to run which granting summary circuit court erred in already existing twenty-foot to an ease- judgment to because Center- CenterPoint gas pipeline ment for a that had been in proceeded deny Point under color of law to forty- at least a place since as well as rights. jurisdiction CSS’s We assumed by-forty-foot work site and an access road. R. 1- pursuant Sup.Ct. this case to Ark. 2(b)(Z) (6), and as it involves issues of first 19, 2010, February On the circuit court impression statutory interpretation. and possession, finding entered an order of affirm. We condemn petition that CenterPoint’s
CenterPoint, and that the estimated gas pipeline compa granted a should be on ny power just compensation that has the of eminent domain for the easement $64,000 to section 7 of the Natural Gas GSS’s in the amount of pursuant (“NGA”) |sdeposited registry into the Act of 1938 and Arkansas Code had been 18-|¡>15-1301 15, 2010, seq., §§ et and 23- the court. On March GSS filed Annotated began negotiating-in petition et June an answer to the to condemn and seq., 15-101 purchase right-of-way tаking. 2009 to a easement the declaration of GSS also al- leged against on GSS’s in order to construct a counterclaims CenterPoint taking, and violation of the Arkan- pipeline. new After CenterPoint GSS for unlawful Rights trespass, Act of agree compensation were unable to on the sas Civil easement, outrage. Although for the GSS filed a motion for to be CenterPoint 17, 2010, that May being requested ment Collins and preliminary injunction a specific requests they the motion follow- discussed Collins’s voluntarily withdrew putting greens, paths, that cart tee hearing. A second motion for а ing a boxes, fairways open then filed not be cut. preliminary injunction was GSS, agreed August Wright was set for indicated hearing 2010; however, not the fair- greens withdrew the to drill under but again ways. request- entered He stated that Collins had motion as moot after CenterPoint changed, date. ed that the route of the line be property prior hearing but he told him that the route that had filed a motion to dismiss engineers, been established their counterclaims, and GSS then filed a GSS’s already existing followed the route of the summary judgment, asserting motion for easement, one he pipeline and was the petition to condemn that CenterPoint’s *4 go Wright “had to with.” did state that pro- should be dismissed because it had requested Collins had a small deviation wholly partially a ceeded under the to accommodate the future build- route preempted statutory state scheme and also home, ing site of his which CenterPoint comply with the because it had failed to approved. NGA, in the prerequisites set forth 717f(h). 30, 2011, negotiation price On June the The over the for the U.S.C. well, go according circuit court both easement did not denied CenterPoint’s $46,000 Wright. dismiss motion fоr first offered motion to and GSS’s CenterPoint easement, however, summary judgment; the court for the and GSS counteroffered $464,000. In September, found that the Arkansas condemnation with late $288,000, accept followed offered to while statutes Cen- Center- $64,000. Wright terPoint were constitutional. Point raised its offer to negotiated stated that he on Collins 27, 2012, On March CenterPoint filed its separate ten to fifteen occasions over six summary judgment own motion for months, they or seven but could not reach GSS’s counterclaims. assert- CenterPoint agreement. an He was told his super- ed that GSS had failed to meet its burden visor, Brinker, Richard to then turn over showing that the condemna- Arkansas attorney. the file Wright to CenterPoint’s tion statutes followed this case were only indicated that he had one more con- preempted by unconstitutional or the NGA Collins, tact with when he let him know and that all of GSS’s counterclaims there- moving that CenterPoint was the drill- genuine fore failed to create issues of ma- ing rig. He stated that another Center- terial fact and should be dismissed as a agent Point also went out and looked at motion, matter of law. In of its support properly the to see what could be done to excerpts depo- CenterPoint attached from damage. minimize employees agents, sitions of its right-of-way |4data | ¿Richard Brinker, sheet, Wright’s and an who was su- appraisal CenterPoint, agreed In at that the property being pervisor GSS of the taken. $200,000 apart on the deposition, Larry Wright, negoti- parties his who two were CenterPoint, price negotiations ated with GSS on behalf of for the easement when Collins, Guy He takes stated that he first met with ceased. stated CenterPoint early rights any 2009 on GSS’s the ownеr’s rer- agent, GSS’s June and that currently being oper- outing requests which into consideration properly, was request did and obtain a reroute public golf ated as a nine-hole course. Collins According ease- around his future home site. Wright presented stated that he Brinker, weekly progress response re- GSS’s also attached its entire he received which agents appraisal report, all of the who were revealed that ports from proposed eight-mile pipe- appraiser already existing included the working on completion thеre was a date easement favor of CenterPoint and cal- line and that board, the total amount of land being after culated across pro- ap- file a condemnation taken as 3.36 acres. CenterPoint’s typically would Stone, Jr., praisal by was not reached John which was also ceeding agreement if an exhibit, right-of-way only The attached as an calculated with the landowner. acreage currently pro- contained in the support data sheet attached Center- easement, posed notes on the de- which was 1.731 аcres. Point’s motion contained Wright’s negotiations appraisal with Collins Stone concluded in his that the tails of deposition just compensation present taking with the tes- for the and was consistent $32,000. timony. por- also attached a was report appraiser, tion of the from GSS’s hearing prior beginning After a to the Pearce, just Mike which concluded 5, 2012, July trial on circuit properly being taken compensation for granted court CenterPoint’s motion for $103,000. summary judgment pre- on the issues of emption process, ruling and due that “the motion, response In its GSS con- observed, process provided has been it’s *5 tended that there were sufficient issues of law, by going Arkansas and we’re forward preclude grant material fact to the sum- The trial then proceeded on that basis.” GSS asserted that mary judgment. Cen- just on the sole issue of the amount of proceeded preempted under a terPoint had compensation to be to GSS for the statutory procedure and that the scheme hearing testimony by After the easement. condemning property used in GSS’s violat- GSS, well as agents CenterPoint and as rights. GSS’s In addi- ed constitutional jury the parties’ appraisers, from the two tion, did not argued GSS CenterPoint $64,000 just compensa- as awarded GSS negotiate good required in faith as under entered Judgment to this effect was tion. Blink- Wright’s the NGA and cited to 6, 2012, timely appeal- and GSS August on testimony that CenterPoint deposition er’s ed from this order. the location of the agree change not to did argues point appeal, In its first on GSS property. GSS’s GSS also pipeline across Collins, its discretion that the circuit court abused by stating an affidavit attached the value excluding concerning in in evidence hаd a current value properly that the contiguous that was to parcel re- of a of land million and that he had excess of $2 sought GSS to in- property subject property. the the inquiries purchase ceived testimony by evidence after of that amount. The affida- troduce this well in excess appraiser, |7John Stone, |fiof averred that the use the CenterPoint’s vit further comparable proper- the golf a course would be ad- which he discussed property as by appraiser report. ties used GSS’s his versely affected the construction ruling is not con- good Apparently, although attempted negotiate that Collins record, had CenterPoint, in the the circuit court offering a reason- tained faith put GSS could not prior the ruled to trial that ably acceptable alternative route for case, easement; however, regarding separate evidence a forth proposed CenterPoint Energy route Gas Transmission to consider the alternative CenterPoint refused Green, 326, 413 App. only consider the route it want- Co. v. and would was a condemnation take. S.W.3d ed to involving capacities, property contig- action an for the same in the same on easement case, proposed pipeline present properly as in the uous to the at here and issue property adjacent property. opened on to GSS’s because the door to CenterPoint After a bench trial before the same circuit by attacking comparable proper- the issue case, judge present just as in the the com- argues prejudiced ties. GSS that it was pensation for the easement was found to by the exclusiоn of this evidence because $68,100, finding be and this was affirmed jury the accepted the valuation of Center- appeal. Id. appraiser rejected higher Point’s the own put appraiser. value forth its
Notwithstanding
pre-
the circuit court’s
ruling,
trial
argued
that it should now
that this
responds
CenterPoint
evidence
be allowed to introduce evidence on the
correctly
was
excluded
the circuit court
property
valuation of the
because
Green
because it
was not discussed
either of
the
opened
had
door
its
CenterPoint
appraisal reports
in this case and be-
expert’s testimony regarding comparables.
relevant, given
dispar-
cause it was not
objected, asserting that GSS’s
CenterPoint
ity in
and the
property
sizes of
Green
appraiser’s report had not discussed the
properly at issue here.
fur-
property
sup-
Green
and that GSS had not
that, contrary
ther notes
to GSS’s asser-
plemented the report. CenterPoint
fur-
tion,
accept
did not
Stone’s valua-
argued
ther
Green
tion,
awarding
instead
twice that amount
comparable
not
this case
just compensation.
because it was much smaller. The circuit
As
a
argues,
party
has
court ruled that
it would not allow the
duty
supplement
discovery respons-
Green case to control
present
case and
26(e)(1)
pursuant
es
to Ark. R. Civ. P.
it was going
prior
to stand on its
(2013), including
subject
matter and
ruling to exclude this evidence. GSS then
substance of an expert witness’s testimo-
proffered
testimony
that would have
ny.
Hwy.
Ark. State
v. Frisby,
Comm’n
*6
Stone,
during
elicited
cross-examination of
(1997).
506,
329 Ark.
GSS contends that the evidence
a
the same
cases,
ing
properly
the valuation of the
in
party,
Green
or
other
because such
highly
voluntary
was
relеvant in this case
“sales” are not
because
transactions and
very
involved the
appraisers, acting
compromise.
same
are
the nature of a
Bark-
er,
(citing
transportation
Yonts v. Public Serv. Co.
of
supra
gas,
natural
and the
Ark.,
179 Ark.
GSS first that the condemna- contends right- turnpike companies, secure tion used consent, contract, agree- of-way by preempted by provisions this case are ment, corporation then the shall have here are The statutes at issue of the NGA. right to proceed procure the con- 717f(h), § 18- Ark.Code Ann. 15 U.S.C. *7 lands, demnation of the property, rights, (Repl.2003), and Ann. 15-1303 Ark.Code privileges, and easements in the manner Imthrough §§ 18-15-1201 18-15-1207 provided by taking private prop- law for (Repl.2003). provision, The NGA 15 for railroads as erty right-of-way 717f(h) § U.S.C. states as follows: 18-15-1201-18-15-1207, by §§ provided (h) Right of eminent domаin for con- including procedure providing the pipelines, struction of etc. by publication by notice and certified any pub- holder of a certificate of When § mail in 18-15-1202. necessity lic convenience and cannot ac- Finally, § Arkansas Code Annotated 18- contract, quire by or is agree unable to 15-1206, titled, “DisputesMoney which is with the owner of to the com- deposits” states for, pensation necessary to be the (a) construct, In cases in which the determination right-of-way operate, and controversy pro- in the questions of pipe piрe maintain a line or lines for the 590 NGA,
ceedings likely progress by is to retard the virtue of the the whole field” 717f(h) of work on or the business of the rail- admits that section explicitly incor- court, judge porates the company, practice pro- road the use of state and vacation, an amount of cedure in an action for designate shall condemnation. However, federal statute company, the because this does money deposited to be court, procedure for the subject expressly provide to the for the not order of purpose making compensation, pursuant of in this case used 18-15-1206, § when the amount thereof has been as- Ann. Ark.Code judge sessed and the designate shall the GSS refers to a “quick-take,” as GSS ar- place deposit. of the gues particular provision conflicts with the preempted. federal statute and is n(b) Whenever the deposit has been 1 made, in compliance with the order of argument procedure GSS’s used judge, the court or it shall be lawful for pursuant to Ark.Code Ann. company upon to enter the lands and |12 § preempted 18-15-1206 is is per- not proceed company’s work 717f(h) § suasive because 15 con- U.S.C. through over lands controver- language tains no to indicate Congress’s sy prior to the assessment and payment so; instead, specifically intention to do damages right. for the use and contemplates the use of state condemna- procedure proceedings tion under the
The doctrine of federal preemp
federal
tion is
statute. GSS cites Transwestern
based on the United States Consti
Const, Pipeline
Supremacy
Property
Co. v. 17.19 Acres
tution’s
Clause. U.S.
Located in Maricoрa County,
art.
cl. 2.
have held that
591
NGA,
expedient;
and the circuit
this discretion cannot be con-
provisions of
summary
in granting
by
court was correct
in
trolled
courts
the absence of
issue.
therefore af-
judgment
fraud,
faith,
on this
We
bad
or gross abuse of discre-
point.
firm on this
Rock,
City
tion.
Little
346
Pfeifer
of
449,
(2001);
Ark.
jury, and money compensate deposit mary judgment to CenterPoint on GSS’s Further, counterclaims, landowner. and we affirm. fully
these statutes have been found to
Affirmed.
satisfy
procedural
both substantive and
due-process standards. DeSalvo v. Ark.
HART, J., dissents.
(E.D.Ark.
Co.,
F.Supp.
312
La. Gas
1965).
GSS asserts in its brief that
While
HART, Justice,
JOSEPHINE LINKER
registry
into the
of the
dissenting.
only
the just compensation
court
62% of
The circuit court
discretion in
abused its
taking,
for
awarded GSS
refusing
inquire
to allow
into the
CSS
$64,000, the
amount
that
same
Center-
methodologies
valuation and
use
Cen-
deрosited,
Point had
and GSS does not
terpoint’s appraiser, John David Stone.
argue on
that
appeal
this award was insuf
necessarily
This evidence
would have been
ficient.
|
used
cross-examine Stone. The issue
lfito
1^Although
argues
property
GSS
that its
simple
why
was
and obvious:
did Stone
not
giv-
could
be condemned without first
“compara-
not include in his real estate
ing proper
notice such
it
that
could have
Green,
bles” land owned
which is con-
court,
day
its
it was served with Center-
tiguous
property,
to CSS’s
that he had
condemnation,
petition
Point’s
declara-
appraised at a significantly higher value?
taking,
tion of
and the order of possession.
quintessential
In this
“battle of the ex-
petition,
GSS then filed an answer to the
perts,”
inquiry
relevant because
was
injunc-
as well as a motion for preliminary
compe-
could have been used to test the
tion,
it voluntarily
withdrew after a
credibility
tence and even the
of Center-
Also,
hearing.
although
argues
that
appraiser.
Point’s
possession
the order of
was entered before
served,
prior
summons was
notice was
Likewise,
majority wrong
is
to find
required
not
under Ark.Code Ann.
18-
apрropriate
it was
for the circuit court
Further,
15-1206.
the cases cited GSS to exclude
evidence
accordance with
inapposite,
are
as in
High-
Arkansas State
Rule 26 of the Arkansas Rules of Civil
French,
way
Ark.
Commission
Procedure. While it
is true that CSS
(1969),
case should be trial.
a new
Theresa Ar-
on behalf of a class of all other Similarly Situated, Appellant
kansans
HEALTHPORT, INC.; Healthport Tech-
nologies, Document LLC Smart f/k/a
Solutions, LLC; Healthport Incorpo- Technologies Companion
rated f/k/a Weiss,
Corporation; and Richard Director, Capacity Ar-
his Official As Department of Finance and
kansas
Administration, Appellees.
No. CV-13-828.
Supreme of Arkansas. Court
April 2014.