A Refresher On The Condemnation Litigation Process For Utilities

Public utilities rely on access to private and public land to build and maintain essential infrastructure. When voluntary acquisition efforts fall short, litigation becomes a necessary tool to secure those rights. Understanding the eminent domain litigation process enables utilities to navigate court procedures effectively, maintain project timelines, and manage risk while balancing the rights of property owners. This overview dives into what happens once litigation becomes necessary.

EMINENT DOMAIN LITIGATION OVERVIEW

Filing the Eminent Domain Action

The formal condemnation process begins with the filing of a Complaint in Eminent Domain. In this Complaint, a utility must clearly identify: (1) the nature and scope of the project, including its location and purpose; (2) the public use and necessity justifying the taking; and (3) all properly named defendants, including all persons and entities holding any right, title, or interest in the subject property, whether known or unknown. A utility must also file a Notice of Pendency of Action (a notice of “Lis Pendens”), which provides notice of the action affecting title to the property; a Summary Statement of the Basis of the Appraisal Opinion, outlining the valuation supporting the utility’s offer of just compensation; and a Notice of Deposit, reflecting the amount the utility deposited with the State Treasurer as probable compensation.

As part of the same filing, a utility typically seeks to take early possession of the property through a Motion for Prejudgment Possession. This motion requests a court order permitting the condemning agency to possess and make use of the property while litigation continues.

Motion for Prejudgment Possession

A Motion for Prejudgment Possession is a critical procedural tool in eminent domain proceedings, as it enables the condemning utility to secure timely access to the property and avoid costly project delays that could undermine construction schedules, increase expenses, and disrupt essential public infrastructure improvements. To obtain possession, the utility must demonstrate that:

1. It has the authority to exercise eminent domain;
2. It has deposited probable compensation;
3. There is an overriding need for early possession and a substantial hardship if possession is denied; and
4. The hardship to the utility outweighs any hardship to the property owner or occupant.

The timing for granting prejudgment possession varies depending on whether the property is occupied, as additional procedural protections and notice requirements apply when individuals are present on the property. For occupied property, hearings are generally set approximately 90 days after service of the motion, with possession granted about 30 days after service of the order. For unoccupied property, hearings are typically set within 60 days, with possession available approximately 10 days after the order.

For a public utility seeking possession, declarations play a critical role at the outset of the case. The appraiser’s declaration, which is referred to as the summary basis of appraisal, outlines the appraiser’s qualifications, details the project, confirms that the subject property was appraised, and explains the basis for the compensation determination.

Additional declarations from those identified as the individuals most knowledgeable about the project and best positioned to attest to its details, such as project managers and engineers, are submitted in support of the Motion for Prejudgment Possession. These declarations typically address the scope and purpose of the project, the necessity of acquiring the subject property, alternatives considered, anticipated impacts, the construction schedule, and the potential hardship to the utility and the public if possession is delayed.

Right to Take Challenges

A right to take challenge is a legal objection by a property owner questioning whether the condemning entity has the lawful authority or justification to acquire the property. Property owners may challenge the condemning entity’s right to take the property. Common grounds for these challenges include claims that the utility lacks statutory authority, failed to comply with environmental requirements, is not pursuing a valid public use, or that the property is not necessary for the project.

Importantly, any right to take challenges are generally waived if the property owner withdraws the funds deposited with the State Treasurer. If not waived, these challenges are typically bifurcated from the issue of compensation and resolved in a bench trial before a judge. While such challenges are not commonly successful, they carry significant risk, because if the property owner prevails, the court may dismiss the action and order the condemning entity to pay the owner’s litigation expenses.

Preparing for Trial

As the case progresses, the parties conduct discovery and prepare valuation evidence, typically exchanging appraisal data. Final offers and demands must be exchanged at least 20 days before trial, and if the court finds the condemning entity’s offer unreasonable and the owner’s demand reasonable, it may award litigation expenses. Many cases are resolved during this phase through alternative dispute resolution, such as mediation, which can reduce costs and avoid trial uncertainty.

Trial on Just Compensation

If the matter does not settle, it proceeds to trial on the issue of just compensation. This is typically a jury trial focused solely on determining the fair market value of the property and any damages.

Trial proceedings generally include:

• Jury selection (“voir dire”)
• Opening statements
• Defendant (property owner) presents their case
• Condemning entity presents their case
• Closing Arguments
• Jury Instructions and Deliberations
• Jury’s determination

Each party presents fact witnesses and valuation experts. The judge acts as the gatekeeper on legal issues, while the jury determines the amount of compensation.

Judgment and Final Order of Condemnation

Following trial, the court enters a final order of condemnation. Once recorded, this order transfers title of the property to the condemning entity.

Post Judgment Considerations

Even after judgment, risks remain. If the project does not proceed, the utility may face pre-condemnation or inverse condemnation claims and, in some cases, may be required to offer the property back to the original owner.

Navigating the eminent domain process requires careful coordination, strategic planning and a clear understanding of each procedural step. From initial filings to final judgment, staying proactive and attentive to key action items can help avoid delays, control costs, and reduce risk. With the right approach, utilities can efficiently secure the property rights they need to advance critical infrastructure projects while ensuring compliance with complex procedural and substantive legal rules.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.