COMMONWEALTH OF KENTUCKY

COURT OF AfPEALS
CASE NO. 2014-CA-000517
BJ"UEGRASS PIPELINE COMPANY, LLC APPELLANT
v.
Appeal from Franklin Circlli! Comt
13-CI-1402
KENTUCKIANS UNITED TO
RESTRAIN EMINENT DOMAIN, INC.
AMICUS CURIAE BRIEF OF
Al\1ERICAN CIVIL LIBERTIES UNION OF KENTUCKY
Sllbmitted by:
. vG"l-7'-t-----C 1\

William Sharp
Randal A. Strobo .. j
W.H. Graddy & Associates
APPELLEE
Legal Director
ACLU OF KENTUCKY
315 Gllthrie Street, Sllite 300
Louisville, Kentucky 40202
(502) 581-9746
sharp@aclu-ky.org
ACLU OF KENTUCKY Cooperating Attomey
Post Office Box 4307
Midway, Kentucky 40347
(859)-879-0020
rstrobo@graddylaw.com
Certificate required by CR 76.12(6)
The undersigned certifies that copies of this Brief were served upon the following
named individuals by first class mail on August 13, 2014: Hon. Phillip Shepherd, Chief
Circuit Judge, Franklin County Courthouse, 222 st. Clair Street, FrankfOli, Kentucky
40601; Hon. Thomas J. fitzGerald, KENTUCKY COUNCIL, INC., 213
st. Clair Street, Suite 200, Post Office Box 1070, Frankfort, Kentucky 40602-1070; Hon. '
Gregory Parsons, STITES & HARBISON, 2300 Lexington Financial Center, 250 West
Main Street, Lexington, Kentucky 40507; and Hon. Chadwick McTighe, STITES &
HARBISON, 400 West Market Sheet, Suite 1800, Louisville, Kentucky 40202. The
undersigned further certifies that the record on appeal was not withdrawn from the
Cferk's office in the preparation of this 'rf-I'I-;---
.
Ran al A. Stro 0
STATEMENT OF POINTS AND AUTHORITIES
STATEMENT OF POINTS AND AUTHORITIES ........................................................... .i
STATEMENT OF THE CASE ..................................................................... .1
SUMMARY OF THE ARGUMENT ............................................................. .1
ARGUMENT .......................................................................................... 2
I. THE KENTUCKY CONSTITUTION REQUIRES THAT EXERCISES
OF EMINENT DOMAIN MUST BE FOR A PUBLIC USE ................... 2
A. Ky. Const. 13 and 242 Impose a Public Use Requirement. ................. 2
God's Ctr. Found., Inc. v. Lexington Fayette Urban Cnty. Gov't,
125 S.W.3d 295 (Ky. Ct. App. 2002) ................................................. .2,3
Boom v. Patterson, 98 U.S. 403 (1878) ............................................................ 2
Ky. Canst. 13 ..................................................................................... 2, 4
Ky. Canst. 242 .................................................................................. 2-3, 4
Rabourn v. Commonwealth, 2006 Ky. App. Unpub. LEXIS 137
(Ky. Ct. App. July 14, 2006) ................................................................ 3
Profitt v. Louisville & Jefferson Co., 850 S.W.2d 852 (Ky. 1993) ............................ .3
KRS 278.502 ........................................................................................ .3
Chesapeake Stone Co. v. Moreland, 104 S.W. 762 (1907) .................................. .3-4
B. Kentucky's Public Use Requirement Is More Protective of
Individuals' Property Rights Than Is The United States
Constitution ............................................................................. .4
U.S. Canst., Amend. V .......................................................................... .4, 5
MICHAEL A. RUH, JR. and MATTHEW T. LOCKABY, Balancing Private Property Rights
With "Public Use": A Survey o/Kentucky Courts' Intelpretation 0/ the Power
O/Eminent Domain, 32 N. Ky. 1. Rev. 743 (2005) .................................... .4
Berman v. Parker, 348 U.S. 26 (1954) ........................................................... .4
Hawaii Housing Auth. v. Midkiff, 467 U.S. 229 (1984) ........................................ .4
Kelo v. City o/New London, Conn., 545 U.S. 469 (2005) .............................. 4-5,6-7
KRS 416.675 ........................................................................................ 5
City o/Owensboro v. McCormick, 581 S.W.2d 3 (Ky. 1979) ............................. 5-6,7
Miles v. Dawson, 830 S.W.2d 368 (Ky. 1991) ................................................... 6
Prestonia Area Neighborhood Ass '/1 v. Abramson, 797 S.W.2d 708 (Ky.
1990) ............ 6
Decker v. Somerset, 838 S.W.2d 417 (Ky. Ct. App. 1992) ..................................... 6
Bernard v. Russell County Air Board, 718 S.W.2d 123 (Ky. 1986) ........................... 6
II. CONCLUSION ............................................................................. 7
Ky. Const. 2 ......................................................................................... 7
Ky. Const. 13 ....................................................................................... 7
Ky. Const. 242 ...................................................................................... 7
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STATEMENT OF THE CASE
Appellee Kentuckians United to Restrain Eminent Domain ("KURED") is an
organization consisting of members who are united "to protect Kentuckians from the ...
exercise [of] eminent domain by entities not in public service to Kentuckians." KURED
filed this action seeking declaratory relief regarding the claimed eminent domain
authority asserted by Appellant Bluegrass Pipeline Co., LLC ("BGP") in its negotiations
with landowners as it sought to purchase land for the development of a pipeline to
transpOli natural gas liquids ("NGLs"). Following briefing and oral argument, the
Franklin Circuit Couti awarded summary judgment to KURED finding that BGP lacks
eminent domain authority because: 1) BGP is not a utility regulated by Kentucky's Public
Service Commission [Opinion & Order, 12]; and 2) even if eminent domain were
available to unregulated utilities, BGP is not in "public service" as required by statute.
[ld. at 15.]
SUMJVIARY OF THE ARGUMENT
This appeal implicates, but does not squarely address, fundamental questions
about the limits upon eminent domain authority (and, by necessity, the concomitant
protections for individuals' property rights) found in the Kentucky Constitution.
Specifically, the Kentucky Constitution is more protective of individuals' property rights
than is the United States Constitution because it imposes a strictly-construed public use
requirement upon the exercise of eminent domain authority. Because Kentucky's coutis
have remained faithful to this constitutional language by constlUing it as a meaningful
limitation upon eminent domain authority, Kentuckians have been able to be secure in
their ownership of propeliy free from arbitrary and unconstitutional interference. Here, a
1
narrow construction of the purpotied bases for eminent domain authority at issue is
consistent with that historical approach and therefore suppOltive of the judgment below.
Thus, the ACLU of Kentucky urges this Couti to affirru the grant of summary judgment
to KURED.
ARGUMENT
I. THE KENTUCKY CONSTITUTION REQUIRES THAT EXERCISES OF
EMINENT DOMAIN MUST BE FOR A PUBLIC USE.
A. Ky. Const. 13 and 242 Impose A Public Use Requirement.
The power of eminent domain - also commonly refel1'ed to as the power of
"condemnation" - "is an attribute of sovereignty" that authorizes the taking of one's
propetiy even though that person may object. God's Ctr. Found., Inc. v. Lexington
Fayette Urban Cnty. Gov't, 125 S.W.3d 295, 306 n.8 (Ky. Ct. App. 2002) (quoting Boom
v. Patterson, 98 U.S. 403 (1878)). The state may delegate its power of eminent domain to
others tln'ough various statutory grants of authority. And in doing so, it is of no
consequence whether the person or entity to whom the authority is confell'ed is a private
or public entity.
But, even though the state's power to exercise eminent domain is "not dependent
upon authority conferred by the Constitution," it is nonetheless constrained by
constitutional limitations. God's Ctr. Found., Inc., 125 S.W.3d at 306 n.8 (emphasis
added). Specifically, Section 13 of the Kentucky Constitution states that "No person
shall, for the same offense, be twice put in jeopardy of his life or limb, nor shall any
man's property be taken or applied to public use without the consent of his
representatives, and without just compensation being previously made to him."
(Emphasis added). Similarly, Section 242 provides:
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Municipal and other corporations, and individuals invested with the
privilege of taking private property for public use, shall make just
compensation for property taken, irifured or destroyed by them; which
compensation shall be paid before such taking, or paid or secm-ed, at the
election of such corporation or individual, before such injury or
destruction. The General Assembly shall not deprive any person of an
appeal from any preliminary assessment of damages against any such
corporation or individual made by Commissioner or otherwise; and upon
appeal from such preliminary assessment, the amount of such damages
shall, in all cases, be detelmined by a jury, according to the com-se of the
common law.
Ky. CONST., 242 (emphasis added); see also Rabourn v. Commonwealth, 2006 Ky.
App. Unpub. LEXIS 137 (Ky. Ct. App. July 14, 2006) ("[TJhe legislature's delegation of
the power of eminent domain is limited only by the constitutional requirements that
private property may only be taken for public use, that the condenmee receive just
compensation '" and that exercise of that authority may not be arbitrary."). Thus, the
exercise of eminent domain authority in Kentucky (whether by public or private entities)
must, inter alia, satisfy the constitutional requirement that it be for a public use.! See
Profitt v. Louisville & Jefferson Co., 850 S.W.2d 852, 854 (Ky. 1993) ("It has long been
held that 'in every case in which the power of eminent domain is invoked, it must appear
that the property is desired for a public use and will be reasonably necessary for the
use ... "). Moreover, the public use must be the primary or principal use for the
condemned property, not merely secondary to a private use. See e.g., God's Ctr. Found.,
Inc., 125 S.W.3d at 302.
The constitutional limitation upon eminent domain authority represents the
"minimum" requirements. But, as the trial court cOlTectiy noted, the General Assembly is
free to enact more stringent limitations upon the exercise of that authority. [Opinion &
Order, 15 (noting that Kentucky, in 1948, nalTowed the scope of KRS 278.502 by
"shifting from a broader 'public use' standard to a more nalTOW 'in public service'
standard. "J
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In construing the public use requirement, Kentucky courts have stated:
Public use means use by the public; and this, it seems to us, is the
construction the words should receive in the constitutional provision in
question. The reasons which incline us to these views are, first, that it
accords with the primary and more commonly understood meaning of the
words; second, it accords with the general practice in regard to taking
private property for public use in vogue when the phrase was first brought
into use in the earlier constitutions; third, it is the only view which gives
the words any force as a limitation, or renders them capable of any definite
or practicable application. If the Constitution means that private property
can be taken only for use by the public, it affords a direct guide for both
the legislature and the courts.
Chesapeake Stone Co. v. Moreland, 104 S.W. 762, 765 (1907) (internal quotations and
citation omitted). As is more fully explained below, Kentucky's public use limit upon the
exercise of eminent domain is more protective of individuals' property rights than is
found under the analogous provision of the United States Constitution.
B. Kentucky's Public Use Requirement Is More Protective Of
Individuals' Property Rights Than Is The United States Constitution.
The text of the Fifth Amendment to the United States Constitution, like 13 and
242 of the Kentucky Constitution, requires that exercises of eminent domain be in
furtherance of a "public use." U.S. CaNsT., Amend. V (" ... nor shall private propeliy be
taken for public use, without just compensation."). But in construing this provision, the
United States Supreme Court has "broadened its ... interpretation of the 'public use'
provision ... to include 'public purpose' as may be characterized by local legislatures."
MICHAEL A. RUH, JR. and MATTHEW T. LOCKABY, Balancing Private Property Rights
With "Public Use": A Survey of Kentucky Courts' Intelpretation of the Power of Eminent
Domain, 32 N. Ky. L. Rev. 743, 755 (2005) (citing Berman v. Parker, 348 U.S. 26
(1954); Hawaii Housing Auth. v. Midkiff, 467 U.S. 229 (1984.
4
The Supreme Court further confirmed its expansive interpretation of the Fifth
Amendment's public use requirement in Kelo v. City of New London, Conn., 545 U.S.
469, 480 (2005). Specifically, Kelo involved an assertion of eminent domain authority to
condemn and purchase residential property from unwilling homeowners for the purpose
of economic redevelopment in which the condemned land would be leased to another
private paliy, not by the public. !d. at 478-79. In upholding the exercise of eminent
domain authority, the Court noted that it had "long ago rejected any literal requirement
that condemned propeliy be put into use for the general public." ld. at 479. Instead, the
Court held that the Fifth Amendment's Takings Clause only requires that the exercise of
eminent domain serve a "public purpose." ld. at 480. And under that view, the COUli
noted that its "cases defIne[) that concept broadly, reflecting our longstanding policy of
deference to legislative judgments in tltis field." !d.
By contrast, the Kentucky General Assembly, in response to the Kelo decision,
adopted KRS 416.675 in which it made clear that in order to take property in Kentucky,
the taking must be for a "public use" and not merely for a "public purpose." Specifically,
KRS 416.675 states in pertinent part:
(1) Every grant of authority contained in the Kentucky Revised
Statutes to exercise the power of eminent domain shall be subject to the
condition that the authority be exercised only to effectuate a public use of
the condemned property.
(2) "Public use" shall mean the following:
****
(d) The use of the property for the creation or operation of public
utilities or common carriers; or
( e) Other use of the property expressly authorized by statute.
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(3) No provision in the law of the Commonwealth shall be construed
to authorize the condemnation of private property for transfer to a private
owner for the pU/pose of economic development that benefits the general
public only indirectly, such as by increasing the tax base, tax revenues, or
employment, or by promoting the general economic health of the
community . ..
(Emphasis added). As evidenced by its plain language, this statute specifically rejects the
Supreme Court's broader interpretation of public use under the Fifth Amendment
miiculated in Kelo in favor of a nan-ower, and more explicitly defined, public use
requirement.
Moreover, the Legislature's statutory expression nan-owly defming the public use
requirement is also consistent with Kentucky courts' judicial interpretation of the
constitutional language. For exmnple, the Kentucky Supreme Court has concluded that
equating public use with public purpose under the Kentucky Constitution - as is the case
under the United States Constitution - would be "an alarming concept." City of
Owensboro v. McCormick, 581 S.W.2d 3, 7 (Ky. 1979). In McCormick, the Court
explained that the "opportunity for tyranny, particularly by the self-righteous, exists in
condemnation of private property to a vastly greater degree than in the levying of taxes
and the expenditure of public funds," thus "the constitutional provisions involved clearly
require that finding of 'public purpose' does not satisfY the requirement of a finding of
'public use.'" ld. The Court wamed that should public use be expansively interpreted to
include public purpose or public benefit, there would be no restrictions on the
govemment's ability to take private propeliy. In an oft-quoted passage, the Court
explained:
Naked and unconditional govemmental power to compel a citizen to
sun-ender his productive and attractive property to another citizen who will
use it predominantly for his own private profit just because such
6
alternative private use is thought to be preferable in the subjective notion
of governmental authorities is repugnant to our constitutional protections
whether they be cast in the fundamental fairness component of due
process or in the prohibition against the exercise of arbitrary power.
ld. at 5. See also Miles v. Dawson, 830 S.W.2d 368, 370 (Ky. 1991); Prestonia Area
Neighborhood Ass 'n v. Abramson, 797 S.W.2d 708, 711 (Ky. 1990); Decker v. Somerset,
838 S.W.2d 417, 422 (Ky. Ct. App. 1992).
Kentuckians' respect for the rights of property owners and their appropriate
recognition of the potential for abuse inherent in the exercise of eminent domain
authority are why "[t]he power to condenm is not to be taken lightly." Bernard v. Russell
County Ail' Board, 718 S.W.2d 123 (Ky. 1986). Thus, we have long recognized the need
to circumscribe the eminent domain power even before Justice O'Connor warned in her
Kelo dissent:
Any property may now be taken for the benefit of another pllvate patty,
but the fallout from this decision will not be random. The beneficiaries are
likely to be those citizens with disproportionate influence and power in the
political process, including large corporations and development firms. As
for the victims, the government now has license to transfer property from
those with fewer resources to those with more. The Founders cannot have
intended this perverse result.
Kelo at 505 (O'Conner, dissenting).
Because Kentucky'S courts and the General Assembly have strictly construed the
public use requirement as a material limitation upon the eminent domain power, this
COUlt should do the same and affirm the judgment below.
2
2
The threat for potential abuse in condenmation proceedings is particularly acute
given the parties' relative unequal bargaining strength. In many instances, an individual
property owner is threatened with eminent domain during negotiations for the sale of her
property before proceedings are commended. Thus, property owners frequently face a
Hobson's choice - sell their property for a valuation that may be skewed in favor of the
condenmor or risk incurring litigation costs associated with a condenmation lawsuit.
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II. CONCLUSION
Kentuckians enjoy meaningful limitations upon the state's eminent domain
authority that enable them to be secure in their ownership of property. McCormick, supra,
at 5. This includes that private property may only be taken for public use, that a
condemnee receive just compensation, and that exercise of eminent domain authority
may not be arbitrary. Ky. CONST. 2, 13, 242. Furthermore, "public use" as used in the
Kentucky Constitution has been distinguished from "public purpose", and the meaning of
"public use" should be nall'owly construed. Because the Franklin Circuit Court's analysis
properly construed BGP's claimed eminent domain authority narrowly (and thus
consistent with Kentucky's constitutional and statutOlY framework), this Court should
affirm the grant of summary judgment to KURED and hold that BGP does not enjoy
eminent domain authority to take property for its proposed Natural Gas Liquids pipeline.
BGP asserts, however, that "[ s ]ince the court is required to decide the petitioner's
condemnation authority at the outset of any condemnation action, the landowner will not
incur litigation costs associated with the valuation phase of the case unless a court
determines the right to condemn." [Br. for Appellant, 8.] But that assertion disregards the
fact that if a property owner chooses to challenge the would-be condemnor, she must
invest a substantial amount of time and money to litigate the case before any valuation
phases occurs because the right to condemn phase can (and often is) more expensive to
litigate. These costs often dissuade property owners from challenging the right to
condemn particularly given that they are unable to recover those substantial litigation
costs whether they win or lose.
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