Two Noteworthy Illinois Appellate Cases

Shay Law attorneys were involved in two recent cases on appeal, one decided by the Illinois Supreme Court and the other that is pending before the Illinois Appellate Court, Second District.

A.    In an Opinion issued last fall, the Illinois Supreme Court found an application to the Illinois Commerce Commission (“ICC”) for approval of a proposed new high voltage direct current electric transmission line to be lacking. In Illinois Landowners Alliance, NFP, et al. v. Illinois Commerce Commission, et al., 2017 IL 121302, the Court, in affirming the judgment of the Appellate Court, Third District, held that Rock Island Clean Line, LLC was ineligible for ICC regulatory approval to construct its proposed project and to conduct business as a public utility in this state.  The Court based its holding on its interpretation of the Illinois Public Utilities Act (the “Act”) and, in affirming the Appellate Court, found that Rock Island did not meet the statutory definition of “public utility” (220 ILCS 5/3-105). Specifically, the Court found that Rock Island did not own or control assets in this state as required by the statutory definition. The Court left undisturbed the Appellate Court’s additional finding that Rock Island failed to show that its proposed project would be for a “public use,” an additional requirement under the Act to be classified as a public utility.

Shay Law attorney William Shay and Melissa Schoenbein (formerly with the Firm), along with Michael Reagan of Ottawa, wrote the Supreme Court briefs on behalf of the Illinois Landowners Alliance (“ILA”), a large group of landowners who prevailed in the case.  Mr. Reagan participated in the oral argument before the Court. Shay Law also represented the ILA before the Third District.

B.   The Illinois Appellate Court, Second District, recently heard oral argument and took under advisement an appeal of a decision from the Kane County Circuit Court.  In Muirhead Hui, LLC, et al. v. Forest Preserve District of Kane County, et al., Case No. 2-17-0835, the Plaintiffs filed suit against the Forest Preserve and its attorney for, among other claims, an alleged breach of their fiduciary duties and legal malpractice stemming from the Defendants’ unilateral and unauthorized alteration of deeds to property the Plaintiffs conveyed subject to restrictions that the property be used only for outdoor recreational purposes. After removing the restrictive covenant and re-recording the deeds, without the grantor-Plaintiffs’ knowledge or consent, the Defendants attempted to offer an easement across the property for construction of a high voltage electric transmission line.

The Second District will issue a written decision, which will likely address whether the restrictive covenant gives the Plaintiffs a legally recognized property interest and standing to sue; whether the Forest Preserve, its president, and executive director are protected from liability under the Tort Immunity Act; and whether an attorney owes a non-client a duty of care.

Shay Law attorneys William Shay, John Albers, and Melissa Schoenbein (formerly with the Firm) drafted the appellate briefs on behalf of the Plaintiffs. William Shay argued the case before the Second District on June 13, 2018.

Enbridge considering new pipeline in Boone, DeKalb, LaSalle & Livingston counties

As early as February of 2014, Enbridge Energy, Limited Partnership began surveying land for the possible expansion of its pipeline system in Wisconsin and Illinois.  Enbridge now operates Line 61, which runs from Superior, Wisconsin to Flanagan, Illinois.  The survey work is being done as Enbridge contemplates constructing a new pipeline parallel to Line 61.  Impacted Illinois counties include Boone, DeKalb, LaSalle, and Livingston Counties.  In order to construct a new pipeline, it is likely that Enbridge will need new or expanded easements from impacted landowners.  Before construction can begin, however, Enbridge will need approval from the Illinois Commerce Commission.

Several aspects of any such pipeline construction project impact a landowner’s rights.  The initial survey work, route selection, finding of public need by the ICC, and easement negotiation all represent areas where landowners must be aware of their rights and the risk of loss.  For instance, when a pipeline company asks for permission to conduct a preliminary survey, it is advisable to insist on a written agreement and financial compensation before consenting.  While a company may characterize its survey work as non-invasive, past landowners have experienced damage to fences, rutted lanes, holes left from soil borings, and escaped livestock as a result of survey work.  A written agreement prepared by those with experience in handling such matters can protect a landowner’s interests.  Another example where knowledgeable assistance can make a difference pertains to the ICC.  As an administrative agency subject to specific laws and its own unique rules, having the help of someone experienced with ICC proceedings will make navigating the regulatory process easier.  Easement negotiation is also critical in that it includes more than just money.  A variety of other factors should be considered in easement negotiations to successfully protect a landowner’s interests.

In all of these areas, Shay Law, Ltd. can assist developers in obtaining their required certificates and approvals, and assist landowners and others to protect their interests.  Over the years, William Shay has represented energy developers, energy cooperatives, and numerous landowners in negotiations with utilities, as well as in ICC proceedings.  Mr. Shay’s representation of developers, cooperatives, and landowners, and groups of landowners, includes numerous ICC pipeline and electric transmission line dockets.  For example, Shay Law, Ltd. represented a group of landowners in ICC Docket 14-0754, in which Dakota Access, LLC sought approval for the construction of, and route for, a new petroleum pipeline.  In addition, among the attorneys at Shay Law, Ltd. are former ICC administrative law judges John Albers and Jan Von Qualen.  Mr. Albers and Ms. Von Qualen have presided over dockets relating to pipelines, electric transmission lines, natural gas transmission lines, and water distribution lines.  Their experience can provide valuable insight into the ICC decision making process. 

Utility Line & Pipeline Easements Damages to the Remainder (Part 3)

Previous discussions (this is the third and final part of a series of blog posts on damages to the remainder) of the damage to the remainder have addressed Illinois courts’ recognition of such and the impact of utility facilities on property that remains after a partial taking for the purpose of constructing utility facilities.  This part will briefly consider how Illinois courts will assess the value of the damage to the remainder; it is not meant to be all encompassing.  The Illinois Supreme Court may have described just compensation for damage to the remainder most simply when it stated that the diminution in value is the difference between the fair market value of the remainder prior to the taking and its fair market value after the taking and improvement.  While this may sound simple, for many landowners this has proven difficult. 

In practice, a landowner should consider his or her parcel as two separate parcels: the easement parcel and the remainder parcel.  The fair cash market value of the remainder parcel will then need to be determined under two different scenarios: (1) the remainder parcel sits next to the easement parcel as it currently exists (before anything has been done with the easement parcel), and (2) the remainder parcel sits next to the easement parcel with the project for which it was taken having been completed.  The difference between the values under the two scenarios represents the damages to the remainder parcel.  To help ascertain the value of the remainder parcel under the two scenarios, a landowner should consider employing more than one professional appraiser in order to establish a range of values.

To determine the competency of a witness to testify to value in a condemnation proceeding, a witness must have some means of forming an intelligent and valid judgment as to value beyond what is presumed to be possessed by members of the general public.  Individuals the Court has found competent to testify about the impact of a pipeline on their land, for example, include lifelong farmers, one of whom had been a drainage commissioner and a president of the local Farm Bureau.  In another example, the Court permitted testimony about the inconvenience to farming caused by transmission line poles and the corresponding expense increases.  The Court noted that the testimony appropriately pertained to what a willing buyer would pay for an operating grain farm that happened to be located next to a transmission line.

The main lesson from past court decisions is that landowners should focus on market valuation of the land and not lost farming income.  Lost income may affect the land’s value, and so is relevant, but lost income must be translated into impacts on the value of the subject property. Attempts to recover damages based on lost income have failed.  To the extent that rental property may be at issue, the Court has consistently found that in eminent domain proceedings involving premises which are owner occupied, evidence of projected or future rental income is too speculative and dependent upon too many contingencies to be safely accepted as evidence of the fair cash market value.  Furthermore, not every factor that brings about a reduction in value represents a recoverable item of damage.  Diminution suffered in common by all lands in the vicinity of an improvement is not compensable.  A landowner must show a direct disturbance peculiar to his or her property.  In addition, in some situations, the public use for which a portion of private property was taken may actually result in a benefit to the remainder of the private property.  Under such circumstances, any benefit accruing to the remainder property may not be set off against the land taken; but it may be taken into consideration as reducing or completely offsetting any damages to the remainder.

Clearly, knowing the proper elements of damage and how to present them makes a significant difference in whether a landowner receives the compensation he or she believes is merited for damages to the remainder of land in a partial taking.

Ameren Spoon River Transmission Line

Earlier this year, the Illinois Commerce Commission entered an Order authorizing Ameren Transmission Company of Illinois to build a 345 kV transmission line between Galesburg and Peoria, Illinois. Shay Law, Ltd. intervened on behalf of landowners along Ameren's preferred route for building the project. Its attorneys were able to persuade the Illinois Commerce Commission to have the line built on an entirely different route, a rare and quite successful result. While results can never be guaranteed, Shay Law, Ltd.'s success in altering the proposed routing of this particular transmission line is an example of our highly-effective, landowner focused, practice in utility law.

Now, Ameren is sending letters to landowners along the route approved by the Illinois Commerce Commission. Shay Law, Ltd. has helped dozens of landowners in easement negotiations with utility companies. Our holistic approach does not just seek to maximize your compensation. We also negotiate that the terms of easements are fair, reasonable, and agreeable to our clients.

Anyone who has received a letter from Ameren Transmission Company of Illinois should call us for a free consultation. We are offering reasonably priced, in some cases flat-rate, representation for easement negotiations with Ameren.