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Texas Eminent Domain: Laws in need of reform

By Matt Felder
Field Editor

Covey Neatherlin could only watch from his back porch as part of his life’s work, a pecan orchard planted more than 40 years ago, was reduced to nothing more than mulch—all for the sake of "progress."

"I had no idea they could just come through and take my trees out and not compensate me, but that’s what they did," Neatherlin said.

Nearly 100 trees from his 800 tree orchard, just outside of Waller, were destroyed earlier this year to make way for a 42-inch natural gas pipeline which stretches from Grimes County to Katy.

The pipeline company took a 75-foot easement and another 50 feet of work space from Neatherlin through eminent domain. He said he was paid for the land but not the trees, an estimated investment of $200,000.

"They had a lot of value to them, "Neatherlin said. "They’re 40-something-year-old-pecan trees. It takes years to develop a tree and grow it, a lot of expense—spraying, watering, disking and trimming."

Neatherlin hired a lawyer when he first heard of the pipeline in early 2008. However, it was a battle of David versus Goliath.

"I hired lawyers and paid them a lot of money, but in the end they said it was hopeless to fight the pipeline companies because they had an unlimited amount of money and time," Neatherlin said.

Some $25,000 later in lawyer fees, Neatherlin decided to take the pipeline company offer instead of risking much more in what he considered a lost cause.

In Texas, nearly 80 percent of property owners take the first offer in eminent domain proceedings. Property owners who do fight for their rights to receive fair compensation can still lose, experts say. Even if they win in court and receive fair compensation, they are saddled with attorney’s fees, expert witness expenses and court costs. In states such as Wisconsin, attorney fees are awarded if the final amount is 15 percent above the initial offer.

That is just one of the many eminent domain reforms Texas Farm Bureau (TFB) is seeking in the upcoming Texas legislative session.

"There’s no way you can make those with eminent domain authority negotiate, because they immediately file condemnation proceedings so they can go ahead and start on the pipeline and the trees, and everything else that they destroy," TFB District 11 State Director Tom Paben said. "There’s no guarantee you will ever get paid for it."

Paben says negotiations need to take place before the entity claiming eminent domain should be allowed to set foot on the property.

"It all comes down to landowners being treated fairly," he said.

Another area where landowners are not compensated is in diminished access to property. In many instances—when a new project cuts through a property—the producer is left with a more difficult route to get in and out of his field.

Today, eminent domain is no longer used as a last resort when parties cannot come to an agreement. Instead it’s used as a club to purchase property at below market value, Paben said.

"A pipeline pays for itself in 10 years," Paben said. "Pipelines put in 40 years ago, they already paid for them and most of the time they resell them and make money on them. But the landowner gets a one-time payment."

That should change, Neatherlin agreed.

"I understand we need gas and we’ll have to have pipelines, but if they put pipelines over a person’s property, then I think the property owner should have some interest in that pipeline," he said.

In Neatherlin’s case, future plans for his orchard could be hindered due to the new pipeline. Planted back in 1964, Neatherlin always had a vision to turn the land into two to three acre home sites, a sound investment as Houston continues to move closer. However, what now lies beneath the land has changed the game.

"I think the pipeline has definitely changed the perspective on it," he said. It’s not going to be quite as good. I would think people would stay away from a high pressure gas line."