Ryan Whaley Coldiron Shandy

In a recent condemnation case, the Oklahoma Court of Civil Appeals issued an opinion that nicely summarizes certain aspects of the law of eminent domain in Oklahoma and provides more guidance about the meaning of the “public purpose” requirement. The court supported its decision with an interesting analogy relating to interstate highways.

In Oklahoma Gas & Electric Co. v. Beecher, et al., 2011 OK CIV APP 1, the project at issue was a 121-mile right of way for a new electrical transmission line from Woodward to Oklahoma City. The main purpose of the new line was to transmit large amounts of wind-generated electricity to OG&E customers. The landowner-opponents argued the project was not for a public purpose because most of the line’s capacity would be used by customers outside Oklahoma and the line would be controlled by the Southwest Power Pool, a regional transmission organization.

In Oklahoma, corporations that furnish electricity or gas are authorized to exercise the power of eminent domain by statute, subject to Sections 23 and 24 of Article II of the Oklahoma Constitution, which provide that private property may only be taken by condemnation for a public purpose or use. In general, Oklahoma requires that for a public purpose to exist, the primary intended beneficiary of the project must be the Oklahoma public. Board of County Commissioners v. Lowery, 2006 OK 31, 136 P.2d 639.

A key argument by the landowners was that only 22 percent of the project’s capacity would be needed to meet OG&E customer demands through 2012. From this, the landowners argued that 78 percent of the line’s capacity would be used to transmit electricity to out-of-state customers. However, the court found two problems with this reasoning. First, the court stated that the landowners did not present actual evidence regarding out-of-state usage; rather they only drew an inference. Nor did the landowners show that over the longer life of the project (50-60 years) OG&E customers would not use most of the line’s capacity.

Second, the court stated the key factor is not whether 51 percent or more of the “substance” being produced or transmitted by a project such as a transmission line will be used by Oklahomans, but whether the primary intended beneficiary, under all the circumstances, is the Oklahoma public, as opposed to private or out-of-state entities or persons.

Relying in part on a potent analogy, the court had little trouble finding that the primary intended beneficiaries of the transmission line were OG&E customers. The court stated that even though an interstate highway through Oklahoma would have to be built to federal standards and might be used by more out-of-state drivers than Oklahoma citizens, most would agree the Oklahoma public would be the highway’s primary beneficiary.

The court went on to find that Southwest Power Pool’s control over access to the transmission lines did not destroy the public purpose behind the project, especially considering the strong policy in favor of supplying reliable electric power and the fact that OG&E is expected to have the planned-for access.

An interesting procedural sidelight is that the landowners’ pending request for a jury trial on damages did not prevent an immediate appeal of the trial court’s ruling on the issue of the right to take the property. Upon final resolution of the appeal, the landowners may still contest the compensation to be paid for the taking.

RWCS is currently involved in a major condemnation action involving more than a hundred landowners – and is also very good at drawing an apt analogy to make a great point in litigation!