TransCanada Is Seizing People’s Land To Build Keystone, But Conservatives Have Been Dead Silent

For Julia Trigg Crawford, watching TransCanada construct the southern leg of the Keystone XL pipeline on a corner of her 600-acre farm was “gut-wrenching.”

Crawford, who lives in Direct, Texas, had been trying since 2011 to keep the pipeline company off her property. But she ultimately lost, the portion of her land needed for the pipeline condemned through eminent domain — a process by which government can force citizens to sell their property for “public use,” such as the building of roads, railroads, and power lines. Crawford can’t wrap her head around why TransCanada, a foreign company, was granted the right of eminent domain to build a pipeline that wouldn’t be carrying Texas oil through the state of Texas.

That question — how eminent domain can be used in a case like Keystone — has some anti-Keystone groups stumped too. But the groups that usually are vocal proponents of property rights, including the Institute for Justice, have been silent when it comes to the controversial pipeline.

“I have not seen a single group that would normally rail against eminent domain speak up on behalf of farmers or ranchers on the Keystone XL route,” said Jane Kleeb, founder of the anti-Keystone group Bold Nebraska.

That’s surprising to Kleeb, whose organization is supporting the efforts of a group of Nebraska landowners along the pipeline’s proposed route who have held out against giving TransCanada access to their land. She had thought that at least a few conservative or pro-lands rights groups would have voiced their general support for Keystone XL, but still denounced the use of eminent domain to get it built. That hasn’t happened, Kleeb said — not among property rights groups nor among most pro-Keystone lawmakers.

“If this were a wind mill project or a solar project, Republicans would have been hair-on-fire crazy supporting the property rights of farmers and ranchers,” she observed. “But because it’s an oil pipeline, it’s fine.”

Traditional Public Use?

The Institute for Justice, a tax-exempt, libertarian-leaning law firm founded in 1991 with more than $2.5 million in financial help from oil billionaires Charles and David Koch, holds private property as one of its “four pillars of litigation” — along with economic liberty, free speech and school choice. But Steven Anderson, the Institute for Justice’s managing vice president, told ThinkProgress that the group’s focus is on making sure eminent domain is reserved for “traditional public uses,” and that it does not currently take a position on pipelines in general or Keystone XL in particular. Instead, he said, the group focuses on “obvious private to private transfers.”

The Institute for Justice isn’t the only group that’s remained silent on — or come out in favor of — Keystone XL. The American Conservative Union backs the pipeline. Americans for Limited Government backs the pipeline. The Heritage Foundation backs the pipeline. The Heartland Institute issued a press release cheering the Nebraska Supreme Court’s rejection of the previous Keystone XL eminent domain challenge, asking rhetorically about the pipeline, “What’s not to like?”

This support is not entirely shocking, as many of these groups have received significant funding from Keystone XL stakeholders. Over the years, the Heritage Foundation has received more than $500,000 from ExxonMobil’s foundation and more than $5 million from the Koch Brothers’ foundations. Americans for Limited Government has received more than $7 million from the Koch-linked American Encore (formerly the Center to Protect Patient Rights). The Heartland Institute has received more than $500,000 in ExxonMobil money, more than $100,000 from the Kochs, and at least $25,000 from the American Petroleum Institute (the trade association for the fossil fuel industry). The American Conservative Union received more than $50,000 from the American Petroleum Institute and its foundation received $90,000 from ExxonMobil.

But as these groups stay silent, Americans like Crawford have already fought to keep TransCanada off their land — and lost. Crawford, whose farm is traversed by Keystone XL’s southern leg (which runs from Oklahoma to the Gulf Coast of Texas and came into commission in 2014), began fighting TransCanada in 2011, trying to keep the pipeline company off her property. TransCanada ended up legally condemning her land, however, and now the pipeline runs through a corner of her 30-acre cattle pasture.

Crawford said that Keystone, as a pipeline carrying foreign goods, shouldn’t have been classified as a “common carrier,” a status given to highways, electrical wires, and other projects that move people, things, and data for the general public. Right now, a company is able to achieve common carrier status in Texas — and thus gain the right to eminent domain — simply by checking off a box on its application for a proposed project, though recently introduced rules in Texas would clarify the difference between projects that qualify and those that don’t.

Oil pipelines like Keystone XL are often classified as common carriers — both in Texas and in other states. But groups like Bold Nebraska argue that Keystone XL would principally benefit the tar sands oil companies working in Alberta, Canada (including Charles and David Koch’s Koch Industries), rather than the American public. The pipeline, they say, is an example of Anderson’s “private to private” transfer — it’s a privately-owned pipeline that will use private land to transport oil, and that oil will end up benefiting private interests.

Dave Domina, a lawyer representing a group of Nebraska landowners who are holding out against granting TransCanada the right to build the pipeline across their land, told ThinkProgress that he doesn’t think TransCanada fits into any of the traditional molds for an entity with rights to eminent domain. Keystone XL isn’t something like a bridge or highway or even a smaller pipeline that would transport oil to Arkansas or Texas or another nearby state — those are all things that are built for the public’s use, he said. That’s what eminent domain has traditionally been used for: projects that have some degree of common benefit. Instead, Keystone is being built to transport foreign oil out of the country. The project has “strayed a long way from a public purpose,” Domina said.

“There is no logical argument or construct to support it,” he said. “The only argument to support it is profit, and profit is not a justification for economic or political existence.”

Kelo and Keystone

Conservative groups might not agree with Domina’s assessment, but ten years ago, many of these groups’ tones on eminent domain were different. In 2000, the city government in New London, Connecticut approved a private redevelopment plan it hoped would revitalize struggling sections of town. A registered nurse named Susette Kelo and others sued the city, in an attempt to block the taking of their homes. The Kelo v. New London case made it all the way to the U.S. Supreme Court, which sided with the city by a five to four vote in 2005. The court held that “the government’s pursuit of a public purpose will often benefit individual private parties.”

The decision was met with widespread criticism, from property rights groups and conservatives and from some civil rights organizations and prominent liberals. Perhaps the most vocal objections came from the Institute for Justice, which had represented Kelo in the case.

Susette Kelo's former home

Workers disassemble the former home of Susette Kelo, in New London, CT, after it was taken by eminent domain.

CREDIT: AP Photo/Jack Sauer

The Institute for Justice denounced Kelo as “one of the most reviled U.S. Supreme Court decisions in history,” in which, “the Court upheld the use of eminent domain by governments to take someone’s private property and give it to another for private economic development.” It noted that the ruling had given the government eminent domain power to purely private developments, while in the past the power had been only for “unambiguous public uses, such as schools or courthouses.”

Other like-minded groups took a similar tack. The Heritage Foundation decried the redefinition of “public use” from its original definition — land to be “used by the general public,” including “roads, schools, or libraries.” Americans for Limited Government, the Heartland Institute, the American Conservative Union and others made clear their outrage over the ruling.

Rick Manning, president of Americans for Limited Government, told ThinkProgress in a statement that his group believes there is “no relationship to these normal requests related to the Keystone XL pipeline and the Kelo decision,” as such takings are “a normal part of building infrastructure and have long been established as covered under the eminent domain clause of the U.S. Constitution.” The Heartland Institute, Heritage Foundation, and American Conservative Union did not respond to a request for comment.

Members of Congress spoke out against Kelo too. Sen. John Cornyn (R-TX) called it a “radical departure both from what the Constitution says — that the power of government to condemn private property should be used only for public use.” In House, 365 U.S. Representatives voted for a resolution expressing their “grave disapproval” of the verdict.

But, like the national pro-property rights groups, many of these lawmakers now also back Keystone XL. Eighty-eight of the members of Congress who voted for the anti-Kelo resolution ten years ago and still serve in Congress today backed legislation this year to force immediate approval of the Keystone XL pipeline.

Cornyn even added language to that now-vetoed bill reaffirming that the land taken for Keystone XL “may only be acquired consistently with the Constitution” — but helped defeat a proposed amendment by Sen. Bob Menendez (D-NJ) that would have ensured private property would not be “seized through condemnation or eminent domain for the private gain of a foreign-owned business entity.”

And though the Institute for Justice claims that pipelines aren’t its concern, in 2011, the group weighed in on a different pipeline case. When the Texas Supreme Court held unanimously that governments cannot give the “extraordinary” power of eminent domain to pipelines, even when they claim to be for a public purpose, without first determining whether they will really serve the public, Institute for Justice Senior Attorney Clark Neily said that the court’s “refusal to rubber-stamp this flagrant abuse of power presents a salutory example of judicial engagement over judicial abdication.”

Why The Change?

The Institute for Justice and its allies in the property rights movement railed against Kelo because they objected to the notion that private property could be taken to benefit a powerful private commercial entity.

This reluctance among supporters of property rights to extend to this case that outrage over a private business having power over an individual’s property could have several origins. Alexandra B. Klass, a professor of law at the University of Minnesota Law School, said he thinks property rights groups mainly take an anti-government position, so they are less likely to object to private pipeline companies using eminent domain. James W. Ely, Jr., Milton R. Underwood Professor of Law Emeritus at Vanderbilt University, says it’s the common carrier piece of the puzzle that’s key: the developers in Kelo weren’t classified as common carriers, and thus “owed no legal duties to the public.”

Ely also doesn’t think eminent domain objections to Keystone XL stand up to scrutiny, in part because pipelines don’t require large-scale destruction of homes or businesses and don’t negatively impact people on a wide scale. Property law professor Bethany Berger of the University of Connecticut School of Law agreed: she said that in terms of federal constitutional law, pipelines like Keystone XL are a perfectly valid use of the eminent domain provisions of the constitution.

But Klass says the biggest reason for the groups’ silence may be political — they don’t like the idea of blocking an oil pipeline out of concern for the environment.

“I don’t think it’s really a different legal situation — I think it’s different politics,” she said.

Bold Nebraska Director Jane Kleeb

Bold Nebraska Director Jane Kleeb

CREDIT: AP Photo/Nati Harnik

For Kleeb, the reason behind the groups’ silence doesn’t matter as much as the silence itself. She doesn’t agree with TransCanada using eminent domain to secure Keystone XL’s route, and it’s not just the oil in the pipeline that she objects to: “We do not believe in eminent domain for private gain, period, whether it’s an oil pipeline, solar farm, or strip mall.”

No Eminent Domain For Private Gain

Berger notes that while the landowners would not have a good argument against the use of eminent domain for Keystone XL under federal constitutional law, state laws may be a different matter. Many states expanded the rights of property owners, post-Kelo.

Nebraska has become a battleground state for the eminent domain concerns surrounding this pipeline. It’s the only state in which landowners along the planned route have successfully held out against TransCanada, refusing to accept the company’s offers of money in exchange for letting the pipeline run through their land. A group of those landowners sued the state in 2012 over one law — LB1161 — which allows TransCanada’s Keystone route to be examined by the state’s Department of Environmental Quality and approved or denied by Nebraska’s governor, instead of forcing the company to submit its proposal to the state’s Public Service Commission, which put the proposal through a more rigorous permitting process. According to the landowners, the law, which also grants companies like TransCanada the right of eminent domain, violates the state’s constitution.

The case made it to the Nebraska Supreme Court, which ended up reversing the lower court’s decision that the law violated the state’s constitution, granting Keystone XL its former route through Nebraska. But the divided court left open the possibility for a subsequent challenge and the landowners are, once again, challenging the law. This month, the landowners scored a victory when a Nebraska judge ordered TransCanada to temporarily halt its use of eminent domain to secure the land of landowners in the state. The injunction will remain in place until the state Supreme Court hears the landowners’ cases.

But like Crawford, landowners in other states have also struggled with eminent domain issues surrounding Keystone. Crawford told ThinkProgress that, in Texas, the eminent domain process is “way too loaded against the landowner.” After their land is condemned, landowners in the state aren’t invited to the condemnation hearing, and Crawford said that the only way she was able to get access to a judge was if she appealed the condemnation, something she ended up doing.

John Harter, a rancher in South Dakota, agreed with Crawford. He declined TransCanada’s easements until last year when, worried that he’d face court time in an eminent domain suit if he refused much longer, he agreed to settle with TransCanada. So even though his land wasn’t ultimately condemned by TransCanada, the threat of eminent domain was always there, and played into his decision to stop fighting the pipeline company. TransCanada has said that 88 percent of the Keystone XL easements signed in the last two years have been voluntary, but Harter said he thinks there have been other landowners who have signed easements out of fear that their land would eventually be taken by eminent domain.

“They brag about voluntary easements… there was nothing voluntary about my easement,” he said.

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