County Com'Rs of Muskogee Co. v. Lowery, 98,361.

Decision Date09 May 2006
Docket NumberNo. 98,362.,No. 98,361.,No. 98,363.,No. 98,531.,98,361.,98,362.,98,363.,98,531.
PartiesThe BOARD OF COUNTY COMMISSIONERS OF MUSKOGEE COUNTY, Plaintiff/Appellee, v. Edward L. LOWERY and Mary L. Lowery, Husband and Wife, Defendants/Appellants and Rural Water District No. 5, and the Muskogee County Treasurer, Defendants. The Board of County Commissioners of Muskogee County, Plaintiff/Appellee, v. Jack E. Whitten and Doris M. Whitten, Husband and Wife, Defendants/Appellants and Rural Water District No. 5, and the Muskogee County Treasurer, Defendants. The Board of County Commissioners of Muskogee County, Plaintiff/Appellee, v. Richard Hyslope, Defendant/Appellant and The Farm Credit Bank of Wichita Rural Water District No. 5, and the Muskogee County Treasurer, Defendants. The Board of County Commissioners of Muskogee County, Plaintiff/Appellee, v. Paul Hobbs and Diann Hobbs, Husband and Wife, Defendants/Appellants and Mary Murl Barrett, Bank of Cherokee County, Rural Water District No. 5, and the Muskogee County Treasurer, Defendants.
CourtOklahoma Supreme Court

Certiorari to the Court of Civil Appeals, Division IV.

Appeal from the District Court of Muskogee County; Honorable Mike Norman, Trial Judge.

¶ 0 Muskogee County, through The Board of County Commissioners of Muskogee County (hereinafter "The County"), brought condemnation proceedings against Defendant Landowners (hereinafter "Landowners") in the District Court of Muskogee County for the purpose of acquiring right-of-way easements for placement of three water pipelines, two of which would solely service Energetix, L.L.C. (hereinafter "Energetix") a private electric generation plant proposed for construction and operation in the county. Upon the condition precedent of success in attainment of that easement, Energetix was contractually obligated to construct the third pipeline on behalf of the Muskogee County Rural Water District No. 5, which would provide water service to rural residents of the county. Landowners filed an answer and counterclaim seeking declaratory and injunctive relief, objecting to the unlawful and unconstitutional taking of Landowners' private property for the private use of Energetix in violation of Article 2, §§ 23 & 24 of the Oklahoma Constitution. The County argued the economic development of Muskogee County constituted a valid public purpose to support the County's exercise of eminent domain in accordance with the Oklahoma Constitution and 27 O.S.2001 § 5. The District Court agreed and ultimately confirmed the takings. Landowners appealed. We thereafter entered an Order providing that all four appeals shall proceed as appeals from final orders of the District Court. This Court additionally entered an Order providing that the instant cases are related and shall be treated as companion cases and assigned to the same reviewing court. The Court of Civil Appeals (hereinafter "COCA") reversed and remanded with instructions. The County thereafter filed a Petition for Writ of Certiorari. Upon Landowners' showing of good cause for additional briefs on certiorari, this Court ordered the filing of supplemental briefs on certiorari, the filing of an amicus curiae brief, as well as heard oral argument en banc. We consolidate the four companion appeals for the purpose of one opinion addressing all four. We hold the takings in the four instant cases are impermissible takings of Landowners' respective private property to confer a private benefit on a private party, Energetix, in violation of Article 2, §§ 23 & 24 of the Oklahoma Constitution. We further hold that economic development alone (not in connection with the removal of blighted property) does not constitute a public use or public purpose to justify the exercise of eminent domain as a matter of Oklahoma constitutional law, nor does it satisfy the public purpose requirement of 27 O.S.2001 § 5. Upon certiorari previously granted.

THE COURT OF CIVIL APPEALS' OPINION IS VACATED; THE DISTRICT COURT'S JUDGMENT IS REVERSED AND THE CAUSE IS REMANDED FOR FURTHER PROCEEDINGS NOT INCONSISTENT WITH TODAY'S PRONOUNCEMENT; APPELLANTS' MOTION FOR APPEAL-RELATED ATTORNEYS' FEES IS GRANTED; APPELLANTS' MOTION FOR APPEAL-RELATED COSTS IS GRANTED IN PART.

C. Bart Fite of Wright, Stout, Fite & Wilburn, Muskogee, OK, Mark James Caywood of Mark James Caywood, P.L.L.C., Oklahoma City, OK, for Plaintiff/Appellee, County.

Harlan Hentges of Mulinix, Ogden, Hall, Andrews, & Ludlum, Oklahoma City, OK, for Defendants/Appellants, Landowners.

Stephen J. Scherer of Muskogee, OK, for Defendants/Appellants, Landowners Edward L. Lowery and Mary L. Lowery.

Jo Nan Allen of Tahlequah, OK, for Defendants/Appellants, Landowners Paul Hobbs and Diann Hobbs.

Tina Jordan of Tahlequah, OK, for Defendants/Appellants, Landowners Paul Hobbs and Diann Hobbs.

Eric J. Groves of Groves & Associates, Oklahoma City, OK, for The Institute for Justice, Amicus Curiae.

Dana Berliner of The Institute for Justice, Washington, DC, admitted pro hac vice, for The Institute for Justice, Amicus Curiae.

Daniel P. Muino of Gibson, Dunn & Crutcher LLP, San Francisco, CA, admitted pro hac vice, for The Institute for Justice, Amicus Curiae.

LAVENDER, J.

¶ 1 The issues in the present cause are as follows: (1) whether the County's exercise of eminent domain in the instant cases is for public use in accordance with Article 2, § 23 and Article 2, § 24 of the Oklahoma Constitution and (2) whether the County's taking for purposes of economic development of Muskogee County constitutes "public purposes" within the meaning of 27 O.S.2001 § 5 to support such a taking.

I FACTS AND PROCEDURAL HISTORY

¶ 2 Plaintiff/Appellee County initiated condemnation proceedings against Defendant/Landowners1 for the purpose of acquiring temporary and permanent right-of-way easements for the installation of three water pipelines. Two of the proposed water pipelines (referred to by the parties and hereinafter collectively referred to as "the Eagle Pipeline") would solely serve Energetix, a privately owned electric generation plant, which was proposed for construction in Muskogee County. By way of the Eagle Pipeline, Energetix's proposed operations would require a maximum of 8,000,000 gallons of water daily for use in cooling towers associated with the operation of an 825 megawatt natural gas-fired power plant. The Eagle Pipeline would extend from the plant site to the Arkansas River with one of the two pipelines designated for carrying water to the plant and the other pipeline designated for return of the water to the Arkansas River.

¶ 3 Energetix proposed to build the third water pipeline (hereinafter "the Water District Pipeline") on behalf of the Rural Water District No. 5 (hereinafter "Water District")2 pursuant to a contract entitled "Rural Water District Number 5, Muskogee County: Water Pipeline Construction Agreement,"3 which expressly provided for Energetix's agreement to build this pipeline at no cost to the Water District "as part of the consideration to induce certain property owners to grant private easements for the Eagle Pipeline." The Water District Pipeline was intended to serve residents of the Water District who were not currently being served and to enhance current water service to residents of the Water District, who were receiving it. This contract expressly specified that Energetix's duty to construct the Water District pipeline arises only on the conditions precedent that Energetix first succeeds in obtaining all rights-of-way needed to construct the private Eagle Pipeline and Energetix begins construction of the Eagle Pipeline.4 Under the terms of this contract, the Water District would be responsible for supplying the necessary materials for construction of the pipeline, but Energetix would pay all construction costs. Energetix additionally contracted to provide and install up to six (6) fire hydrants at its expense during the construction of the Eagle Pipeline and the Water District Pipeline (with Energetix's duty to construct the hydrants likewise tied to the same conditions precedent above).

¶ 4 Landowners filed an answer and counterclaim in each case seeking declaratory and injunctive relief on the basis that the County's proposed taking was an unlawful taking of private property for private use and private purpose of the private company, Energetix, in violation of 27 O.S.2001 § 5 and the eminent domain provisions contained within both the Oklahoma Constitution and the U.S. Constitution.

¶ 5 County filed a motion to strike Landowners' answer and counterclaim on the basis that Landowners failed to comply with the statutory procedure applicable to condemnation proceedings. The Report of Commissioners5 was thereafter filed, which provided the takings were for a public purpose and established the amount of just compensation to be awarded to Landowners for their respective properties.6 Landowners filed their respective Exceptions to the Commissioners' Report,7 objecting primarily on the basis that the takings were not for a valid public purpose, but rather an unlawful taking of private property for private purpose.

¶ 6 The trial court ultimately agreed with the County and entered an Order confirming the takings in these cases. The trial court's order further provided the County properly exercised the power of eminent domain pursuant to 27 O.S. § 5 in furtherance of the following public purposes: 1) enhancing the economic development of Muskogee County; 2) providing for temporary and permanent jobs for Muskogee County residents; and 3) for the operation of a pipeline to be used in conjunction with the construction of an electricity generation plant to be owned and operated by a private company and located in Muskogee County. Additionally, the trial court order concluded "the land acquired is necessary for the installation and maintenance of certain water lines. These water lines are necessary for the...

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