Smith v. Ark. Midstream Gas Servs. Corp.

• Decision Date: 27 May 2010
• Docket Number: No. 09–1186.,09–1186.
• Citation: 377 S.W.3d 199,2010 Ark. 256
• Parties: Carroll W. SMITH and Lorene R. Smith, Appellants, v. ARKANSAS MIDSTREAM GAS SERVICES CORP., Appellee.
• Court: Arkansas Supreme Court

2010 Ark. 256
377 S.W.3d 199

Carroll W. SMITH and Lorene R. Smith, Appellants,
v.
ARKANSAS MIDSTREAM GAS SERVICES CORP., Appellee.

No. 09–1186.

Supreme Court of Arkansas.

May 27, 2010.

[377 S.W.3d 201]

Donald Paul Raney, Searcy, for Appellant.

Daniel C. Brock, Searcy, Jerry Lee Canfield, Fort Smith, for Appellant.

ROBERT L. BROWN, Justice.

[2010 Ark. 1]Appellants Carroll W. Smith and Lorene R. Smith appeal from a White County Circuit Court order finding that Appellee Arkansas Midstream Gas Services Corporation (Midstream) had the authority to exercise the power of eminent domain over the Smiths' land in order to construct and maintain a natural gas pipeline. The Smiths present several issues on appeal. We affirm the order of the circuit court.

Midstream is an Arkansas pipeline company presently engaged in a project to construct a pipeline for natural gas transmission across certain lands in White County. It is a wholly-owned subsidiary of Chesapeake Energy Corporation. The Smiths are the owners of real property located in Section Seven (7), Township Eight (8) North, Range Eight (8) West, White County.

[2010 Ark. 2]In 2007, Midstream attempted to negotiate a right-of-way agreement with the Smiths for the purpose of constructing and maintaining a natural gas pipeline across the Smiths' land. After the negotiation proved unsuccessful, Midstream petitioned the White County Circuit Court on January 4, 2008, to assert the power of eminent domain over a sixty-foot right of way across the Smiths' land under the authority of the Public Utilities Code (Arkansas Code Annotated sections 23–15–101) and the Eminent Domain Code (Arkansas Code Annotated 18–15–1303). On January 15, 2008, the Smiths moved to dismiss Midstream's eminent-domain action and alleged that Midstream did not have the authority to exercise the right of eminent domain because: (1) Midstream was seeking to exercise that right to acquire property for private, rather than public, use in violation of the Arkansas Constitution; (2) section 23–15–101 was unconstitutionally vague; (3) section 23–15–101 was incompatible with the Arkansas Constitution; and (4) section 18–15–1303 did not apply to Midstream's circumstances.¹

On February 25, 2008, Midstream filed an amended petition seeking the same relief as the original petition. The Smiths renewed their motion to dismiss, and following a [2010 Ark. 3]hearing, the circuit judge issued a letter order finding that Midstream had the constitutional and statutory right to exercise the power of eminent domain because

[377 S.W.3d 202]

the taking at issue was for a public use. An order denying the Smiths' motion to dismiss was entered on November 7, 2008. ²

On July 1, 2009, the circuit judge entered a final order of possession and reiterated his finding that sections 23–15–101 and 18–15–1303 were not unconstitutional. The order granted Midstream the immediate right of entry onto, and the possession of, the following portions of the Smiths' real property and approved this use:

Permanent pipeline right-of-way across:

Part of the Northwest Quarter (NW/4) Section Seven (07), Township Eight (08) North, Range Eight (08) West, more particularly described as follows, to wit:

Thirty Feet (30') on both sides of a centerline described as follows, to wit:

Commencing at a found stone at the Northwest Corner of said Section Seven (7); Thence S 39°58'09? E, 1753.6 feet to the Point of Beginning; Thence N 24°01'33? W, 311.0 feet; Thence N 09°58'13? E, 863.0 feet; Thence N 34°58'15? E, 223.0 feet; to a point on the North line of said Section Seven (7), said point being the Point of Termination.

In addition, Plaintiff, its permitees, agents and contractors, are entitled to have the immediate right of entry onto and possession of a temporary easement fifteen feet in width on the West side of the previously described permanent right-of-way.

[2010 Ark. 4]The circuit judge also granted the Smiths' motion for supersedeas and stayed the order of possession pending appeal on condition that the Smiths post a supersedeas bond of $1000 to protect Midstream from “any damages sustained by the Plaintiff for the delay of the pipeline.” In addition, Midstream was ordered to tender $4,250.00 into the registry of the court as a just-compensation deposit. The Smiths appealed to this court, but we were forced to remand the case to the circuit court for compliance with Arkansas Rule of Civil Procedure 54(b)(1). See Smith v. Arkansas Midstream Gas Servs. Corp., 2010 Ark. 32, 2010 WL 199650. An amended order in full compliance with Rule 54(b) was entered on February 12, 2010. The Smiths now assert that the circuit judge erred by denying their motion to dismiss because Midstream “cannot claim the power of eminent domain under a constitutional delegation of authority through [Arkansas Code Annotated] § 23–15–101.” The Smiths make several arguments in support of this assertion, which we will consider seriatim.

a. Unconstitutional as Applied

We first address the issue that Arkansas Code Annotated section 23–15–101 is unconstitutional as applied to the facts of this case. Section 23–15–101 provides in pertinent part:

All pipeline companies operating in this state are given the right of eminent domain and are declared to be common carriers, except pipelines operated for conveying natural gas for public utility service.

[2010 Ark. 5]Article 2, section 22, of the Arkansas Constitution reads: “[t]he right of property is before and higher than any constitutional sanction; and private property shall not be taken, appropriated or damaged for public use, without just compensation therefor.” The Arkansas Constitution further provides that the power of eminent domain is an attribute of, and inherent in, a sovereign state.

[377 S.W.3d 203]

Ark. Const. art. 2, sec. 23; Pfeifer v. City of Little Rock, 346 Ark. 449, 57 S.W.3d 714 (2001).

It is well established that in light of Article 2, section 22 of the Arkansas Constitution, the right of eminent domain cannot be exercised for the purpose of acquiring property for private use and the General Assembly cannot exercise the power of eminent domain nor delegate its exercise except for public uses. See, e.g., Arkansas State Highway Comm'n v. Alcott, 260 Ark. 225, 539 S.W.2d 432 (1976); Ozark Coal Co. v. Pennsylvania Anthracite Co., 97 Ark. 485, 134 S.W. 634 (1911); Roberts v. Williams, 15 Ark. 43 (1854). Without the consent of the owner, private property cannot be taken for private use, even under the authority of the legislature. City of Little Rock v. Raines, 241 Ark. 1071, 411 S.W.2d 486 (1967); Mountain Park Terminal R.R. Co. v. Field, 76 Ark. 239, 88 S.W. 897 (1905); Williams, 15 Ark. at 46.

Whether private property is being taken for a public or private use is a judicial question which the owner has a right to have determined by the courts. Pfeifer, 346 Ark. at 460, 57 S.W.3d at 721;Raines, 241 Ark. at 1083, 411 S.W.2d at 493;Hogue v. Housing Authority of North Little Rock, 201 Ark. 263, 144 S.W.2d 49 (1940). The landowner, [2010 Ark. 6]however, bears a heavy burden in proving that the taking was not for a public use. City of El Dorado v. Kidwell, 236 Ark. 905, 370 S.W.2d 602 (1963); Woollard v. State Highway Comm'n, 220 Ark. 731, 249 S.W.2d 564 (1952).

Eminent-domain statutes are strictly construed in favor of the landowner. Pfeifer, 346 Ark. at 459, 57 S.W.3d at 720;Loyd v. Southwest Ark. Util. Corp., 264 Ark. 818, 580 S.W.2d 935 (1979). All statutes, nevertheless, are presumed to be constitutional, and this court resolves all doubts in favor of constitutionality. Arkansas Tobacco Control Bd. v. Sitton, 357 Ark. 357, 166 S.W.3d 550 (2004). The party challenging a statute's constitutionality has the burden of proving that it is unconstitutional. Id.

The Smiths contend that Midstream's proposed use of their property “is an absolute private one” in that Midstream's pipeline “is for the exclusive use of a single individual, or a collection of individuals less than the public.” Citing City of Little Rock v. Raines, the Smiths assert that Midstream's use is not, in fact, a public use because “the public at large does not have an interest which would allow them to ship materials through [Midstream's] underground pipeline.” Accordingly, the Smiths conclude that section 23–15–101 is unconstitutional as applied to the facts in this case because it granted the power of eminent domain to Midstream for a private use.

We disagree. This court recently rejected an as-applied challenge to section 23–15–101 in a case involving very similar facts. See Linder v. Arkansas Midstream Gas Servs. Corp., 2010 Ark. 117, 362 S.W.3d 889. In Linder, landowners in Cleburne County also challenged [2010 Ark. 7]Midstream's right to assert...