March 2021 Legal Intelligencer / Law Weekly article by Lamb McErlane PC attorneys James ‘Jim’ Sargent, Jr., & Katherine ‘Katie’ E. LaDow.

Beyond the Commonwealth agencies such as PennDOT and the Turnpike Commission that frequently exercise the power of eminent domain, there are a number of political subdivisions, authorities and public utilities with that power.

1. Municipalities

Generally, Pennsylvania municipalities have the right to condemn land within their borders.  While the process of condemnation for each type of municipality may slightly differ (i.e. Third Class City versus Second Class Township), Article IX, Section 2 of the Pennsylvania Constitution provides, in relevant part: “Municipalities shall have the right and power to frame and adopt home rule charters. …. A municipality which has a home rule charter may exercise any power or perform any function not denied by this Constitution, by its home rule charter or by the General Assembly at any time.” 53 Pa.C.S. § 2961. A home rule municipality in Pennsylvania is one incorporated under its own unique charter, created pursuant to the state’s Home Rule and Optional Plans Law and approved by referendum.  All three types of municipalities (cities, boroughs, and townships) may become a home rule municipality.

When the General Assembly enacted the Home Rule Law, 53 Pa.C.S. § 2961, the legislature gave home rule charter communities the broadest powers and specifically required the presumption that those communities had the power to undertake the action they desired to take, and unless it was specifically denied, that action should be upheld. 53 Pa.C.S. § 2961 provides: “A municipality which has adopted a home rule charter may exercise any powers and perform any function not denied by the Constitution of Pennsylvania, by statute or by its home rule charter. All grants of municipal power to municipalities governed by a home rule charter under this subchapter, whether in the form of specific enumeration or general terms, shall be liberally construed in favor of the municipality.” (Emphasis added).

While municipalities have wide discretion to condemn property, the municipality must establish that the taking is for a public purpose.  In the case of In re Condemn. by City of Coatesville, 898 A.2d 1186 (Pa. Cmwlth. 2006), private landowners challenged the City’s declaration of taking by filing preliminary objections.  The property owner claimed that the City did not have the power to condemn the property for a recreational golf facility because it was a proprietary business, not a public purpose.  However, the court overruled the property owners’ preliminary objections and reasoned, relying upon Dornan v. Philadelphia Hous. Auth., 200 A. 834, 840 (Pa. 1938), that “[t]he taking of land for a public golf course or playground would be for a public use although, while some players are using it, all other members of the public are necessarily excluded from utilizing or enjoying the facilities. The difference in the duration of occupancy in these various instances is one of degree. It is not essential that the entire community or even any considerable portion of it should directly enjoy or participate in an improvement in order to make its use a public one.”

2. School Districts

The Public School Code, 24 P.S. § 7-703, grants a school district and its Board the power to condemn real estate that it “may deem necessary to furnish school buildings or other suitable sites for proper school purposes.” Exercise of this power may be challenged only where property is condemned based on fraud or “palpable bad faith” on the part of the school district, where there is no reasonably foreseeable use for the property, where grossly excessive property is taken, or where the property taken is for a private purposes. Importantly, the party challenging the school district’s actions bears an extremely heavy burden and the courts will give great deference to the judgment of school officials in the exercise of their discretion in exercising the power of eminent domain. A decision by a school district to condemn private property is almost always upheld by the state courts.  Challenges to a school district’s decision to exercise its power to condemn property for the construction of a new school are frequently unsuccessful. This is not to say that such circumstances never present themselves.  In re Condemnation by W. Chester Area Sch. Dist., 50 Pa. D. & C. 4th 449 (2001), is a classic example, where preliminary objections were granted because the school board adopted its resolution to condemn at a “special” meeting without giving the notice required by Pennsylvania’s Sunshine Act. Of course, where such a resolution is adopted at the regular meeting of the condemning entity, an issue with notice is unlikely to arise.

3. Redevelopment Authorities

Pennsylvania’s Urban Redevelopment Law, 35 P.S. § 1701, et seq., created county and city redevelopment authorities throughout the Commonwealth “to promote elimination of blighted areas…throughout the Commonwealth; by…redevelopment of such areas to be for the promotion of health, safety, convenience and welfare….” Under the law, redevelopment authorities are specifically authorized “to plan and contract with private, corporate or governmental redevelopers.”   A redevelopment authority “shall constitute a public body, corporate and politic, exercising public powers of the Commonwealth as an agency thereof,” (35 P.S. § 1709), including the power to acquire property by eminent domain. 35 P.S. § 1709 (i).

The exercise of eminent domain by redevelopment authorities frequently has been challenged because the ultimate beneficiaries may include not only the public but private interests. See, e.g., Kelo v. City of New London, 545 U.S. 469 (2005).

4. Public Utilities

Public utility corporations are entities referred to in Article X, Section 4 of the Pennsylvania Constitution that can be vested with the power of eminent domain if it is exercised for a public purpose.  Jurisdiction over the certification and regulation of public utilities in the Commonwealth is vested in the Public Utility Commission (“PUC”). The Public Utility Code defines a “Public Utility” as “Any person or corporations now or hereafter owning or operating in this Commonwealth equipment or facilities for: …Transporting or conveying natural or artificial gas, crude oil, gasoline, or petroleum products, materials for refrigeration, or oxygen or nitrogen, or other fluid substance, by pipeline or conduit, for the public for compensation.” 66 Pa.C.S. § 102(1)(v).

Simply being subject to PUC regulation, however, is insufficient for an entity to acquire the power of eminent domain.  Pursuant to 66 Pa.C.S. § 1104, a public utility must also possess a certificate of public convenience (“CPC”) issued by the PUC.  To obtain a CPC, a public utility is required to submit a written application to the PUC, after which “A certificate of public convenience shall be granted by order of the commission, only if the commission shall find or determine that the granting of such certificate is necessary or proper for the service, accommodation, convenience, or safety of the public.” 66 Pa.C.S. § 1103(a).

The procedure for a public utility to exercise the power of eminent domain is set forth under 15 Pa.C.S. § 1511.[1] Once the PUC approves a CPC, the public utility corporation can begin taking private property by filing a declaration of taking. A property owner challenging the declaration, must file preliminary objections pursuant to § 306(a)(3) of the Eminem Domain Code.

Recently, the Sunoco Pipeline condemnation proceedings have received much attention.  In the matter, In re Condemn. by Sunoco Pipeline L.P., 165 A.3d 1044, 1051 (Pa.Cmwlth. 2017), property owners challenged Sunoco’s status as a public utility and argued that the Mariner East Pipeline did not serve the public need.  However, the Commonwealth Court, giving great deference to the determination of the PUC, held that Sunoco is a public utility regulated by the PUC that has the power of eminent domain.  The Court further opined that the Mariner East Pipeline was for the public need as demonstrated by the PUC’s issuance of a CPC.

There are a great many wrinkles and nuances to condemnation practice beyond what is referred to in this series of articles. Unique questions may arise that are case specific, and these require a deeper review of the Eminent Domain Code and the case law applying the Code.

For more information contact attorneys James (Jim) C. Sargent or Katherine (Katie) LaDow.

Click here to read the article in the Legal Intelligencer / Law Weekly.

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James (Jim) C. Sargent is a Partner and Co-Chairman of Lamb McErlane’s Appellate Advocacy Group and Litigation Department.  Jim represents small businesses, as well as major national and multinational manufacturers in litigation and appeals.  His practice includes commercial contracts, real estate and banking law, construction litigation, municipal law, restrictive covenants, employment contracts, as well as condemnation matters. Jim also offers mediation services in commercial/construction/business ownership disputes. jsargent@lambmcerlane.com. 610-701-4417. www.lambmcerlane.com

Katherine (Katie) LaDow is an Associate in the litigation department at Lamb McErlane PC. She concentrates her practice in the areas of state and federal civil litigation, municipal litigation, government liability & civil rights defense, personal injury, workers compensation and landlord / tenant work, as well as condemnation matters. She represents individuals, small and large businesses and municipalities in a wide array of civil, employment and tort-based disputes. kladow@lambmcerlane.com. 610-701-3261.

* Ranjani Sarode, an intern at Lamb McErlane PC also assisted with this article. Ranjani is attending Temple Law School, she is currently pursuing Land Use/Zoning, Real Estate, and Environmental Law as her preferred practice areas.

[1] 15 Pa.C.S. § 1511(a) provides: A public utility corporation shall, in addition to any other power of eminent domain conferred by any other statute, have the right to take, occupy and condemn property for one or more of the following principal purposes and ancillary purposes reasonably necessary or appropriate for the accomplishment of the principal purposes:

(1) The transportation of passengers or property or both as a common carrier by means of elevated street railway, ferry, inclined plane railway, railroad, street railway or underground street railway, trackless-trolley omnibus or by any combination of such means.

(2) The transportation of artificial or natural gas, electricity, petroleum or petroleum products or water or any combination of such substances for the public.

(3) The production, generation, manufacture, transmission, storage, distribution or furnishing of natural or artificial gas, electricity, steam, air conditioning or refrigerating service or any combination thereof to or for the public.

(4) The diverting, developing, pumping, impounding, distributing or furnishing of water from either surface or subsurface sources to or for the public.

(5) The collection, treatment or disposal of sewage for the public.

(6) The conveyance or transmission of messages or communications by telephone or telegraph for the public.

(7) The diverting, pumping or impounding of water for the development or furnishing of hydroelectric power to or for the public.

(8) The transportation of oxygen or nitrogen, or both, by pipeline or conduit for the public.