Railroad continues to push eminent domain

    Although the court case involving northeast Wyoming landowners and Dakota, Minnesota and Eastern (DM&E) Railroad has not moved very far within this state, the railroad has gained small ground in South Dakota.
    After a lengthy series of hearings and legal meetings, the South Dakota Transportation Commission mid-March granted DM&E the right to use eminent domain to gain control of land from Wall, S.D. west to the Wyoming border for use in a rail line extension that they’ve proposed to run to coal mines the Powder River Basin.
    Soon following the permission, however, was a notice of appeal from lawyers representing the affected South Dakota landowners. “The landowners in South Dakota will not evaluate the merits of an appeal and potentially pursue it,” says Gillette attorney Tad Daly of Daly, Davidson and Sorenson, who represents 14 of the 19 Wyoming landowners along the proposed route.
    “The decision of the Transportation Commission can be appealed to the state Supreme Court in South Dakota, and if the landowner appeal’s not successful, that gives DM&E the right to use eminent domain to take the landowners to court,” says Nancy Darnell, who ranches with husband Donley near Newcastle and is one of the affected Wyoming landowners.
    The Transportation Commission only granted DM&E the right to use eminent domain from Wall west to the state line, although they had asked for the whole state. Even though they’ve been granted the right to use eminent domain, Darnell says that doesn’t mean they will.
    “There’s lot of time to play out yet in this, and there’s a long way to go in the appeal process,” says Darnell. “Either or both sides may appeal, because neither side got what they wanted from the Transportation Commission decision.”
    She says the basis on which the South Dakota landowners may appeal is that they believe there were a number of irregularities in the proceedings before the Transportation Commission.
    In Wyoming DM&E’s case has been heard in federal court in Casper. “All the evidence has been heard in the case, and it’s awaiting the judge’s decision as far as I know,” says Darnell.  She says there have been several court sessions and attorneys submitted final arguments last fall.
    DM&E sued under Wyoming law to be a condemner, which is where state law is different from South Dakota. “Authority was never a question in Wyoming,” says Daly.
    “We’ve been litigating this for a little over a year and a half now,” says Daly. “We went to trial last summer in federal court and spent two weeks in trial on two of the three parts of eminent domain.” He says the two sides have not yet litigated the damage portion.
    “The judge required each side to submit findings of fact and conclusions of law, and those were due September 2008. Those have all been submitted to the court and now it’s under his review,” says Daly of the waiting period. “We’re waiting for the court to make a decision based on the evidence.”
    He says it’s very difficult to predict when a federal judge will make a decision.
    Further complicating the case is the purchase of DM&E by Canadian Pacific Railway. “Canadian Pacific will make the ultimate decision to develop this project or not, and the people making the decision aren’t even involved in the litigation,” says Daly. “We hope that makes a difference, and the judge is aware of Canadian Pacific’s stance as it pertains to the Powder River Basin.”
    Darnell speculates the railroad wants to pursue eminent domain to secure the right to develop so they have potential expansion projects to show to investors.
    “The official word is that Canadian Pacific has not made a decision,” says Darnell, adding that Canadian Pacific became the operator of DM&E in Fall 2008. “Prior to that, all their announcements were that they’d take from one to five years to decide if they want to follow through on the project.”
    Meanwhile, DM&E CEO Kevin Schieffer, who pushed the development, has been fired.
    “We have been in this particular controversy for almost 12 years,” says Darnell. “From time to time we’ve had to spend a huge amount of time and money defending our ranchland and defending against what we feel is wrong. It’s affected us greatly, because that was time taken away from our ranch operations.”
    “What DM&E has done to the landowners through all of this is encumber their property with the threat of condemnation through a federal lawsuit, which makes it hard to do anything with the land – market to sell or use as potential collateral for operating loans – because nobody knows what’s going to happen,” says Daly of harm already done to his clients. “What they’ve done is clouded the title to the degree the landowners can’t use it to the best of their abilities.”
    “If the railroad is truly built, a number of ranchers, including us, will have places and property completely cut off from the rest of the ranch,” says Darnell. “The large amount of uncertainty does affect us, even though our day-to-day operation has not been affected. We’re on hold.”
    Christy Hemken is assistant editor of the Wyoming Livestock Roundup and can be reached at Christy@wylr.net.