On Tuesday May 31, 2011, the Wisconsin Legislature’s Joint Committee on Finance (JFC) advanced a proposal to gut key protections for landowners when property is taken from them against their wishes for roads, power lines, sewers or similar projects. These protections were put in place in the mid-1970’s after the legislature studied and re-studied eminent domain abuses that victimized small landowners.
The proposal is cleverly designed to leave thousands of small landowners helpless when government agencies or large utilities make “low-ball” offers on private property slated for seizure under the government’s power of eminent domain. The proposal accomplishes this goal by precluding these property owners from being reimbursed for litigation costs they incur when battling for just compensation.
Under this proposal, landowners would face the prospect of being “spent into the ground” by condemners, who regularly force the landowner to commit more to the matter than the amount they are fighting for as fair compensation for their land.
As our Supreme Court recognized in a decision issued May 26, 2011 “. . . litigation expenses may dwarf the difference between the compensation offered and that eventually awarded.” Klemm v. ATC, Wisconsin Appeals Case No. 2009 AP 2784
In the single case where I have been able to extract information about how much such a “condemner” (in that case, American Transmission Company, “ATC”) might put into fighting a landowner, I calculated–using figures that ATC had been required to disclose–that the utility had committed a total of over $100,000.00 to the matter.
ATC mounted that effort to avoid paying a landowner $8,000.00.
If the proposal that the JFC approved were law at the time of that case, the landowner in the example above would have been “forced to surrender” because he could not have been reimbursed for the cost of battling for just compensation. No matter how much he won at trial, his expenses would have exceeded that amount. His only reasonable option would have been to accept the low-ball offer, allowing ATC to effectively seize his property for a fraction of its value.
That’s why the 1977 amendments were codified, and that’s why the current JFC proposal should not become law.
While the cost of a lawsuit could break a landowner, such costs do not seem to matter to a condemner taking the property. As ATC’s lawyer explained to the Wisconsin Supreme Court on April 14, 2011:
“ATC doesn’t have a financial stake in this. This is…it, it, it… ATC’s rate holders do, but this is a pass-through cost for ATC. It . . .as long as they spend their money prudently, they can recover that money in rates. It doesn’t affect ATC.”
When one side–the government agency or corporation– can spend lavishly, and the other is strictly limited, it is easy to predict the outcome – – landowners will be coerced into accepting low-ball offers because their only other choice is to spend even more battling the giant government agency or private corporation.