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PO Box 1070, Frankfort, KY 40602  Phone 502.875.2428, Fax 502.875.2845

Motion Seeks Ruling That Bluegrass Pipeline Lacks Eminent Domain Power  Posted: February 21, 2014

COMMONWEALTH OF KENTUCKY
FRANKLIN CIRCUIT COURT
CIVIL ACTION NO. 13-CI-1402
DIVISION NO. I

KENTUCKIANS UNITED TO
RESTRAIN EMINENT DOMAIN, INC. PLAINTIFF

V.

BLUEGRASS PIPELINE COMPANY, LLC
DEFENDANT

PLAINTIFF’S MEMORANDUM IN SUPPORT OF MOTION FOR SUMMARY JUDGMENT

* * * * *

INTRODUCTION

This action arises under the Kentucky Declaratory Judgment Act, KRS 418.040 et seq., seeking a declaration of rights between the Plaintiff Kentuckians United To Restrain Eminent Domain, Inc. (“KURE”) and the Defendant Bluegrass Pipeline Company LLC (“Bluegrass”), as to the validity of the claim asserted by Bluegrass of the right to invoke KRS 278.502, KRS 416.675, and KRS 278.470 in order to condemn properties in furtherance of the installation of a natural gas liquids pipeline through portions of Franklin and other counties in Kentucky.

An actual controversy exists between the parties in that Bluegrass has asserted publicly that it has the right to condemn property under KRS 278.502, KRS 416.675(2)(d), and KRS 278.470, if needed, in order to obtain easements for the construction and installation of the proposed pipeline, and Kentuckians United to Restrain Eminent Domain, on behalf of member Penny Greathouse and other members, disputes that claim. Accordingly, a declaration of rights is appropriate in this case to end this uncertainty and dispute.

STATEMENT OF MATERIAL FACTS

KURE, a non-profit corporation incorporated under the laws of the Commonwealth of Kentucky, whose members organized “to protect Kentuckians from the threat of and attempts to exercise eminent domain by entities not in public service to Kentuckians,” filed this action on December 5, 2013 seeking a declaration of rights on behalf of its members. Among those members is Penny Greathouse, who owns property located in Franklin County and who has several times been approached by agents for Bluegrass seeking to acquire an easement across her property in order to locate a portion of the proposed “Bluegrass Pipeline,” which is a 24-inch pressurized pipeline for transporting natural gas liquids (an unfractionated mixture of pentane, propane, butane, isobutane, and ethane) from the Marcellus and Utica shale formations in Pennsylvania, West Virginia, and Ohio, to the Gulf of Mexico. Ms. Greathouse is also a member of the Board of Directors of KURE, and executed an Affidavit that was attached as Appendix A to the Complaint.

Bluegrass Pipeline Company LLC, a limited liability company with a principal office at One Williams Center, Tulsa, Oklahoma, 74142, and a registered office in Kentucky at 306 W. Main Street, Suite 512, Frankfort, Kentucky, 40601, is a joint venture of Williams Company and Boardwalk Pipeline Partners. The Bluegrass Pipeline Project, according to Williams Company Chief Executive Officer Alan Armstrong, is a “large-scale, integrated solution that connects Marcellus-Utica natural gas liquids to diverse domestic markets, fractionation, storage and export facilities in the Gulf Coast.” Bluegrass has employed agents to acquire easements in support of the Bluegrass Pipeline project, one of which approached Ms. Greathouse in an effort to acquire an easement for the construction and installation of the proposed natural gas liquids (“NGL”) pipeline. A representative of Bluegrass has indicated to Ms. Greathouse that the company believes it has the power of eminent domain in support of the proposed pipeline. Affidavit of Penny Greathouse, Complaint Appendix A. A representative of Bluegrass indicated to Franklin County Judge Executive Ted Collins in a letter dated August 1, 2013, that “In Kentucky, we have eminent domain power as provided by Kentucky Revised Statutes (KRS): KRS Sec. 278.502, KRS Sec. 416.675(2)(d), and KRS Sec. 278.470.” Mr. Hunt further stated that “our hope is that Bluegrass Pipeline will acquire land rights by reaching agreements with landowners rather than using eminent domain to let a court determine the fair market value of a landowner’s property.” Complaint, Appendix B at p. 7.

Bluegrass has acknowledged that it is not a public utility regulated by the Kentucky Public Service Commission, and Staff Opinion 2013-006 issued on July 30, 2013 by the Commission concurs in that judgment. A copy of that Staff Opinion is annexed hereto as Appendix 1.

STANDARD OF REVIEW

Summary judgment may where “the pleadings, depositions, answers to interrogatories, stipulations, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” CR 56.03. In Paintsville Hospital Co. v. Rose, 683 S.W.2d 255 (Ky. 1985), the Supreme Court of Kentucky held that for summary judgment to be proper the movant must demonstrate that the adverse party cannot prevail under any circumstances. This rule was reaffirmed in Steelvest, Inc. v. Scansteel Service Center, Inc., 807 S.W.2d 476 (Ky. 1991).

“The trial judge must examine the evidence, not to decide any issue of fact, but to discover if a real issue exists.” Id. In this matter, the Court is presented with a question of law, to wit, whether the three statutes cited by Bluegrass confer on that entity the power of eminent domain. There are no material facts in dispute, and summary disposition on this question of law is appropriate.

I. PLAINTIFF IS ENTITLED TO A DECLARATION THAT BLUEGRASS PIPELINE COMPANY LLC DOES NOT HAVE THE POWER OF EMINENT DOMAIN UNDER KENTUCKY LAW FOR THE PROPOSED BLUEGRASS NGL PIPELINE PROJECT

A. This Matter Is Ripe For Review And A Declaration of Rights Is Appropriate Concerning The Claim Of Bluegrass Pipeline To Eminent Domain Power Under Kentucky Law

KURE brought this action on behalf of its members, including Penny Greathouse, seeking a declaration of their rights relative to the claim asserted by Bluegrass that it has the power of eminent domain under Kentucky law. Bluegrass, in its Answer, denies that a justiciable controversy exists inasmuch as it has not attempted to initiate eminent domain proceedings in Kentucky. Answer, Numerical Paragraph (hereinafter “Num. Para.”) 6.

This matter is ripe for review and a declaration of rights is appropriate at this time. KRS 418.040 vests this court with jurisdiction over an action by a plaintiff seeking a declaration of rights, “either alone or with other relief,” where an actual controversy exists, and this Court “may make a binding declaration of rights, whether or not consequential relief is or could be asked.”
An actual controversy exists between the parties regarding the claim of Bluegrass Pipeline Company LLC to the power to condemn property pursuant to KRS 278.502, KRS 416. 675(2)(d), and KRS 278.470. According to August 1, 2013 Letter from Wendell Hunt to Franklin County Judge Executive Ted Collins, Hunt stated that “In Kentucky, we have eminent domain power as provided by Kentucky Revised Statutes (KRS): KRS [Section] 278.502, KRS [Section] 416.675(2)(d) and KRS [Section] 278.470.” In that same letter, Mr. Hunt indicated that “our hope is that Bluegrass Pipeline will acquire land rights by reaching agreements with landowners’ rather than using eminent domain to let a court determine the fair market value of a landowner’s property.” That letter, attached to the Complaint as Appendix B, reflects plainly that Bluegrass reserves the right to invoke eminent domain against any landowner with whom it cannot reach agreement, including Ms. Greathouse and other KURE members.

KRS 418.045 provides that any person “whose rights are affected by statute, municipal ordinance, or other governmental regulation . . . or who is concerned with any title to property” may apply to secure a declaration of rights and duties. That statute further provides that the enumeration of instances in KRS 418.045 where a declaratory judgment may be prayed and granted under KRS 418.040 “does not exclude other instances…whether such other instance be of a similar or different character to those” described in KRS 418.045.

KURE member Penny Greathouse has, (as is reflected in her Affidavit) been approached by agents of Bluegrass regarding the grant of an easement, and KURE has standing to seek a declaration of rights on her behalf with respect to whether the statutes identified by Bluegrass Pipeline Company LLC actually provide such authority.

KURE has “associational” or “representational” standing in this matter. As noted by the Kentucky Supreme Court in Bailey v. Preserve Rural Roads of Madison County, et al., Ky. 394 S.W.3d 350 (2011) there are three requirements that an association must meet in order to maintain suit on behalf of its members – “(a) its members would otherwise have standing to sue in their own right; (b) the interests it seeks to protect are germane to the organization's purpose; and (c) neither the claim asserted nor the relief requested requires the participation of the individual members in the lawsuit.” Corn. ex rel. Brown v. Interactive Media Entertainment and Gaming Ass'n, Inc., 306 S.W.3d 32, 38 (Ky. 2010) (citing Hunt v. Washington State Apple Adver. Comm'n, 432 U.S. 333, 97 S. Ct. 2434, 53 L. Ed. 2d 383 (1977)). While Kentucky has never officially adopted this entire test, we have held that, at a minimum, to establish associational standing at least one member of the association must individually have standing to sue in his or her own right.” Bailey, supra, at 356. Each prong of the test is met, since as the Affidavit of Penny Greathouse reflects, she is both a Board member and a member of KURE, who has been approached by a company that seeks an easement and has asserted the right to condemn properties in the Commonwealth in the absence of agreements.

Declaratory relief is appropriate in this case under KRS 418.065 since the requested declaration of rights will terminate the uncertainty and controversy that exists in this situation, and is squarely within the remedial purpose of KRS 418.040 to 418.090 announced in KRS 418.080, since a declaration of rights would afford “relief from uncertainty and insecurity with respect to rights, duties and relations” as between KURE and its members, and Bluegrass Pipeline Company LLC.

Bluegrass suggests that since it has not yet filed an action seeking to condemn land in support of the proposed pipeline that this matter is not ripe for review and no actual controversy exists. According to Bluegrass, an actual controversy would not exist until it attempts to initiate eminent domain proceedings in Kentucky. Answer, Num. Para. 6.

Yet it is precisely because of the uncertainty surrounding the relative rights of Ms. Greathouse to be free of the fear of condemnation by Bluegrass, and a desire to end that uncertainty and insecurity in advance of having to defend a condemnation action, that a declaration of rights is appropriate. The specter of condemnation created by the assertion by Bluegrass both to Ms. Greathouse, see Affidavit at num. para. 4, and to County Judge Collins in the Hunt letter, that it possesses the power of eminent domain under Kentucky law, hangs like a pall over any discussions that might occur between Bluegrass and Ms. Greathouse and similarly situated KURE members, and a declaration of rights would end the uncertainty and insecurity created by the claim and by the decision of Bluegrass not to foreswear condemnation as a vehicle for gaining desired property rights in the path of the proposed pipeline.

To read the Kentucky Declaratory Judgment Act as Bluegrass suggests is inconsistent with the expressed remedial purpose of the law. According to the General Assembly, KRS 418.040 to 418.090 is declared to be remedial and its purpose is to “make the courts more serviceable to the people by the way of settling controversies, and affording relief from uncertainty and insecurity with respect to rights, duties, and relations, and are to be liberally construed and administered.” KRS 418.080.

As noted in the Greathouse Affidavit, the assertion by Bluegrass that it possesses the power of eminent domain under Kentucky law has created a current uncertainty and insecurity “regarding whether, under Kentucky statutes, they have the right of eminent domain as they have claimed.” The uncertainty is not a matter of speculation or idle curiosity, but is one that immediately colors her discussions with Bluegrass – discussions initiated by Bluegrass in seeking an easement across her property. As Ms. Greathouse notes, “[w]hether that power exists has a significant bearing on whether I will agree to negotiate an easement with Bluegrass Pipeline, and the terms of that negotiation.” This situation is quintessentially what KRS 418.040 through 418.090 was adopted to address and resolve. Having “picked this fight,” as it were, by seeking an easement from Ms. Greathouse and by asserting though an agent and in letter to Judge Collins that it possesses the power to condemn lands for which it cannot reach agreement, Bluegrass cannot dodge the obligation to defend its claim of eminent domain powers under Kentucky law.

B. Venue Is Appropriate In This Case Since The Registered Office of Bluegrass Pipeline LLC is in Franklin County, and Since The Property of Plaintiff KURE’s Member Penny Greathouse is Located In Franklin County

In the Complaint, KURE asserted that venue was appropriate in this Court inasmuch as the “principal” office of Bluegrass is location in Franklin County, and because the property of KURE Member Penny Greathouse is located in Franklin County. Bluegrass acknowledged in its Answer that it has a registered office in Franklin County. Answer, Num. Para. 4, and admits that Ms. Greathouse owns property in Franklin County for which Bluegrass has sought an easement for the pipeline project. Venue is appropriate both because the Defendant Bluegrass maintains a registered office and agent for process in Franklin County, and because the property of Ms. Greathouse that has been the subject of requests for the granting of an easement by Bluegrass is admitted to be located in Franklin County. Whether characterized as an action seeking to clarify rights in order to avoid injury to property under KRS 452.460, or as a matter involving rights and interests in realty under KRS 452.400, there is no more appropriate venue in the Commonwealth for this action than in Franklin County.

C. All Persons Claiming An Interest Who Would Be Affected By the Requested Declaration of Rights Have Been Named As Parties To This Action

As its Fourth Defense, Bluegrass asserts that Plaintiff has “failed to join as parties to this action all persons who have or claim an interest which would be affected by the requested declaration of right as required by KRS 418.075. Bluegrass is mistaken, since this action for declaratory relief is between KURE and its members, for whom KURE has representational standing, and Bluegrass. The action neither names nor implicates the rights of Bluegrass and other landowners whose property may lie in the path of the proposed pipeline, and both Bluegrass and those parties reserve all rights and defenses that they may have under current law. The implication that KURE cannot seek a declaration of rights as between its members and Bluegrass without naming each landowner who may be along the path of the pipeline is unreasonable, since KURE would be without knowledge of the properties involved and the owners of those properties (and other interest holders). Joinder of all other landowners would be impractical, and is unnecessary since in this matter complete relief can be obtained as between the parties in the absence of any additional parties. KURE should not be required to identify and join all landowners along the path of the pipeline, any more than Bluegrass would be required to join as necessary parties all landowners if it were to initiate a condemnation action against one of them. KURE does not seek to bind any non-parties to a judgment in this matter, and the remedy sought, which is a declaration of rights, can be resolved in the absence of any nonparties.

KRS 418.075 requires that where declaratory relief is sought, “all persons shall be made parties who have or claim any interest which would be affected by the declaration, and no declaration shall prejudice the rights of persons not parties to the proceeding.” Complete relief can be accorded as between the parties to this action, and no nonparties rights are being adjudicated or prejudiced, therefore joinder of other parties is not necessary. No non-parties interests would be divested by the judgment of this Court, so that those parties are not “necessary.” Additionally, intervention is available to any party satisfying the requisite criteria who wishes to participate in and be bound by the judgment of this Court.

II. BLUEGRASS PIPELINE LLC LACKS THE POWER OF EMINENT DOMAIN UNDER KENTUCKY LAW

By letter dated August 1, 2013, Bluegrass representative Wendell Hunt asserted in a letter to County Judge Executive Ted Collins that:

"In Kentucky, we have eminent domain power as provided by Kentucky Revised Statutes (KRS): KRS [Section] 278.502, KRS [Section] 416.675(2)(d) and KRS [Section] 278.470. Bluegrass Pipeline meets the criteria of a common carrier under Kentucky law because it will provide open access to any potential Kentucky customer that is willing to meet the Bluegrass Pipeline’s tariff conditions and pay the tariff rate."

August 1, 2013 Letter from Wendell Hunt to County Judge Executive Collins , Complaint Appendix B.

As a matter of law, none of the three statutes identified by Bluegrass as the basis of its claim to “eminent domain power” in Kentucky provide such authority.

KRS 278.502, the first of the three statutes cited by Bluegrass, provides in full that:

"278.502 Condemnation for pipelines and related facilities, including rights of ingress and egress.

Any corporation or partnership organized for the purpose of, and any individual engaged in or proposing to engage in, constructing, maintaining, or operating oil or gas wells or pipelines for transporting or delivering oil or gas, including oil and gas
products, in public service may, if it is unable to contract or agree with the owner after a good faith effort to do so, condemn the lands and material or the use and occupation of the lands that are necessary for constructing, maintaining, drilling, utilizing, and operating pipelines, underground oil or gas storage fields, and wells
giving access thereto and all necessary machinery, equipment, pumping stations,appliances, and fixtures, including tanks and telephone lines, and other communication facilities, for use in connection therewith, and the necessary rights of ingress and egress to construct, examine, alter, repair, maintain, operate, or remove
such pipelines or underground gas storage fields, to drill new wells and utilize existing wells in connection therewith, and remove pipe, casing, equipment, and other facilities relating to such underground storage fields and access wells. The proceedings for condemnation shall be as provided in the Eminent Domain Act of Kentucky."

KRS 278.502 (Italics added).

By its terms, the grant of eminent domain powers under this statute is limited to entities engaged in or proposing to engage in transporting “oil or gas” or “oil or gas products” “in public service.”

The proposed “Bluegrass Pipeline” is intended to transport natural gas liquids from the Marcellus and Utica shale gas producing formations in Pennsylvania, West Virginia, and Ohio, to the petrochemical and export markets in the U.S. Gulf Coast. It’s ability to invoke KRS 228.502 hinges on several distinct questions which must be answered in the affirmative in order to be eligible to use the power delegated by the General Assembly under that statute.

The first threshold is whether the proposed pipeline would be transporting or delivering oil or gas “in public service[.]” Both the language and the context of the phrase suggest that the Bluegrass Pipeline would not be considered “in public service” since it is transporting natural gas liquids for distribution in the Gulf Coast region to petrochemical facilities and for export.0

Initially, the context in which the grant of power to oil and gas pipelines in KRS 278.502 is found suggests that the Bluegrass Pipeline would not be “in public service.” The grant of power is not in KRS Chapter 416, which provides numerous statutory grants of condemnation authority as well as providing through the Eminent Domain Act of Kentucky, the manner in which condemnation proceedings are prosecuted. Instead, in a Chapter captioned “Public Service Commission,” which provides for regulation of utilities providing electricity, heat, water, and fuels “to or for the public,” the General Assembly has chosen to limit the power of condemnation in KRS 278.502 to those entities “in public service.” This constraint is in addition to the general obligation arising under the Kentucky Constitution and codified in KRS 416.675 that every grant of authority in the Kentucky Revised Statutes to exercise eminent domain shall be to “effectuate a public use[.]” That the General Assembly limited condemnation power to pipelines “in public service” in the same chapter that creates the Public Service Commission to regulate “utilities,” rather than including that grant of eminent domain authority in KRS Chapter 416, suggests that only those pipelines and wells owned and operated by entities regulated by the Public Service Commission (i.e. utilities) enjoy the power to condemn citizens’ property.

Additionally, the case law concerning what constitutes “in public service” within the context of KRS 278.502, supports a construction that would preclude invocation of the power by Bluegrass. The predecessor to KRS 278.502, Section 3766b-1 of the Kentucky Statutes, granted the power of condemnation for construction, maintenance or operation of oil or gas well or wells or pipe line or lines for conveying, transporting or delivering oil or gas, or both oil and gas, and declared all such uses “to be a public use[.]” In the cases of State Tax Commission v. Petroleum Exploration, 68 S.W.2d 777 (Ky. 1933) and Texas Co. v. Commonwealth, 198 S.W.2d 316 (Ky. 1946) the Court turned aside challenges from pipeline companies that they were not subject to franchise or privilege taxes because their activities were not within those granted eminent domain powers under the statute, and held that whether they exercised the power or not, they were garbed with condemnation powers under the broad statute and thus had a privilege or franchise subject to the tax. Thereafter, the General Assembly narrowed the scope of what is now KRS 278.502, by imposing an additional requirement for the exercise of eminent domain beyond being a “public use,” to being “in public service.” This requirement is distinct from and in addition to the General Assembly’s declaration in KRS 278.470 that every company receiving, transporting, or delivering oil or natural gas for public consumption is a common carrier, and such activities are deemed “a public use.”

In a 2012 decision, the Court of Appeals in Milam v. Viking Energy Holdings, 370 S.W.3d 530 (2012) rejected a distinction that the landowner tried to make between “gathering lines” and “transmission lines,” and concluded that Viking could use KRS 278.502 to condemn a property for its gathering lines because the condemnation power in that statute does not differentiate the types of oil or gas pipelines. The Court concluded that Viking was a common carrier transporting in public service, noting that “we have reviewed and agree with Viking's arguments that it is a common carrier and engaged in public services for purposes of this suit, although we acknowledge that the Milams did not specifically address these questions in their appellate brief.” The distinctions drawn by Viking, and accepted by the Court. in arguing that it was a common carrier “in public service” under KRS 278.502, underscore that an interstate pipeline not serving Kentucky customers or producers, is not “in public service” within the meaning of KRS 278.502. A copy of the brief of Appellee Viking Oil and Gas, LLC, before the Court of Appeals in that case, is annexed hereto as Appendix 2.

In the Milam case, Viking drew the distinction that “in public service” referred to the intrastate services and benefits of the activity, and rested the argument that it had condemnation powers under KRS 278.502 because it was in “public service,” on several points: first, that it was required to provide a farm tap under KRS 278.485 because it had wells producing gas in Kentucky; second, that the eventual sales of the gas were to Kentuckians. By contrast, the Bluegrass Pipeline would neither be serving the public in Kentucky, nor would it be subject to a farm tap obligation. The interstate nature of the Bluegrass Pipeline places it outside both the “common carrier” and “public service” limitations under Kentucky law, a conclusion reinforced by the Public Service Commission’s inability to order that the Bluegrass Pipeline transport natural gas for others in intrastate commerce if it has unused capacity. KRS 278.505.

The last question raised in KRS 278.502 is whether natural gas liquids, which Bluegrass describes as “ethane, propane, butane and natural gasoline,” Answer, Num. Para.2, are “oil or gas” or “oil and gas products” as the terms are used in KRS 278.502. While the terms are not defined in KRS Chapter 278, the General Assembly has elsewhere differentiated oil or gas from natural gas liquids. For example, KRS 143A.010 defines “natural resources” for purposes of imposition of severance taxes, to include “natural gas” and “natural gas liquids,” thus recognizing that they are not the same, and further defining natural resources to exclude oil in that same definition. Throughout the severance tax statutes, a distinction is drawn between “natural gas,” and “natural gas liquids,” reflecting that the General Assembly recognizes that “oil” and “gas” are distinct from “natural gas liquids.” See: KRS 143A.025(2), (3). Similarly, in KRS 224.01-400(1)(a), the General Assembly differentiated the terms “natural gas” from “natural gas liquids” and from “petroleum” and “crude oil or any fraction thereof” unless specifically listed as a hazardous substance. Since the General Assembly has recognized a distinction between the terms oil, natural gas, and natural gas liquids, the limitation of the grant of eminent domain powers to “oil” or “gas” and their products, and the lack of a grant of eminent domain power to a pipeline company transporting natural gas liquids, precludes Bluegrass from availing itself of condemnation powers under KRS 278.502 for natural gas liquids transportation.

KRS 278.470 is cited by Bluegrass in the Hunt Letter as the second of three statutory bases for its claim to the power of eminent domain. KRS 278.470 provides in full that:

"Every company receiving, transporting or delivering a supply of oil or natural gas for public consumption is declared to be a common carrier, and the receipt, transportation and delivery of natural gas into, through and from a pipeline operated by any such company is declared to be a public use."

The General Assembly has not defined in KRS 278.470 what is intended by the limitation “for public consumption.” The case law suggests that “for public consumption” is for ultimate use by the public in Kentucky, rather than shipment through the state for processing by the pipeline company for end use by a discrete set of persons rather than the public at large.

In the case of In Re: Langford, a Bankruptcy Court decision from the Western District of Kentucky, construed KRS 278.470 to apply only to “companies engaged in the transportation of gas ‘for public consumption’—that is, for ultimate use by Kentucky consumers.” In Re: Langford v. Equitable Life Assurance Society of the United States, U.S Bankruptcy Court W.D. Ky. 32 B.R. 746; 1982 Bankr. LEXIS 5436 (1982).

Since Bluegrass is not transporting “a supply of oil or natural gas for consumption by the general public in Kentucky, it is not a “common carrier” under KRS 278.470, nor is the proposed activity a “public use.” The Bluegrass Pipeline proposes to transport natural gas liquids for further processing in the Gulf of Mexico and delivery to a limited population of industrial end users.

The final basis identified by the Hunt letter as supporting Bluegrass’ claim of eminent domain authority under Kentucky law is KRS 416.675(2)(d), which provides in relevant part that:

"416.675 Public use required -- No condemnation for indirect benefit –Exemption.

(1) Every grant of authority contained in the Kentucky Revised Statutes to exercise the power of eminent domain shall be subject to the condition that the authority be exercised only to effectuate a public use of the condemned property.

(2) "Public use" shall mean the following:

* * *

(d) The use of the property for the creation or operation of public utilities or common carriers; or

(e) Other use of the property expressly authorized by statute."

KRS 416.675 (2006).

Adopted in the aftermath of the U.S. Supreme Court Kelo decision, KRS 416.675 does not provide an independent grant of condemnation authority, but instead by its plain language imposes “conditions” on those grants of eminent domain authority found elsewhere in the Kentucky Revised Statutes. KRS 416.675(2)(d) does not grant Bluegrass Pipeline Company LLC any power or right to invoke eminent domain in order to obtain easements for the Bluegrass Pipeline project, but merely conditions rights that might otherwise be accorded by state law.

CONCLUSION AND PRAYER FOR RELIEF

WHEREFORE, for the reasons above stated, Plaintiff respectfully requests that this Court:

1. Accept jurisdiction over this complaint and petition for a declaration of rights;

2. Docket this Motion for Summary Judgment for early hearing as authorized under KRS 418.050;

3. Grant Summary Judgment on behalf of Plaintiff and declare that Bluegrass Pipeline LLC does not possess any power or authority under the laws of the Commonwealth of Kentucky to utilize eminent domain to condemn the properties of Penny Greathouse or other members of KURE in support of the proposed Bluegrass NGL Pipeline project, and specifically, that KRS 278.502, KRS 416.675, and KRS 278.470 confer no eminent domain authority to Bluegrass Pipeline LLC for such actions; and

4. Grant such other relief pursuant to KRS 418.055 based on the declaratory judgment, order, or decree, as the Court deems necessary or proper, and to which Plaintiff may appear entitled.

Respectfully submitted,

____________________________
TOM FITZGERALD
Kentucky Resources Council, Inc.
213 St. Clair Street, Suite 200
Post Office Box 1070
Frankfort, Kentucky 40602-1070
(502) 875-2428
fitzkrc@aol.com

Counsel for Plaintiff Kentuckians
United To Restrain Eminent Domain, Inc.


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