When a landowner legally challenges an agency’s use of eminent domain to appropriate property, Ohio law requires a trial court to hold a hearing to determine the agency’s right to make the appropriation, according to a recent decision by the Ohio Supreme Court. The Court held that an appeal to a higher court is not permissible until the trial court holds such a hearing and rules on the issues raised in the hearing. For landowner Diane Less, the ruling means the trial court--the Mahoning County Court of Common Pleas--must hold a hearing to determine whether Mill Creek MetroParks had the right to make the appropriation of her land and whether that appropriation is necessary.
The case is one of several lawsuits and long-running controversies over Mill Creek MetroPark’s use of eminent domain to appropriate land for a bike path. The Mahoning County disputes are one reason behind a current legislative proposal to revise Ohio’s eminent domain laws, which includes a prohibition against the use of eminent domain for recreational trails. The legislation is at a standstill, however, with many opponents lining up against the recreational trails and other provisions of the bill.
Basis for the decision
The current Mill Creek MetroParks v. Less case made its way to the Ohio Supreme Court after the Seventh District Court of Appeals reversed the Mahoning County court’s summary judgment decision that MetroParks was authorized to use eminent domain to take Less’ land. MetroParks appealed that decision to the Ohio Supreme Court. But rather than addressing the issue of authority to take the land, the high court focused on the procedures outlined in Chapter 163 of the Ohio Revised Code. The statutes “provide a uniform eminent domain procedure for all appropriations sought by public and private agencies,” including procedures for when a property owner contests an appropriation. The Court reviewed the statutory requirements in ORC 163.09, which require a trial court to hold a hearing when:
- A property owner files an answer to a petition for eminent domain that specifically denies the right to make the appropriation or the necessity for the appropriation,
- The answer alleges sufficient facts in support of the denial, and
- The appropriation is not sought in a time of war or other public exigency or not for the purpose of making or repairing roads.
When MetroParks filed the eminent domain action against Less, she did file an answer that denied the Park District’s right to make the appropriation and the necessity for the appropriation. Less also filed a motion for summary judgment, asking the court to rule in her favor and dismiss the case because there were no genuine issues of material fact in the case. The trial court denied her motion, however, and Less filed an appeal of that denial to the Seventh District Court of Appeals. The Supreme Court points out that the appeal should not have occurred, however, because the statutory procedures required the trial court to hold a hearing after it denied the summary judgment motion by Less. Nevertheless, the Seventh District ruled on the appeal, reaching a decision that agreed with Less’ argument that the Park District did not have authority to take her land.
The Supreme Court accepted the case for review, but its purpose was not to rule on the issue of whether there was authority for the use of eminent domain. Instead, the Court held that it had no jurisdiction to hear MetroPark’s appeal of the Seventh District’s decision, and that the Seventh District Appeals Court did not have jurisdiction to review the decision of the trial court. Because the trial court had failed to follow the statutory procedures for a hearing and decision on the authority and necessity of the appropriation, there was no “final appealable order” that either party could appeal to a higher court.
What happens next?
The Supreme Court vacated the decision of the Seventh District Court of Appeals and sent the case back down to the Mahoning County Court of Common Pleas. The county court must now hold a hearing to review the landowner’s arguments on the authority and necessity for the park’s appropriation. The court’s decision after that hearing will be an order that either party may choose to appeal to the Seventh District. The best answer to the question of what happens next, most likely, is that case will continue to roll on for quite some time.
Despite the arrival of summer and continuing disagreements over the state budget, Ohio legislators have been working on several pieces of legislation relevant to Ohio agriculture. All of the proposals are at the committee level but may see action before the Senate and House after the budget bill process ends. Here’s a summary of the ag related proposals currently under consideration.
Senate Bill 111 – Urban Agriculture
Senator Paula Hicks-Hudson (D-Toledo) targets barriers for farmers in urban settings in SB 111, which has had three hearings before the Senate Agriculture and Natural Resources Committee. OSU Extension, the Ohio Municipal League, and several farmers have testified in support of the proposal, which contains three components:
- Establishes an Urban Farmer Youth Initiative Pilot Program to provide youth between the ages of six and eighteen living in urban areas with programming and support for farming and agriculture. The bill would appropriate $250,000 over 2024 and 2025 for the pilot, to be administered by OSU Extension and Central State Extension.
- Exempts temporary greenhouses, such as hoop houses, from the Ohio Building Code, consistent with Ohio law’s treatment of other agricultural buildings and structures.
- Codifies the Department of Taxation’s current treatment of separate smaller parcels of agricultural land under the same farming operation, which allows the acreages to be combined to meet the 10 acre eligibility requirement for Current Agricultural Use Valuation.
House Bill 64 – Eminent Domain
A proposal to make Ohio’s eminent domain laws more favorable to landowners remains on hold in the House Civil Justice Committee. HB 64 is receiving more opposition than support, with dozens of parties testifying against it in its fourth hearing on May 23. Read more about the proposal in our previous blog post.
House Bill 162 - Agriculture Appreciation Act
Rep. Roy Klopfenstein (R-Haviland) and Rep. Darrell Kick (R-Loudonville) introduced HB 162 on May 1 and the bill received quick and unanimous approval from the House Agriculture Committee on May 16. The proposal would make several designations under Ohio law already recognized by federal law:
- March 21 as "Agriculture Day."
- October 12 as "Farmer's Day."
- The week beginning on the Saturday before the last Saturday of February as "FFA Week."
- The week ending with the second Saturday of March as "4-H Week."
House Bill 166 – Temporary Agricultural Workers
A bill addressing municipal income taxes for H2-A agricultural workers has met opposition in the House Ways and Means Committee. HB 166, sponsored by Rep. Dick Stein (R-Norwalk) would subject foreign agricultural workers’ income to municipal income taxes. The current municipal tax base in Ohio is based on federal tax laws that exclude foreign agricultural worker pay from Social Security and Medicare taxes since the workers cannot use those programs, and HB 166 would remove that exclusion and add H2-A income to the municipal tax base. The bill would also require employers to withhold the taxes for the municipality of the workers’ residences. While municipal interests support the bill, Ohio Farm Bureau and other agricultural interests testified against it in its third hearing on June 13. Opponents argue that H2-A workers are not residents because they are “temporary,” that the proposal would have many potential adverse effects on how Ohio handles the H2-A program, and would hamper the ability of agricultural employers to use the H2-A program to hire employees.
House Bill 193 – Biosolid and biodigestion facilities
Biosolid lagoons and biodigestion facilities would have new legal requirements and be subject to local regulation under a proposal sponsored by Rep. Kevin Miller (R-Newark) and Rep. Brian Lampton (R-Beavercreek). HB 193 would grant county and township zoning authority over the lagoons and facilities, require a public meeting and county approval prior to seeking a facility permit from the Ohio EPA, require the Ohio EPA to develop rules requiring covers on new biosolid lagoons, and modify feedstock requirements for biodigestion facilities to qualify for Current Agricultural Use Valuation property tax assessment. HB 193 had its first hearing before the House Agriculture Committee on June 13.
House Bill 197 – Community Solar Development
A “community solar” proposal that did not make it through the last legislative session is back in a revised form. HB 197 proposes to define and encourage the development of “community solar facilities,” smaller scale solar facilities that are directly connected to an electric distribution utility’s distribution system and that create electricity only for at least three “subscribers.” The bill would establish incentives for placing such facilities on distressed sites and Appalachian region sites through a “Community Solar Pilot Program” and a “Solar Development Program.” Rep. James Hoops (R-Napoleon) and Sharon Ray (R-Wadsworth) introduced the bill on June 6, and it received its first hearing before the House Public Utilities Committee on June 21. “The goal of this legislation is to create a small-scale solar program that seeks to be a part of the solution to Ohio’s energy generation and aging infrastructure need,” stated sponsor Hoops.
House Bill 212 – Foreign ownership of property
Ohio joins a movement of states attempting to limit foreign ownership of property with the introduction of HB 212, the Ohio Property Protection Act. Sponsored by Representatives Angela King (R-Celina) and Roy Klopfenstein (R-Haviland), the proposal would prohibit foreign adversaries and certain businesses from owning real property in Ohio. The bill was introduced in the House on June 13 and has not yet been referred to a committee for review.
Eminent domain is one of those topics that always generates concern among farmland owners. That may be part of the reason behind an eminent domain bill sponsored by Representatives Darrell Kick (R-Loudonville) and Rodney Creech (R-W Alexandria), who introduced House Bill 64 in February. According to the sponsors, the bill would “reform current eminent domain laws to provide landowners with more rights and support.” But HB 64 now faces significant resistance and uncertainty.
What HB 64 proposes
Ohio’s Legislative Service Commission summarizes the procedural changes HB 64 proposes as follows:
- Voids appropriations (the taking of property through eminent domain) that do not follow statutorily mandated procedures.
- Increases the taking agency’s (the government or private entity appropriating property) burden of proof in appropriation proceedings.
- Narrows factual presumptions made in favor of taking agencies in appropriations
- Prohibits a taking agency from reducing any offer it makes in an effort to acquire
property, if the attempts may result in appropriations proceedings, or subsequently arguing for a lower valuation in an appropriation proceeding.
- Expands required attorney fee, cost, and expense awards due to property owners in appropriation actions.
- Allows property owners who allege their property has been appropriated outside of the required judicial process to sue for inverse condemnation.
- Requires courts hearing inverse condemnation cases to award successful property owners’ attorneys’ fees, costs, and expenses.
- Requires court hearing appropriations cases to award property owner damages if the taking agency uses coercive actions.
- Lengthens certain appropriation proceeding deadlines.
In addition to revising eminent domain procedures, HB 64 would also prohibit the use of eminent domain to obtain property for recreational trails and to maintain recreational trails—a controversial issue tracing back to the Mill Creek Metroparks bike trail project in Mahoning County.
Committee hearings on HB 64
HB 64 has yet to pass out of the House Civil Justice Committee since being referred to the committee on February 28. Three parties testified in favor of the bill a hearing on March 14—Ohio Farm Bureau, Ohio Dairy Producers, and Ohio Council of Retail Merchants. The parties commended the additional protections given to landowners facing eminent domain proceedings and stated that the reforms in the bill would “prevent excess and unnecessary use of eminent domain.” Committee members raised several questions about the proposal at that time, and the bill then stalled for two months.
On May 16, the committee accepted a substitute bill that changed several provisions regarding recreational trails, compensation offers and awards, and relocation assistance—all questions raised in the earlier committee hearing. Changes in the substitute bill include:
- A limit the prohibition on using eminent domain for recreational trails, stating that eminent domain could not be used to take property if the primary use of the property would be for a recreational trail and the property is not adjacent to a public road and within a road right of way.
- Restoration of an agency’s authority to reduce a compensation offer amount if it discovers conditions that it could not have discovered when it make the original compensation offer.
- Revised amounts that would be awarded to a landowner if a jury’s award of compensation is higher than an agency’s most recent good faith offer and removes a percentage limit on mandatory cost and expense awards.
Despite the substitute bill revisions, 37 parties representing a wide variety of interests submitted opponent testimony at the fourth hearing for the bill on May 23. Local governments and associations such as the County Commissioners Association of Ohio, County Engineers Association of Ohio, Ohio Municipal League, and Ohio Mayors Alliance testified against the bill. Business interests such as American Electric Power, Ohio Oil and Gas Association, and Ohio Chamber of Commerce also opposed the bill, as did transportation and recreational interests such as Central Ohio Transit Authority, Mid-Ohio Regional Planning Commission, Rails-to-Trails Conservancy, and Ohio Parks and Recreation Association. Several common themes appear in the opponent testimony: that Ohio’s current eminent domain laws are not “broken” but instead effectively balance landowner rights against public needs, that the bill would create negative financial and taxpayer impacts, and that it would hamper economic development and infrastructure and public works projects in Ohio.
What happens next with the eminent domain bill?
The strong resistance to HB 64 certainly signals problems for its adoption and highlights a need for agreement on whether Ohio’s eminent domain law effectively balances public needs and private property rights. Even so, there are several routes the bill could take from this point: the committee chair could schedule a committee vote on the bill, the sponsors could hold further “interested party” meetings with the intent to further revise the bill, a Senate sponsor could introduce a similar bill and try to move it through the Senate, or the bill could simply die an early death.
Civil Justice Committee Chair Brett Hillyer (R-Uhrichsville) did not schedule the bill for a fifth hearing and potential vote for the committee meetings held on June 6 and June 13. Several opponents encouraged additional “interested party” negotiations and further changes to the proposal. Based on the resistance to the bill in its current form, if such discussions don’t take place or are not successful, the bill will likely die that early death or arise in a different form in the future.
Sixty-six undergraduate students just completed our Agribusiness Law class in the College of Food, Agricultural, and Environmental Sciences at OSU yesterday. It’s always a challenge to teach students all I want them to know about agricultural law in the short time I have with them. And it always generates excitement and relief when I can see that they have learned.
In one assignment this semester, students had to consider the property laws we studied and devise three “real life” questions about the laws. Next, they had to write the answers to the questions they drafted. The legal accuracy of their answers is important, of course, and illustrates their comprehension of the laws we studied. But selecting and writing the questions is equally important, as students must predict when and how the law would apply in a “real world” situation they might encounter.
Many of the student works showed that learning had certainly taken place this semester. And some of their questions were so insightful and relevant that they should also be useful in the “real world.” Below are excellent questions and answers from four students. They illustrate what the students learned, but they will likely be helpful for our readers, too. Take a look at what our students are asking and answering about agricultural property laws!
Question 1 comes from Katie Anderholm, a senior from Medina, Ohio majoring in Agribusiness and Applied Economics.
Q: Am I at risk to be sued from my new neighbors who keep complaining about my cows?
A: A farmer is not as risk to be sued, or at least rightfully sued, by their new neighbors because of the Ohio Revised Code 929.04 and 3767.13. Both codes, the Right to Farm defense to civil action for nuisance and Ohio’s “Statutory Nuisance” Law, protect farmers and their operations from complaints regarding farming. The farmer’s neighbors who have been complaining about his cows do not have a strong argument for legal action because the agricultural activities were established before they moved adjacent to the farm. If the farmer is following proper animal care and manure handling and the neighbors moved after the farming began, then the neighbors will not have merit for a civil action. I would advise the farmer to have a conversation with the neighbors to ease tensions and explain that they knowingly moved next to a cattle operation and that there are certain things that come with that. I have learned that people who are not involved in agriculture in their everyday life to not understand the fundamentals, and sometimes education and consideration can go a long way.
Question 2 is from Cori Lee, a senior from Marysville, Ohio, graduating this May with a major in Sustainable Plant Systems Agronomy and a minor in Agribusiness.
Q: Two siblings own ground that was passed on to them by their parents, where one farms, and the other one has no interest in farming. Can one sibling sell the land, even if the other one does not want to? What can be done to prevent losing the ground?
Yes, as co-owners, one sibling can sell their share of the land, even if the other sibling disagrees and is actively using the land for income and farming. This would force the other sibling to either also sell their share of the land or buy the other sibling out. This is explained in Section 5307.01 of the Ohio Revised Code, the partition law. Whether it is considered a “Tenancy in Common” or “Survivorship Tenancy”, they are both subject to partition. The partition process is also explained in Chapter 5307, and is often lengthy and can ultimately result in both owners being forced to sell the land. However, placing the land in an LLC can prevent this situation, as it would remove partition rights completely and the LLC would be treated as the sole owner of the land. This also provides other opportunities to have more control over how the land could be sold and allow terms to be set to buy out other LLC members. In order to avoid a scenario like this, landowners should carefully plan the transition of their estate to avoid any costly mistakes for the next generation.
Question 3 is by Kole Vollrath, a senior from South Charleston, Ohio majoring in Construction Systems Management.
Q: I own a field and the state has contacted me seeking eminent domain for a roadway that they are planning to build cutting directly through my field. I am new to this sort of action and I am wondering what the proper actions will be in this case?
A: Ohio Revised Code Chapter 163 is the eminent domain law that contains the four required procedures the taking entity (the state in this situation) must provide to the landowner. The first is the notice which you have already received, followed by a “just compensation” offer for the land in question, then appraisal of the property, and then finally a hearing in court to decide on or stop the taking if you don't agree to the offer. In the situation of a road as in this case, it is hard to stop the taking, so the fourth option will likely be more about getting fair money out of the deal rather than stopping construction completely. The reason that it will be hard to stop a road construction is because of Ohio Constitution Article 1 Section 19. This explains that eminent domain is allowed to happen when it is for a valid public use of the property, and since this is a road, it will be hard to argue that is not valid. However, it can still be beneficial to the landowner to hold strong in steps 2 and 3 and get an appraisal, then go to court and try to extract fair money for yourself out of the situation.
Question 4 is from Lyndie Williams, a senior from Bucyrus, Ohio majoring in Agribusiness and Applied Economics.
Q: Can I be held accountable for damage to a neighbor’s property that they claim is due to water drainage from my property?
A: In short, yes it is possible to be held accountable for damage to a neighbor’s property if it was caused by water drainage from your property, but not always. While every property owner has the right to reasonably use their land, including water flow and drainage, there can be consequences of this if harm is caused to others. First, determining what is “reasonable” for water drainage when evaluating harm to another is necessary. Courts will look at four factors when determining reasonable drainage: utility of the use, gravity of the harm, practicality of avoiding the harm, and justice. If your purpose for drainage is valid, the harm caused by drainage use is not overly detrimental to others, it is impractical to use an alternative form of drainage, and it is not unfair to require other landowners to bear losses caused by your drainage, then you would not likely be held accountable for damage to their property due to water drainage from your property. However, if some or all of these “reasonable” requirements are not met, then you would need to look into drainage problem resolutions, as you could be accountable for their damages. Drainage problem resolutions include voluntary fix, drainage improvement projects, drainage easements, and litigation. For example, one drainage problem resolution is a drainage easement which is in writing, recorded, and involves an attorney. In a drainage easement you would pay the neighboring landowner for the right to drain your water onto their property for the damages they will incur as a result. Drainage easements are usually perpetual but can be termed and include access and maintenance rights and responsibilities for the easement holder.
An eminent domain revisions bill appears to be on hold after its removal from the committee agenda that would have provided the bill a third hearing. House Bill 64 was introduced by sponsors Rep. Darrell Kick (R-Loudonville) and Rep. Rodney Creech (R-W. Alexandria) on February 21. The bill had two hearings before the House Civil Justice Committee on March 7 and 14, but was removed from the committee’s March 21 meeting agenda.
House Bill 64 proposes quite a few major changes to Ohio eminent domain law:
- Voids an appropriation of property if the agency does not follow statutory procedures for the appropriation, such as procedures for appraisal of value, good faith offers of compensation, and negotiation with the landowner. Under the proposal, a landowner could bring a claim against the agency for violating any of these procedures and the appropriation would be invalid. The proposal is the opposite of current law, which states that procedural violations do not affect the validity of an appropriation of property.
- Increases an agency’s burden of proof in showing that a taking is for a public use and is necessary, that the agency has authority to appropriate the property, and that the parties are unable to agree on a voluntary purchase of the property. The agency would have to meet the “clear and convincing evidence” burden of proof rather than the “preponderance of evidence” standard stated in current law.
- Removes two presumptions the law currently makes in favor of an agency. The first is that an appropriation is necessary if the agency adopts a resolution or ordinance declaring its necessity and the second is that an appropriation for a public utility or common carrier is necessary upon the offering of evidence supporting the necessity. Removing these presumptions also affects the burden of proof the agency must meet regarding the necessity of a taking.
- Revises an irrebuttable presumption in current law that an appropriation is necessary if the agency is a common carrier or public utility and a state or federal regulatory authority has approved the appropriation. The proposal would allow a landowner to rebut this presumption and would limit the presumption only to the specific interests reviewed by the regulatory authority.
- Prohibits an agency from reducing or revoking the compensation made in an initial offer to a landowner or from later arguing or presenting evidence for a lower amount. Current law allows an agency to revise an offer if they discover new conditions after making an initial offer.
- Expands attorney fee, cost, and expense awards for landowners. Current law allows attorney fee and cost awards if an agency challenges a landowner’s appraisal and the final compensation awarded is less than 125% of the agency’s first offer. The bill would require reasonable attorney fees, expenses, and costs if an agency appeals and does not prevail, in whole or in part. It also removes a provision requiring a landowner to pay court costs if the landowner denies an agency’s offer and is later awarded less than the offer amount.
- Awards “coercive damages” to landowners who prove by a preponderance of evidence that an agency used coercive actions during the appropriation process. Coercive actions include, but are not limited to, advancing the time of a taking, deferring negotiations, deferring the deposit of funds with the court, and attempting to force an agreement on the compensation award.
- Provides landowners the right to an “inverse condemnation” action, which is a claim that an agency has taken property without filing a court proceeding. In that case, a landowner may file an inverse condemnation lawsuit in the court of common pleas. If the landowner proves by a preponderance of evidence that the agency has taken the property, the court can award the landowner compensation and damages for the taking as well as attorney fees, costs, and expenses. Currently, a landowner must file a “mandamus” action asking the court to order the agency to initiate an eminent domain proceeding and must offer clear and convincing evidence to the court that the agency has taken the property.
- Extends case timelines. The bill increases the minimum number of days for the court to set hearing dates. If a landowner files an answer denying an agency’s authority, the necessity of the taking, or that the parties were unable to agree, the hearing date on those issues would extend from 15 to 30 days after the answer was filed and the compensation hearing date, if the court settles in favor of the agency, would change from at least 60 to at least 90 days after the court settles the issue. If a landowner could have but failed to file an answer to an eminent domain action, the compensation hearing date would be at least 90 days rather than 20 days from the date the answer was due. If an owner appeals a court’s determination on authority, necessity, or inability to agree on an appropriation, the bill prohibits the court from setting a compensation hearing until the appeal is final.
- Removes recreational trails from eminent domain authority. The proposal states that the use of property for a recreational trail is not a valid “public use” for eminent domain purposes. Recreational trails, according to the proposal, are trails used for hiking, bicycling, horseback riding, ski touring, canoeing, or other nonmotorized forms of recreational travel. The proposal also excludes the making or repairing of or access management to shared-use paths, bike paths, or recreational trails from the use of eminent domain for making and repairing roads.
In the March 14 committee hearing, the Ohio Farm Bureau Federation testified in support of the bill. Committee members raised questions about the bill’s recreational trail prohibition, initial offer minimum, coercive action awards, and attorney fee awards. Although the committee chair suggested that a third hearing for opponent testimony would take place in the following week, the bill was later removed from that committee hearing agenda.
A landowner challenging the taking of land for a bikeway has lost in an appeal to the Ohio Supreme Court. The decision by the state’s highest court doesn’t address whether Mill Creek MetroParks may take the land for the bike trail, but instead gives the Mahoning County Common Pleas Court the go ahead to continue the eminent domain proceeding.
The landowner’s argument. Mill Creek MetroParks filed a case in 2019 to appropriate land from Edward Schlegel, who would not voluntarily consent to selling some of his land for the park district’s bike trail extension. Schlegel sought to have the case dismissed when the Ohio General Assembly included a provision in the state’s budget bill in 2021 intended to address landowner opposition to the Mill Creek MetroParks bike trail. The new provision prevents any park district in a county of between 220,000 and 240,000 people from using eminent domain for a “recreational trail” until July 1, 2026. Mahoning County falls within the population range.
Schlegel asked the Mahoning Court of Common Pleas to dismiss the Park District’s eminent domain proceeding against him based on the new law. But Common Pleas Court Judge Sweeney denied Schlegel’s request, stating that the new law did not apply because the legislature passed the law after the Park District filed Schlegal’s case. Schlegal then asked the Ohio Supreme Court for a “writ of prohibition” that would prevent Judge Sweeney from continuing with the eminent domain case.
The Supreme Court’s reasoning. In seeking a writ of prohibition, Schlegal had to demonstrate that the common pleas court exceeded its authority and that he had no remedy at law other than a writ of prohibition. The problem with Schlegel’s request, according to the Supreme Court, is that he did have an alternative and adequate remedy: an appeal. When the Mahoning County court issues a decision in the eminent domain proceeding, Schlegal has a right to appeal the decision. At that time, he could challenge the judge’s decision not to dismiss the case due to the new law.
Schlegel argued that the procedures for an eminent domain case prevented him from challenging the common pleas court’s refusal of his request to dismiss the case. An eminent domain proceeding has two parts: the first is a determination of whether the agency has the right to make an appropriation of property and if so, the second is to determine the amount of compensation due for the appropriation. Schlegel argued that because the new law became effective after the common pleas court determined the Park District had eminent domain authority, he lost his right to appeal that issue. Not so, according to the Supreme Court. Schlegel still has the right to appeal whether the park district may use eminent domain when the court issues its final judgment in the case regarding compensation. A writ of prohibition therefore is not warranted, the Court concluded.
What now? Schlegel’s eminent domain case will resume in the Mahoning County court. We can expect an appeal by Schlegel when the court determines the amount of compensation for the taking.
Another bike trail case is coming. In the meantime, the Ohio Supreme Court recently decided to review another case challenging the Mill Creek MetroParks bike trail. The Seventh District Court of Appeals issued a decision earlier this year in favor of a bike trail challenge by landowner Diane Less. The court held that the Park District lacked authority to use eminent domain against Less, basing its decision on the insufficiency of the resolutions the Park District passed when it decided to acquire land for the bike trail. Ohio law allows a park district to use eminent domain authority for two specific purposes: the conversion of forest reserves and the conservation of natural resources, and the appellate court determined that the Park District’s purpose for using eminent domain to extend the bike trail did not meet either of those purposes. The Park District appealed that decision and on September 14, the Ohio Supreme Court agreed to review the decision. The Court will likely hear the case in 2023.
An appeals court ruling now stands in the way of a bikeway project begun more than 27 years ago by the Mill Creek Metropolitan Park District (MetroParks) in Mahoning County. The Seventh District Court of Appeals recently ruled that MetroParks did not have the power of eminent domain when it attempted to acquire undeveloped stretches of the bikeway. Several landowners have challenged MetroPark’s use of eminent domain for the project over the years, but this is the first case to yield a positive outcome for landowners who have not wanted the bikeway on their properties. We take a closer look at the decision in today’s post.
The court case began in 2019, when MetroParks offered landowner Diane Less $13,650 for a permanent easement for construction of the bikeway across her land. When the landowner did not agree to the conveyance, MetroParks filed an eminent domain proceeding in the Mahoning County Court of Common Pleas. The landowner responded that MetroParks did not have authority to use eminent domain for the bikeway project and attempted to have the case dismissed through a summary judgment motion. The trial court found that MetroParks was authorized to appropriate the property for the bikeway and denied the motion, and the landowner appealed.
The appellate court began its review of the case by pointing out that whenever Ohio’s legislature grants the power of eminent domain to a subdivision of the state, that grant must be “strictly construed” and any doubts about the right must be resolved in favor of the property owner. An entity like a park district has eminent domain authority (also referred to as appropriation or takings) only when the Ohio legislature grants the power in statutory law. MetroParks relied on Ohio Revised Code 1545.11 as the grant of power to acquire the bikeway land by eminent domain. That statute states:
The board of park commissioners may acquire lands either within or without the park district for conversion into forest reserves and for the conservation of the natural resources of the state, including streams, lakes, submerged lands, and swamplands, and to those ends may create parks, parkways, forest reservations, and other reservations and afforest, develop, improve, protect, and promote the use of the same in such manner as the board deems conducive to the general welfare. Such lands may be acquired by such board, on behalf of said district, (1) by gift or devise, (2) by purchase for cash, by purchase by installment payments with or without a mortgage, by entering into lease-purchase agreements, by lease with or without option to purchase, or, (3) by appropriation.
The appeals court examined MetroParks’ purpose for acquiring the land for the bikeway to determine if it met either of the authorized purposes in the statute of “conversion into forest reserves” or “conservation of natural resources.” MetroParks explained that it established its purposes and the necessity of acquiring the bikeway land in two resolutions in 1993 and 2018. The first resolution stated that the “public interest demanded the construction of a bicycle path” and the second stated that the bikeway “will provide local and regional users with a safe, uniformly-designed, multi-use, off-road trail facility dedicated for public transportation and recreational purposes.”
According to the court, however, both resolutions failed to relate the necessity of the bikeway to the purposes in the statute of acquiring land “for conversion into forest reserves and for the conservation of the natural resources of the state.” The court noted other Ohio court decisions that do conclude that a bikeway meets the purpose of acquiring land for the “conservation of natural resources” when it “supplies a human need,” “contributes to the health, welfare, and benefit of the community” and is “essential for the well-being of such community and the proper enjoyment of its property.” But important to the landowner is the court’s statement that it disagrees with these principles, “especially when applied to a rural area where it appears the public need is speculative at best and the harm to the private property owners is great." Reminding us that a statutory grant of eminent domain authority must be strictly construed and interpreted to favor a property owner, the court stated that prior decisions characterizing any project that serves the public and contributes to the health and welfare of the community as “conservation of natural resources” for purposes of R.C. 1545.11 is “a bit of a stretch.”
A second point the court made in questioning whether a bikeway fits within the purposes of park district land acquisition outlined in R.C. 1545.11 is that a law enacted after that statute assigned Ohio’s Department of Natural Resources the duty to plan and develop recreational trails, along with the authority to appropriate land for recreational trails. The statute suggests that the state agency, not park districts, possesses the authority to use eminent domain to establish recreational trails and bikeways.
Despite its disagreement with the assumption that R.C. 1545.11 permits the acquisition of land for bikeways as the “conservation of natural resources,” the court reviewed the MetroParks resolutions to determine if the park’s purpose constituted the “conservation of natural resources.” Not surprisingly, the court concluded that the resolutions were completely devoid of any purposes that met the statute’s requirements. Creating a bikeway through an extensive acreage of family-owned farmland in a rural area does not constitute the purpose of acquiring land for “conservation of natural resources of the state,” the court stated. Nor does providing recreation automatically equate to the conservation of natural resources. The resolutions did not “indicate that the creation of this particular trail or bikeway is designed to promote the general health and welfare of the pubic, which we believe requires more than just a recreational purposes” and failed at “even remotely tying the creation of the bikeway to the conservation of natural resources.”
Lacking a required statutory purpose for acquiring the bikeway land, the court concluded that MetroParks abused its discretion in attempting to appropriate the landowner’s property. The appeals court instructed the Mahoning Court of Common Pleas to grant summary judgment not only in this case, but also for a second bikeway eminent domain case the landowner was a party to with MetroParks.
A question now before MetroParks is whether it will ask the Ohio Supreme Court to review the decision of the Seventh District Court of Appeals. The park district board will meet on May 9 to discuss how it will proceed.
A continuing problem
The case highlights a recurring issue with the use of eminent domain for bike paths, as this is not the only legal issue MetroParks has faced in its mission to build its bikeway. Several other court cases have challenged the park’s eminent domain authority, though unsuccessful, and an amendment to last year’s budget bill included specific language that prohibits the use of eminent domain for recreational trails for five years in a county with a population between 220,000 and 240,00 people. Mahoning County falls within that population range. Recent attempts by Mahoning County legislators to enact laws that prohibit the use of eminent domain for recreational trails or give local governments the right to veto such actions have not made it through the Ohio General Assembly. The divisive issue is clearly one that requires a closer look by our legislators.
You may have been involved in or known someone that was involved in an eminent domain dispute with a utility company or other state agency. When the government tries to take an individual’s property, emotions are understandably heightened. In Ohio, state agencies and other specific entities – like a public utility company – can appropriate or “take” a person’s property, but only if the taking is necessary and for a public use. If the government or governmental agency does appropriate a landowner’s property, then the landowner is entitled to compensation for the taking.
In the case below, a group of landowners disputed a power company’s ability to appropriate their property and the ability of the power company to assume it is entitled to an appropriation simply because a project for public use was approved by state authorities. The landowners also sought to clarify when a landowner is entitled to recover the costs associated with defending their property interests against an attempted appropriation by the state or state agency.
Ohio Power Company v. Burns, et al.
In 2017, the Ohio Power Board of Directors (“Ohio Power Board”) gave initial approval for a project located in Marietta, Ohio to enhance the electric transmission network (the “Project”). The Project included miles of new transmission lines and required siting, rights of ways, and some property purchases. In 2018 the Ohio Siting Board (“Siting Board”) issued a certificate of environmental compatibility and public need for the Project. In 2019, the Project was given final approval by the Ohio Power Board.
After failed easement negotiations, the Ohio Power Company (Plaintiff) filed petitions for appropriation against several landowners (“Defendants”) to take easements on the Defendants’ property. As required by Ohio law, the trial court held a hearing on the appropriation petitions (the “Appropriation Proceedings”). Plaintiff argued that it currently possesses an easement across the property of each Defendant, but it was seeking to replace the existing easement with a new, wider easement for the Project. Plaintiff claimed that the new easements were necessary for a public good and that the Siting Board recognized the necessity of the Project and of acquiring easements, rights of way, and other interests in property along the new power line.
Defendants, however, responded by saying that the Siting Board declared the Project a necessity, not the appropriations. Further, Defendants argued that the easements sought by Plaintiff were overly broad and that the terms of the proposed easements went beyond the necessity to promote the public use. Lastly, Defendants claimed that when Plaintiff was ordered to remove distribution line rights from its appropriation petition, Plaintiff voluntarily abandoned its appropriation which required the trial court to enter a judgement against Plaintiff for the costs associated with defending against the distribution line rights contained within the proposed easements.
The trial court determined that the Siting Board’s certification of the Project and the testimony presented at the hearing established that the appropriations were necessary under Ohio law. Additionally, the trial court found that even if the Siting Board’s certificate did not create an irrebuttable presumption, the appropriations were still necessary because Plaintiff, as a public utility company, is in the best position to determine what is necessary and what is not. The trial court also held that Plaintiff did not abandon the appropriations simply by removing certain provisions from the petitions. Defendants then appealed to the 4th District Court of Appeals.
The following is brief explanation of the 4th District’s opinion that both agreed and disagreed with the trial court.
Rebuttable and irrebuttable presumption
Normally under Ohio law, a public utility company, like the Plaintiff, has to prove that it has the right to make an appropriation and/or that the appropriation is necessary. Plaintiff can do this by presenting evidence at an appropriation hearing and if the judge is persuaded, then Plaintiff will be allowed to take the property. The important part is that the burden of proof is on the public utility company.
However, there are a few situations where the law assumes that a public utility company or other state agency has the right to make an appropriation. Further, those presumptions are either rebuttable or irrebuttable. If the state agency has a rebuttable presumption, then the law will assume that agency has the right to make the appropriation or that the appropriation is necessary unless another party, like a landowner, can prove otherwise. In these situations, the burden of proof switches from the state agency to the landowner to prove that the state agency does not have the right to an appropriation or that the appropriation is not necessary. A state agency gets a rebuttable presumption when:
- A resolution or ordinance of the governing or controlling body, council, or board of the agency declares the necessity for the appropriation; or
- The public utility company presents evidence of the necessity for the appropriation.
A public utility company can also get an irrebuttable presumption about its right to an appropriation or the necessity of an appropriation. This means that no evidence can be presented to prove that the state agency does not have the right to an appropriation or that the appropriation is not necessary. A state agency receives an irrebuttable presumption when it receives approval by a state or federal regulatory authority of an appropriation.
In this case, the Defendants claimed that the Siting Board, which is a state regulatory authority, and the Ohio Power Board, the board of the agency, approved the project, not the appropriation. Therefore, Defendants argued that the rebuttable or irrebuttable presumptions did not apply to Plaintiff. Plaintiff on the other hand thought that both the rebuttable presumption and the irrebuttable presumption applied, and because the irrebuttable presumption applied, Plaintiff argued that the trial court did not need to review the easements. Plaintiff maintained judicial review of the easements was not necessary because a jury would decide the scope of the easement at a compensation hearing for the taking.
The trial court agreed with the Plaintiff and found that Plaintiff was entitled to an irrebuttable presumption of the necessity for the appropriation because of the Siting Board certification. Additionally, the trial court also found that Plaintiff was entitled to a rebuttable presumption because the Ohio Power Board declared the necessity for the appropriation of property interests for the Project.
However, the appeals court disagreed. The 4th District noted that the Plaintiff’s argument ultimately allows it to “take whatever property rights it wants. . .” and the only constraint on Plaintiff’s power to take would be how much a jury determines Plaintiff must pay for the taking. The appellate court found Defendants’ argument to be persuasive. The appellate court held that because the Siting Board and the Ohio Power Board only approved the project and not the specific appropriations at issue in this case, Plaintiff was not entitled to either a rebuttable or irrebuttable presumption. Although the Ohio Power Board recognized “the necessity of acquiring easements or rights of way in connection with” the project, the board only recognized such a necessity in a broad sense. The appellate court held that specific appropriations must be reviewed and approved before a state agency is entitled to the rebuttable or irrebuttable presumption under Ohio law.
The Defendants also argued that the trial court erred when it did not review the proposed easements. The trial court found that the Plaintiff is in the best position to determine the necessity of the easements. The trial court, therefore, did not review the proposed easments and defered to the expertise of the Plaintiff to determine the legality of the easements. Additionally, the court deferred any issues regarding the scope of the easements to a jury at the future compensation hearing.
The court of appeals disagreed with the trial court and held that the trial court should have reviewed the easements and should have made a separate necessity finding as to each one. The 4th District determined that courts are required to engage in the review of easements under Ohio law to make sure that (1) the state is not taking more property than necessary; and that the state is acting (2) fairly; (3) without bad faith; (4) without pretext; (5) without discrimination; and (6) without improper purpose. The appeals court reasoned that a trial court’s role is a critical constitutional check on the state’s power. The appellate court noted that it is a trial court’s duty to determine the extent of the taking and a jury’s duty to determine the amount of damages owed to a landowner as a result of the taking.
Another issue in this case was whether Plaintiff “abandoned” its appropriation for distribution lines. If Plaintiff was found to have abandoned its appropriation, then Defendants would be entitled to fees and other costs associated with defending their property interest.
In its initial appropriation petition, Plaintiff included an appropriation for distribution lines across the Defendants’ properties. However, during the appropriation hearing, Plaintiff conceded that it did not need an appropriation for distribution lines and only included the distribution line rights in its appropriation petition just in case it was needed. Plaintiffs admitted that their proposed easement was broader in scope than necessary, and the trial court ordered that Plaintiff remove the distribution line rights from its petitions. However, the trial court did not find that Plaintiff abandoned its appropriation for distribution lines and did not award Defendants any fees and costs for the alleged abandonment.
On appeal, Defendants argued that the trial court was wrong for not entering a judgment against the Plaintiff for fees and costs associated with defending against the appropriation for distribution lines. Plaintiff claimed that it did not abandon its petition because it essentially amended its petition, it didn’t drop its petition entirely. The trial court agreed with Plaintiff, reasoning that removing the word “distribution” from Plaintiff’s petition did not amount to an abandonment.
The court of appeals agreed with the trial court that Plaintiff did not abandon its appropriation petition but still found that Defendants were entitled to recover costs associated with defending their property interests. The 4th district found three scenarios when a landowner would be entitled to the costs associated with defending its property interest against a taking. Those three scenarios are:
- When an agency, like a public utilities company, voluntarily abandons the appropriation proceedings;
- When a trial court determines that the appropriation is not necessary or not for public use; and
- When a trial court determines, at any time during the appropriation proceedings, that the agency is not entitled to appropriate “particular property.”
Defendants argued that the court ordering Plaintiff to remove the distribution line rights from its petition constituted a voluntary abandonment under scenario 1. However, the 4th District found that Plaintiff could have only voluntarily abandoned the appropriation proceedings before the trial court’s order. The appellate court reasoned that the voluntary part of scenario 1 is absent once a court orders a party to remove an appropriation from its petition. The 4th District also found that scenario 2 did not apply to this case either. According to the appellate court, the trial court must dismiss the entire matter because the appropriations are not necessary or not for public use. Because that did not happen in this case, the 4th District determined that Defendants cannot recover costs under scenario 2.
Under scenario 3, however, the 4th District did find that Defendants were entitled to costs for defending against the distribution line rights in Plaintiff’s petition. In this scenario, an agency can bring appropriation proceedings for various parcels, property rights, or other property interests. Understanding that different rights can be disputed, the appellate court found that if a court determines an agency is not entitled to appropriate “particular property”, or in other words take a particular property interest, then the agency must reimburse the landowner for its costs and fees associated with defending that property interest. The 4th District determined that because the trial court ordered the Plaintiff to remove the distribution line rights from its petition, the trial court determined that the Plaintiff is not entitled to appropriate the “particular property” – or in this case, the distribution line rights. Therefore, the 4th District determined that Plaintiff must be ordered to pay Defendants for the costs associated with defending against the distribution line rights.
Although this ruling doesn’t dramatically change Ohio law, it helps clarify the requirements and procedures that must be followed when a state agency petitions for an appropriation. This ruling will be closely reviewed by public utility companies and other state agencies to ensure that they have all the required approvals before filing any petition for future appropriations. View the 4th District’s opinion for more details.
The Ohio General Assembly is off and running in its new session. Many bills that affect agriculture in Ohio are already on the move. Here’s a summary of those that are gaining the most momentum or attention.
Tax Conformity Bill – S.B. 18 and H.B. 48. The Senate has already passed its version of this bill, which conforms our state tax code with recent changes to the Internal Revenue Code made in the latest COVID-19 stimulus provisions of the Consolidated Appropriations Act. Both the Senate and the House will also exempt forgiven Paycheck Protection Program second-draw loan proceeds from the Commercial Activity Tax. The Senate version additionally exempts Bureau of Workers Compensation dividend rebates from the Commercial Activity Tax beginning in 2020, but the House bill does not. Both bills include “emergency” language that would make the provisions effective in time for 2020 tax returns.
Beginning farmers tax credits – H.B. 95. A slightly different version of this bill is returning after not passing in the last legislative session. The bi-partisan bill aims to assist beginning farmers through several temporary income tax credits:
- Businesses that sell or rent agricultural assets such as land, animals, facilities or equipment to certified beginning farmers can receive a 5% income tax credit for sales, a 10% of gross rental income credit for cash rents, and 15% of gross rental income for share rents.
- Certified beginning farmers can receive an income tax credit equal to the cost of participating in a certified financial management program.
Beginning farmers, among other requirements, are those in or seeking entry into farming in Ohio within the last ten years who are not a partner, member or shareholder with the owner of the agricultural assets and who have a net worth of less than $800,000 in 2021, which adjusts for inflation in subsequent years. Beginning farmers must be certified by the Ohio Department of Agriculture or a land grant institution. The House Agriculture and Conservation Committee will discuss the bill at its meeting on February 16.
Wind and solar facilities – S.B. 52. In addition to revising setback and safety specifications for wind turbines, this proposal would amend Ohio township zoning law to establish a referendum process for large wind and solar facility certificates. The bill would require a person applying for a certificate for a large wind or solar facility to notify the township trustees and share details of the proposed facility. That notification sets up opportunities for the township trustees or residents of the township to object to the application and submit the proposed application to a vote of township residents. A certificate would not take effect unless approved by a majority of the voters. A first hearing on S.B. 52 will be held on Tuesday, February 16 before the Senate Energy and Public Utilities Committee.
Grants for broadband services – H.B. 2 and S.B. 8. The Senate passed its version of this bill last week, which sets up a $20 million competitive grant program for broadband providers to extend broadband services throughout the state. The proposal would also allow broadband providers to use electric cooperative easements and poles, subject to procedures and restrictions. The bill had its second hearing before the House Finance Committee last week.
Eminent domain – H.B. 63. Based on a similar bill that didn’t pass last session, this bill changes eminent domain law in regard to property taken for the use of recreational trails, which include public trails used for hiking, bicycling, horseback riding, ski touring, canoeing and other non-motorized recreational travel. H.B. 63 would allow a landowner to submit a written request asking a municipality or township to veto the use of eminent domain for a recreational trail within its borders. The bill would also allow a landowner to object to a use of eminent domain for any purpose at any time prior to a court order for the taking, rather than limiting that time period to ten days as in current law. The bill had its first hearing before the House Civil Justice Committee last week.
Minimum wage increases. S. B. 51 and H.B. 69. Bills on each side of the General Assembly propose gradually increasing the state minimum wage to $15, but have different paths for reaching that amount. S.B. 51 proposes increasing the wage to $12/hour in 2022, followed by $1/hour increases each year and reaching $15 by 2025, which is when a federal bill proposes to establish the $15 minimum wage. H.B. 69 begins at $10/hour in 2022 with $1/hour increases annually, reaching $15 in 2027. S.B. 51 was referred last week to the Workforce and Higher Education Committee and H.B. 69 was referred to the Commerce and Labor Committee.
Here’s our latest gathering of agricultural law news that you may want to know:
Congress considers bankruptcy code changes with Family Farmer Relief Act of 2019. Senator Grassley and Representative Delgado introduced companion bills in their respective chambers of Congress that would modify the definition of “family farmer” in the federal bankruptcy code. The change would raise the operating debt limit for a family farmer from $3.2 million as listed in the U.S. Code to $10 million. Sometimes a small change can make a big difference. In chapter 12 of the bankruptcy code, a “family farmer” has special options that other chapters do not offer, such as the power to determine a long-term payment schedule and pay the present market value of the asset instead of the amount due on the loan. Many farmers had not been able to take advantage of the special bankruptcy provisions because of the low debt limit, but that may change. For more information on the bills, click HERE for S.897 and HERE for H.R. 2336.
Congress also considers changing the number of daily hours a driver may transport livestock. The Transporting Livestock Across America Safely Act would instruct the Secretary of Transportation to amend the rules governing drivers who transport certain animals. The changes would loosen restrictions on the number of hours that drivers may drive, and increase the types of activities that are exempt from counting toward the maximum time. Travel under 300 miles would be exempt from the hours of service (HOS) and electronic logging (ELD) requirements. Both chambers of Congress are considering this bill, and both companion bills are currently in committee. For more information on the bills and to learn about the changes proposed, click HERE for S.1255 and HERE for H.R. 487.
It’s not too late to submit comments to the FDA about its potential cannabidiol rulemaking. Electronic or written comments can be sent to the FDA until July 2nd, although the deadline to request to make an oral presentation or comment at tomorrow’s hearing has passed. Click HERE for more information from the Federal Register about the May 31st hearing and submitting comments.
Meatpackers face second class-action lawsuit, and R-CALF refiles. In our last edition of The Harvest, we talked about a new class-action lawsuit filed in Illinois federal court by a number of cattle ranchers, including R-CALF, against the nation’s largest meatpacking companies. Now, another lawsuit has been filed in Minnesota federal court also alleging a price fixing conspiracy by the meatpackers. The second lawsuit is being brought by a cattle futures trader, rather than a rancher. After the second suit was filed, R-CALF voluntarily dismissed its case in Illinois to refile it in Minnesota. This refiling allows the lawsuits to be heard by the same court.
Tyson sues the USDA’s Food Safety and Inspection Service. Tyson, which is named as a defendant in the class action suits we just mentioned, is a plaintiff in a case against the USDA’s Food Safety and Inspection Service. The company alleges that a FSIS inspector falsified an inspection of 4,622 hogs, which were intermingled with another 8,000 carcasses, at one of its Iowa facilities in 2018. The company claims that the false inspection required it to destroy all of the carcasses, and cost nearly $2.5 million in total losses and expenses. The complaint, which is available HERE, alleges four counts: negligence, negligent inspection, negligent retention, and negligent supervision. The lawsuit is based on the legal principle that an employer is liable for the actions of its employee.
Ohio Case Law Update
Plaintiff must prove that a defendant wedding barn operator’s breach of a duty caused her harm. Conrad Botzum Farmstead is a privately operated wedding and event barn located in the Cuyahoga Valley National Recreation Area and on lease from the National Park Service. The plaintiff in the case was attending a wedding at the barn, where she broke her ankle while dancing on a wooden deck. The jury trial found that the barn operator was 51% at fault for her injuries, and awarded the plaintiff compensation. However, the barn operator appealed the decision and won. The Ohio Ninth District Court of Appeals found that the plaintiff did not introduce sufficient evidence to prove that any act or breach of duty by the barn operator actually or proximately caused the plaintiff to fall and break her ankle. The case raises standard questions of negligence, but it is worth noting in the Ag Law Blog because the court did not base its decision on Ohio’s agritourism immunity statute. The case is cited as Tyrrell v. Conrad Botzum Farmstead, 2019-Ohio-1874 (9th Dist.), and the decision is available HERE.
Ohio History Connection can use eminent domain to cancel Moundbuilders Country Club’s lease. A Licking County judge ruled in early May that the Ohio History Connection, formerly the Ohio Historical Society, can reclaim full ownership of land that it had leased to a country club. The Moundbuilders County Club has operated a golf course around prehistoric Native American earthworks for decades under a long-term lease with the state. The Ohio History Connection sought to have the lease terminated in order to give the public full access to the earthworks as part of a World Heritage List nomination. The judge viewed the request as sufficiently in the public interest to apply Ohio’s eminent domain laws.