Midship Pipeline Company, LLC v. 2.331, 2.435, 0.458 acres, Bryan County, Oklahoma et al

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF OKLAHOMA
MIDSHIP PIPELINE
COMPANY, LLC,
§
§
§
§
Plaintiff, 	§
§
Case Number: 6:18-cv-302-RAW
vs. 	§
§
Judge: Ronald A. White
TRACT NO. BR-0860.000,
2.331 ACRES OF LAND,
MORE 	OR 	LESS,
PERMANENT
EASEMENT 	(PIPELINE
RIGHT 	OF 	WAY) 	IN
BRYAN 	COUNTY,
OKLAHOMA, et al.,
§
§
§
§
§
§
§
§
Defendants. 	§
ORDER AND INSTRUCTIONS FOR COMMISSION
The Court orders as follows:
Introductory Instruction
This is an eminent domain action brought by Midship Pipeline Company, LLC
(“Midship”) to acquire a non-exclusive easement from Defendant Landowners for a 36”
natural gas pipeline, as authorized by the Federal Energy Regulatory Commission
(“FERC”), in the interest of public convenience and necessity.
The term "eminent domain" describes a special legal proceeding in which Midship
acquires private property for a public purpose. It is also called a condemnation proceeding.
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The United States Constitution and Oklahoma Constitution allow private property
to be taken for a public use if just compensation is paid to the owners of the property that
is being condemned. Pursuant to Federal Rule of Civil Procedure 71.1, the Court has
appointed a Commission to assist the Court in determining the compensation owed.
In this case, the Natural Gas Act, 15 U.S.C. §§ 717a-z, gives Midship the right to
acquire the non-exclusive easement subject to the requirement that compensation for such
acquisition shall be assessed by the Commission. In your deliberations, you should not
consider whether or not the taking was necessary, wise, or proper. That has already been
decided, and it is not an issue in this case.
The Commission acts as an assessing body in determining just compensation.
Williams Natural Gas Co. v. Okla. City, 890 F.2d 255 (10th Cir. 1989); Parkes v. Natural
Gas Pipe Line Co. of Am., 249 P.2d 462 (OK 1952); Fed. R. Civ. P. 71.1 (h)(2)(C).
General Instructions on Commissioners’ Duties, Powers, and Report.
Pursuant to Rule 71.1, “[a] Commission has the powers of a master under Rule
53(c). Its action and report are determined by a majority. Rule 53(d), (e), and (f) apply to
its action and report.” 	Fed. R. Civ. P. 71.1(h)(2)(D). Accordingly, the Court directs that
the Commissioners shall: (1) regulate all Commission hearings and all proceedings related
to these hearings, such as briefing at the discretion of the Commissioners; (2) take all
appropriate measures to perform their assigned duties fairly and efficiently; and (3)
exercise the same power as this Court to compel, take, and record evidence. Fed. R. Civ.
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P. 53(c). The Commission shall establish its own procedures for filing and responding to
motions. 	The 	Commission 	shall 	produce 	written 	orders 	as 	necessary, 	which 	the
Commission shall forward to chambers for filing and service on each party. Fed. R. Civ.
P. 53(d). Similarly, the Commission shall produce a written report on just compensation
(“report”) to the Court, which shall be filed and served on each party involved in a hearing.
Fed. R. Civ. P. 53(e). The Commission may, in its discretion, issue a single report at the
conclusion of all hearings, or issue reports on different dates regarding different properties
grouped as it deems appropriate.
All written orders and reports shall be signed by the participating Commission
members, and, as with all orders and reports, an electronic signature is sufficient.
Evidentiary or procedural orders as recognized below that fall within the province of the
Chairperson need only be signed by the Chairperson. The written orders and reports shall
include all relevant findings of fact and conclusions of law; procedural orders need not be
as comprehensive but should be sufficiently detailed to enable this Court to conduct
adequate review when necessary. The United States Supreme Court has stated that
“[c]onclusory findings are alone not sufficient,” because a district court would “have no
way of knowing what path the Commissioners took through the maze of conflicting
evidence.” United States v. Merz, 376 U.S. 192, 198 (1964). Thus, although “[t]he
Commissioners need not make detailed findings such as judges do who try a case without
a jury[,]” the Commissioners must nonetheless “reveal the reasoning they use in deciding
on a particular award, what standard they try to follow, which line of testimony they adopt,
what measure of severance damages they use, and so on.” Id.; see also 13 James W. Moore,
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Moore’s Federal Practice § 71.1.12[4] (“A report containing only conclusory statements
and a summary of the evidence is clearly insufficient.”). Additionally, not “every contested
issue raised on the record before the [C]ommission must be resolved by a separate finding
of fact[]” and there does not have to be “an array of findings of subsidiary facts to
demonstrate that the ultimate finding of value is soundly and legally based.” Merz, 376
U.S. at 198-199. Rather, the path followed by the Commissioners in reaching their
decisions should be “distinctly marked.” Id. at 199. The Commission is therefore “required
to state not only the end result of their inquiry, but the process by which they reached it.”
Id.
Upon the filing of a Commission order or report, a party involved in the hearing
with which the order or report is concerned may file specific and detailed objections to the
Commission order or report no later than fourteen (14) days after a copy of a report is
served. Fed. R. Civ. P. 53(f)(2). This shall constitute the party’s notice of and opportunity
to be heard on the order or report. Fed. R. Civ. P. 53(f)(1). The Court may in its discretion
elect to receive evidence related to the order or report, but no oral argument or hearing on
any objection will be held unless ordered by the Court. The parties should note that in
acting on a Commission order or report, the Court may adopt or affirm, modify, wholly or
partly reject or reverse, or resubmit to the Commission with instructions the order or report.
Fed. R. Civ. P. 53(f)(1).
A response to any objection to an order or report must be filed within seven (7) days
of the objection. No reply briefs may be filed, unless specifically allowed by the Court.
The Court will decide any objection to a conclusion of law or finding of fact made or
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recommended by the Commission on a de novo basis. Fed. R. Civ. P. 53(f)(4). The Court
will review the Commission’s ruling on a procedural matter under an abuse of discretion
standard. Fed. R. Civ. P. 53(f)(5). The Commission’s report(s) on just compensation shall
be submitted to the Court and filed of record. Fed. R. Civ. P. 71.1 and 53.
Duties of Chairperson.
The Court has designated Mr. Chris D. Jones as the Commission Chairperson. The
Chairperson shall make all discovery and evidentiary rulings related to all hearings in
which he takes part and will ensure that the Commission adheres to any rulings by this
Court. See 13 James W. Moore, Moore’s Federal Practice § 71.1.12[1] (“A lawyer is often
appointed by the court to function as Chairperson and to make evidentiary rulings.”). In
any hearing in which the Chairperson does not participate, he shall designate another
Commissioner to assume the role of chairperson for that hearing and that designated
Chairperson shall make all evidentiary rulings. The Chairperson shall also be responsible
for conducting the hearing – i.e., calling the hearing to order and supervising the
proceedings. Finally, although all of the exhibits that have been admitted into evidence will
go to the courtroom deputy following the filing of the report to which they pertain, the
Chairperson is charged with maintaining control of the exhibits until delivery to the
courtroom deputy.
Location of Hearing.
Unless otherwise ordered by the chairperson or this Court, or stipulated by the
parties, all hearings shall be held at such location or locations as the Commission shall
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decide. Hearings may, as necessary, be held at locations convenient to the parties, counsel,
or Commission members.
Manner of Hearing.
Each property shall be the subject of a separate and distinct hearing before a panel
of three Commissioners, unless the parties stipulate or the Commission decides that more
than one property be combined into a single hearing (e.g., in the case of a Defendant
property owner who owns more than one property upon which Plaintiff has obtained
Easements). The manner of the hearings shall adhere to the conventions of a trial.
The parties through counsel shall give opening statements to the Commission, either
at the commencement of the proceeding or immediately prior to the party presenting its
evidence. 	Evidence shall then be presented to the Commission. The parties through
counsel shall then present an oral closing argument, after which time the panel shall take
the matter under advisement and conduct subsequent deliberations that should result in a
written report. The decision of the Commission is determined by a majority. See 13 James
W. Moore, Moore’s Federal Practice § 71.1.04[2][h] (stating that a Commission’s “action
and report are determined by a majority”).
All hearings must be on the record through a registered court reporter. Plaintiff shall
compensate any court reporter used at a hearing at the regular hourly rate of that reporter,
in addition to travel expenses. The parties are responsible for the costs of obtaining a
transcript just as they would be in any case. The reporter shall bill Plaintiff directly, and
any issue surrounding billing or payment should be brought to the attention of the Court
promptly.
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Duty in Deliberating.
The Court cannot embody all the law in any single part of these instructions. One
portion of the instructions should be considered in light of and in harmony with all the
instructions. Whether certain instructions are applicable may depend upon the conclusions
the Commission reaches on the facts. If a Commissioner has an impression that the Court
indicated how any disputed fact should be decided, the Commissioner must put aside such
impression because only the Commissioners determine such a matter. The Commission
must 	not 	be 	influenced 	by 	any 	consideration 	of 	sympathy 	or 	prejudice. 	It 	is 	the
Commission’s duty to weigh the evidence, to decide the disputed questions of fact, to apply
the instructions to the Commission’s findings, and to render a decision accordingly. In
fulfilling their duty, the Commissioners’ efforts must be to arrive at a fair and just
compensation award.
It is the Commissioners’ duty to consult with one another and to deliberate with a
view of reaching an agreement if they can do so without disturbing their individual
judgment. Each of the Commissioners must decide each contested issue for himself or
herself, but should do so only after an impartial consideration of the evidence in the case
with their fellow Commissioners. In the course of the Commission’s deliberations, no
Commissioner should hesitate to re-examine his or her own views and change his or her
opinion if he or she is convinced that it is erroneous. However, no Commissioner should
surrender his or her honest conclusion as to the weight or effect of the evidence solely
because of the opinion of his or her fellow Commissioners or for the mere purpose of
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returning a decision. The Commissioners are the impartial triers of the facts. Their sole
interest is to ascertain the truth from the evidence in the case.
Federal Law Controls
This is a case brought by Midship under the Natural Gas Act, 15 U.S.C. §§717a-z.
In federal condemnation actions, federal procedural laws and evidentiary rules 	control.
See 	United States v. Miller, 317 U.S. 369, 380, 63 S. Ct. 276, 283 (1943); United States
v. 93.970 Acres, 360 U.S. 328, 333, 79 S. Ct. 1193, 1196 (1959).
The Commission proceedings shall be conducted as a trial in accordance with the
Federal Rules of Evidence and the Federal Rules of Civil Procedure, except where
provisions of the latter are clearly inapplicable to Commission proceedings. Hanna v.
Plumer, 380 U.S. 460, 469-74, (1965); United States v. 60.140 Acres of Land in Warren &
McKean Counties, 362 F.2d 660, 665–666 (3d Cir. 1966); Columbia Gas Transmission
Corp. v. Exclusive Natural Gas Storage Easement, 962 F.2d 1192, 1199 (6th Cir. 1992);
City of Guymon v. Cal Farley’s Boys Ranch, 2006 U.S. Dist. LEXIS 76332*, *4 (W.D.
Ok. 2006); also 13 James W. Moore, Moore’s Federal Practice § 71.1.12[4], at 71.1-59
(noting that “[t]he Federal Rules of Evidence apply in all condemnation proceedings,
whether tried before the court, a jury or a commission”).
General Instruction.
It is the duty of the Commission to determine the amount of just compensation
payable by Plaintiff to each Defendant. Although the Commissioners are the sole finders
of the fact, they are duty-bound to follow the law as stated in the instructions of the Court
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and to apply the law to the facts as they find the facts from the evidence presented to the
Commission. The Commission is not to single out any one instruction alone as stating the
law, but must consider these instructions as a whole. No Commissioner is to be concerned
with the wisdom of any rule of law. Regardless of any opinion that a Commissioner may
have as to what the law ought to be, it would be a violation of that Commissioner’s duty to
base a decision upon a view of the law that contradicts the view given in the instructions
of the Court, just as it would also be a violation of the Commissioner’s duty, as a finder of
the facts, to base a decision on anything other than the evidence in the case.
However, these instructions are not intended to state fully all rules of law that the
Commission may find applicable. The recitation of any rules of law herein are not meant
to exclude different or additional rules, except to the extent that any such rules contradict
any statements on the law contained in these instructions. The Commission may make a
formal request to the Court to clarify the current instructions or seek to include additional
instructions as it deems necessary.
Duties of the Commission.
Our system of law does not permit the Commission to be governed by prejudice,
sympathy, or public opinion. The parties and the public expect that the Commission will
carefully and impartially consider all of the evidence in the case and reach a just
compensation decision regardless of the consequences.
All Persons Equal Before the Law.
The Commission should consider and decide each hearing as an action between
persons of equal standing in the community, of equal worth, and holding the same or
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similar stations in life. All persons, whether corporations, a governmental entity, or
individuals, stand equal before the law and are to be dealt with as equals in a court of
justice.
Evidence
The evidence in each hearing consists only of the sworn testimony of the witnesses
and all the exhibits that will have been received in evidence in that hearing, stipulations,
and judicially noticed facts. To constitute documentary evidence which may be considered
by you, exhibits must be received in evidence. Exhibits marked for identification but not
admitted are not evidence, nor are materials brought forth only to refresh a witness’
recollection. The evidence does not include any statements of counsel made during the
hearing unless such statement was an admission or agreement admitting certain facts. The
opening statements and the closing arguments of counsel are designed to assist the
Commission, but they are not evidence. The Commission is to consider only the evidence
in the hearing. It is for you alone to decide the weight, if any, to be given to the testimony
you have heard and the exhibits you have seen. 4 Modern Federal Jury Instructions-Civil
P 74.01; Michalic v. Cleveland Tankers, Inc., 364 U.S. 325, 330 (1960); Rasmussen
Drilling, Inc., v. Kerr-McGee Nuclear Corporation, 571 F.2d 1144 (10th Cir. 1978).
Statistical evidence
Statistics are inherently slippery in nature, are not irrefutable, and, like any other
kind of evidence, they may be rebutted. FED-JI § 104.43
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Diagrams, charts, or summaries of opinion evidence of fair market value
The testimony of an appraiser or an accountant as to any diagrams or charts or
summaries, and any summaries or diagrams or charts admitted in evidence, are competent
for the purpose of explaining or summarizing facts disclosed by the appraiser's or
accountant's testimony, or by other testimony, or by photographs or maps or other
documents that are in evidence. If you should find that such charts or diagrams or
summaries do not reflect facts and figures shown by the testimony or other evidence in this
case, then you should disregard them. FED-JI § 154.57
Burden of Proof
In condemnation cases the landowner has the burden of establishing property
values. United States ex rel T.V.A. v. Powelson, 319 U.S. 266, 273-74, 63 S. Ct. 1047, 87
L. Ed. 1390 (1943); United States v. 10,031.98 Acres of Land, 850 F.2d 634, 638 (10th Cir.
1988); McAllester Urban Development Auth. v. Lorince, 519 P.2d 1346, 1349 (OK 1973).
Date of Taking
Just compensation shall be determined as of the date of taking. Unless otherwise
ordered by the Court in advance of a particular hearing, the date of taking is January 3,
2019 – the date when Midship perfected its right to take possession by posting Court-
ordered security. 	Horne v. Dep’t of Agriculture, 135 S. Ct. 2419, 2423 (2015) (citing to
Olson v. United States, 292 U.S. 246, 255, 54 S.Ct. 704, 708, 78 L.Ed. 1236 (1934)); N.
Natural Gas Co. v. L.D. Drilling, 862 F.3.d 1221, 1225 (10th Cir. 2017).
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Permanent Easement
Midship has acquired through this condemnation proceeding certain limited rights
in the owner’s lands. The rights Midship acquired generally include a permanent non-
exclusive pipeline easement, exclusive permanent Surface Site Easements, including but
not limited to T-Tap Surface Site, Main Line Valve Site Easement, as well as temporary
workspace easements, as described and depicted in Verified Complaint for Condemnation
with exhibits thereto, as amended, and in the Notice of Commencement of Condemnation
with exhibits thereto, as amended. An easement creates a nonpossessory right to enter and
use land in the possession of another and obligates the possessor not to interfere with the
uses authorized by the easement. It does not confer ownership of the land, only the right to
use the land for the purpose of a natural gas pipeline, approved by the Federal Energy
Regulatory Commission. The owner may use the area of the easement for all purposes
consistent with the easement. Midship’s easement rights are described in paragraphs 26-47
of Plaintiff’s Verified Complaint, as amended. The easements to be taken are fully
described and depicted in the certified plat attached to Midship’s Complaint and exhibits
thereto, as amended, and in the Notices of Commencement of Condemnation Action and
exhibits thereto, as amended. 	Weyerhaeuser Co. v. Brantley, 510 F.3d 1256, 1265 (10th
Cir. 2007) (citing to Restat. 3d of Prop: Servitudes, § 1.2 (3rd 2000)); In re Amendments
to Okla. Unif. Jury Instructions - Civil, 2016 OK 90, ¶ 6.
Temporary Easement
In addition to the permanent easement involved in this litigation, Midship has
obtained temporary easements for the purpose of constructing the natural gas pipeline. A
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temporary easement is the right to use an area of land for a limited time and limited
purposes. The measure of compensation for a temporary taking is the fair market value of
the loss of use of the property taken. That fair market value is the fair rental value. United
States v. Virginia Electric & Power Co., 365 U.S. 624, 632, 81 S.Ct. 784 (1961); United
States v. General Motors Corp., 323 U.S. 373, 65 S. Ct. 357, 89 L. Ed. 311 (1945); Kimball
Laundry Co. v. United States, 338 U.S. 1, 69 S. Ct. 1434, 93 L. Ed. 1765 (1946); United
States v. 77,819.10 Acres of Land, 647 F.2d 104, 107 (10th Cir. 1981); United States v.
Banisadr Bldg. Joint Venture, 65 F.3d 374 (4th Cir. 1995); United States v. Shewfelt
Investment Co., 570 F.2d 290 (9th Cir. 1977); Chi., Rock Island & Pac. Ry.Chi., Rock
Island & Pac. Ry. v. Prigmore, 1937 OK 275, ¶ 5, 180 Okla. 124, 125, 68 P.2d 90, 92; 3A
Kevin F. O’Malley et al., Federal Jury Practice and Instructions (6th Ed.), Chapter 154,
Eminent Domain, § 154.21.
Just Compensation
The term “just compensation” means the amount of money that will make the
Defendant Landowner whole—that is, the amount of money that will put the person whose
property has been taken in as good a position as the person would have been had the taking
not occurred. In this case, this amount of money includes (1) the fair market value of the
easements on each property in question on January 3, 2019 (the date of the taking), plus
(2) any injury to the property left remaining after the taking. The fair market value of the
property taken (here, the easements) is the amount of money which a buyer, who is willing
but does not have to buy, would pay an owner, who is willing but does not have to sell, to
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buy the property. The fair market value of the property should be determined according to
the highest and best use for which it is suitable, regardless of what it may have been used
for in the past or what future use the owner may have intended for it. The Commission’s
award must be based upon the fair market value of the easements on January 3, 2019, the
date of the taking. 	In determining the injury to the remaining property, you should
determine how much, if at all, the fair market value of this property diminished as a result
of the taking of the easements on January 3, 2019. The “remaining property” excludes the
easements themselves but includes the land, any buildings or other things that are attached
to the land, and any other interests connected with the use of the land, such as access to
roads. If you find that some features of the easements on a property increased the value of
the remaining property and others decreased the value of the remaining property, you
should determine the total effect of these increases and decreases on the fair market value
of the remaining property. If you find that the value of the remaining property stayed the
same or increased, then you should award damages only for the fair market value of the
easements on January 3, 2019. You may not offset an increase in the value of the remaining
property against the award of damages for the easements.
The damages to the remaining property cannot exceed the fair market value of that
remainder. Schneberger v. Apache Corp., 1994 OK 177, ¶ 11, 890 P.2d 847, 849 (OK.
1994).
In determining just compensation, the Commission should not consider what the
landowner has gained and the value of the easements taken to Midship and to its customers
is not to be considered in any way. 	Olson v. United States, 292 U.S. 246, 255, 54 S. Ct.
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704, 708, 78 L. Ed. 1236 (1934); United States v. 20.53 Acres of Land, 478 F.2d 484, 488
(10th Cir. 1973). In re Amendments to Okla. Unif. Jury Instructions - Civil, 2016 OK 90, ¶
6.
Fair Market Value
To determine the fair market value of property, you may consider evidence of
comparable sales of other property. Generally, the more similar one property is to another,
the closer their values are. In weighing evidence of a comparable sale, you should consider
how similar the other property is to the property that was taken. The following are some of
the many factors to consider:
1. How far away the other property is;
2. How similar the neighborhoods are in which the properties are located;
3. Any zoning or other restrictions on the uses to which the properties may be put;
4. The size, condition, and shape of the properties;
5. How close the date of the other sale was to the date of the taking;
6. The terms of the other sale; and
7. Whether the other sale was a voluntary, arms-length transaction.
No two properties are identical, and you will need to make appropriate adjustments
to account for differences between the properties.
The determination of just compensation in a condemnation case is a matter of sound
judgment and discretion based upon a consideration of all of the evidence the Commission
has heard and seen. A landowner whose property rights are taken must not be forced to
sacrifice or suffer by receiving less than full and fair value for what was taken. Just
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compensation should enrich neither the Defendant Landowner at the expense of Midship
nor Midship at the expense of the Defendant Landowner.
United States v. 25.02 Acres of Land, 495 F.2d 1398, 1400 (10th Cir. 1974); In re
Amendments to Okla. Unif. Jury Instructions - Civil, 2016 OK 90, ¶ 6.
Highest and Best Use.
The property subject to the non-exclusive easement must be valued at its worth for
the most valuable use which it may reasonably, lawfully and practically be used. This is
called highest and best use. 	Highest and best use contemplates a present existing use or
one reasonably likely to take place in the immediate of near future, whereby availability of
this future use would have affected the market price. A “highest and best use” must be
legally permissible, financially feasible, maximally productive, and physically possible. In
the absence of proof to the contrary, the highest and best use of property is presumed to be
its current use. United States v. 77,819.10 Acres of Land, 647 F.2d 104, 110 (10th Cir.
1981); United States v. 46672.96 Acres of Land, 521 F.2d 13 *16 (10th Cir. 1975); United
States v. L.E. Cooke Co., 991 F.2d 336, 341 (6th Cir. 1993).
Speculative Damages.
Damages which are speculative and which have not been proved with a reasonable
degree of certainty are not to be considered in making just compensation determinations.
Olson v. United States., 292 U.S. 246, 54 S. Ct. 704 (1934); United States v. 494.10 Acres
of Land, 592 F.2d 1130, 1132 (10th Cir. 1979).
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No Increase or Decrease Due to the Necessity of Taking
The value is not to be increased or decreased because of the necessity of Midship
to take the easements nor because these proceedings require the owners to part with their
exclusive use of the lands burdened by the easements, nor because of any benefits that may
accrue to the owners because of the natural gas pipeline. City of Cushing v. Buckles, 273
P.346, 348 (OK 1928).
Damages from Alleged Torts.
The sole issue to be determined in these hearings is the amount of just compensation
owed by Midship to the landowner for the taking of the easements. All evidence of damages
caused to the landowner’s property or improvements thereon by negligence, nuisance, or
trespass, if any, committed during construction of Midship’s pipeline or post-construction
restoration must be excluded from the just compensation hearings. United States v. 79.20
Acres of Land, 710 F.2d 1352, 1356 (8th Cir. 1983); United States v. 101.88 Acres of Land,
616 F.2d 762, 772 (5th Cir. 1980); Columbia Gas Transmission v. 252.071 Acres, More or
Less, in Baltimore City, 216 U.S. Dist. LEXIS 15138865, *11-12 (D. Md. 2016); Curtis v.
WFEC R.R. Co., 2000 OK 26, ¶ 15, 1 P.3d 996, 1000.
Lost profits, lost development opportunities,
or frustration of plans are not recoverable
Just compensation does not include such consequential damages as lost profits, lost
development opportunities, or frustration of plans. 	United States v. General Motors Corp.,
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323 U.S. 373, 379-80 (1945); City of Stilwell v. Ozarks Rural Elec. Coop. Corp., 166 F.3d
1064, 1073 (10th Cir. 1999); Questar Pipeline Co. v. 94.86 Acres of Land, 2011 U.S. Dist.
LEXIS 25844*, *6 (Dist. Utah 2011).
Damages Common to the Public
Damage to the residue resulting from the exercise of eminent domain may be
recovered only for damages not common to the public. Batten v. United States, 306 F.2d
580, 584 (10th Cir. 1962).
Opinion Evidence as to Fair Market Value
The rules of evidence ordinarily do not permit witnesses to testify as to opinions or
conclusions. An exception to this rule exists as to those whom we call “expert witnesses.”
Witnesses who, by education and experience, have become expert in some art, science,
profession, or calling, may state opinions as to relevant and material matter in which they
profess to be expert, and may also state their reasons for their opinions. 	The opinion
testimony of an expert witness as to the fair market value may be based upon education,
study, experience, investigation, knowledge of the property, prices paid for similar property
in the vicinity, and all reasons given by the expert witness as the basis for his opinion, and
must be founded upon substantial data, not mere conjecture, speculation or unwarranted
assumption. 	United States v. Sowards, 370 F.2d 87, 92 (10th Cir. 1966); Durell v. Pub.
Serv. Co. of Oklahoma, 1935 OK 1103, 174 Okla. 549, 51 P.2d 517, Syl. Pt. 2 (Ok. 1935);
Kamo Elec. Coop., Inc. v. Nichols, 2017 OK CIV APP 60, ¶ 11, 406 P.3d 36, 39.
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Landowner’s Testimony
The Landowner may testify as to her/his land’s value, if she/he has a fair knowledge
of the property and its value when and where destroyed. 	The owner’s qualification to
testify does not change the “market value” concept and permit her or him to substitute a
“value to me” standard for the accepted rule, or to establish a value based entirely upon
speculation. To have probative value, that opinion or estimate must be founded upon
substantial data, not mere conjecture, speculation or unwarranted assumption. It must have
a rational foundation. United States v. Sowards, 370 F.2d 87, 92 (10th Cir.1966); Poteet v.
MFA Mut. Ins. Co., 1974 OK 110, 527 P.2d 18, 21 (OK 1974).
Evidence as to Offers for Sale of Comparable Properties
If evidence is propounded as to offers for sale of allegedly comparable properties in
the vicinity and in other areas, such evidence should be considered to the extent that you
find it assists you in arriving at your own finding as to market value. The general rule is
that unaccepted offers are not competent evidence of value. Sharp v. United States, 191
U.S. 341, 348, 24 S.Ct. 114, 115 (1903). United States. v. Regents of New Mexico School
of Mines, 185 F.2d 389, 391 (10th Cir.1950); FED-JI § 154.63
Sales in Anticipation of Condemnation
You may have heard of other sales of easements to pipeline companies seeking to
acquire easements by eminent domain. Sales to pipeline companies seeking to condemn
pipeline easements cannot be used to establish fair market value. United States v. 46672.96
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Acres of Land, 521 F.2d 13*, *17 (10th Cir. 1975). A pipeline company condemning land
might be willing to give more than it is worth, and the owner of land might be willing to
take less than what it is worth, rather than have a lawsuit. Thus, such forced sales should
not be considered by you in determining fair market. Id.; United States v. 25.02 Acres of
Land, 495 F.2d 1398, 1401 (10th Cir. 1974).
Use of Linear Valuation Methodology
You may have heard of “per rod” or “per foot” as a methodology for the
determination of a customary “going rate.” But while customary rates may offer a
convenient pricing system in other settings, “going rates” cannot be used as a proxy for
market value in federal acquisitions requiring payment of just compensation. Going rates
tend to reflect non-compensable considerations above the market value of the property
acquired, such as avoiding the cost of condemnation or other litigation, and economic
pressures to complete construction and place the planned facility or infrastructure in
operation . United States. v. Virginia Electric Co., 365 U.S. 624, 630, 81 S. Ct. 784, 789
(1961); United States v. 8.41 Acres of Land in Orange Cty., 680 F.2d 388, 392 (5th Cir.
1982); Questar Southern Trails Pipeline Co. v. 3.47 Acres of Land, No. CIV 02-10
BB/LFG July 31, 2003 (D. N.M. 2003); Kamo Elec. Coop., Inc. v. Nichols, 2017 OK CIV
APP 60, 406 P.3d 36; Okla. Tpk. Auth. v. Deal, 1965 OK 57, ¶¶ 16-17, 401 P.2d 508, 511;
Cities Service Gas Company v. Beck, 1975 OK CIV APP 16, 534 P.2d 27, 28; Uniform
Appraisal Standards for Federal Land Acquisitions, 2016.
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Timber/Crops
Standing timber, shrubbery and crops are a part of the land and are to be valued as
part of the land to the extent they contribute value thereto. These items cannot be separately
valued as an item additional to the value of the land. United States v. Shoshone Tribe of
Indians, 304 U.S. 111, 116 (1938); City of Tulsa v. Lloyd, 263 P. 153, 153 (OK 1935);
Young v. Spencer, 405 P.3d 701, 704 (Ok. Civ. App. 2017).
Mineral Damages
In the present action, Midship is seeking condemnation of a non-exclusive easement
across the defendant properties for its FERC-approved natural gas pipeline. 	Midship is
not seeking to condemn any minerals. In the case of land that is underlaid with marketable
minerals, and you find that the mining, production or removal of same will be adversely
affected by the imposition of the easements condemned by Midship, the existence of those
minerals is a factor of value to be considered in determining the market value of the
property as a whole, but the landowner is not entitled to have the surface value of the land
and the value of the underlying minerals determined separately and then aggregated to
determine market value of the land. The value of the mineral deposit is to be considered
only to the extent to which it goes into and affects the over-all market value of the
property—to the extent it enhances the per acre value of the land. And it is not permissible
to determine the value of a mineral deposit by estimating the number of tons in place and
then multiplying the tonnage by a unit price per ton. United States v. 179.26 Acres of Land,
644 F.2d 367, 372-73 (10th Cir. 1981).
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Lot Development
In a condemnation action, evidence of the value of the property for any use to which
it is reasonably adapted, is admissible, but such evidence must be limited to a bare
statement why the property is adapted for a particular purpose and to testimony of its value
for such purpose. Where the land is unimproved, but there was a showing of adaptability
for subdivision purposes, valuation must be based upon the whole subdivision and not the
“lot method” approach to valuation. The measure of compensation is not the aggregate of
the prices of the lots into which the tract could be best divided, since the expense of clearing
off and improving the land, laying out streets, dividing it into lots, advertising and selling
the same, holding it, and paying taxes and interest until all the lots are disposed of cannot
be ignored, and is too uncertain and conjectural to be computed. 	United States v. 6.09
Acres of Land, 140 F. Supp. 3d 1218, 1247 (N.D. Ala. 2015); City of Tulsa v. Biles, 360
P.2d 723, 725-26 (Ok. 1961); 4 Nichols on Eminent Domain § 12B.14 (2019).
Right-of-Way Restoration
In determining just compensation in this matter, the Commissioners must assume
that Midship has complied and will comply with the terms of the Certificate of Public
Convenience and Necessity (Dkt. 1-3), and the Final Environmental Impact Statement
(Dkt. 1-5 through 1-14) regarding restoration. Any claims that Midship has failed or will
fail to do so are not a proper subject of these proceedings. Am. Energy Corp. v. Rockies
Express Pipeline LLC, No. 2:09-cv-284, 2009 U.S. Dist. LEXIS 59972, 2009 WL 2148197,
at *3 (S.D. Ohio July 14, 2009) (the FERC has exclusive jurisdiction over the conditions
of a FERC certificate); Am. Energy Corp. v. Rockies Express Pipeline LLC, 622 F.3d 602,
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605 (6th Cir. 2010) ("Exclusive means exclusive, and the Natural Gas Act nowhere permits
an aggrieved party otherwise to pursue collateral review of a FERC certificate in state court
or federal district court." ); Rover Pipeline, LLC v. 10.055 Acres of Land, No. 5:17-CV-
239, 2018 U.S. Dist. LEXIS 217574, at *20-27 (N.D. Ohio Dec. 28, 2018) (disallowing
evidence of 	speculative losses 	caused 	by 	alleged failure to de-compact or 	restore
productivity which would effectively bypass the conditions of FERC Certificate).
Verdict — Single Sum Only
You are instructed that your award in this case shall be for a single sum of money.
Do not award separate sums of money for each portion of property taken or each item of
damage that Owner(s) suffered on account of the taking. Also, do not award separate sums
of money for each of the owners of the property being taken.
In re Amendments to Okla. Unif. Jury Instructions - Civil, 2016 OK 90, ¶ 6.
Supplements to the Commission Instructions.
Any supplemental instruction must be made specifically and in writing to this Court
thirty (30) days prior to a scheduled hearing. Any responsive memorandum shall be filed
within fourteen (14) days thereafter. No reply memorandum is permitted. A requested
supplemental instruction filed after the deadline shall be stricken unless permitted by this
Court for good cause shown and the party filing the untimely supplemental instruction shall
be deemed to have waived or forfeited the instruction. Parties should not resubmit
previously rejected instructions through this process.
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Compensation of Commissioners
Each Commissioner shall be compensated using a uniform hourly rate of
$250.00 per hour as provided to the Court and the parties, plus reimbursement for
mileage 	and 	other 	reasonable 	case-related 	expenses. 	To 	determine 	the
Commissioners’ compensation, the following procedure is ordered:
i. 	Each Commissioner shall submit monthly invoices to the Court,
which invoices should state the number of hours spent generally on all tracts and note
time specifically spent on individual tracts, along with a description of services;
ii. 	Upon receipt of the invoices from Commissioners, the Court
shall review the invoices for accuracy and reasonableness. If approved by the Court,
it shall forward the invoices to Midship; and
The Commissioners’ invoices shall be paid by Midship within thirty (30) days from
receipt. If Midship objects to any invoice, it shall file an objection within ten (10) days of
receipt.
Compensation of Court Reporters.
Midship shall compensate any court reporter used at a hearing at the regular hourly
rate of that reporter, in addition to travel expenses. The parties are responsible for the costs
of obtaining a transcript just as they would be in any case. The reporter shall bill Plaintiff
directly, and any issue surrounding billing or payment should be brought to the attention
of the Court promptly.
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IT IS SO ORDERED THIS 29 th day of April, 2021.
_________________________________
RONALD A. WHITE
UNITED STATES DISTRICT JUDGE
EASTERN DISTRICT OF OKLAHOMA
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