Opinion ID: 1698690
Heading Depth: 1
Heading Rank: 2

Heading: Exxon Pipeline v. George Hill, et al.

Text: In 1936, Exxon Pipeline Company (Exxon) obtained its first pipeline servitude across the Hill property. [1] The terms of that servitude agreement did not specify either the length or the width of the land affected by the right of way granted to Exxon. Subsequent amendments to the 1936 servitude agreement limited Exxon's right of way to an eighty foot wide strip of land and allowed for the installation of eight pipelines. In 1995, Exxon obtained another conventional servitude by agreement with the Hills. Exxon was allowed to place five pipes in a fifty to seventy-five foot wide strip across the land. The right of way obtained in 1995 is located adjacent to and runs parallel with the eighty foot wide right of way obtained earlier by Exxon. [2] On January 13, 1998, Exxon petitioned the court, seeking entitlement to a permanent servitude for the installation of three pipelines. After a trial on the merits, the trial court awarded the Hill family $17,172 as just compensation for the expropriated property. The Hill family appealed the trial court's judgment to the Court of Appeal, First Circuit, arguing the trial court erred in finding the testimony of their expert real estate appraiser inadmissible, which therefore tainted the court's factual conclusion of the highest and best use of the expropriated property. The court of appeal reversed the trial court, conducted a de novo review of the evidence, and awarded the Hill family $251,505 as just compensation for their loss. Exxon Pipeline Co. v. Hill, 99-0073 (La.App. 1st Cir.6/23/00) 763 So.2d 144. The court's primary concern was the trial court's refusal to allow the testimony of the landowners' expert, Oren Russell (Russell). After conducting an analysis under Daubert v. Merrell Dow Pharmaceuticals, 509 U.S. 579, 113 S.Ct. 2786, 125 L.Ed.2d 469 (1993) and Kumho Tire Co. v. Carmichael, 526 U.S. 137, 119 S.Ct. 1167, 143 L.Ed.2d 238 (1999), the court determined the landowners' expert's opinion was not unreliable and should have been allowed into evidence. First, the court agreed with Russell that the highest and best use of the property is as a pipeline corridor. In doing so, the court employed Russell's method of using the value which other pipeline companies paid for similar right of ways and/or servitudes. It found that the method of valuation utilized by Russell, i.e. utilizing pipeline servitude comparables, has a reliable basis and a valid connection to the pertinent inquiry of valuation of just compensation for the subject property. Thus, the court agreed with Russell that the traditional method of valuing of pipeline servitudes by use of land comparables is erroneous. Finally, the court determined the proper measurement of pipeline servitudes is by rod rather than the traditional per acre measurement.