Prior-Precedent Rule Dictates Result in Condemnation Action

In Sabal Trail Transmission, LLC v. 18.27 Acres of Land, 59 F.4th 1158 (11th Cir. 2023), the court applied its prior-precedent rule and held that state rather than federal law provides the measure of compensation to be paid to a landowner upon a private party’s exercise of federal eminent-domain power under the federal Natural Gas Act.

Sabal Trail is a natural-gas company eligible to exercise eminent domain power under either Florida law or federal law. In 2016, acting under federal eminent-domain authority, Sabal Trail condemned two tracts of land in Florida, owned by a father and son. The parties were unable to agree on compensation for the taking, so the district court held a jury trial on the question, issuing damages awards and indicating that the landowners would also be entitled to attorneys’ fees and costs under Florida law. Sabal Trail appealed, and the Eleventh Circuit affirmed the damages awards and dismissed as premature the appeal on the attorneys’ fees issue.

On remand, Sabal Trail argued that no attorneys’ fees should be awarded because the United States Constitution’s “just compensation” standard applied and did not authorize an award of fees. The district court disagreed, holding that “state substantive law governs the measure of compensation in eminent domain cases brought by private parties against private property owners under the [Natural Gas Act].” Sabal Trail appealed.

The Eleventh Circuit affirmed. The court’s opinion, written by Judge Rosenbaum, begins by observing that the text of the Natural Gas Act does not address what standard should apply to the determination of compensation to the landowner. Other sections of the Act call for a federal measure of compensation, but the section authorizing the power exercised by Sabal Trail—15 U.S.C. § 717f(h)—does not say what standard applies. In filling that “gap,” though, the court did not “write on a blank slate[,] because of the prior-precedent rule,” that is, “the absolute rule that a prior decision of the circuit (panel or en banc) [can]not be overruled by a panel but only by the court sitting en banc.” That’s true even if the second panel thinks the prior decision is wrong, and “[e]ven a later Supreme Court decision does not provide a basis for failing to follow prior precedent unless the Supreme Court decision is ‘clearly on point.’”

The outcome of the dispute before it, the court continued, was dictated by Georgia Power Co. v. Sanders, 617 F.2d 1112 (5th Cir. 1980), an “old Fifth” decision binding on the Eleventh Circuit. Georgia Power concerned the Federal Power Act, rather than the Natural Gas Act, but the similarity of the two statutes and the fact that Georgia Power presented the same question as the one before the court—did federal or state law provide the standard for compensation for the exercise of the right of eminent domain by a private party?—triggered application of the prior-precedent rule. In Georgia Power, the court concluded that state law provided the standard. Accordingly, “we are bound to hold that state law supplies the measure of compensation in proceedings that arise under Section 717f(h) of the Natural Gas Act.”

Posted by Valerie Sanders.

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