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Thursday, August 27, 2009

DM&E drops condemnation against Wyoming landowners

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The Dakota Minnesota & Eastern dropped its condemnation lawsuit against several Wyoming landowners in northeast Wyoming, the Casper Star-Tribune reports. 

In addition, the DM&E said current regulatory and economic conditions for its proposed rail expansion into the Powder River Basin coal-mining district are not good.

According to DM&E's dismissal notice filed in U.S. District Court in Cheyenne, "There are uncertainties regarding the time when DM&E will be able to meet the necessary thresholds for the project, and it is clear that the project will not proceed in the immediate term."

The $1-billion-plus project is not dead, however, DM&E spokesman Mike Lovecchio told the Star-Tribune. 

"The decision to proceed with the expansion will be contingent on several conditions: access to a right-of-way land corridor, mine and utility contracts and economic and regulatory environment that would support a long-term investment of this magnitude."

For nearly 15 years, DM&E has pushed a proposal to extend its railroad 278 miles to access surface coal mines in Wyoming's Powder River Basin, which is currently served by BNSF Railway and Union Pacific. Those two railroads, combined, have an annual coal-carrying capacity in the region in excess of 450 million tons.

In 2007, DM&E sought condemnation of some 19 landowners in Converse, Weston, Campbell and Niobrara counties for rights-of-way to some 1,200 linear acres.

 The lawsuit was filed June 28, 2007, just days before changes to Wyoming's eminent domain laws went into effect on July 1 of that year. Those changes included more advanced notice of intent to develop and gave property owners the right to use "comparable sales" to figure fair market value for their land.

 DM&E said those new laws threatened its then-existing construction schedule and financing alternatives.

"With delays now occasioned by external circumstances, there is no need to engage in further litigation over that objection," DM&E attorneys stated in the filing.

Lovecchio said DM&E would now negotiate with those same landowners it had sought to condemn in U.S. District Court for the past two years. 

Randall T. Cox, attorney for several landowners involved in the lawsuit, said the dismissal was a victory for those who fought to protect their land.

"I believe the DM&E spent more on litigation than it offered for right-of-way in Wyoming," Cox told the Star-Tribune. "DM&E would never consider increasing its offers of money. This was the most spectacularly unsuccessful right-of-way negotiating strategy that I have ever witnessed."

Cox noted that several landowners had opposed DM&E's loan application to the Surface Transportation Board, which was denied. After which, DM&E brought the condemnation suit against the landowners.

"This is an abuse of discretion," Cox said. "I appreciate that current management under the Canadian Pacific is more realistic."

Canadian Pacific acquired DM&E after the condemnation filing in 2007 and had said the project would continue as long as it met certain thresholds, including a favorable regulatory climate, available financing and acquisition of land rights.

"I want to stress, as of today, no decision has been made by Canadian Pacific whether to proceed with the Powder River Basin project," Lovecchio said.

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