The Fargo Moorhead Diversion Project is a major flood control project intended to provide flood relief primarily to the Cities of Fargo and Moorhead. Unfortunately, this will come at the expense of others, including many rural landowners and farmers. For more information on the Project, click on the links below.
While the fight against the FM Diversion has not come to an end, we have been approached by many landowners inquiring about the eminent domain process if the Project ultimately goes forward. Our firm has developed a reputation as a preeminent law firm in the Midwest, including Minnesota and North Dakota when it comes to water law and condemnation/eminent domain matters. We are experienced with the legal processes and landowner rights in both North Dakota and Minnesota, as well as displaced landowners’ rights under the federal relocation statutes. Our experience includes the representation of landowners impacted by other large governmental projects such as other flood diversion projects, high voltage transmission lines, pipelines, water control structures, roads, bridges and other public improvements. It also includes representation of landowners impacted by this Project from whom early acquisitions have been sought.
We know many landowners will be faced with significant decisions that will greatly affect their lives, including where to relocate. For some, that means re-locating their entire farming operation. For others, they are concerned about what a flowage easement will do to their property value, ability to farm, ability to insure against flooding damage, and what damage they might expect to improvements on their land or crops.
Below we have addressed a number of frequently asked questions about the Project and potential acquisitions stemming from it.
What expectations should I have about the Minnesota acquisition process?
You should expect good faith negotiations. Specifically, you should expect to be approached by a land acquisition agent for the Diversion Authority with an offer to acquire your property or certain rights (i.e. a flowage easement) from you. In most instances, they will have an appraisal to support their offer. If a negotiated purchase cannot be made, the Diversion Authority will initiate eminent domain or condemnation proceedings against you seeking a Court Order allowing them to take the property interest they seek. It is anticipated they will “quick take” the property on 90 days’ notice. The Diversion Authority must deposit with the Court the amount they have determined to be just compensation, which will be commensurate with their appraisal. The Court will determine whether there is a public need and purpose for the acquisition and three commissioners will be appointed to hold hearings on the amount of compensation you are entitled to receive. The commissioners’ decision as to just compensation is subject to appeal to Minnesota District Court for a jury trial.
What expectations should I have about the North Dakota acquisition process?
Much like in Minnesota above, you should expect attempts to negotiate a purchase. You will be contacted by a land acquisition agent and presented with an offer and an appraisal. The Diversion Authority will send you a formal offer with an appraisal absent an agreement after at least 60 days’ worth of informal attempts to reach an agreement. At least 15 days later they will send a letter requesting a meeting. Meeting or not, after thirty (30) days, they will send a notice of intent to quick take your property by certified mail. Thereafter, they must seek approval from the local Board of County Commissioners to quick take the property at a hearing and give a minimum of thirty (30) days’ advance notice. If the quick take is approved, the Diversion Authority will deposit the amount reflected in their appraisal with the Court and may take possession subject to appeal. You can request a jury trial or a court trial to determine the amount of just compensation.
Should I get an appraisal?
In most cases, yes. However, we recommend having an attorney experienced with condemnation review their offer and appraisal before hiring an appraiser. Appraisal costs are often reimbursed in whole or in part in both Minnesota and North Dakota. In Minnesota, you are guaranteed minimum reimbursement of $1,500 for a residence and $5,000 for a farm or business (unless damages are expected to be less than $25,000). If your damages are ultimately found to be in excess of $25,000 and total at least 120% of the last offer from the Diversion Authority prior to initiating condemnation proceedings, the Court has the discretion to reimburse your full appraisal costs. In North Dakota, the district court, no matter the outcome, has discretion to reimburse you your reasonable costs.
Will I be reimbursed attorneys’ fees?
In Minnesota, if your award is at least $25,000 and 120% of the last written offer from the Diversion Authority prior to condemnation, the Court has discretion to reimburse the landowner its reasonable costs and attorneys’ fees. If the award is at least 140% of the last written offer and greater than $25,000, the District Court in Minnesota shall reimburse the landowner its reasonable costs and attorneys’ fees.
In North Dakota, the district court has the authority to reimburse your costs and attorneys’ fees no matter the outcome on just compensation. While the Court will consider the outcome as a factor, it is not controlling. Pursuant to CCJWRD v. Erickson, 918 N.W.2d 371 (ND 2018), the landowner does not need to be awarded more than offered for the Court to award reimbursement of fees and costs.
If I am being relocated, am I entitled to any additional relief?
If the Project impacting you involves federal funds (which we understand this Project does) and you are displaced as a result of the acquisition, you are entitled to relocation benefits under the Federal Relocation Act. For residential occupants, these benefits include but are not limited to replacement housing payments for owners and tenants and moving expenses. Businesses and farms are also entitled to certain relocation benefits and services, which includes moving expenses and reestablishment reimbursement. It is important to consult with an attorney experienced in dealing with the determination of relocation benefits under the Federal Relocation Act. For more information On the Federal Relocation Act click here.
How are damages determined?
For takings in both Minnesota and North Dakota, the general rule is fair market value. In Minnesota, if you are required to relocate, you may be entitled to minimum compensation. Minimum compensation is the minimum amount sufficient for an owner to purchase comparable property in the community. Minimum compensation may exceed the fair market value of your property. It is important to consult with experienced legal counsel to maximize your rights.
What is a flowage easement?
It’s an easement in favor of the Diversion Authority that allows them to “occasionally” flood and submerge your property in connection with the operation and maintenance of the Project. You can review a sample flowage easement, by clicking on the link below.
Will I receive crop damages I might incur as a result of the flowage easement?
The sample flowage easement in the link above only allows for the payment of crop damages resulting from the Diversion Authority’s ingress and egress to your property. However, it specifically excludes any crop damage payment associated with flooding resulting from the Project with the following language: “[CCJWRD] is not responsible for any damages to crops or for interference with any other of Grantor’s uses of the Easement Property as a result of any inundation or any of Grantee’s other rights and privileges regarding the Easement Property.” So, crop damages payments are limited to crop that is destroyed as a result of the Diversion Authority entering and exiting your property, not for crops they flood.
How will damages associated with a flowage easement be calculated?
An appraiser will determine the value of the property before the easement and the value of the property after the easement is acquired based on available sales data and other information. The difference between the values will represent the damages to the property resulting from the flowage easement. The challenge with assessing the impacts of this easement is the very vague reference to “periodic” and “occasional” flooding of your property. That could mean anything from flooding with minimal impact on your ability to farm to you losing your crop on a regular basis and anything in between. You only get paid once for the easement, no matter the level of flooding you experience thereafter. There is no second bite at the apple if the flooding ends up being worse than perhaps “advertised” by the Diversion Authority or their land acquisition agents.
Impacts to your ability to effectively use the property for agricultural purposes are of particular concern. While you may be able to obtain crop insurance, it is highly doubtful that the crop insurer will compensate you for damages resulting from the Project. The insurer is expected to take the position that the landowner has already been paid for the government flooding and all damages associated therewith.
What if I am not condemned but later experience damage as a result of the Project?
If no property rights are taken from you and you experience damage to your property that is a result of the Project, you may have the right to bring an inverse condemnation claim. In that scenario, you will be the Plaintiff and will have the burden to prove a causal connection between the Project and the damages you have experienced. That may very well require the use of an expert hydrologist. As with any claim there will be a statute of limitations or time period within which to bring your claim. However, that time period does not generally begin to run until you have been damaged. If you experience damage after the construction of the Project, it will be important for you to consult with legal counsel to explore your options.
Pursuant to the Property Rights Acquisition and Mitigation Plan of August of 2018 put together for the Project, there will be a Dispute Resolution Board that will hear claims from property owners claiming to have suffered flood impacts as a result of the Project. It is a formal process established by the Project. The Board will be made up of three review officers that will be selected by the Project with input from the county commissioners in both North Dakota and Minnesota. While not mandatory, the decision of the Board is not binding and use of the Board does not preclude a claimant from filing an action in District Court seeking compensation for damages. For more information on the Dispute Resolution Board, review the August 2018 Acquisition and Mitigation Plan.
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