Minnesota is the land of 10,000 miles of road construction, or so it seems. Some of that is for highway construction where the Minnesota Department of Transportation has acquired property through eminent domain. MnDOT is required to pay property owners “just compensation” for their land.
But in recent cases, David Jann has recovered compensation from 220.51 percent to 1,396.83 percent over the condemning authority’s offer. Those results were far in excess of the 40 percent difference that means that the government has to pay the property owner’s fees and costs, under Minn. Stat. sec. 117.031. The attorney’s fees statute is vitally important to landowners who, as Jann’s results demonstrate, may receive, from MnDOT or other condemning authorities, significantly low-balled offers.
The Minnesota Supreme Court in December heard argument in Commissioner of Transportation v. Smith on whether a law firm’s contingency fee agreement with a client should govern the award or whether the court must use the lodestar method to determine a reasonable hourly rate and a reasonable number of hours expended, and then adjust the fee as required.
“This is perilous territory,” said Jann, a partner at Faegre Baker Daniels. “It’s a huge matter of public policy. The contingent fee is the poor person’s entry into the court system.”
Eminent domain is an extremely emotional event for landowners, Jann said. “They know that they are not being offered just compensation.” In addition, Minnesota law adds a commissioner’s hearing prior to a court proceeding which adds to the fees and costs, and isn’t governed by the Rules of Evidence. In other states, a condemnation is handled like any civil case, Jann said. “The entire procedure could be changed.”