UDOT v. Coalt, Inc.

August 17, 2020

2020 UT 58 (August 17, 2020)

The Utah Supreme Court affirmed a lower court decision that UDOT’s condemnation of land to mitigate environmental impacts of a transportation project was made under proper authority, regardless that the decision to condemn resulted from a settlement agreement to litigation over the project. The Court additionally reversed the lower court’s decision that the project’s influence should be included in the assessment of value.

In the early 2000s, UDOT received a Clean Water Act permit to begin construction on an identified route for the Legacy Parkway project in Davis County. However, several public interest groups tied up the project by challenging the permit in federal court. After several years of litigation, UDOT reached a settlement agreement with the parties to resolve the lawsuit, which included the agreement to require additional land as environmental mitigation of the project as well as potential future projects. While the additional land served to end the litigation, it was not a prerequisite for federal approval of the project. 

Respondent, Coalt Inc., owned property that was condemned as a result of UDOT’s settlement agreement, and it challenged the condemnation by claiming that UDOT was not acquiring it for transportation purposes or public use, but to settle third-party litigation. Coalt alternatively argued that if the land could be taken, the project’s impact should be included in assessing value because the property was not necessary for the Legacy Parkway project, but some unidentified future project. The district court ruled in favor of UDOT, and the Court of Appeals affirmed on the question of authority, but reversed on the valuation question, though mostly because UDOT had failed to adequately brief the valuation issue.   

The Supreme Court held that what matters was not how UDOT arrived at the decision to condemn, or what outside influences motivated the decision, but rather the purpose of the acquisition. The Rights-of-Way Act empowers UDOT to “acquire any real property . . . necessary for temporary, present, or reasonable future state transportation purposes by . . . condemnation,” UCA§ 72-5-103(1), and lists a number of “state transportation purposes” including “the mitigation of impacts from public transportation projects.” Id. § 72-5-102(12). The property was acquired for mitigation of the Legacy Parkway project, and the fact that the acquisition came as a result of a settlement that resolved litigation to allow the project to go forward only supports, not detracts, from the idea that the condemnation was necessary for a public purpose. Because the acquisition was therefore necessary for the Legacy Parkway project, the lower court erred in allowing the project’s influence to be included in the valuation of the property.