California Eminent Domain Report

Last week was a fairly slow week for California eminent domain news, but I came across an article about a case that seems interesting enough to warrant a brief discussion, even if it has no direct application in California. 

Fronteer Gold, apparently a Canadian-owned company with a division formed under Delaware law, is seeking to condemn property in Nevada to help implement its plans for the Long Canyon gold mine. 

You might wonder how a private company, under Canadian ownership, can condemn property from private owners in Nevada.  Apparently, Nevada law contains a provision that grants eminent domain authority to private companies for purposes of protecting mining operations, and Nevada eminent domain law describes mining as "the paramount interest of this State" (see Nev. Rev. Stat. Ann. § 37.010(f)(1)).  

According to a June 3 article in the Elko Daily Free Press, "Fronteer seeks eminent domain: Company wants ranch land for gold mine," that is want Fronteer is trying to accomplish:

Fronteer requested use of eminent domain to obtain surface rights for land it has mineral rights for, to obtain access easements, to obtain additional lands and for use of roads.

On the other hand, in 2008, Nevada voters passed the People's Initiative To Stop The Taking of Our Land (PISTOL)  in response to Kelo, seeking to prohibit private companies from condemning property from other private owners.  But it didn't stop there, as proponents and opponents of PISTOL have apparently agreed on a potential compromise measure, which will now appear on the November 2010 ballot, and which, if passed, will replace PISTOL.  

Quickly scanning both the text of the new eminent domain proposal and the current eminent domain law under PISTOL, I do not see any exception that would allow a private company to condemn property for mining purposes, despite mining being Nevada's "paramount interest." 

What does all of this mean?  I'm guessing the parties will either find a way to reach an agreement on the property's value, or there will be a significant right-to-take battle on the horizon, regardless of whether the 2010 amendment passes.