North Dakota landowners want to bring eminent domain case to US Supreme Court

A group of McKenzie County landowners who spent years in court with a pipeline company wants the U.S. Supreme Court to rule that they’re entitled to attorney fees.

The case stems from a federal court settlement between the landowners and natural gas pipeline developer WBI Energy, which used eminent domain to take a portion of their property in 2018. The federal Natural Gas Act allows companies like WBI to seize property for public natural gas development with compensation for the landowners.

The confidential settlement, signed in 2021, only reimburses the landowners for the value of their property, according to court records. However, the landowners — which include Leonard and Denae Hoffmann, Randall Stevenson and Rocky Prestangen — argue they should also be compensated for the legal costs they paid to reach the settlement. They claim they’re entitled to recoup those expenses under North Dakota law.

WBI Energy counters that state law doesn’t apply because it seized the land under a federal law. When the federal government uses eminent domain to take property, it is not required to reimburse the owners for attorney fees, WBI argued. WBI declined a request for comment Thursday.

The Natural Gas Act is silent as to whether federal or state law should decide the issue of legal fees, so the parties have looked to the courts to settle the matter.

A North Dakota federal judge initially ruled in favor of the landowners, and ordered WBI to pay them roughly $380,000. That decision was overturned by the U.S. Circuit Court of Appeals for the 8th Circuit in March. It’s the only federal appellate circuit to make this finding.

The landowners on Thursday filed a request asking the U.S. Supreme Court to reverse the 8th Circuit’s ruling.

Allowing the 8th Circuit’s decision to stand would pave the way for a “massive wealth transfer” from landowners to private companies, said Bob McNamara, the lead attorney representing the McKenzie County property owners.

He said historically, courts have recognized that state property laws should be honored in federal eminent domain cases.

For the first 100 years of the United States’ existence, eminent domain was exclusively a state power, not a federal power, McNamara added.

While it’s very rare for the U.S. Supreme Court to agree to review a case, McNamara said the high court has a record of taking lawsuits involving eminent domain and property rights cases.

The split between the 8th Circuit and other courts could also attract the Supreme Court’s attention, he added.

North Dakota Monitor reporter Mary Steurer can be reached at [email protected].