South Dakota Part of 12-State Coalition Urging Supreme Court to Take Up Property Rights Case

By Mary Steurer

North Dakota and 11 other states are advocating for the U.S. Supreme Court to consider the arguments of North Dakota ranchers in a dispute with an energy company.

WBI Energy used eminent domain to take a portion of the northwest North Dakota landowners’ property for a pipeline project in 2018. The ranchers were compensated for their land under a confidential settlement with WBI in 2021, though the parties disagreed as to whether the group was also entitled to legal fees.

A North Dakota federal judge initially ordered WBI to pay the landowners about $380,000 in legal expenses, though the 8th Circuit Court of Appeal overturned that decision earlier this year.

In early August, the landowners filed a petition asking the U.S. Supreme Court to review the appellate court’s decision. They ultimately want the high court to reverse the circuit court’s ruling.

Twelve Republican-led states in a Monday friend-of-the-court brief took the landowners’ side.

Bob McNamara, the lead attorney representing the McKenzie County property owners, said it’s “remarkable” to see so many states come together in support of the ranchers’ petition.

The dispute centers on whether the parties have to follow federal or state law.

WBI took the ranchers’ land under a federal law called the Natural Gas Act, which allows private businesses to use the federal government’s eminent domain power for public natural gas infrastructure. While the landowners were paid for their land, the act doesn’t say whether that sum must also include landowners’ legal expenses.

Both the plaintiffs and the 12-state coalition that filed Monday’s brief take the stance that when federal law is silent, state property law governs.

Under North Dakota law, WBI is required to pay their attorney fees, the ranchers say.

WBI and the 8th Circuit Court of Appeals disagree. The 8th Circuit in its ruling said that because WBI wielded the federal government’s eminent domain power when it took the land, state law does not apply. When the federal government exercises eminent domain, it doesn’t have to cover property owners’ legal costs.

Allowing the appellate court’s ruling to stand would upset the balance of power between states and the federal government, the states argue in their Monday filing.

“Under the Eighth Circuit’s decision, landowners in seven states no longer have the benefit of state law property rights that landowners in the rest of the country have,” the brief says.

The states expressed concern that the 8th Circuit’s legal interpretation could allow the federal government to quietly assume more regulatory authority over property-related matters.

WBI has to file a response to the landowners’ petition sometime in October, McNamara said. WBI declined a request for comment Thursday.

The U.S. Supreme Court is expected to consider the petition sometime in November, he added.

It’s extremely rare for the U.S. Supreme Court to agree to review a case, though the justices have shown an interest in eminent domain and property rights issues, McNamara said previously. 

He said the states’ brief could help put the case on the high court’s radar.

“The court listens to states when they say, ‘This creates a big federalism problem,’” McNamara said.

The 11 states that signed onto the brief with North Dakota are Alabama, Arkansas, Florida, Idaho, Indiana, Louisiana, Nebraska, South Carolina, South Dakota, Tennessee, and Texas.

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

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