The gas pipeline case the Supreme Court accepted Monday pits conservative priorities against each other.
On one side, there’s states’ rights and property rights. On the other is the need for gas pipelines and other energy development.
In the middle is a $383,000 tab for legal work, racked up as attorneys for a group of North Dakota ranchers fought with a gas company about a pipeline across their land.
The landowners didn’t oppose the pipeline, but they said the company was offering far less money than they’d gotten from other pipeline companies. They settled their case but left to the courts the question of who pays the fees.
And the courts haven’t been able to agree. North Dakota state law says the company should pay, and federal law doesn’t.
That’s the legal question. But the conflict presents the conservative-dominated Supreme Court with questions about what rights landowners should have when the federal government authorizes energy projects that affect their property.
The Trump administration has sided with the gas company in the case, WBI Energy, and against the landowners, saying the constitutional requirement for “just compensation” in eminent domain cases doesn’t include attorney fees.
The conflict between property rights and energy development makes it hard to predict how the court will rule, said Frances Morris, an environmental lawyer at Kelley Drye & Warren.
“The administration is all for energy infrastructure,” said Morris, who formerly worked in the Environment and Natural Resources Division at the Department of Justice. “But this also implicates other really important concepts of states rights and property owners.”
But she doesn’t think the case will have much effect on pipeline construction, even if the justices open the door for more landowners in eminent domain cases to be reimbursed for attorney fees. Pipeline companies are already familiar with the prospect of paying attorney fees when they lose condemnation cases.
“That’s kind of what they’re living with already,” Morris said.
The case goes back to 2018, when WBI Energy told the ranch owners it planned to lay a new, 12-inch-wide natural gas line across their property.
The land is in western North Dakota in the middle of the Bakken shale oil drilling zone. Landowners expected they’d be paid what they had gotten from oil pipelines, whose developers did not have the power of eminent domain.
But WBI, which is part of MDU Resources, didn’t want to pay that rate. The company calculated the value by doing appraisals of the land before and after pipeline construction and paying the difference. MDU declined comment Monday.
After a judge allowed the ranchers to use market prices to show the value of their land, the two sides settled.
But they left it up to the courts whether the company should also have to pay the hundreds of thousands of dollars the ranchers had racked up in attorney fees. The trial judge said the company did.
Most federal appeals courts have ruled that state law applies, Morris said. But the 8th Circuit U.S. Court of Appeals, splitting from other circuits, said it didn’t.
In May, the Trump administration sided with the gas company. Solicitor General D. John Sauer recommended that the high court take the case and said the constitutional requirement for “just compensation” doesn’t include attorney fees. And unlike other federal condemnation laws, the Natural Gas Act, which governs pipelines approved by the Federal Energy Regulatory Commission, doesn’t specify that landowners should get attorney fees when they contest companies’ offers.
The DOJ brief stated that the ranchers’ “policy objections to that choice are best directed to Congress, not this Court.”
The ranchers are being represented by the Institute for Justice, a libertarian-oriented group that litigates on behalf of landowners facing eminent domain seizures. Robert McNamara, the group’s deputy litigation director, said making landowners pay attorney fees in such cases creates an unfair burden that lets companies benefit from making lowball offers.
In an email exchange Monday, McNamara said he was pleased the court agreed to hear the case.
“We’re looking forward to making the case for forcing private companies to respect state-law protections for property when they take land for their own use,” he said.
