The U.S. Supreme Court has agreed to answer whether a group of McKenzie County landowners is entitled to attorney fees from a pipeline company.
The lawsuit stems from the landowners’ yearslong legal battle with WBI Energy after the company used eminent domain to take a portion of their properties for a pipeline project in 2018. The federal Natural Gas Act allows companies to take land for public natural gas infrastructure so long as landowners are fairly compensated.
The property owners — Leonard and Denae Hoffmann, Randall Stevenson and Rocky Prestangen — were paid for their land under a confidential settlement reached in federal court in 2021. They claim they’re also entitled to legal costs.
The plaintiffs and WBI disagree on whether federal or state law should decide who pays attorney fees. The Natural Gas Act doesn’t specifically direct WBI to cover this expense. However, North Dakota statute does, the McKenzie County property owners claim.
The landowners want the Supreme Court to find that companies are required to follow state statute in this area.
Robert McNamara, the lead attorney representing the plaintiffs, told the North Dakota Monitor previously that courts have long recognized that state property laws should be honored in federal eminent domain cases. Eminent domain was exclusively a state power until the late 19th century, said McNamara, deputy litigation director for the Institute for Justice, a libertarian legal group.
North Dakota U.S. District Court Judge Daniel Hovland in 2024 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 last spring.
The 8th Circuit is the only federal appeals court to rule this way, McNamara said.
WBI Energy says that state law doesn’t apply in this instance because it seized the land under a federal statute. The Natural Gas Act essentially delegates the federal government’s power of eminent domain to natural gas companies, WBI writes in court records, and the federal government is not required to cover property owners’ legal expenses in most cases. It says the Natural Gas Act is intended to make the process for building natural gas pipelines more uniform across the country, so it wouldn’t make sense for companies to have to follow different laws for attorney fees in every state.
WBI also claims that even if state law did govern in this scenario, North Dakota law would not require it to cover this expense, either. North Dakota law allows judges the discretion to award attorney fees in eminent domain actions filed in state court, but does not mandate that they be provided, the company argues.
WBI declined a request for comment Tuesday.
The landowners petitioned the Supreme Court to take up the case last year.
In September, a coalition of 12 states led by North Dakota filed a friend-of-the-court brief urging the justices to decide the suit on the side of the landowners. The U.S. Department of Justice in May filed a brief advising the court to decide the issue in favor of WBI.
“What you’re kind of seeing here is the age-old fight of federalism,” McNamara said.
The high court agreed to review the suit late last month.
In the coming months, each party will file additional documents with the court outlining their arguments. McNamara said he expects the Supreme Court to hold oral arguments in the case this fall. The justices will likely issue their decision between three and six months after that
WBI is proposing a major new natural gas pipeline between McKenzie County and eastern North Dakota. It has said it expects the project, known as the Bakken East pipeline, to be operational by 2030.
“It would be nice if everyone knew what the rules were before deciding to build a new pipeline,” McNamara said.
WBI Energy President Rob Johnson previously said the company will only use eminent domain for the project as a last resort.