Supreme Court to hear North Dakota landowners' legal fees case

Supreme Court to Review North Dakota Property Rights and Legal Fees

The Supreme Court is preparing to hear a case that could fundamentally change how property owners across the country recover the costs of defending their land against government-backed projects. At the center of the dispute is a North Dakota legal battle over whether a company exercising eminent domain must reimburse a landowner for the legal fees incurred while fighting for fair compensation, Action News 5 reported.

RACE CALL: North Dakota Supreme Court Justice Douglas Bahr, who ran unopposed, has been REELECTED. Judicial Hub rates Bahr as independent/indeterminate.

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The conflict involves WBI Energy, a company that utilized eminent domain to construct a natural gas pipeline. While the company eventually provided the landowners with the compensation they sought for their property, the legal process left the owners with a bill for nearly $380,000 in attorney fees. The central question now before the justices is whether the company is legally obligated to cover those costs.

The Conflict Between State Law and Federal Authority

North Dakota law includes provisions intended to protect property owners who are forced into court to secure just compensation for seized land. Sam Spiegelman of the Spiegelman Law Group has argued that state law “clearly says that just compensation includes the legal costs for an owner to vindicate their property rights.” However, the 8th Circuit Court of Appeals reached a different conclusion, ruling that these state-level protections should not apply when the federal government is involved in the legal dispute.

This creates a significant tension between state-level property protections and federal regulatory reach. Bob McNamara, representing the Institute of Justice, pointed out that North Dakota has established broad laws to protect citizens against eminent domain, particularly regarding private natural gas pipelines. According to McNamara, pipeline companies have contended that they are exempt from these state regulations because they operate under the authority of the federal government.

National Stakes for Landowners

The implications of this case extend well beyond North Dakota. If the Supreme Court upholds the 8th Circuit’s decision, it could effectively strip away the financial safety net that currently encourages landowners to challenge undervaluation in court. Spiegelman noted that without the ability to recover legal expenses, landowners nationwide “will not have any good incentive to pursue the vindication of the full value of their land.”

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The case also highlights the growing friction between private infrastructure developers and individual property rights. McNamara emphasized the broader scope of the issue, stating, “What’s at stake here are property rights protections. And really all 50 states that are under threat from private pipeline companies operating with the federal government’s authority.”

As the court begins its review, the Natural Gas Act is expected to be a focal point of oral arguments. The act suggests that federal standards should take precedence in disputes of this nature, potentially overriding the specific statutes that North Dakota landowners have relied upon. For property owners and developers alike, the outcome will define the boundaries of financial accountability when private industry leverages federal power to acquire land.