Supreme Court to Decide if Pipeline Firms Must Pay Landowners' Legal Bills

The Supreme Court will decide whether a government-backed company must cover the legal costs of a property owner who wins an eminent domain lawsuit.

The dispute involves North Dakota landowners and WBI Energy. WBI Energy operates a pipeline under a federal contract. The owners sued the company to secure fair payment for their seized land. The company eventually provided that compensation. The owners are now seeking nearly $380,000 to cover the fees their attorneys incurred during the litigation.

North Dakota law states that just compensation includes the legal costs for an owner to vindicate their property rights. Sam Spiegelman of Spiegelman Law Group argued that this rule is clear. The Eighth Circuit Court of Appeals disagreed. The appellate court ruled that the state law should not apply because the federal government is on the other side of the lawsuit. The case now moves to the highest court in the country to resolve that conflict.

Bob McNamara of the Institute of Justice noted that North Dakota has broad laws protecting victims of eminent domain and private natural gas pipelines. He stated that pipeline companies say they do not have to follow those laws because they operate like the federal government. Spiegelman warned that without this protection, landowners across the country may lack the incentive to pursue the full value of their land in court.

The court heard oral arguments on Monday. The Natural Gas Act is expected to feature prominently in the discussion. That act suggests federal standards should apply to disputes of this nature. The decision could set a precedent for property owners in all 50 states who face similar actions by private pipeline companies operating with federal authority.