Supreme Court to Decide Pipeline Eminent Domain Fee Dispute

The U.S. Supreme Court will decide whether North Dakota landowners can recover attorney fees when pipeline companies use federal eminent domain authority under the Natural Gas Act.

(P&GJ) — The U.S. Supreme Court will consider whether North Dakota law allows landowners to recover attorney fees after a natural gas pipeline company acquires property through federal eminent domain authority, according to the North Dakota Monitor.

The dispute involves Leonard and Denae Hoffmann, Randall Stevenson and Rocky Prestangen, whose McKenzie County properties were partially acquired by WBI Energy for a pipeline project in 2018. The landowners reached a confidential compensation settlement with the company in 2021 but continued seeking reimbursement for their legal expenses.

At issue is whether compensation under the federal Natural Gas Act should incorporate state eminent domain rules. The landowners argue North Dakota law permits recovery of attorney fees, while WBI maintains that federal law governs because the company exercised authority granted under a federal statute.

A federal district judge sided with the property owners in 2024 and ordered WBI to pay approximately $380,000. The 8th U.S. Circuit Court of Appeals later overturned that decision, finding that the company was not required to pay the additional costs.

WBI has argued that applying different state compensation standards would undermine the Natural Gas Act’s goal of creating a consistent process for interstate pipeline development. The company also contends North Dakota law gives judges discretion to award attorney fees rather than requiring payment in every case.

North Dakota and 11 other states urged the Supreme Court to support the landowners, while the U.S. Department of Justice backed WBI’s position. The case presents a broader dispute over the balance between federal pipeline authority and state property protections, as reported by the North Dakota Monitor.

The Court is expected to hear arguments during its next term, with a ruling likely to clarify how compensation is calculated in future Natural Gas Act condemnation cases.