North Dakota ranchers fought a gas company's pipeline easement and won $383,375 in legal costs, only to lose the award on appeal; their dispute is now headed to the US Supreme Court on November 9

The US Supreme Court will hear a dispute on Monday over whether a private natural gas pipeline company must pay the legal expenses of landowners whose property it acquires through eminent domain.The case involves North Dakota rancher Leonard Hoffmann and his neighbours, who won an award of $383,375.76 in attorney's fees and litigation expenses against WBI Energy Transmission, according to SCOTUS Analytics. However, the US Court of Appeals for the Eighth Circuit overturned the award in March 2025, ruling that federal law, rather than state law, governs compensation in such cases. The ranchers have now challenged that decision before the Supreme Court.The dispute began in 2018 when WBI Energy Transmission informed Hoffmann and other landowners in North Dakota that it planned to acquire an easement across their ranchland for a natural gas pipeline. An easement gives another party the right to use a specific portion of privately owned property. Although WBI is a private company, it holds a federal certificate that allows it to exercise eminent domain powers under the Natural Gas Act.According to the Institute for Justice, the public-interest law firm representing the ranchers, WBI initially offered them about half the property's market value. The landowners challenged the proposed amount and took the dispute to court.The parties eventually reached a settlement over the value of the property. However, they left unresolved whether the company was also required to pay the landowners' legal fees and other expenses incurred during the proceedings. The federal district court in North Dakota ruled that state law governed the issue and ordered WBI to reimburse the ranchers $383,375.76.WBI challenged the order before the Eighth Circuit. The appeals court reversed the decision, holding that a private company exercising eminent domain powers under the Natural Gas Act stands in the position of the federal government. It ruled that federal law, not North Dakota law, determines the compensation payable in such cases. The ranchers subsequently approached the Supreme Court, which agreed to examine the dispute.Legal question before the Supreme CourtThe central question is whether compensation for property acquired by a private pipeline company under the Natural Gas Act should be determined by state law or by the federal constitutional standard under the Fifth Amendment.The Fifth Amendment requires the payment of just compensation when private property is taken for public use. The disagreement is over whether this federal requirement also determines the rules for recovering legal expenses when a private company exercises delegated eminent domain powers.The ranchers argue that the Natural Gas Act does not expressly replace state compensation laws with a federal standard. They contend that state law should continue to apply because states are the primary source of rules governing property rights and compensation.Their lawyers have also argued that Congress would have clearly stated its intention if it wanted to displace existing state laws. They point out that the Natural Gas Act's eminent domain provision was based on a similar provision in the Federal Power Act, which lower courts have interpreted as allowing state compensation rules to apply.The ranchers further argue that the Eighth Circuit's decision conflicts with earlier rulings by four other federal appeals courts: the Third, Fifth, Sixth and Eleventh Circuits. They maintain that these courts have allowed state compensation laws to govern private condemnations under federal statutes.WBI Energy Transmission argues that Congress delegated federal eminent domain powers to eligible pipeline companies under the Natural Gas Act. Therefore, it says, the same federal compensation standard that applies when the government takes property should also apply when a private company exercises those powers.The company has also argued that Congress deliberately adopted state procedural rules in the Natural Gas Act but did not expressly adopt state compensation measures. According to WBI, the law was intended to create a uniform federal system instead of allowing different state laws to govern pipeline land acquisitions.The US government has supported the company's position in the Supreme Court proceedings. In its brief, the government argued that when Congress delegates federal eminent domain powers to a private entity without expressly adopting state compensation rules, the Fifth Amendment standard applies. Under that interpretation, attorney's fees are not recoverable.You use AI every day. Now get your AI Quotient. Take the AIQ test.