Court upholds IUB approval of pipeline

Attorney: Dakota Access pipeline case is headed for Supreme Court

The Polk County District Court upheld the Iowa Utilities Board’s approval of an oil pipeline across the state Wednesday, ruling against landowners who sued to block the pipeline from crossing their property.

The court rejected claims by 15 landowners that Texas-based Dakota Access LLC had no right to use eminent domain, and that the right shouldn’t have been granted by the Iowa Utilities Board to let Dakota Access seize farmland from unwilling landowners.

A judge heard arguments on the case on Dec. 15, 2016.

The landowners will appeal the decision to the Iowa Supreme Court, their attorney, Bill Hanigan, of the Davis Brown Law Firm in Des Moines, said.

The Sierra Club also was part of the case, claiming the IUB never proved the pipeline would serve “public convenience and necessity,” so the pipeline’s permit should be revoked.

In his decision upholding the IUB’s actions, District Court Judge Jeffery Farrell said the board’s findings were supported by evidence.

The board weighed the pros and cons and found there would be a benefit to the state, in spite of environmental risks, Farrell said.

“The board ultimately concluded that the benefits outweighed the public and private costs,” he wrote.

The factors which the board found most significant were the increased safety of transporting crude oil by pipeline rather than rail, economic benefits to the state, environmental issues, safety risks, and oil spill remediation, Farrell wrote.

“The board noted the potential environmental impact as the primary factor weighing against the application, but found that the risk of harm was minimized by the terms and conditions imposed by the board in its decision, voluntary safety measures offered by Dakota, and regulatory review by other state and federal agencies,” he wrote.

Farrell noted that Dakota Access agreed to greater design and testing standards than required by federal law.

Landowners argued that economic impact shouldn’t be considered when deciding if the pipeline will serve the “public necessity and convenience,” but that isn’t supported by law, Farrell wrote.

The board estimated economic benefits to Iowa of between $787 million and $1.11 billion. It found the project would employ 3,100 to 4,000 workers, and create 25 long-term jobs. Dakota Access would also pay about $27 million in property taxes each year, Farrell wrote.

“It may be reasonable to question whether these short-term benefits should play a major role in the analysis,” the judge wrote. “Still, there is no distinction in the case law between short-term and long-term economic benefits. The court cannot find as a matter of law that the board cannot consider the significant amount of money spent during a major construction project.”

The court disagreed with Sierra Club that an environmental report should have been required, agreeing with the board that it could consider environmental issues by using its standard hearing procedures.

The court also disagreed that the pipeline must provide services directly to Iowa in order for its application to be considered, Farrell wrote.

On the matter of eminent domain, Farrell said the company had an exception to the limits the landowners claimed would block its use.

The landowners argued that the IUB’s power of granting eminent domain should be limited by Iowa’s general eminent domain statute in chapter 6A, Farrell wrote. But the IUB’s eminent domain powers are granted in the code section specifically for that board, and aren’t limited by the general statute.

“In fact, there is language in chapter 6A showing the legislative intent to defer to other statutes granting eminent domain to entities under the jurisdiction of the board,” Farrell wrote.

Dakota Access also counts as a common carrier under the law, which the landowners had disputed, because it has entered into contracts with nine third-party shippers to transport oil via the pipeline and reserved 10 percent of the pipeline’s capacity for walk-up shipping not covered by those contracts, he wrote.

The court spoke specifically to questions on Keith Puntenney’s land located south of Harcourt in Webster County. Puntenney had claimed the board didn’t consider potential impact to his drainage tile, or to his goal of getting wind turbines installed on his land.

The court found the board’s determination that the drainage tile wouldn’t be affected was based on “substantial evidence.”

The same was found for Pilot Mound resident LaVerne Johnson’s claims about his drainage tile.

The landowners had asked the court to revoke Dakota Access’ use of eminent domain and order the company to remove the pipeline from the landowners’ properties.

“We are disappointed,” said Hanigan, “but we’re not deterred. A private, out-of-state company, which doesn’t serve Iowans, should not be able to use eminent domain to seize Iowa farmland for the purpose of exporting crude oil.”

One of the 14 landowners, Dick Lamb, who lives near Boone, said he believes Iowans are on his side.

“We’re not giving up,” Lamb said. “We don’t want this pipeline, and I think most Iowans don’t want it either.”

The pipeline crosses 343 miles across 18 Iowa counties on its 1,168-mile journey from the Bakken oil fields of North Dakota to Patoka, Illinois.

It’s been a long process to get the 30-inch pipe into the ground. Dakota Access, which is part of Energy Transfer Partners, filed initial documents in November 2014, and held informational meetings in every affected county in December 2014.

It officially filed for its hazardous liquid pipeline permit on Jan. 20, 2015.

The board received more than 200 public comments about the application. It released its final decision and order on March 10, 2016.

A lawsuit challenging eminent domain was filed in July 2015, and dismissed in October 2015, with a judge saying the farmers couldn’t bring the case to trial before working through the board first.

The current lawsuit was filed in May 2016.

In August 2016 the landowners sought a stay from the court to keep work from being done on their land until after this case could be heard in court. The request was denied, and construction began on the contested properties shortly afterwards.