Iowa Supreme Court Rejects Lawsuit Challenging the Dakota Access Pipeline

On May 31, 2019, the Iowa Supreme Court issued its opinion rejecting a lawsuit filed by landowners, and interested parties including various landowner associations and the Sierra Club Iowa Chapter, challenging the Dakota Access pipelines routing through Iowa. The Court noted the pipeline has already been constructed, but found that did not moot out the challenges to the pipeline. The Court then examined whether the Iowa Utilities Board (“IUB”) had exceeded its statutory authority in finding that the pipeline will promote the public convenience and necessity.

The Iowa Supreme Court agreed that the IUB was within the scope of its authority in concluding that the pipeline met that standard, in that Iowa is a heavy user of petroleum products, and the pipeline would among other things help reduce the cost of petroleum products available in Iowa despite the fact that the oil was not produced in Iowa, refined in Iowa, or offloaded in Iowa. The Court also addressed the constitutional authority for the exercise of eminent domain, noting that was the most significant issue in the case.

The challenge made by the landowners and interested parties was that the pipeline was essentially a private enterprise with insufficient public value to justify the use of eminent domain and that the use of eminent domain therefore violated the constitutional protections afforded to the landowners and other parties. The Iowa Supreme Court examined U.S. Supreme Court authority, and found that eminent domain cannot be exercised simply because there is public benefit in the form of economic development, but did find that eminent domain could be used by something qualifying as “common carrier, akin to a railroad or a public utility.”

The Court found the pipeline qualified as a common carrier that also provided public benefits to Iowa of reduced prices of crude oil products and derivatives therefrom. The Court found that it justified the use of eminent domain in a fashion that did not violate the constitutional rights of the complaining parties including landowners. Finally, the Court found that the specific route that was approved by the IUB was justified with appropriate reasons.

Justices Wiggins and Appel concurred in part and dissented in part, and Justice McDonald dissented. Justices Wiggins and Appel disagreed with the finding that the pipeline constituted a common carrier, and Justice McDonald found that the pipeline having been already completed rendered the entire appeal moot. A copy of the Iowa Supreme Court’s opinion may be found at this link.