Montana-Dakota Utilities Co., a Division of MDU Resources Group, Inc., n/k/a Montana-Dakota Utilities Co., a Subsidiary of MDU Resources Group, Inc., Plaintiff, Appellant, and Cross-Appellee v. Lavern Behm, Defendant, Appellee, and Cross-Appellant
No. 20180321
IN THE SUPREME COURT STATE OF NORTH DAKOTA
May 16, 2019
2019 ND 115
Opinion of the Court by Tufte, Justice.
Appeal from the District Court of Ward County, North Central Judicial District, the Honorable Gary H. Lee, Judge.
Anthony J. Ford (argued) and Malcolm H. Brown (appeared), Bismarck, N.D., for plaintiff, appellant, and cross-appellee.
Lynn M. Boughey, Mandan, N.D., for defendant, appellee, and cross-appellant.
REVERSED AND REMANDED.
[¶1] Montana-Dakota Utilities Co. (“MDU“) appeals, and Lavern Behm cross-appeals, from a judgment dismissing MDU‘s eminent domain action. Because the district court misapplied North Dakota law in concluding a taking was not necessary for a public use, we reverse and remand for trial on eminent domain damages to be awarded to Behm.
I
[¶2] MDU brought an eminent domain action under
[¶3] The district court bifurcated the proceedings between necessity and damages. Following a bench trial, the district court concluded that the “proposed pipeline is . . . a use authorized by
MDU‘s proposal is to place a 3000 foot pipeline beneath Lavern Behm‘s property for the benefit of a single user, Burlington Northern Santa Fe. While it is certainly not subject to dispute that maintaining railway switches is a necessity to the safe operations of the railroad, the construction of this pipeline is not necessary for this purpose. The current switch has been, and can continue to be maintained through the use of propane. The proposed pipeline serves only the convenience of a single user, Burlington Northern Santa Fe, while imposing a permanent restriction on Lavern Behm‘s use of his private property.
The location of the proposed pipeline further stretches the meaning of necessity to mean mere convenience to MDU. That convenience is not even a present convenience, but one of a future, highly speculative convenience.
. . . .
The proposed taking [of] Lavern Behm‘s property for the purpose of this pipeline is thus premised on a project to benefit a single user, Burlington Northern Santa Fe. It is to be placed on Lavern Behm‘s property, a mere 5 feet from the existing 33 foot section line right [of way]. That placement is deemed necessary by MDU based on the speculative fear of a future event which may never occur, and even if it does, may not necessitate the repair or replacement of the pipeline. The necessity proposed by MDU is nothing more than its own mere convenience.
Contrasted to this are Lavern Behm‘s rights to own his property and to farm or otherwise develop it as he sees fit, without the burden of this easement. The burden on Lavern Behm is immediate and permanent as opposed to the uncertain and speculative necessity argued by MDU.
The Court therefore finds that the proposed taking and pipeline route is not compatible with the greatest public benefit when weighed against the immediate and permanent private injury to Lavern Behm.
The court further concluded that “[t]his one-sided analysis by MDU, resolving all uncertainties and speculations in its favor, and without consideration of Lavern Behm‘s rights of ownership is arbitrary and capricious.”
II
[¶4] MDU argues the district court‘s ruling that the proposed taking was not necessary contradicts North Dakota law.
[¶5] In Brandt v. City of Fargo, 2018 ND 26, ¶ 11, 905 N.W.2d 764, we recently restated the standard for a court‘s review of questions of public necessity:
Under
N.D.C.C. § 32-15-05(2) , “the legislature has entrusted the right to review a determination of the question of necessity in an eminent domain action to the judicial branch of government.” Oakes Mun. Airport Auth. v. Wiese, 265 N.W.2d 697, 699 (N.D. 1978); see also KEM Elec. Coop., Inc., v. Materi, 247 N.W.2d 668, 670 (N.D. 1976); Otter Tail Power Co. v. Malme, 92 N.W.2d 514, 521 (N.D. 1958); Cty. of Pembina v. Nord, 78 N.D. 473, 477, 49 N.W.2d 665, 667 (1951). In Wiese, 265 N.W.2d. at 700 (citations omitted), this Court clarified the court‘s role in determining public necessity:To clarify the court‘s role in the determination of the question of public necessity, we emphasize that the determination of a condemning authority to exercise the power of eminent domain for an authorized public use is solely a legislative or political question which is not subject to judicial review. . . . The court‘s review of public necessity is limited to the question of whether the taking of the particular property sought to be condemned is reasonably suitable and usable for the authorized public use. Much latitude is given to the condemning authority to determine the location and the extent of the property to be acquired, and a taking is not objectionable merely because some other location might have been made or some other property obtained that would have been as suitable for the purpose. In the absence of bad faith, gross abuse of discretion, or fraud by the condemning authority in its determination that the property sought is necessary for the authorized use and is pursuant to specific statutory authority, such determination should not be disturbed by the courts.
[¶6] Behm‘s primary issue in his cross-appeal is that this Court has misinterpreted our earlier eminent domain case law since the Wiese decision was rendered in 1978. According to Behm, the problem was exacerbated by dicta in Cent. Power Elec. Coop., Inc. v. C-K, Inc., 512 N.W.2d 711, 714 n.2 (N.D. 1994), where this Court said in the course of dismissing for lack of jurisdiction, “[w]hen contested, necessity is generally found unless the condemnor acted arbitrarily, capriciously, in bad faith, or fraudulently.” Behm argues earlier cases such as KEM Elec. Coop., Inc. v. Materi, 247 N.W.2d 668 (N.D. 1976); Otter Tail Power Co. v. Malme, 92 N.W.2d 514 (N.D. 1958); Bd. of Educ. of City of Minot v. Park Dist., 70 N.W.2d 899 (N.D. 1955); and N. Pac. Ry. Co. v. Boynton, 17 N.D. 203, 115 N.W. 679 (1908), stand for the proposition that the limited standard of review for bad faith, gross abuse of discretion, or fraud committed by the condemnor applies only to the extent of a proposed taking and not to the necessity of the taking. Behm urges that we adopt an expanded judicial review of the necessity of taking so condemnors cannot “use any presumption or standard of proof to [countenance] a taking that is not first fully justified as necessary and for a proper public use.” To the extent he is not simply misreading our cases, Behm has not provided persuasive reasons for us to depart from the reasoning in more than 40 years of our precedent.
A
[¶7]
[¶8] The Century Code authorizes exercise of eminent domain for the following public uses:
Oil, gas, coal, and carbon dioxide pipelines and works and plants for supplying or conducting gas, oil, coal, carbon dioxide, heat, refrigeration, or power for the use of any county, city, or the inhabitants thereof, together with lands, buildings, and all other improvements in or upon which to erect, install, place, maintain, use, or operate pumps, stations, tanks, and other machinery or apparatus, and buildings, works, and plants for the purpose of generating, refining, regulating, compressing, transmitting, or distributing the same, or necessary for the proper development and control of such gas, oil, coal, carbon dioxide, heat, refrigeration, or power, either at the time of the taking of said property or for the future proper development and control thereof.
[¶9] Where a property owner contests “public use” under
[¶10] MDU, the condemnor, and BNSF, the customer it intends to serve, are both “a common carrier or utility business.”
B
[¶11] MDU argues the district court erred in ruling the proposed taking of Behm‘s property was not necessary for the public use but was of “mere convenience to MDU.” Before property may be taken for a use authorized by law, “it must appear . . . [t]hat the taking is necessary to such use.”
[¶12] In support of its decision, the district court relied on an 1883 California Supreme Court decision, Spring Valley Water-Works v. San Mateo Water-Works, 28 P. 447 (Cal. 1883), in which the court affirmed a decision refusing to allow
Private property, contiguously situated to the works of a corporation, may be very convenient for its corporate purpose, and the acquisition of the same might add to the wealth of the corporation by enhancing the value of the property which it has in hand, and yet not be reasonably necessary to the corporation in the discharge of its duty to the public. “For public uses the government has the right to exercise its power of eminent domain and take private property, giving just compensation; but for public convenience it has not. A public convenience is not such a necessity as authorizes the exercise of the right of eminent domain. The taking of private property for public uses is in derogation of private right, and in hostility to the ordinary control of the citizen over his estate, and statutes authorizing its condemnation are not to be extended by inference or implication.”
Id. at 449. Here, the district court reasoned that no necessity was shown because a pipeline crossing Behm‘s property would only serve the convenience of MDU, which could select an alternative route for the pipeline, and the convenience of BNSF, which could continue to heat its railroad switch with propane.
[¶13] The district court‘s analysis of the necessity of the public use is inconsistent with North Dakota law. Unlike in Spring Valley Water-Works, the easement sought by MDU is not a taking for “mere convenience.” In Materi, 247 N.W.2d at 671-72, we held that a showing of customer convenience in uninterrupted electric service and the condemnor‘s convenience and safety in construction and maintenance was sufficient to render reasonable a conclusion in favor of a taking‘s necessity. In Spring Valley Water-Works the court found it relevant to the necessity analysis “that it was entirely practicable for the plaintiff to construct on its own land, just above the land of defendant, the improvement for which it seeks to condemn the defendant‘s land.” 28 P. at 450. In contrast, MDU does not own adjacent land on which it could construct a pipeline. We have held that “a taking is not objectionable merely because some other location might have been made or some other property obtained that would have been as suitable for the purpose.” Brandt, 2018 ND 26, ¶ 11, 905 N.W.2d 764 (quoting Wiese, 265 N.W.2d at 700) (emphasis added).
[¶14] A “court‘s review of public necessity is limited to the question of whether the taking of the particular property sought to be condemned is reasonably suitable and usable for the authorized public use.” Brandt, 2018 ND 26, ¶ 11, 905 N.W.2d 764 (quoting Wiese, 265 N.W.2d at 700). In C-K, Inc., 512 N.W.2d at 714, n.2, we said:
While we have said before that “landowner[s] may not object merely because some other location might have been made or some other property obtained that would have been as suitable for the purpose,” KEM, 247 N.W.2d at 671, citing to Otter Tail Power Co. v. Malme, 92 N.W.2d 514, 521 (N.D. 1958) (emphasis ours), we have not held that this proposition stands when the property chosen for the route is less suitable. In light of the growing body of case law in the area of electromagnetic fields, see 8A Nichols, Eminent Domain ch. 26 (3d ed.), Landowners in this case may have a valid argument that alternate routes benefit the public with less private injury.
[¶15] Behm proposed two alternative routes for the pipeline. The first would run through BNSF‘s current east-west railroad easement. The second would run along a north-south section line right of way adjacent to the route selected by
[¶16] The district court‘s belief that the pipeline was unnecessary because BNSF could continue to heat the railroad switch with propane erroneously focuses on the customer‘s necessity rather than the public utility‘s necessity. Whether a project is necessary at all, including the “condemning authority‘s determination to exercise the power of eminent domain for an authorized public use[,] is a legislative question which is not subject to judicial review.” Brandt, 2018 ND 26, ¶ 12, 905 N.W.2d 764. The necessity inquiry under
Every public utility shall furnish, provide, and maintain such service, instrumentalities, equipment, and facilities as shall promote the safety, health, comfort, and convenience of its patrons, employees, and the public, and as shall be in all respects adequate, convenient, just, and reasonable, and without any unjust discrimination or preference.
The court‘s consideration of BNSF‘s preference for gas by pipeline to heat its railroad switch misapplied the law. It is the necessity of MDU, not that of BNSF that is the proper consideration. To the extent that we have considered the members of the public served by the condemnor‘s proposed public use, we have said “convenience to the public becomes a necessity for the board of education in establishing a junior high school.” Bd. of Educ. of City of Minot, 70 N.W.2d at 906.
[¶17] Ultimately, it appears the district court substituted its judgment for that of the condemning authority. “In the absence of bad faith, gross abuse of discretion, or fraud by the condemning authority in its determination that the property sought is necessary for the authorized use and is pursuant to specific statutory authority, such determination should not be disturbed by the courts.” Brandt, 2018 ND 26, ¶ 11, 905 N.W.2d 764 (quoting Wiese, 265 N.W.2d at 700). Behm did not establish that MDU acted in bad faith, grossly abused its discretion, or committed fraud in determining whether its chosen route across Behm‘s property was reasonably suitable in terms of the greatest public benefit and the least private injury.
[¶18] We conclude the district court erred in ruling MDU‘s proposed taking was not necessary for a public use.
[¶19] Behm lists ten issues in his cross-appeal but does not specifically address any of them in his brief. We do not address inadequately briefed issues. See, e.g., State v. Nice, 2019 ND 73, ¶ 11, 924 N.W.2d 102. We reverse the judgment and remand for trial on eminent domain damages to be awarded to Behm.
[¶20]
Jerod E. Tufte
Jon J. Jensen
Carol Ronning Kapsner, S.J.
Daniel J. Crothers, Acting C.J.
[¶21] The Honorable Carol Ronning Kapsner, Surrogate Judge, sitting in place of VandeWalle, C.J., disqualified. The Honorable Lisa Fair McEvers disqualified herself subsequent to oral argument and did not participate in this decision.