Supreme Court to Resolve Circuit Split on Attorney's Fee Recovery in Natural Gas Act Eminent Domain Proceedings
The Supreme Court granted certiorari to resolve a circuit split over whether the Fifth Amendment or state law governs compensation—including attorney's fees—when interstate pipeline companies exercise federal eminent domain authority under the Natural Gas Act. The Eighth Circuit's exclusion of $383,000 in attorney's fees awarded under North Dakota law to landowners directly conflicts with Third, Fifth, Sixth, and Eleventh Circuit precedent permitting state-law fee recovery in Natural Gas Act condemnation proceedings.
Background
WBI Energy Transmission, Inc. exercised federal eminent domain authority under the Natural Gas Act to acquire pipeline easements across property owned by Leonard W. Hoffmann and other North Dakota landowners. The district court awarded compensation for the easements and, applying North Dakota law, included $383,000 in attorney's fees as part of just compensation. WBI appealed the fee award, arguing that federal law—specifically the Fifth Amendment's Just Compensation Clause—exclusively governs what constitutes compensable damages in Natural Gas Act condemnation proceedings.
The Circuit Split
The Eighth Circuit reversed the attorney's fee award, holding that the Fifth Amendment provides the exclusive framework for determining just compensation in federal eminent domain actions under the Natural Gas Act. The court concluded that because the Supreme Court has historically excluded attorney's fees from Fifth Amendment just compensation, such fees cannot be recovered even when state law would otherwise permit them. This ruling created a direct conflict with established precedent in the Third, Fifth, Sixth, and Eleventh Circuits, all of which have held that state law governs the measure of compensation—including attorney's fees—in Natural Gas Act condemnation proceedings.
The Question Presented
The Supreme Court will resolve whether the Fifth Amendment or state law governs compensation when interstate pipeline companies exercise federal eminent domain authority under the Natural Gas Act. The resolution will determine whether landowners in condemnation proceedings can recover attorney's fees under state law or whether federal constitutional standards preclude such recovery.
Implications for Pipeline Development
The Supreme Court's resolution of this split will determine whether pipeline companies exercising Natural Gas Act eminent domain authority face potential liability for landowners' attorney's fees under state condemnation statutes. Currently, the availability of fee-shifting depends on which circuit hears the condemnation action, creating inconsistent outcomes across federal jurisdictions.