Hoffmann v. WBI Energy Transmission, Inc.

WBI Energy Transmission, Inc. is a private natural gas company that holds a federal certificate authorizing it to use eminent domain to build and operate a natural gas pipeline. WBI used that authority to condemn an easement across ranchland in McKenzie County, North Dakota, owned by Leonard Hoffmann, Margaret Hoffmann, Denae Hoffmann, Rocky & Jonilla Farms, LLP, and Randall Stevenson. After roughly three years of litigation over the value of the taken property, the parties settled that question but expressly reserved the issue of whether the landowners could recover their attorney’s fees and litigation costs. The landowners argued that North Dakota law governed compensation and that state law entitles condemnees to recover those costs. WBI argued that federal law controlled and capped compensation at the constitutional minimum set by the Fifth Amendment, which does not include attorney’s fees.

The district court agreed with the landowners, applied a federal choice-of-law framework, concluded that North Dakota law governed, and ordered WBI to reimburse the landowners $383,375.76 in fees and litigation expenses. WBI appealed, and the U.S. Court of Appeals for the Eighth Circuit reversed, holding that private companies exercising eminent domain power under the Natural Gas Act stand in the federal government’s shoes and owe only the constitutional minimum of just compensation under the Fifth Amendment, expressly splitting with the Third, Fifth, Sixth, and Eleventh Circuits.