Keith Puntenney, Laverne I. Johnson, Richard R. Lamb, Marian D. Johnson, Northwest Iowa Landowners Association, Iowa Farmland Owners Association, Inc., and the Sierra Club Iowa Chapter v. Iowa Utilities Board, and Office of Consumer Advocate and The Main Coalition, and Dakota Access, LLC ( 2019 )

IN THE SUPREME COURT OF IOWA
No. 17–0423
Filed May 31, 2019
KEITH PUNTENNEY; LAVERNE I. JOHNSON; RICHARD R. LAMB,
Trustee of the Richard R. Lamb Revocable Trust; MARIAN D. JOHNSON
by her Agent VERDELL JOHNSON, NORTHWEST IOWA LANDOWNERS
ASSOCIATION; IOWA FARMLAND OWNERS ASSOCIATION, INC.; and
the SIERRA CLUB IOWA CHAPTER,
Appellants,
and
HICKENBOTTOM EXPERIMENTAL FARMS, INC. and PRENDERGAST
ENTERPRISES, INC,
Petitioners,
vs.
IOWA UTILITIES BOARD, A Division of the Department of Commerce,
State of Iowa,
Appellee,
and
OFFICE OF CONSUMER ADVOCATE and THE MAIN COALITION,
Intervenors-Appellees,
and
DAKOTA ACCESS, LLC,
Appellee.
Appeal from the Iowa District Court for Polk County, Jeffrey D.
Farrell, Judge.
2
Landowners appeal a district court decision denying a petition for
judicial review of a decision by the Iowa Utilities Board authorizing a
company to use eminent domain to build a crude oil pipeline. AFFIRMED.
William E. Hanigan and Jason R. Lawrence of Davis, Brown, Koehn,
Shors & Roberts, P.C., Des Moines, for appellants Richard R. Lamb;
Marian D. Johnson by Agent, Verdell Johnson; Northwest Iowa
Landowners Association; and Iowa Farmland Owners Association, Inc.
Wallace L. Taylor of Law Offices of Wallace L. Taylor, Cedar Rapids,
for appellants Keith Puntenney, LaVerne I. Johnson, and Sierra Club Iowa
Chapter.
Bret A. Dublinske and Brant M. Leonard of Fredrikson & Byron,
P.A., Des Moines, for appellee Dakota Access, LLC.
David J. Lynch (until withdrawal), Cecil I. Wright II, and Benjamin J.
Flickinger, Des Moines, for appellee Iowa Utilities Board.
Mark R. Schuling and John S. Long, Des Moines, for intervenor-
appellee Office of Consumer Advocate.
Matthew C. McDermott and Espnola F. Cartmill of Belin McCormick,
P.C., Des Moines, for intervenor-appellee The Main Coalition.
David Bookbinder, Washington, D.C., and Scott L. Long of Long &
Gilliam, Des Moines, for amicus curiae Niskanen Center.
3
MANSFIELD, Justice.
The Bakken Oil Field has made North Dakota the second leading oil-
producing state in our country. Almost all of America’s oil-refining
capacity, however, is located elsewhere in the nation. For this reason, an
underground crude oil pipeline was proposed that would run from western
North Dakota across South Dakota and Iowa to an oil transportation hub
in southern Illinois. Following a lengthy administrative proceeding, the
Iowa Utilities Board (IUB) approved the construction of this pipeline in
Iowa and approved the use of eminent domain where necessary to
condemn easements along the pipeline route.
Several landowners and an environmental organization sought
judicial review. They contended the pipeline did not serve the “public
convenience and necessity” as required by law, see Iowa Code § 479B.9
(2016); did not meet the statutory standard required for a taking of
agricultural land, see id. §§ 6A.21(1)(c), .22(1); and did not meet the
constitutional definition of “public use” set forth in article I, section 18 of
the Iowa Constitution and the Fifth Amendment to the United States
Constitution. Two of the landowners also raised claims personal to them.
The district court denied the petitions for judicial review, and the
petitioners have appealed.
On appeal, we conclude that the IUB’s weighing of benefits and costs
supports its determination that the pipeline serves the public convenience
and necessity. We also conclude that the pipeline is both a company
“under the jurisdiction of the [IUB]” and a “common carrier,” and therefore
is not barred by Iowa Code sections 6A.21 and 6A.22 from utilizing
eminent domain. See id. §§ 6A.21(2), .22(2)(a)(2). In addition, we conclude
that the use of eminent domain for a traditional public use such as an oil
pipeline does not violate the Iowa Constitution or the United States
4
Constitution simply because the pipeline passes through the state without
taking on or letting off oil. Lastly, we determine that the IUB’s resolution
of the two individual landowner claims was supported by the law and
substantial evidence. For these reasons, we affirm the district court’s
judgment.
I. Background Facts and Proceedings.
In October 2014, Dakota Access, LLC (Dakota Access) filed
documents with the IUB disclosing its intent to construct an underground
crude oil pipeline from western North Dakota to Patoka, Illinois, an oil
transportation hub. The pipeline would traverse Iowa from the northwest
corner to the southeast corner of the state, passing through eighteen
counties over a distance of approximately 343 miles.
In December 2014, as required by law, Dakota Access held
informational meetings, attended by IUB representatives, in each of the
eighteen counties. See id. § 479B.4. The following month, Dakota Access
filed a petition with the IUB for authority to construct the pipeline. See id.
§§ 479B.4–.5. In the petition, Dakota Access sought “the use of the right
of eminent domain for securing right of way for the proposed pipeline
project.” See id. § 479B.16. Various parties requested and were granted
permission to intervene, including landowners, trade unions, business
associations, and environmental groups.
On June 8, the IUB filed a procedural schedule for the case in which
it identified three issues for consideration:
(a) whether the proposed pipeline will promote the public
convenience and necessity, (b) whether the location and route
of the proposed pipeline should be approved, and (c) whether
and to what extent the power of eminent domain should be
granted . . . .
5
The hearing on Dakota Access’s application took place in November
and December 2015. On the first day, the IUB received public comments
from over 200 people both in support of and against the pipeline. An
eleven-day evidentiary hearing followed. During that hearing, sixty-nine
witnesses testified. After the conclusion of the hearing, the IUB received
posthearing briefs.
On March 10, 2016, the IUB issued a 159-page final decision and
order. First, it addressed whether the pipeline would promote the public
convenience and necessity. The IUB concluded that the public
convenience and necessity test should be treated “as a balancing test,
weighing the public benefits of the proposed project against the public and
private costs or other deteriments as established by the evidence in the
record.” It also concluded that it could consider “public benefits outside
of Iowa” for an interstate oil pipeline. In addition, the IUB noted that
climate change is “a very important issue,” but that the pipeline
“represents, at most, a change in the method of crude oil deliveries that
are already taking place and that will continue to take place regardless of
whether this pipeline is built.” The IUB further found that “the increased
safety associated with pipeline transport of crude oil is significant” as
compared to existing rail transportation of that oil.
Continuing, the IUB also found overall economic benefits to Iowa
from the construction and operation of the pipeline. And while it observed
that it would be impossible to build and operate a pipeline without any
environmental impact, it found that the route was “selected in a manner
intended to minimize adverse environmental impacts” and specifically “to
minimize the possibility of leaks.” It added that “Dakota Access has taken
reasonable steps to reduce the safety risks associated with the proposed
pipeline.”
6
The IUB required that the parent companies of Dakota Access
provide unconditional financial guarantees of the pipeline’s liabilities and
made a series of modifications to the agricultural impact mitigation plan.
Among other things, the IUB required that the pipeline be installed at a
minimum depth of forty-eight inches where reasonably possible, that all
tiling be repaired and restored, and that Dakota Access provide a GPS map
to the landowner of any tiling found during construction.
Ultimately, the IUB found that the pipeline would promote the public
convenience and necessity. It did so primarily for two reasons:
First, the proposed pipeline represents a significantly safer
way to move crude oil from the field to the refinery when
compared to the primary alternative, rail transport. The most
credible evidence in this record, based on data from the U.S.
Department of Transportation, shows that the spill incident
rate for transport of crude oil by rail transport is three to four
times higher than the incident rate for pipeline transport on a
ton-mile basis. The oil is going to be produced and shipped
as long as the market demands it; given that reality, shipping
by the safest available method makes sense.
Second, in the IUB’s view, there would be considerable economic benefits
“associated with the construction, operation, and maintenance of the
proposed pipeline.”
On the other side of the ledger, the IUB noted that there were
potential adverse environmental and agricultural impacts from the
pipeline as well as effects on the landowners whose land would be
trenched. Yet, with certain precautionary measures in place, it found that
the benefits outweighed the costs associated with the project.
Regarding the pipeline’s route through Iowa, the IUB observed that
Dakota Access had used a software program that evaluated alternative
routes and “developed a route that would avoid those land areas where the
pipeline could impact critical structures or habitat.” It found that a zigzag
7
route that contained right angles and followed division lines (as proposed
by some landowners) would create additional safety issues.
The IUB then turned to the eminent domain issues. It found that
sections 6A.21 and 6A.22 gave authority to a pipeline company under the
IUB’s jurisdiction to condemn an easement for “public use.” It concluded
that this statutory public-use requirement had been met. In addition, it
determined that constitutional objections to the exercise of eminent
domain were resolved by the statutory public-use determination.
The IUB also considered a series of objections by landowners to the
exercise of eminent domain over their specific properties. In several
instances, it sustained the objections in whole or in part. Thus, in one
case, it required that the route be relocated to avoid additional buildings
that were being constructed for a turkey farm. In response to another
landowner’s plea, the IUB directed the preservation of certain fruit trees
that were roosting places for several species of bats. The IUB also refused,
on legal grounds, to allow the condemnation of property that was owned
by governmental entities such as counties.
The IUB was not persuaded, however, by landowner Keith
Puntenney’s objection. Puntenney requested that the pipeline’s path be
diverted because he wanted to install three wind turbines on his property
in the area of the proposed route. But the IUB concluded that there was
no “firm plan” to install wind turbines and “it has not been shown that the
pipeline would necessarily interfere with the possible future installation of
wind-driven turbine generators.” As to landowner LaVerne Johnson, the
IUB did not agree that the pipeline could not cross his tiling system,
although it did require that the pipeline be bored under his tiling system
including the main concrete drainage line.
8
Following the IUB’s final decision and order, several motions for
clarification and rehearing were filed. On April 28, the IUB issued an order
denying these motions.
On May 26 and May 27, several petitions for judicial review were
filed in the Polk County District Court. The petitioners included
Puntenney, Johnson, the Sierra Club, and a group of landowners known
as the Lamb petitioners. The petitions were later consolidated for hearing.
Meanwhile, in June, Dakota Access began construction of the
pipeline in Iowa. On August 9, the Lamb petitioners asked the district
court to stay any construction activity on their property. The stays would
have been limited to construction on the fifteen parcels of land owned by
the Lamb petitioners and would not have extended statewide. In their
expedited relief request, the Lamb petitioners argued, “Until the pipeline
trench is actually dug, petitioners’ claims are not moot,” and added that
“if they do not receive a stay before [Dakota Access’s] pipeline trench is
dug, any remedy will be inadequate.”
On August 21, the district court denied the request for stay because
the Lamb petitioners had failed to seek relief first from the IUB. See id.
§ 17A.19(5)(c). The Lamb petitioners returned to the IUB, which denied
the stay. On August 29, the district court denied the Lamb petitioners’
renewed request for a stay. No request was made to this court for
interlocutory review of the denial of the stay.
On February 15, 2017, following briefing and argument, the district
court denied the petitions for judicial review. Regarding the question of
public convenience and necessity, the court concluded that the IUB had
“balanced the pros and cons of the project and entered a reasonable
decision based on the evidence presented.” It added that the decision was
“supported by substantial evidence.”
9
On the eminent domain question, the district court reasoned that
Iowa Code sections 6A.21 and 6A.22 conferred condemnation authority on
common-carrier pipelines under the jurisdiction of the IUB. It also found
that the condemnations were for a public use, thus meeting the
requirements of the Fifth and Fourteenth Amendments and article I,
section 18 of the Iowa Constitution. Finally, it overruled the specific claims
advanced by Puntenney and Johnson as to the exercise of eminent domain
over their properties.
Puntenney, Johnson, the Sierra Club, and the Lamb petitioners
appealed. We retained the appeal.
II. Standard of Review.
When an administrative review proceeding is before us, we “apply
the standards set forth in section 17A.19(10) and determine whether our
application of those standards produce[s] the same result as reached by
the district court.” Hawkeye Land Co. v. Iowa Utils. Bd., 847 N.W.2d 199,
207 (Iowa 2014) (alteration in original) (quoting Auen v. Alcoholic
Beverages Div., 679 N.W.2d 586, 589 (Iowa 2004)).
Accordingly, “we review constitutional issues in agency proceedings
de novo.” Id. at 208 (quoting NextEra Energy Res. LLC v. Iowa Utils. Bd.,
815 N.W.2d 30, 44 (Iowa 2012)); see also Iowa Code § 17A.19(10)(a).
Regarding an agency’s interpretation of a statute:
If the legislature clearly vested the agency with the authority
to interpret specific terms of a statute, then we defer to the
agency’s interpretation of the statute and may only reverse if
the interpretation is “irrational, illogical, or wholly
unjustifiable.” If, however, the legislature did not clearly vest
the agency with the authority to interpret the statute, then
our review is for correction of errors at law.
10
NextEra, 815 N.W.2d at 37 (citations omitted) (quoting Doe v. Iowa Dep’t
of Human Servs., 786 N.W.2d 853, 857 (Iowa 2010)); see also Iowa Code
§ 17A.19(10)(c), (l).
Here, we think the legislature clearly vested the IUB with the
authority to interpret “public convenience and necessity” as used in Iowa
Code section 479B.9. We reach this conclusion for several reasons.
First, we believe “public convenience and necessity” is a term of art
within the expertise of the IUB. See Renda v. Iowa Civil Rights Comm’n,
784 N.W.2d 8, 14 (Iowa 2010) (referring to “a substantive term within the
special expertise of the agency”).
In addition, the Iowa Code itself indicates that the legislature wanted
the IUB to have leeway in determining public convenience and necessity.
Section 479B.9 states,
The board may grant a permit in whole or in part upon
terms, conditions, and restrictions as to location and route as
it determines to be just and proper. A permit shall not be
granted to a pipeline company unless the board determines
that the proposed services will promote the public
convenience and necessity.
(Emphasis added.) The phrase “unless the board determines” seemingly
affords the IUB deference. Otherwise, if the matter were to be left to
judicial determination, the statute would say something like, “unless the
proposed services will promote the public convenience and necessity.”
Additionally, we have previously held that it is not a judicial function
to determine whether a service will promote the public convenience and
necessity. See Application of Nat’l Freight Lines, 241 Iowa 179, 186, 40
N.W.2d 612, 616 (1950) (“We have held several times that the
determination whether the service proposed will promote the public
convenience and necessity is a legislative, not a judicial, function. . . . It
is not for the district court or this court to determine whether the
11
commission has acted wisely nor to substitute its judgement for that of
the commission.”)
On the other hand, we do not defer to the IUB’s interpretation of
Iowa Code sections 6A.21 and 6A.22. Chapter 6A is a general eminent
domain law that applies to all state agencies, and the term “public use” is
not “uniquely within the subject matter expertise of the agency”—here the
IUB. Renda, 784 N.W.2d at 14.
Lastly, we review the IUB’s factual findings under a substantial
evidence standard. See Iowa Code § 17A.19(10)(f). “The agency’s decision
does not lack substantial evidence merely because the interpretation of
the evidence is open to a fair difference of opinion.” NextEra, 815 N.W.2d
at 42 (quoting ABC Disposal Sys., Inc. v. Dep’t of Nat. Res., 681 N.W.2d
596, 603 (Iowa 2004)).
III. Standing of the Sierra Club.
We must first consider two threshold matters—standing and
mootness. Dakota Access challenges the standing of the Sierra Club. The
Sierra Club is a nonprofit environmental organization. The Sierra Club is
asserting the interests of two of its members—Mark Edwards and Carolyn
Raffensperger. Edwards lives in Boone and worked for the Iowa
Department of Natural Resources as a trail coordinator for thirty years.
He submitted an affidavit expressing concern that the pipeline will damage
Iowa’s waterways, contribute to climate change, and destroy Native
American burial grounds and cultural sites.
Raffensperger lives in Ames. Her home sits about one mile from the
pipeline. She submitted an affidavit voicing concern for her own safety
and the immediate environment around her property as well as her belief
that the pipeline will contribute to climate change, damage Native
American cultural sites, and pollute Iowa waterways.
12
Dakota Access does not dispute that the Sierra Club can assert the
interests of its members for standing purposes. See Citizens for Wash.
Square v. City of Davenport, 277 N.W.2d 882, 886 (Iowa 1979). However,
Dakota Access points out that Sierra Club has not shown that any of its
members owns property on the pipeline route. Accordingly, Dakota Access
maintains that the Sierra Club lacks standing.
We disagree. In Bushby v. Washington County Conservation Board,
we adopted the United States Supreme Court’s standard for standing in
environmental disputes. 654 N.W.2d 494, 496–97 (Iowa 2002) (“The
United States Supreme Court has held that plaintiffs in cases involving
environmental concerns establish standing if ‘they aver that they use the
affected area and are persons “for whom the aesthetic and recreational
values of the area will be lessened” by the challenged activity.’ ” (quoting
Friends of the Earth, Inc. v. Laidlaw Envtl. Servs., 528 U.S. 167, 183, 120
S. Ct. 693, 705 (2000))).
Here, Sierra Club met the Bushby standard. Sierra Club members
Raffensperger and Edwards submitted affidavits describing their use and
enjoyment of the rivers, streams, soil, and other natural areas and
aesthetics. They described their concerns that the construction and
operation of the pipeline would have adverse environmental impacts on
those areas that they use and enjoy.
Raffensperger’s and Edwards’s concerns are not entirely
speculative, remote, and in the uncertain future as Dakota Access
suggests. Sierra Club presented the IUB with actual evidence of pipeline
accidents that have resulted in millions of dollars in cleanup and damages.
Nothing in the Iowa Code limits standing in pipeline proceedings to
individuals whose property is in the direct path of the pipeline. Section
479B.7 allows any person “whose rights or interests may be affected by
13
the proposed pipeline” to file objections. Iowa Code § 479B.7. Section
17A.19 authorizes any “person or party whose is aggrieved or adversely
affected by agency action” to seek judicial review. Id. § 17A.19. The Sierra
Club has standing.
IV. Mootness.
Dakota Access next argues that the appeal is moot. This presents a
closer issue. The pipeline was actually completed two years ago in May
2017 at a cost of approximately $4 billion. Since then it has been regularly
carrying crude oil from North Dakota to Illinois. Its capacity is 450,000
barrels of oil per day. The record does not indicate how much Dakota
Access actually paid for easements to bury the pipeline underground in
Iowa, but the projected cost was $85 million. Where the pipeline was
buried during construction, land restoration has already taken place.
Iowa Code section 17A.19 states in part, “The filing of the petition
for review does not itself stay execution or enforcement of any agency
action.” Id. § 17A.19(5)(a). In short, it places the burden on the party
contesting agency action to obtain a stay. As noted above, the Lamb
petitioners’ application for a stay from the district court was denied nearly
three years ago. They did not seek a stay from this court, nor did they ask
to expedite this appeal when it was filed over two years ago. 1
Ninety years ago, this court ruled that an eminent domain appeal
challenging the taking of the plaintiff’s twenty-tree apple orchard was moot
once the road in question had been built. Welton v. Iowa State Highway
Comm’n, 208 Iowa 1401, 1401, 227 N.W. 332, 333 (1929). We explained,
It is substantiated by uncontroverted affidavit that,
subsequent to the decision of the district court in this case, and
in the absence of an order staying appellees’ actions, the road
1Filingan appeal does not result in an automatic stay of a trial court ruling. See
Iowa R. App. P. 6.601(1).
14
in controversy was established, and the land in question,
including the claimed orchard, was taken and used by the
appellees for primary road purposes, and that the road has
been fully constructed and paved through the premises
involved in this action; that the appellant has perfected an
appeal to the district court of Mahaska county, from the award
of the condemnation commissioners, as to the amount of his
damages, by reason of the taking of the identical property
involved in this action, and which cause was assigned for trial
in the district court of Mahaska county, to begin on the very
day of the submission of this cause to this court. It will thus
be observed that, during the pendency of the appeal, the
defendant did not obtain a restraining order from this court, as
was done in the Hoover Case, supra. This court has the
power, upon application being made, to grant a restraining
order to maintain the status quo of the parties during the
pendency of an appeal, and, when no other means of
protection is afforded by the law, there is no hesitancy in
granting the order.
It is apparent from the uncontroverted affidavit that the
orchard has been taken for highway purposes and the paving
laid. No order which we can now make can preserve to
appellant his orchard.
Id. (emphasis added) (citations omitted).
Welton arguably should control here. As in Welton, the petitioners
lost on the merits and then did not try to obtain a stay from this court
while a substantial construction project went forward. See id.
Similarly, in Porter v. Board of Supervisors, we held it was too late
for us to enjoin condemnation proceedings once a drainage ditch had been
installed:
We call attention also to the fact that it was stated in oral
argument, and not denied, that the construction had already
taken place and that the canal or ditch was in operation.
There was no stay of proceedings nor application in this court
for an order to stay construction. Under these circumstances
the construction of the ditch became an established fact
before the case was submitted to us for decision.
238 Iowa 1399, 1404, 28 N.W.2d 841, 844 (1947).
On the other hand, in Lewis Investments, Inc. v. City of Iowa City,
we held that an appeal from an order condemning a property as a nuisance
15
so the city could rehabilitate it was not moot, because the only thing that
had happened was that the city had paid its deposit and taken possession
of the property. 703 N.W.2d 180, 184 (Iowa 2005). We observed that
the city’s ultimate goal—transfer of the property to a private
individual for rehabilitation or demolition—has not become an
accomplished fact like the road in Welton. There is nothing in
the record to show that the property has been transferred or
that substantial improvements have been made to the
property that would place it beyond the power of this court to
restore the parties to their former positions. Therefore, we
hold the appeal is not moot.
Id. In short, Lewis Investments was distinguishable from Welton because
no work had been performed on the property.
The petitioners counter that the case is not moot because the courts
could order relief other than a tear-out of the entire pipeline. For example,
the pipeline could be partially removed and rerouted around the
petitioners’ properties. Another possibility is that the petitioners could
obtain trespass damages. It is noteworthy that most property owners
along the route chose to make voluntary easement agreements with
Dakota Access to allow the pipeline to go underneath their farmland;
hence, their rights and status might not be affected by a decision in this
case. The petitioners also counter that a lawsuit of these constitutional
and practical dimensions should not become moot simply because Dakota
Access chose to proceed with construction while the petitioners’ judicial
review proceeding was still pending.
One case worth considering is Grandview Baptist Church v. Zoning
Board of Adjustment, 301 N.W.2d 704 (Iowa 1981). In Grandview Baptist,
a church obtained a permit from the building commissioner to build a steel
storage building. Id. at 706. Within days, a contractor built the building
and several neighboring property owners appealed the granting of the
permit to the zoning board of adjustment. Id. The board ruled that the
16
structure was not proper and had to be removed. Id. Both the district
court and our court upheld the board’s action. Id. at 708–09.
In our decision, we rejected the church’s argument that it was too
late for our court to do anything about the building. Id. at 709. We
elaborated,
The objectors timely appealed to the board, but before their
appeal was heard the building had been constructed. The
Church claims the objectors are estopped because the Church
has vested rights in the building.
Under such circumstances the Church cannot
successfully invoke the doctrine of vested rights so as to
deprive the objectors of the fruits of their appeal. Otherwise
the right of appeal would be meaningless.
Id.
We are not persuaded that Grandview Baptist controls here. There
the contractor put up the storage building based on an administrator’s go-
ahead before any hearing could occur. Id. at 706. The church then lost
at the board of adjustment and at every subsequent stage of the
proceedings. Id. The “right of appeal” referred to in Grandview Baptist
Church was the right to appeal an individual’s granting of a permit to the
board of adjustment, not the right to appeal an agency action to the district
court or a district court ruling to the Iowa Supreme Court. See id. at 709.
Iowa Code section 414.11 governs city board of adjustment appeals
and states that an appeal from the city administrative officer to the board
of adjustment
stays all proceedings in furtherance of the action appealed
from, unless the officer from whom the appeal is taken
certifies to the board of adjustment after the notice of appeal
shall have been filed with the officer that by reason of facts
stated in the certificate a stay would in the officer’s opinion
cause imminent peril to life or property.
17
This is different from section 17A.19(5)(a), which provides that an appeal
does not stay administrative action.
Nonetheless, after careful consideration, we do not believe the
present appeal is moot. “The key in assessing whether an appeal is moot
is determining whether the opinion would be of force or effect in the
underlying controversy.” Perkins v. Bd. of Supervisors, 636 N.W.2d 58, 64
(Iowa 2001). We are not persuaded that a decision in this case would lack
force or effect. Although dismantling of the pipeline would not be feasible,
the IUB still has authority to impose other “terms, conditions, and
restrictions” to implement a ruling favorable to the petitioners. Iowa Code
§ 479B.9; see also Standing Rock Sioux Tribe v. U.S. Army Corps of Eng’rs,
301 F. Supp. 3d 50, 61–64 (D.D.C. 2018) (dismissing National Historic
Preservation Act claims as mooted by the construction of the Dakota
Access pipeline, but proceeding to determine other claims on the merits).
V. Public Convenience and Necessity.
Section 479B.9 gives the IUB authority to issue a permit for a
pipeline that “will promote the public convenience and necessity.” Iowa
Code § 479B.9. Chapter 479B begins,
It is the purpose of the general assembly in enacting this
law to grant the utilities board the authority to implement
certain controls over hazardous liquid pipelines to protect
landowners and tenants from environmental or economic
damages which may result from the construction, operation,
or maintenance of a hazardous liquid pipeline or underground
storage facility within the state, to approve the location and
route of hazardous liquid pipelines, and to grant rights of
eminent domain where necessary.
Id. § 479B.1.
Regarding the meaning of “public convenience and necessity,” our
court has held,
18
The words are not synonymous, and effect must be
given both. The word “convenience” is much broader and
more inclusive than the word “necessity.” Most things that
are necessities are also conveniences, but not all conveniences
are necessities. . . . The word “necessity” has been used in a
variety of statutes . . . . It has been generally held to mean
something more nearly akin to convenience than the
definition found in standard dictionaries would indicate. So
it is said the word will be construed to mean not absolute, but
reasonable, necessity.
Thomson v. Iowa State Commerce Comm’n, 235 Iowa 469, 475, 15 N.W.2d
603, 606 (1944) (quoting Wis. Tel. Co. v. R.R. Comm’n, 156 N.W. 614, 617
(Wis. 1916)). In its order, the IUB looked to Thomson for guidance as well
as an Illinois case construing the same phrase, which held,
The word connotes different degrees of necessity. It
sometimes means indispensable; at others, needful, requisite,
or conducive. It is relative rather than absolute. No definition
can be given that would fit all statutes. The meaning must be
ascertained by reference to the context, and to the objects and
purposes of the statute in which it is found.
Wabash, Chester & W. Ry. v. Commerce Comm’n ex rel. Jefferson Sw. R.R.,
141 N.E. 212, 215 (Ill. 1923). The IUB also relied on our decision in S.E.
Iowa Cooperative Electric Association v. Iowa Utilities Board, which
approved the IUB’s use of a balancing test in a related context and its
determination that “the substantial benefits [of the project] outweighed the
costs.” 633 N.W.2d 814, 821 (Iowa 2001).
In our view, the IUB’s balancing approach to public convenience and
necessity should be upheld because it is not “irrational, illogical, or wholly
unjustifiable.” Iowa Code § 17A.19(10)(l). The approach is consistent with
our prior caselaw and is supported by legal authority elsewhere. See Fed.
Power Comm’n v. Transcon. Gas Pipe Line Corp., 365 U.S. 1, 23, 81 S. Ct.
435, 447 (1961) (indicating that “ ‘public convenience and necessity’
connotes a flexible balancing process, in the course of which all the factors
are weighed prior to final determination”).
19
Puntenney, Johnson, and the Sierra Club challenge the IUB’s
determination of public convenience and necessity on several grounds.
First, they urge that the pipeline does not serve the public because
shippers wanted it. But shippers wanted it as a way of reducing
transportation costs. Given that petroleum products are commodities sold
in a competitive market, lower costs for crude oil transportation tend to
keep prices of crude oil derivatives lower than they otherwise would be.
Iowa is a heavy user of petroleum products. Iowa consumes the
equivalent of 85.2 million barrels of oil per year but produces no oil itself.
Iowa is fifth in the country in per capita energy use. Iowa ranks eighth in
the country in per capita gasoline consumption. Iowa’s percentage of gross
domestic product from manufacturing ranks near the top in this country,
and Iowa ranks sixth highest nationally in energy consumption per capita
in its industrial sector. The record indicates that the Dakota Access
pipeline will lead to “longer-term, reduced prices on refined products and
goods and service dependent on crude oil and refined products.” We agree
with the IUB that these are public benefits, even though the pipeline also
provides benefits to the shippers of crude oil. See S.E. Iowa Coop. Elec.,
633 N.W.2d at 820 (stating that “cost savings are a legitimate
consideration”). 2
Next, Puntenney, Johnson, and the Sierra Club contend that drilling
in the Bakken Oil Field has declined, demonstrating a reduced need for
pipeline transportation. But according to the evidence before the IUB,
actual crude oil production from the Bakken Oil Field has only declined
2The Sierra Club makes a forceful environmental argument against the Dakota
Access pipeline. But this environmental argument against the pipeline to a degree
bolsters the economic argument for the pipeline. That is, the Sierra Club criticizes the
pipeline for making it “easier” to bring Bakken Oil Field oil to the market. Another way
of saying “easier” is “cheaper” or “more economical.”
20
about 10%, from approximately 1.2 million barrels per day to
approximately 1.1 million barrels per day. At the time of the hearing, the
demand for the pipeline was still there. As the IUB pointed out, shippers
had executed long-term “take or pay” contracts, committing to pay for
pipeline use whether they shipped oil or not.
Additionally, Puntenney, Johnson, and the Sierra Club maintain
that rail transportation is safer than the pipeline transportation that would
replace it. Various data were presented to the IUB on this issue. However,
the IUB found, and the data support, that on a volume-distance basis (i.e.,
per barrel-mile), pipeline transportation of oil is safer than rail
transportation of oil.
Lastly, Puntenney, Johnson, and the Sierra Club challenge the IUB’s
reliance on secondary economic benefits resulting from the construction
and operation of the pipeline in Iowa. For example, the IUB observed that
the pipeline would result in at least 3100 construction jobs in Iowa, at
least twelve long-term jobs for Iowans, and more than $27 million annually
in property tax revenue. As the Puntenney petitioners point out, Dakota
Access, the IUB, and the district court cited no authority that these types
of benefits can be taken into account in making a public-convenience-and-
necessity determination. Yet the Puntenney petitioners cited no authority
that these benefits cannot be considered. See N. Plains Res. Council v.
Surface Transp. Bd., 668 F.3d 1067, 1094–95 (9th Cir. 2011) (noting that
the Surface Transportation Board considered “new jobs created by the
construction and operation of the new rail line”); Pliura Intervenors v. Ill.
Commerce Comm’n, 942 N.E.2d 576, 585 (Ill. App. Ct. 2010) (considering,
among other things, “increased revenues for local economies” resulting
from a pipeline extension); Accokeek, Mattawoman, Piscataway Creeks
Cmtys. Council, Inc. v. Md. Pub. Serv. Comm’n, 133 A.3d 1228, 1240 (Md.
21
Ct. Spec. App. 2016) (treating “monetary benefits from construction
employment and longer-term tax payments” as benefits relevant to the
public-convenience-and-necessity determination). We are not persuaded
that the IUB acted improperly in factoring these benefits into the public-
convenience-and-necessity determination.
For the foregoing reasons, upon our review of the record, we
conclude the IUB’s legal determinations with respect to public convenience
and necessity were not “[b]ased upon an irrational, illogical, or wholly
unjustifiable application of law” and its factual determinations were
supported by “substantial evidence.” Iowa Code § 17A.19(10)(f), (l).
VI. Statutory Limits on the Exercise of Eminent Domain.
The Lamb petitioners argue that Dakota Access’s exercise of eminent
domain over farmland would violate Iowa Code sections 6A.21 and 6A.22.
Section 6A.21(1)(c) limits the authority to condemn agricultural lands by
defining “public use,” “public purpose,” or “public improvement” in a way
that requires landowner consent. Id. § 6A.21(1)(c). Hence, section
6A.21(1)(c) reads, “ ‘Public use’ or ‘public purpose’ or ‘public improvement’
does not include the authority to condemn agricultural land for private
development purposes unless the owner of the agricultural land consents
to the condemnation.” Id.
But section 6A.21 also carves out exceptions. See id. § 6A.21(2).
One of them is that “[t]his limitation also does not apply to utilities,
persons, companies, or corporations under the jurisdiction of the Iowa
utilities board.” Id.
The Lamb petitioners argue vigorously that Dakota Access is not a
“utility.” That, however, is not the full wording of the exception. We agree
with the IUB and the district court that Dakota Access is a “compan[y] . . .
under the jurisdiction of the [IUB],” id., via the permit process laid out in
22
chapter 479B. Therefore, landowner consent is not required by section
6A.21 prior to condemnation.
The Lamb petitioners urge us to apply the canon of ejusdem generis
to section 6A.21(2). Hence, they ask us to interpret “persons, companies,
or corporations” as related to the immediately preceding word, “utilities.”
Their argument is difficult to follow. If the Lamb petitioners are saying
that the phrase “persons, companies, or corporations” refers to kinds of
utilities, then the word “utilities” would be sufficient by itself and the
remaining language would become unnecessary. That would contravene
an established principle of statutory construction. See id. § 4.4(2) (setting
forth the presumption that “[t]he entire statute is intended to be effective”).
On the other hand, if the Lamb petitioners are saying that the phrase
“persons, companies, or corporations” refers to entities other than utilities
that are nonetheless under the jurisdiction of the IUB, then Dakota Access
seemingly falls in that category.
The IUB also advances an alternative ground for rejecting the Lamb
petitioners’ argument. It notes that section 6A.22(2) authorizes “[t]he
acquisition of any interest in property necessary to the function of . . . a
common carrier.” Id. § 6A.22(2)(a)(2). In the IUB’s view, Dakota Access
qualifies as a common carrier.
There is no dispute that most of the pipeline capacity has been
contracted to shippers in advance; however, 10% is required to be made
available for walk-up business. That is all the Federal Energy Regulatory
Commission requires of a common carrier. See, e.g., Navigator BSG
Transp. & Storage, 152 F.E.R.C. ¶ 61,026, at 61,127 (July 10, 2015); Shell
Pipeline Co., 146 F.E.R.C. ¶ 61,051, at 61,238 (Jan. 29, 2014). The IUB
maintains it is enough here.
23
Based on the record before us, and our own common-carrier
precedents, we agree with the IUB. It would be unrealistic to require a
$4 billion pipeline to depend entirely on walk-up business, just as it would
be unrealistic to require an airline to refuse all advance bookings for a
flight. The key is whether spot shippers have access, and the federal
agency with expertise in the matter has concluded that 10% is sufficient.
We have said that “a common carrier need not serve all the public all the
time.” Wright v. Midwest Old Settlers & Threshers Ass’n, 556 N.W.2d 808,
810 (Iowa 1996) (per curiam). A common carrier may combine “other
vocations” and still be considered a common carrier. Id. at 811. Long ago
we held that a trucker who transported films and advertising for members
who had signed an alleged association agreement was still a common
carrier where he also transported films and advertising for theaters that
had not signed the agreement. State ex rel. Bd. of R.R. Comm’rs v.
Rosenstein, 217 Iowa 985, 989–93, 252 N.W. 251, 254–55 (1934).
Significantly, Dakota Access does not involve a situation where service
“has been limited to those under contract.” State ex rel. Bd. of R.R.
Comm’rs v. Carlson, 217 Iowa 854, 857, 251 N.W. 160, 161 (1933)
(emphasis added). 3
The Lamb petitioners insist that the Dakota Access pipeline is not a
common carrier because it does not serve “the Iowa public.” Yet adding
Mid-American Pipeline Company v. Iowa State Commerce Commission, we said
3In
that a grant of eminent domain authority to a private company to construct a pipeline
exclusively for its own use was “for a strictly private purpose” and “beyond legislative
authority.” 253 Iowa 1143, 1146–47, 114 N.W.2d 622, 624 (1962) (noting that “Northern
intends to handle only its own products by pipe line and is not a common carrier of such
products”). Those are not the facts here. Again, Dakota Access serves a variety of
customers and 10% of pipeline capacity is available on a walk-up basis. See also
Crawford Family Farm P’ship v. TransCanada Keystone Pipeline, L.P., 409 S.W.3d 908,
922–24 (Tex. App. 2013) (determining that a pipeline would be a common carrier because
there was a “reasonable probability” it would ship crude petroleum for one or more
customers who would retain ownership of the oil).
24
the modifier “Iowa” would be a gloss on the statute for which there is no
basis in the statute itself. For these reasons, we find no violation of
sections 6A.21 and 6A.22.
VII. Constitutional Authority for the Exercise of Eminent
Domain.
This brings us to the most significant issue in the case, whether the
use of eminent domain for the Dakota Access pipeline as authorized by
Iowa Code section 479B.16 violates article I, section 18 of the Iowa
Constitution or the Fifth and Fourteenth Amendments to the United States
Constitution.
Section 479B.16 addresses the use of eminent domain for pipelines.
It provides in part,
A pipeline company granted a pipeline permit shall be vested
with the right of eminent domain, to the extent necessary and
as prescribed and approved by the board, not exceeding
seventy-five feet in width for right-of-way and not exceeding
one acre in any one location in addition to right-of-way for the
location of pumps, pressure apparatus, or other stations or
equipment necessary to the proper operation of its pipeline.
Iowa Code § 479B.16.
Article I, section 18, the takings clause in the Iowa Constitution,
states in part,
Private property shall not be taken for public use without just
compensation first being made, or secured to be made to the
owner thereof, as soon as the damages shall be assessed by a
jury, who shall not take into consideration any advantages
that may result to said owner on account of the improvement
for which it is taken.
Iowa Const. art. I, § 18. The Fifth Amendment to the United States
Constitution similarly provides that “private property [shall not] be taken
for public use, without just compensation.” U.S. Const. amend. V.
25
We have said that we consider federal cases interpreting the Federal
Takings Clause “persuasive in our interpretation of the state provision,”
but “not binding.” Kingsway Cathedral v. Iowa Dep’t of Transp., 711
N.W.2d 6, 9 (Iowa 2006); see also Harms v. City of Sibley, 702 N.W.2d 91,
97 (Iowa 2005).
The Lamb petitioners deny that the Dakota Access pipeline furthers
a constitutionally valid public use. They contend that the indirect
economic benefits of an infrastructure project, such as jobs created or tax
revenues generated, cannot be considered in determining public use. They
also contend that an oil pipeline that crosses Iowa but does not pick up or
drop off oil within the state does not constitute a public use. We will
address these arguments in order.
We begin by considering the United States Supreme Court’s
interpretation of the Fifth Amendment in Kelo v. City of New London, 545
U.S. 469, 125 S. Ct. 2655 (2005). In Kelo, the Court addressed the
question of “whether a city’s decision to take property for the purpose of
economic development satisfies the ‘public use’ requirement of the Fifth
Amendment.” Id. at 477, 125 S. Ct. at 2661. There, an economic
development plan was intended to remedy decades of economic decline
that led to the City of New London being designated a “distressed
municipality.” Id. at 473–75, 125 S. Ct. at 2658–60. A majority of the
Court found that the City of New London could compel private
homeowners to turn over their homes to a private developer because the
city’s plan served a “public purpose.” Id. at 484, 125 S. Ct. at 2665. The
Court noted, “For more than a century, our public use jurisprudence has
wisely eschewed rigid formulas and intrusive scrutiny in favor of affording
legislatures broad latitude in determining what public needs justify the
use of the takings power.” Id. at 483, 125 S. Ct. at 2664.
26
Justice O’Connor filed a dissenting opinion in which Chief Justice
Rehnquist and Justices Scalia and Thomas joined. Id. at 494, 125 S. Ct.
at 2671 (O’Connor, J., dissenting). She characterized the majority as
holding
that the sovereign may take private property currently put to
ordinary private use, and give it over for new, ordinary private
use, so long as the new use is predicted to generate some
secondary benefit for the public—such as increased tax
revenue, more jobs, maybe even esthetic pleasure.
Id. at 501, 125 S. Ct. at 2675. In her view, a secondary benefit alone was
not enough for a governmental transfer of property from one private entity
to another to qualify as a taking for a public purpose. Id. She reasoned
that almost any lawful use of private property will generate some
secondary benefit and, thus, if “positive side effects” are sufficient to
classify a transfer from one private party to another as “for public use,”
those constitutional words would not “realistically exclude any takings.”
Id.
Although she did not agree that economic development alone could
justify a taking, Justice O’Connor did acknowledge there were three
categories of legitimate public use:
Our cases have generally identified three categories of
takings that comply with the public use requirement, though
it is in the nature of things that the boundaries between these
categories are not always firm. Two are relatively
straightforward and uncontroversial. First, the sovereign may
transfer private property to public ownership—such as for a
road, a hospital, or a military base. Second, the sovereign may
transfer private property to private parties, often common
carriers, who make the property available for the public’s
use—such as with a railroad, a public utility, or a stadium.
But “public ownership” and “use-by-the-public” are
sometimes too constricting and impractical ways to define the
scope of the Public Use Clause. Thus we have allowed that,
in certain circumstances and to meet certain exigencies,
takings that serve a public purpose also satisfy the
Constitution even if the property is destined for subsequent
private use.
27
Id. at 497–98, 125 S. Ct. at 2673 (citations omitted).
The Kelo decision has proved controversial, not least because the
development that justified the taking of Ms. Kelo’s home never occurred.
See Alberto B. Lopez, Kelo-Style Failings, 72 Ohio St. L.J. 777, 779–80
(2011). Several state supreme courts have held that public use must mean
something more than indirect economic benefits. See, e.g., Sw. Ill. Dev.
Auth. v. Nat’l City Envtl., L.L.C., 768 N.E.2d 1, 10–11 (Ill. 2002); County of
Wayne v. Hathcock, 684 N.W.2d 765, 783 (Mich. 2004); City of Norwood v.
Horney, 853 N.E.2d 1115, 1123 (Ohio 2006); Bd. of Cty. Comm’rs of
Muskogee Cty. v. Lowery, 136 P.3d 639, 647 (Okla. 2006).
Thus, in Southwestern Illinois, the Illinois Supreme Court held that
a regional development authority could not exercise eminent domain to
take a recycling facility’s property and convey it to a private racetrack for
a parking lot. 768 N.E.2d at 4, 11. The court concluded the purported
benefit of positive economic growth in the region was not enough to satisfy
public use as required under the Illinois Constitution. Id. at 10–11. The
court also found shorter lines to enter parking lots and the fact that
pedestrians might be able to cross from parking areas to event areas in a
safer manner unpersuasive as sufficient factors to satisfy the public-use
requirement. Id. at 9.
In Southwestern Illinois, the racetrack estimated the condemned
land, which was to be used for open-field parking, would lead to an
increase of $13 to $14 million in revenue per year. Id. at 10. The Illinois
court recognized that such profit could trickle down and bring revenue
increases to the region. Id. Yet it reasoned, “[R]evenue expansion alone
does not justify an improper and unacceptable expansion of the eminent
domain power of the government.” Id. at 10–11.
 28
Similarly, in Hathcock, the Michigan Supreme Court held a private
entity was not entitled to exercise eminent domain to build a business and
technology park. 684 N.W.2d at 783–84. The Michigan court determined
that something beyond economic benefits was required to show public use
under the Michigan Constitution. Id. at 783. The court there relied on its
own jurisprudence and its interpretation of the Michigan constitutional
founders’ intent. Id. at 785–87. The court, tracking O’Connor’s dissent in
Kelo, concluded,
[T]he transfer of condemned property to a private entity, seen
through the eyes of an individual sophisticated in the law at
the time of ratification of our 1963 Constitution, would be
appropriate in one of three contexts: (1) where “public
necessity of the extreme sort” requires collective action;
(2) where the property remains subject to public oversight
after transfer to a private entity; and (3) where the property is
selected because of “facts of independent public significance,”
rather than the interests of the private entity to which the
property is eventually transferred.
Id. at 783. While the Michigan Constitution’s takings clause is not
identical to ours, it resembles ours in prohibiting takings of private
property “for public use without just compensation therefore being first
made.” Mich. Const. art. X, § 2 (1963) (amended in 2006, after Hathcock,
to define “public use” as more than “for the purpose of economic
development or enhancement of tax revenues”).
Adopting Hathcock’s reasoning, the Ohio Supreme Court held that
economic factors could be considered in determining whether property
may be appropriated but could not alone satisfy the public-use
requirement of the Ohio Constitution. Norwood, 853 N.E.2d at 1123. In
Norwood, a struggling city (much like New London in Kelo) entered into a
contract with a private developer to redevelop a neighborhood. Id. at 1124.
The plans called for over 200 apartments and condominiums, over
29
500,000 square feet of office and retail space, and two large public-parking
facilities. Id. at 1124. The city estimated the redeveloped area would bring
in $2 million in annual revenue to the city. Id.
Several property owners, however, refused to sell for the planned
development, and the city therefore tried to exercise eminent domain to
take the properties. Id. at 1124–26. The Ohio Supreme Court declined to
follow the majority opinion in Kelo, stating that the Hathcock opinion and
the dissenting opinions in Kelo were better models for interpreting the Ohio
Constitution. Id. at 1140–41.
Though the Ohio Constitution may bestow on the sovereign a
magnificent power to take private property against the will of
the individual who owns it, it also confers an “inviolable” right
of property on the people. When the state elects to take
private property without the owner’s consent, simple justice
requires that the state proceed with due concern for the
venerable rights it is preempting.
Id. at 1137–38.
Along the same lines, the Oklahoma Supreme Court determined that
economic development alone was not a public purpose to justify the
exercise of eminent domain under the Oklahoma Constitution. See Bd. of
Cty. Comm’rs of Muskogee Cty., 136 P.3d at 647. In Board of County
Commissioners, the city wanted to install three water pipelines, two of
which would serve only a proposed privately-owned electric generation
plant and which would improve and expand existing public service. Id. at
642–43. The private energy company had agreed to build the third public
pipeline only if the company first obtained all rights-of-way to construct
the energy plant and the accompanying first two water pipelines. Id. at
643.
The court reasoned that although one pipeline would serve the
public, the purpose of the takings was for the construction and operation
30
of the privately owned energy company. Id. at 649. Further, the court
said that although the construction of the energy plant would enhance
economic development through taxes, jobs, and investment, those
economic benefits alone would not suffice to satisfy the public use
requirement. Id.
These state constitutional decisions would not necessarily have
disappointed the Kelo majority. The Kelo majority themselves noted that
“nothing in our opinion precludes any State from placing further
restrictions on its exercise of the takings power.” Kelo, 545 U.S. at 489,
125 S. Ct. at 2668 (majority opinion). It added that “many States already
impose ‘public use’ requirements that are stricter than the federal
baseline,” and “[s]ome of these requirements have been established as a
matter of state constitutional law.” Id.
Since Kelo was decided, we have twice quoted from Justice
O’Connor’s dissent. In Clarke County Reservoir Commission v. Robins, we
noted,
Justice O’Connor underscored the constitutional necessity
that any taking be for a “public use” with “just compensation”:
These two limitations serve to protect the security
of Property, which Alexander Hamilton described
to the Philadelphia Convention as one of the great
obj[ects] of Gov[ernment]. Together they ensure
stable property ownership by providing
safeguards against excessive, unpredictable, or
unfair use of the government’s eminent domain
power—particularly against those owners who,
for whatever reasons, may be unable to protect
themselves in the political process against the
majority’s will.
862 N.W.2d 166, 171–72 (Iowa 2015) (alteration in original) (quoting Kelo,
545 U.S. at 496, 124 S. Ct. at 2672 (O’Connor, J., dissenting)). We went
on to state, “The public-use requirement is to prevent abuse of the power
31
for the benefit of private parties.” Id. And in Star Equipment, Ltd. v. State,
we observed,
Four dissenters noted in the context of the Federal Takings
Clause: “We give considerable deference to legislatures’
determinations about what governmental activities will
advantage the public. But were the political branches the sole
arbiters of the public-private distinction, the Public Use
Clause would amount to little more than hortatory fluff.”
843 N.W.2d 446, 459 n.11 (Iowa 2014) (quoting Kelo, 545 U.S. at 497, 125
S. Ct. at 2673).
Like our colleagues in Illinois, Michigan, Ohio, and Oklahoma, we
find that Justice O’Connor’s dissent provides a more sound interpretation
of the public-use requirement. If economic development alone were a valid
public use, then instead of building a pipeline, Dakota Access could
constitutionally condemn Iowa farmland to build a palatial mansion,
which could be defended as a valid public use so long as 3100 workers
were needed to build it, it employed twelve servants, and it accounted for
$27 million in property taxes. 4
Having said that, this case is not that one. Instead, this case falls
into the second category of traditionally valid public uses cited by Justice
O’Connor: a common carrier akin to a railroad or a public utility. See Kelo,
545 U.S. at 498, 125 S. Ct. at 2673. This kind of taking has long been
4In fairness to the Kelo majority, they did not say that any economic development
benefit would meet the public-use test. If the economic benefits of merely building a
project qualified as a public use, then the legislature could empower A to take B’s house
just because A planned to erect something new on the lot. Even the Kelo majority did not
go that far. See Kelo, 545 U.S. at 487, 125 S. Ct. at 2667 (“Such a one-to-one transfer of
property, executed outside the confines of an integrated development plan, is not
presented in this case.”). But as Justice O’Connor noted in dissent, it is problematic to
have a fact-based public-use test that allows economic development benefits to suffice in
some cases, depending on whether the economic development benefit derives from “a
multipart, integrated plan rather than . . . an isolated property transfer.” Id. at 503–04,
125 S. Ct. at 2676.
32
recognized in Iowa as a valid public use, even when the operator is a
private entity and the primary benefit is a reduction in operational costs.
Back in 1870, when our constitution was only thirteen years old,
this court held that a taking for a private railroad was a taking for a public
use within the meaning of article I, section 18. Stewart v. Bd. of
Supervisors, 30 Iowa 9, 19–21 (1870). We said this proposition was
“elementary and unquestionable.” Id. at 21. We quoted with approval “the
leading American case,” where it was written:
The right of eminent domain does not, however, imply a right
in the sovereign power to take the property of one citizen and
transfer it to another, even for a full compensation, where the
public interest will be in no way promoted by such transfer.
But if the public interest can be in any way promoted by the
taking of private property, it must rest in the wisdom of the
legislature, to determine whether the benefit to the public will
be of sufficient importance to render it expedient for them to
exercise the right of eminent domain and to interfere with the
private rights of individuals for that purpose. . . . In all such
cases the object of the legislative power is the public benefit
derived from the contemplated improvement, whether such
improvement is to be effected directly by the agents of the
government, or through the medium of corporate bodies, or of
individual enterprise.
Id. (quoting Beekman v. Saratoga & Schenectady R.R., 3 Paige Ch. 45, 73
(N.Y. Ch. 1831)). More recently, in S.E. Iowa Cooperative Electric
Association, we held that cost savings alone were a sufficient statutory
“public use” to justify the construction of a new electrical transmission
line. 633 N.W.2d at 820. We explained that “the public is served” when
they can “obtain service at a lower cost.” Id. 5
5The 1857 Constitutional Convention turned down language that would have
expressly allowed the use of eminent domain for “private roads.” 1 The Debates of the
Constitutional Convention of the State of Iowa 207 (W. Blair Lord rep., 1857),
www.statelibraryofiowa.org/services/collections/law-library/iaconst. A private road,
though, was defined by a member of the convention as “a way leading from a public
highway to a person’s dwelling for his convenience merely.” Id. That is not analogous to
the Dakota Access pipeline. Notably, our legislature has long given private property
owners the ability to use eminent domain to connect their land-locked lands to existing
33
In sum, because we do not follow the Kelo majority under the Iowa
Constitution, we find that trickle-down benefits of economic development
are not enough to constitute a public use. To the extent that Dakota
Access is relying on the alleged economic development benefits of building
and operating the pipeline, we are unmoved. But here there is more. While
the pipeline is undeniably intended to return profits to its owners, the
record indicates that it also provides public benefits in the form of cheaper
and safer transportation of oil, which in a competitive marketplace results
in lower prices for petroleum products. As already discussed, the pipeline
is a common carrier with the potential to benefit all consumers of
petroleum products, including three million Iowans.
The Lamb petitioners assert that even these benefits are not enough,
because no Iowa business or consumer will actually use the pipeline to
deliver or receive crude oil. This approach is too formalistic. Iowa has
some of the most advanced and productive farming in the world. But our
economy, including our agricultural economy, depends on other states to
produce crude oil and refine that crude oil into petroleum products. If our
consideration of public use were limited as the Lamb petitioners propose,
it would be very difficult ever to build a pipeline across Iowa carrying any
product that isn’t produced in Iowa. Yet Iowa is crisscrossed with
pipelines. 6
In Enbridge Energy (Illinois), L.L.C. v. Kuerth, the Illinois Appellate
Court took a more nuanced view, which we find persuasive. 99 N.E.3d
public roads so long as the resulting road is open to the public, see Iowa Code § 6A.4(2),
and we have upheld the constitutionality of that legislation. See In re Luloff, 512 N.W.2d
267, 273–74 (Iowa 1994).
6As we have previously noted, the Dakota Access pipeline is intended to replace
transportation of crude oil through Iowa by rail. If those railroads are a valid public use,
then why would a pipeline not be a public use when it serves the same function?
34
210, 218 (Ill. App. Ct. 2018). There the court rejected an appeal by certain
landowners and upheld a grant of eminent domain authority for an oil
pipeline project. Id. at 213–14, 218. The court reasoned, “The
fundamental flaw of landowners’ argument is that they focus entirely upon
who uses the pipeline rather than who benefits from it.” Id. at 218. The
court added,
Oil, natural gas, and other energy sources are essential to
modern American life and must be transported from
production facilities to refineries and ultimately to consumers.
Pipelines are necessary for this transportation and are often
safer and more efficient than transportation by train or truck.
Id. Further, the court noted, “[T]he public use requirement can still be
met even if the public does not have the right to enter or use the
condemned property.” Id. The court went on,
In this case, despite landowners’ arguments to the
contrary, the trial court was not required to examine who
would be using the pipeline, the extent of any particular
company’s use of the pipeline, whether those companies were
part of the public, or who would financially benefit from the
proposed pipeline. This is because the legislature has
determined that pipelines are in the public interest and that
it is efficient for private companies, rather than the
government, to construct and maintain these pipelines. . . .
....
[T]he only evidence landowners presented was evidence
showing that private companies would own and benefit from
a proposed pipeline. However, as we emphasize again, who
owns or benefits from a proposed pipeline is not relevant
evidence to rebut the applicable presumptions. Because
landowners did not introduce any relevant evidence to show
that the public, in the aggregate, would not be the primary
beneficiary of the pipeline, they utterly failed to meet their
burden to rebut the presumptions of public use and necessity.
Id. at 220–21 (citations omitted).
This reasoning applies here. The record indicates that the Dakota
Access pipeline will lead to “longer-term, reduced prices on refined
35
products and goods and service dependent on crude oil and refined
products.”
In a similar vein, the Ohio Court of Appeals confronted and then
ultimately rejected the following argument from a landowner:
She claims the pipeline has no “off ramps” in Ohio, which
means 100% of the product will be shipped and consumed
outside of Ohio. Ohio will only get an economic benefit, which
is insufficient to satisfy public use. Furthermore, there is no
indication the propane or butane shipped to Marcus Hook will
come back to Ohio for heating or gasoline use. Appellant
asserts the benefit to Appellee, a private company, is certain
while the benefit to Ohio is speculative. Appellant also argues
the intended purpose of allowing private companies to
appropriate land when they are a common carrier was to build
intrastate energy infrastructure, not to authorize the building
of interstate infrastructure or interstate transportation of
Ohio’s resources.
Sunoco Pipeline L.P. v. Teter, 63 N.E.3d 160, 171–72 (Ohio Ct. App. 2016).
Notwithstanding Norwood, the court found this argument unpersuasive.
Id. at 172–73. It reasoned,
Appellee is a common carrier, not a megastore or a private
enterprise that would only be providing economic benefit to
Ohio. The reason the General Assembly gave common carriers
a rebuttable presumption is because common carriers, as
defined by statute, provide our citizens with necessities such
as electricity and water. The products, propane and butane,
being transported are used to heat homes and as an additive
to gasoline. Propane and butane are also used in the
production of many products our society uses every day.
Thus, the transportation of propane and butane provides
more than economic benefit to Ohio, it provides some of the
necessities of life.
Id. at 173–74. Oil is, if anything, more of a necessity than the
hydrocarbons that were involved in Sunoco Pipeline.
The Lamb petitioners rely on Mountain Valley Pipeline, LLC v.
McCurdy, 793 S.E.2d 850 (W. Va. 2016). There a company sought to build
a natural gas pipeline to carry almost exclusively natural gas produced by
its own affiliates from West Virginia to a terminus in Virginia. Id. at 852.
 36
The West Virginia Supreme Court found that this was not a public use
within the meaning of a West Virginia statute. Id. at 855, 862–63. The
court explained,
MVP has been unable to identify even a single West Virginia
consumer, or a West Virginia natural gas producer who is not
affiliated with MVP, who will derive a benefit from MVP’s
pipeline. . . . MVP is a private company seeking to survey
property for the ultimate purpose of exercising the right of
eminent domain. . . . In fact, the only benefit to West Virginia
that has been asserted by MVP in this appeal is the benefit to
producers and shippers of the natural gas that is located in
West Virginia. Significantly, however, the owners of that
natural gas are affiliates of MVP.
Id. at 860–61 (footnotes omitted).
The Mountain Valley Pipeline court cited Bluegrass Pipeline
Company, LLC v. Kentuckians United to Restrain Eminent Domain, Inc. 478
S.W.3d 386 (Ky. Ct. App. 2015). 793 S.E.2d at 862. In Bluegrass Pipeline,
the Kentucky Court of Appeals concluded that a pipeline transporting
natural gas liquids through Kentucky on the way to the Gulf of Mexico was
not in “public service” and could not exercise eminent domain. 478 S.W.3d
at 388, 391–92. Among other things, the court took note that
the NGLs in Bluegrass’s pipeline are being transported to a
facility in the Gulf of Mexico. If these NGLs are not reaching
Kentucky consumers, then Bluegrass and its pipeline cannot
be said to be in the public service of Kentucky.
Id. at 392.
These cases can be distinguished. The West Virginia case involved
a private pipeline, not a common carrier. See Mountain Valley Pipeline,
793 S.E.2d at 860–61. The Kentucky case turned in part on the court’s
view that “the legislature only intended to delegate the state’s power of
eminent domain to those pipeline companies that are, or will be, regulated
by the [Kentucky Public Service Commission].” Bluegrass Pipeline Co., 478
S.W.3d at 392. But more importantly, we have a different view of “public
37
use” under the Iowa Constitution. We do not believe a common carrier of
a raw material that is essential to Iowa’s economy but isn’t produced or
processed in Iowa is prohibited from exercising eminent domain when so
authorized by the general assembly. The public use concept is not that
restrictive. See Transcon. Gas Pipe Line Corp. v. Calco Enters., 511 S.E.2d
671, 676 (N.C. Ct. App. 1999) (“The concept is flexible and adaptable to
changes in society and governmental duty.”). The Iowa Constitution does
not hang on the presence of spigots and on-ramps.
Accordingly, we hold that there was no violation of article I, section
18 of the Iowa Constitution. For the reasons already stated, we also find
no Fifth Amendment violation. We recognize that a serious and warranted
concern about climate change underlies some of the opposition to the
Dakota Access pipeline. Maybe, as a matter of policy, a broad-based
carbon tax that forced all players in the marketplace to bear the true cost
of their carbon emissions should be imposed. The revenues from this
broad-based tax could be used to offset other taxes. But policy making is
not our function, and as a legal matter we are satisfied that the Dakota
Access pipeline meets the characteristics of a public use under the Iowa
and United States Constitutions.
VIII. Puntenney’s and Johnson’s Individual Claims.
Puntenney lives in Boone and owns farmland in Webster County,
which is used for growing soybeans and corn. Before the IUB, Puntenney
submitted a map showing that the pipeline route was going to cut through
the very southwest corner of his property and that it could be rerouted,
without becoming any less “straight,” so as not to go through his property.
Puntenney contends the pipeline should have been rerouted around his
property, especially in light of his plans to install wind turbines.
38
The record shows that the pipeline generally runs on a straight line
from northwest Iowa to southeast Iowa but is not entirely straight because
of the software employed by Dakota Access to account for environmental
features (such as critical habitat, fault lines, state parks, national forests,
and historic sites), engineering considerations (such as existing pipelines
and power lines), and land use considerations (such as homes, other
buildings, dams, airports, cemeteries, and schools).
Puntenney contends that by not requiring Dakota Access to go
around his property, the IUB violated Iowa Code section 479B.1, which
only confers “rights of eminent domain where necessary.” (Emphasis
added). According to Puntenney, it was not necessary for the pipeline to
traverse his property.
We do not read the statute that way. Obviously, with a pipeline that
bisects the entire state, it is never going to be strictly “necessary” for that
pipeline to cut across any particular landowner’s property. Diversions will
always be possible. In our view, the demands of this statute are met if the
pipeline company demonstrates that the pipeline requires the exercise of
eminent domain and demonstrates why the particular route it has
proposed is superior. Both criteria were met here. See Green v. Wilderness
Ridge, L.L.C., 777 N.W.2d 699, 704 (Iowa 2010) (deciding in a private
condemnation action that the legislature intended a flexible approach and
that “it is unlikely that the legislature intended to mandate that the land
to be condemned must always be the shortest route”).
Puntenney also contends the IUB acted arbitrarily in not relocating
the proposed pipeline to accommodate his plans to install wind turbines,
even as it directed a rerouting for the benefit of a turkey farmer. But the
IUB explained why. The turkey farmer was further along. He was talking
turkey about putting up new buildings. Puntenney, on the other hand,
39
had merely conceived the idea of installing wind turbines and had no
specific plan. Moreover, the record did not show that the pipeline would
interfere with any later plans to erect wind turbines, especially when it
only ran under the very southwest corner of Puntenney’s property. 7
Lastly, Puntenney contends that he was not allowed to testify to his
concerns about the impact of the pipeline on his drainage tile. However,
Puntenney was allowed to file written objections that detailed his tiling
concerns. He was also asked specifically about tiling in his live testimony.
And he was asked open-ended questions in his live testimony. For
example, the chairperson of the IUB asked Puntenney, “Can you tell the
Board exactly what you’re looking for in terms of relief beyond moving the
pipeline off of your property?” Puntenney did not request the chance to
testify further.
Johnson is a corn and soybean farmer in Boone County, who like
Puntenney sought the rerouting of the pipeline to avoid his property.
Johnson said he feared the pipeline would destroy the drainage tile and
concrete pipe he had installed on his land. The IUB did not order
rerouting, but it did grant relief to Johnson: it directed Dakota Access to
install the pipeline below Johnson’s entire drainage system, including the
twenty-four-inch concrete main that was already buried up to twenty-two
feet deep. A Dakota Access witness explained that it would not be feasible
to divert the line as Johnson had requested because in the area of
proposed diversion there were a forest, a creek, and a county drain line.
Dakota Access would have to cut out trees, cross a creek, and encumber
another drain line. The IUB concluded, “[T]here appears to be no
7Puntenney also compares his situation to that of another landowner who was
granted relief. But that landowner was only granted partial relief. Dakota Access was
directed to negotiate with that landowner to avoid one parcel that it had conceded it could
avoid and to relocate the route over three other parcels (without avoiding them entirely).
40
reasonable alternative to granting eminent domain along the route
proposed by Dakota Access and boring under the 24-inch main appears
to be the least intrusive alternative.” This finding is supported by
substantial evidence.
IX. Conclusion.
For the foregoing reasons, we affirm the judgment of the district
court.
AFFIRMED.
All justices concur except Wiggins, J., who concurs in part and
dissents in part, joined by Appel, J., and McDonald, J., who dissents.
41
#17–0423, Puntenney v. IUB
WIGGINS, Justice (concurring in part and dissenting in part).
I dissent from the majority’s conclusion that the use of eminent
domain does not violate the Iowa Constitution. I agree with the majority
that incidental economic benefits alone are not enough for a taking to
qualify as “for public use” under article I, section 18. However, I disagree
that the Dakota Access pipeline fits within the “common carrier exception”
for purposes of the Iowa Constitution. I also find fault in Dakota Access’s
use of eminent domain because it is unrelated to the purpose of the
applicable eminent-domain-authorizing statute.
One way a taking complies with article I, section 18’s public use
requirement is where “the sovereign . . . transfer[s] private property to
private parties, often common carries, who make the property available for
the public’s use.” Kelo v. City of New London, 545 U.S. 469, 497–98, 125
S. Ct. 2655, 2673 (2005) (O’Connor, J., dissenting). Inherent in this “use-
by-the-public” method of compliance is that the condemning sovereign’s
public be able to use the taken property. Various courts have recognized
that
[t]he sovereign’s power of eminent domain, whether exercised
by it or delegated to another, is limited to the sphere of its
control and within the jurisdiction of the sovereign. A state’s
power exists only within its territorial limits for the use and
benefit of the people within the state. Thus, property in one
state cannot be condemned for the sole purpose of serving a
public use in another state.
Mountain Valley Pipeline, LLC v. McCurdy, 793 S.E.2d 850, 862 (W. Va.
2016) (quoting Clark v. Gulf Power Co., 198 So. 2d 368, 371 (Fla. Dist. Ct.
App. 1967)); accord, e.g., Adams v. Greenwich Water Co., 83 A.2d 177, 182
(Conn. 1951) (noting “no state is permitted to exercise or authorize the
exercise of the power of eminent domain except for a public use within its
42
own borders” and collecting cases); Square Butte Elec. Coop. v. Hilken, 244
N.W.2d 519, 525 (N.D. 1976) (“[A]lthough other states may also be
benefited, the public in the state which authorizes the taking must derive
a substantial and direct benefit . . . , something greater than an indirect
advantage . . . .”); see Gralapp v. Miss. Power Co., 194 So. 2d 527, 531 (Ala.
1967).
Recently, other states have relied on that principle when considering
whether a pipeline running across the state constituted a public use. See
Mountain Valley Pipeline, 793 S.E.2d at 860–62 (West Virginia high court
finding a natural gas pipeline was not for a public use because West
Virginians could not use and did not directly benefit from the pipeline or
the natural gas it was to transport); see also Bluegrass Pipeline Co. v.
Kentuckians United to Restrain Eminent Domain, Inc., 478 S.W.3d 386, 392
(Ky. Ct. App. 2015) (finding pipeline was not “in the public service of
Kentucky” because the product in the pipeline was being transported to a
facility in the Gulf of Mexico and not reaching Kentucky consumers); cf. In
re Condemnation by Sunoco Pipeline, L.P., 143 A.3d 1000, 1019 (Pa.
Commw. Ct. 2016) (upholding finding of public benefit of pipeline because
the intrastate pipeline would enhance delivery options for natural gas and
liquids in Pennsylvania).
Additionally, I would find Dakota Access’s takings do not qualify as
“for public use” because the primary purposes of the takings and their
incidental economic and public safety benefits are unrelated to the
purpose of the statute authorizing the use of eminent domain.
In this case, the statute authorizing the use of eminent domain is
not Iowa Code chapter 6A but rather chapter 479B. The purpose of
chapter 479B is “to protect landowners and tenants from environmental
or economic damages which may result from the construction, operation,
43
or maintenance of a hazardous liquid pipeline.” Iowa Code § 479B.1
(2016).
The primary purported purposes of Dakota Access’s pipeline are
(1) so a private business can build a private pipeline to “transport crude
oil from sources in North Dakota to a hub in Illinois” and (2) to answer the
oil industry’s desire for a pipeline. However, the purpose of chapter 479B
is neither to facilitate private transportation of crude oil (or other
hazardous liquids) nor to acquiesce to a particular industry’s desire for a
particular method of transporting its product. Thus, the primary
purported purposes of the pipeline are unrelated to the purpose of
exercising eminent domain as contemplated in chapter 479B.
Likewise, the Iowa Utility Board’s (IUB) finding that the pipeline
promotes public safety does not correspond with the purpose of chapter
479B. The IUB found the pipeline promotes public safety because the risk
of an oil spill is lower when the oil is transported by pipeline than when it
is transported by rail. But the public safety purpose of chapter 479B is
not to lower the risk of damages resulting from the transportation of oil
generally. It is to protect against damages resulting “from the
construction, operation, or maintenance” of an oil pipeline. Id.
In sum, I conclude the Dakota Access pipeline does not fit within
the common carrier exception for purposes of the Iowa Constitution
because the Iowa public cannot use and does not derive a direct benefit
from it. Further, even taking into account the purported incidental and
secondary benefits to Iowans, the use of eminent domain in this case does
not accord with the purpose for which eminent domain may be exercised
as stated in the pertinent statute authorizing the use of eminent domain.
I would hold the Dakota Access’s takings violate article I, section 18 of the
Iowa Constitution.
Appel, J., joins this concurrence in part and dissent in part.
44
#17–0423, Puntenney v. IUB
McDONALD, Justice (dissenting).
The Iowa Utilities Board (IUB) approved construction of the pipeline.
The IUB authorized Dakota Access to use the eminent domain power to
condemn easements. Dakota Access exercised the eminent domain power
as granted. The appellants accepted the condemnation awards. Dakota
Access built the pipeline. Oil is flowing through the pipeline. No further
relief is available. What’s done, is done. The case is moot.
The leading case is Welton v. Iowa State Highway Commission, 208
Iowa 1401, 227 N.W. 332 (1929). In Welton, we concluded a challenge to
the construction of a highway was moot when construction was completed:
[S]ubsequent to the decision of the district court in this case,
and in the absence of an order staying appellees’ actions, the
road in controversy was established . . . [. T]he appellant has
perfected an appeal to the district court of Mahaska county,
from the award of the condemnation commissioners, as to the
amount of his damages . . . . [D]uring the pendency of the
appeal, the defendant did not obtain a restraining order from
this court . . . .
It is apparent from the uncontroverted affidavit that the
orchard has been taken for highway purposes and the paving
laid. No order which we can now make can preserve to
appellant his orchard.
Id. at 1402–03, 227 N.W. at 333.
Similarly, in Porter v. Board of Supervisors, we concluded the
completion of a drainage ditch was an established fact that precluded
relief:
We call attention also to the fact . . . that the construction
ha[s] already taken place and that the canal or ditch [i]s in
operation. There was no stay of proceedings nor application
in this court for an order to stay construction. Under these
circumstances the construction of the ditch became an
established fact before the case was submitted to us for
decision.
45
238 Iowa 1399, 1404, 228 N.W.2d 841, 844 (1947).
As in Welton and Porter, the construction and operation of the
pipeline is an established fact—what’s done cannot be undone. The
appellants previously conceded their claims were moot once the pipeline
was completed and placed into service. In the district court, the appellants
sought a stay. In support of their application for stay, the appellants
conceded “if they d[id] not receive a stay before [Dakota Access’s] pipeline
trench [wa]s dug, any remedy w[ould] be inadequate.” The district court
denied the application for stay. The appellants did not seek interlocutory
appeal, did not seek a stay from this court, and did not seek to expedite
the appeal. In the meantime, the “trench [was] actually dug.”
The completion of the pipeline and the appellants’ acceptance of the
condemnation awards are established facts that render their claim moot.
See Campbell-Ewald Co. v. Gomez, 577 U.S. ___, ___, 136 S. Ct. 663, 669
(2016) (“If an intervening circumstance deprives the plaintiff of a ‘personal
stake in the outcome of the lawsuit,’ at any point during litigation, the
action can no longer proceed and must be dismissed as moot.” (quoting
Genesis Healthcare Corp. v. Symczyk, 569 U.S. 66, 72, 133 S. Ct. 1523,
1528 (2013))); Standing Rock Sioux Tribe v. U.S. Army Corps of Eng’rs, 301
F. Supp. 3d 50, 63 (D.D.C. 2018) (“The specter of mootness raised in
Standing Rock’s earlier filings has now come to pass—construction is
complete and oil is flowing through the pipeline.”); Gunnar v. Town of
Montezuma, 228 Iowa 581, 584, 293 N.W. 1, 3 (1940) (stating a case is
moot if “the threatened action has become an accomplished fact”). For
these reasons, I would dismiss the appeal.