District Court Challenges to Carbon Pipeline Survey Access
The potential carbon dioxide pipeline projects in Iowa have created some controversy. One issue that has concerned some landowners is the statute granting companies proposing pipelines the right to access their land for a survey. Several recent cases addressing this issue have come before Iowa district courts.
Background
As part of the hazardous liquid pipeline permitting process, Iowa Code § 479B.15 allows a pipeline company to access private lands for surveying purposes. The company must give 10 days’ notice to the person responsible for the taxes on the property and anyone “residing or in possession” of the land using restricted certified mail. [i] If the company follows this procedure, the “surveys shall not be deemed a trespass[.]” If the survey causes “actual damages” then the company must pay the landowner for those damages.
For more information about the statutory process for the Iowa Utilities Board to approve a permit for a carbon pipeline, see our article here. For more information about landowner considerations when granting an easement for the pipeline, including tax consequences, read our article here. The IUB has scheduled the Summit hearing to commence on August 22, 2023, at the Cardiff Event Center, 3232 First Avenue South, Fort Dodge, Iowa. The hearing will begin with testimony from landowners subject to potential eminent domain claims.
Constitutional Challenges to Survey Provision
Some landowners have challenged the constitutionality of Iowa Code § 479B.15. This law allows a pipeline company to enter private property to survey the land without the need for the landowners’ permission. A handful of landowners who have prevented pipeline agents from coming onto their land have been sued by pipeline companies to allow access, and as a defense have argued that this statute violates U.S. Const. amend. V and Article I, section 18 of the Iowa Constitution. Specifically, they argue that the law takes away their right to exclude others from their land without giving them just compensation in return.
The constitutional challenge stems from the recent 2021 U.S. Supreme Court decision in Cedar Point Nursery v. Hassid. In the case, the Supreme Court determined that a California regulation that mandated landowners to allow union organizers on their land to approach agricultural workers violated the Fifth Amendment because it was an unconstitutional taking without just compensation. Specifically, the Court ruled that the government was taking away a landowner’s right to exclude others from their property.
While the Supreme Court found that the facts of Cedar Point violated the Fifth Amendment, the opinion did note that not every authorized physical invasion will rise to the level of a taking. Importantly, the court noted that there are “longstanding background restrictions” that constitute a “pre-existing limitation upon the owner’s title.”[ii]
For a more thorough analysis on the Cedar Point opinion, see the CALT article here.
Clay County Case
On May 3rd, 2023, Judge John Sandy issued an opinion finding Iowa Code § 479B.15 unconstitutional. As a result, Navigator Heartland’s petition asking the court to order the defendant to allow Navigator to enter the defendant’s land for surveying purposes was denied. A copy of the opinion can be found here.
The court found that survey visits pursuant to Iowa Code § 479B.15 are government-authorized physical invasions of private land, and, therefore, presumed takings under Cedar Point. The court stated that the Cedar Point opinion lists three categories of allowable government authorized physical invasions: (1) public and private necessity, (2) abatement of nuisances, and (3) enforcement of criminal law.[iii] The court found that the survey access does not fit into any of these categories and therefore the statute creates a taking.
The court then analyzed whether the statute provides for “just compensation.” It reviewed the statute’s compensation structure, noting that the pipeline company must pay for “actual damages.” The court determined that the language provides no compensation for the entry itself, meaning there is no just compensation to the landowner. Since there is no just compensation, the court ruled that the statute allowing the taking is unconstitutional.
Hardin County Case
On May 10, 2023, Judge Amy More issued an opinion finding Iowa Code § 479B.15 constitutional. As a result, Summit Carbon Solution’s motion for summary judgment on the issue was granted, and the defendant’s counterclaim that Iowa Code § 479B.15 is unconstitutional was dismissed. A copy of the opinion can be found here.
The court first emphasized that the survey access in Iowa Code § 479B.15 “can provide a public benefit” since the intended result is an authorized IUB pipeline. The court then reviewed the constitutionality of the statute under the recent Cedar Point case. The court found that survey access is a “longstanding background restriction.” First, even though Cedar Point did not specifically mention survey access as a background restriction, the opinion cited multiple legal treatises that acknowledge survey access is not a taking. Second, the court noted that Iowa law has allowed pre-condemnation surveys since 1851. Third, every state in the U.S. has a statute that allows for this type of survey access. The court used these examples to determine there was ample support that pre-condemnation survey access is not a taking because it is a pre-existing limitation of an American landowner’s title to the land.
The court further reasoned that even if the surveys were a taking, the statute justly compensates the landowner. Quoting the concurrence in Garrison v. New Fashion Pork LLP, the court stated that the Article I, section 18 of the Iowa Constitution limits just compensation to “diminution-of-value.”[iv] Just compensation is available to landowners since Iowa Code § 479B.15 provides an avenue for a landowner to recover actual damages.
Woodbury County Case
On May 30, 2023, Judge Roger Sailer issued an opinion finding Iowa Code § 479B.15 constitutional. As a result, the defendant’s counterclaim against Navigator Heartland Greenway arguing that Iowa Code § 479B.15 is unconstitutional was dismissed. A copy of the opinion can be found here.
The court found that the examples of background restrictions listed in Cedar Point constituted a non-exhaustive list of restrictions. Instead, the court reasoned the listed examples were “merely illustrative examples.” In further support of this analysis, the court listed many of the same reasons the Hardin County court listed to determine that survey access is allowed. The court also emphasized that the statutory language authorizing survey access is a codification of a common law privilege, and that Cedar Point expressly stated that the allowable title restrictions “also encompass traditional common law privileges.”[v] The court did not discuss whether just compensation was provided since it did not find a taking.
Challenge to Notice
The defendants in the Woodbury County case above also challenged Navigator’s compliance with the 10-day notice required by Iowa Code § 479B.15. The court found that Navigator had failed to comply with the statute because it did not attempt to send the notice to the husband landowner who resided in a nursing home. Therefore, Navigator’s request for an injunction allowing access for the survey was denied.
The notice requirement in Iowa Code § 479B.15 is that a 10-day notice must be sent “by restricted certified mail to the landowner as defined in section 479B.4 and to any person residing on or in possession of the land.” The defendants made many arguments that Navigator failed to comply with the 10-day notice requirement. The court did find that service to the wife was proper. When service was delivered to her, she could not refuse to accept the restricted certified mail and then claim no delivery occurred. However, the husband lives in a nursing facility to care for his Alzheimer’s and dementia. No notice was sent to the facility. Thus proper notice was not given. The court noted the difference in notice requirements between Iowa Code §§ 479B.4(5)(b) and 479B.15. While § 479.4(5)(b) has a good-faith requirement, § 479.15 does not. Instead, “notice must be given to the landowner . . . – full stop.” The court found that the legislature intended this difference and that Navigator failed to attempt to give notice to the husband landowner.