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,
IOWA UTILITIES BOARD, A Division of the Department of Commerce, State of Iowa, Appellee, and HICKENBOTTOM EXPERIMENTAL FARMS, INC. and PRENDERGAST ENTERPRISES, INC, Petitioners, and OFFICE OF CONSUMER ADVOCATE and THE MAIN COALITION, Intervenors-Appellees, and DAKOTA ACCESS, LLC, Appellee.
from the Iowa District Court for Polk County, Jeffrey D.
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
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.
A. Dublinske and Brant M. Leonard of Fredrikson & Byron,
P.A., Des Moines, for appellee Dakota Access, LLC.
J. Lynch (until withdrawal), Cecil I. Wright II, and Benjamin
J. Flickinger, Des Moines, for appellee Iowa Utilities Board.
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
Bookbinder, Washington, D.C., and Scott L. Long of Long &
Gilliam, Des Moines, for amicus curiae Niskanen Center.
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.
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.
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 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.
Background Facts and Proceedings.
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.
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.
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 . . . .
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.
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.
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."
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
the IUB found that the pipeline would promote the public
convenience and necessity. It did so primarily for two
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
in the IUB's view, there would be considerable economic
benefits "associated with the construction, operation,
and maintenance of the proposed pipeline."
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.
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
route that contained right angles and followed division lines
(as proposed by some landowners) would create additional
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
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.
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.
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.
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.
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."
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
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."
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.
Johnson, the Sierra Club, and the Lamb petitioners appealed.
We retained the appeal.
Standard of Review.
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
"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 §
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.
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).
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.
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").
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."
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 commission has acted
wisely nor to substitute its judgement for that of 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.
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)).
Standing of the Sierra Club.
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
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.
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.
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))).
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.
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.
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 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
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.
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
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 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 ...