North Dakota, as you might expect, can be cold in the winter. So cold that railroad switches need to be heated, else they get... frozen. The railroad uses refillable propane tanks, but these need to be refilled from time to time. And North Dakota is so cold in the winter that sometimes, the propane trucks can't get to the tanks to refill them. Frozen switches.
Enter MDU, the Montana-Dakota Utilities Company. The railroad asked MDU to install a natural gas pipeline, "believing that natural gas by pipeline would increase reliability and decrease the cost associated with heating the switch." The cheapest and most practical place to locate this pipeline was on Behm's land: "MDU claimed that other routes for the pipeline would be too expensive or might in the future require modification or removal of the pipeline.
Behm didn't see it that way. He objected, asserting the taking was not for public use because it was to benefit the railroad and only the railroad. The trial court agreed, although it couched its ruling in terms of "necessity." The court held the taking was authorized by the statute which permits takings for gas pipelines, "but that a taking of Behm's property was not necessary for the public use." The pipeline would benefit a single user, the railroad. And the railroad could continue to heat its switch by propane, or the utility could choose another route for the pipeline. It would just be a hassle, and "[t]he location of the proposed pipeline further stretches the meaning of necessity to mean mere convenience to MDU."
In Montana-Dakota Utilities Co. v. Behm, No. 20180321 (May 16, 2019), the North Dakota Supreme Court disagreed. The necessity of the taking, the court held, is "limited to the question of whether the taking of the particular property sought to be condemned is reasonably suitable and usable for the authorized public use." Slip op. at 3. Unless there's proof of bad faith or fraud that is (and we all know how often a property owner can prove that to a court's satisfaction). The court rejected the property owner's argument that the North Dakota "adopt an expanded judicial review of the necessity of taking." Slip op. at 3. It did so in two steps.
First, the court agreed that the question of public use is ultimately a judicial one, but affirmed that the court's review is highly deferential. Here, it meant that the use on which the trial court should have focused on was MDU's use as a pipeline, not the railroad's use of the gas in the pipeline to heat its switch:
MDU’s proposed pipeline to supply natural gas to BNSF for the purpose of heating the railroad switch is for a public use because MDU is a public utility, even though the portion of the pipeline at issue here is intended to serve only a single customer.
Slip op. at 5.
Having disposed of the challenge to the public use of the taking, the court turned to the necessity question. It concluded the trial court applied the wrong standard. The Supreme Court rejected a California decision which held that necessity doesn't mean mere convenience. Slip op. at 6 (citing Spring Valley Water-Works v. San Mateo Water-Works, 28 P. 447, 449 (Cal. 1883)).
The MDU easement, the court concluded, was not for its mere convenience. It didn't already own adjacent land so Behm's land was as good as any other. And the governing standard sets a very low bar: necessity only asks if the property is "reasonably suitable and usable" for the purpose for which it is being taken. Was Behm's land suitable for a pipeline? For sure.
Behm's suggestion that there were two better routes for the pipeline were met by the usual judicial response: deference to the condemnor. "Ultimately, it appears the district court substituted its judgment for that of the condemning authority." Slip op. at 8.
Read the briefs and listen to the oral argument recording here.
Montana-Dakota Utilities Co., v. Behm, No. 20180321 (N.D. May 16, 2019)
