CHEROKEE | A state judge said he will rule within two weeks on whether three landowners in the path of a proposed crude oil pipeline can proceed with their lawsuit against the Iowa Utilities Board.
The owners — Marian Johnson of Cherokee County, Brent Jesse of Buena Vista County and Richard Lamb of Boone County — are challenging the IUB's authority to grant an out-of-state developer, Dakota Access LLC, the power of eminent domain to take land for the 30-inch-diameter pipe, which would run diagonally through the state, from the northwest to the southeast corner.
The IUB and Dakota Access, a subsidary of Dallas, Texas-based Energy Transfer Partners L.P., have both filed motions to dismiss the suit.
District Court Judge Carl J. Petersen heard oral arguments from each side during a one-hour hearing Thursday in Cherokee. A crowd estimated at around 60, which included a number of landowners and their supporters, watched the proceedings from the gallery.
Petersen acknowledged the case affects a lot people and said he would make a timely decision.
Attorneys for the IUB and Dakota Access argued the case should be dismissed because the plaintiffs have not exhausted their administrative remedies, a requirement before a party can challenge actions of a state agency in district court.
William Hanigan, a Des Moines attorney representing the landowners, said his clients have an exception to the exhaustion rule because of "immediate irreparable injury" related to the threat of eminent domain and decreased property values.
"Ripeness doesn't require the Iowa Utility Board to do anything," Hanigan said of bringing the case to trial. "We have ripeness because of what Dakota Access has already done."
Hanigan said his clients want to go directly to trial because they lack the means to seek answers about the oil company.
Dakota Access attorney Bret Dublinske of Des Moines told the court the plaintiffs can ask those questions during a three-week administrative hearing the IUB has scheduled from Nov. 12 to Dec. 2 in Boone.
"There is no case law saying these questions can't be heard by the Iowa Utilities Board," Dublinske said.
After the hearings, the IUB is expected to rule on Dakota Access' requests to build the pipeline and use eminent domain. The developer has said it would resort to the condemnation process only in the rare cases in which it doesn't reach voluntary agreements with landowners.
The developer estimates it will spend $200 million to acquire permanent easements for about 2,000 tracts of land. Payments for farmland would vary, depending on productivity.
If forced to sell through eminent domain, the plaintiffs argue the compensation would be based on fair market value, which they contend would be much lower than a transaction between a willing seller and buyer.
The 1,100-mile pipeline through four states would carry up to 570,000 barrels of crude from the Bakken region of western North Dakota to a shipping terminal in Patoka, Illinois.
In Iowa, 346 miles of underground pipe would be laid through 18 counties, including Sioux, O'Brien, Cherokee, Buena Vista and Sac.
In January, Dakota Access filed for a hazardous liquids pipeline permit with the IUB. Under state law, the board is allowed to grant eminent domain for utility projects, which includes hazardous liquids pipelines. However, Hanigan argued that it remains unclear whether the project serves a public purpose, a requirement to receive eminent domain for nonutility companies.
The IUB's attorney, David Lynch of Des Moines, said the state agency and Dakota Access share a common interest in the judge’s decision but are not siding together.
Lamb said Thursday's hearing was a step in the right direction for Iowa landowners affected by the proposed pipeline but said there is still a lot of work left to do.
"I'm optimistic in the long run that we'll prevail," Lamb said. "I feel as if an out-of-state corporation has decided they have a better plan for my land than I do. I see no justice in that."