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Alliance Pipeline L.P. v. 4.360 Acres of Land

United States Court of Appeals, Eighth Circuit

March 24, 2014

Alliance Pipeline L.P., Plaintiff - Appellee
v.
4.360 Acres of Land, More or Less, in the S/2 of Section 29, Township 163 North, Range 85 West, Renville County, North Dakota; 4.675 Acres of Land, More or Less, in the SE/4 of Section 30, Township 163 North, Range 85 West, Renville County, North Dakota; Leonard Smith; Ione Smith, Defendants - Appellants

Submitted December 17, 2013.

Petition for certiorari filed at, 07/21/2014

Page 363

Appeal from United States District Court for the District of North Dakota - Bismarck.

For Alliance Pipeline L.P., Plaintiff - Appellee: Lawrence Bender, Michael David Schoepf, Fredrikson & Byron, Bismarck, ND.

For 4.360 Acres of Land, More or Less, in the S/2 of Section 29, Township 163 North, Range 85 West, Renville County, North Dakota, 4.675 Acres of Land, More or Less, in the SE/4 of Section 30, Township 163 North, Range 85 West, Renville County, North Dakota, Leonard Smith, Ione Smith, Defendants - Appellants: Robert S. Rau, Bosard & Mccutcheon, Minot, ND.

Before WOLLMAN, LOKEN, and KELLY, Circuit Judges.

OPINION

Page 364

WOLLMAN, Circuit Judge.

Leonard and Ione Smith (the Smiths) appeal from a district court[1] order condemning portions of their property for the construction of a natural gas pipeline owned and operated by Alliance Pipeline, L.P. (Alliance), and granting Alliance immediate use and possession of the condemned land. Alliance brought the condemnation action against the Smiths' property after obtaining a certificate from the Federal Energy Regulatory Commission (FERC) authorizing Alliance to condemn land along the route of its proposed pipeline. The Smiths assert that Alliance's certificate is ineffective against them because Alliance failed to provide the Smiths with notice of its application for the certificate and because FERC failed to consider relevant state law in granting the certificate. The Smiths also assert that Alliance's condemnation action runs afoul of state and federal procedural law. We affirm.

I.

Alliance operates an approximately 2300-mile network of oil and natural gas pipelines in the United States and Canada. In 2011, Alliance began plans to construct a 79-mile-long underground pipeline from a natural gas processing plant near Tioga, North Dakota, to an interconnection with Alliance's main pipeline near Sherwood, North Dakota. There was at that time (and there continues to be) an oil boom in North Dakota, and occasionally oil prospectors would find reservoirs containing both petroleum and natural gas. The oil companies, having no pipeline capacity to ship the gas to major markets, would burn the gas at the source--a practice called " flaring." Alliance sought to take advantage of this market inefficiency by shipping the otherwise wasted gas east to Chicago.

Anyone who wishes to construct a natural gas pipeline in the United States must first obtain a certificate of public convenience and necessity from FERC, the federal agency responsible for supervising and coordinating the production of energy in the United States. See 15 U.S.C. § 717f(c)-(e). Such a certificate also gives the recipient the authority to condemn land along the route of its pipeline under the power of eminent domain. See 15 U.S.C. § 717f(h). Alliance applied to FERC for a certificate of public convenience and necessity on January 25, 2012. FERC published notice of Alliance's application in the Federal Register on February 7, 2012.

The Smiths are an elderly couple who own a farm near Sherwood, North Dakota. The route of Alliance's proposed pipeline crossed the Smiths' property. Sometime in February 2012, Alliance representatives visited the Smiths' farm to ask the Smiths if Alliance could purchase an easement across their land. Because the Smiths were in poor health, Alliance representatives met with Guy Solemsaas, the son of Ione and stepson of Leonard, who lives next to the Smiths and helps tend the

Page 365

Smiths' farm. Solemsaas told Alliance that neither he nor the Smiths were interested in negotiating the sale of an ...


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