Key Takeaways
- • The U.S. Supreme Court will hear oral arguments on November 9, 2026, in Leonard W. Hoffmann v. WBI Energy Transmission, Inc., to decide whether just compensation in private condemnations under the Natural Gas Act should be determined by reference to state law.
- • The Eighth Circuit denied attorney fees to North Dakota ranchers, holding that the Fifth Amendment standard applies. Four other circuits have allowed fee recovery under federal common law that can incorporate state law, creating a circuit split.
- • The ranchers sought $383,375.76 in attorney fees and costs after three years of litigation. WBI argued the recoverable amount should be limited to $220,625.52.
- • The Supreme Court granted certiorari on June 26, 2026, after the Solicitor General urged it to uphold the Eighth Circuit. The attorneys general of ten states and several amici filed in support of the ranchers.
- • The outcome could make some interstate pipeline condemnations cheaper and faster or more expensive and slower, and Congress may legislate in response.
Summary
The Supreme Court will hear oral arguments on November 9, 2026, in Leonard W. Hoffmann v. WBI Energy Transmission, Inc. The case asks whether just compensation in private condemnations under the Natural Gas Act (NGA) should be determined by reference to state law. According to the analysis, the Court's ruling will resolve a split among the circuits over whether attorney fees may be recovered in NGA condemnation proceedings.
Under NGA Section 7(c), the Federal Energy Regulatory Commission issues certificates of public convenience and necessity for new interstate natural gas pipelines, and only private parties can obtain them. Section 7(h), enacted by Congress, allows certificate holders to exercise eminent domain in federal or state court, but it does not address compensation or attorney fees.
WBI Energy Transmission received certificate authorization in February 2018 to build roughly 12 miles of 24-inch pipeline through ranch land in western North Dakota, in the Bakken formation of the Williston Basin. The parties could not agree on an easement price. The ranchers pointed to prices oil pipelines had paid for comparable easements, while WBI offered only what it had paid for a parallel natural gas line easement years earlier. After the district court permitted immediate use of the easements, the parties settled the easement value confidentially, with the ranchers reserving their right to seek fees and WBI reserving its right to contest them. The trial court relied on United States v. Kimbell Foods to fill the statutory gap with North Dakota law and awarded fees, which WBI appealed.
Four circuits have applied federal common law to permit fee and cost recovery in NGA condemnations, answering "no" to the Kimbell Foods questions on whether uniformity is required, whether state law would frustrate federal objectives, and whether uniform federal law would disrupt existing state-law commercial relationships. The Eighth Circuit reversed, holding that Fifth Amendment just compensation generally equals market value and excludes indirect costs such as attorney fees, and that only a statute could provide more. The Supreme Court granted certiorari on June 26, 2026, after the Solicitor General urged it to uphold the Eighth Circuit.
The ranchers argue that NGA Section 7(h) grants a limited delegation of power to file a straight condemnation, so their compensation rights derive from the statute rather than the Fifth Amendment. They also argue that real property law lies at the core of state authority, that the Court borrows state substantive law absent explicit preemption, and that state-law fee rules are consistent with the statute's purpose. Six amicus groups supported them, including Florida property owners, who argued that unrepresented owners are often pressured into settlements near a company's low offers. The analysis notes that the outcome may make some pipeline condemnations less expensive and quicker or, alternatively, more expensive and slower, and that Congressional action could follow regardless of the decision.
Under NGA Section 7(c), the Federal Energy Regulatory Commission issues certificates of public convenience and necessity for new interstate natural gas pipelines, and only private parties can obtain them. Section 7(h), enacted by Congress, allows certificate holders to exercise eminent domain in federal or state court, but it does not address compensation or attorney fees.
WBI Energy Transmission received certificate authorization in February 2018 to build roughly 12 miles of 24-inch pipeline through ranch land in western North Dakota, in the Bakken formation of the Williston Basin. The parties could not agree on an easement price. The ranchers pointed to prices oil pipelines had paid for comparable easements, while WBI offered only what it had paid for a parallel natural gas line easement years earlier. After the district court permitted immediate use of the easements, the parties settled the easement value confidentially, with the ranchers reserving their right to seek fees and WBI reserving its right to contest them. The trial court relied on United States v. Kimbell Foods to fill the statutory gap with North Dakota law and awarded fees, which WBI appealed.
Four circuits have applied federal common law to permit fee and cost recovery in NGA condemnations, answering "no" to the Kimbell Foods questions on whether uniformity is required, whether state law would frustrate federal objectives, and whether uniform federal law would disrupt existing state-law commercial relationships. The Eighth Circuit reversed, holding that Fifth Amendment just compensation generally equals market value and excludes indirect costs such as attorney fees, and that only a statute could provide more. The Supreme Court granted certiorari on June 26, 2026, after the Solicitor General urged it to uphold the Eighth Circuit.
The ranchers argue that NGA Section 7(h) grants a limited delegation of power to file a straight condemnation, so their compensation rights derive from the statute rather than the Fifth Amendment. They also argue that real property law lies at the core of state authority, that the Court borrows state substantive law absent explicit preemption, and that state-law fee rules are consistent with the statute's purpose. Six amicus groups supported them, including Florida property owners, who argued that unrepresented owners are often pressured into settlements near a company's low offers. The analysis notes that the outcome may make some pipeline condemnations less expensive and quicker or, alternatively, more expensive and slower, and that Congressional action could follow regardless of the decision.
Go deeper than the headline
Research every firm in this story, track the ones that matter and get the daily briefing — free for 7 days.