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A closer look at North Dakota’s condemnation law

Posted on: December 27th, 2016
by David Ganje

A closer look at North Dakota’s condemnation law

This is the second of two articles discussing eminent domain law in both South Dakota and North Dakota. This article will address several problems with North Dakota condemnation law.

The use of eminent domain (condemnation) is a modern legal problem. Condemnation is the taking of property for a public or, in some cases, private interest. Condemnation is a legally sanctioned sword. My argument is not that eminent domain as a concept is wrong, but that in its present state as a legal vehicle attempting to provide fairness, eminent domain is in need of repair on both sides. This law allows a governmental body — and a private business — to convert privately owned land to another use, often over the objections of the landowner. Traditionally in a legal taking a landowner receives “market value” for the land taken. This often includes money for reduction in agriculture output or for the loss of other productive use of the land.

Justice Sandra Day O’Connor famously said in her dissent to a private taking condemnation case, “The specter of condemnation hangs over all property. Nothing is to prevent the State from replacing any Motel 6 with a Ritz-Carlton, any home with a shopping mall, or any farm with a factory.” One local North Dakota government official said it aptly regarding action to condemn property: it is better to look at condemnation through our local eyes rather than through the developers’ egos.

In my opinion, there are four notable problems with current North Dakota law:

1. While eminent domain makes sense under a public utility easement paradigm, how does this process apply when a pipeline easement on a landowner’s property is the “transportation vehicle” for a commodity? How does one calculate “fair market value” when millions of dollars’ worth of product are flowing across privately-held land? President elect Donald Trump said, “I want the Keystone pipeline, but the people of the United States should be given a piece, a significant piece of the profits.” North Dakota law does not take this into consideration. In fact, state law prohibits this. The law states that no benefit from the proposed improvement may be allowed in calculating a landowner’s compensation.

2. A land owner is not allowed to recover reasonable attorney’s fees if he appeals and does not prevail or if he applies for a new trial and does not receive greater compensation than awarded in the first trial. Why should the land owner be penalized for exercising his right to an appeal or to a new trial when the whole process of condemnation is involuntary in the first place? This lawsuit and claim is not “elective surgery” to the landowner. He is forced into the circumstances of condemnation.

3. In a federal condemnation, even if a landowner does not formally answer the condemnation lawsuit, the landowner may still present evidence of the value of his land and may participate in the distribution of awarded monies. North Dakota law does not provide for this.

4. Eminent Domain law is old law — too old. About half of the states still maintain that the property owner has the burden of proving value and proving the amount of compensation; this is ridiculous. Condemnation is not private litigation. It is a special legal right given to the condemnor to take land from another party. But North Dakota law requires that the burden of proof rests with the landowner to prove entitlement to compensation. This is also ridiculous. Rather than placing the burden of proof on the landowner who would often not prefer the forced taking, the law and the legal burden of proof should hold responsible the government or private party trying to take the land.

I am reminded of one of my tutors during my legal internship, who said something very memorable about the law while instructing me: “David, the law is a strange thing to citizens. They don’t pay much attention to it until it affects their property or their daughters.” The North Dakota Supreme Court acknowledges the dilemma in our society concerning the taking of someone else’s property. The Court stated that condemnation is, “Clear in theory but often cloudy in application.” A landowner in a condemnation case is not a party choosing elective surgery. Although the state has made progress in addressing fairness for surface owner’s, equity demands that more work be done.

David Ganje practices law in the area of natural resources, environmental and commercial law.