North Dakota Eminent Domain Laws and Property Rights

The following responses are intended to provide general information about eminent domain laws in the featured state. Such information does not constitute legal advice. Anyone interested in learning more about eminent domain law and the impact it may have on a given set of facts should consult with an OCA attorney or another attorney experienced in handling eminent domain cases.

• Who can exercise Eminent Domain Laws?

  Generally speaking, the state or any of its departments, agencies or political subdivisions can exercise the power of eminent domain with appropriate statutory authorizations. North Dakota’s Constitution prohibits private property from being “taken for the use of, or ownership by, any private individual or entity, unless that property is necessary for conducting a common carrier or utility business.”

• What Are the Legal Requirements for Exercising the Power?

  There are three primary statutory requirements with which a condemnor must comply before condemnation is authorized by a court:
  
  1. That the use to which it is to be applied is a use authorized by law.
  2. That the taking is necessary to such use.
  3. If already appropriated to some public use, that the public use to which it is to be applied is a more necessary public use.
  
  N.D.C.C. § 32-15-05. Additionally, the Supreme Court of North Dakota held almost a century ago that “courts can always inquire into the nature of the use for which the property is to be condemned for the purpose of determining whether such is, in fact, a public use.” City of Jamestown v. Leevers Supermarkets, Inc., 552 N.W.2d 365, 369 (N.D. 1996) (emphasis added) (citing Bigelow v. Draper, 6 N.D. 152, 69 N.W. 570, 574 (1896). See also Northern Pacific Ry. Co. v. Kreszeszewski, 17 N.D. 203, 115 N.W. 679, 681 (1908). “[M]ere legislative fiat cannot make that a public use which is clearly not such use.” Northern Pacific Ry. Co. v. Kreszeszewski, 17 N.D. 203, 115 N.W. 679, 681 (1908). “Courts can inquire because a use must be public before private property can be taken by eminent domain under N.D. Const. Art. I, § 16 and U.S. Const. amend. V.” City of Jamestown v. Leevers Supermarkets, Inc. at 369.

• What Limitations or Defenses Exist?

  Landowners can challenge whether a project truly has a public use or whether their property is truly necessary for the public use. These are very difficult challenges on which to succeed because the government is generally given a large amount of deference by the courts. Nonetheless, landowners have a right to challenge any takings that is in excess of what is reasonably necessary for the public project. The North Dakota Supreme Court has said:
  

  • Generally, the nature or extent of a title or rights taken in the exercise of eminent domain depends on the statute conferring that power. Such statute will be strictly construed. Where the estate or interest to be taken is not definitely set forth, only such estate or interest may be taken as is reasonably necessary to carry out a public purpose for which the land is being taken.
  • In eminent domain, therefore, that construction must be adopted which leaves the owner with the greatest possible estate, in event of uncertainty or indefiniteness in the statute.

  
  Wallentinson v. Williams Cty., 101 N.W.2d 571, 575 (N.D. 1960).

• What Constitutes a Public Purpose?

  The North Dakota Supreme Court addressed this issue in Square Butte Elec. Coop. v. Hilken with reference to numerous other cases it discussed in that decision:
  
  From these cases, it appears that the following elements must be present for a public use to exist in the state where the property sought to be condemned lies. First, the public must have either a right to benefit guaranteed by regulatory control through a public service commission [Bokma] or an actual benefit [Gralapp]. Second, although other states may also be benefited, the public in the state which authorizes the taking must derive a substantial and direct benefit [Greenwich Water], something greater than an indirect advantage [Grover Irrigation]. Third, the public benefit, while not confined exclusively to the state authorizing the use of the power [Greenwich Water], is nonetheless inextricably attached to the territorial limits of the state because the state's sovereignty is also so constrained [Clark and Grover Irrigation].
  
  Square Butte Elec. Coop. v. Hilken, 244 N.W.2d 519, 525 (N.D. 1976).
  
  North Dakota Century Code 32-15-02 also sets forth the public purposes declared by the Legislative Assembly to be permissive uses for which eminent domain may be exercised and includes most traditional public uses.

• How is Just Compensation Determined?

  The Supreme Court of North Dakota stated in Otter Tail Power Company v. Von Bank that the landowner is “entitled to compensation for such of his property rights as were appropriated by the plaintiff in the taking of the easement and for damage done by the taking to the remainder of the property not covered by the appropriation.” Otter Tail Power Company v. Von Bank, 72 N.D. 497, 506, 8 N.W.2d 599, 604 (1942). This measure is also found in statute in N.D.C.C. § 32-15-22 which requires the fact-finder to assess “the value of the property sought to be condemned and all improvements thereon pertaining to the realty and of each and every separate estate or interest therein.”
  

• How Is Fair Market Value Defined?

  The North Dakota Supreme Court explains: “Although not necessarily an absolute or exclusive standard or method, the general rule for determining the value of property taken under subsection (1) of § 32-15-22, NDCC, is a consideration of the fair market value of such property. This court has defined fair market value in condemnation cases as the highest price property can be sold for in the open market by a willing seller to a willing purchaser, neither acting under compulsion and both exercising reasonable judgment.” Hazelton v. Daugherty, 275 N.W.2d 624, 627 (N.D. 1979).
  
  For partial takings like pipeline easements, the use of the “before and after” approach, which assesses the loss in value to the larger parcel before and after imposition of the easement, is an accepted approach, but is not required in North Dakota. “There is no sole measure for determining severance damages as such damages are not susceptible to precise proof and can only be approximately shown by the opinion of witnesses having the requisite information.” Hazelton v. Daugherty, 275 N.W.2d 624, 628 (N.D. 1979).

• What About Recovering Damages to Remaining Property?

  N.D.C.C. § 32-15-22(2) and 32-15-22(3) require payment of both severance and other damages to the property arising from the taking:
  

  • If the property sought to be condemned constitutes only a part of a larger parcel, the damages which will accrue to the portion not sought to be condemned by reason of its severance from the portion sought to be condemned and the construction of the improvement in the manner proposed by the plaintiff. If the property, though no part thereof is taken, will be damaged by the construction of the proposed improvement, the amount of such damages.

• Is the Landowner Entitled to Recover Reasonable Attorney Fees? Expert Fees? Litigation Costs?

  Landowners generally recover their attorneys’ fees, court expenses, and expert witness fees in eminent domain proceedings in North Dakota. Under N.D.C.C. § 32-15-32, “The court may in its discretion award to the defendant reasonable actual or statutory costs or both, which may include interest from the time of taking except interest on the amount of a deposit which is available for withdrawal without prejudice to right of appeal, costs on appeal, and reasonable attorney's fees for all judicial proceedings.”
  
  This statutory provision has generally been interpreted as a law that was “designed for the benefit of the landowner, and should be construed so as to give him its benefit to the full extent.” Petersburg Sch. Dist. of Nelson Cty. v. Peterson, 103 N.W. 756, 759 (1905). For example, in 1977 Justice Vogel wrote: “The purpose of the statute allowing attorney fees in eminent-domain actions was to make certain that the landowner received the full ‘just compensation’ for his land, without diminution by attorney fees.” City of Bismarck v. Thom, 261 N.W.2d 640, 647 (1977) (Vogel, Justice, dissenting).