Northwest Landowners Association WINS Lawsuit against State of ND and Continental Resources, Inc. over Unconstitutional Taking of Private Property

Northwest Landowners Association (NWLA) filed a Complaint in state district court asking the court to declare Senate Bill 2344 an unconstitutional taking of private property. On January 21, 2021,the Northeast Judicial District Court issued its decision in favor of the Landowners, agreeing that it is an unconstitutional taking, and striking the law down in full. The Court explained in its opinion: “There is no choice in the matter. This is an unconstitutional taking of an inherent, inalienable property right….” The Court ruled that the law is also unconstitutional under the North Dakota Constitution because the taking is ”for the improper purpose of economic development, by giving all value of those property rights to a private party, for a non-public purpose.” The Court concluded that “The provisions of SB 2344, both individually and taken together, prohibit landowners from obtaining any compensation for any oil and gas operators’ use of their pore space estate, whether reasonable or unreasonable, whether at large or small volumes, whether at a large financial detriment or small financial detriment. These provisions act as an absolute bar to not just money damages, but to all other meaningful remedies, including trespass, nuisance or other torts. The three provisions at issue here, enacted or amended within SB 2344, render the pore space worthless in every instance of its application, and it is unconstitutional on its face.”

The judge also made it clear that the law also violated the North Dakota constitution because “the taking of pore space from surface owners is clearly and unambiguously for the constitutionally impermissible purpose of economic development to benefit private parties, i.e. the oil and gas industry.” The statute “acts to give North Dakota landowners’ value from pore space to the oil and gas industry, for free, under the guise of the North Dakota Industrial Commission. The citizens of North Dakota are protected from such action by both the state and federal constitutions.”

NWLA has never been engaged in litigation, but as board member Patty Jensen said with respect to taking on the responsibility of challenging the constitutionality of Senate Bill 2344, “It’s just the right thing to do.” Troy Coons, the chairman of the Association, said “it is always our goal to work cooperatively with the government and industry to address issues related to use of the land for energy development. Unfortunately, on this issue, the state and the industry chose to ignore our concerns and forced us to raise them in a court of law. We are very happy to know that the system of checks and balances in our government works, and that landowners can rely on the protections of the United States and North Dakota constitutions when other efforts fail to protect private property rights. In the end, it is the landowners of North Dakota who won today.”

The Association was very active during the legislative session opposing Senate Bill 2344. NWLA is leading the charge, but it is well known that landowners throughout the state are extremely upset over the unconstitutional taking embodied by Senate Bill 2344.