Puntenney v. Iowa Utilities Board

The Iowa Utilities Board (IUB) (defendant) was authorized to issue permits for hazardous-liquid pipelines that the IUB determined would “promote the public convenience and necessity.” In 2016, the IUB approved the construction in Iowa of the Dakota Access pipeline (the pipeline), an underground crude-oil pipeline running from an oilfield in North Dakota to an oil-transportation center in Illinois. In making its public-convenience-and-necessity determination, the IUB weighed the pipeline’s costs and benefits and concluded that (1) the pipeline would benefit crude-oil shippers by reducing transportation costs and benefit the public by reducing prices of petroleum products, (2) there was demand for the pipeline because the oilfield was producing 1.1 million barrels of crude oil per day, (3) transporting the oil by pipeline was safer than transporting the oil by rail, and (4) the pipeline would create jobs and increase tax revenue in Iowa. The IUB also approved the use of eminent domain by the pipeline’s constructor, Dakota Access, to condemn easements along the pipeline’s proposed route. Although an Iowa statute limited an entity’s ability to condemn agricultural land without a landowner’s consent unless the entity seeking to exercise eminent domain was a utility, person, company, or corporation under the jurisdiction of the IUB, the IUB concluded that Dakota Access was a company under the IUB’s jurisdiction. Keith Puntenney, LaVerne Johnson, and the Sierra Club (plaintiffs) challenged the decision to approve the pipeline, arguing that the IUB had improperly analyzed the pipeline’s costs and benefits. Richard Lamb (plaintiff) also challenged the decision, arguing that granting Dakota Access the right of eminent domain was prohibited by the Iowa statute and was unconstitutional under the takings clauses of the Iowa and United States Constitutions because the pipeline did not further a valid public use. Specifically, Lamb argued that the jobs and tax revenues created by the pipeline could not be considered in determining whether a public use existed and that the pipeline did not constitute a public use in Iowa because it carried oil across the state but neither picked up nor dropped off oil within the state.