Key Takeaways
- • The Supreme Court granted certiorari on June 29, 2026 in Leonard Hoffmann v. WBI Energy Transmission, Inc., addressing whether pipeline companies must pay landowners' attorney's fees under state law when using federal eminent domain authority under Natural Gas Act Section 7.
- • The Eighth Circuit ruled that ranchers were not entitled to recover $383,300 in attorney's fees, creating a circuit split with four other courts of appeals and triggering Supreme Court review during the October 2026 Term.
- • The case hinges on whether "just compensation" under the Fifth Amendment standard (excluding attorney's fees) or state law standards (potentially including attorney's fees) applies to NGA Section 7 condemnation proceedings.
- • Twelve states—North Dakota, Alabama, Arkansas, Florida, Idaho, Indiana, Louisiana, Nebraska, South Carolina, South Dakota, Tennessee, and Texas—filed amicus briefs supporting the landowners' position favoring state law protections and property rights.
- • A Supreme Court reversal of the Eighth Circuit could incentivize more litigious condemnation proceedings and potentially slow pipeline construction, creating material industry implications for natural gas infrastructure development.
Summary
The Supreme Court's June 29, 2026 grant of certiorari in Hoffmann addresses a fundamental question about the allocation of costs in pipeline condemnation disputes: whether Natural Gas Act Section 7 certificate holders must reimburse landowners' attorney's fees under state law, or whether federal Fifth Amendment takings standards apply exclusively. The case arises from an Eighth Circuit decision denying North Dakota ranchers recovery of $383,300 in legal fees incurred during compensation negotiations with WBI Energy Transmission, Inc. This ruling conflicts with precedent from four other federal circuits, establishing a clear split that warranted Supreme Court intervention.
The legal framework centers on the intersection of federal and state authority in condemnation proceedings. All interstate natural gas pipelines must obtain FERC certification under NGA Section 7, which grants federal eminent domain authority to take private land subject to Fifth Amendment protections. However, the statute is silent on whether "just compensation" includes ancillary costs such as attorney's fees. Some states, including North Dakota, permit recovery of such fees in condemnation actions, while federal courts have interpreted the Fifth Amendment standard as limited to market value. The Supreme Court must determine which standard governs—a question with significant implications for both landowner protections and pipeline development costs.
Landowners and their 12 state amici argue that the NGA's silence on "just compensation" creates a legal gap that should be filled with state law borrowing, citing the 1979 precedent United States v. Kimbell Foods, Inc. They contend that the NGA merely authorizes private condemnation lawsuits rather than delegating categorical federal eminent domain authority. Conversely, WBI Energy and the United States—filing as amicus curiae—rely on the Supreme Court's 2021 decision in PennEast Pipeline Co., LLC v. New Jersey, which held that NGA certificate holders "step into the federal government's shoes" when exercising eminent domain, thereby triggering federal takings standards. The Court's recent expansion of executive power and federalism precedent in related pipeline cases suggests the outcome remains genuinely uncertain.
This case marks the second time in five years that the Supreme Court has interpreted NGA Section 7, underscoring the statute's centrality to infrastructure disputes. The practical stakes are substantial: if the Court reverses the Eighth Circuit, attorney's fee awards could become recoverable, potentially increasing litigation costs and timeline uncertainty for pipeline projects. Conversely, affirmance would reinforce federal preemption of state law protections in NGA condemnation proceedings, lowering transaction friction but intensifying landowner opposition. Industry participants should monitor the October 2026 Term arguments closely, as the decision will establish binding precedent governing condemnation expense allocation across the national pipeline network.
The legal framework centers on the intersection of federal and state authority in condemnation proceedings. All interstate natural gas pipelines must obtain FERC certification under NGA Section 7, which grants federal eminent domain authority to take private land subject to Fifth Amendment protections. However, the statute is silent on whether "just compensation" includes ancillary costs such as attorney's fees. Some states, including North Dakota, permit recovery of such fees in condemnation actions, while federal courts have interpreted the Fifth Amendment standard as limited to market value. The Supreme Court must determine which standard governs—a question with significant implications for both landowner protections and pipeline development costs.
Landowners and their 12 state amici argue that the NGA's silence on "just compensation" creates a legal gap that should be filled with state law borrowing, citing the 1979 precedent United States v. Kimbell Foods, Inc. They contend that the NGA merely authorizes private condemnation lawsuits rather than delegating categorical federal eminent domain authority. Conversely, WBI Energy and the United States—filing as amicus curiae—rely on the Supreme Court's 2021 decision in PennEast Pipeline Co., LLC v. New Jersey, which held that NGA certificate holders "step into the federal government's shoes" when exercising eminent domain, thereby triggering federal takings standards. The Court's recent expansion of executive power and federalism precedent in related pipeline cases suggests the outcome remains genuinely uncertain.
This case marks the second time in five years that the Supreme Court has interpreted NGA Section 7, underscoring the statute's centrality to infrastructure disputes. The practical stakes are substantial: if the Court reverses the Eighth Circuit, attorney's fee awards could become recoverable, potentially increasing litigation costs and timeline uncertainty for pipeline projects. Conversely, affirmance would reinforce federal preemption of state law protections in NGA condemnation proceedings, lowering transaction friction but intensifying landowner opposition. Industry participants should monitor the October 2026 Term arguments closely, as the decision will establish binding precedent governing condemnation expense allocation across the national pipeline network.
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