Iowa Supreme Court Takes Conservative Approach to Airspace Hazards

Iowa farm grain elevators have height restrictions near airports

Restrictions on land use near an airport are important for obvious reasons. Tall objects create hazards to ascending and descending aircraft, and local land uses that attract large numbers of people produce a greater risk of injury if something does go wrong on take off or landing. Various methods exist to limit building height and land uses; the most familiar are local zoning ordinances. 

The Federal Aviation Administration (FAA) has also enacted rules for airports, known as the Part 77 rules. These rules help ensure the safe operation of the airport by describing “imaginary surfaces” above and around the airport that cannot be penetrated by obstructions like buildings or trees. The rules require that any proposed construction within certain distances from an airport be submitted to the FAA for a hazard determination. Until the FAA performs its assessment, construction is prohibited. The regulations permit the FAA to determine that an obstruction may not be a hazard even if it penetrates a Part 77 surface, if certain mitigating measures are taken.

The Iowa Supreme Court recently decided a case, Carroll Airport Commission, v. Danner, in which local farmers (the Danners) wanted to build a  twelve-story grain leg (bucket elevator) in the flight path of the Carroll, Iowa, municipal airport.  Unbeknownst to the Danners, the airport commission had adopted zoning regulations that limited the height of structures in the vicinity of the airport. The regulations generally match the Part 77 height restrictions. The Danners began construction before notifying the FAA or the airport of their plans. 

 A local airport commissioner saw the Danners’ construction taking place. The commission then told the Danners that the grain leg violated airport zoning regulations and would not be approved. The commission also asked the FAA to perform a hazard evaluation under Part 77. Though the proposed elevator leg exceeded the Part 77 height limits, the FAA made a “no hazard” determination “on the condition the farmer paint it and place blinking red lights on top.”  Despite the “no hazard” determination, the commission refused to grant a variance from its zoning height restrictions and sued to require the elevator leg be torn down as a nuisance. The Danners defended the suit on the basis that, once the federal agency made a “no hazard” determination, that ruling took precedence and the commission was preempted from enforcing a more rigorous requirement.

The Iowa Supreme Court had to decide whether the local airport zoning could be enforced even though it was more exacting than the FAA’s determination. This raises the question of when a federal government action preempts local regulation. The answer implicates the Supremacy Clause of the U.S. Constitution:

This Constitution, and the laws of the United States which shall be made in pursuance thereof; and all treaties made, or which shall be made, under the authority of the United States, shall be the supreme law of the land; and the judges in every state shall be bound thereby, anything in the Constitution or laws of any State to the contrary notwithstanding.

Article VI, Clause 2, United States Constitution

The Supremacy Cause makes federal law the supreme law of the land, which controls over conflicting local law. This leaves open the possibility that local law is enforceable where it does not conflict with federal law. After analyzing the federal regulations, case law, and Iowa law, the Iowa Supreme Court determined there was no conflict between federal and local law here and, in fact, the federal laws contemplated that local rules could be more restrictive. In conclusion, the Court upheld the commission’s finding that the grain leg was a nuisance and a hazard to air navigation and ordered the structure removed.

Eminent Domain and the Bakken Pipeline Redux

Iowa farm land

The Dakota pipeline carries oil from North Dakota to Illinois through Iowa, but does not pick up or drop off product in this state. A while back, I wrote a post about the pipeline and the fight over the use of eminent domain to acquire Iowa land for its construction. That post noted that in May 2016, the Iowa Utilities Board (IUB), over the objections of certain environmental groups and landowners, granted the pipeline company a permit for the pipeline’s construction. The IUB found that the pipeline would “promote the public convenience and necessity,” in the language of the statute. The IUB then granted the company the right to use eminent domain if necessary to acquire right of way for the project. The objectors appealed to the Iowa district court, which upheld the IUB’s ruling. The objectors then appealed to the Iowa Supreme Court, which issued its ruling on May 31, 2019, upholding the IUB’s decision, 4-3.

The initial question the Court needed to answer was who, in the first instance, decides whether a project “promotes public convenience and necessity,” the agency or the courts.  The Court found that the legislature intended that the IUB be the body that determines what projects meet the test. That being the case, on judicial review of the agency’s decision the courts, following general principles of administrative law, do not remake the determination. Instead, the courts review the IUB’s decision to ensure that it was not “[b]ased upon an irrational, illogical, or wholly unjustifiable application of law” and that its factual determinations were supported by “substantial evidence.”  The Court held the IUB’s ruling had met the tests; that is, it was rational and based on the evidence presented. 

Next, the Court took on what it called the most significant issue in the case: whether the use of eminent domain for the Dakota Access pipeline violated the Iowa Constitution’s prohibition on taking private property except for public use. The Court’s focus was on whether the public benefits of a project must be direct or whether indirect benefits are enough. In that regard, the Court found that, even though Iowans could not directly access the pipeline, the pipeline provides beneficial side effects in the form of cheaper and safer transportation of oil, which in a competitive marketplace results in lower prices for petroleum products for all, including Iowans. The Court noted that Iowa benefits significantly from lower fuel prices pointing out the very interesting facts that, “Iowa is fifth in the country in per capita energy use [and] eighth in the country in per capita gasoline consumption.”

The decision was not unanimous, however. Justice Wiggins, joined by Justice Appel, dissented, arguing that the use of eminent domain to acquire the necessary right of way for the pipeline that simply runs through the state is not authorized by the Iowa constitution “because the Iowa public cannot use and does not derive a direct benefit from it.” He argued that the indirect or secondary benefits to Iowa relied on by the IUB are not sufficient.

Justice McDonald also dissented, but on the grounds that the case was moot. By the time the case got to the Supreme Court, the pipeline was built and operating. Therefore, there was nothing meaningful for the Court to do. Or, as Justice McDonald put it, “What’s done is done.”

Upcoming Event: Local Government Law CLE

We are pleased and excited to announce that David Ferree will be speaking at the upcoming Continuing Legal Education event for the National Business Institute on Tuesday, December 5, 2017, in Des Moines:

Local Government Law: What Attorneys Need to Know, covering topics including:

  • Open Meeting Laws
  • Public Records Issues
  • Human Resources Issues
  • Budgets and Local Government Legalities
  • Public Contracts and Procurement
  • Cybersecurity
  • Ethics

6 Iowa CLE credits are available for attendance. Follow the link to learn more and sign up to attend!

Eminent Domain and the Bakken Pipeline

Iowa farm land is subject to eminent domain under specific circumstances.
An Iowa farm. The Iowa legislature determines when Iowa land is subject to eminent domain.

A great deal of ink has been spilled writing about the Bakken Pipeline currently being built across Iowa and how eminent domain is being used to acquire the land for the project. Not all of the writings have been entirely clear and some of the statements quoted in articles have not been entirely accurate. This post attempts to provide readers enough information about a) the power of eminent domain and b) the Iowa Utilities Board (IUB) decision about the Bakken Pipeline to provide at least a basic understanding of the issue. For those who are interested, the complete decision can be found here (PDF).

For those who are unfamiliar with the power of eminent domain, it is the power of the government to take private property for a public purpose. The government has to pay for the property it takes, but it has the right to force private property owners to sell. At the outset, that power rests entirely with the Iowa legislature, but the legislature can delegate the power to other entities. It has done so many times. For example, it granted the power of eminent domain to the Iowa Department of Transportation to aid in the construction of highways. Interstate pipeline companies are vested with the power of eminent domain when they receive a permit to construct and operate in Iowa. However, they can use eminent domain only under the conditions set out in the permit. So the first step for a pipeline company is to get a permit, and to get a permit it must petition the IUB.

In the Iowa Code, the legislature gave the IUB the authority to grant permits to build and operate interstate pipelines in Iowa. However, the IUB can grant the permits, along with the power of eminent domain, only after following the procedures and meeting the criteria that the legislature set out in the law.

On January 20, 2015, Dakota Access, LLC, filed a Petition for Hazardous Liquid Pipeline Permit with the IUB asking to build 346 miles of 30-inch diameter crude oil pipeline diagonally through 18 Iowa counties. The work is part of a 1,168 mile project to carry oil from the Bakken area near Stanley, North Dakota, to an oil transfer station, or hub, near Patoka, Illinois. Initially, the proposed pipeline will have a capacity of approximately 450,000 barrels per day, which can be increased to 570,000 barrels per day.

As provided for in the law, the IUB took evidence from Dakota Access, as well as from proponents and opponents of the project. The first issue for the board was to determine whether the project would “promote the public convenience and necessity.” To make this determination, the IUB said it needed to consider and balance the public use and public benefits of the pipeline against the public and private costs and detriments. The parties, both proponents and opponents, presented voluminous and vigorously contested evidence regarding the project’s costs and benefits, including the effects on global warming from oil production, the world oil market, energy independence and security, the safety of rail shipments versus pipelines, the impact of freeing up rail cars for grain shipments, alternative energy sources, the extent of the Bakken reserves, the economic activity produced during construction of the project, the annual property taxes generated, the impact on cultural resources, the safety of the operation, and the plans for spill remediation.

In a more than 150 page Final Decision and Order filed March 10, 2016, the IUB reviewed the evidence and concluded that the public convenience and necessity favored the pipeline. Underlying the IUB’s decision is its conclusion that the evidence showed the demand for oil was such that the Bakken oil would be extracted and transported from the oil fields to refineries one way or another. With that in mind, the IUB considered the evidence and determined that two factors, safety and economic benefits to Iowa, weighed most heavily in favor of granting a permit and the attendant limited power of eminent domain. Addressing safety first, the IUB considered two alternative methods of transporting the oil, pipeline and rail (trucking was given only a passing reference). Citing a U.S. Department of Transportation study that found the spill incident rate for transport of crude oil by rail is three to four times higher than the spill incident rate for pipeline transport on a ton-mile basis, the IUB decided that the pipeline was the safer and, therefore, preferred mode. Next, the board said the economic benefits to Iowa generated by the project were significant; $800 million during construction and $27 million in annual property taxes.

Turning to the costs and detriments, the IUB first found the environmental harm flowing from the pipeline’s construction and operation could be sufficiently mitigated. Dakota Access was in compliance with federal environmental regulations, and the proposed design and construction specifications exceeded federal safety standards for pipelines. Regarding the impacts on private property owners whose land would be used for the project, the board imposed certain conditions that it determined would protect them. Those protections include requirements to bury the pipeline 48 inches deep and to replace the topsoil that is removed when the trenches are dug. Furthermore, the owners will be entitled to compensation for the taking of their land.

With that, the board issued the permit and granted Dakota Access the power of eminent domain to acquire any property it could not purchase from property owners acting voluntarily. Several project opponents who disagreed with the IUB’s decision appealed to the Iowa District Court and asked the court to stay the IUB’s decision while the case was on appeal. The court denied the stay request and so, pending the court’s final ruling, Dakota Access may proceed with the project, including proceeding with using the power of eminent domain. We are now awaiting the court’s review of the IUB’s decision granting the permit.