Square Butte Electric Cooperative v. Hilken,

No. 24097 (N.D. Dist. Ct. August 14, 1975)

The court dismisses an electrical cooperative's complaint seeking to exercise the power of eminent domain against a number of individual North Dakota landowners in order to construct an electrical transmission line. The taking of private property for public use under the state's power of eminent domain, which has been delegated to the plaintiff, requires a showing of substantial benefit to North Dakota residents. The primary purpose of the proposed transmission line is to supply power to the taconite industry of Minnesota, and while this is a necessary and valid use within Minnesota, it will not support use of eminent domain in North Dakota. Plaintiff has failed to show that the line will be of substantial benefit to the citizens of North Dakota; since no valid public use within the state will be served, the complaint must be dismissed.

Counsel for Plaintiff
David F. Knutson
Vogel, Vogel, Brantner & Kelly
409 1/2 6th Avenue North
Fargo, N.D. 58102

Counsel for Defendants
Loren L. Johnson
Johnson, Johnson & Devine
Johnson Building
Lakota, N.D. 58344

Carma Christensen
Box 1771
Bismarck, N.D. 58501

Joseph A. Vogel
Box 484
Mandan, N.D. 58554

Alfred C. Schultz
Sperry & Schultz
Woolworth Building, Suite 27
Bismarck, N.D. 58501

[6 ELR 20042]

Graff, J.:

This case involves the exercise of eminent domain by the plaintiff, Square Butte Electric Cooperative, hereinafter known as Square Butte, against a number of individual land owners within Burleigh County. The purpose of the proposed taking is for the construction of a DC transmission line from Center, North Dakota to Duluth, Minnesota, a total of some 400 miles, approximately 100 of which lie in North Dakota.

The facts of the instant case show that Square Butte was formed specifically for the purpose of condemning land in North Dakota, and, in addition, to provide a vehicle by which financing could be obtained without the liabilities of Minnkota attaching. It is not formed of independent parties, but of members of Minnkota Power Cooperative, a Minnesota Cooperative, which, in turn, is formed of eight Minnesota cooperatives and four North Dakota cooperatives. It has no line crews, labor force, or office staff but has entered into agreements with Minnkota and Minnesota Power and Light, a private power company of Minnesota, which, in essence, leaves all managerial and operational decisions with these two foreign bodies. It has often been said that corporations and cooperatives are fictional and exist only by the status the government gives them. Assuming this to be true, Square Butte is the "Dick Tracy" of all cooperatives.It has but one employee, the general manager. In other words, it has the shell of a body but no soul.

The agreements entered into by Square Butte provide that MP & L is to receive all power from the line in question for seven years commencing when the line becomes operational. This means that 1985 is the earliest period when any power generated from Center Number 2 and sent across this transmission facility could be supplied to North Dakota residents. At that time, Square Butte would have the alleged option of taking up to 120 megawatts but not more than 30 percent of the plant net capability. Eventually, some 17 years after the line was in existence, Square Butte would have the alleged option of taking up to 51 percent of the plant net capability.

The plaintiff has provided the court with projections showing that Minnkota and its members will be in need of power by 1977-1978. This is assuming an annual load growth of a certain size throughout the system as we creep into the century. No supporting data is given to the court as to what such projections are based on other than average growth.

The transmission line itself is not tapped within the confines of the State of North Dakota but only extracted at its terminus at Duluth, Minnesota where very elaborate and costly equipment is necessary to convert the power transmitted from direct current to alternating current which can be sent across conventional transmission and distribution lines. If any of the North Dakota consumers included within Square Butte are ever to receive power from this transmission, it will not come from the line in question, but rather from MP & L lines located within the State of Minnesota which would return AC power to some point in North Dakota for distribution.

An individual member cooperative of Minnkota or Square Butte can not demand and receive power from this transmission line at its own request, but only by Board action. Assuming a hypothetical situation, and recognizing the manner in which cooperatives exercise their privilege to vote, the Minnesota cooperatives could effectively prevent any North Dakota cooperative from ever receiving an ounce of power from the MP & L lines by simply voting not to exercise the option. There is no question that the specific line at issue will never be tapped by North Dakota.

Section 32-15-01 of the North Dakota Century Code reads, in part, as follows:

"Eminent domain" defined — How exercised. — Eminent domain is the right to take private property for public use.

The question one immediately arrives at is what then is a public use? This court must conclude that the intent of the legislature at the time the power was granted requires a showing of substantial benefit to North Dakota residents. The leading expert in the field of eminent domain has stated:

The power of eminent domain in any sovereignty exists only for its own purposes. The fundamental principal which forms the base upon which the power rests does not permit the exercise of the power for purposes other than to enable the State to effect its own proper ends and the policy of its laws. See Nichols, Eminent Domain, 3rd Edition, Vol. 1, § 2, 111.

The whole concept means nothing more than a premise founded on the principal of appropriating property of individual residents of the state for the greater public good. This court is quite impressed by the language of the case of Grover Irrigation and Line Company v. Lovella Ditch, Reservoir and Irrigation Company, 21 Wyo. 204, 131 P 43 (1915). In that case condemnation was sought in the State of Wyoming. Since there was no showing of service to the Wyoming public, eminent domain was denied.

The proponents of the line state that the project will provide projected power needs to Square Butte, actually Minnkota, in the near future. The court finds that there is no substantial evidence to show that this will be done. It appears strange to the court that if the need is so great, why the willingness to wait until 1985. It is additionally alleged that the ultimate cost of energy to the consumer will be lower, but the court finds no evidence in the record of any ultimate cost to consumers through the use of such transmission facilities. The proponent further speaks of power pools and emergency back ups which the court does not feel is direct enough to support the building of this transmission line. There has been testimony regarding the stabilization of the AC lines within the State of North Dakota which this court finds are not persuasive enough to supply public use for condemnation purposes. Personally, this court could suffer the inconvenience of an outage of power for one or more hours without the need for an additional 200 miles of line in our state, even were that the only alternative.

From the evidence shown to the court, the primary purpose for the proposed transmission facility is the supplying of power to the taconite industry in northern Minnesota. Although the court believes this is a necessary and valid use within the State of Minnesota, it will not support the exercise of eminent domain within the State of North Dakota. The proposed transmission line supplies not one drop of electrical output to our state and yet disturbs innumerable farms and private citizens in the enjoyment of their property. This court finds that no substantial benefit accrues to the citizens of North Dakota from the construction of this line, nor is any other valid public use served within the state. It would merely result in the additional extension of another electric eel across our state syphoning off the natural resources which we have and accruing no benefit to the people within the confines thereof. What proposed benefits allegedly are conferred are too remote or speculative to be considered by this court.

It is the benefit of this court that the legislature should reexamine the powers of eminent domain which it has granted to a number of private enterprises, thereby subordinating the right of its citizens. In view of the problems of water usage, economic impact on cities, and environmental impact on farmlands and wildlife, it may no longer be possible to entrust such broad privileges to anyone deciding to incorporate within our bounds. If the proposed line could be built, would we next have an application from a dummy corporation set up by Con Edison of the eastern United States to extract the power produced here for the benefit of those who suffer the brown-outs in New York City during the summer. An absolute policy of energy transmission and the use of our natural resources must be established within the state. The court recognizes that society is widely integrated but it should not support the incredible power of eminent domain. The last legislature did take steps to invoke the jurisdiction of the PSC to establish some guidelines in [6 ELR 20043] determining where lines and corridors may be established throughout our state to prevent the helterskelter building at a place that seems convenient to those who exercise the power. Let us hope that the requirements and the demands of the law are met as soon as possible.

In conclusion, it is the opinion of this court that the exercise of the power of eminent domain, like a guardianship, ought to be directed to the good of those who confer, not of those who receive the trust. It is accordingly ordered that the Complaint of the plaintiff is hereby dismissed and that counsel for the defendant may prepare the appropriate Findings of Fact, Conclusions of Law and Order for Judgment for the court's signature.