Summit Carbon Sols. v. Kasischke

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Summit Carbon Solutions, LLC, Appellee, v. Kent Kasischke, Appellant.

No. 23-1186

Supreme Court of Iowa

November 22, 2024

Submitted October 8, 2024

Appeal from the Iowa District Court for Hardin County, Amy M. Moore Judge.

A landowner appeals a judgment allowing a pipeline surveyor access to his private property under Iowa Code section 479B.15. Affirmed.

Brian E. Jorde (argued) and Christian T. Williams of DominaLaw Group pc llo, Omaha, Nebraska, for appellant.

Ryan G. Koopmans (argued) of Koopmans Law Group, LLC, Des Moines Bret A. Dublinske, Brant M. Leonard, Kristy Dahl Rogers, and Nicci M. Ledbetter of Fredrikson &Byron, P.A., Des Moines; Brian D. Boone and Michael R. Hoernlein of Alston &Bird LLP, Charlotte, North Carolina; and Karla M. Doe and Andrea L. Galvez of Alston & Bird LLP, Atlanta Georgia, for appellee.

Jason W. Grams and Theodore T. Appel (until withdrawal), of Lamson, Dugan &Murray, LLP, West Des Moines, for amici curiae Liquid Energy Pipeline Association and American Petroleum Institute.

Tara Z. Hall of Dentons Davis Brown PC, Des Moines, and Colin Smith, of Sullivan &Ward, West Des Moines, for amici curiae Iowa Utility Association and Iowa Association of Electric Cooperatives.

Waterman, J., delivered the opinion of the court, in which all justices joined.

Waterman, Justice.

This appeal presents our court's first, limited, foray into legal challenges to a proposed underground carbon dioxide pipeline. A Hardin County landowner refused to allow a surveyor for the pipeline developer to enter his private property. The district court ordered the landowner to allow the surveyor temporary access pursuant to Iowa Code section 479B.15 (2021), which governs hazardous liquid pipelines. The district court rejected the landowner's claim that this legislative enactment is facially unconstitutional under the "takings" clauses of the Fifth Amendment to the U.S. Constitution and article I, section 18 of the Iowa Constitution. The district court also rejected the landowner's argument that chapter 479B did not apply because carbon dioxide is not a "hazardous liquid" when transported through the pipeline in a supercritical state. The district court ruled the party seeking access was a "pipeline company" with access rights under section 479B.15 and provided proper statutory notice to the landowner. The landowner appealed, and we retained the case.

On our review, we hold that the district court correctly rejected this facial challenge to section 479B.15 under both the Federal and Iowa Constitutions. Although even temporary compelled access can constitute an unconstitutional taking, see Cedar Point Nursery v. Hassid, 594 U.S. 139, 149 (2021), the access for surveyors granted under section 479B.15 is a lawful "pre-existing limitation upon the land owner's title." See id. at 160 (quoting Lucas v. S.C. Coastal Council, 505 U.S. 1003, 1028-29 (1992)). The supreme courts of North Dakota and South Dakota have already reached the same conclusion as to this proposed pipeline. See SCS Carbon Transp. LLC v. Malloy, 7 N.W.3d 268, 271-72 (N.D. 2024); Betty Jean Strom Tr. v. SCS Carbon Transp., LLC, 11 N.W.3d 71, 93-94 (S.D. 2024). The record supports the district court's finding that proper notice was given. We further hold that the supercritical carbon dioxide to be transported in the pipeline is a "hazardous liquid" within the meaning of section 479B.2. The district court therefore correctly ruled that the plaintiff is a pipeline company allowed to obtain temporary access for its surveyors onto private property. For the reasons more fully explained below, we affirm the district court's judgment.

I. Background Facts and Proceedings

Summit Carbon Solutions, LLC, (Summit) is developing a multistate pipeline system to transport carbon dioxide captured at corn ethanol production facilities to North Dakota, where it will be sequestered underground. The project is touted as ameliorating climate change by removing carbon dioxide from the atmosphere that would otherwise contribute to global warming. The project's supporters argue it will enhance the marketability of corn ethanol fuel and thereby raise corn prices, a key contributor to the Iowa economy. Summit proposes to build a network of underground pipelines extending over 2,000 miles across five states: Iowa, Minnesota, Nebraska, South Dakota, and North Dakota. The proposed pipeline would cover over 700 miles in Iowa across thirty counties, including Hardin County, where Kent Kasischke owns land in its path.

On September 13, 2021, Summit conducted an informational meeting in Hardin County about its proposed pipeline, as required by Iowa Code section 479B.4. On January 28, 2022, Summit filed a petition with the Iowa Utilities Board (IUB)^[1] for a permit to construct, operate, and maintain the pipeline. The IUB conducted a twenty-five-day public hearing on Summit's application. Meanwhile, Summit negotiated voluntary easements with many landowners in the proposed pipeline's path, and Summit or its affiliates executed agreements with future customers at corn ethanol production sites to capture their carbon dioxide for transport and sequestration in North Dakota.

Summit sought access to land along the proposed route to complete preliminary civil, environmental, archaeological, and soil surveys and investigations. Kasischke denied Summit access to his land. Summit sought to compel access under Iowa Code section 479B.15, which provides:

After the informational meeting or after the filing of a petition if no informational meeting is required, a pipeline company may enter upon private land for the purpose of surveying and examining the land to determine direction or depth of pipelines by giving ten days' written notice by restricted certified mail to the landowner as defined in section 479B.4 and to any person residing on or in possession of the land. The entry for land surveys shall not be deemed a trespass and may be aided by injunction. The pipeline company shall pay the actual damages caused by the entry, survey, and examination.

Summit sent a letter to Kasischke on March 12, in an envelope marked as "USPS CERTIFIED MAIL" and "RESTRICTED DELIVERY." The letter notified Kasischke of Summit's intent to enter his property to conduct a survey "not less than ten (10) days from the date of this notice." The letter asked Kasischke to identify any tenants on the property so that they could be notified. The letter was delivered to Kasischke on March 19, and he signed a return slip indicating his receipt. Kasischke continued to deny Summit access and identified no tenant.

On July 14, Summit sent a second letter to Kasischke by restricted certified mail again requesting access to his property. This letter threatened legal action if Kasischke continued to refuse access to surveyors. The letter was again sent in an envelope marked as "USPS CERTIFIED MAIL" with the notation "RESTRICTED DELIVERY." Kasischke refused to accept delivery of this letter.

On September 19, Summit filed a petition for injunctive relief to compel access under section 479B.15. Summit filed an amended petition on October 19. Summit alleged that it is a pipeline company as defined by section 479B.2, that it complied with the statutory requirements to gain access to the property, and that Kasischke denied Summit access. Kasischke filed an answer to the petition in which he admitted that Summit was a pipeline company for purposes of section 479B.15. But Kasischke alleged that Summit failed to satisfy the statutory notice requirements and failed to prove the requisite irreparable harm for injunctive relief. Kasischke counterclaimed, asserting a facial challenge to Iowa Code section 479B.15. He argued that section 479B.15 falls within a new category of "per se takings" recognized in Cedar Point Nursery v. Hassid. See 594 U.S. at 149.

On March 17, 2023, Summit moved for summary judgment on grounds that section 479B.15 is facially constitutional and that Summit had satisfied the statutory requirements for entry. Kasischke's resistance claimed for the first time that he had a previously undisclosed tenant who had not received notice. On May 4, Summit mailed a third letter by restricted certified mail to include the alleged tenant. Summit narrowed its summary judgment motion to the constitutional claim. On May 10, the district court granted partial summary judgment rejecting Kasischke's constitutional challenge, stating:

Iowa law makes clear that survey access is a long-recognized background restriction on private property.... Nationally, all fifty states have a statutory allowance for entities to enter private property for pre-condemnation surveys without trespass liability. Based upon the foregoing, the court finds that section 479B.15 falls well within the background restrictions identified in Cedar Point, which renders its holding inapplicable to Mr. Kasischke's challenge.

(Citation omitted.)

On May 16, the district court conducted a bench trial on the remaining issues of Summit's compliance with the statute. During this trial, Kasischke orally moved to amend his answer to deny for the first time that Summit is a pipeline company within the meaning of section 479B.15. The district court allowed the amendment and permitted the parties to submit additional evidence and briefing on that issue.

Kasischke testified about his interactions with Summit. In his direct testimony, he denied ever receiving the March 12, 2022 letter. On cross-examination, he acknowledged the return receipt "appeared" to bear his signature. He denied refusing delivery of the July 14 letter but admitted he had discussed with neighbors the strategy of refusing delivery of any letter requesting access to their properties. He named...