Ray L. Olin v. Dakota Access, LLC
Opinion
Plaintiffs, a group of landowners from Morton County, North Dakota, entered into easement contracts with Dakota Access, LLC, to allow construction of the Dakota Access Pipeline across their properties. They brought suit alleging that they were induced to sign the contracts based on various misrepresentations made by Dakota Access and its contracting affiliate Contract Land Staff, LLC (CLS). The landowners appeal the district court's
1
dismissal of their claim under
I
The Dakota Access Pipeline runs approximately 1,172 miles from oil production areas in North Dakota to terminal facilities in Illinois. Seventy-one miles of the pipeline run through Morton County. In 2014, Dakota Access and its agent CLS contacted plaintiffs, seeking easements across their property for purposes of building the pipeline. Plaintiffs allege they were all offered the same price: $180 for each 16.5-foot unit of pipe (called a "rod") that crossed their property, plus a twenty-percent bonus if they signed within thirty days. Dakota Access allegedly told plaintiffs that this was the best price anyone in Morton County would receive, and that if they refused to sign, either the pipeline would be moved or their land would be taken by eminent domain. All plaintiffs signed the contracts. Lee, Thomas, and Matthew Ingalls apparently negotiated a higher price of $400 per rod; all other plaintiffs agreed to the offered price.
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Plaintiffs later learned that other landowners in the county negotiated better deals. Some allegedly received as much as $2,000 per rod in exchange for their easements. Plaintiffs brought this suit, asserting that Dakota Access induced them to sign the easement contracts through misrepresentations. In addition to fraud claims against Dakota Access and CLS, plaintiffs brought a claim against Dakota Access under
Although it was not styled as a fraud claim, the district court concluded that plaintiffs' claim under § 49-22-16.1 sounded in fraud and relied on the same factual allegations as the two fraud claims. As such, all three claims were governed by the heightened pleading standard of Rule 9(b), which requires a party alleging fraud to "state with particularity the circumstances constituting fraud." Because plaintiffs failed to meet this standard, the court dismissed their claims.
Plaintiffs appeal only the dismissal of their claim under § 49-22-16.1. We review the district court's dismissal de novo,
Olson v. Fairview Health Servs. of Minn.
,
II
"In order to satisfy the pleading requirements of Rule 9(b), 'the complaint must plead such facts as the time, place, and content of the defendant's false representations, as well as the details of the defendant's fraudulent acts, including when the acts occurred, who engaged in them, and what was obtained as a result.' "
Olson
,
"Whether a state-law claim sounds in fraud, and so triggers Rule 9(b) 's heightened standard, is a matter of substantive state law ...."
Republic Bank & Tr. Co. v. Bear Stearns & Co.
,
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Under "a pleading-specific inquiry" in which the focus is on "the elements of the claims asserted," plaintiffs' claim under § 49-22-16.1 sounds in fraud.
See
Streambend Properties II, LLC
,
Plaintiffs' additional characterization of Dakota Access's statements as "misrepresentations" or "deception" does not help them. Under North Dakota law, such allegations sound in fraud. For instance, the state's consumer protection statute declares unlawful the "act, use, or employment by any person of any deceptive act or practice, fraud, false pretense, false promise, or misrepresentation, with the intent that others rely thereon in connection with the sale or advertisement of any merchandise."
Plaintiffs' remaining allegations fail to state a claim under the ordinary notice pleading standard. For instance, the complaint alleges, without further explanation or detail, that "[p]ersons acting on Dakota Access's behalf harassed, threatened, and intimidated" plaintiffs. This is nothing more than a "formulaic recitation of the elements of a cause of action," and it is insufficient to survive dismissal.
Bell Atl. Corp. v. Twombly
,
III
Accordingly, the judgment of the district court is affirmed.
The Honorable Daniel L. Hovland, Chief Judge, United States District Court for the District of North Dakota.
Reference
- Full Case Name
- Ray L. OLIN; Carole J. Olin; Paul Johnson; Candace Johnson ; Neal R. Slavick; Dennis Olin; Carol Olin; David F. Heid; Tami A. Heid; Brent Heid; Michele Burger; James Bahm; Gary A. Haugen ; Melinda K. Haugen; Timothy Lee Johnson and Wesley Johnson Partnership; Lee L. Ingalls; Matthew E. Ingalls; Thomas J. Ingalls; Robert J. Slavick; Jacquelyn M. Slavick; Clark A. Norton; Debra D. Norton Plaintiffs - Appellants v. DAKOTA ACCESS, LLC Defendant - Appellee Contract Land Staff, LLC Defendant
- Cited By
- 24 cases
- Status
- Published