The South Dakota Supreme Court has ruled in favor of landowners who challenged two lower court decisions that allowed a pipeline developer to conduct surveys on their land without permission.
The court reversed the decisions of six lawsuits filed by South Dakota landowners and a seventh by Summit Carbon Solutions, an Iowa company planning to build a multi-billion dollar carbon capture pipeline, according to the opinion released on Thursday.
The legal battle began in June 2022 when Summit Carbon notified the landowners of its intent to survey their property, with or without their consent. The landowners refused and later sued in South Dakota’s 3rd and 5th Circuit Courts.
The landowners argued that Summit Carbon does not qualify as a “common carrier,” a designation that allows companies to acquire private property through eminent domain. This status is crucial for Summit Carbon to proceed with its project.
In April, Fifth Circuit Judge Richard Sommers had ruled in favor of Summit Carbon, allowing the company to survey land in several counties despite the landowners’ opposition.
However, in their successful appeal, South Dakota Justice Janine Kern stated that the lower courts made a mistake in granting summary judgment because Summit Carbon had not proven it was a common carrier. Kern emphasized that a pipeline cannot claim to be a common carrier simply by asserting it.
All the justices agreed with Kern’s opinion, sending the case back to the lower courts for further consideration.
Kern noted that the case’s outcome could hinge on “offtake agreements,” which are contracts between Summit Carbon and regional ethanol plants. These agreements, which Summit Carbon claims are confidential, are crucial to determining whether the company is genuinely offering its services to the general public.
Summit Carbon’s spokesperson, Sabrina Zenor, stated that the company would review the court’s decision and is ready to present evidence supporting its claim as a common carrier. She added that the carbon capture project would have a significant positive impact on rural America, particularly benefiting agriculture and farmers.