Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Olin v. Dakota Access, LLC

United States District Court, D. North Dakota

October 10, 2017

Ray L. Olin and Carole J. Olin, husband and wife as joint tenants; Paul Johnson and Candace Johnson, husband and wife; Neil R. Slavick; Dennis Olin and Carol Olin, husband and wife as joint tenants; David F. Heid; Tami A. Heid; Brent Heid; Michele Burger; James Bahm; Gary A. Haugen and Melinda K. Haugen, husband and wife as joint tenants; Timothy Lee Johnson and Thomas Wesley Johnson Partnership; Lee L Ingalls; Matthew E. Ingalls; Thomas J. Ingalls; Robert J. Slavick; Jacquelyn M. Slavick; and Clark A. Norton and Debra D. Norton, husband and wife, Plaintiffs,
v.
Dakota Access, LLC and Contract Land Staff, LLC, Defendants.

          ORDER GRANTING DEFENDANTS' MOTION TO DISMISS AND MOTION FOR JUDGMENT ON THE PLEADINGS

          Daniel L. Hovland, Chief Judge United States District Court.

         Before the Court is Defendant Contract Land Staff, LLC's (“CLS”) Rule 12(b)(6) motion to dismiss filed by on February 24, 2017. See Docket No. 10. The Plaintiffs filed a response in opposition to the motion on March 16, 2017. See Docket No. 13. CLS filed a reply brief on March 30, 2017. See Docket No. 15. Also before the Court is a Rule 12(c) motion for judgment on the pleadings filed by Defendant Dakota Access, LLC (“Dakota Access”) on April 6, 2017. See Docket No. 19. The Plaintiffs filed a response in opposition to the motion on April 26, 2017. See Docket No. 22. Dakota Access filed a reply brief on May 10, 2017. See Docket No. 23. For the reasons set forth below, the motion to dismiss and motion for judgment on the pleadings are granted.

         I. BACKGROUND

         The factual background is largely taken from the Plaintiffs' amended complaint. See Great Plains Trust Co. v. Union Pac. R.R. Co., 492 F.3d 986, 990 (8th Cir. 2007) (On a motion to dismiss for failure to state a claim upon which relief can be granted, the facts in the complaint must be taken as true). The Plaintiffs are a group of twenty-one individuals and one general partnership who own real property located in Morton County, North Dakota. Defendant Dakota Access is a limited liability company organized under the laws of the State of Delaware, having its principal place of business in Texas. Defendant CLS is a limited liability company organized under the laws of the State of Indiana, having its principal place of business in Texas.

         The Dakota Access Pipeline is a pipeline that runs approximately 1, 172 miles and is designed to transport domestically produced light sweet crude oil from the Bakken and Three Forks production areas in North Dakota to terminal facilities in Patoka, Illinois. Seventy-one miles of the Dakota Access Pipeline travels through Morton County, North Dakota. Dakota Access needed to obtain easements from the Plaintiffs so its pipeline could lawfully travel through Morton County. Dakota Access approached the Plaintiffs around August 2014 regarding the easements at issue in this case. Dakota Access employed CLS to make contact with the Plaintiffs and negotiate the easements. Dakota Access offered each of the Plaintiffs the same agreement in exchange for the easements. Dakota Access offered a price of $180 per rod, with a 20% signing bonus. A rod is equal to 16.5 feet. Together with the 20% signing bonus, the total offer equated to $216 per rod.

         The Plaintiffs contend Dakota Access and CLS made numerous misrepresentations to them during the easement negotiation process. Specifically, they contend Dakota Access and CLS told them they had thirty days to sign the easement or they would lose the 20% bonus offer. Additionally, Dakota Access and CLS informed the Plaintiffs that $216 was the best price that would ever be offered to landowners in Morton County; that they would lose the 20% signing bonus if the neighbors did not sign the easement agreements; that if they did not sign the easements, their land would be condemned by eminent domain; that they would not receive a better deal by eminent domain, and they would receive less money, or “basically nothing” at all through the eminent domain process; that if they did not accept the price of $216 per rod and grant the easements, the pipeline would just be moved to different land; and, that they should sign the easement agreements right away because the price of oil was going down and the pipeline may not be constructed. The Plaintiffs allege they signed their easement agreements based on these representations made by CLS on behalf of Dakota Access.

         The Plaintiffs allege these representations were deceptive and unfair tactics and designed to induce them to sign the easement agreements at a lower price than other landowners in Morton County. The Plaintiffs contend other unnamed and unidentified landowners in Morton County received more than $216 per rod from Dakota Access for pipeline easements. The Plaintiffs further allege that because other Morton County landowners received a better price, the representations made by CLS and Dakota Access were false, misleading, deceptive, and unfair.

         The Plaintiffs commenced this action in federal court on January 1, 2017. See Docket No. 1. An amended complaint was filed on January 31, 2017. See Docket No. 4. The amended complaint raises four claims against the Defendants. The first claim alleges Dakota Access violated Section 49-22-16.1 of the North Dakota Century Code by engaging in unfair tactics in acquiring land easements when negotiating with the Plaintiffs. The second claim asserts that Dakota Access committed fraud by misrepresenting material facts when negotiating the terms of the easements in question. The third claim alleges CLS committed fraud by misrepresenting material facts when negotiating the terms of the easements in question. The fourth claim alleges a civil conspiracy against both Dakota Access and CLS in relation to the negotiation of the easements in question. Defendant Dakota Access filed an answer to the amended complaint. See Docket No. 7. In lieu of an answer, CLS filed a motion to dismiss on February 24, 2017. See Docket No. 10. Dakota Access filed a motion for judgment on the pleadings on April 6, 2017. See Docket No. 19. Both motions have been fully briefed and are ready for decision.

         II. STANDARD OF REVIEW

         There are two motions before the Court. CLS has filed a Rule 12(b)(6) motion to dismiss for failure to state a claim upon which relief may be granted. Dakota Access has filed a Rule 12(c) motion for judgment on the pleadings. “Judgment on the pleadings is appropriate only when there is no dispute as to any material facts and the moving party is entitled to judgment as a matter of law[.]” Ashley Cty. v. Pfizer, Inc., 552 F.3d 659, 665 (8th Cir. 2009) (quoting Wishnatsky v. Rovner, 433 F.3d 608, 610 (8th Cir. 2006)). The Court evaluates a motion for judgment on the pleadings under the same standard as a motion brought under Federal Rule of Civil Procedure 12(b)(6). Id.

         Rule 8(a)(2) of the Federal Rules of Civil Procedure requires a pleading to contain a “short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8 (a)(2). Rule 12(b)(6) of the Federal Rules of Civil Procedure mandates the dismissal of a claim if there has been a failure to state a claim upon which relief can be granted. In order to survive a motion to dismiss under Rule 12(b)(6), “a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). The complaint must contain sufficient facts, as opposed to mere conclusions, in order to satisfy the legal requirements of the claim and avoid dismissal. Levy v. Ohl, 477 F.3d 988, 991 (8th Cir. 2007). The court must accept all factual allegations as true, except for legal conclusions or the “formulaic recitation of the elements of a cause of action.” Ashcroft, 556 U.S. at 681. Detailed factual allegations are not necessary under the Rule 8 pleading standard, rather a plaintiff must set forth grounds of its entitlement to relief which “requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). A complaint does not “suffice if it tenders a naked assertion devoid of further factual enhancement.” Ashcroft, 556 U.S. at 678.

         The determination of whether a complaint states a claim upon which relief can be granted is “a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.” Id. at 679. Dismissal will not be granted unless it appears beyond doubt the plaintiff can prove no set of facts entitling plaintiff to relief. Ulrich v. Pope Cnty, 715 F.3d 1054, 1058 (8th Cir. 2013). “[I]n considering a motion to dismiss, the district court may sometimes consider materials outside the pleadings, such as materials that are necessarily embraced by the pleadings and exhibits attached to the complaint.” Mattes v. ABC Plastics, Inc., 323 F.3d 695, 697 n.4 (8th Cir. 2003).

         Fraud claims must comply with the heightened pleading standards of Rule 9(b), which require plaintiffs to plead “the circumstances constituting fraud . . . with particularity.” Fed.R.Civ.P. 9(b). “Under Rule 9(b), a plaintiff must plead ‘such matters as the time, place and contents of false representations, as well as the identity of the person making the misrepresentation and what was obtained or given up thereby.'” Abels v. Farmers Commodities Corp., 259 F.3d 910, 920 (8th Cir. 2001). Therefore, the plaintiff must typically identify the “who, what, where, when, and how” of the alleged fraud. United States ex rel. Costner v. URS Consultants, Inc., 317 F.3d 883, 888 (8th Cir. 2003). “This requirement is designed to enable defendants to respond ‘specifically, at an early stage of the case, to potentially damaging allegations of immoral and criminal conduct.'” Abels, 259 F.3d at 920. “A plaintiff need not show each factor to plead fraud with sufficient particularity. Instead, a plaintiff must state enough so that the pleadings are not merely conclusory.” Cunningham v. PFL Life Ins. Co., 42 F.Supp.2d 872, 885 (N.D. Iowa 1999) (quoting Roberts v. Francis, 128 F.3d 647, 651 n.5 (8th Cir. 1997)). “The level of particularity required depends on, inter alia, the nature of the case and the relationship between the parties.” Payne v. United States, 247 F.2d 481, 486 (8th Cir. 1957). “Conclusory allegations that a defendant's conduct was fraudulent and deceptive are not sufficient to satisfy the rule.” BJC Health Sys. v. Columbia Cas. Co., 478 F.3d 908, 917 (8th Cir. 2007) (quoting Commercial Prop. Invs. v. Quality Inns Int'l Inc., 61 F.3d 639, 644 (8th Cir. 1995)). Claims grounded in fraud are subject to the Rule 9(b)'s heightened pleading requirement as well. Streambend Properties II, LLC v. Ivy Tower Minneapolis, LLC, 781 F.3d 1003, 1010 (8th Cir. 2015).

         III. LEGAL ANALYSIS

         A. FRAUD CLAIMS

         In counts two and three of the amended complaint, the Plaintiffs allege both Dakota Access and CLS committed fraud by making misleading statements and misrepresentations to induce the Plaintiffs into signing the easement agreements. Dakota Access and CLS contend the fraud and/or misrepresentation claim should be dismissed for three reasons. First, the Defendants contend the Plaintiffs have failed to plead fraud with the particularity required by Rule 9(b) of the Federal Rules of Civil Procedure. Second, the Defendants contend the Plaintiffs have failed to identify any specific misrepresentations of material fact. Third, the Defendants contend the claims are barred by the integration clause in the easement agreements. All three arguments are persuasive.

         1. RULE 9 PLEADING STANDARDS

         Dakota Access and CLS contend the amended complaint fails to meet the heightened pleading requirements for fraud. The Defendants allege the Plaintiffs have failed to identify the individuals who made the allegedly fraudulent statements or the recipients of those statements. The Defendants further allege the Plaintiffs have failed to specify the time, location, manner of communication, or the context of the alleged fraudulent representations.

         The Plaintiffs argue they have sufficiently identified the party making and receiving the alleged misrepresentations. The Plaintiffs argue it is sufficient to identify CLS as the “entity” who made the misrepresentation and that Dakota Access used CLS to make contact with them. The Plaintiffs argue the names of the actual individuals who made the statements are not required. They claim their allegations are sufficient and detailed enough for the Defendants to respond and prepare a defense, and therefore comply with Rule 9(b).

         The purpose of the heightened pleading standard for fraud is to enable defendants to respond specifically, at an early stage of the case, to potentially damaging allegations. See Fed.R.Civ.P. 9(b); Abels, 259 F.3d at 920-21. . Plaintiffs must generally state the who, what, where, when and the context of the alleged fraud. Wivell v. Wells Fargo Bank, N.A., 773 F.3d 887, 898 (8th Cir. 2014). Plaintiffs do not need to state every factor ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.