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
Dakota Access, LLC Defendant-Appellee Contract Land Staff, LLC Defendant
Submitted: October 18, 2018
from United States District Court for the District of North
Dakota - Bismarck
SHEPHERD, KELLY, and STRAS, Circuit Judges.
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 dismissal of their claim under N.D. Cent.
Code § 49-22-16.1 for failure to satisfy the heightened
pleading requirement of Federal Rule of Civil Procedure 9(b).
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
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 N.D. Cent. Code
§ 49-22-16.1. This statute provides a cause of action
when easements are acquired using "harassment, threat,
intimidation, misrepresentation, deception, fraud, or other
unfair tactics." § 49-22-16.1(2).
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.
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., 831
F.3d 1063, 1070 (8th Cir. 2016), assuming all factual
allegations in the complaint as true and construing all
reasonable inferences in favor of the nonmoving party,
Retro Television Network, Inc. v. Luken Commc'ns,
LLC, 696 F.3d 766, 768 (8th Cir. 2012).
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, 831
F.3d at 1070 (quoting United States ex rel. Joshi v. St.
Luke's Hosp., Inc., 441 F.3d 552, 556 (8th Cir.
2006)). Particularly in cases with multiple defendants,
"the complaint should inform each defendant of the
nature of his alleged participation in the fraud."
Streambend Props. II, LLC v. Ivy Tower Minneapolis,
LLC, 781 F.3d 1003, 1013 (8th Cir. 2015) (quoting
DiVittorio v. Equidyne Extractive Indus., Inc., 822
F.2d 1242, 1247 (2d Cir. 1987)). Plaintiffs' complaint
lacks such details, and plaintiffs do not argue that, if Rule
9(b) applies, their complaint would survive. They argue
instead that the district court erred in concluding that
their claim under § 49-22-16.1 was subject to Rule
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., 683 F.3d 239, 247 (6th Cir.
2012). Plaintiffs argue that Rule 9(b) should not apply
because North Dakota law prohibits procuring easements
through various means, not just fraud. It is true that §
49-22-16.1 penalizes obtaining easements through
"intimidation," and other "unfair
tactics," as well as through
"misrepresentation," "deception," and
"fraud." But that does not clarify whether
plaintiffs' claim is grounded in fraud such that
Rule 9(b) applies. A claim may sound in fraud even though it
is brought under a statute that also prohibits non-fraudulent
conduct. See Kearns v. Ford Motor Co., 567 F.3d
1120, 1125 (9th Cir. 2009); Shapiro v. UJB Fin.
Corp., 964 F.2d 272, 288 (3d Cir. 1992).
"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, 781 F.3d
at 1012-13; see also Shaw v. Digital Equip. Corp.,
82 F.3d 1194, 1223 (1st Cir. 1996) (discussing application of
Rule 9(b) to all claims based on "a unified course of
fraudulent conduct"). In support of all three claims,
plaintiffs allege that Dakota Access induced them to sign the
easement contracts by making representations about what would
happen if they refused: they would lose the signing bonus and
either the pipeline would be moved elsewhere ...