A recent decision of a District Court Judge in North Dakota may provide some support for landowners who oppose a project operated by Wabash Carbon Services or its parent (collectively WCS) to inject 20 million tons of liquified carbon dioxide into porous rock formations 5,000 feet underground in Vermillion and Vigo Counties, Indiana. The Dec. 2 decision is based primarily on North Dakota law and is still subject to appeal, and, of course, it does not bind courts in Indiana.

But the decision may have some implications for WCS’s CO2 project.

WCS’s Project

WCS’s project is authorized by special legislation passed by the Indiana legislature. Indiana Code (IC) 14-39-1, et seq. One key issue is how WCS may obtain the right to use the porous rock formations that it will use to store the 20 million tons of CO2, and how much and when owners of the pore space will be compensated for the use of their property. Owners of the surface land own the subsurface rock formations, unless they have previously conveyed them. IC 14-39-1-16.

Under the plan, WCS will inject liquified CO2 into the ground using two injection wells, one in Vermillion County and one in Vigo County. After it is injected into the rock formations about 5,000 feet below ground, the CO2 will migrate into the porous rock about one and a half miles from the injection point. The extent of the migration is called the “pore space” or the “pore area.”

Under the special law, WCS is not required to obtain the consent of any landowner to use his or her pore space, unless it elects to use eminent domain powers.  

Sec. 14-39-1-17 of the special law for WCS’s project provides that “before the anticipated migration of carbon dioxide,” the operator of WCS’s project shall notify the persons who own the pore space and offer to pay them an amount equal to 40% of the rental value of the surface area, as specified in the Purdue University farm survey. Payments will be required each year until the injections of carbon dioxide stop. IC 14-39-1-17.

A landowner who does not accept this offer may request a nonbinding mediation. IC 14-39-1-18(a) and (b). If the parties do not reach an agreement in the mediation concerning “the acquisition, lease, or occupancy of the pore space,” the landowner may “pursue a civil action against the pilot project operator.” But “[a] civil action described in this subsection may be brought only under this section.” IC 14-39-1-18(c). (Emphasis added)

In that civil action, a court may not grant “injunctive relief or an order of possession;” and the court may not award “monetary relief that exceeds the fair market value of the pore space in Indiana.” IC14-39-1-18(d).

There is an exception. “Monetary relief” is not limited in cases alleging “tangible physical injury or damage” to a person, tangible property or an animal. IC 14-39-1-18(e).

Indiana’s Constitution provides in Section 21: “No person’s property shall be taken by law, without just compensation; nor, except in the case of the State, without such compensation first assessed and tendered.”

The North Dakota decision

In the recent North Dakota case, Northwest Landowners Association v State of North Dakota, link below, the district court held that a North Dakota law that authorized an operator of a CO2 storage project to store CO2 in a specified pore space was an unconstitutional taking of property because “it provides for a government-authorized physical invasion of property, which constitutes a taking, and it does not provide for ‘just’ compensation as outlined in Article I, Sec. 16 of the N.D. Constitution.” (Opinion, p. 7)

The North Dakota statute provided that if a CO2 storage operator did not obtain the consent of all persons who own the pore space to be used in the project, a state  commission may require that the pore space owned by non-consenting owners be made available for storage of the CO2. Before issuing a permit to operate the CO2 storage project, the state commission is required to find that all non-consenting pore space owners “are or will be equitably compensated.” (Opinion, p. 2)*

Once the carbon capture project is complete, the North Dakota law provides that title to the pore space and the stored carbon dioxide will transfer to the state “without payment of any compensation.” (Opinion, p. 3)

The district court relied heavily on a North Dakota Supreme Court case, Northwest Landowners Association v. State of North Dakota, 978 N.W. 2d 679 (N.D. 1972) which held that a state statute that authorized salt water to be pumped into an underground pore space constituted an unconstitutional taking.  The district court said, quoting, in part, the North Dakota Supreme Court:  “Government-authorized physical invasions of property constitute the ‘clearest sort of taking’ and therefore are a per se taking. ‘[A]n owner suffers a special kind of injury when a stranger directly invades and occupies the owner’s property.’ A physical invasion ‘is qualitatively more severe than a regulation of the use of property … since the owner may have no control over the timing, extent, or nature of the invasion.’ Further, regardless of whether the physical occupation is permanent or temporary, just compensation is required. Even if the physical invasion has only minimal economic impact on the owner, compensation is required because when there is a physical occupation of property, it effectively destroys the owner’s right to possess, use, and dispose of the property. Further, because government-authorized physical invasions take away the landowner’s right to exclude – ‘one of the most treasured’ rights of property ownership – they are a per se taking.” (Opinion, p. 4)

The district court concluded that under North Dakota’s CO2 storage statute, storage operators could inject millions of tons of CO2 into landowners’ pore spaces and store it there for an undetermined amount of time, and eventually title to CO2 and the pore space would pass to the state. The court held that the statute “clearly contains a government-authorized physical invasion of an interest in property, and interferes with a landowner’s use and enjoyment of property, including, but not limited to, a landowner’s right to exclude others.” (Opinion, p. 5)

The district court next found that while the statute provides for “compensation,” it “clearly does not provide “just compensation” as defined in North Dakota. (Opinion, p. 5)

The district court noted first that under North Dakota’s Constitution, “A jury decides the amount of compensation due for the taking, unless a jury is waived.”(Opinion, p. 6)

In addition, the district court noted that North Dakota’s Constitution has a timing requirement.  Art. I, Sec. 16, provides in part, “Private property shall not be taken or damaged for public use without just compensation having been first made to, or paid into court for the owner, …”  (Opinion, p. 6)

The court held that the CO2 storage law “is unconstitutional as it provides for a government-authorized physical invasion of property, which constitutes a taking, and it does not provide for ‘just’ compensation as outlined in Article I, Sec. 16 of the N.D. Constitution.”  (Opinion, p. 7)

Some Implications for the Indiana special legislation

Under the special law for WCS’s project, if the parties do not reach an agreement that gives WCS the right to use the landowner’s pore space, the landowner’s sole remedy is to file a civil action against WCS. But in that civil action, a court may not grant “injunctive relief or an order of possession.”

This section does not expressly give WCS authority to use a landowner’s pore space without obtaining the landowner’s consent. But by depriving a landowner of his/her right to seek injunctive relief or an order of possession, the special law takes away any right of the landowner to exclude WCS from using his or her pore space. The special law, in essence, permits WCS to take a landowner’s pore space.

Arguably, this constitutes a taking of a landowner’s property without compensation.

Second, Article I, Section 21 of Indiana’s Constitution provides, “No person’s property shall be taken by law, without just compensation.” The special law for WCS’s project, though, provides that a court may not award a landowner of pore space “monetary relief that exceeds the fair market value of the pore space in Indiana.”  There is an exception, though, if there is “direct and tangible physical injury or damage” to a person, tangible property or an animal. IC 14-39-1-18 (c)-(e).

Arguably, this provision may preclude a landowner from recovering for any decline in the market value of his/her surface property because tons of carbon dioxide have been injected underground. It may also preclude a landowner from seeking other damages that might be considered in determining the amount of “just compensation.”

Third, the special law does not require that “compensation be assessed and tendered” before WCS may pump CO2 into the pore space of a non-consenting landowner, as required by Art. I, Sec. 21 of the Indiana Constitution. Rather, the special law puts the burden on the landowner to file the suit. And WCS may inject CO2 into a landowner’s pore space before compensation is “assessed and tendered”.

Fourth, another potential issue is whether a landowner is entitled to have a jury determine what constitutes “just compensation” before WCS may inject CO2 into the landowner’s pore area. The special law does not provide that a landowner is entitled to a jury to determine the amount of “just compensation,” nor does it provide there is no such right.

The Indiana constitution provides in Art. I, Sec. 20, “In all civil cases, the right of trial by jury shall remain inviolate.”

In State of Indiana v. $2,435 in United States Currency, 220 N.E.3d, 542 (2023),  the Indiana Supreme Court said there is a line of older cases that have held that there is no constitutional right to a jury when the case involved a special statutory procedure. One of the cases falling into this line of cases cited by the Court is Anderson v. Caldwell, 91 Ind. 451, 454 (1883), which held that an eminent-domain claim for assessing damages to land is a special statutory proceeding, in which it is competent for the legislature to dispense with a jury.

But in the $2,435 in United States Currency case, the Indiana Supreme Court noted that there was another line of cases holding that a civil action, even as a “creature of positive statute” is triable by a jury, “so long as it “did not come into existence as a suit of equitable cognizance.” The Court held that it agreed with this latter line of cases, and clarified: “Parties in a civil action have a constitutional right to trial by jury in a cause of action (1) that was triable by jury at the adoption of the current constitution in1851; or (2) if no such cause of action existed at the time, one is essentially legal, rather than equitable, as those terms were understood in 1851.” (Opinion, pages 6-7)

In light of this recent Indiana Supreme Court case, landowners may arguably have a constitutional right to a jury trial to determine “just compensation” if there is a taking under the special law. If there is such a right, then the just compensation determined by the jury would need to be tendered before CO2 could be pumped into a landowner’s pore space.

Nothing in this article is legal advice or other advice.

Footnote

*Indiana has enacted a second law, IC 14-39-2, dealing with the storage of CO2 in underground pore spaces, which applies to all CO2 storage projects in Indiana, except to the one provided for in the special law. The manner in which the general law permits an operator of a CO2 storage project to obtain pore space has many similarities to the way provided in the law held unconstitutional by the District Court in North Dakota.  

Links:

Link to the Dec. 2, 2025 decision of the District Court in North Dakota:    https://northdakotamonitor.com/wp-content/uploads/2025/12/nwla-opinion.pdf

Link to the North Dakota Supreme Court’s decision in Northwest Landowners Association v. State of North Dakota, 978 N.W. 2d 679 (N.D. 1972):  https://cases.justia.com/north-dakota/supreme-court/2022-20210148.pdf?ts=1659622645

Link to Indiana Supreme Court decision in  State of Indiana v. $2,435 in United States Currency: https://cases.justia.com/north-dakota/supreme-court/2022-20210148.pdf?ts=1659622645

Links to other related articles in Vermillion Reports:

“Taking a look at the constitutionality of the law authorizing Wabash Valley Resources’ CO2 project”: https://vermillionreports.org/laws-concerning-c02-project

“Analysis and Viewpoint: The public was short-changed in the EPA public hearing and comment period on Wabash Carbon Services’ CO2 permits”: https://vermillionreports.org/public-shortchanged-epa-public-hearings

“Analysis: New report concludes that storing CO2 deep underground in rock formations containing brine is too risky,”: https://vermillionreports.org/new-report-concludes-that-storing-co2-deep-underground-in-rock-formations-containing-brine-is-too-risky

“WVR plans to truck CO2 to injection wells in Vermillion and Vigo counties, which will intensify the use of the injection sites.  One question is: does the intensified use comply with local zoning?”:  https://vermillionreports.org/plans-to-truck-co2