Bang v. Continental Resources: Clarifying the Implied Right to Salt-Water Pipelines and Defining the Limits of Surface-Damage Claims in North Dakota

Introduction

In Bang v. Continental Resources, 2025 ND 131, the North Dakota Supreme Court delivered a multifaceted decision that touches on several recurring issues in oil-and-gas litigation:

• Whether a mineral lessee enjoys an implied contractual and easement right to construct salt-water pipelines and ancillary facilities on a surface owner’s land when the lease text only expressly mentions pipelines for oil and gas.
• How the “accommodation doctrine” and implied easement principles interact with the express wording of an oil and gas lease.
• The admissibility and probative value of third-party settlement agreements and easement payments in proving damages under N.D.C.C. ch. 38-11.1.
• Whether topsoil constitutes an “improvement” for which a surface owner may recover under N.D.C.C. § 38-11.1-04.
• The proper scope of appellate briefing and the impermissibility of “incorporation by reference.”

John and Stacy Bang (“the Bangs”) sought damages and injunctive relief after Continental Resources, Inc. (“Continental”) installed two well pads, a salt-water pipeline corridor, and related infrastructure on their Dunn County property. The district court granted Continental partial summary judgment, a jury awarded limited damages to the Bangs, and post-trial motions were denied. On appeal, the Supreme Court affirmed in all respects, producing a decision that clarifies mineral-development rights and evidentiary standards that will reverberate throughout North Dakota’s booming energy sector.

Summary of the Judgment

The Supreme Court, per Justice Bahr, upheld:

1. Partial Summary Judgment for Continental
   The 2004 lease’s broad grant—“with rights of way and easements for laying pipelines, and erection of structures … to produce, save and take care of said products”—implicitly allowed salt-water and other production-related pipelines. The Bangs’ claims for trespass and permanent injunction therefore failed.
2. Exclusion of Expert/Testimonial Evidence
   (a) Failure to disclose expert foundations warranted barring Mark Johnson’s expert testimony.
   (b) Settlement agreements and easement payments to other landowners were correctly excluded as either inadmissible under N.D.R.Ev. 408 or, alternatively, not sufficiently probative under Rule 403.
   (c) Evidence of future crop-loss damages based solely on historical yields was speculative and inadmissible.
3. Judgment as a Matter of Law on Topsoil “Improvements.”
   The Court held that topsoil is part of the land itself, not a separate “improvement,” thus no additional damages were available under § 38-11.1-04 for its alleged diminution.
4. Jury Instructions and Post-Trial Motions.
   The instructions adequately stated the law; the Bangs’ motions for new trial or relief from judgment lacked merit.

Practitioners should note the Court’s strong admonition against incorporating lower-court arguments by reference in appellate briefs—failure to brief an issue directly will leave it unreviewed.

Analysis

1. Precedents Cited and Their Influence

• North Dakota Energy Services, LLC v. Lime Rock Resources III-A, 2024 ND 159
  The Court had recently interpreted identical lease language to authorize water-transport “lay-flat hoses.” Bang extends that reasoning: if temporary hoses are permissible, permanent salt-water pipelines are likewise permissible because nothing in the broad lease language “repels such a construction.”
• Hunt Oil Co. v. Kerbaugh, 283 N.W.2d 131 (N.D. 1979)
  A foundational exposition of the implied easement doctrine and “due regard” accommodation. The Court re-emphasized that a mineral estate (or exclusive leasehold) remains dominant unless expressly limited.
• Getty Oil Co. v. Jones, 470 S.W.2d 618 (Tex. 1971) & Merriman v. XTO Energy, 407 S.W.3d 244 (Tex. 2013)
  Texas accommodation-doctrine cases were cited to articulate the surface owner’s burden of showing the mineral operator has reasonable alternatives that avoid surface disruption.
• Mosser v. Denbury Resources, 2017 ND 169 & Continental Resources, Inc. v. Fisher, 102 F.4th 918 (8th Cir. 2024)
  While these cases allowed third-party disposal or easement payments to be considered, Bang clarifies they are potentially probative but not automatically admissible: proponent must show comparability and overcome Rule 403 concerns.
• Procedural Precedents on Briefing
  Daniels v. Ziegler, 2013 ND 157; Minto Grain v. Tibert, 2009 ND 213—reiterated to condemn the “incorporation by reference” tactic.

2. Legal Reasoning

The Court’s reasoning unfolds in four interconnected layers:

1. Lease Interpretation First. Under North Dakota contract law, the text governs unless ambiguous. The lease’s grant of “exclusive right … with rights of way and easements for laying pipelines” is permissive, not restrictive. The absence of the word “salt-water” does not negate an implied need to transport a by-product that is universally recognized as integral to oil production.
2. Implied Easement & Accommodation Doctrine. Even if the lease were silent, an implied easement exists, limited only by the requirement that the use be “reasonably necessary” and give “due regard” to existing surface uses. The Bangs offered no evidentiary showing of an alternative that would have preserved their surface use, thus failed on summary judgment.
3. Evidentiary Gatekeeping. Exercising broad discretion, the district court excluded:
   • Expert testimony with undisclosed foundations (Rule 26(e) & sanctions).
   • Settlement/easement payments lacking comparability or cloaked in Rule 408 protections.
   • Speculative future-crop calculations anchored only in past yields.
   The Supreme Court affirmed each exclusion, signalling tighter evidentiary reins in surface-damage litigation.
4. Statutory Construction—“Improvements.” Drawing on dictionary and statutory usage, the Court held that improvements are additions to land (e.g., fences, roads), not inherent components like topsoil. Consequently, diminution of topsoil value rolls into “lost land value,” not “lost improvements.”

3. Impact and Future Significance

The decision’s ripple effects include:

• Expanded Operator Rights. Energy companies can rely on broad lease clauses to justify salt-water and ancillary infrastructure, reducing litigation over whether such lines require separate surface-use agreements.
• Narrower Surface-Owner Damages. By classifying topsoil as non-improvement and tightening admissibility of comparative settlement evidence, the ruling constrains large damage awards under ch. 38-11.1.
• Evidence Road-Map. Counsel must now marshal detailed comparability data (location, land use, payment allocation) before introducing third-party contracts. Blanket reliance on Rule 408 will no longer suffice; courts will scrutinize probative value versus jury confusion.
• Appellate Practice. The Court’s stern warning on “incorporation by reference” means future appellants must write self-contained arguments or risk waiver.
• Accommodation Doctrine Clarification. Although the Court sidestepped a definitive pronouncement when a lease exists, it hints that absent concrete evidence of an alternative, summary judgment for the operator is likely.

Complex Concepts Simplified

• Implied Easement / Dominant Estate
  When mineral rights are severed or leased, the mineral estate (or lessee) gains a non-written right to use as much of the surface as is reasonably necessary to develop those minerals. This is called an implied easement; the mineral estate is “dominant,” the surface “servient.”
• Accommodation Doctrine
  Even though the mineral estate is dominant, it must accommodate existing surface uses if (1) the surface use would otherwise be substantially impaired, and (2) the operator has reasonable alternatives. The surface owner bears the burden to prove both elements.
• N.D.C.C. ch. 38-11.1 Damages
  North Dakota’s Surface Damage Act allows recovery for:
  • Lost land value.
  • Loss of agricultural production and income.
  • Lost use and access.
  • Lost value of “improvements” (structures/additions to the land).
  The Act aims to give surface owners “the maximum amount of constitutionally permissible” protection, but within evidentiary and statutory limits.
• Rule 408 Exclusion
  Settlement discussions are generally inadmissible to prove liability or the amount of a claim. Bang underscores courts’ willingness to extend this exclusion to unrelated third-party settlements when offered without sufficient foundation.

Conclusion

Bang v. Continental Resources crystallises several doctrines at the intersection of property, contract, and evidence law in North Dakota’s oilfields. Most notably, the Court:

1. Affirms that a broadly worded oil and gas lease implicitly authorises salt-water pipelines and related infrastructure.
2. Declares that topsoil is part of the land itself, not an “improvement,” thereby limiting separate recovery for its diminution.
3. Tightens evidentiary standards for surface-damage claims, especially concerning expert testimony and third-party settlements.
4. Reinforces the requirement that appellate arguments be fully developed within the brief, not imported wholesale from lower-court filings.

Collectively, the ruling enhances certainty for mineral developers while compelling surface owners to present meticulous, comparable evidence of their damages. Future litigants must adapt—structuring leases, negotiating surface-use agreements, and preparing evidence—with Bang as the latest guidepost from North Dakota’s highest court.