Knox County gets favorable ruling in wind farm lawsuit

North Fork Wind, which operates out of Bloomington, Minnesota, and 12 Knox County landowners filed suit in August in the U.S. District Court for the District of Nebraska against Knox County, its board of supervisors, planning commission and zoning administrator, as well as a group of wind energy opponents.

North Fork Wind had planned a 600-megawatt commercial wind energy conversion system (CWECS) that had been under development for years and involved the investment of millions of dollars, all with the full knowledge of Knox County’s board of supervisors, planning commissioners and zoning administrator, the lawsuit alleged.

Knox County had adopted commercially reasonable zoning regulations for CWECS in November 2023, with public notice and opportunities for the public to comment.

In early 2024, a group of people referring to themselves as the “Wind Watchers,” among others, organized opposition to the wind farm by proposing a slate of new CWECS amendments.

On July 24, the Knox County Board of Supervisors, at the recommendation of the planning commission, voted 5-1 to adopt a 1¼ -mile (6,600-foot) setback for wind turbines from nonparticipating dwellings, beyond the prior setback of 2,000 feet.

“The unequivocal goal of the proposed amendments was to prohibit or otherwise prevent North Fork Wind’s construction of the wind farm in Knox County,” the plaintiffs alleged.

At the time the lawsuit was filed, North Fork Wind had invested nearly $12.2 million developing the project.

The company said development costs had accrued through several steps taken over the past seven years, one of which involved North Fork Wind securing its place in the queue with the Southwest Power Pool. To secure its queue positions for the wind farm, North Fork Wind posted financial security deposits totaling $16,765,072, of which $7,791,268 is nonrefundable.

The project had entailed $1,568,502 in lease and easement payments to landowners, in addition to more than $1 million for performing analyses needed to develop a project layout that complied with the 2023 zoning resolution and prepare associated permit applications.

In the lawsuit, the plaintiffs asserted the July 2024 zoning amendments violated the following federal and Nebraska state constitutional provisions:

— The Contracts Clause.

— The Equal Protection Clause of the 14th Amendment and of the Nebraska Constitution.

— The prohibition of "special legislation” in the Nebraska Constitution.

— Both the substantive and procedural components of the Due Process Clause of the 14th Amendment.

— The Takings Clause of the Fifth Amendment and of the Nebraska Constitution.

The defendants sought to dismiss each claim. Gerrard’s ruling allows only the Takings Clause claims and state law claims relating to nonpublication of zoning ordinances to proceed.

The judge wrote that there's certainly a factual issue as to whether the challenged regulations actually constitute an effective ban on all commercial wind farms, or whether it only makes the plaintiffs' characterization of the zoning ordinance as true. But, Gerrard wrote, “there's no mechanism under Nebraska or federal law that prevents Knox County from banning commercial wind farms, so long as there is a conceivably or hypothetically rational reason to do so.”

Gerrard’s opinion states that the limited avenue available to the plaintiffs to pursue their lawsuit may seem stringent, given the allegations concerning the conduct of the Knox County zoning board.

“But governmental bodies are provided wide latitude to enact laws that those bodies believe are in the best interest of the public,” he said. “It is not the place of the court to disrupt those decisions.”

The alleged behavior on the part of Knox County has no relevance to the determination of the plaintiffs' property interest, Gerrard added. Whether Knox County's attitude toward wind energy is wise or in the best interest of its citizens are questions outside the court's purview, he said.

Jim Sokol, chairman of the Knox County Board of Supervisors, said it is significant that at this early stage of the litigation, the bulk of the lawsuit was dismissed. He added that the possibility remains that the entire lawsuit could be dismissed on summary judgment.

Among the relief sought by the plaintiffs are the issuance of a permanent injunction prohibiting the defendants from enforcing or attempting to enforce the amendments, as well as requiring the board of supervisors, zoning administrator and the planning commissioners to make a public record canceling and nullifying the amendments.

Gerrard referred the case to a magistrate judge for progression and bifurcated discovery.

“The factual evidence required to determine whether the plaintiffs have a vested property interest is wholly separate from the other issues presented in this case (and is likely determinative),” Gerrard said. “In the interests of expediency, and to avoid prejudice, the court will limit discovery to the issue of whether the plaintiffs' physical use of their property was substantial enough to vest a property interest in a now-nonconforming use.”

Omaha attorney David Begley has served as special Knox County attorney in the case.

Friday’s ruling by Gerrard comes as wind energy companies seek to increase wind farm presence across Northeast Nebraska.

The Madison County Board of Commissioners last year voted not to change its existing zoning regulations, which are conducive to wind farm development, after hearing from hundreds of opponents and proponents of the issue.

Two wind companies may soon seek conditional use permits as they look to develop wind farms in Madison County.