Federal appellate panel sends Michigan pipeline challenge to state court

Michigan Attorney General Dana Nessel's lawsuit seeking to shut down part of a petroleum pipeline that runs beneath the Straits of Mackinac belongs in state court, a federal appellate panel ruled Monday.

The pipeline's operator, Enbridge Inc., moved the case from state court to federal court more than two years past the deadline for changing jurisdictions. A three-judge panel from the 6th U.S. Circuit Court of Appeals found Enbridge clearly missed the deadline and ordered the case remanded to state court.

Nessel filed the lawsuit in June 2019 seeking to void a 1953 easement that enables Enbridge to operate a 4.5-mile (6.4-kilometer) section of Line 5 beneath the straits, which link Lake Michigan and Lake Huron.

Concerns over the section rupturing and causing a catastrophic spill have been growing since 2017, when Enbridge engineers revealed they had known about gaps in the section's protective coating since 2014. A boat anchor damaged the section in 2018, intensifying fears of a spill.

The attorney general won a restraining order from a state judge in June 2020, although Enbridge was allowed to restart operations after complying with safety requirements. The energy company moved the lawsuit into federal court in December 2021.

Nessel argued to the 6th U.S. Circuit panel that the lawsuit belongs in state court. During oral arguments before the panel in Cincinnati in March, her attorneys insisted the case invokes the public trust doctrine, a concept in state law in which natural resources belong to the public, as well as the Michigan Environmental Protection Act.

Enbridge attorneys countered the case should stay in federal court because it affects trade between the U.S. and Canada. Line 5 moves petroleum products from northwestern Wisconsin through Michigan into Ontario.

The judges — Richard Griffin, Amul Thapor and John Nalbandian — did not address the merits of the case.

Nessel said in a statement that the case never should have left state court and ripped Line 5 as “old, dangerous and worsening.”

“And I am still committed to doing everything in my power to shut down its passage through the Straits,” she said.

Enbridge filed a separate federal lawsuit in 2020 arguing that the state's attempt to shut down the pipeline interferes with the federal regulation of pipeline safety and could encourage copycat actions that would impede interstate and international petroleum trading. That case is pending.

Enbridge spokesperson Ryan Duffy said in an email to The Associated Press that the company was disappointed that the case was moved back to state court, arguing that Line 5 is regulated under federal law and a 1977 crude oil treaty between the U.S. and Canada. He added that a ruling in the remaining federal lawsuit should fully resolve the state case, and the company believes that case should proceed first.

Enbridge also has been working to secure permits to encase the section of pipeline beneath the straits in a protective tunnel. The project will create jobs and “make a safe pipeline safer," Duffy said.

The pipeline is at the center of a legal dispute in Wisconsin as well. A federal judge in Madison last summer gave Enbridge three years to shut down part of Line 5 that runs across the Bad River Band of Lake Superior's reservation. The company has proposed rerouting the pipeline around the reservation and has appealed the shutdown order to the 7th U.S. Circuit Court of Appeals. That case is pending.