Michigan, Enbridge spar in court over Line 5 oil pipeline closure tactics

The state of Michigan argued to federal appellate judges Thursday that Enbridge Energy's efforts to avoid a closure of its Line 5 petroleum pipeline should be decided in state court, not federal, because the Canadian oil giant missed a procedural window to move its case to federal court.

But Enbridge pushed back in arguments before the Sixth Circuit Court of Appeals, arguing that a federal judge's ruling in a separate case brought by Gov. Gretchen Whitmer restarted the company's 30-day clock for federal removal.

The arguments in front of appellate judges Richard Griffin, Amul Thapar and John Nalbandian mark the latest battle in a five-year legal war between the state and Enbridge over the continued operation of Line 5 through the Straits of Mackinac — one that's been fought in courtrooms, in regulatory meetings, in international treaty negotiations and in legislative policy battles over the oil pipeline's future.

The debate over whether that fight should continue in a federal courtroom or in front of a state bench will determine the limits of Michigan's ability to use state law and regulatory authority to govern the 70-year-old pipeline.

"I think it's clear that Enbridge missed its timeline here," Assistant Attorney General Daniel Bock said Thursday of Enbridge's chance to remove the case to federal court. "To the extent that there is any ambiguity or any question, that ambiguity must be resolved in favor of remand to state court."

But Enbridge pointed to a 2020 case filed by Whitmer as the lynchpin that set into motion a series of events at the federal level and eventually restarted the clock for moving the lawsuit into federal court.

"The governor set a deadline of six months of shutting down the pipeline and that's what sparked the foreign affairs controversy, and that's what made it more than just a plain, reasonable federal dispute," said Alice Loughran, an attorney for Enbridge.

5 years of litigation

The lawsuit at issue in Thursday's arguments in a Cincinnati courtroom was filed in state court by Attorney General Dana Nessel in 2019. The lawsuit alleged Line 5's easement through the Straits of Mackinac constituted a public nuisance and violated public trust and environmental laws.

Enbridge, at that time, made no effort to remove the case to federal court, even after an Ingham County judge ordered a temporary closure in June 2020 because of some newly discovered damage to a leg of the pipeline.

Nearly a year and a half after Nessel filed her suit, in November 2020, Whitmer and the director of the Michigan Department of Natural Resources filed a second similar suit in state court, asking a judge to support the state's revocation of Enbridge's 1953 easement through the Straits of Mackinac because the pipeline was an "unreasonable risk" to the Great Lakes.

Enbridge countersued the governor in federal court a couple weeks later, seeking to keep the pipeline open, and then removed the governor's case to federal court where federal law and federal regulators would have precedence.

While the federal cases were pending, Nessel's 2019 case in state court was halted.

In October 2021, Canada formally invoked a never-before-used 1977 treaty seeking to prevent Whitmer's threatened closure, arguing the U.S.-Canada treaty put limits on transit pipeline actions that may harm the energy supply in either country. Canada argued two of its provinces rely heavily on the products flowing through Line 5.

Prior to Canada's invocation of the treaty, Whitmer had been fighting Enbridge's removal of the case to federal court, hoping to try her case in state court where state laws, state regulators and state judges more friendly to Michigan's case would take precedence.

But in November 2021, federal District Judge Janet Neff ruled the case must stay in federal court since it involved federal law, federal regulators and, with Canada's treaty invocation, could have a profound effect on foreign affairs.

Whitmer dismissed her case rather than continue to engage in a forum fight and threw her support behind Nessel's 2019 case.

In December 2021, Enbridge removed Nessel's case to federal court as well, arguing Neff's decision in Whitmer's case had constituted new and pertinent action that restarted a 30-day clock for removal that otherwise would have ended in July 2019.

State or federal?

In an audio livestream from the Cincinnati courtroom Thursday, the three-member federal panel sounded skeptical — and, at times, exasperated — with Enbridge's arguments that the 30-day clock had restarted with Neff's opinion, questioning why there was enough to remove Whitmer's case in 2020 but not enough to remove Nessel's at that time.

Loughran, Enbridge's attorney, argued Whitmer's case spurred new developments that weren't present when Nessel filed her case, but ultimately had the effect of allowing for removal. Loughran pointed to the involvement of Canada as well as Neff's ultimate ruling that the issues being debated were decidedly federal.

"The governor's action generated a significant foreign affairs controversy that came out subsequent to both complaints and was partial basis for the district court's order, saying there were significant issues," Loughran said.

Bock argued Enbridge had its chance to move the case to federal court in 2019, but instead chose to litigate in state court for months, despite many of the legal questions paralleling Whitmer's case.

"Enbridge litigated this case extensively in state court, got a significant adverse ruling where the state court shut down the pipelines for actually about two months in 2020 and then ... Enbridge used the governor’s later filed case as a vehicle to fly to federal court," Bock said.

The attorneys also sparred over whether state law held absolute authority over the governance of pipelines and submerged bottomlands or whether federal law trumped state's rights in those cases.

Loughran argued the state's title to the bottomlands is "expressly burdened" by federal law, so much so that the federal courts should have jurisdiction over the case.

The federal submerged lands act, she said, "provides that the federal government releases title except when dealing with international relations."

But Bock argued the land belonged to the public and that the attorney general's office had a right to protect the public interests of the state. The federal government, if it does have a say over the issue, hasn't shown much interest in getting involved, he added.

"The U.S. has known about this case for five years and has remained completely silent,” Bock said.

eleblanc@detroitnews.com