Enbridge Faces Michigan AG's Attempt to Halt Line 5 Pipeline in State Court Decision

(Reuters) — A U.S. appeals court on Monday handed Michigan's attorney general a jurisdictional victory in her bid to force Enbridge to stop operating the Line 5 oil pipeline underneath the Straits of Mackinac in the Great Lakes by allowing her to pursue her case in state rather than federal court.

The Cincinnati-based 6th U.S. Circuit Court of Appeals ruled the Canadian pipeline company waited too long to seek to have Democratic Attorney General Dana Nessel's 2019 lawsuit removed to federal court when it tried to do so in late 2021.

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U.S. Circuit Judge Richard Griffin, writing for Monday's three-judge panel, said Enbridge could not establish why it would not have known from the onset of Nessel's case it potentially could be moved to federal court, like a similar case was by the state's governor.

The ruling reversed an August 2022 decision by U.S. District Judge Janet Neff in favor of Calgary-based Enbridge, which has been locked in a long-running dispute with Michigan over Line 5, which ships 540,000 barrels per day of crude and refined products from Superior, Wisconsin, to Sarnia, Ontario.

A four-mile (6.4-km) section of the aging pipeline runs underwater through the Straits of Mackinac and environmentalists are concerned about the risk of an oil leak.

"This case never should have left state court in the first place, and after this long delay caused by Enbridge’s procedural manipulations, we’re elated to welcome Nessel v. Enbridge back to its rightful judicial venue," Nessel said in a statement.

Enbridge in a statement said it was disappointed by the 6th Circuit's ruling but that it remained confident that the Michigan state courts would ultimately find that Nessel could not shut down Line 5.

Nessel had in June 2019 filed a lawsuit in state court in Ingham County that sought to enjoin Enbridge’s continued operation of Line 5 based on alleged violations of state public nuisance and environmental laws.

While that case was being actively litigated before a state court judge, Michigan Governor Gretchen Whitmer, a Democrat, in November 2022 revoked an easement that allowed the pipeline to be operated and filed a lawsuit to enforce the revocation.

Enbridge removed that state court case to federal court, arguing Whitmer's state-law claims raised federal questions related to foreign affairs and were potentially preempted by the federal Pipeline Safety Act and the Submerged Lands Act.

Neff rejected Whitmer's bid to remand the case in November 2021. Based partly on that order, Enbridge a month later then moved to have Nessel's earlier lawsuit also transferred to federal court.

Normally a defendant must seek to remove a case to federal court within 30 days of being served a complaint.

Enbridge argued it could nonetheless transfer the case 887 days after receiving Nessel's lawsuit based on a provision of the statute governing case removals that allows a case to be removed 30 days after an order from which it could be first determined a case could be heard in federal court.

The case is Nessel v. Enbridge Energy LP, 6th U.S. Circuit Court of Appeals, No. 23-1671.

For Nessel: Daniel Bock of the Office of the Michigan Attorney General

For Enbridge: Alice Loughran of Steptoe

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