Enbridge loses attempt to have Michigan Line 5 lawsuit referred to federal court

The U.S. Court of Appeals for the Sixth Circuit has ruled that a lawsuit brought by the Attorney General of the State of Michigan to shut down Enbridge Inc.’s Line 5 pipeline due to safety risks should be heard in state court because Enbridge failed to timely assert federal court jurisdiction.

The 645-mile-long Line 5 is part of a pipeline network that transports oil products to refineries in the Midwestern United States and the Canadian provinces of Ontario and Quebec. Line 5 runs from Superior, Wisconsin, to Sarnia, Canada. It transports up to 540,000 barrels of light crude oil, light synthetic crude oil, and natural gas liquids daily.

Judges Amul R. Thapar, John B. Nalbandian and Richard Allen Griffin said the Canadian downstream company’s motion to dismiss – a legal term for moving a civil case to federal court – was not filed within the time limit set by the United States Code (USC).

Monday’s decision benefited Attorney General Dana Nessel, who had appealed after failing to convince the District Court for the Western District of Michigan that the case should be heard in state court.

Gov. Gretchen Whitmer had previously lost a bid in district court to bring a similar lawsuit against Enbridge to state court. The governor had filed the suit to enforce a state government notice revoking a right-of-way granted for Line 5.

“The facts of this litigation are not before us,” the appellate judges said of Nessel v. Enbridge. “Instead, we are considering only which court should decide this case: Does it belong in Michigan state court (where the attorney general filed it in 2019) or in federal court (where Enbridge moved it more than two years later)?

“We believe that Enbridge failed to timely remove this case to federal court under 28 USC § 1446(b) and that there are no equitable exceptions to the statutory removal timelines.”

This section of federal law specifies that a motion to remove must be filed, according to the official language, “within 30 days after the defendant receives, by service or otherwise, a copy of the original complaint setting forth the relief upon which such action or proceeding is based, or within 30 days after service of the summons upon the defendant if such original complaint has since been filed with the court and no longer needs to be served upon the defendant, whichever is shorter.”

Monday’s ruling states: “Relying on the district court’s denial of the motion to remand in the Governor’s case and the provision of § 1446(b)(3) permitting remand within 30 days of the defendant’s receipt of an ‘order … first establishing that the case is or has been remanded,’ Enbridge remanded this case to federal court on December 15, 2021.”

“Although 887 days had passed since the Attorney General’s complaint was received, Enbridge argued that the dismissal was nevertheless timely because the company could not have established that grounds for dismissal existed until the district court denied the motion to remand the Governor’s case,” the appeals court said.

It ruled that Enbridge had good cause to seek federal jurisdiction within the initial deadline, “and to the extent that the later deadline for removal under section 1446(b)(3) was open at all, Enbridge failed to meet that deadline as well.”

The Court of Appeal also confirmed that the time limits for deportation provided for in the law were “mandatory”.

“When asserted in a timely motion for remand, these limitations leave no room for equitable exceptions,” the statement said. “Enbridge’s failure to comply with these mandatory requirements requires remand.”

“For these reasons, we reverse the district court’s denial of the motion to remand. We remand the matter so that the district court may enter an order remanding the case to the 30th District Court of Michigan for Ingham County.”

The Canadian government opposed the closure in an amicus curiae brief, demanding that the United States fulfill its obligations under the 1977 U.S.-Canada Pipeline Transit Treaty and ensure that Line 5 remains operational.

In a related amicus curiae brief from the U.S. federal government on a land rights dispute between Enbridge and a Chippewa tribe, the Justice Department also expressed support for the continued operation of the pipeline, but acknowledged that Enbridge had trespassed on tribal land.

In response to Monday’s decision to dismiss the case, Enbridge insisted that the case should be decided under federal law. “The Attorney General wants to shut down Line 5 based on perceived safety concerns, but Line 5 safety is regulated exclusively by the Pipeline and Hazardous Materials Safety Administration,” the company told Rigzone in an emailed statement.

“The unhindered operation of Line 5 is also protected by the 1977 bilateral transit agreement between the United States and Canada,” it said.

“In Enbridge’s view, these federal issues should have supported keeping the case in federal court.

“Although the Attorney General’s case has been remanded to the Michigan state court, Enbridge remains confident that the dispute can be fully resolved through the pending motions for summary judgment in Enbridge’s separate action, Enbridge v. Whitmer. That case remains in federal court and was recently assigned to Federal District Judge Robert J. Jonker.”

Enbridge said the Whitmer case must be resolved before Nessel’s case can be heard in state court and hoped for a favorable ruling from the first court.

It was added that a tunnel project under which Line 5 is to pass will continue despite these cases.

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