Michigan judge rejects attorney general's effort to move Line 5 case to state court

Calgary-based Enbridge Inc. scored a key victory in the Line 5 dispute Tuesday as a judge in Michigan rejected the state attorney general's bid to get the dispute over the cross-border pipeline kicked out of federal court.

U.S. Circuit Court Judge Janet Neff issued the long-awaited written ruling late Tuesday, agreeing with Enbridge that its dispute with Michigan Gov. Gretchen Whitmer's administration involves "substantial federal issues."

The decision resolves one of the central questions in the case whether a federal court is the proper forum for it and gives additional weight to Enbridge's argument that the standoff is an important bilateral issue with consequences for both countries, and is for Canada and the U.S. to resolve.

In her ruling, Neff said she's satisfied that the Line 5 case comprises a "substantial federal question" and that hearing it won't undermine Michigan's right to resolve state issues.

"The court holds that the Enbridge parties have borne their burden of demonstrating that this action was properly removed [from state court]," she writes.

"The scope of the property rights the state parties assert necessarily turns on the interpretation of federal law that burdens those rights, and this court is an appropriate forum for deciding these disputed and substantial federal issues."

Ruling a significant victory for Enbridge

The ruling marks a significant victory for Enbridge, which sought the move from state to federal court in the first place, a move the state of Michigan has been contesting for the last 12 months.

"Enbridge is pleased with the decision and agrees that this case belongs in federal court, as we've asserted all along," the company said in a statement. "This is both a federal and international law issue and the federal court will now handle the case."

A spokesperson for the Michigan attorney general's office did not immediately respond to media inquiries Tuesday.

Neff also agreed to accept two recent supplemental briefs filed by the federal government in Ottawa detailing Canada's decision to invoke a 1977 treaty designed to ensure the uninterrupted flow of cross-border energy between the two countries.

Those briefs make it clear that planning for bilateral treaty talks on Line 5 is "well underway," with formal negotiations expected to begin "shortly." Should those negotiations fail, the next stage of the dispute resolution process would be binding international arbitration.

The decision comes at an opportune time for Prime Minister Justin Trudeau, who will have Line 5 on his agenda when he meets Thursday with U.S. President Joe Biden and Mexican President Andres Manuel Lopez Obrador at the White House.

A standstill

Canada opted to formally invoke the 44-year-old treaty last month after talks involving a court-appointed mediator ended in what Neff described Tuesday as a "standstill."

Last November, Whitmer revoked a 1953 easement that allowed Line 5 to operate and ordered it shut down for fear of an environmental disaster in the ecologically sensitive Straits of Mackinac, the waterway where the pipeline crosses the Great Lakes.

The White House has acknowledged that the U.S. Army Corps of Engineers is conducting an environmental assessment on Enbridge's plans to encase the underwater portion of the twin pipeline in a deep, fortified underground tunnel.

But they have assiduously avoided casting judgment on the efforts by Whitmer, by all accounts a close ally of Biden's who was once on the shortlist to be his vice-president, to get the line shut down entirely.

Line 5 ferries upwards of 540,000 barrels per day of crude oil and natural gas liquids across the Canada-U.S. border and the Great Lakes by way of a twin line that runs along the lake bed beneath the straits linking Lake Michigan and Lake Huron.

Proponents call it a vital and indispensable source of energy particularly propane for several Midwestern states, including Michigan and Ohio. It is also a key source of feedstock for refineries on the northern side of the border, including those that supply jet fuel to some of Canada's busiest airports.

Critics want the line shut down, arguing it's only a matter of time before an anchor strike or technical failure triggers a catastrophic environmental disaster in one of the area's most important watersheds.

They also point to a recent pipeline rupture off the coast of California, believed to be the result of an anchor strike, as an example of the fate that could befall the straits if Line 5's operations continue.