Nebraska Landowners Challenge Pipeline Law, Lawyer Says

Three Nebraska landowners asked the state Supreme Court to overturn a new law allowing the governor to approve pipeline routes and delegate the right to acquire property for such projects, a lawyer for the plaintiffs said.

TransCanada Corp. (TRP)’s permit application to run the Keystone XL pipeline through the state is being processed under the new law, the attorney, David Domina, said in an interview today. Under the law, Calgary-based TransCanada can gain eminent domain authority without having to wait for federal permits, he said.

The law, which went into effect in April, changed the pipeline permit approval process, giving rights to the governor and the Nebraska Department of Environmental Quality previously held by the state’s Public Service Commission, Domina said.

The new law “violates the doctrine of separation of powers” and fails “to provide for notice to affected parties, thereby depriving them of due process of law,” the landowners said in a copy of the filing provided by Domina. The plaintiffs, Randy Thompson, Susan Luebbe and Susan Dunavan, want the state’s high court to hold the law unconstitutional, Domina said.

The filing couldn’t immediately be confirmed with the court. Domina said his clients will be filing a separate complaint today over the law in state district court in Lincoln, Nebraska.

TransCanada Isn’t Named

“This lawsuit does not name TransCanada as a party,” Domina said in a press conference today. It names “only those responsible for enforcement of the law,” he said, including the governor, the director of the environmental quality department and the state’s treasurer.

“We’re certainly aware of the lawsuit, but we’re not commenting directly on it,” Grady Semmens, a TransCanada spokesman, said in an interview.

“We continue to work with the Department of Environmental Equality” on a new route for the pipeline, he said. “We’re not going to speculate on the outcome of the lawsuit.”

Sue Roush, a spokeswoman for Nebraska Governor Dave Heineman, didn’t immediately return a call for comment.

The landowners are seeking immediate review by the state supreme court, Domina said. The court could decide as early as May 30 to accept the case, he said. Any decision would take months, he said.

Early Ruling

An early ruling on the law by the court would be in TransCanada’s interest, he said. “If we’re right about these issues, ultimately what TransCanada attempts to do will be invalid,” he said at the press conference.

TransCanada reapplied for a permit to carry crude from Alberta’s oil sands to Steele City, Nebraska, after an earlier iteration of the pipeline was rejected by President Barack Obama in part because of potential environmental risks in Nebraska.

The company is now building the Keystone XL as originally conceived in two segments and may begin construction on the southern portion from Cushing, Oklahoma, to Texas refineries as soon as next month. TransCanada has applied for a federal permit on the northern segment and has also submitted a new route plan to Nebraska that is being reviewed by state officials.

Officials with the Nebraska Department of Environmental Quality have conducted hearings and will begin an environmental impact study on the route that may conclude as soon as August, TransCanada Chief Executive Officer Russ Girling said May 4. The company has said it expects to receive state and federal approvals by the first quarter of next year and could complete construction on the northern segment by early 2015.

The current law “would allow a foreign corporation to condemn Nebraska properties prior to having a permit to construct their project within our borders,” plaintiff Thompson said in press release distributed by the Domina law firm.

To contact the reporter on this story: Margaret Cronin Fisk in Detroit at mcfisk@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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