State, landowners make cases on Keystone XL to Nebraska Supreme Court

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LINCOLN, Neb. ??? The Nebraska Supreme Court heard arguments Friday on the case the Obama administration is waiting on before deciding whether to approve construction of the Keystone XL oil pipeline from Canada across America.

Three Nebraska landowners whose property was in the original proposed path of the pipeline sued the state, challenging the constitutionality of a law passed two years ago to change the pipeline route approval process. That marked the first time Nebraska opponents successfully delayed federal approval of the proposed oil pipeline by claiming it should be rerouted around the state???s environmentally fragile Sandhills.

The state appealed a ruling by a Lancaster County District judge that under the state constitution, the state Public Service Commission has regulatory control over the routing of ???common carriers??? such as oil pipelines. The bill moved that authority to the governor and state environmental regulators.

The state contends the PSC???s powers don???t extend to regulation of interstate common carriers and oil pipelines.

If the process used to approve the route through Nebraska is struck down as unconstitutional, TransCanada would likely be back at square one with the siting process. The company has already revised its route through the state once.

Nebraska has been a hotbed of resistance to the Keystone XL pipeline, which would carry tar sands oil from Alberta, Canada, to Gulf Coast refineries. Opponents have peppered the state with anti-pipeline signs and held rallies and protests for years, from the governor???s mansion to the White House.

The state Supreme Court heard 15 minutes of testimony from each side, with the landowners represented by Dave Domina, who is also running for U.S. Senate. A large group of pipeline fighters showed up for the hearing, and many of them had to watch the proceedings on a video in an overflow room.

The state argues the lower court ruling should be reversed because the landowners lack legal standing to bring the suit and claims the court erred in categorizing an oil pipeline as an intrastate (in Nebraska only) common carrier rather than interstate (meaning it goes through other states, too).

Supreme Court Justice William Connolly questioned Deputy Attorney General Katherine Spohn about the standing issue, citing an exception for matters of great concern. Spohn said there must also be no other entity to challenge the constitutionality, and there are other individuals better suited to challenge the law, such as pipeline carriers.

After the hearing, Domina said the justices ???quickly disposed of??? the standing argument and the state will have ???tough sledding??? on that issue, which was no surprise to him.

After the hearing, Attorney General Jon Bruning said the standing issue is not the big issue, although the justices spent a lot of time talking about it. The real crux of the case is whether lawmakers had the authority under the constitution to shift pipeline approval from the PSC to the governor.

Domina contends the law doesn???t provide enough due process, whereas the PSC process requires discovery, evidence, a hearing, sworn testimony and proof, with judicial review to ensure it???s not a political decision.

???Haste makes waste,??? he said of lawmakers??? hasty passage of the bill during the waning days of the 2012 session. ???No private company takes our land without due process.???

Bruning said he thought Spohn did a ???superb job of advocating the state???s interest??? and is confident the law will be found constitutional.

Spohn said there???s ample opportunity for public input in the process, and the governor???s approval of the route isn???t the same as granting eminent domain, or the taking of land through condemnation. Landowners can challenge the compensation for their land and public use issue during condemnation proceedings, she said. She said the Legislature can grant condemnation authority, and has granted it to private companies before, such as railroad companies.

???Let???s be honest, nobody wants a pipeline to go through their land,??? she said during a press conference after the court hearing. But if the court strikes down the law, no public works projects could be built in the state, such as highways or roads, Spohn said.

She said the law is constitutional as long as not all of the PSC???s authority is taken away.

Bruning said even if the law were struck down, pipeline opponents would challenge any new laws, too.

???On the other side the goal is no pipeline never, ever, ever,??? he said. ???The reality is we have pipelines in Nebraska.???

Bruning said he expects a ruling by year???s end, after the November elections.