July 30 (Reuters) - A U.S. appeals court found Enbridge liable for trespass for running a pipeline under land belonging to a northern Wisconsin tribe, but gave the Canadian energy company more time to reroute the pipeline and ordered a recalculation of damages.
Thursday's decision by the 7th U.S. Circuit Court of Appeals in Chicago addressed appeals from a federal district judge's June 2023 order that Enbridge pay the Bad River Band of the Lake Superior Tribe of Chippewa Indians $5.15 million in restitution
plus an additional sum for ongoing trespass, and move the pipeline within three years.
That deadline expired last month, but had been put on hold. Circuit Judge Michael Scudder urged the district judge to adopt measures to ensure that Enbridge reroute the pipeline "as soon as possible."
Enbridge had no immediate comment. Josh Handelsman, a lawyer for the tribe, said his client is reviewing the decision.
Built in 1953, the Line 5 pipeline carries up to 540,000 barrels of oil per day through the Great Lakes region from Canada, including about 12 miles (19 km) under the Bad River Reservation.
U.S. District Judge William Conley in Madison, Wisconsin, awarded damages and ordered a reroute following a non-jury trial. Bad River Band had warned a shutdown was needed because spring rains had eroded a riverbank protecting the pipeline.
DELAY 'DOES NOT REFLECT OUR APPROVAL'
Writing for a three-judge panel, Scudder said the three-year timetable to move the pipeline was too aggressive, but a shutdown risked harming consumers, sparking international fallout with Canada, and violating a 1977 U.S.-Canadian treaty governing transit pipelines.
"Make no mistake: Enbridge must remove the pipeline from the [tribe's land]," Scudder wrote. "The grace period we direct the district court to afford Enbridge is the product of the broader public context in which the pipeline operates, and it does not reflect our approval of the company’s behavior."
As to damages, Scudder said Conley abused his discretion for "double-counting," by taking into account Enbridge’s profits attributable to the trespass as well as the company’s economic benefit from deferring expenses for a reroute.
A recalculation should consider the ongoing nature of Enbridge's trespass, interest that may be owed, and both sides' conduct concerning a reroute, Scudder said.
The appeals court refused to hold Enbridge liable for nuisance, saying federal law preempted the tribe's claim.
Though Enbridge's easement for the pipeline over some tribal land parcels ran through 2043, its rights-of-way over other parcels expired in 2013.
The tribe sued in 2019 after out-of-court negotiations failed.
(Reporting by Jonathan Stempel in New YorkEditing by Bill Berkrot)
