Nebraska Legislator Proposes Repeal of Eminent Domain Law

State senator Ernie Chambers of Omaha has introduced a bill that would repeal the eminent domain law that Nebraska passed in 2012 to facilitate the building of the Keystone XL pipeline. Legislative Bill 473 would repeal the Major Oil Pipeline Siting Act, which granted the governor and the Department of Environmental Quality the power to approve the routing of pipelines through Nebraska. This law allowed TransCanada, the builder of Keystone XL, to bypass the Public Service Commission, which reviews most pipeline proposals. The Department of Environmental Quality is overseen by the governor. Former Governor Dave Heineman, a Republican, had been an outspoken supporter of the Keystone XL pipeline while in office. He approved Keystone’s siting within Nebraska in 2012 shortly after this law passed.

Sen. Chambers said that Nebraska landowners did not ask him to introduce this bill. He did so because he wanted to give them a voice in future pipeline projects. LB 473 would not apply retroactively, so it would no impact on the development of Keystone XL.

In January, the Nebraska Supreme Court upheld the pipeline siting law but only by default. Four members of the court concluded that the law was unconstitutional and violated fundamental limits on government power. But the Nebraska constitution requires a supermajority to strike down legislation on constitutional grounds. The court needed five votes to formally uphold or strike down the law, but it had only four, so the legislation had to stand by default. The other three judges on the panel felt that the plaintiffs did not have standing to sue and refused to issue a ruling on the merits. The court’s decision paved the way for the U.S. Congress to pass legislation authorizing the Keystone XL pipeline. President Obama recently vetoed that legislation. He is waiting on a State Department report before making a decision on the pipeline.

The Nebraska legislature held a hearing on the proposed bill on March 11, 2015, which drew dozens of landowners to the state capitol both in support and in protest of the bill. The current legislative session ends June 5, 2015.

Keywords: energy litigation, Nebraska, eminent domain, Keystone XL, TransCanada

_{Courtney Scobie is with Ajamie LLP in Houston, Texas.}

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