State Points to Fatal Flaw in ‘Line 5’ Tunnel Law

In Enbridge v. Michigan, the Court of Appeals Hears Arguments on Constitutionality of Lame-Duck Legislation Fast-tracked under Former Gov. Snyder

Photo: Robert Reichel, framed in green rectangle, an Assistant Attorney General at the Michigan Department of Attorney General, addresses the Michigan Court of Appeals on June 3, 2020, via Zoom, in the case, Enbridge v. State of Michigan.

By Jim Olson

What may seem like dry legal arguments over the interpretation of a few words sometimes can have ripple effects on people, health, safety, and the environment.

Such is the case with arguments heard June 3 before the Michigan Court of Appeals over the fate of the proposed Enbridge oil pipeline tunnel under the Straits of Mackinac, which promises to leave a lasting mark on the future of the Straits and the people of the Upper Great Lakes. (Click here to watch a video-recording of the Court of Appeals hearing).

In December 2018, the Legislature passed Act 359 as the Snyder Administration prepared to leave office. The goal of the Act was to help Canada’s Enbridge build, lease-back, use, and operate tax-free a tunnel to house a new pipeline to replace its decaying Line 5 crude oil pipeline snaking across the bottom of the Straits of Mackinac. In March 2019, Attorney General Dana Nessel, in a carefully written opinion, ruled that the tunnel law was unconstitutional because it violated article 4, section 24 of the Michigan Constitution.

As a result, state agencies could not process matters based on the proposed tunnel law because the Attorney General’s opinion was binding on those agencies.  A few months later, Enbridge filed a lawsuit against the State to nullify the Attorney General’s opinion and rule Act 359 constitutional and its tunnel pipeline deal valid, prevailing in the Court of Claims in October. The State appealed to the Court of Appeals for the arguments heard Wednesday and a decision.

State: Title of Tunnel Law Says One Thing, Does Something Else

The State of Michigan focused its argument in front of the Appeals Court on article 4, section 24 of the Michigan’s Constitution, popularly labeled the “title-object” clause, which prohibits the legislature from saying a law’s purpose is one thing, when the text of the law is about something else or when adding other things that are not incidental to implementing the law’s purpose.

Let’s give this some context. For example, the legislature cannot state in legislation that it is acquiring state land to establish and operate a public state park, then convey the land to a private corporation to build and operate the park. Or, given the same example, the state law cannot expressly say the project is a public park, then provide in the law for also using the land for a race-track, which is not incidental to implementing a public park, the law’s purpose.

So, there’s good reason for this provision of the state constitution, because it prohibits the legislature from duping others, including the public, into thinking the law is about one thing, when in fact it is about another or multiple things. In short, as our Supreme Court has said, the purpose of the “title-object” limitation is to provide “fair notice” to legislators and the public and to prevent “subterfuge” or deceit on affected persons and the public.

Enter the COVID-19 “Zoom” Courtroom of the Michigan Court of Appeals

On June 3, Judges Cameron, Boonstra, and Letica heard arguments from Robert Reichel, a senior, career lawyer for Michigan’s Attorney General Dana Nessel, and John Bursch, a lawyer for Enbridge, over the constitutionality of Act 359 under the “title-object” clause of the Michigan Constitution.  There were no fireworks. Bob Reichel meticulously laid out the State’s two-fold arguments: 

1. The title clause of Act 359 authorized the Mackinac Bridge Authority (“MBA”) to acquire and operate, or a new Mackinac Straits Corridor Authority (“MSCA”) to acquire and operate a state corridor utility tunnel for Enbridge’s oil pipeline and supposedly other utility electrical or natural gas lines under the Straits of Mackinac. But the provisions of the law itself authorized Enbridge, a private corporation, to acquire the bottomlands of the Straits, construct, transfer to the MSCA the title, but leaseback to Enbridge to control, occupy, and use the public trust bottomlands for 99 years, with little oversight.
2. The title clause of Act 359 has a single object, the acquisition and operation of a public bridge by the authority for public vehicles. The body of the law has multiple purposes or objects, including transferring authority for the tunnel and pipeline to MSCA, assigning easements, entering into the 99-year lease, requiring the MSCA to review and sign a tunnel agreement, third agreement, authorizing Enbridge to sublease and manage the tunnel space, and requiring the Attorney General of Michigan to pay Enbridge’s legal costs if the Attorney General on behalf of the people of Michigan objects to the lawfulness of the tunnel and pipeline [Emphasis added].

Enbridge Downplays the “Who” and Expands the “What” in Tunnel Law

John Bursch for Enbridge avec bowtie, argued that the title clause of Act 359 covered infrastructure connecting the Upper Peninsula to the Lower Peninsula, so the tunnel and pipeline are surely part of the purpose and object. He also argued that it doesn’t matter “who” does the project, as long as it’s a government agency doing it, so the MSCA has full authority to sign agreements and to satisfy the project described in Act 359. As to multiple purposes not squarely within the title, he argued they were germane to carrying out the project.

Robert Reichel exercised his right to rebuttal and pointed out that both the “who” and “what” mattered.  In the “title” clause of Act 359, both the new Mackinac Straits Corridor Authority and older Mackinac Bridge Authority are authorized to acquire, establish, and operate a public project. But unlike the “title” clause, the body or provisions of Act 359 itself actually authorize Enbridge, a private entity, to control and operate the tunnel. After listening to arguments, none of the three judges asked any questions.

A Private Tunnel Project Paraded as a Publicly Operated One Is Subterranean Subterfuge

The way I see it, the scales of justice in this case tip precipitously in favor of the people of the State of Michigan and the integrity of the state constitution. The law should mean what it says, not what a lame-duck legislature concocts in the last weeks of 2018 to satisfy the desires embodied in self-serving agreements between Enbridge and the Governor’s executive office. Ironically, these agreements themselves offer up the violation of the title-object clause.  

The 1952 law creating the Mackinac Bridge Authority provided for the establishment and operation of a public project, financed by the public, and managed and operated by the public through the MBA and Michigan Department of Transportation. The title clause of the 2018 tunnel law, Act 359, represents the same thing, a public utility tunnel, owned and operated by the MSCA, a state governmental body.  In fact, the body of the law provides for a complex set of agreements, rights, and duties that hands the tunnel and pipeline control, and control of other utilities, and operation entirely to Enbridge with relatively little paper-shuffling control by the MSCA. Paragraph G of the Second Agreement, signed by Snyder and Enbridge in October 2018, contains this glaring admission: 

The State and Enbridge agree to initiate discussions, as soon as practicable, to negotiate a public-private partnership agreement with the Mackinac Bridge Authority (“Authority”) with respect to the Straits Tunnel for the purpose of locating the Line 5 Straits Replacement Segment and, to the extent practicable, Utilities in that Tunnel (hereinafter “Tunnel Project Agreement”)… [T]he Authority would execute a lease or other agreements to: (a) authorize Enbridge’s use of the Straits Tunnel for the purpose of locating the Line 5 Straits Replacement Segment for as long as the Line 5 Straits Replacement Segment shall be in operation by Enbridge; (b) provide that Enbridge will operate and maintain the Straits Tunnel during the term of the lease on terms to be agreed; and (c) specify the conditions under which Utilities may gain access to the Straits Tunnel.

Nowhere in the “title” clause of Act 359 calling on the MSCA to establish and operate a tunnel does the law state that Enbridge will build, control, use, and operate a tunnel for as long as the tunnel is in operation. In the words of the Michigan Supreme Court, this does not provide fair notice to the log-rolling that took place in the last days of 2018. Worse, it constitutes a subterfuge and deceit on the people of Michigan that our constitution and courts prohibit.  

Attorney General Nessel was right when she issued her opinion in 2019; Act 359 is unconstitutional. If Enbridge wants to build and operate a tunnel, let it choose to design and apply for the authorization and permits to build a tunnel for its private crude oil pipeline under the laws of Michigan that apply to and protect the waters and bottomlands of the Straits of Mackinac and the Great Lakes.