North American pipeline transmission and energy major Enbridge Energy has suffered a major setback after the federal appeals court ruled on Monday that the lawsuit challenging the company’s operation of Line 5 can proceed in a Michigan state court.

As OilPrice reported on Tuesday, June 18, citing a news report published by Michigan Public, the legal battle began after Michigan Attorney General Dana Nessel filed a lawsuit in 2019, seeking to rescind Enbridge's easement to operate the pipeline in the Straits of Mackinac due to alleged environmental concerns. 

However, Enbridge Energy argued that the Michigan court lacked the jurisdiction to handle the case. According to Enbridge, the case falls in federal court since it involved interstate commerce and a trade protection treaty with Canada. 

The 6th U.S. Circuit Court of Appeals in Cincinnati said the company waited too long to raise that argument and missed a deadline to remove the case from state court. Based on the aforementioned grounds, the court reverted the case back to a Michigan court.

“The State has an obligation and imperative to protect the Great Lakes from the threat of pollution, especially the devastating catastrophe a potential Line 5 rupture would wreak upon all of Michigan,” Nessel said in a statement on Monday, June 17, 2024. 

“As we've long argued, this is a Michigan case brought under Michigan law that the People of Michigan and its courts should rightly decide.”

Expressing their disappointment, Enbridge spokesperson Ryan Duffy said the company was disappointed with the decision.

“We continue to believe that the federal court is the proper venue to decide the future of Line 5, which is a critical piece of energy infrastructure for both the United States and Canada,” Duffy said.

In 2021, Canada invoked the 1977 treaty with the US to seek negotiations with the US government over the future of Line 5, which transports oil from Canada through Michigan and Wisconsin.