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Court orders federal agency to explain NEXUS pipeline decision

The city of Oberlin and a group called Coalition to Reroute Nexus argued that the use of eminent domain should not have been allowed
Credit: AP
FILE - In this Thursday, July 16, 2015, file photo, a truck passes a sign against Nexus on the property of Kathy Cikotte, in Berlin Heights, Ohio. An Ohio city and others are asking federal appeals judges in Washington to rule that their property was illegally seized to build a $2 billion pipeline that sends large quantities of natural gas to Canada. (AP Photo/Tony Dejak, File)

CLEVELAND (AP) — The nation's top appeals court has ruled that a federal agency must explain why it approved a pipeline sending substantial quantities of natural gas to Canada and allowed the energy companies to force U.S. citizens to sell property so construction could begin.

The U.S. Court of Appeals for the District of Columbia agreed with Oberlin, Ohio, and other plaintiffs Friday that the Federal Energy Regulatory Commission failed to justify giving owners of the NEXUS Gas Transmission pipeline credit for gas shipped to Canada to prove the project's need.

FERC officials declined to comment Tuesday about the ruling.

Opponents long argued it was unlawful for the pipeline owners, Canada's Enbridge Inc. and Detroit's DTE Energy, to force U.S. citizens to sell property under legal threat so the 255-mile-long (412-kilometer-long) pipeline stretching across northern Ohio and into Michigan could be built.

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Plaintiff attorney Carolyn Elefant told a three-judge panel during oral arguments in May that about one-third of the pipeline's daily capacity of 1.5 billion cubic feet (40 million cubic meters) per day was being shipped to a massive trading and storage hub in Ontario.

The decision dismissed the remaining claims made by Oberlin and other opponents and allowed the pipeline, which began transporting gas from Appalachian shale fields in October, to remain in service.

FERC attorney Carol Banta told the court in May that 93 percent of the pipeline was built without using eminent domain.

Judge Robert Wilkins responded: "Even if it's 1% of eminent domain needed, that's someone's property being taken, and that raises constitutional issues."

Attorney David Mucklow said the decision is a "great victory for enforcing people's property rights in the United States."

"It's going to force FERC to handle these types of cases differently," Mucklow said, adding that people who sold property after being sued by NEXUS were forced to negotiate "with a gun to their heads."

Mucklow said the company hired police officers from outside the area to intimidate property owners, many of whom were elderly, to "sign away their rights." He said he is not aware of a case involving a court sending a project back to FERC for reconsideration.

Pipeline approvals for natural gas exports involve a section of the National Gas Act that FERC failed to consider, he said.

Still, Mucklow is skeptical FERC will do the right thing. If it doesn't, he said, the plaintiffs could consider returning to the Court of Appeals or filing a class action lawsuit to force NEXUS to renegotiate with people about the price it paid for property.

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