i
e. The Commission’s procedural rules denied Sierra Club and other intervenors a
meaningful right to be heard. ............................................................................................. 38
Conclusion ................................................................................................................................ 41
ii
Table of Authorities
Cases
Application of Red Carpet Limousine Serv., Inc.,
221 Neb. 340, 344 (1985) .................................................................................................... 2, 8
Block v. Lincoln Telephone and Telegraph Company,
170 Neb. 531, 540, 103 N.W.2d 312, 317 (1960)) ............................................................. 3, 36
Brock v. Roadway Express, Inc.,
481 U.S. 272 (1987) .............................................................................................................. 35
Brown v. Farmers Mut. Ins. Co.,
237 Neb. 855, 468 N.W.2d 105 (1991) ....................................................................................9
Center for Biological Diversity, Inc. v. FPL Group, Inc.,
166 Cal. App. 4th 1349 (2008) .......................................................................................... 3, 33
Chase 3000, Inc. v. Public Service Commission,
273 Neb. 133, 278 N.W.2d 560 (Neb. 2007) .......................................................................... 36
Cohen v. Beneficial Indus. Loan Corp.,
337 U.S. 541, 559 (1949) ...................................................................................................... 31
County of Sioux v. State Board of Equalization,
185 Neb. 741, 178 N.W.2d 754 (1970) .................................................................................. 13
Davis v. Scherer,
468 U.S. 183, 202 (1984) ...................................................................................................... 36
Hamdi v. Rumsfeld,
542 U.S. 507, 528-29 (2004) ................................................................................................. 31
In re Application A-16642,
236 Neb. 671, 707, 463 N.W.2d 591, 614 (1990) ................................................................... 10
In re Application No. B-1829,
293 Neb. 485, 488 (2016) ........................................................................................................3
In re Application of Renzenberger,
225 Neb. 30, 402 N.W.2d 294 (1987)) ................................................................................. 2, 9
Jantzen v. Diller Telephone Co.,
245 Neb. 81, 100, 511 N.W.2d 504, 517 (1994)..................................................................... 37
Ketteler v. Daniel,
251 Neb. 287, 295 (1996) ...................................................................................................... 16
Marshall v. Wimes,
261 Neb. 846, 851, 626 N.W.2d 229, 235 (2001) ................................................................... 35
National Association for the Advancement of Colored People v. Federal Power Commission,
425 US. 662, 669 (1976) ................................................................................................... 2, 18
Palko v. State of Connecticut,
302 U.S. 319, 324 (1937) ...................................................................................................... 31
State ex. rel. Spire v. Northwestern Bell Tel. Co.,
233 Neb. 262, 445 N.W.2d 284 (1989) ....................................................................................8
State v. Osborn,
241 Neb. 424 (1992).............................................................................................................. 16
State v. Patricia B. (In re Levanta S.),
295 Neb. 151, 165, 887 N.W.2d 502, 512 (2016)............................................................... 3, 40
iii
State v. Schrein,
244 Neb. 136, 504 N.W.2d 827 (1993) ................................................................................ 2, 9
State v. Wood,
245 Neb. 63, 511 N.W.2d 90 (1994) .................................................................................... 2, 9
Telrite Corp. v. Nebraska Pub. Serv. Comm.,
288 Neb. 866, 852 N.W.2d 910 (2014) ....................................................................................4
Statutes and Regulations
50 C.F.R. § 402.16 .................................................................................................................... 26
Magna Carta, ch. 29, in 1 E. Coke, The Second Part of the Institutes of the Laws of England
45 (1797)............................................................................................................................... 30
NE Const. art. 1 § 3 .....................................................................................................................2
NE Const. art. 15 §§ 4, 5 ....................................................................................................... 3, 33
NE Const. art. IV § 20 ............................................................................................................. 2, 8
Neb. Rev Stat. § 84-901 (Reissue 1981) .................................................................................... 10
Neb. Rev. St. § 46-701 .............................................................................................................. 33
Neb. Rev. St. § 46-702 .............................................................................................................. 33
Neb. Rev. St. §§ 46-701, 46-702 .................................................................................................3
Neb. Rev. Stat. § 57-1402 (1) .................................................................................................... 18
Neb. Rev. Stat. § 57-1403 ................................................................................................... 19, 20
Neb. Rev. Stat. § 57-1403(2) ..................................................................................................... 21
Neb. Rev. Stat. § 57-1403(4) ..................................................................................................... 21
Neb. Rev. Stat. § 57-1407(4) ........................................................................................... 2, 21, 23
Neb. Rev. Stat. § 57-1408 ...........................................................................................................4
Neb. Rev. Stat. § 75-136 .............................................................................................................4
Neb. Rev. Stat. § 75-136(2) .........................................................................................................3
Neb. Rev. Stat. § 84-312.02....................................................................................................... 36
Neb. Rev. Stat. § 84-912.02.........................................................................................................2
Neb. Rev. Stat. § 84-914 (1) ...................................................................................................... 10
Neb. Rev. Stat. § 84-914(3) ................................................................................................... 2, 10
Neb. Rev. Stat. §§ 57-1403(2), (4)...............................................................................................1
Neb. Rev. Stat.§ 57-1402(1) ........................................................................................................1
Neb. Rev. Stat.§ 57-1405 ............................................................................................................4
US Const. amend. V § 1 ..............................................................................................................2
US Const. amend. XIV ................................................................................................................2
Rules
291 Neb. Admin. Code 1 § 015.01 ........................................................................................ 2, 37
291 Neb. Admin. Code 9, § 023.06 ....................................................................................... 2, 37
291 Neb. Admin. Code 9, § 023.07B3 ....................................................................................... 20
Other Authorities
Black’s Law Dictionary (10th ed. 2014) .................................................................................... 17
Merriam-Webster Dictionary .................................................................................................... 17
The Public Trust Doctrine: Could a Public Trust Declaration for Wildlife Be Next? (2006)
vol. 2006, No. 9, Cal. Envtl. L. Rptr. 1 ...................................................................................... 33
iv
Walter Wheeler Cook, “Substance” and “Procedure” in the Conflict of Laws,
42 YALE L.J. 333, 335-36 (1933) ............................................................................................. 31
v
Jurisdictional Basis
The Sierra Club, Nebraska Chapter (the “Sierra Club”) hereby adopts the jurisdictional
statement contained in the Appellant Landowners’ Opening Brief. Furthermore, the Sierra Club
has standing to raise claims in this case by virtue of being granted formal intervenor status by the
Nebraska Public Service Commission (the “Commission”) pursuant to its March 31, 2017 Order
Landowners’ Opening Brief, with the following additions: In its order granting the Sierra Club
formal intervenor status, the Commission lumped the Sierra Club, the Bold Alliance, two other
organizations and 36 individuals under the category of “natural resources intervenors”, limited
them to one witness (later expanded to two witnesses) and limited the issues they could address.
Sierra Club, along with Bold and other formal intervenors filed a series of objections to this
ruling, including continuing objections during the hearing August 7-10, 2017.
Sierra Club offered written evidence pointing out discrepancies and errors in
witnesses, changing several numbers related to natural resources impacts on its application and
Propositions of Law
1. The Commission erred in approval of the Mainline Alternative Route for
(“KXL”) in that TransCanada failed to meet its burden of proof. (Neb. Rev. Stat. § 27-401
(Reissue 1989); Neb. Rev. Stat.§ 57-1402(1); Neb. Rev. Stat. §§ 57-1403(2), (4); Neb. Rev. Stat.
1
§ 57-1407; Neb. Rev. Stat. §§ 57-1407(2), (4); Neb. Rev. Stat. § 84-914(3); Application of Red
Carpet Limousine Serv., Inc., 221 Neb. 340, 344 (1985); State v. Wood, supra; State v. Schrein,
supra. In re Application of Renzenberger, 225 Neb. 30, 402 N.W.2d 294 (1987)).
2. The Commission erred in approving the KXL Mainline Alternative Route in that
it was not in the public interest with respect to economic and social impacts of the KXL project.
(Neb. Rev. Stat. § 57-1407(4); In re Application of Northwestern Bell Tel. Co., 218 Neb. 563,
357 N.W.2d 443 (1984); In re Application of GCC License Corp., 264 Neb. 167, 175, 647
N.W.2d 45, 52 (2002); Wells Fargo Armored Serv. Corp of Neb. v. Bankers Dispatch Corp, 186
3. The Commission erred in approving the KXL Mainline Alternative Route in that
it was not in the public interest with respect to consideration of alternative utility corridors.
(Neb. Rev. Stat. 57-1407(4); National Association for the Advancement of Colored People v.
Federal Power Commission, 425 US. 662, 669 (1976); In re Application of Northwestern Bell
4. The Commission erred in approving the KXL Mainline Alternative Route in that
it was not in the public interest with respect to irreversible impacts on Nebraska’s natural
resources. (MOPSA Neb. Rev. Stat. 57-1407(4); In re Application of Northwestern Bell Tel. Co.,
5. The Commission failed to provide Appellee Sierra Club with fundamental rights
under the due process clauses of the U.S. and Nebraska Constitutions. (US Const. amend. V § 1;
US Const. amend. XIV; NE Const. art. 1 § 3; NE Const. art. IV § 20; 291 Neb. Admin. Code 1 §
015.01C; 291 Neb. Admin. Code 9, § 023.06; Neb. Rev. Stat. § 84-912.02; Neb. Rev. Stat. § 57-
1408(2); Hurtado v. California, 110 U.S. 516, 527 (1884); Mathews v. Eldridge, 424 U.S. 319,
2
335 (1976); Hass v. Neth, 265 Neb. 321, 326, 657 N.W.2d 11, 19 (2003); Kerry v. Din, 135 S.
Ct. 2128, 2132 (2015); Douglas Cty. Welfare Admin. v. Parks, 284 N.W.2d 10, 11-12, 204 Neb.
570, 572 (1979); Thompson v. Heineman, 289 Neb. 798, 815, 857 N.W.2d 731, 747 (2015); State
v. Patricia B. (In re Levanta S.), 295 Neb. 151, 165, 887 N.W.2d 502, 512 (2016))
6. The Commission violated the fiduciary duties it owed to the citizens of Nebraska
to protect water resources as required by the public trust doctrine by conducting the evidentiary
examination of the effect of the KXL project on Nebraska’s water resources. (NE Const. art. 15
§§ 4, 5; Neb. Rev. St. §§ 46-701, 46-702; Nebraska Mid-State Reclamation Dist. v. Hall County,
152 Neb. 410, 436 (1950); Center for Biological Diversity, Inc. v. FPL Group, Inc., 166 Cal.
App. 4th 1349 (2008); Block v. Lincoln Telephone and Telegraph Company, 170 Neb. 531, 540,
Statement of Facts
The Sierra Club adopts the statement of facts contained in the Appellant Landowners’
Opening Brief.
Standard of Review
Under Neb. Rev. Stat. § 75-136(2), an appellate court reviews a Commission order de
novo on the record. In re Application No. B-1829, 293 Neb. 485, 488 (2016).
In a de novo on the record review, the appellate court reappraises the evidence as
presented by the record and reaches its own independent conclusion concerning the matter at
issue. Id.
3
In Telrite Corp. v. Nebraska Pub. Serv. Comm., 288 Neb. 866, 852 N.W.2d 910 (2014),
the Nebraska Supreme Court addressed whether the Court was required to defer to the
arbitrariness or any abuse of discretion by the Commission. This is no longer the case. Now,
this Court must reappraise the evidence on the record and reach an independent conclusion.
Argument
This is a very simple case. Although the Transcript contains more than 6,000 pages of
documents, and the testimony before the Nebraska Public Service Commission adds more than
1,000 pages to the record, this case boils down to three questions: 1) Did TransCanada meet its
burden of proof? 2) Is the proposed pipeline route in the public interest? and 3) Did the
Commission proceedings meet the standards of due process for the participants? The answer to
denied.
The Sierra Club generally supports the propositions put forward by the Landowners in
their opening Appellants’ brief. In particular, the Sierra Club supports the following
propositions: 1) The Commission lacked jurisdiction to hear this matter since the provisions of
Neb. Rev. Stat. § 57-1405 and § 57-1408 were not fulfilled; and 2) The Commission lacked
4
Since Landowners have eloquently and persuasively put forth these propositions, Sierra
Club will only address issues Landowners have raised to the extent there are additional facts or
Neb. Rev. Stat. 57-1407(4) states: “The pipeline carrier shall have the burden to
establish that the proposed route would serve the public interest.” (emphasis supplied).
However, the Commission made no finding that TransCanada had met its burden of proof for the
Mainline Alternative. The Sierra Club submits that the failure to make this finding was no
accident, that it was impossible to make such a finding due to the factors described in the
following paragraphs, particularly: TransCanada had not applied for approval of the Mainline
Alternative, and there was an utter failure to meet its burden of proof for any route.
application for something the applicant did not seek. However, in this case not only did the
Commission approve the Mainline Alternative route despite the fact that TransCanada did not
seek approval of that route, but this error was compounded by additional factors: TransCanada
actively opposed the Mainline Alternative while simultaneously failing to provide evidence that
would sustain their burden of proof for any route. This error was magnified by significant
evidence opposing the application, including unrebutted evidence of irreversible and irretrievable
It would take an algorithm to calculate the number of references to the Preferred Route in
the more than 7,000 pages that constitute the record of this case. However, it is undisputed that
5
TransCanada sought approval of its Preferred Route and the overwhelming body of evidence and
It is a logical impossibility for an applicant to meet the burden of proof for something it
did not seek. The issue at hand is not the abstract question of pipelines in general or a general
grant of authority for a pipeline company to operate in the State of Nebraska. It is an application
for a particular route. The focus of TransCanada’s Application was on its Preferred Route and
their presentation of evidence was based on the proposition that the Preferred Route was superior
TransCanada’s application, at section 2.1.3, set forth a list of reasons for why they did not
The only witness who provided testimony that could even remotely be construed as
favoring TransCanada’s Mainline Alternative over the Preferred Route was Sierra Club’s own
witness, Dr. Thomas Hayes, and his testimony was actually a harsh indictment of biases and
recommendation of approval. (T2378:1-31, T23801-4). Indeed, Dr. Hayes’s conclusion was that
the permit application should be denied, not support for the Mainline Alternative. (T2388:23-28).
TransCanada responded to Dr. Hayes’s testimony by changing the numbers in Table 2-1, offered
6
testimony by Dr. Jon Schmidt contradicting his earlier testimony, and filed a 300-page
amendment to its application intended to rebut Dr. Hayes. (T2012 to T2305). Although we will
later discuss issues with Schmidt’s credibility, the fact that he devoted three pages of testimony
to reasons the Mainline Alternative was inferior to the Preferred Route is explicit evidence that
TransCanada did not support the Mainline Alternative Route. (T2018:129 to T 2022:225). Given
the fact that TransCanada opposed the Mainline Alternative Route and there was no evidence
introduced in support of it, it is nearly impossible to conclude that TransCanada met its burden of
proof of demonstrating that the Mainline Alternative Route was in the public interest.
b. TransCanada did not meet its burden of proof for any route.
TransCanada failed to present evidence on elements necessary to meet its burden of proof
on specific elements of Neb. Rev. Stat. § 57-1407(4). Those elements will be discussed in detail
Given that TransCanada did not support the Mainline Alternative and provided
Route was clearly in error. Since TransCanada failed to demonstrate knowledge and
understanding of its own application, failed to present credible evidence and failed to present
evidence on necessary statutory elements, it is clear that TransCanada failed to meet its burden of
i. Evidentiary standards
regulatory body for common carriers created by the Nebraska Constitution. Under Article IV,
Section 20, the Nebraska Legislature can restrict the Commission’s plenary powers over
common carriers through specific legislation. See State ex. rel. Spire v. Northwestern Bell Tel.
7
Co., 233 Neb. 262, 445 N.W.2d 284 (1989).). Article IV, Section 20 (“These shall be a Public
Service Commission …the powers and duties of such Commission shall include the regulation of
rates, service and general control of common carriers as the Legislature may provide by law…”).
The Nebraska Legislature has constrained the Commission’s powers by enacting the
Major Oil Pipeline Siting Act (“MOPSA”), Neb. Rev. Stat. 57-1401 through 57-1413. Under
MOPSA, the pipeline carrier has the burden to establish that the proposed route of a major oil
pipe would serve the public interest. Neb. Rev. Stat. 57-1407.
In determining whether the applicant has met its burden, the Commission is required to
evaluate a number of pieces of evidence, including: evidence of the impact due to intrusion upon
natural resources; evidence regarding the irreversible and irretrievable commitment of land areas
and connected natural resources and the depletion of beneficial uses of nature resources;
evidence of methods to minimize the potential impacts of the major oil pipeline to natural
resources; and evidence regarding the economic and social impacts of the major oil pipeline.
The key word here is “evidence.” In order to find that TransCanada has met its burden of
proof in establishing that the pipeline route is in the public interest, the Commission must be able
to point to specific factual evidence the applicant presented during the course of the
administrative hearing.
TransCanada failed to meet its burden of proof for any route in this case, and thus the
Commission should have denied its application in its entirety. See, e.g, Application of Red
Carpet Limousine Serv., Inc., 221 Neb. 340, 344 (1985) (finding applicant before the
Commission failed to meet its burden of proof necessary to establish public convenience and
necessity). TransCanada’s Application is largely vague and generic, and much of what it
8
presented in the hearing was not factual evidence at all; rather, the direct testimony of
TransCanada’s witnesses primarily consisted of recitations that the witness was responsible for
Nebraska case law clearly establishes that the record on its face must reflect an adequate
basis from which the Commission can base its decision. See In re Application of Northwestern
Bell Tel. Co., 218 Neb. 563, 357 N.W.2d 443 (1984).
An administrative agency must also have relevant evidence, that is, evidence having any
tendency to make the existence of any fact that is of consequence to the determination of the
action more probable or less probable than it would be without the evidence, to support its
decision. Neb.Rev.Stat. § 27-401 (Reissue 1989); State v. Wood, 245 Neb. 63, 511 N.W.2d 90
(1994); State v. Schrein, 244 Neb. 136, 504 N.W.2d 827 (1993); Brown v. Farmers Mut. Ins.
Relevant evidence is evidence having any tendency to make the existence of any fact that
is of consequence to the determination of the action more probable or less probable than it would
be without the evidence. Neb.Rev.Stat. § 27-401 (Reissue 1989); State v. Wood, supra; State v.
Schrein, supra.. In the case of In re Application of Renzenberger, 225 Neb. 30, 402 N.W.2d 294
(1987), this Court set aside a Commission order because the Commission had relied on witnesses
who knew nothing about the question before the Commission, and who failed to offer any
evidence that would support its finding. In re Application of Renzenberger stands for the
proposition that an agency’s decision is considered arbitrary when it is against the weight of
evidence.
The Commission’s Rule 016.01 on probative evidence states as follows: “Evidence which
is admissible in civil actions under the Revised Statutes of Nebraska will be admissible before
9
the Commission. While the Commission will not be bound to follow the technical rules of
evidence, the record will be supported by evidence which possesses probative value commonly
related to the kind of evidence an agency can consider when making a determination. Certain
portions of the APA apply to the Commission by definition. "As used in sections 84-901 to 84-
916: (1) Agency shall mean each board, Commission, department, officer, division, or other
administrative office or unit of the state government authorized by law to make rules...." Neb.
Rev Stat. § 84-901 (Reissue 1981). In that regard, Neb. Rev. Stat. Section 84-914 (1) states that
an agency may admit and give probative effect to evidence which possesses probative value
commonly accepted by reasonably prudent persons in the conduct of their affairs, and must
exclude incompetent, irrelevant, immaterial and unduly repetitive evidence. Neb. Rev. Stat. § 84-
914(3) states that all evidence including records and documents in the procession of the agency
of which it desires to avail itself shall be offered and made a part of the record in the case.
Agencies must base their decisions on facts which would lead a reasonable and honest
person to the same conclusion. A decision is arbitrary when it is made in disregard of the facts or
circumstances and without some basis which would lead a reasonable person to the same
conclusion. In re Application A-16642, 236 Neb. 671, 707, 463 N.W.2d 591, 614 (1990).
Here, TransCanada failed to present sufficient probative evidence to meet its burden of
proof for any route. Instead, it made numerous assertions that lacked factual support. The
Commission was not provided with sufficient evidence supported by relevant and admissible
10
ii. TransCanada witnesses failed to demonstrate knowledge and
understanding of its own application
It is axiomatic that an applicant should understand and have knowledge of the application
it seeks to have approved. However, Tony Palmer led a parade of TransCanada witnesses who
repeatedly indicated they did not know the answers to basic questions about sections of the
Application, as well as repeated responses passing the buck to someone else. On more than fifty
occasions in the proceeding, TransCanada witnesses responded with some variation of “I can’t
answer that” or “I don’t know” when questioned about sections of the Application the witness
supposedly prepared. See generally testimony of TransCanada witnesses. (60 to 683). At least
four witnesses referred to Meera Kothari as the person who could answer questions about
sections of the Application, but Kothari repeatedly responded that she was not the person to
answer those questions, meaning significant details of the Application were never addressed
during the course of the hearing. (656 to 658). The following is a sampling of TransCanada
Q. And you state that you develop reclamation procedures in conjunction with University
of Nebraska scientists, correct?
A. Yes.
Q. And not one of them is here to testify in support of your application, correct?
A. Correct.
(348:15-24).
Q. Perhaps you encounter something and, before you realize what you have encountered,
the damage has been done. Then how would that be reclaimed?
A. I think that would be a question for Ms. Salisbury to talk in detail about cultural
resources management.
11
A. Yes, I believe so. [Ms. Salisbury did not speak to reclamation issues.]
Q. And what measures has TransCanada taken to identify traditional medicinal plants that
would be impacted by pipeline construction and operation?
(385:12-25).
Q. Okay. Were state threatened and endangered species considered in this process?
A. Yes.
Q. Isn't it a fact that there's 14 state threatened and endangered species that are being
considered in this application?
(658:1-8).
A. Dr. Schmidt.
Q. Okay. So you don't know anything about the factual validity of any of these
statements?
(676:8-25).
Q. Okay. And is there anything in those three sections that you're here to testify about
that you're aware of that deals with irrigation interruption due to excessive electrical
demand?
A. No.
12
Q. And is there anything that you're aware of in those sections of the report to indicate a
methodology for determining crop yield losses?
A. No.
Q. And is there anything in those sections that you're aware of that deals with the
construction mitigation reclamation process?
A. No.
(656: 6-25).
the application demonstrates a failure to meet its burden of proof for any proposed pipeline route.
inaccurate testimony. For example, the case of County of Sioux v. State Board of Equalization,
185 Neb. 741, 178 N.W.2d 754 (1970), involved an appeal from the action of the State Board of
He was asked if the basic data upon which he based his judgment decisions was
available. He stated that the decisions involved a tremendous amount of material, and that
he did not have the material with him. There would be absolutely no way in this record to
determine the basis on which those decisions were made.
Id.
The Court concluded: “Clearly, none of this evidence can be used to sustain the action of
the state board. To do so would be a clear violation of the Nebraska Administrative Procedures
Act, section 84-914(3).” Id. Similarly, to the extent the Commission relied on inaccurate or
unsupported statements from TransCanada, that reliance would also violate the rules cited above.
The testimony of Dr. Jon Schmidt is especially significant because he was the witness
charged with environmental analysis regarding the proposed route and proposed route
13
alternatives, which are central aspects of this process. Schmidt’s testimony contains numerous
errors, fails to provide necessary documentation and is misleading in several aspects. Although
TransCanada complained in its reply brief that describing the inaccuracies and inconsistencies of
Schmidt’s testimony was a personal attack, there is nothing personal about this. It is merely an
accounting of the evidence. The following is a list of errors and misleading testimony from
Schmidt:
(1) When confronted with testimony from Sierra Club’s expert witness Dr. Thomas
Hayes regarding data in Table 2-1 of the Application showing more miles of erodible soils on the
Preferred route than on the Mainline Alternative, Schmidt asserted that the chart is “incomplete”.
“Incomplete” implies there were numbers missing from the document, when in fact all the cells
in the table were complete. Use of the word “incomplete” in this context is both incorrect and
(2) Schmidt’s explanation regarding the inaccurate information in Table 2-1 was that
the information was only partially downloaded. There is no documentation for this statement,
and no foundation to support it. There is likewise no documentation of the source of the
information used to “correct” the data, so neither the Commission nor the Intervenors had any
method of determining whether the new data in Table 2-1 was correct. (T2013:24-25).
power lines associated with the project will be added within the migratory corridor [within
there will be approximately 70 miles of new transmission lines. (T20151). Schmidt later
14
contradicted himself in his cross-examination testimony, where he agreed that there would
(4) Schmidt claimed that “the whooping crane merely flies through Nebraska during its
migratory journey”. (2014:57). This was rebutted by the testimony of Dr. Paul Johnsgard.
(1002:12-15).
(5) During cross-examination, Schmidt asserted that the Northern High Plains Aquifer
extended all the way to Texas, which is erroneous, since it is primarily in Nebraska. (574:8-25).
(6) Schmidt asserted that the Preferred Route is the result of years of effort by many
people and agencies. (T 2022: 223, 224). Yet there were errors which were pointed out by the
Sierra Club’s witnesses that required major corrections, as noted above. This hardly sounds like
the work of an applicant which has considered all the necessary ramifications of its proposed
routes.
(7) Most significantly, Schmidt changed his testimony. In February 13, 2017,
Schmidt swore that the facts set out in sections 2.1, 3, 13, 16, 17, and 18 were true and accurate
(T 452:24-30). On July 10, 2017, Schmidt signed an 18-page sworn statement accompanied by a
300-page amendment to the Application making changes to the facts he swore were true in
February. (T2012 to 2305). The fact that a key witness changed significant aspects of the
application late in the process is a reflection on the competence of the applicant and the accuracy
of its application.
Table 2-1 (T68-71) is a crucial element of TransCanada’s Application. Table 2-1 is titled
“Comparison of the Preferred Route to the Two Proposed Alternatives” and is vital to the
Application since it provides numerical comparisons between its Preferred Route and its two
alternatives, in an apparent effort to show the alternatives were inferior to its preferred choice.
15
However, TransCanada erred in preparing Table 2-1 since it shows aspects of the
Preferred Route have greater negative resources impacts than the Mainline Alternative.
Specifically, original Table 2-1 showed 57.4 miles of highly water erodible soils on the Preferred
Route compared to 33.0 miles on the Mainline Alternative and 47.1 miles of highly wind
erodible soils on the Preferred Route to 43.5 miles on the Mainline Alternative. (T68). After
Sierra Club’s witness Dr. Thomas Hayes pointed out these discrepancies in his testimony
(T2377:30 to 2380:4), TransCanada changed Table 2-1 to indicate there were 61.2 miles of
highly water erodible soils and 48.9 miles of highly wind erodible soils on the Mainline
Alternative. (T2030). By themselves, these changes may be minor, but the fact that TransCanada
chose to pretend they weren’t correcting errors, filed an 18-page rebuttal from Dr. Schmidt,
failed to provide foundation or documentation for the changes, and filed a 300-page amendment
to the application, raises serious questions about the veracity of either version of Table 2-1.
The fact that Schmidt testified under oath to the accuracy of the original Table 2-1 and
then later testified under oath that the changed documents were also true leads to the conclusion
that the Commission should have disregarded his testimony, including attachments, in its
entirety. “This court has held that when a party, acting as a witness, changes his testimony
without offering a reasonable explanation, the altered testimony is discredited and disregarded as
a matter of law.” Ketteler v. Daniel, 251 Neb. 287, 295 (1996), citing State v. Osborn, 241 Neb.
424 (1992).
Schmidt could be viewed as a party since he prepared sections 2.1, 3, 13, 16, 17, and 18
of the Application as well as providing the changes to the Application described herein. If he is
not viewed as a party, but rather as an expert witness, the changed testimony reflects on his
credibility as a witness. The major inconsistencies and contradictions in his testimony described
16
herein further buttress the rationale that all his testimony should be disregarded, including the
exhibits attached to it. TransCanada repeatedly bragged about how it spent many years working
on its Application, yet was unable to get key details correct in its original Application and then
3. The Commission erred in finding the KXL Mainline Alternative Route is in the
public interest.
The Commission based its finding that the Mainline Alternative is in the public interest
by way of a convoluted analysis, using circular reasoning, which concluded it had the authority
to decide what was in the public interest because it didn’t understand the meaning of MOPSA.
However, apparently the Commission decided to determine what it felt was in the public interest
with no analysis as to whether the Applicant had met its burden of proof. This analysis largely
ignored the purposes and intent of MOPSA. This is the wrong analysis.
Nebraska law holds that in the absence of anything to the contrary, statutory language is
to be given its plain and ordinary meaning. In re Application of GCC License Corp., 264 Neb.
The plain and ordinary meaning of the term “public” means of, relating to, or affecting all
the people or the whole area of a nation or state. See Merriam-Webster Dictionary. The plain and
ordinary meaning of “public interest” means: “1. The general welfare of a populace considered
as warranting recognition and protection. 2. Something in which the public as a whole has a
stake; esp., an interest that justifies governmental regulation.” Black’s Law Dictionary (10th ed.
2014).
had met its burden of proving that the pipeline would be in the public interest, meaning
something that advances the welfare and well-being of the general populace of Nebraska. Better
17
understanding of the meaning of public interest in this case involves examining the purpose and
intent of MOPSA.
The Commission did correctly note the interpretation of public interest by the Nebraska
Supreme Court in Wells Fargo Armored Serv. Corp of Neb. v. Bankers Dispatch Corp, 186 Neb.
261 (1971), and articulated by the United States Supreme Court: “in order to give content and
meaning to the words ‘public interest’ it is necessary to look to the purposes for which the acts
were adopted.” National Association for the Advancement of Colored People v. Federal Power
Commission, 425 US. 662, 669 (1976). However, the Commission failed to appropriately
The Nebraska Legislature set forth the purposes of MOPSA in Neb. Rev. Stat. § 57-1402
(1) as follows:
(a) Ensure the welfare of Nebraskans, including protection of property rights, aesthetic
values and economic interests;
(b) Consider the lawful protection of Nebraska’s natural resources in determining the
location of routes of major oil pipelines within Nebraska;
(c) Ensure that a major oil pipeline in not constructed within Nebraska without receiving
the approval of the Commission under section 57-1408;
(d) Ensure that the location of routes for major oil pipelines is in compliance with
Nebraska law; and
(e) Ensure that a coordinated and efficient method for the authorization of such
construction is provided.”
Although the Commission recited the provisions of 57-1402 (1), it made no evaluation of
whether the purposes of the statute were being met. It also made no findings related to the
18
The first two provisions of § 57-1402(1) deal with substantive matters, the latter three
relate to procedure. Based on the authority cited above, TransCanada needed to provide evidence
that the application was consistent with the purposes of MOPSA in order to meet its burden of
proof that the proposed route is in the public interest. This they did not do.
TransCanada offered no evidence to show that its proposed pipeline would protect the
property rights of Nebraskans. It therefore failed to meet its burden pursuant to Neb. Rev. Stat. §
57-1402(1)(a). There could hardly be a more egregious violation of property rights than a foreign
for-profit corporation seeking eminent domain to forcibly acquire perpetual easements from
Nebraska farm families for a pipeline that it has no intention to ever remove from the ground.
values as set forth in the purposes of the statute. A pipeline that rips up a fifty-foot wide swath of
the earth for 275 miles through the heart of Nebraska, forever destroys native prairies, and leaves
grass and croplands with years to recover, clearly violates fundamental aesthetic values.
In order to determine public interest pursuant to MOPSA, the legislative intent and
history are also instructive. Reviewing the legislative findings of Neb. Rev. Stat.§ 57-1403 can
lead to only one conclusion: the predominant concern of the Legislature in enacting MOPSA was
protecting the land and natural resources of the state. Water is set out as a matter of particular
importance in the siting process for many reasons, including its increasing value in the future and
its vital importance to Nebraska’s agricultural economy. Three of the four findings deal with
these issues and yet the Commission made no reference to them, nor to any evidence in relation
to them.
19
The legislative findings state: “(1) Nebraska has the authority as a sovereign state to
protect its land and natural resources for economic and aesthetic purposes for the benefit of its
residents and future generations by regulation through approval or disapproval of major oil
pipeline siting and the location of routes, so long as it does not regulate in the area of safety as to
the design, installation, inspection, emergency plans and procedures, testing, construction,
extension, operation, replacement, and maintenance of major oil pipelines and pipeline facilities;
(2) The water and other natural resources in Nebraska will become increasingly valuable, both
economically and strategically, as the demand for agricultural products for both food and fuel
increases; (3) The construction of major oil pipelines in Nebraska is in the public interest of
Nebraska and the nation to meet the increasing need for energy; and (4) The irrigation economy
of Nebraska which relies on quality water adds over one billion dollars annually to net farm
income and increases the gross state product by three billion dollars annually.” Neb. Rev. Stat. §
57-1403.
The overwhelming majority of the testimony and comments in the legislative history
were about protection of Nebraska’s natural resources. Water was cited over and over again by
witnesses who testified in support of the need to establish a siting process. See Legislative
The Commission erroneously cited only Neb. Rev. Stat. § 57-1403(3) as a basis for
approving the Mainline Alternative Route. This is improper use of legislative findings, for
several reasons. First, this finding is a general statement, not directly related to approval of the
route sought through this application. Second, the Commission failed to consider the other three
elements of the findings in Neb. Rev. Stat. § 57-1403, as set forth above. Conversely, if one
20
construes the language of 57-1403(3) as a basis for approving a specific project, that would
The lack of evidence concerning aquifers is especially significant. There is nothing in the
Application regarding aquifers and no witness testified about the relationship between the
proposed route and aquifers. Since MOPSA has specific findings regarding the value of water
(Neb. Rev. Stat. § 57-1403(2)) and its benefit to the agricultural economy in Nebraska (Neb.
Rev. Stat. section 57-1403(4)), this omission provides further indication that TransCanada failed
MOPSA itself has seven references to “natural resources” in its text, including three
references in a single subdivision. Therefore, the Commission erred when it failed to highlight
the importance of natural resources in its consideration of the public interest and evaluation of
the evidence. In making its determination, the Commission appeared to draw the conclusion that
economic factors outweighed other considerations, which is contrary to both the intent and
The Commission stated that its conclusions were guided by Neb. Rev. Stat. § 57-1407(4)
The pipeline carrier shall have the burden to establish that the proposed route would serve
the public interest. In determining whether the pipeline has met its burden, the
Commission must evaluate:
(a) Whether the pipeline carrier has demonstrated compliance with all applicable state
statutes, rules, and regulations and local ordinances;
(b) Evidence of the impact due to intrusion upon natural resources and not due to safety
of the proposed route of the major oil pipeline to the natural resources of Nebraska,
including evidence regarding the irreversible and irretrievable commitments of land areas
and connected natural resources and the depletion of beneficial uses of the natural
resources;
21
(c) Evidence of methods to minimize or mitigate the potential impacts of the major oil
pipeline to natural resources;
(d) Evidence regarding the economic and social impacts of the major oil pipeline;
(e) Whether any other utility corridor exists that could feasibly and beneficially be used
for the route of the major oil pipeline;
(f) The impact of the major oil pipeline on the orderly development of the area around the
proposed route of the major oil pipeline;
(g) The reports of the agencies filed pursuant to subsection (3) of this section; and
(h) The views of the governing bodies of the counties and municipalities in the area
around the proposed route of the major oil pipeline.
The Commission discussed each of these provisions but made no findings that
TransCanada had met its burden of proof for any of them. It is significant that the Commission’s
order offers very little attention to the Mainline Alternative in its analysis, so that its conclusion
supporting the Mainline Alternative is a surprise ending. However, this is not a novel or a movie;
it is an administrative proceeding which is supposed to derive conclusions based on law and fact.
Given the fact that TransCanada did not support the Mainline Alternative, there was almost no
evidence supporting any of the statutory categories concerning the Mainline Alternative. Since
there was significant evidence in opposition from intervenors, it is impossible to conclude that
TransCanada met its burden of proof that the public interest is served by the approval of the
Mainline Alternative. Therefore, the Commission erred when it found that the Mainline
We will briefly discuss the factors of § 57-1407(4) set out above with more detailed
discussion of the following components: irreversible and irretrievable commitments of land areas
22
c. TransCanada’s proposed routes pose potential irreversible impacts to
Nebraska’s natural resources.
Neb. Rev. Stat. 57-1407(4)(b) provides that “evidence regarding the irreversible and
irretrievable commitments of land areas and connected natural resources” is to be evaluated. See
routes during the proceeding. Because of serious questions about the credibility of whether to
rely on the numbers in Table 2-1 or amended Table 2-1, it is unclear the exact dimensions of the
was not seeking approval of the Mainline Alternative Route, there is an absence of evidence
commitments.
However, regardless of the route, it is irrefutable that a 36-inch tar sands pipeline such as
KXL would cause “irreversible and irretrievable commitment of land areas and connected
natural resources” in several ways, including: (a) cutting an 80-110 foot wide construction right-
of-way along the entire pipeline route, through sensitive areas including native grasslands; (b)
creating and maintaining a permanent 50 foot pipeline wide right of way, in which crews will
prevent anything from growing back; (c) converting high-quality forested wetlands to scrub-
shrub wetlands; and (d) heating the soil several feet around the pipeline.
Landowners presented evidence that they will be permanently prevented from using the
land in the pipeline right of way in many ways, including a negative impact on their ability to
grow crops, lack of restoration of native prairie grasses, and dangers of increased erosion. Art
23
Tanderup testified that because he engages no-till farming on the sandy soil, the roots of his
crops would be closer to the pipe and the heat from the pipeline would make it difficult for crops
to grow. (738:18-25, 739:1-23). He is particularly concerned about the impact of the heat on the
Ponca corn which has only recently been re-established in Nebraska and is viewed by the Ponca
Indians and many others as sacred. (756:21-25, 757:1-3). Diana Steskal had concerns about the
pipeline because she has sandy, porous soil on her property. (870:23-25). Rick Hammond
testified that corn production would be impacted. “And the productivity will definitely be
reduced.” (950:22-23)
Robert Allpress (whose property would still be crossed by the Mainline Alternative)
testified it will pass through uplands with a shale/clay base over impermeable hard shale, and
such soil has a high chance of sliding when saturated. (884:13-17). As Allpress explained,
“Within a mile of the proposed route, within – as close as 200 yards we have had significant hill
slides of up to an acre, and maybe a -- 500 cubic yards of soil has moved as much as 50 yards
down the hills.” (884:19-25). A hill slide could threaten natural plants and animals in the area
The landowners who testified uniformly stated that the pipeline would have irretrievable
or irreparable impacts. Allpress testified that he believed the pipeline would represent irreparable
damage to natural resources. (884:11-25). Robert Krutz responded to a question about irreparable
harm to natural resources as follows: “Yes. Because it's just like getting a cut on your arm or so.
You know, sometimes it can heal naturally. And then sometimes you have a scar. And with that
construction work, it may just end up leaving a scar of what I call no vegetation on the soil, just
sand and whatnot be left there that vegetation would have a hard, hard time growing back on
24
The permanence of these impacts is particularly significant since TransCanada witnesses
testified they have no plans to remove the pipeline after its useful life is over. Installing a
pipeline of this size, length, and magnitude in Nebraska soil represents an irreversible
commitment of land areas and would impact native grasses and wildlife as well as impacting
agricultural operations.
There was also expert testimony raising concerns about irreversible impacts. Dr. Thomas
Hayes testified that locating a pipeline in areas with porous, sandy soils increased the likelihood
heavy equipment in the construction process would cause compaction, which would significantly
decrease aeration, percolation and storage of water, drainage, root biomass, and plant
Because of this, “the pipeline may be an irreversible commitment of land and natural resources.”
(T 2383: 2-3).
Joseph Trungale, a specialist in hydrology with a focus on in-stream flows, testified that
“simply placing the pipeline with a shallow aquifer could alter flow paths which could result in
irreversible and irretrievable impacts on local springs.” (T2399:25-26). Moreover, the pipeline
trench may act as a conduit for groundwater migration and may act as a barrier to near-surface
flow in areas with shallow ground water. (T2399:16-17). “This could impact spring flows and
the fish and wildlife species that depend on the springs.” (T2399:18-19).
One can hardly consider a more “irreversible and irretrievable impact” than one which
creates the likelihood of threatening the continued existence of the endangered whooping crane.
Proposed transmission lines for pumping stations in areas where there have been documented
increased feeding and roosting activities by whooping cranes would create an “irreversible and
25
irretrievable impact”. Dr. Paul Johnsgard, one of the world’s experts on whooping cranes,
testified that he knows their migration patterns, that transmission lines are the major cause of
whooping crane mortality. (T2406 to T2408). Dr. Johnsgard testified that the proposed route
presents a threat to the continued existence of the endangered whooping crane. This is due to
proposed transmission lines in areas where telemetry data showed that whooping cranes rest and
feed, the locations where they are most vulnerable. (1000:16-25, 1001:1-7, 18-25) None of this
evidence was rebutted. TransCanada’s witness, Salisbury, admitted that the whooping crane was
culturally important to Native American tribes. (1135: 2-5). The Commission failed to consider
factors that have real potential to lead to the demise of the whooping crane, a cherished and
iconic species.
TransCanada relied on the U.S. Fish and Wildlife Service (“USFWS”) Biological
Opinion related to the whooping cranes. (T2033 to T2305) The Commission likewise relied on
that opinion. However, the Biological Opinion is suspect because it relies on data that is at least
8 years old. New telemetry data has been collected which provides more current and more
accurate information. (1041:10-16) Federal law appears to mandate a new consultation under
Section 7 of the Endangered Species Act, 16 U.S.C. § 1531 et seq., when new information
reveals effects of the action that may affect listed species or critical habitat in a manner or to an
extent not previously considered. 50 C.F.R. § 402.16. Updated telemetry data would be “new
information” which would require a new consultation, i.e., a new biological opinion. This leads
to the conclusion that it was error for the Commission to rely on an out of date opinion that does
Although Dr. Johnsgard conceded that the risk to any one whooping crane is relatively
small, the reality is that even a relatively small threat to an endangered species is still a threat.
26
The whooping crane was on the brink of extinction just a few years ago and major investments
of time, money and other resources were necessary to bring it back to its current population, but
Reduced impacts to threatened and endangered species was touted as a reason for the
Commission’s decision to approve the Mainline Alternative Route. However, the Mainline
Alternative Route still crosses more than 160 miles of the whooping crane migration path.
(T6195). The same risk factors still exist; including transmission lines for pumping stations in
areas where telemetry data indicates whooping cranes take off and land, the point where they are
most vulnerable to the greatest source of crane mortality, collision with power lines.
TransCanada failed to present any evidence that risks to cranes would be reduced or eliminated
on land areas and connected natural resources. Its approval of the Mainline Alternative was not
supported by the evidence. Since there is no finding that TransCanada met its burden of proof
with regard to protection of natural resources, the Commission’s finding that the Mainline
The Commission placed a great deal of reliance on economic impacts in its decision to
economist Dr. Goss and the “economic intervenors.” As previously noted, Landowners’ cross-
examination of Dr. Goss revealed serious questions about his methodology and findings that go
to the heart of his credibility as an expert. (311-314). In addition, Landowners’ economist Dr.
Michael O’Hara rebutted the testimony of Dr. Goss. (LO189). Even giving TransCanada and
27
“economic intervenors” witnesses the benefit of the doubt, any positive economic impact is for a
small number of people for a short period of time and will be far outweighed by negative impacts
over the long haul. There was no consideration of the costs to maintain and eventually remove
the pipeline long after the one-time payment to landowners and any tax revenues have
disappeared. The bottom line is there was no consideration of the interest of the people of the
resources, despite the fact there is explicit reference to economic impacts to natural resources in
three of the four subdivisions of Neb. Rev. Stat. § 57-1403. (330:19-22). Although the
Commission recognized the benefit of tourism related to the Sandhill cranes and endangered
whooping cranes (T6182), it failed to factor in the annual, long-term benefit of such tourism and
the potential damage a pipeline and its infrastructure could wreak on this industry.
The Commission also erred in its handling of social issues. While the Sierra Club
strongly supports environmental justice and is pleased that the Commission considered the
potential impacts to specific Native American tribes, the social impacts of a pipeline route like
this extend far beyond the parameters of the two tribes granted intervenor status. The pipeline
has had a huge impact on many aspects of society in Nebraska. Many people along the pipeline
route talk about others in their community who no longer speak to them, and of frayed social
relationships among friends and neighbors. There is also the emotional strain of years spent
fighting a foreign pipeline company out of a sense of loyalty to country, to their pioneer heritage,
and to their children and future generations. This strain takes its toll on individuals and is
manifested in the community in which they live. The importance of this issue to a much wider
28
proposed pipeline at hearings before the State Department, the Legislature, the Nebraska
Department of Environmental Quality, and in this process. A special session of the Legislature
was called to address siting and routing of major oil pipelines, which led to the legislation which
led to the creation of MOPSA. Rather than acknowledge and address the interests of the public at
large, the Commission chose a narrow, parochial view. The failure to permit evidence of wider
social impacts by the proposed route and the failure to recognize these social impacts resulted in
a lack of evidence supporting a finding that this section fulfills the public interest.
Neb. Rev. Stat. § 57-1407(4) requires consideration of “[w]hether any other utility
corridor exists that could feasibly and beneficially be used for the route of the major oil
pipeline.” This is the primary section which the Commission used to base its decision to approve
application and evidence did not support the Mainline Alternative Route. There was no evidence
submitted supporting approval of the Mainline Alternative. Both Dr. Hayes and Joseph Trungale
testified that it was their opinion that a route that followed the Keystone I route would
significantly reduce the negative environmental impacts of the pipeline route. (Hayes T 2388:29,
2389:1-8; Trungale T2400:19-29, 2401:1-4). TransCanada chose not to submit any evidence
regarding the Keystone I utility corridor although they could have done so. Since the evidence
TransCanada presented did not support the Mainline Alternative, they failed to meet their burden
29
4. The Commission failed to provide the Sierra Club with fundamental due process rights
required under the Constitutions of the United States and the State of Nebraska.
The Commission failed to provide intervenors, including the Sierra Club, with
fundamental due process rights required under the U.S. and Nebraska Constitutions. Due process
of law is a core principle of our legal system, and its historical roots in the Magna Carta have
“[t]he Due Process Clause has its origin in the Magna Carta. As originally drafted, the
Great Charter provided that “[n]o freeman shall be taken, or imprisoned, or be disseised
of his freehold, or liberties, or free customs, or be outlawed, or exiled, or any otherwise
destroyed; nor will we not pass upon him, nor condemn him, but by lawful judgment of
his peers, or by the law of the land.”
Kerry v. Din, 135 S. Ct. 2128, 2132 (2015) (quoting Magna Carta, ch. 29, in 1 E. Coke, The
Second Part of the Institutes of the Laws of England 45 (1797)). Early decisions by the Supreme
Court explored the meaning of due process – procedural and substantive. “The principles, then,
upon which the process is based, are to determine whether it is ‘due process’ or not, and not any
considerations of mere form. Administrative and remedial process may be changed from time to
time, but only with due regard to the landmarks established for the protection of the citizen.”
Protection of citizens is crucial, as noted by the Supreme Court in Hurtado. The manner
in which the Commission’s hearing on TransCanada’s application for approval of its proposed
route for KXL through Nebraska was conducted failed to protect the citizens of this state. The
intervenors such as the Sierra Club with due process required by both the U.S. and Nebraska
Constitutions.
30
a. Due Process Standards.
Courts have viewed the due process clause as embracing those fundamental rights that
are “implicit in the concept of ordered liberty.” Palko v. State of Connecticut, 302 U.S. 319, 324
(1937). The due process requirements of Nebraska’s Constitution are similar to those in the U.S.
Constitution. The Fifth Amendment to the U.S. Constitution provides that “[n]o person shall ...
be deprived of life, liberty, or property, without due process of law ...” The Fourteenth
Amendment to the U.S. Constitution explicitly imposes this requirement on states. While
conceptually distinct, the categories of substantive and procedural due process are, in practice,
closely intertwined. Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541, 559 (1949) (Rutledge,
J., dissenting) (“Suffice it to say that actually in many situations procedure and substance are so
interwoven that rational separation becomes well-nigh impossible.”); Walter Wheeler Cook,
“Substance” and “Procedure” in the Conflict of Laws, 42 YALE L.J. 333, 335-36 (1933)
(“[O]ur problem turns out to be not to discover the location of a pre-existing ‘line’ [between
In practice, an examination of due process rights involves a balancing act, where courts
review: (1) “the private interest that will be affected by the official action”; (2) “the risk of an
erroneous deprivation of such interest through the procedures used, and the probable value, if
any, of additional or substitute procedural safeguards”; and (3) “the Government’s interest,
including the function involved and the fiscal and administrative burdens that the additional or
substitute procedural requirement would entail.” Mathews v. Eldridge, 424 U.S. 319, 335 (1976);
see also Hamdi v. Rumsfeld, 542 U.S. 507, 528-29 (2004) (“The ordinary mechanism that we use
… for determining the procedures that are necessary to ensure that a citizen is not ‘deprived of
31
life, liberty, or property, without due process of law,’ is the test that we articulated in Mathews v.
Eldridge.”).
As an initial matter, the Commission has clearly recognized Sierra Club’s interests
affected by the Commission’s decision. While the property interests of the landowners in this
case are undisputed, the Sierra Club has a distinct private interest affected by the Commission’s
decision. In its order granting intervenor status to the Sierra Club, the Commission designating
the Sierra Club as a “Natural Resources Petitioner,” conceded that MOPSA required
consideration of the impact of the “intrusion of the pipeline upon natural resources of Nebraska”,
along with “evidence regarding the irreversible and irretrievable commitments of land areas and
connected natural resources and the depletion of beneficial uses of the natural resources”, and
that the Sierra Club, as a “Natural Resources Petitioner” had a cognizable interest (T706).
However, in this case, the core standards set forth in Mathews v. Eldridge warrant
reversal of the Commission’s order approving the alternative route for KXL.
The conduct of the Commission in these proceedings, and the standard it must adhere to
in its decision-making process is a significant thread in the overall question of whether due
process was afforded the intervenors. Because Nebraska has adopted a public trust doctrine
approach to protection of water resources, the Commission must adhere to a higher, fiduciary
standard when making decisions that affect the State’s water resources. It failed to do so. The
effect of the proposed pipeline on Nebraska’s natural resources cannot be understated given its
route through the State’s water system. This Court has recognized the importance of water as a
natural want “absolutely necessary to human existence.” Nebraska Mid-State Reclamation Dist.
v. Hall County, 152 Neb. 410, 436 (1950). This reflects the provisions of Nebraska’s
32
Constitution, which states that “[t]he necessity of water for domestic use and for irrigation
purposes in the State of Nebraska is hereby declared to be a natural want.” Neb. Const. Art. 15, §
4. Furthermore, “[t]he use of the water of every natural stream within the State of Nebraska is
hereby dedicated to the people of the state for beneficial purposes …” Neb. Const. Art. 15, § 5.
This Constitutional emphasis on the need for protection of water for the “people of the
state” is also reflected in the provisions of the Nebraska Ground Water Management and
Protection Act, Neb. Rev. St. § 46-701, et seq. In declaring its intent, the Act explicitly states that
“[t]he Legislature finds that ownership of water is held by the state for the benefit of its cit izens,
that ground water is one of the most valuable natural resources in the state, and that an adequate
supply of ground water is essential to the general welfare of the citizens of this state and to the
present and future development of agriculture in the state.” Neb. Rev. St. § 46-702.
By its Constitution and the provisions of the Ground Water Management and Protection
Act, Nebraska has embraced the principles of the public trust doctrine with respect to its water
resources. The public trust doctrine holds that certain natural resources belong to all and cannot
be privately owned or controlled because of their intrinsic value to each individual and society.
“[T]he Public Trust Doctrine is a critically important reminder of the duty of government to
preserve wildlife, to protect the public’s right to enjoy and benefit from a diverse ecosystem, and
the duty of courts to carefully scrutinize any attempts to abandon the public trust in those
resources.” Center for Biological Diversity, Inc. v. FPL Group, Inc., 166 Cal. App. 4th 1349
(2008) (quoting Carstens, The Public Trust Doctrine: Could a Public Trust Declaration for
Wildlife Be Next? (2006) vol. 2006, No. 9, Cal. Envtl. L. Rptr. 1).
This is an important point because it means that the Commission is held to a higher
standard with respect to its decision-making processes under the principles of the public trust
33
doctrine. Public governmental bodies such as the Commission are, in effect, held to be trustees,
with a fiduciary duty owed to the public to safeguard those resources. That fiduciary duty means
that the Commission must, first and foremost, review each and every decision it makes with a
This fiduciary duty on the part of the Commission goes directly to the second prong of
the due process analysis set forth in Matthews, that the Court examine “the risk of an erroneous
deprivation of such interest through the procedures used, and the probable value, if any, of
proceedings, and how they were conducted, constituted a denial of due process rights to the
Sierra Club, as well as to other intervenors, and furthermore constituted a violation of the
protect the citizens of Nebraska by ensuring due process rights were meaningfully honored. First,
the evidentiary hearing before the Commission was held on an accelerated time table, leaving
intervening parties such as the Sierra Club with inadequate time to conduct comprehensive
discovery that would have permitted a meaningful exploration of the issues involved in the
decision to permit KXL to slice through Nebraska. Second, limitations placed on intervenors
with respect to both the number of prospective witnesses and the subject matters such witnesses
could testify about (T699-708) resulted in process that failed the citizens of Nebraska by
precluding a full and fair hearing of critical issues concerning risks posed by KXL, and whether
permitting construction of the pipeline through Nebraska is in the public interest of the citizens
of the State.
34
In its Order dated March 31, 2017, the Commission granted its request for formal
intervention status, but with significant limitations that unlawfully impinged upon its due process
rights. (T699-708). The Commission ruled that Sierra Club’s formal intervenor status would be
restricted to examining “concerns for the environment and natural resources of Nebraska as
potentially impacted by the Keystone XL Pipeline route.” (T706). The Order also required that
Sierra Club be aggregated with thirty-nine other formal intervenors, described by the
Commission as “Natural Resource Petitioners”, and that all thirty-nine intervenors would jointly
be permitted to present testimony of only one witness at the public hearing, submit one joint
hearing. (T706). The issues surrounding siting of the proposed KXL pipeline are complex,
involving significant environmental, engineering, and other scientific questions. The limitations
placed on citizen and intervenor participation in these proceedings by the Commission precluded
meaningful participation – thereby violating the due process rights Sierra Club and other
intervenors are entitled to under law. The Commission, in placing these limitations, also violated
its fiduciary duties under the public trust doctrine by failing to allow a comprehensive and
Procedural due process limits the ability of the government to deprive people of protected
property interests and requires that “parties deprived of such interests be provided adequate
notice and an opportunity to be heard.” Hass v. Neth, 265 Neb. 321, 326, 657 N.W.2d 11, 19
meaningful time and in a meaningful manner.” Id., citing Marshall v. Wimes, 261 Neb. 846, 851,
626 N.W.2d 229, 235 (2001) and Brock v. Roadway Express, Inc., 481 U.S. 272 (1987); also see
35
Davis v. Scherer, 468 U.S. 183, 202 (1984). Describing a “proper and sufficient hearing” in the
“The right to a full hearing includes a reasonable opportunity to know the claims of the
opposing party and to meet them in order that an administrative hearing be fair, there
must be adequate notice of the issues, then the issues must be clearly defined.”
Block v, Lincoln Telephone and Telegraph Company, 170 Neb. 531, 540, 103 N.W.2d 312, 317
(1960).
d. The Commission’s procedural orders were contrary to its own rules, thereby
constituting a denial of due process rights.
The intervenors’ due process rights were denied because the Commission failed to follow
its own rules of procedure in setting forth the process by which these proceedings were
conducted. In issuing its March 31, 2017 Order, the Commission made a significant error when
imposing limitations on Sierra Club’s status as a formal intervenor. The Nebraska Supreme
Court explicitly states that the Commission’s underlying authority lies in Neb. Rev. Stat. § 75-
110, which requires that the Commission promulgate rules of procedure, and instructs that “[t]he
Commission shall not take any action affecting persons’ subject to the Commission’s jurisdiction
unless such action is taken pursuant to a rule, regulation, or statute”. Chase 3000, Inc. v. Public
Service Commission, 273 Neb. 133, 278 N.W.2d 560 (Neb. 2007) and In re Application No. C-
1889 of GCC License Corporation, 264 Neb. 167, 647 N.W.2d 45 (Neb. 2002). Instead of
properly relying on its own rule, 291 Neb. Admin. Code 1 § 015.01, the Commission improperly
defaulted to Nebraska Administrative Procedures Act (“APA”), Neb. Rev. Stat. § 84-312.02, et
The underlying basis for the Commission’s Order in these proceedings is thus contrary to
directions given by the Nebraska Supreme Court, which unequivocally states that the
36
Commission is bound by the rules set forth in Title 291, Chapter 1, § 015.01 of the Nebraska
“In summary, the rules set forth who may be a party, how a party may intervene, and
what rights the parties may have based on the type of intervention. These rules and
regulations are binding on the Commission in the same manner as if they were statutes.
The Commission is required to conform to these rules.”
Jantzen v. Diller Telephone Co., 245 Neb. 81, 100, 511 N.W.2d 504, 517 (1994). The reason this
issue is significant is because Section 015.01C of the Commission’s Rules sets forth the way a
“[a] formal intervenor shall be entitled to participate in the proceeding to the extent of
his/her express interests in the matter. Such participation shall include, without limitation,
presentation of evidence and argument, cross-examination of witnesses and submission
of rebuttal evidence.”
291 Neb. Admin. Code 1 § 015.01C (emphasis added). Interestingly, the Commission’s own
rules reinforce these precepts – specifically as to MOPSA – by stating that “filing petitions for
intervention…and the conduct of the hearing shall be governed by the Rules of Commission
Procedure.” 291 Neb. Admin. Code 9, § 023.06 (emphasis added). Further reinforcing this
principle, the Nebraska Supreme Court explicitly ruled that an agency must follow its own rules:
“[P]rocedural rules are binding upon the agency which enacts them as well as upon the
public, and the agency does not, as a general rule, have the discretion to waive, suspend,
or disregard, in a particular case, a validly adopted rule so long as such rule remains in
force…To be valid, the action of the agency must conform to its rules which are in effect
at the time the action is taken, particularly those designed to provide procedural
safeguards for fundamental rights.”
Douglas Cty. Welfare Admin. v. Parks, 284 N.W.2d 10, 11-12, 204 Neb. 570, 572 (1979)
(emphasis added).
37
e. The Commission’s procedural rules denied Sierra Club and other
intervenors a meaningful right to be heard.
While the portion of the APA that the Commission improperly relied on to restrict
intervenors’ participation in the proceedings does allow agencies to “impose conditions upon the
evidence and argument”, Neb. Rev. Stat. § 84-912.02, the Commission’s own rules require that
formal intervenors be afforded procedural due process rights to engage in more expansive
meaningful participation. Neb. Rev. Stat. § 84-916 states that the intent of the APA is to establish
“minimum administrative procedure for all agencies.” Appropriately rising above the bare
minimum, the Commission previously and explicitly adopted its own rules that mandate broader
and more meaningful procedural rights for formal intervenors. Under law, the Commission must
follow its own rules. In restricting Sierra Club’s ability to meaningfully participate in the
proceedings, the Commission failed to follow its own rules. This is a per se violation of the
In its Petition, Sierra Club demonstrated its legal rights and privileges were substantially
affected by TransCanada’s application and that it has a direct and legal interest that could not
adequately be represented by another party. The routing decision to be made by the Commission
is a matter of significant public concern, which was recognized by the Nebraska Supreme Court
in Thompson v. Heineman, 289 Neb. 798, 815, 857 N.W.2d 731, 747 (2015). Sierra Club sought
to formally intervene in these proceedings not only to protect their organizational interests, but to
advocate for its stakeholders whose interests would be impaired by construction of the KXL
pipeline.
38
The Commission’s March 31, 2017 Order states that limitations on the participation of
formal intervenors are to “[balance] the requirement to adhere to the strict and aggressive
timeline imposed by the Siting Act, with the need to ensure creation [of] a complete and robust
record … that includes the opportunity for all interested parties to be fully and fairly heard.”
(T702). Unfortunately, the intervenor limitations and the procedural schedule adopted by the
Commission did completely the opposite. A full and fair hearing did not occur. MOPSA requires
the Commission to issue an order no later than eight months after issuance of a Presidential
Permit to TransCanada for its KXL project. Neb. Rev. Stat. § 57-1408(2). While the Sierra Club
recognizes the need for efficiency and the arbitrary deadline imposed on the Commission by
MOPSA, those concerns do not justify the Commission’s failure to provide for procedural due
process rights guaranteed to formal intervenors under its own rules, and its failure to permit a full
For example, the procedural schedule adopted by the Commission in its April 5, 2017
2017 (T750), allowing only a ten-day response period, followed by a requirement that motions to
compel discovery be filed by May 19, 2017 (T750). In a complex case involving significant
issues and substantial documentation, such an accelerated schedule for not only conducting, but
completing discovery is nothing less than absurd and denies the intervenors the opportunity to
engage in meaningful discovery to ensure that all issues are fully vetted and understood. This
absurdity is further compounded by the Commission’s requirement in its April 5, 2017 Order
that the intervenors file their formal written testimony, witness lists, workpapers, and exhibits by
May 26, 2017 (T750). The Commission is required to determine, among other things, whether
TransCanada’s proposed KXL project is in the public interest of the citizens of Nebraska. The
39
contested administrative process is supposed to provide a mechanism for parties to fully explore
all issues in a meaningful way. That is the essence of due process. In this case – thanks to the
unreasonable and unlawful limitations placed on intervenors, combined with the unrealistic
scheduling order – there was no opportunity for a full and fair hearing of the issues in any
The Sierra Club raised these issues in a Motion to Reconsider the Commission’s March
31, 2017 Order (T767-770), specifically noting deficiencies with that Order. However, in its
April 13, 2017 Order, the Commission merely repeated its desire to conduct an “orderly and
prompt proceeding” and the need to meet the “aggressive timeline imposed by the Siting Act”
(T814-821, at 816). These formulaic recitals are inadequate. Sierra Club’s due process rights to
participate in this matter in a meaningful manner, and to be fully and fairly heard, which includes
the ability to present their evidence and arguments, were denied. The Fourteenth Amendment to
the U.S. Constitution and Neb. Const. Art. I, § 3, prohibit the State from depriving any person of
rights without due process of law. Sierra Club’s rights to procedural due process are core
constitutional rights that trump MOPSA. The Nebraska Supreme Court held that “the central
meaning of procedural due process [is] clear: ‘Parties whose rights are to be affected are entitled
to be heard…’” State v. Patricia B. (In re Levanta S.), 295 Neb. 151, 165, 887 N.W.2d 502, 512
(2016). The restrictions on Sierra Club’s ability to present witnesses, to engage in full and
order that eviscerated the ability of intervenors to engage in meaningful discovery constituted a
clear denial of due process rights afforded by the both the U.S. and Nebraska Constitutions. On
40
Conclusion
This Court should reverse the Commission’s Order approving the Mainline Alternative
Route for TransCanada’s proposed KXL pipeline project. The Commission’s Order provides
ample grounds for reversal, including the fact there was no finding TransCanada had met its
burden of proof. There was no witness who provided evidence supporting the Mainline
impossible to conclude that it met its burden of proving the Mainline Alternative was in the
public interest. In fact, TransCanada failed to meet its burden of proof for any proposed route
since there was a lack of probative supporting evidence on key issues, including the irreversible
and irretrievable impacts on Nebraska’s land areas and natural resources. social and economic
Critically, the Commission’s issued its Order approving the KXL Mainline Alternative
Route without affording the Sierra Club and intervenors with fundamental due process rights
required by both the U.S. and Nebraska Constitutions. The Commission’s procedural orders
precluded meaningful participation on the part of intervenors and placed undue restrictions on
the ability to fully and meaningfully explore the impacts of a highly-significant private
infrastructure project on the citizens of Nebraska. In doing so, the Commission violated the
fiduciary duties owed to citizens of Nebraska under the public trust doctrine.
Respectfully submitted,
/s/ Kenneth C. Winston
Nebraska Bar No. 16961
1327 H St., Suite 300
Lincoln, NE 68508
(402) 212-3737
kwinston@inebraska.com
Attorney for Sierra Club, Nebraska
Chapter
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S-17-1331
Affidavit of Service
On May 16, 2018, Kenneth C. Winston served (1) copy of Appellee’s Brief by electronic
On May 16, 2018, Dara M. Illowsky, on behalf of Kenneth C. Winston, also served a
copy of Appellee’s Brief to all parties of record via e-mail and via U.S. mail to those without
Robert J Henry 753 State Avenue Ste 475 Kansas City KS 66101 rjh@blake-uhlig.com
Michael J Stapp 753 State Avenue Ste 475 Kansas City KS 66101 mjs@blake-uhlig.com
Michael E Amash 753 State Avenue Ste 475 Kansas City KS 66101 mea@blake-uhlig.com
Steven M. Kramer 900 17th Street, NW, Ste. Washington DC 20006 skramer@aopl.org
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Ross Eisenberg 733 10th Street, NW, Ste. Washington DC 20001 ross.e.eisenberg@nam.org
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Nebraska Doug Peterson 2115 State Capital Building Lincoln NE 68509 Kimberly.daugherty@nebraska.gov
Attorney
General