Enbridge Energy Co. lost the central liability fight over its Line 5 pipeline when the 7th U.S. Circuit Court of Appeals said the company has been trespassing on tribal land in northern Wisconsin, but the panel stripped away two major remedies that had shaped the case: a $5.15 million restitution award and a June 2026 shutdown date.
The July 30 decision leaves the Bad River Band of the Lake Superior Tribe of Chippewa Indians with a significant win on trespass while reopening the questions of how much Enbridge must pay and how quickly it must remove the pipeline from disputed parcels. The panel also cut back the case by reversing a public nuisance ruling based on erosion near the Bad River, concluding that the federal Pipeline Safety Act displaces the tribe’s federal common-law theory.
Judge Michael Y. Scudder, writing for a panel that included Judges Frank H. Easterbrook and Amy J. St. Eve, described the dispute as more than a property fight, emphasizing its implications for tribal sovereignty, environmental protection, energy supply and cross-border relations. “Do not let this summarized retelling mask the complexity of this case,” he wrote, citing “the magnitude of the interests on both sides — all of which has the ongoing attention of both the United States and Canada given the tribal, environmental, and commercial issues at stake.” Bad River Band of the Lake Superior Tribe of Chippewa Indians of the Bad River Reservation v. Enbridge Energy Co. Inc. and Enbridge Energy, L.P., Nos. 23-2309 & 23-2467 (7th Cir., July 30, 2026).
Line 5 moves more than 20 million gallons of crude oil and natural gas liquids daily between Superior, Wisconsin, and Sarnia, Ontario. One stretch crosses 12 miles under the Bad River Reservation, including land in which the Band has ownership interests. The rights-of-way for 12 parcels, referred to in the opinion as the “Allotted Parcels,” ended June 2, 2013. Enbridge left the pipeline in place, and the Band’s Tribal Council later voted twice, in 2017 and 2019, against renewal.
Those facts put trespass at the center of the appeal. “In the final analysis, we agree that Enbridge is trespassing,” Scudder wrote.
Enbridge pointed to a 1992 agreement in which the Band accepted $800,000 and granted a 50-year easement over different land, the “Tribal Parcels.” The company said that agreement obligated the Band to approve renewed rights-of-way for the Allotted Parcels, but the panel said the contract did not reach that far, because it dealt with identified parcels then covered by the agreement and did not promise future consent over later-acquired land.
The court’s contract analysis turned in part on tribal sovereignty and the rule that sovereign authority is not lightly given up. Quoting Merrion v. Jicarilla Apache Tribe, Scudder wrote that “sovereign power, even when unexercised, is an enduring presence that governs all contracts subject to the sovereign’s jurisdiction, and will remain intact unless surrendered in unmistakable terms.” Ordering the Tribal Council to consent, he wrote, “would strike at the heart of tribal sovereignty.”
The panel was no more receptive to Enbridge’s reliance on Section 558(c) of the Administrative Procedure Act, which the company said kept the expired rights-of-way in effect while the Interior Department considered renewal applications. The court said the applications were not “sufficient” because they lacked the tribal consent federal regulations required. “But Section 558(c) is a misfit for Enbridge’s argument,” Scudder wrote.
The Band fared less well on the remedy calculation. U.S. District Judge William M. Conley had set restitution at $5,151,668, using both profits tied to the trespassing pipeline segments and the value Enbridge gained by postponing reroute costs. The 7th Circuit agreed that restitution can be awarded for intentional trespass, but said the formula appeared to count the deferred-cost benefit twice. “It needed to pick one or the other,” Scudder wrote. The panel also told Conley to revisit the discount applied to a $296.2 million deferred-cost estimate.
The injunction was sent back as well. Conley had ordered Enbridge to stop using Line 5 across the Allotted Parcels by June 2026, then stayed the order during the appeal. The panel said equitable relief remains proper because the trespass cannot be open-ended, but it directed the district court to give Enbridge a realistic opportunity to finish its planned reroute around the reservation.
In reaching that conclusion, the court weighed the 1977 U.S.-Canada transit treaty, Line 5’s economic significance and submissions from both governments. “On balance, the three-year deadline strikes us as too aggressive, and we conclude the district court exceeded its discretion by imposing it,” Scudder wrote.
The court, however, did not soften the ultimate command. “Make no mistake: Enbridge must remove the pipeline from the Allotted Parcels,” Scudder wrote, adding that the additional time “is the product of the broader public context in which the pipeline operates, and it does not reflect our approval of the company’s behavior.” On remand, the panel said Conley should consider oversight tools, including reporting requirements or monetary sanctions, to keep the reroute moving.
The practical result is a mixed ruling. The Band keeps the finding that Enbridge has lacked authority to operate on the parcels since 2013. Enbridge loses that liability issue but gains a new round of litigation over how restitution should be measured and what timeline should govern the pipeline’s removal.
The public nuisance claim met a different end. The Band had challenged the safety risk at a bend in the Bad River called “the meander,” where erosion has brought the river closer to the buried pipeline. Conley found that the danger of exposure and rupture supported a monitoring and shutdown protocol. The panel reversed, saying Congress had placed pipeline safety decisions of that kind with the Pipeline and Hazardous Materials Safety Administration. “We see no gap for federal common law to fill,” Scudder wrote.
The Pipeline Safety Act, the panel said, gives federal regulators tools to inspect pipelines, set safety requirements, order corrective measures and restrict or suspend operations when hazards arise. The court also declined to read the act’s saving clause for “tort liability” as preserving the federal nuisance injunction, saying the district court’s order functioned like the regulatory action Congress assigned to PHMSA.
