Connolly, J.
The State appeals from the district court's judgment that determined L.B. 1161,
Neb. Const. art. V, § 2, in relevant part, requires that a supermajority of this court's members concur before it can strike down legislation as unconstitutional: "No legislative act shall be held unconstitutional except by the concurrence of five judges."
Four judges of this court have determined that the appellees (the landowners), who challenged the constitutionality of L.B. 1161, have standing to raise this issue and that the legislation is unconstitutional. Three judges of this court conclude that the landowners lacked standing and decline to exercise their option to address the constitutional issues.
The majority's opinion that the landowners have standing controls that issue. But because there are not five judges of this court voting on the constitutionality of L.B. 1161, the legislation must stand by default. Accordingly, we vacate the district court's judgment.
The following judges are of the opinion that the landowners have standing and that the challenged legislation is unconstitutional: Justices Connolly, McCormack, and Miller-Lerman, and Judge Riedmann.
L.B. 1161 allows "major oil pipeline" carriers to bypass the regulatory procedures of the Public Service Commission (PSC). As an alternative to obtaining approval from the PSC — a constitutional body charged with regulating common carriers — L.B. 1161 permits these pipeline carriers to obtain approval from the Governor to exercise the power of eminent domain for building a pipeline in Nebraska. The district court ruled that the Legislature had unconstitutionally divested the PSC of its regulatory authority over common carriers. On appeal, the State contends that the landowners lacked standing to sue and that L.B. 1161 is constitutional.
L.B. 1161 has its origins in the controversial Keystone XL oil pipeline proposed in 2008 by TransCanada Keystone Pipeline, LP (TransCanada). TransCanada wanted to construct its pipeline to carry crude oil products from Canada to the Texas coastline. By executive order, the construction of a pipeline that crosses an international border requires a permit from the President of the United States.
As originally proposed, the pipeline would have passed directly through Nebraska's Sandhills, raising considerable public concern about environmental damage to a sensitive ecosystem and the region's high water table. In 2008, the statute that governs eminent domain power for oil pipelines imposed no standards on carriers for the right to exercise eminent domain power.
In the 2011 special session, the Legislature amended § 57-1101 by enacting L.B. 1, a legislative bill called the Major Oil Pipeline Siting Act (MOPSA).
In passing MOPSA, the Legislature recognized
But MOPSA contained a significant exemption to its requirement that major oil pipeline carriers comply with the PSC procedures: MOPSA did not apply to TransCanada. It excluded any major pipeline carrier that had submitted an application to the U.S. Department of State "pursuant to Executive Order 13337" before MOPSA became effective.
In the same special session, the Legislature enacted separate legislation — L.B. 4 — for TransCanada's pipeline.
The National Environmental Policy Act of 1969 requires federal agencies to determine the environmental impact of significant federal actions. When making this determination, a federal agency must request the comments of appropriate state and local agencies.
On January 18, 2012, the President of the United States denied TransCanada's application. Because TransCanada no longer had an active application pending with the U.S. Department of State, it was subject to the PSC regulatory procedures under MOPSA if it reapplied for a presidential permit or route through Nebraska.
On January 19, 2012, during the regular session, Senator Jim Smith introduced L.B. 1161, which amended the statutory changes to § 57-1101 enacted by MOPSA and § 3 of L.B. 4.
Originally, § 3 of L.B. 4 did not require a pipeline carrier to apply for approval from the DEQ or the Governor. As noted, it authorized the DEQ to collaborate with federal agencies in producing a supplemental environmental impact statement for Nebraska and authorized the Governor to approve that statement.
In conducting an independent review of a proposed route, L.B. 1161 requires the DEQ to analyze the "environmental, economic, social, and other impacts associated with the proposed route and route alternatives in Nebraska."
The DEQ's final report on TransCanada's proposed route shows that it makes no recommendations to the Governor whether to approve a proposed route. And L.B. 1161 does not require a carrier to have approval from the DEQ for its proposed route. If the Governor approves a route, § 1 implicitly gives a pipeline carrier the power of eminent domain in Nebraska: "If condemnation procedures have not been commenced within two years after the date the Governor's approval is granted or after the date of receipt of an order approving an application under [MOPSA], the right under this section expires."
Under L.B. 1161, if a pipeline carrier submits a route for evaluation by the DEQ, the carrier must reimburse the DEQ for the cost of the evaluation.
On April 18, 2012, TransCanada submitted for the DEQ's review its preferred alternative route, which it revised to avoid the Sandhills. On May 4, TransCanada filed a new application with the U.S. Department of State to construct the Keystone XL pipeline. On May 24, the DEQ entered into a memorandum of understanding with the U.S. Department of State to collaborate on an environmental review of potential pipeline routes in Nebraska. About 8 weeks later, the DEQ issued a "Feedback Report" after holding public meetings along the corridor of TransCanada's proposed new route. This report identified Nebraskans' concerns, summarized the DEQ's review efforts, and disclosed its concerns to TransCanada to give TransCanada an opportunity to address these concerns in its routing decision.
In September 2012, TransCanada submitted a report to the DEQ entitled "Supplemental Environmental Report for the Nebraska Reroute." In this report, TransCanada stated that it had revised its preferred reroute in response to the DEQ's feedback report and comments from landowners that the pipeline would still cross fragile land areas with high water tables. The extensive report comprised TransCanada's evaluation of the review factors required by L.B. 1161: "The analysis presented in this [Supplemental Environmental Report] supports [the] DEQ's review and approval of a preferred route in Nebraska." The parties stipulated that if built, the proposed pipeline would cross Nebraska's border with South Dakota in Keya Paha County and continue to Nebraska's Kansas border in Jefferson County. In October, the DEQ issued its "Draft Evaluation Report" for public comment.
On January 3, 2013, the DEQ submitted its final evaluation report to the Governor. On January 22, the Governor approved TransCanada's proposed route and asked the President and the U.S. Secretary of State to include Nebraska's evaluation in the U.S. Department of State's supplemental environmental impact statement.
In March 2013, the landowners filed their operative complaint against the Governor, the DEQ's director, and the State Treasurer. They sought a declaratory judgment that L.B. 1161 is unconstitutional. They alleged that the bill violated the Nebraska Constitution's equal protection, due process, and separation of powers provisions, and its prohibition of special legislation. They alleged that the bill unconstitutionally delegated to the Governor powers over a common carrier that exclusively belong to the PSC and unconstitutionally delegated to the Governor plenary authority over the exercise of eminent domain power that exclusively belongs to the Legislature. Finally, they alleged that the bill unlawfully allocated $2 million to the DEQ to implement unconstitutional laws and unlawfully pledged the State's funds and credit to a pipeline applicant that repays the funds in the future. In support of this claim, they alleged that the DEQ had advanced more than $5 million in public funds to TransCanada under L.B. 1161.
In its answer, the State denied the landowners' allegations that L.B. 1161 was unlawful legislation. It affirmatively alleged that the landowners lacked standing to bring the action; their claims were not ripe for judicial review; their claims, in part, were moot; they failed to state a claim upon which relief could be granted; and the court lacked subject matter jurisdiction over the action.
The court stated that because it could not determine from the landowners' affidavits whether their property was located in the path of the proposed pipeline, they had failed to establish traditional standing. But the court concluded that they had established taxpayer standing to challenge L.B. 1161 and that the legislation was unconstitutional. Regarding standing, the court rejected the State's arguments that our case law required the landowners to show that there was no better suited party to bring the action and that no illegal expenditure existed because TransCanada had reimbursed the State for all of the DEQ's expenditures.
The court concluded that in the case on which the State was relying, this court's holding regarding "better suited" parties was limited to the claims dealing with a governmental body or official's failure to assess taxes.
The court rejected the State's argument that the landowners had lost standing to challenge an illegal expenditure after TransCanada reimbursed the State for the DEQ's costs. The court noted that this argument was more properly characterized as a mootness challenge, but concluded that taxpayer standing should not turn on a manipulable factor like the repayment of public funds: "Nor should courts, in analyzing taxpayer standing, be required to resort to forensic accounting methods to determine whether all public expenditures have been reimbursed." The court found that in response to the State's invoices, TransCanada had reimbursed the State for over $5 million in costs. It concluded that our case law conferred standing on taxpayers to challenge illegal appropriations and
Regarding the landowners' constitutional challenges, the court rejected all their arguments except one. It concluded that pipeline carriers are common carriers and that absent specific legislation, the PSC's authority over them is absolute. It concluded that the Legislature had unconstitutionally divested the PSC of control over pipeline common carriers and had delegated the routing decisions for them to the DEQ and the Governor. It rejected the State's argument that routing decisions are not within the PSC's constitutionally enumerated powers.
The court also rejected the State's argument that because a pipeline carrier could choose to comply with the PSC's regulatory procedures, L.B. 1161 was not unconstitutional in every circumstance, which would defeat the landowners' facial challenge. The court reasoned that the landowners' challenge was limited to that part of L.B. 1161 that allows pipeline carriers to choose the DEQ's review process and the Governor's approval of a route. It concluded that L.B. 1161 completely divested the PSC of authority over carriers that make this election and thus violated article IV, § 20, of the Nebraska Constitution. It concluded that L.B. 1161 must be declared void, as well as the Governor's approval of TransCanada's route, because it was premised on an unconstitutional statute.
The State assigns that the court erred in (1) determining that the landowners had taxpayer standing, (2) determining that an environmental review by the DEQ and approval by the Governor for proposed oil pipelines that are not intrastate common carriers divests the PSC of its authority, in violation of Neb. Const. art. IV, § 20; and (3) considering an exhibit that was not admitted into evidence.
On cross-appeal, the landowners assign that the court erred in failing to hold that L.B. 1161 is unconstitutional and void because it (1) fails to provide for judicial review and violates due process; (2) confers upon the Governor the authority to grant a private entity the power to exercise eminent domain; (3) lacks a legal standard against which to test applications for authority to act as a common carrier; and (4) involves an unlawful pledge of the State's credit to a private entity.
We independently review questions of law decided by a lower court.
Standing is a jurisdictional component of a party's case.
But taxpayer standing is an exception to the injury-in-fact requirement. Here, the district court determined that the landowners had taxpayer standing for two reasons. First, taxpayers have an equitable interest in public funds, including state public funds.
The State argues that the court erred in concluding the landowners had taxpayer standing based solely on a challenged appropriation. It contends that no illegal expenditure occurred because L.B. 1161 requires a pipeline carrier to reimburse the State for the DEQ's regulatory costs in evaluating a proposed route. It also argues that the landowners failed to show there is no better suited plaintiff to bring the action as required by Project Extra Mile v. Nebraska Liquor Control Comm.
The landowners argue that this case illustrates why taxpayers have an interest in challenging unlawful appropriations, regardless of whether the legislation requires reimbursement of the expenditures. They point to evidence that TransCanada has reimbursed the State for over $5 million in costs, despite a legislative appropriation to the DEQ of only $2 million.
The landowners contend that they made a prima facie showing there is no better party to bring the challenge and that the State adduced no evidence to refute their position. The landowners also argue that it is irrelevant whether TransCanada reimbursed the State. They argue that they are challenging the facial validity of L.B. 1161, not whether an illegal expenditure occurred in this particular case.
Neither party, however, has addressed the court's determination that this case raises a matter of great public concern. But we agree with that determination.
We adopted the "great public concern" exception in Cunningham v. Exon.
We had previously recognized that a taxpayer, without showing an injury peculiar to himself, has standing to challenge an unlawful governmental expenditure or appropriation, or an unlawful increase in the burden of taxation.
In Cunningham, we concluded that this exception, which permitted citizens to challenge unlawful statutes and ordinances, applied even more strongly to an action challenging the validity of a constitutional amendment:
The "great public concern" exception is another name for the "public interest" exception
Contrary to the dissent, we do not conclude that our early mandamus cases are distinguishable because the landowners sought a declaratory judgment here instead of a writ of mandamus. In either case, a plaintiff's standing rests upon a public interest, not a private one. The primary difference between our early mandamus cases and more recent cases lies in our narrowing of the public interest that is sufficient to invoke taxpayer standing, and in State ex rel. Reed v. State,
In State ex rel. Reed, we stated that the exception in our early mandamus cases to permit citizens to enforce a public right had been clarified in Cunningham. And we noted that since Cunningham, we have declined to find an exception to the requirement that the plaintiff have a personal stake in the outcome of the controversy. Specifically, we declined to extend Cunningham when the plaintiff claimed that (1) city officials had unlawfully entered into a cable television contract for the residents
In another case, Ritchhart v. Daub,
We summarized our public interest case law in State ex rel. Reed:
In State ex rel. Reed, we concluded the plaintiff's claim that state officials had violated their duties was really his attempt to impose his opinions on how they should exercise their duties. He lacked standing to try to influence state officials' discretionary duties through a legal action. But we clearly recognized that taxpayers could have standing to challenge unlawful governmental acts involving a matter of great public concern. And we have more recently suggested that one of our illegal expenditure cases should be treated as raising a matter of great public concern.
In Chambers v. Lautenbaugh,
Under Chambers, preventing the use of public time and money to implement and enforce allegedly invalid rules is a sufficient interest to confer taxpayer standing to challenge the rules.
Our suggestion in Project Extra Mile that Chambers should be treated as raising a matter of great public concern is consistent with our reasoning in Cunningham. That is, a citizen taxpayer's interest in his or her form of government exceeds any pecuniary interests he or she may have in other types of government action. In both Chambers and Cunningham, because all citizens had an interest in their representatives' obeying the law, no resident taxpayer could have claimed a greater interest than any other to challenge the alleged violations. Of course, that was also true in cases decided after Cunningham. But Cunningham involved a claim that the Legislature had unlawfully changed the constitution, and Chambers involved a claim that an election commissioner had unlawfully changed the way citizens elected their local representatives.
Like claims involving the election of representatives and the way the constitution can be changed, the claims here also involve the citizens' interest in their form of government. Specifically, the landowners alleged violations of the constitutionally required distribution of political powers in this state. The substantive issues are whether the Legislature (1) unlawfully delegated a duty constitutionally conferred on the PSC to the Governor and (2) unlawfully delegated to the Governor the Legislature's power to bestow the State's right of eminent domain on private organizations. These issues necessarily involve the delegation of powers under the Nebraska Constitution, which are fundamental matters of great public concern to all resident taxpayers.
In deciding this appeal, we are cognizant that our standing rules are circumscribed by case law. Unlike federal courts, we are not bound by the strictures of constitutional standing requirements.
But without an exception for matters of great public concern, elected representatives could flout constitutional violations with impunity. As we explained in Project Extra Mile, we have recognized taxpayer standing because "[a] good deal of unlawful government action would otherwise go unchallenged"
So when a taxpayer claims that the Legislature enacted a law that undermines the fundamental limitations on government powers under the Nebraska Constitution, this court has full power and the responsibility to address the public rights raised by a challenge to that act. Without the prudent exercise of such judicial responsibility, the Legislature might successfully define the role of all government bodies. Where, as here, the Governor and the current members of the PSC have acquiesced in the Legislature's disregard of the Nebraska Constitution's distribution of powers,
So we reject the State's argument that recognizing taxpayer standing in this case would essentially eliminate any standing requirements for taxpayers. As we stated in Project Extra Mile, public officials must be free to perform their duties without fear of being sued whenever a citizen disagrees with their exercise of authority. But there is a critical distinction between exercising legitimate authority and a claim that public officials ignored constitutional constraints on that authority.
This does not mean that taxpayers may challenge any legislation that allegedly violates a constitutional provision without
The inscription above the main entrance to this Capitol proclaims that the "Salvation of the State is Watchfulness in the Citizen." For that inscription to have meaning, someone must have standing to defend the Nebraska Constitution, regardless of whether a direct injury can be shown.
Finally, the State argues that under Project Extra Mile, any taxpayer who cannot show a direct injury should be required to show that there is no better suited party to bring the action. We disagree. As noted, in Cunningham, the State specifically argued that the only persons who had standing to challenge the constitutional amendments were those persons who could lose federal funding because of the change. And we rejected that argument.
The State misconstrues Project Extra Mile by omitting a crucial limitation on the holding that a taxpayer must show there is no better suited party to bring the action:
This discussion was obviously directed at cases involving an unlawful failure to assess or collect taxes. And the italicized holding was clearly intended to preclude the argument that a plaintiff must rule out every other possible plaintiff. Instead, under Project Extra Mile, a plaintiff satisfies the burden to show that there is no better party to bring the action if the plaintiff shows that persons or entities directly and immediately affected by the unlawful act are beneficially affected by it.
So even if we extended Project Extra Mile to other types of taxpayer actions, the burden would be met here. TransCanada, in particular, and all major pipeline carriers, benefited from having a procedural choice. First, the Governor's approval of a route under the DEQ procedures was not subject to judicial review. Second, even if the Governor denied approval of a route, a major oil pipeline carrier could seek PSC approval. These two advantages alone are sufficient to show that major oil pipeline carriers benefited from the passage of L.B. 1161.
Similarly, the State argued to the district court that the only persons who should have standing to challenge L.B. 1161 are those facing a condemnation proceeding when TransCanada exercises the power of eminent domain. But the challenge here is that the Governor has no constitutional authority to decide whether TransCanada can exercise that power. A challenge in which every citizen has an interest should not hinge upon whether any particular landowner in an approved pipeline route has the resources and ability to resist a condemnation proceeding on constitutional grounds. Equally important, any landowner resisting condemnation would be required to challenge the legislation as unconstitutional for the same issues that are presented here. Given the widespread significance of these constitutional issues, we will not deny standing on the chance that a different citizen could raise the issue. We conclude that the holding in Project Extra Mile — that a taxpayer must show an alleged unlawful act would otherwise go unchallenged because no other potential party is better suited to bring the action — has no application to taxpayer actions raising a matter of great public concern.
Before concluding our standing analysis, we address some of the dissent's comments. The dissent erroneously asserts that the division of opinion regarding standing creates an "impasse" that prevents its consideration of the constitutional claims. There is no impasse. The four judges of this court who have concluded that the landowners have standing are not a "plurality," as the dissent asserts. We are the majority on the issue of standing, and our decision controls. That is, our decision is the court's decision on standing and the law governing this case.
The dissent correctly notes that "[j]urisdictional requirements apply equally to all cases." In this seven-member court, it takes only four judges to determine if the case meets the jurisdictional requirements for this court to consider the merits. We apply this rule of majority "equally to all cases," including the one before us.
The dissent incorrectly claims that five votes are required to determine standing and hence jurisdiction. The dissent cites no constitutional provision and no authority to support this imaginative assertion. Neb. Const. art. V, § 2, in relevant part, provides the following:
While the supermajority provision in this passage clearly requires five judges to concur on the conclusion that a legislative act is unconstitutional, the dissent reads into this provision the additional requirement that five judges concur on the conclusion that this court has jurisdiction to decide
The quorum provision in article V, § 2, sets the minimum number of judges who must sit before this court can decide a case. Quorum provisions ensure that a case is not decided by one or two judges on a court.
The plain language of the supermajority requirement in article V, § 2, applies only to our voting on the merits of the constitutional challenge. That is, it is limited by its terms to requiring five votes to hold that an enactment is unconstitutional. We have never held that this provision requires five votes to decide any procedural or jurisdictional issue in a case presenting a constitutional challenge to a statute.
So we reject the dissent's interpretation of the supermajority requirement and the dissent's assertion that our approach would yield "absurd" results. It is true that this provision can lead to unusual results. But the dissent's hypothetical voting outcomes are not absurd results. They simply flow from the Nebraska Constitution's unusual supermajority requirement.
We note that there are numerous examples of judges who dissented on a jurisdictional matter and reached the merits of the appeal, if only to express his or her disagreement.
In sum, although the dissent disagrees with the court's decision on standing, there is no constitutional or jurisprudential barrier that precludes the dissenting judges from proceeding to decide the landowners' constitutional challenge to L.B. 1161. And because the case presents a matter of great public concern, the citizens of this state deserve a decision on the merits.
Clearly, the dissent would narrow Cunningham's standing exception for matters of great public concern to the point that the exception is nonexistent. But Cunningham is not an outlier case; it is consistent with our early mandamus cases. More important, Cunningham is the law of this jurisdiction. Obviously, Cunningham did not require the plaintiff to show an injury in fact or to rule out potential parties who would have a more direct interest in the controversy to establish standing. And that conclusion was correct.
Cunningham's great public concern exception to traditional standing exists for a reason. The primary hurdle for application of the great public concern exception, as we have narrowed it, is the existence of a great public concern — not the availability of a perfect plaintiff with injury-in-fact standing. The dissent's reasoning on standing would so limit the pool of effective plaintiffs as to render taxpayers mere spectators without a forum to challenge a perceived manipulation by the Legislature of the fundamental limits on political power in Nebraska. This we will not do.
The landowners contend that the court correctly ruled that L.B. 1161 violates article IV, § 20, because it divests the PSC of its control over a class of common carriers and transfers its powers to the Governor.
The State counters that because the landowners presented a facial challenge to L.B. 1161, they must show that the legislation is invalid in every circumstance. They conclude that the court erred in determining that L.B. 1161 is facially unconstitutional for three reasons. First, the State contends that under Nebraska's statutes, only intrastate pipeline carriers — and not interstate pipeline carriers — transporting oil products are common carriers subject to the PSC's regulatory control. It argues that the court should have interpreted L.B. 1161 as applying only to interstate carriers, which would be constitutional. Second, the State contends that because private pipeline carriers could validly seek the Governor's approval of their routes, L.B. 1161 is not invalid in every circumstance. Finally, the State contends that even if the PSC has exclusive control over pipeline carriers, routing decisions are not within its enumerated powers.
The landowners have the burden of establishing that L.B. 1161 is unconstitutional.
The PSC is not a statutorily created state agency. Until 1972, it was called the State Railway Commission (Commission).
We have previously explained the historical facts leading up to the voters' adoption in 1906 of article IV, § 20.
Consistent with this constitutional history, we have held that the PSC has "independent legislative, judicial, and executive or administrative powers" over common carriers,
Later, in State ex rel. Spire v. Northwestern Bell Tel. Co.,
Specifically, because of the Commission's constitutional jurisdiction over common carriers, we have held that a party cannot initiate an action in district court to enforce a statute requiring a common carrier to provide reasonable accommodations.
The PSC's constitutional authority to regulate "common carriers" is limited to the common-law meaning of that term unless the Legislature has authorized the PSC to exercise control over carriers that are outside of that meaning.
In City of Bayard v. North Central Gas Co.,
In City of Bayard, the evidence showed that the defendant gas company was using its own pipelines and distribution systems to transport gas it purchased to consumers in cities that had granted it a franchise by contract. No evidence showed that it transported gas for others, gratuitously or for a consideration. We held that the company was not a common carrier and could not be subjected to the Commission's control.
As the above definition of common carrier implies, under Nebraska's common law, whether a carrier offers its services to the general public — like a passenger carrier, for example — is not always relevant to determining whether it is a common carrier. Instead, a carrier is a common carrier if its "vocation is of a public nature, although limited to the transportation of certain classes or kinds of freight, and it may be of service to a limited few who by their peculiar situation or business may have occasion to employ it."
Under our definition of a common carrier, an oil pipeline carrier is a common carrier if it holds itself out as willing to transport oil products for a consideration to all oil producers in the area where it offers its transportation services. The State does not dispute the landowners' contention that TransCanada is a common carrier, and a Texas case supports that conclusion.
As stated, the landowners contend that the court correctly ruled that L.B. 1161 violates article IV, § 20, because it divests the PSC of its control over a class of common carriers and transfers its powers to the Governor. The rules that we have set out above clearly support that contention. We therefore turn to the State's arguments that L.B. 1161 is not facially unconstitutional in every circumstance.
First, the State argues that the court erred in concluding that all oil pipeline carriers are common carriers. It claims that interstate pipeline carriers are not common carriers under Nebraska's statutes and that the court erred in failing to interpret L.B. 1161 as applying to only interstate pipeline carriers.
The State correctly contends that a plaintiff can succeed in a facial challenge only by establishing that no set of circumstances exists under which the act would be valid, i.e., that the law is unconstitutional in all of its applications.
As stated, unless the Legislature enacts legislation to specifically restrict the PSC's authority and retains control over that class of common carriers, it cannot constitutionally deprive the PSC of its regulatory powers. The State points to Neb.Rev.Stat. § 75-501 (Reissue 2009), which provides that pipeline carriers transporting oil for hire in Nebraska intrastate commerce "shall be a common carrier subject to commission [the PSC] regulation." It contends that this statute defines a pipeline common carrier as one that transports oil for hire only in intrastate commerce (i.e., only within Nebraska's borders). The State also relies on Neb.Rev.Stat. § 75-502 (Cum.Supp.2014), which was amended by L.B. 1
The State's reliance on these statutes is misplaced. Although it argues that interstate carriers are not common carriers under Nebraska law, it does not argue that they are private carriers. It appears to argue that interstate pipeline carriers of oil are a class by themselves — neither common nor private carriers. But under Nebraska common law, there are only two classes of carriers: private and common. "Interstate" is not a class by itself. Interstate pipeline carriers under federal law are also classified as private or common, and pipeline carriers transporting oil in interstate commerce are subject to federal regulation as common carriers.
We also reject the State's argument that § 75-501 defines the term "common carrier" for persons transporting oil products. Section 75-501 provides:
(Emphasis supplied.)
Section 75-501 does not explicitly state that it is defining a term or limiting the PSC's authority to intrastate carriers. Interpreting § 75-501 to define the whole field of pipeline common carriers would be an expansive reading and contrary to the statute's historical context. The statute explicitly acknowledges that federal agencies regulate interstate pipeline carriers, and it is this tension that explains why the statute's reach is limited to intrastate pipeline carriers. Section 75-501's historical context shows that the Legislature intended only to ensure that intrastate carriers are regulated.
In 1906, Congress amended the federal Interstate Commerce Act (ICA) to make interstate oil transporters common carriers subject to federal regulation.
In 1903, the Nebraska Legislature passed the first law giving pipeline carriers an unconditional right to exercise the power of eminent domain in Nebraska to construct a pipeline.
In 1917, the Legislature repealed the 1903 law and replaced it with a statute declaring that pipelines transporting oil products or gases from one point in Nebraska to another point for a consideration are common carriers. These carriers could exercise the power of eminent domain but were subject to the Commission's control and regulation.
It is true that absent preemptive federal laws, the Legislature probably could have enacted siting laws to protect the health of its citizens if those laws did not unnecessarily impede interstate commerce.
In 1923, the Legislature passed a bill giving interstate pipeline carriers an unconditional right to exercise eminent domain.
In 1963, the Legislature enacted comprehensive legislation to reorganize statutes related to the Commission's powers.
Current federal law expressly preempts state regulation of safety issues related to interstate oil pipelines.
Given this history, we do not interpret the Legislature's silence on the State's regulation of interstate carriers as its determination that the Commission could have no regulatory powers over interstate carriers to the extent state regulation is permitted by federal law. Notably, when the Legislature restricted the PSC's authority to regulate some natural gas utilities, the restriction was explicit.
It is true that we will interpret a statute to be constitutional if we can do so reasonably.
The State argues that the court erred in implicitly assuming that all pipeline carriers operate on a "for hire" basis. It contends that L.B. 1161 could be facially unconstitutional only if every pipeline carrier satisfied the "for hire" requirement for common carriers. In that same vein, it argues that the court erred in determining that a state's authority for a carrier to exercise the power of eminent domain is the essential characteristic of common carrier status. In effect, the State argues that L.B. 1161 is not facially invalid because some of the carriers seeking the Governor's authorization to exercise eminent domain could be private carriers. We disagree that a private carrier serving no public purpose could exercise the power of eminent domain.
The State relies on City of Bayard
It is true that § 75-609 granted interstate pipeline carriers the right to exercise eminent domain without declaring them common carriers or imposing any regulatory control. But as explained above, in 1957, when City of Bayard was decided, Congress had not passed any law clarifying that states could regulate interstate pipeline carriers. More important, our holding in City of Bayard rested on the lack of evidence that the company transported gas for others. We assumed for the analysis that the company could be a common carrier if it had held itself out as transporting gas for hire, but concluded there was no evidence that it had done so.
Equally important, the company was transporting natural gas for a public purpose. We specifically noted that the city had statutory authority
As our definition of common carriers suggests, the reason common carriers can exercise the right of eminent domain lies in their quasi-public vocation of transporting passengers or commodities for others. A citizen's property may not be taken against his or her will, except through the sovereign powers of taxation and eminent domain, both of which must be for a public purpose.
The State's eminent domain power resides in the Legislature and exists independently of the Nebraska Constitution.
In short, because a common carrier performs a public transportation service, the Legislature can grant it the sovereign power to take private property for a public use and the State can control its operations, to the extent that the regulation is not precluded by federal law.
But the Nebraska Constitution prohibits the taking of private land for a private purpose.
We agree with this reasoning, which is consistent with our holding in other cases prohibiting the use of eminent domain for a private purpose.
The State argues that even if the PSC has exclusive regulatory control over pipeline carriers, an environmental review of a pipeline route is not one of its enumerated powers over common carriers: i.e., the PSC's regulation of their rates and service, or exercise of "general control."
This appeal is not about the wisdom or necessity of constructing an oil pipeline but instead is limited to the issues of great public concern raised here: which entity has constitutional authority to determine a pipeline carrier's route and whether L.B. 1161 comports with the Nebraska Constitution's provisions controlling this issue.
Four members of this court, a majority of its seven members, conclude that the district court correctly ruled the landowners have standing to challenge the constitutionality of L.B. 1161. Because their complaint alleged that the act violated limits on political power under the Nebraska Constitution, it raised matters of great public concern. Under our established case law, such matters are an exception to the injury-in-fact requirement for standing. Thus, contrary to the dissent, we hold that the landowners had standing before the district court and this court.
The same four members of this court conclude that the court correctly determined that L.B. 1161 is unconstitutional. L.B. 1161 unconstitutionally transfers to the Governor the PSC's enumerated constitutional powers over common carriers. When a common carrier seeks the Governor's approval of a pipeline route under the DEQ procedures, L.B. 1161 unconstitutionally gives the Governor the authority to approve the route and bestow the power of eminent domain on the carrier. The Nebraska Constitution prohibits this transfer of power. Because we conclude that L.B. 1161 is facially unconstitutional for this reason, we do not address the landowners' other claims.
No member of this court opines that the law is constitutional. But the four judges who have determined that L.B. 1161 is unconstitutional, while a majority, are not a supermajority as required under the Nebraska Constitution. Neb. Const. art. V, § 2, in relevant part, provides that "[n]o legislative act shall be held unconstitutional except by the concurrence of five judges." We reject the dissent's interpretation of this provision as requiring five of the seven members of this court to concur on jurisdictional requirements to hear a case, in addition to requiring five judges to concur that a legislative enactment is unconstitutional.
As explained, the supermajority requirement is a voting requirement on the disposition of a constitutional challenge to a statute. It is not a requirement that must be satisfied in order for a court to determine if it may proceed to take action in a case and has no application to jurisdictional decisions. Having been outvoted on the issue of standing, the dissent compounds its error by declining to exercise its option to decide the substantive issues.
Under these circumstances, the constitutional supermajority provision controls the outcome. Although four members of the court conclude that L.B. 1161 violates fundamental constitutional limits on government power in Nebraska, our power is also limited by article V, § 2. We believe that Nebraska citizens deserve a decision on the merits. But the supermajority requirement of article V, § 2, coupled with the dissent's refusal to reach the merits, means that the citizens cannot get a
JUDGMENT VACATED.
Wright, J., not participating.
Heavican, C.J., and Stephan and Cassel, JJ., dissenting in part, and in part concurring in the result.
According to the plurality, all that is now required for standing to challenge the constitutionality of a statute is a tax receipt and a cause. To reach the merits of this case, the plurality expands an exception to the general rule of common law standing that has been employed only once before in the history of this court. Although this exception was not briefed by the parties and was mentioned only in passing by the district court, the plurality concludes that the appellees, solely in their capacities as citizen taxpayers, have standing to challenge the constitutionality of L.B. 1161 because it presents "a matter of great public concern." But the plurality ignores the requirement that in order for this exception to apply, it must be shown that the legislative enactment at issue may go unchallenged unless the taxpayer has the right to bring the action. That requirement has not been and cannot be met in this case.
And the plurality is in fact a plurality. While it represents the larger numerical block of votes, that number is insufficient under our constitution to declare a statute unconstitutional.
Courts are obligated to decide the merits of cases which are properly before them, but they have an equally important obligation to refrain from deciding matters over which they lack jurisdiction. A ruling made in the absence of subject matter jurisdiction is a nullity.
One long-honored limitation on judicial power is the principle of standing. Standing
A party invoking a court's or a tribunal's jurisdiction bears the burden of establishing the elements of standing.
But there was a failure of proof. The district court concluded that it was "unable to determine, from the evidence presented, whether the [appellees'] property sits on the current pipeline route ... or instead sits on a route previously proposed." As such, the district court was "unable to determine whether [the appellees'] alleged injury — as it regards land in the path of the pipeline — is actual and imminent, or merely conjectural and hypothetical." Accordingly, the district court found that the appellees had failed to establish "traditional standing."
The appellees did not cross-appeal from this determination, and as all members of this court agree, they have not established traditional common-law standing to challenge the constitutionality of the legislation at issue here. Thus, their ability to invoke the jurisdiction of a court to adjudicate the constitutionality of L.B. 1161 depends upon whether they fall within one of the exceptions to the common-law standing requirement.
This court has recognized very limited exceptions to the standing requirement that a litigant have a personal stake in the outcome of a controversy. Our approach in this regard has been careful and conservative. We have specifically rejected invitations to liberalize our standing requirements.
There is one characteristic shared by all of the exceptions — scarcity of application. The traditional, common-law rule dominates our jurisprudence. The exceptions are few, and resort to them is rare.
The first exception to develop has nearly been lost in antiquity. As this court recently summarized,
We need not consider this exception further, because the appellees sought a declaratory judgment rather than proceeding for a writ of mandamus. We focus instead on the remaining two exceptions, both of which involve actions brought by persons who have no interest in the subject matter of the suit distinct from that of the general public.
The resident taxpayer exception, though rare in comparison to traditional, common-law standing, is much more common than either of the other exceptions.
Under this exception, a resident taxpayer, without showing any interest or injury peculiar to himself or herself, may bring an action to (1) enjoin the illegal expenditure of public funds raised for governmental purposes
In Project Extra Mile v. Nebraska Liquor Control Comm.,
In its analysis of taxpayer standing in this case, the district court erroneously concluded that Project Extra Mile "does not require [the appellees] to show [L.B.] 1161 would otherwise go unchallenged unless taxpayers have the right to bring the action." In Project Extra Mile, we concluded that the taxpayer had met her "burden" of establishing standing to challenge the Nebraska Liquor Control Commission's classification of malt beverages as beer for purposes of taxation by showing that the only parties directly affected by the classification were sellers of malt liquor who were beneficially affected by the classification and thus had no incentive to challenge it. If it had been unnecessary for the taxpayer to show that there was no one better suited to maintain the action challenging the classification, we would not have characterized such a showing as a component of the taxpayer's burden to establish standing.
The exception for matters of "great public concern" appears to have entered our jurisprudential lexicon in 1979 via this court's opinion in Cunningham v. Exon.
Cunningham is the only case in which we have applied this exception to the general rule of common-law standing before today. Perhaps that is because Cunningham provides no objective basis for determining whether a particular issue is one of "great public concern." Moreover, the issue in Cunningham involved the structural integrity of the state Constitution itself, not whether one of hundreds of laws enacted by the Legislature violated a constitutional provision, as is the claim here. As the plurality correctly notes, we have specifically declined to apply the exception in similar contexts.
At this point, it is worth noting that the appellees have never claimed standing based upon this exception. Instead, they alleged that they had standing as "taxpayers with interests in unlawful expenditure of state funds as required by [L.B.] 1161." Not surprisingly, the only exception to the traditional standing requirement analyzed by the district court was "taxpayer standing." At one point in that analysis, the district court noted that "[t]he issues involved in this case are of great public concern...." But it did not cite Cunningham or specifically analyze the exception which that case recognized. And there is no reference to Cunningham or its holding in any of the appellate briefs.
Nevertheless, the plurality invokes the holding of Cunningham, which until now has been limited to the specific facts of that case. First, it observes that the "great public concern" exception recognized in Cunningham is "another name for the `public interest' exception that we recognized in our early mandamus cases." But our opinion in Cunningham makes no reference to any mandamus cases decided by this court. It adopts the "great public concern" exception from the law of other jurisdictions, primarily Colorado. In an attempt to make the connection between the early mandamus cases and Cunningham, the plurality reads too much into our recent case law, which simply does not link the two lines of authority.
Next, the plurality attempts to identify the issue of "great public concern" presented in this case. As the district court correctly and properly observed in the first paragraph of its order, the issue in this case is not whether the proposed pipeline approved by the Governor should be built, but only whether L.B. 1161, which authorized such approval, is constitutional. The plurality elevates this rather narrow and straightforward separation of powers issue into an issue of "great public concern" by characterizing the challenge to L.B. 1161 as one involving "the citizens' interest in their form of government" and "fundamental limitations on government powers under the Nebraska Constitution."
Any challenge to the constitutionality of a statute can be characterized as involving the "fundamental limitations on government," because by enacting an unconstitutional statute, the Legislature necessarily exceeds its lawful authority. For the same reason, it could always be said that an allegedly unconstitutional statute would fall within "the citizens' interest in their form of government." But we have never
Even if we could accept this reasoning and agree an issue of "great public concern" is presented, the plurality's analysis would still fail. Cunningham requires not only that the issue presented be of "great public concern," but also that the "legislative enactment may go unchallenged unless [the] plaintiff has the right to bring the action."
In Cunningham, we rejected an argument that the only persons who would have standing to challenge the constitutional amendment were "potential" recipients of federal funds who "may have been" affected by the amendment.
But that cannot be said here. When the Governor signed the pipeline siting authorization pursuant to the authority conferred by L.B. 1161, every owner of real property which became subject to condemnation for the pipeline acquired a special pecuniary interest or injury different from that of the public generally, and thus had traditional standing to challenge L.B. 1161. Anyone mildly familiar with Nebraska geography would understand that the route approved by the Governor measures in the hundreds of miles. There must be dozens, if not hundreds, of potential plaintiffs who own property along the proposed pipeline route who would have traditional, common-law standing to bring a declaratory judgment action to challenge the constitutionality of L.B. 1161, or to assert the constitutional issue in condemnation proceedings. Indeed, one or more of the appellees may have a direct interest sufficient to establish traditional standing but simply failed to prove it.
The plurality states that "the landowners have alleged that the Legislature has unconstitutionally authorized the Governor to decide who can exercise the power of
It is true, as the plurality states, that a pipeline company whose proposed route was approved by the Governor would have no incentive to challenge L.B. 1161. But it cannot be seriously contended that property owners facing condemnation of large swaths of their farmland to make way for the pipeline were "beneficially affected" by L.B. 1161 so as to have no incentive to challenge it. Also, if the Public Service Commission believed that its constitutional jurisdiction were threatened by L.B. 1161, it would have traditional standing to challenge it.
In support of its reasoning, the plurality asks, "How could a taxpayer show a direct injury if the Legislature statutorily abolished the [Public Service Commission]?" If those were the facts before us, we might agree that the Cunningham exception applied. Legislative abolition of a constitutional agency would be a structural alteration of the state Constitution which would not produce an immediate adverse impact on any specific citizen, as was the case in Cunningham. But here, the Legislature did not abolish the Public Service Commission or take away any of its powers. Instead, it conferred alternative jurisdiction on the executive to approve the site of a proposed pipeline. The Governor's actions based on that authority had a direct impact on owners of property in the path of the pipeline and, arguably, the Public Service Commission itself. Those parties have traditional standing, and are thus better suited than a citizen or taxpayer who is not directly affected by L.B. 1161 to challenge its constitutionality.
This court has in the past carefully applied exceptions to the traditional, common-law rule of standing in order to "prevent the exceptions from swallowing the rule."
Whether or not it constitutes a matter of "great public concern," the constitutional challenge to L.B. 1161 is a legitimate issue which should be decided by a court as expeditiously as possible. But it must be decided by a court with jurisdiction to do so, or the entire judicial process is for naught. Courts cannot choose to overlook jurisdictional defects; we are obligated to
Because we believe that we lack jurisdiction to do so, we express no opinion as to the constitutionality of L.B. 1161, and we see no purpose to be served by the plurality's willingness to do so. Given this court's division on the issue of standing in this case, there is neither a five-member supermajority to hold that L.B. 1161 is unconstitutional nor a three-member minority which could uphold its constitutionality. Due to this impasse, the constitutional challenge to L.B. 1161 cannot be resolved one way or the other in this case.
Contrary to the view of the plurality, we do not have an "option" to opine on the merits after concluding that we lack jurisdiction to do so. The plurality cites to case law from other jurisdictions, including the U.S. Supreme Court, for the proposition that a judge may dissent on a jurisdictional issue and simultaneously reach the merits of the appeal. But as the plurality itself acknowledges, none of the cited law involves the dissenting judge's issuing an opinion on the merits having precedential value. In other words, while the judges opined on the merits even after finding the court lacked jurisdiction, their opinions did not affect the ultimate resolution of the case by the court.
But as the plurality acknowledges, that is not the situation here. Instead, it invites us to reach the merits in order to resolve the constitutional issue. Apparently, the plurality believes that the constitutional supermajority requirement could be achieved in this fashion. We do not share that view.
Our constitution provides: "A majority of the members [of the Supreme Court] sitting shall have authority to pronounce a decision except in cases involving the constitutionality of an act of the Legislature. No legislative act shall be held unconstitutional except by the concurrence of five judges."
We understand the constitutional supermajority requirement to mean a statute cannot be declared unconstitutional unless at least five members of this court (1) conclude that they have jurisdiction to decide the case and (2) determine on the merits that the statute is unconstitutional. Otherwise, a statute could be declared unconstitutional by four judges who believe they have jurisdiction to decide the issue and one who does not. Or, under the plurality's reasoning, the constitutionality of a statute could be upheld by three judges who do not believe they have jurisdiction to decide the issue but address the merits anyway, if there were four judges who held opposing views as to jurisdiction and constitutionality. Surely, the framers of the constitution did not intend such absurd results.
In summary, we disagree with the plurality that the appellees, having failed to establish that they have traditional standing, may nevertheless have standing as resident taxpayers asserting a matter of "great public concern" without a showing that there are no better suited parties to assert such claims. Our established case law requires such a showing. In this case, it was not and cannot be made.
We conclude that the district court erred by not dismissing the action for lack of jurisdiction due to the failure of the plaintiffs below, the appellees herein, to establish standing. For the foregoing reasons, we respectfully dissent from the plurality's analysis of standing but concur in the result vacating the judgment of the district court.