In re Application No. OP-0003 -- (TransCanada) , 303 Neb. 872 ( 2019 )

Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
10/18/2019 08:07 AM CDT
- 872 -
Nebraska Supreme Court A dvance Sheets
303 Nebraska R eports
IN RE APPLICATION NO. OP-0003
Cite as 303 Neb. 872
In re A pplication No. OP-0003.
TransCanada K eystone Pipeline, LP, et al., appellees and
cross-appellees, v. Susan and William Dunavan et al.,
appellants, Yankton Sioux Tribe of South Dakota
and Ponca Tribe of Nebraska, appellees and
cross-appellants, and Sierra Club, Nebraska
Chapter, et al., appellees.
___ N.W.2d ___
Filed August 23, 2019. No. S-17-1331.
1. Jurisdiction: Appeal and Error. A jurisdictional question which does
not involve a factual dispute is determined by an appellate court as a
matter of law.
2. Administrative Law: Statutes: Appeal and Error. The meaning and
interpretation of statutes and regulations are questions of law for which
an appellate court has an obligation to reach an independent conclusion
irrespective of the decision made by the court below.
3. Constitutional Law: Due Process. The determination of whether the
procedures afforded to an individual comport with constitutional require-
ments for procedural due process presents a question of law.
4. Public Service Commission: Appeal and Error. Under Neb. Rev. Stat.
§ 75-136(2) (Reissue 2018), an appellate court reviews an order of the
Nebraska Public Service Commission de novo on the record.
5. Appeal and Error. In a review de novo on the record, an appellate court
reappraises the evidence as presented by the record and reaches its own
independent conclusions concerning the matters at issue.
6. Administrative Law: Appeal and Error. Where the evidence is in con-
flict, the Supreme Court will consider and may give weight to the fact
that the agency hearing examiner observed the witnesses and accepted
one version of the facts rather than another.
7. Constitutional Law: Public Service Commission. The Nebraska Public
Service Commission is an independent regulatory body created by the
Nebraska Constitution in article IV, § 20.
- 873 -
Nebraska Supreme Court A dvance Sheets
303 Nebraska R eports
IN RE APPLICATION NO. OP-0003
Cite as 303 Neb. 872
8. Public Service Commission. The determination of what is consistent
with the public interest, or public convenience and necessity, is one
that is peculiarly for the determination of the Nebraska Public Service
Commission.
9. Statutes: Appeal and Error. Statutory language is to be given its plain
and ordinary meaning, and an appellate court will not resort to inter-
pretation to ascertain the meaning of statutory words which are plain,
direct, and unambiguous.
10. Statutes: Legislature: Intent. Components of a series or collection of
statutes pertaining to a certain subject matter are in pari materia and
should be conjunctively considered and construed to determine the
intent of the Legislature, so that different provisions are consistent, har-
monious, and sensible.
11. Evidence. Unless an exception applies, only a preponderance of evi-
dence is required in civil cases.
12. Trial: Evidence: Proof. The burden of proof is satisfied by actual proof
of the facts, of which proof is necessary, regardless of which party intro-
duces the evidence.
13. Administrative Law: Pleadings. The rules of pleading are not applied
in administrative proceedings as strictly as they are in court proceedings.
14. Administrative Law: Due Process: Notice. Due process requires notice
and an opportunity for a full and fair hearing at some stage of the
agency proceedings.
15. Notice: Waiver. It is generally held that participation in the hearing
waives any defect in the notice.
16. Administrative Law: Appeal and Error. An appellate court will not
consider an issue on appeal that was not presented to or passed upon by
the administrative agency.
17. Interventions: Final Orders: Appeal and Error. An order denying
intervention is a final order for purposes of appeal.
18. Administrative Law: Statutes. Agency regulations properly adopted
and filed with the Secretary of State of Nebraska have the effect of
statutory law.
19. Rules of Evidence: Hearsay: Statutes. The Nebraska Evidence Rules
provide that hearsay is admissible when authorized by the statutes of the
State of Nebraska.
20. Legislature: Courts: Evidence. The legislative branch has the right to
prescribe the admissibility of certain categories of evidence, but it is
solely a judicial function to determine the weight, if any, to be given
such evidence.
21. Evidence: Appeal and Error. In a civil case, the admission or exclu-
sion of evidence is not reversible error unless it unfairly prejudiced a
substantial right of the complaining party.
- 874 -
Nebraska Supreme Court A dvance Sheets
303 Nebraska R eports
IN RE APPLICATION NO. OP-0003
Cite as 303 Neb. 872
22. Interventions: Pleadings. Intervenors can raise only issues that sustain
or oppose the respective contentions of the original parties.
23. Interventions: Parties. An intervenor who is not an indispensable party
cannot change the position of the original parties or change the nature
and form of the action or the issues presented therein.
24. Interventions. An intervenor cannot widen the scope of the issues,
broaden the scope or function of the proceedings, or raise questions
which might be the subject of litigation but which are extraneous to the
controlling question to be decided in the case.
Appeal from the Public Service Commission. Affirmed.
David A. Domina and Brian E. Jorde, of Domina Law
Group, P.C., L.L.O., for appellants.
Douglas J. Peterson, Attorney General, L. Jay Bartel, David
A. Lopez, and Lynn A. Melson for appellee Nebraska Public
Power Service Commission.
James G. Powers and Patrick D. Pepper, of McGrath, North,
Mullin & Kratz, P.C., L.L.O., for appellees TransCanada
Keystone Pipeline, LP, et al.
Jennifer S. Baker and Leonika R. Charging, of Fredericks,
Peebles & Morgan, L.L.P., for appellee Yankton Sioux Tribe.
Brad S. Jolly, of Brad S. Jolly & Associates, for appellee
Ponca Tribe of Nebraska.
Kenneth C. Winston for appellee Sierra Club, Nebraska
Chapter.
Heavican, C.J., Miller-Lerman, Cassel, Stacy, Funke,
Papik, and Freudenberg, JJ.
Funke, J.
The Nebraska Public Service Commission (PSC) granted
the application filed by TransCanada Keystone Pipeline, LP
(TransCanada), pursuant to the Major Oil Pipeline Siting Act
(MOPSA), Neb. Rev. Stat. §§ 57-1401 to 57-1413 (Reissue
2010 & Cum. Supp. 2018), for approval of a major oil pipeline
- 875 -
Nebraska Supreme Court A dvance Sheets
303 Nebraska R eports
IN RE APPLICATION NO. OP-0003
Cite as 303 Neb. 872
route and eminent domain authority. The PSC approved the
“Mainline Alternative Route” (MAR), a 36-inch major oil pipe-
line and related facilities to be constructed through Nebraska,
from the South Dakota border in Keya Paha County, Nebraska,
to Steele City, Nebraska. The landowners, two Indian tribes,
and the Sierra Club, Nebraska Chapter (Sierra Club), all inter-
vened in the proceedings. The landowners appealed, the Indian
tribes cross-appealed, and the Sierra Club attempted to appeal
from the PSC’s decision.
The intervenors raise numerous arguments on appeal. Each
of these arguments raises issues of public concern and rep-
resents profound, deeply held beliefs. Upon de novo review
of the PSC’s decision, we find the matters in controversy
are resolved based on the determination of four overarching
issues: The first, whether the PSC had jurisdiction to consider
TransCanada’s application; the second, whether TransCanada
met its burden of proof; the third, whether the PSC properly
considered the MAR; and the fourth, whether the intervenors
were afforded due process. We answer each of these questions
in the affirmative.
At the outset, we observe that this appeal comes to us in a
completely different legal framework than we confronted in
Thompson v. Heineman.1 While both cases involve the statu-
tory process for obtaining route approval of an oil pipeline,
the issues in this appeal are distinctly different from those in
Thompson because here, route approval was sought from the
PSC using the MOPSA procedure. In this opinion, we describe
the procedures enacted by the Legislature to effectuate pro-
ceedings under MOPSA. We discuss the record in detail and
show that TransCanada carried its burden of proving that the
MAR is in the public interest. We then determine that the errors
assigned by the intervenors are without merit. Accordingly, we
affirm the PSC’s determination that approval of the MAR is in
the public interest.
1
Thompson v. Heineman, 289 Neb. 798, 857 N.W.2d 731 (2015).
- 876 -
Nebraska Supreme Court A dvance Sheets
303 Nebraska R eports
IN RE APPLICATION NO. OP-0003
Cite as 303 Neb. 872
I. BACKGROUND
TransCanada is a limited partnership organized in Delaware
with its principal place of business in Houston, Texas. In 2008,
TransCanada applied for a presidential permit to construct a
pipeline across the Canadian border into the United States.
The proposed route would have passed through the Nebraska
Sandhills at a time when no legal standards existed in Nebraska
to constrain an oil pipeline carrier’s right to exercise eminent
domain authority.2 In 2011, Gov. Dave Heineman called a
special session of the Legislature to enact siting legislation for
pipeline routing.
1. Siting Legislation
The Legislature enacted MOPSA, 2011 Neb. Laws, L.B. 1,
§ 2, 1st Spec. Sess., which gave routing authority to the PSC,
an independent regulatory body with duly elected officials.3
MOPSA applies to a pipeline with an interior diameter larger
than 6 inches that is built to transport petroleum products
within, through, or across Nebraska.4 MOPSA requires a major
oil pipeline carrier to apply for and obtain routing approval
from the PSC before the carrier is authorized to exercise emi-
nent domain power pursuant to § 57-1101.5
MOPSA recognized that federal law preempts state regula-
tion of safety issues related to oil pipelines and that Nebraska’s
laws cannot interfere with the federal government’s uniform
standards for pipeline safety, operation, and maintenance.6
Consequently, the Legislature enacted MOPSA to address
“choosing the location of the route aside and apart from safety
considerations.”7 With MOPSA, the Legislature ­ harnessed
2
See Neb. Rev. Stat. § 57-1101 (Reissue 2010).
3
See, Neb. Rev. Stat. § 32-509 (Reissue 2016); Neb. Rev. Stat. § 75-101(1)
(Reissue 2016).
4
§ 57-1404(2).
5
See §§ 57-1402(1)(c) and 57-1408(1).
6
§ 57-1402(2).
7
See id.
- 877 -
Nebraska Supreme Court A dvance Sheets
303 Nebraska R eports
IN RE APPLICATION NO. OP-0003
Cite as 303 Neb. 872
Nebraska’s remaining sovereign powers with respect to oil
pipeline construction, granted the PSC authority to conduct
proceedings and decide applications, and determined that
“[t]he construction of major oil pipelines in Nebraska is in the
public interest of Nebraska . . . .”8
In the same special session, the Legislature enacted 2011
Neb. Laws, L.B. 4, 1st Spec. Sess., which created a sepa-
rate procedural avenue for a pipeline carrier to obtain route
approval. Independent from the MOPSA process, § 3 of L.B. 4
authorized Nebraska’s Department of Environmental Quality
(DEQ) to collaborate with any federal agency for the prep-
aration of a supplemental environmental impact statement
(SEIS) for oil pipelines within, through, or across Nebraska,
in accordance with the review process under the National
Environmental Policy Act of 1969, 42 U.S.C. § 4321 et seq.
(2012).9 Once completed, the DEQ was to submit the SEIS to
the Governor, who then would have 30 days to indicate his or
her approval of a route in writing to the relevant federal agen-
cies.10 Both L.B. 1 and L.B. 4 were passed with an emergency
clause and became effective on the same date, November
23, 2011.
On January 18, 2012, the President of the United States
denied TransCanada’s permit application. On April 17, 2012,
the Legislature passed and the Governor approved 2012 Neb.
Laws, L.B. 1161, which amended L.B. 1 and L.B. 4. In its orig-
inal form, MOPSA did not apply to TransCanada, because the
legislation contained an exemption for a pipeline carrier which
had a pending application for a presidential permit.11 L.B. 1161
eliminated that exemption, which led TransCanada to seek to
obtain route approval from the PSC under MOPSA.12
8
§ 57-1403(3).
9
L.B. 4, § 3(1).
10
L.B. 4, § 3(4).
11
L.B. 1, § 5(2).
12
L.B. 1161, § 4.
- 878 -
Nebraska Supreme Court A dvance Sheets
303 Nebraska R eports
IN RE APPLICATION NO. OP-0003
Cite as 303 Neb. 872
L.B. 1161 amended § 3 of L.B. 4 so that the DEQ could
either prepare the SEIS through collaboration with federal
agencies, as L.B. 4 originally had provided, or could indepen-
dently evaluate a route submitted by a pipeline carrier “for the
stated purpose of being included in a federal agency’s or agen-
cies’ National Environmental Policy Act review process.”13
This amendment allowed the DEQ to continue to review pos-
sible routes for the Keystone XL pipeline project, which the
DEQ had ceased reviewing following the President’s denial of
TransCanada’s application for permit.
In conducting an independent evaluation of a proposed
route, L.B. 1161 required the DEQ to hold at least one public
hearing, provide opportunities for public review and comment,
and analyze “the environmental, economic, social, and other
impacts associated with the proposed route and route alterna-
tives in Nebraska.”14 The DEQ would then submit its evalu-
ation of the pipeline route to the Governor, and the pipeline
carrier could then seek the Governor’s approval of the route.15
L.B. 1161 provided that a pipeline carrier’s authorization
to exercise eminent domain power expires “[i]f condemna-
tion 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].”16
2. TransCanada Modifies Route
In 2012, TransCanada modified the original route, which
would have passed through the Nebraska Sandhills, based
on recommendations provided by the DEQ. On September 5,
2012, TransCanada filed a supplemental environmental report
with the DEQ regarding the “reroute.” The “reroute” avoided
13
Neb. Rev. Stat. § 57-1503(1)(a)(i) (Cum. Supp. 2018).
14
Id.
15
See, § 57-1503(4); § 57-1101 (Cum. Supp. 2018).
16
§ 57-1101 (Cum. Supp. 2018).
- 879 -
Nebraska Supreme Court A dvance Sheets
303 Nebraska R eports
IN RE APPLICATION NO. OP-0003
Cite as 303 Neb. 872
the Sandhills and other areas of fragile soils and shallow
groundwater identified by the DEQ. On January 3, 2013, the
DEQ submitted a final evaluation report to the Governor in
accordance with L.B. 1161. On January 22, the Governor
approved the “reroute” in a letter to the President and the U.S.
Department of State (the Department), asking that the DEQ’s
evaluation be included in the federal SEIS report. TransCanada
filed condemnation actions, which were later dismissed follow-
ing litigation challenging the constitutionality of L.B. 1161.
More than 2 years passed after the Governor’s approval of the
route, and TransCanada no longer proceeded on that approval.
On January 24, 2017, the President invited TransCanada to
resubmit its permit application, which TransCanada accom-
plished 2 days later. On February 16, TransCanada filed an
application with the PSC for approval of a major oil pipeline
route. On March 23, the Department granted TransCanada a
presidential permit.
3. TransCanada’s A pplication to PSC
TransCanada’s application to the PSC sought approval of
a route designated as the “Preferred Route” (PR), which was
“refined to reflect the recommendations made by the [DEQ]
and the Governor’s approval.” The “reroute” submitted to
the DEQ in 2012 “was used as the basis for developing the
[PR].” The PR is 275.2 miles long and begins at the Nebraska-
South Dakota border in Keya Paha County and passes through
the Nebraska counties of Keya Paha, Boyd, Holt, Antelope,
Boone, Nance, Merrick, Polk, York, Fillmore, and Saline
before terminating in Steele City.
The application referred to two alternative routes, the MAR
and the “Sandhills Alternative Route” (SAR). TransCanada
developed each of the three routes with the goal of utiliz-
ing the “existing fixed starting point” at the Nebraska-South
Dakota border in Keya Paha County, north of Mills, Nebraska,
and the “existing fixed ending point” at the pump station in
Steele City, which is the end point of the pipeline system
already existing in Nebraska, known as Keystone I. Keystone I
- 880 -
Nebraska Supreme Court A dvance Sheets
303 Nebraska R eports
IN RE APPLICATION NO. OP-0003
Cite as 303 Neb. 872
runs north and south through the Nebraska counties of Cedar,
Wayne, Stanton, Colfax, Butler, Seward, Saline, and Jefferson.
The PR and the MAR run southeastward and were designed to
avoid passing through the Sandhills, an ecological region as
defined by the DEQ.
The PR would run across the southwest corner of Boyd
County and then cross the Keya Paha River; enter Holt County
crossing the Niobrara River; cross the Elkhorn River in
Antelope County, through Boone County; and cross the Loup
River in Nance County. The route would then turn and cross
the northeastern corner of Merrick County; cross the Platte
River; enter Polk County and continue south through York,
Fillmore, and Saline Counties; and end in Jefferson County.
The PR would parallel Keystone I for 7.3 miles and would
require five pump stations.
- 881 -
Nebraska Supreme Court A dvance Sheets
303 Nebraska R eports
IN RE APPLICATION NO. OP-0003
Cite as 303 Neb. 872
The SAR is the route TransCanada initially proposed in
2008. TransCanada’s application stated: “Compared to the
[SAR], the overall footprint of the [PR] represents less envi-
ronmental impact by avoiding the Sandhills region and mini-
mizing impacts to areas with characteristics similar to the
Sandhills, including shallow groundwater and fragile soils.”
The MAR would “follow the [PR] for 110 miles to just
south of the Elkhorn River in Antelope County, then head in
a southeasterly direction across Madison and Stanton coun-
ties for approximately 43 miles to intercept [Keystone I],” and
head south and parallel Keystone I for 97.6 miles, crossing
Shell Creek and the Platte River in Colfax County. Based on
the DEQ’s recommendation, TransCanada adjusted the route
to divert from Keystone I for 29.8 miles to avoid the “Seward
County Wellhead Protection Area.” The route then rejoins
Keystone I and continues through Saline County to Jefferson
County. The MAR would be 5 miles longer than the PR and
would require a total of six pump stations.
TransCanada stated in the application that it viewed the PR
to be superior to the MAR, because the MAR would require
a greater total number of acres; increase the crossing of the
ranges of federally recognized threatened and endangered spe-
cies; increase the crossing of highly erodible soils; increase the
crossing of unusually sensitive ecological areas; and increase
crossings of perennial streams, railroads, and roads. Despite
the MAR’s advantages due to its co-location with Keystone I,
TransCanada considered the PR to be more beneficial than the
MAR, because the PR was shorter and required one fewer
pump station.
The application included a reclamation and revegetation plan
to fully restore lands disturbed by construction along the route
to their preconstruction capabilities. Under the Oil Pipeline
Reclamation Act, Neb. Rev. Stat. §§ 76-3301 to 76-3308
(Reissue 2018), TransCanada is responsible for all reclama-
tion costs necessary as a result of constructing and operating
the pipeline, except to the extent another party is determined
- 882 -
Nebraska Supreme Court A dvance Sheets
303 Nebraska R eports
IN RE APPLICATION NO. OP-0003
Cite as 303 Neb. 872
to be responsible.17 TransCanada intends to revegetate the
pipeline right-of-way as near as practicable to preconstruc-
tion conditions to ensure equivalent land capability following
construction and the establishment of native plant communities
along the pipeline. TransCanada represented that it will abide
by § 76-3304(3) and keep its reclamation and maintenance
obligations until the pipeline is permanently decommissioned
or removed.
The application specified that the pipeline would be 36 inches
in diameter for the entire length of the route. Construction
would occur in a linear segmented fashion within a 110-foot-
wide construction right-of-way, consisting of a 60-foot tem-
porary right-of-way and a 50-foot permanent easement. The
width of the construction right-of-way may be decreased or
increased to address natural resource or engineering concerns.
Moreover, TransCanada stated it will adjust the route “to the
extent practicable” to avoid culturally significant sites. In addi-
tion to the installation of the pipeline, the PR required the con-
struction and operation of permanent aboveground structures,
including 5 pump stations and 19 intermediate mainline valves.
The pump stations would be built on purchased land ranging
from 7 to 17 acres. Each intermediate mainline valve would be
constructed within a fenced site, approximately 50 feet by 50
feet, located within the 50-foot-wide easement.
TransCanada concluded its application by stating that the
PR had been thoroughly evaluated by federal and state agen-
cies, was designed to mitigate impacts to natural resources,
and ensured minimal impacts to the orderly development and
growth of the region. In its prayer for relief, TransCanada
requested an order from the PSC that the PR is in the pub-
lic interest.
4. Prehearing M atters
The PSC published notice of TransCanada’s application in
The Daily Record, a legal newspaper in Omaha, Nebraska, on
17
§ 76-3304(1).
- 883 -
Nebraska Supreme Court A dvance Sheets
303 Nebraska R eports
IN RE APPLICATION NO. OP-0003
Cite as 303 Neb. 872
February 20, 2017, and set the deadline for formal intervention
for March 22. TransCanada filed proof of service of its appli-
cation on the agencies listed in § 57-1407(3), as well as proof
of notice to Antelope, Boone, Boyd, Fillmore, Holt, Jefferson,
Keya Paha, Merrick, Nance, Polk, Saline, and York Counties.
TransCanada later filed proof that notice of the application was
filed in newspapers of general circulation in those counties.
Numerous groups and individuals filed petitions to inter-
vene in the proceedings based on property, economic, natural
resource, social, cultural, and territorial interests. On March
30, 2017, TransCanada filed objections to certain petitions for
intervention, arguing that the asserted legal rights or interests
would not be affected due to the narrow scope of the proceed-
ings. TransCanada argued that MOPSA does not provide a
forum to litigate whether or not a major oil pipeline should be
constructed, but instead is limited to the issue of whether or not
to approve a particular pipeline route.
On March 31, 2017, the hearing officer for the PSC issued an
“Order on Formal Intervention Petitions.” The order explained
that, under § 57-1408(2), the applicable statutory deadline for
the PSC’s decision was “eight months after the issuance of a
presidential permit authorizing the construction of the major oil
pipeline.” The presidential permit for the pipeline was issued
on March 23, which meant that the PSC was required to issue
its final decision on the application by November 23. The order
stated that the decisions on the petitions for intervention were
reached by balancing the strict deadline under MOPSA with
the need to produce a complete record and afford all interested
parties an opportunity to be heard.
The order granted petitions for formal intervention filed by
the landowners with no limitations or conditions. The order
granted petitions for formal intervention filed by three dif-
ferent unions: the Midwest Regional Office of the Laborers
International Union of America (LiUNA); the International
Brotherhood of Electrical Workers, Local Union No. 265; and
the United Association of Journeymen and Apprentices of the
- 884 -
Nebraska Supreme Court A dvance Sheets
303 Nebraska R eports
IN RE APPLICATION NO. OP-0003
Cite as 303 Neb. 872
Plumbing and Pipe Fitting Industry of the United States and
Canada, AFL-CIO (UA). The order imposed conditions on the
unions’ participation by ordering them to jointly offer testi-
mony from one witness at the public hearing, participate in
limited discovery, collaborate on cross-examination of up to 1
hour per witness, and submit one joint brief.
The order granted petitions for formal intervention filed
by the Ponca Tribe of Nebraska (Ponca) and the Yankton
Sioux Tribe of South Dakota (Yankton Sioux). Ponca’s peti-
tion stated it had a direct interest in the proceedings because
the routes pass through its traditional, aboriginal, and federally
recognized territory, which contains “historic, cultural, sacred
and archaeological natural resources.” Yankton Sioux’s petition
stated that the proposed pipeline would “traverse [its] ancestral
territory” and that it had an interest in preserving “cultural,
spiritual, and historic sites.” The hearing officer found that
“neither petition cite[d] a legally cognizable current real prop-
erty interest in land encompassing the route,” but noted that
§ 57-1407(4)(d) requires the PSC “to consider evidence of the
social impacts of the project,” and found that evaluating social
impacts could encompass cultural, anthropological, and histori-
cal issues. The order imposed conditions on the tribes’ petitions
similar to those imposed on the unions.
The order granted petitions for formal intervention, subject
to the same or similar conditions, filed by groups and indi-
viduals asserting environmental and natural resource interests,
including Bold Alliance and the Sierra Club. The order stated
that under MOPSA, the PSC is prohibited from evaluating
safety considerations such as “the risk or impact of spills
or leaks from the major oil pipeline,” but found that the
PSC could appropriately consider issues such as the proposed
route’s “environmental impact, soil permeability, distance to
groundwater, and impact on plant life and wildlife.”
The order on the petitions for intervention concluded with
a separate section devoted to addressing the MAR. The order
stated that “[MOPSA] requires the [PSC] to consider whether
- 885 -
Nebraska Supreme Court A dvance Sheets
303 Nebraska R eports
IN RE APPLICATION NO. OP-0003
Cite as 303 Neb. 872
any other utility corridor exists that could feasibly and benefi-
cially be used for the route of the major oil pipeline,” and that
the MAR “partially parallels [Keystone I].” The order there-
fore “encourage[d] all parties to provide evidence regarding
the feasibility and potential benefits and/or drawbacks of the
[MAR].” The order granted each intervenor group permission
to call an additional witness and offer accompanying exhibits
to provide evidence concerning the MAR. The order noted that
the SAR “was previously rejected by Nebraska authorities” and
therefore has “already effectively been determined to not be a
viable option.”
On April 5, 2017, the hearing officer entered a case man-
agement order. The order set a prehearing conference for July
31 and announced that a public hearing on TransCanada’s
application would commence on August 7 in Lincoln,
Nebraska. The order stated that the PSC may hold public
meetings “for the purpose of receiving input from the public”
and that “[a]ny comments received will be made a part of
the permanent record of this proceeding.” All parties were
required to submit written testimony in advance and make
witnesses available for cross-examination at the public hear-
ing. The order stated that “any/all Hearing Officer Orders . . .
will apply to and bind all parties, will control the course of
the proceedings, and may be modified only by order of the
Hearing Officer.”
The PSC published notice of the public hearing on
TransCanada’s application in The Daily Record newspaper
on April 11, 2017. The notice also announced that the PSC
would hold a public meeting in Lincoln on April 18. The PSC
published notice of its August 7 public hearing in newspapers
in counties along the MAR and the PR, and sent letters to the
governing bodies of the cities and counties along both routes
notifying them that the pipeline route could pass through their
jurisdiction and seeking their views on whether that would be
in the public interest. The letters indicated that the application
was available on the PSC’s website.
- 886 -
Nebraska Supreme Court A dvance Sheets
303 Nebraska R eports
IN RE APPLICATION NO. OP-0003
Cite as 303 Neb. 872
On May 3, 2017, the PSC held a public meeting in York,
Nebraska. On May 10, “after careful and thoughtful delibera-
tion and reflection of the variety of public comment received by
the [PSC] at the [public meeting],” the hearing officer entered
an order “[m]odifying [c]ase [m]anagement [p]lan and [i]nter-
vention [o]rder.” The order allowed each intervenor group to
present testimony from two witnesses, in addition to a “witness
regarding the [MAR] as detailed in the [intervention order].”
On June 7 and 28 and July 26, 2017, the PSC held addi-
tional public meetings in York, O’Neill, Norfolk, and Ralston,
Nebraska, respectively, and received over 450 oral and written
comments from the public.
5. Public Hearing
The PSC held a public hearing on TransCanada’s application
from August 7 to 10, 2017, in Lincoln. TransCanada submitted
prefiled direct examination testimony from 10 witnesses, pre-
sented each witness for cross-examination, and filed rebuttal
testimony from 6 witnesses. The landowner intervenors pre-
filed testimony from 61 witnesses and offered live testimony
from 10 landowners and 1 expert witness. Ponca and Yankton
Sioux each presented testimony from one witness. The natu-
ral resource intervenors presented testimony from three wit-
nesses, and the union groups presented testimony from two
witnesses.
We provide a summary of the presentation of evidence at the
public hearing, along with context added from the thousands of
pages of pleadings, exhibits, testimony, and briefs in the record
before the PSC.
(a) TransCanada Testimony
(i) Tony Palmer
Tony Palmer is the president of TransCanada Keystone
Pipeline GP, LLC, and TransCanada Keystone, LLC, which
together own 100 percent of TransCanada, a company orga-
nized for the purposes of owning and constructing pipelines
which transport crude oil from Canada to the United States.
- 887 -
Nebraska Supreme Court A dvance Sheets
303 Nebraska R eports
IN RE APPLICATION NO. OP-0003
Cite as 303 Neb. 872
Palmer is responsible for development and oversight of the
pipeline project. He testified in support of the request for
approval of the PR as set forth in the application. Palmer stated
the PR was designed by drawing the “shortest footprint . . .
from Hardisty, Alberta, to Steele City.”
Palmer estimated the initial use of the pipeline would be
20 years, which could be extended to 50 years if it was well
maintained. Palmer confirmed that TransCanada is responsible
for all reclamation costs associated with the project, unless
another party is determined to be responsible. Palmer repre-
sented that TransCanada and all affiliated parties will not claim
any tax deductions, exemptions, credits, refunds, or rebates
under the Nebraska Advantage Act, Neb. Rev. Stat. §§ 77-5701
to 77-5735 (Reissue 2009), and testified that “we do not con-
sider selling the route an option.” Palmer stated that based on
TransCanada’s studies and the studies conducted by the DEQ
and the Department, he considered the PR to be superior to
the MAR.
(ii) Paul Fuhrer
Paul Fuhrer, the project manager for TransCanada USA
Services Inc., testified regarding the construction process for
the proposed pipeline and pump stations. Fuhrer stated the
top of the pipeline will sit a minimum of 4 feet below the
surface of land, and a minimum of 25 feet below the surface
of a water stream. Each pump station will be placed an aver-
age of 55 miles apart and utilize approximately 8 to 10 acres
of land, but could utilize up to 17 acres. Shutoff valves will
be placed at intervals along the pipeline, based on hydraulics
and other factors, and located within a 50-foot-by-50-foot
fenced enclosure.
Fuhrer testified about the trenching operations designed
to provide sufficient width and depth to support the pipeline.
The construction and installation of a new pipeline would
require segregating topsoil from subsoil 110 feet across, and
digging trenches that are approximately 8 feet wide and 7
feet deep.
- 888 -
Nebraska Supreme Court A dvance Sheets
303 Nebraska R eports
IN RE APPLICATION NO. OP-0003
Cite as 303 Neb. 872
(iii) Ernie Goss
Dr. Ernie Goss, a professor of economics at Creighton
University and the principal of the “Goss Institute,” testified
regarding his “socioeconomic” impacts report. Goss concluded
that the pipeline project would generate economic activity in
Nebraska such as sales, wages, and jobs, and would contribute
to the state and local tax bases. He estimated that construction
of the pipeline would result in positive state and local tax rev-
enue to exceed $264 million through the year 2034. Goss con-
cluded that during the 2-year construction period, the project
would generate a total of over $890 million in Nebraska, with a
labor income of $326.6 million supporting an average of 3,397
jobs per year. He estimated that, during the operations period
from 2020 through 2034, there would be an economic impact
in Nebraska of $1.2 billion in output/sales, with labor income
of $415.5 million supporting an average of 371.7 jobs per year.
For property tax purposes, Goss considered the pipeline to be a
15-year asset which would depreciate out, except to the extent
that facilities are added, replaced, or maintained.
Goss employed an input-output method, a type of applied
economics analysis that “tracks the interdependence among
various producing and consuming sectors of an economy.”
For example, Goss asserted that each $1 million TransCanada
spends on construction would create a net economic gain of
$286,522 in Nebraska and that each $1 million TransCanada
spends on operation would create a net gain of $150,000. Goss
used “IMPLAN” software in forecasting the economic impact
of the pipeline. IMPLAN combines input-output analysis with
regional-specific statistics. Goss stated that IMPLAN is a
widely used and accepted multiplier system, but agreed that
IMPLAN is limited in its ability to determine whether “jobs
or output are new or already existing and are simply being
reallocated from other uses.”
Goss’ report did not disclose the scope of his engagement,
but he stated that he was engaged to update his report, initially
published in 2013, to reflect the most current data. He did not
- 889 -
Nebraska Supreme Court A dvance Sheets
303 Nebraska R eports
IN RE APPLICATION NO. OP-0003
Cite as 303 Neb. 872
recall how much he had been paid by TransCanada. He admit-
ted the report was not peer reviewed and stated: “The goal was
to do a study that made sense to the woman and man on the
street . . . .”
(iv) Sandra Barnett
Sandra Barnett, an environmental specialist for TransCanada
Corporation, testified regarding environmental issues. Her tes-
timony reiterated TransCanada’s commitment to comply with
the Oil Pipeline Reclamation Act and to minimize potential
impacts on land areas and natural resources. Barnett admit-
ted that for affected cropland, “[t]here would be temporary
yield loss during construction and perhaps for a period of
time afterward,” but stated that TransCanada will reclaim and
revegetate the right-of-way and work with the affected land-
owners to return it “as close as we can make it” to preconstruc-
tion condition.
Barnett stated that if a dispute occurs between TransCanada
and a landowner about the postconstruction condition of land,
the parties will reach a resolution by consulting the Natural
Resources Conservation Service (NRCS), a division of the U.S.
Department of Agriculture, or other agencies, and include them
in the discussion in order to reach a resolution. Regarding sur-
face water resources, Barnett admitted that during construction,
there potentially will be temporary degradation to groundwater
quality and aquatic habitat, as well as bank stability.
(v) John Beaver
John Beaver, a project manager, ecologist, and reclama-
tion specialist with an environmental services company, has
been the senior reclamation specialist and special-status
species biologist for the project since 2009. He stated that
TransCanada will monitor the condition of the right-of-way
during the pipeline’s entire operational life. He admitted that
TransCanada’s land surveys and “Construction Mitigation
and Reclamation Plan” (CMRP) for Nebraska have not been
updated since 2012.
- 890 -
Nebraska Supreme Court A dvance Sheets
303 Nebraska R eports
IN RE APPLICATION NO. OP-0003
Cite as 303 Neb. 872
(vi) Michael Portnoy
Michael Portnoy, the president and chief executive officer
of an environmental consulting and engineering firm, is the
lead hydrologist and project manager for soil permeability and
distance-to-groundwater surveys. He has academic degrees in
geology, geochemistry, hydrology, and business administration.
He testified that there is a wide diversification of soil along the
PR; he did not separately study the soil along the MAR.
(vii) Dr. Jon Schmidt
Dr. Jon Schmidt, vice president of the management con-
tractor for the pipeline project, helped prepare TransCanada’s
application. He testified the application compared the different
routes based on the number of acres disturbed, federally listed
threatened and endangered species, amount of highly erodible
soils, ecologically sensitive areas, and number of crossings of
perennial streams, railroads, and roads. He did not analyze the
route referred to as the “I-90 Route,” which would co-locate
with the entire length of Keystone I.
On cross-examination, Schmidt agreed that the MAR “ha[d]
potential environmental benefits due to its co-location with
[Keystone I].” He agreed that the PR crosses five Nebraska
rivers and the MAR crosses only two rivers, but stated the
MAR crosses more “perennial waterbodies.” He agreed that
according to a map received in evidence, both the PR and the
MAR cross the “Ponca Trail of Tears.”
(viii) Meera Kothari
Meera Kothari, a professional engineer and manager for
TransCanada, helped prepare the section of the application
which addressed the possible routes. She agreed that the MAR
could “feasibly” and “beneficially” be used in Nebraska. She
testified that the MAR’s deviation from Keystone I in Seward
County was to “avoid the wellhead protection area based
on the feedback from the DEQ” and confirmed that “there
are no wellhead protection area issues on either” the PR or
the MAR.
- 891 -
Nebraska Supreme Court A dvance Sheets
303 Nebraska R eports
IN RE APPLICATION NO. OP-0003
Cite as 303 Neb. 872
(b) Landowner Intervenors
Testimony
The PSC heard testimony from the landowners focusing on
issues of soil compaction, topsoil loss, wind and water erosion,
soil blowouts and slides, adverse impacts to crops based on
increased soil temperature, and proximity of pipeline construc-
tion to water sources. The landowners also provided expert
testimony on the issue of economic impact.
(i) Arthur Tanderup
Arthur Tanderup owns farmland in Antelope County. He
and his wife conduct no-till, irrigated farming and raise corn,
native corn, soybeans, and rye. He described his land as highly
erodible and testified that construction will interfere with the
topsoil and the benefits of no-till farming.
(ii) Frank Morrison
Frank Morrison owns farmland in Antelope County, where
he and his wife produce popcorn, edible beans, and peanuts.
The land farmed by Morrison contains 65 irrigation wells.
He testified the proposed route runs approximately 11⁄2 miles
from his processing facilities and intersects his property almost
in half.
(iii) Robert Krutz
Robert Krutz owns land in Antelope County. He and his
wife raise “natural beef,” corn, and soybeans. Krutz testified
that the construction could put his natural beef certification at
risk, which would affect his market sales. He stated his con-
cerns about the continued revegetation of his land which sup-
ports his livestock.
(iv) Jeanne Crumly
Jeanne Crumly owns land in Holt County. She and her
husband conduct no-till, irrigated farming and raise corn, soy-
beans, hay, and potatoes. She testified that the pipeline will
impact erodible and permeable soils.
- 892 -
Nebraska Supreme Court A dvance Sheets
303 Nebraska R eports
IN RE APPLICATION NO. OP-0003
Cite as 303 Neb. 872
(v) Bonny Kilmurry
Bonny Kilmurry owns land in Holt County. She and her
husband have a cow-calf operation, and they harvest hay
from pastureland. Her land contains subirrigated meadows
with water close to the surface, as well as highly erodible soils,
which she described as being similar to Sandhills land.
(vi) Diana Steskal
Diana Steskal owns land in Holt County. Steskal owns
no-till, irrigated farmland that produces wheat, corn, soybeans,
edible beans, and popcorn, and she urged for the protection of
the natural resources on her land.
(vii) Andy Grier
Andy Grier is a manager of a ranch in Holt County. He tes-
tified about the pipeline’s crossing of the Niobrara River, the
potential soil erosion from land clearing, and the proximity of
the pipeline to his ranch’s water supplies.
(viii) Robert Allpress
Robert Allpress owns ranchland on the eastern border of
Keya Paha County. He stated the proposed route will cross
through fragile soil that is susceptible to blowouts and slides
and that many plants and animals will be endangered. He testi-
fied he has observed a bald eagle’s nest and whooping cranes
in areas near his property. In addition, he testified that mem-
bers of the Ponca and Yankton Sioux have surveyed his prop-
erty and have identified “culturally significant sites.”
(ix) Dr. Michael O’Hara
Dr. Michael O’Hara, an economics professor at the
University of Nebraska at Omaha, analyzed the economic
impact of the proposed pipeline in Nebraska and reviewed
Goss’ socioeconomic report. O’Hara opined that the pipeline
would decrease the value of property on the route by approxi-
mately 15 percent, and he concluded that the pipeline would
- 893 -
Nebraska Supreme Court A dvance Sheets
303 Nebraska R eports
IN RE APPLICATION NO. OP-0003
Cite as 303 Neb. 872
“reduce the emotional attitude of property owners towards
their property.” On cross-examination, he admitted that he
did not evaluate the Department’s conclusion that the proj-
ect would not have a negative impact on property values and
would have a positive economic impact through job creation
and earnings. He opined that the project would create few
permanent jobs. He disagreed with Goss’ conclusions about
the increased property tax revenues generated by the pipeline,
but acknowledged that TransCanada will be obligated to pay
significant sales and use taxes.
(c) Yankton Sioux Testimony
Jason Cooke, a member of the Yankton Sioux’s business
and claims committee, the executive body of Yankton Sioux,
testified the pipeline would cross the tribe’s ancestral territory
and would disturb cultural resources. Cooke said he expected
that the pipeline would encounter burials, ceremonial areas,
historic trails, and food and medicine gathering areas. In
addition, he objected to a temporary camp that TransCanada
may build for its pipeline workers approximately 40 miles
from a Yankton Sioux reservation. Cooke stated that such
camps are a source of violence and drugs and that the
pipeline workers would be drawn to the tribe’s casino in
South Dakota.
(d) Ponca Testimony
Shannon Wright, the Ponca’s tribal historic preservation
officer, stated that the PR and the MAR cross the Ponca Trail
of Tears and that construction of either route could damage
or destroy historic sites. Wright stated that the MAR would
cross near Ponca’s service areas in the Nebraska counties of
Boyd, Holt, Madison, Stanton, and Platte. Wright agreed that
impacts from construction would be alleviated if TransCanada
conducted the cultural surveys identified in the “Programmatic
Agreement” (PA) and that there will be time before construc-
tion for TransCanada to complete these surveys.
- 894 -
Nebraska Supreme Court A dvance Sheets
303 Nebraska R eports
IN RE APPLICATION NO. OP-0003
Cite as 303 Neb. 872
(e) Natural Resources Intervenors Testimony
(i) Dr. Paul Johnsgard
Dr. Paul Johnsgard, a University of Nebraska-Lincoln profes-
sor emeritus of biological sciences, has extensively researched
the biology of whooping cranes. Johnsgard asserted that the
pipeline would require placing additional electric transmission
lines in the whooping cranes’ central migration path. He agreed
that the risk posed by the project is “small.”
(ii) Dr. Thomas David Hayes
Dr. Thomas David Hayes, the lead scientist and executive
director of a nonprofit corporation providing research and
technical services on environmental matters, testified the pipe-
line project would adversely impact natural resources “due to
decreased soil permeability and increased soil compaction in
both natural areas and croplands.” He further stated that con-
struction would “seriously deplete native prairie.” Comparing
the PR and the MAR, Hayes concluded that “the [MAR’s]
impact upon federally listed species is significantly less than
that of the [PR], primarily due to the [MAR’s] impacting
84.6 fewer miles of whooping crane habitat.” He stated that
the application
downplays the measurable benefits of co-locating the
[MAR]. With 88.3 and 102.2 more miles, respectively,
of pipeline and total co-location, compared to the [PR],
the [MAR] substantially decreases its overall impact
by reworking far more industrially impacted areas and,
consequently, reducing impacts to relatively undisturbed
land. . . . [I]n this manner, irreparable damage to impor-
tant natural resources, including native soils and grass-
lands, is proportionally reduced.
(iii) Joseph Trungale
Joseph Trungale, a consultant specializing in hydrology
and instream flows, testified about the physical, chemical,
and biological impacts associated with the pipeline’s interac-
tion with stream channels. He stated there was insufficient
- 895 -
Nebraska Supreme Court A dvance Sheets
303 Nebraska R eports
IN RE APPLICATION NO. OP-0003
Cite as 303 Neb. 872
information about mitigation of stream channel erosion and
that shallow aquifers could be affected.
(f) Economic Intervenors Testimony
(i) David Barnett
David Barnett, an international representative assigned to the
pipeline and gas distribution department for UA, testified that
UA has worked with TransCanada on several recent projects
and that the pipeline project would have a positive economic
impact on UA. He estimated that UA could expect 564 jobs for
the construction phase of the project.
(ii) Bill Gerhard
Bill Gerhard, a special representative of LiUNA, testified
that the pipeline project would have a positive economic
impact on LiUNA and its members. He stated the project
would create several different types of energy-related jobs,
including pipeline construction and pump station jobs.
6. Closing A rguments
In their written closing remarks, the landowner intervenors
argued that TransCanada’s application should be denied for
failure of proof. The landowners argued in the alternative that
the PSC had the power to approve an alternate route, so long
as the route followed Keystone I.
Bold Alliance and the Sierra Club asserted in their written
closing argument that “[the] PSC has the authority to approve
or disapprove of each route location by considering the ben-
efits and feasibility of each of the proposed routes.” They
argued that the PR should be denied, because it has more nega-
tive impacts than the MAR, and that the PSC should approve
the I-90 Route.
Ponca opposed both the PR and the MAR. Yankton Sioux
argued about the risks associated with the camps for pipeline
workers. The unions urged the PSC’s approval of the applica-
tion, because the project would bring jobs and other tangible
- 896 -
Nebraska Supreme Court A dvance Sheets
303 Nebraska R eports
IN RE APPLICATION NO. OP-0003
Cite as 303 Neb. 872
economic benefits to their members and the communities in
which they reside and work.
7. PSC’s Order Granting
TransCanada’s A pplication
On November 20, 2017, the PSC issued an order approving
TransCanada’s application, by a 3-to-2 vote, and finding the
MAR to be in the public interest. The PSC began its findings by
stating that MOPSA limits the PSC’s authority to “a review of
the proposed route only. The [PSC] is not to determine whether
or not the pipeline project, or the pipeline itself, should be
built.” (Emphasis in original.) The PSC further stated, “[T]he
Legislature has given the [PSC] the limited responsibility of
determining whether the route of the pipeline is in the public
interest.” In making its public interest determination, the PSC
discussed and analyzed each of the eight factors for consider-
ation under § 57-1407(4), which provides:
The pipeline carrier shall have the burden to establish that
the proposed route of the major oil pipeline would serve
the public interest. In determining whether the pipeline
carrier has met its burden, the commission shall not eval-
uate safety considerations, including the risk or impact of
spills or leaks from the major oil pipeline, but the com-
mission shall evaluate:
(a) Whether the pipeline carrier has demonstrated com-
pliance with all applicable state statutes, rules, and regu-
lations 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 con-
nected natural resources and the depletion of beneficial
uses of the natural resources;
(c) Evidence of methods to minimize or mitigate the
potential impacts of the major oil pipeline to natural
resources;
- 897 -
Nebraska Supreme Court A dvance Sheets
303 Nebraska R eports
IN RE APPLICATION NO. OP-0003
Cite as 303 Neb. 872
(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 sub-
section (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 PSC found that TransCanada had produced sufficient
evidence to satisfy the relevant statutory considerations. The
PSC gave significant weight to subsection (e), and ultimately
approved the MAR rather than the PR based on that subsec-
tion. The PSC found that the MAR utilized an existing utility
corridor, Keystone I, for approximately 100 miles. The PSC
declined to approve the I-90 Route, because TransCanada’s
construction permit in South Dakota required crossing into
Nebraska in Keya Paha County, and the entry point for the I-90
Route is over 100 miles to the east.
The PSC found that “the [PR] fails to take advantage of
any opportunity to co-locate with the existing utility corridor
represented by Keystone I, and therefore we are unable to con-
clude that the [PR] is in the public interest.” The PSC relied
on testimony provided by TransCanada’s engineer, Kothari,
who stated that the MAR was viable and beneficial. The PSC
stated, “We see many benefits to maximizing the co-location
of the Keystone XL Pipeline with Keystone I. It is in the pub-
lic interest for the pipelines to be in closer proximity to each
other, so as to maximize monitoring resources and increase the
efficiency of response times.” The PSC further agreed with the
intervenors that the MAR impacts fewer miles of endangered
species and has other comparative environmental benefits. The
- 898 -
Nebraska Supreme Court A dvance Sheets
303 Nebraska R eports
IN RE APPLICATION NO. OP-0003
Cite as 303 Neb. 872
PSC stated, “[TransCanada] cites the additional [5] miles in
length and one . . . additional pumping station as negatives
against the [MAR]. However, we feel the benefits of maximiz-
ing co-location opportunities and utilizing the existing utility
corridor that is . . . Keystone I . . . outweighs these concerns.”
The PSC found that the MAR “is in the public interest and
shall be approved,” and granted TransCanada’s application.
8. Motions for R econsideration
Several parties moved for reconsideration. TransCanada’s
motion requested leave to file an amended application “to make
the [MAR] [TransCanada’s] [PR].”18 Following oral argument,
the PSC denied the motions. The landowner intervenors filed a
notice of appeal. We moved the case to our docket on our own
motion pursuant to our authority to regulate the caseloads of
the appellate courts of this state.19
II. ASSIGNMENTS OF ERROR
The landowners assign, restated and consolidated, that (1)
the PSC lacked jurisdiction to consider the application, (2) the
PSC erred in finding that TransCanada sustained its burden of
proof, (3) the PSC erred by approving the MAR, (4) the PSC
erred in admitting hearsay evidence under § 57-1407(2) and
(3), and (5) the PSC erred in denying the landowners proce-
dural due process. The landowners also assert constitutional
challenges to various statutes.
On cross-appeal, Ponca assigns, restated, that (1) the PSC
erred in limiting its participation to social and cultural issues
and limiting its witnesses and cross-examination time; (2)
the PSC erred in approving the MAR because TransCanada
never applied for approval of the MAR, the notice require-
ments related to the MAR were not met, and TransCanada
did not meet its burden of proof with respect to the MAR;
and (3) the PSC erred in limiting its consideration of historic
18
Brief for appellee TransCanada at 11.
19
See Neb. Rev. Stat. § 24-1106 (Cum. Supp. 2018).
- 899 -
Nebraska Supreme Court A dvance Sheets
303 Nebraska R eports
IN RE APPLICATION NO. OP-0003
Cite as 303 Neb. 872
and cultural resources to those covered by the National
Historic Preservation Act, 54 U.S.C. § 300101 et seq. (Supp.
III 2015).
On cross-appeal, Yankton Sioux assigns, restated and con-
solidated, that the PSC erred by (1) approving a route which
does not serve the public interest, (2) violating Yankton Sioux’s
procedural due process and equal protection rights, and (3)
applying § 84-912.02 of the Administrative Procedure Act
(APA)20 instead of the PSC’s intervention regulations to limit
Yankton Sioux’s participation. Yankton Sioux also joins in the
errors assigned by the landowner appellants.
The Sierra Club filed a brief but did not include any assign-
ments of error.
III. STANDARD OF REVIEW
[1-3] A jurisdictional question which does not involve a
factual dispute is determined by an appellate court as a matter
of law.21 The meaning and interpretation of statutes and regula-
tions are questions of law for which an appellate court has an
obligation to reach an independent conclusion irrespective of
the decision made by the court below.22 The determination of
whether the procedures afforded to an individual comport with
constitutional requirements for procedural due process presents
a question of law.23
[4-6] Under Neb. Rev. Stat. § 75-136(2) (Reissue 2018),
an appellate court reviews an order of the PSC de novo on
the record.24 In a review de novo on the record, an appellate
20
Neb. Rev. Stat. §§ 84-901 to 84-920 (Reissue 2014 & Cum. Supp. 2016).
21
In re Grand Jury of Douglas Cty., 302 Neb. 128, 922 N.W.2d 226 (2019).
22
In re Petition of Golden Plains Servs. Transp., 297 Neb. 105, 898 N.W.2d
670 (2017).
23
Cain v. Custer Cty. Bd. of Equal., 298 Neb. 834, 906 N.W.2d 285 (2018).
24
In re Application No. B-1829, 293 Neb 485, 880 N.W.2d 51 (2016);
Telrite Corp. v. Nebraska Pub. Serv. Comm., 288 Neb. 866, 852 N.W.2d
910 (2014). See In re Claims Against Pierce Elevator, 291 Neb. 798, 868
N.W.2d 781 (2015).
- 900 -
Nebraska Supreme Court A dvance Sheets
303 Nebraska R eports
IN RE APPLICATION NO. OP-0003
Cite as 303 Neb. 872
court reappraises the evidence as presented by the record
and reaches its own independent conclusions concerning the
matters at issue.25 When an appellate court makes a de novo
review, it does not mean that the court ignores the findings of
fact made by the agency and the fact that the agency saw and
heard the witnesses who appeared at its hearing.26 Where the
evidence is in conflict, the Supreme Court will consider and
may give weight to the fact that the agency hearing examiner
observed the witnesses and accepted one version of the facts
rather than another.27
Lastly, Neb. Ct. R. App. P. § 2-109(D)(1)(d), (e), and (f)
(rev. 2014) requires that the brief of an appellant include a
separate section for assignments of error, designated as such
by a heading, and also requires that the section be located after
a statement of the case and before a list of controlling propo-
sitions of law.28 When a party fails to follow the rules of the
Nebraska Supreme Court, an appellate court may proceed as
though the party had failed to file a brief or, alternatively, may
examine the proceedings for plain error.29
The Sierra Club attempted to file an appeal in this case, but
failed to set forth any assignment of error in its brief. In addi-
tion to considering the assignments of error raised by the land-
owners, Ponca, and Yankton Sioux, we will consider whether
the PSC committed plain error. Plain error is error plainly
evident from the record and of such a nature that to leave it
25
Id.
26
See, Law Offices of Ronald J. Palagi v. Dolan, 251 Neb. 457, 558 N.W.2d
303 (1997); Department of Health v. Lutheran Hosp. & Homes Soc., 227
Neb. 116, 416 N.W.2d 222 (1987).
27
Dieter v. State, 228 Neb. 368, 422 N.W.2d 560 (1988).
28
Steffy v. Steffy, 287 Neb. 529, 843 N.W.2d 655 (2014); In re Interest of
Jamyia M., 281 Neb. 964, 800 N.W.2d 259 (2011).
29
Steffy v. Steffy, supra note 28. See In re Interest of Jamyia M., supra
note 28.
- 901 -
Nebraska Supreme Court A dvance Sheets
303 Nebraska R eports
IN RE APPLICATION NO. OP-0003
Cite as 303 Neb. 872
uncorrected would result in damage to the integrity, reputation,
or fairness of the judicial process.30
IV. ANALYSIS
[7] The PSC is an independent regulatory body created by
the Nebraska Constitution in article IV, § 20.31 The powers
and duties of the PSC include the “general control of common
carriers as the Legislature may provide by law.”32 The constitu-
tional provision creating the PSC must be liberally construed to
effectuate the purpose for which the PSC was created, which is
to serve the public interest.33 In the absence of specific legisla-
tion, the powers and duties of the PSC, as enumerated in the
constitution, are absolute and unqualified.34
[8] We have repeatedly said that the determination of what
is consistent with the public interest, or public convenience
and necessity, is one that is peculiarly for the determination
of the PSC.35 “‘[C]ourts must give substantial deference to
[the PSC’s] judgment about how best to serve the public
interest.’”36 We have made this statement in recognition of the
PSC’s status as a constitutional entity, and we have gone as far
as to state that the “Supreme Court does not act as an appellate
30
Id.
31
Amend v. Nebraska Pub. Serv. Comm., 298 Neb. 617, 905 N.W.2d 551
(2018).
32
Neb. Const. art. IV, § 20.
33
See Myers v. Blair Tel. Co., 194 Neb. 55, 230 N.W.2d 190 (1975).
34
See State ex rel. State Railway Commission v. Ramsey, 151 Neb. 333, 37
N.W.2d 502 (1949).
35
Dahlsten v. Harris, 191 Neb. 714, 217 N.W.2d 813 (1974). See, Andrews
Van Lines, Inc. v. Smith, 187 Neb. 533, 192 N.W.2d 406 (1971); Nebraska
State Railway Commission v. Chicago & N. W. Ry. Co., 187 Neb. 369,
191 N.W.2d 438 (1971); Ace Gas, Inc. v. Peake, Inc., 184 Neb. 448, 168
N.W.2d 373 (1969).
36
In re Application No. C-1889, 264 Neb. 167, 178, 647 N.W.2d 45, 54
(2002).
- 902 -
Nebraska Supreme Court A dvance Sheets
303 Nebraska R eports
IN RE APPLICATION NO. OP-0003
Cite as 303 Neb. 872
[PSC].”37 However, in 2013, the Legislature amended
§ 75-136(2) to change our standard of review from errors
appearing on the record, as provided under the APA, to “de
novo on the record.”
We first addressed the “de novo on the record” standard of
review for PSC cases in Telrite Corp. v. Nebraska Pub. Serv.
Comm.38 Prior to the amendment, a party appealed from the
PSC under the APA, and the initial appeal was taken to district
court, which conducted a de novo review on the record of the
agency.39 Our inquiry in appeals from a district court’s decision
under the APA is limited to whether the decision conformed to
the law, was supported by competent evidence, and was neither
arbitrary, capricious, nor unreasonable.40 In Telrite Corp., we
rejected the PSC’s argument that the previous, more deferential
standard of review for an appellate court under the APA still
applied after the amendment to § 75-136. In so finding, we
stated that the PSC was not “due the same degree of deference
it enjoyed” before the amendment.41
However, the issue of what deference is owed to the PSC
regarding its public interest determinations is more nuanced
than stated in Telrite Corp. Under MOPSA, the PSC views the
witnesses and evaluates the strength of their testimony, receives
comments from the public, investigates the issues presented in
coordination with state agencies and authorized consultants,
evaluates the public interest, and makes the initial decision
of whether to approve an application and authorize eminent
domain power. Under the circumstances, it is appropriate, even
under a de novo standard of review, to adhere to the common
37
In re Application of Crusader Coach Lines, 213 Neb. 53, 58, 327 N.W.2d
98, 101 (1982). Accord In re Application of McCarty, 218 Neb. 637, 358
N.W.2d 203 (1984).
38
Telrite Corp. v. Nebraska Pub. Serv. Comm., supra note 24.
39
See § 84-917(5).
40
Telrite Corp. v. Nebraska Pub. Serv. Comm., supra note 24.
41
Id., 288 Neb. at 874-75, 852 N.W.2d at 916.
- 903 -
Nebraska Supreme Court A dvance Sheets
303 Nebraska R eports
IN RE APPLICATION NO. OP-0003
Cite as 303 Neb. 872
practice among appellate courts to afford appropriate deference
to the findings of the agency before which the record was cre-
ated.42 We articulate this standard in light of the PSC’s being
constitutionally created to serve the public interest.
1. PSC H ad Jurisdiction
The landowners and Yankton Sioux assert that the PSC
lacked jurisdiction to approve TransCanada’s application
because, under the appellants’ reading of MOPSA, the PSC
cannot consider a route application unless the Governor has
already considered and denied the application. We determine
that under the plain language of MOPSA, prior gubernatorial
denial is not required to initiate application proceedings before
the PSC. MOPSA is an independent statutory process under
which pipeline carriers may obtain route approval and eminent
domain authority. Route approval by the Governor is not at
issue in this case.
[9,10] Statutory language is to be given its plain and ordinary
meaning, and an appellate court will not resort to interpretation
to ascertain the meaning of statutory words which are plain,
direct, and unambiguous.43 Components of a series or collec-
tion of statutes pertaining to a certain subject matter are in pari
materia and should be conjunctively considered and construed
to determine the intent of the Legislature, so that different
provisions are consistent, harmonious, and sensible.44
The appellants’ argument is based upon § 57-1405(1), which
provides:
If a pipeline carrier proposes to construct a major oil
pipeline . . . and the pipeline carrier has submitted a route
for an oil pipeline within, through, or across Nebraska
42
See, Law Offices of Ronald J. Palagi v. Dolan, supra note 26; Dieter v.
State, supra note 27; Department of Health v. Lutheran Hosp. & Homes
Soc., supra note 26.
43
Mays v. Midnite Dreams, 300 Neb. 485, 915 N.W.2d 71 (2018).
44
Davio v. Nebraska Dept. of Health & Human Servs., 280 Neb. 263, 786
N.W.2d 655 (2010).
- 904 -
Nebraska Supreme Court A dvance Sheets
303 Nebraska R eports
IN RE APPLICATION NO. OP-0003
Cite as 303 Neb. 872
but the route is not approved by the Governor pursuant to
section 57-1503, the pipeline carrier shall file an applica-
tion with the [PSC] and receive approval pursuant to sec-
tion 57-1408 prior to beginning construction . . . .
(Emphasis supplied.)
Under the appellants’ view, “the PSC may consider an appli-
cation for a route if, but only if, the Governor of Nebraska
first considered, and declined to grant, the proposed pipeline
route within or across the State.”45 According to the appel-
lants, “[d]isapproval is a prerequisite to PSC jurisdiction under
§ 57-1405(1)”46 and “[t]he Governor must say ‘No’ first; then
comes the PSC.”47
It is clear that the appellants’ interpretation is not strictly
derived from the statutory text, but, rather, is an extrapola-
tion thereof. The language of § 57-1405(1) is not phrased as a
jurisdictional prerequisite, but, rather, describes a process for
applying for a pipeline route that has “not [been] approved by
the Governor.” The appellants read the phrase “not approved
by” to mean “must have first considered and denied.” We do
not agree. Logically, one can “not approve” something by tak-
ing no action. The phrase “not approved by” does not require
the Governor to be the first to consider the application or to
consider the application at all. As we explained in the back-
ground section of this opinion, the MOPSA application process
is one of two options the Legislature has enacted to enable a
pipeline carrier to pursue route approval. Though we conduct
a textual analysis as to whether § 57-1405(1) or § 57-1101
authorizes the PSC to consider TransCanada’s application,
we offer no opinion as to the constitutionality of § 57-1101
or other references to the power of the Governor to approve
the route.
Sections 57-1405(1) and 57-1101 relate to the same sub-
ject matter; they address the procedures available for a
45
Brief for appellants at 14 (emphasis in original).
46
Id. at 17.
47
Id. at 15.
 - 905 -
Nebraska Supreme Court A dvance Sheets
303 Nebraska R eports
IN RE APPLICATION NO. OP-0003
Cite as 303 Neb. 872
pipeline carrier to obtain route approval under Nebraska law.
The current versions of these sections were adopted by the
Legislature in the same bill, 2012 Neb. Laws, L.B. 1161, and
MOPSA makes specific reference to § 57-1101.48 Therefore,
§§ 57-1405(1) and 57-1101 are in pari materia and we must
construe them together.
Section 57-1101 provides in relevant part:
[F]or any major oil pipeline . . . to be placed in opera-
tion in the State of Nebraska . . . , any such person,
company, corporation, or association shall comply with
section 57-1503 and receive the approval of the Governor
for the route of the pipeline under such section or shall
apply for and receive an order approving the applica-
tion under [MOPSA], prior to having the rights provided
under this section.
(Emphasis supplied.)
Section 57-1101 describes the two avenues for route
approval, under § 57-1503 and MOPSA, and uses the word
“or” to connect them. The word “or,” when used properly, is
disjunctive.49 This indicates that a pipeline carrier can pursue
either process individually. The processes are independent of
each other and should not be understood as the same thing.
There are several differences.
As described above, under § 57-1503, a pipeline carrier
may not seek the Governor’s approval of an application until
after the DEQ has utilized State funds to prepare a SEIS and
has submitted its evaluation to the Governor. In contrast,
under MOPSA, a pipeline carrier initiates the proceedings, is
required to prove that the route is in the public interest based
on the PSC’s evaluation of multifaceted statutory criteria,
and must pay for the application process.50 MOPSA does not
require gubernatorial denial prior to initiating an application
48
§ 57-1408.
49
See Nebraska Protective Servs. Unit v. State, 299 Neb. 797, 910 N.W.2d
767 (2018).
50
See §§ 57-1405 and 57-1406.
- 906 -
Nebraska Supreme Court A dvance Sheets
303 Nebraska R eports
IN RE APPLICATION NO. OP-0003
Cite as 303 Neb. 872
proceeding. The appellants’ assignment of error that the PSC
lacked jurisdiction over TransCanada’s application is with-
out merit.
2. Evidence Supports PSC’s Determination
that TransCanada M et Burden of P roof
In their next assignment of error, the appellants argue that
the PSC erred in finding that TransCanada sustained its bur-
den of proof. Upon our independent review of the record
before the agency, we find that sufficient evidence supports
the PSC’s decision that TransCanada met its burden of proving
that the MAR is in the public interest. While the intervenors
reduced the strength of TransCanada’s evidence in certain
areas, the intervenors’ objections are not enough to overcome
TransCanada’s comprehensive presentation with respect to the
relevant public interest factors under MOPSA.
Two possible misconceptions must be addressed. First, in
evaluating a route, we are prohibited from considering safety
issues. Nebraska cannot interfere with uniform safety standards
utilized by the federal government. To do so would undermine
MOPSA and jeopardize Nebraska’s ability to review and scru-
tinize a pipeline route in this state under state law. Second,
the MOPSA structure enacted by the Legislature concerns
only the selection of a particular pipeline route. In this case,
TransCanada, as well as some of the appellants, asked the PSC
to approve construction of a particular pipeline route. The PSC
considered the evidence and determined that the MAR is in the
public interest.
[11,12] An application under MOPSA shall be approved
if the proposed route of the major oil pipeline is determined
by the PSC to be in the public interest.51 MOPSA places the
burden of proof on the applicant.52 Although MOPSA does
not specify a standard of proof, unless an exception applies,
51
§ 57-1407(4).
52
Id.
- 907 -
Nebraska Supreme Court A dvance Sheets
303 Nebraska R eports
IN RE APPLICATION NO. OP-0003
Cite as 303 Neb. 872
only a preponderance of evidence is required in civil cases.53
The burden of proof is satisfied by actual proof of the facts, of
which proof is necessary, regardless of which party introduces
the evidence.54 In concluding that the MAR is in the public
interest, the PSC properly relied on all record evidence and
carefully weighed the eight factors under § 57-1407(4).
(a) Compliance With Applicable Laws
The first factor for the PSC’s consideration is “[w]hether the
pipeline carrier has demonstrated compliance with all applica-
ble state statutes, rules, and regulations and local ordinances.”55
TransCanada stated that it would comply with all applicable
state statutes, rules, regulations, and local ordinances, and
that it either has obtained or will obtain all permits necessary
to comply with state laws, regulations, local ordinances, and
zoning requirements. Moreover, TransCanada is required to
comply with all applicable laws as a condition of its presiden-
tial permit. Palmer, the president of the companies that own
TransCanada, reaffirmed these commitments under oath. These
commitments apply to the construction, maintenance, and oper-
ation of the MAR. The record concerning § 57-1407(4)(a)
supports the PSC’s finding that TransCanada met its burden
of proof.
(b) Impact on Natural Resources
The PSC shall evaluate 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, includ-
ing evidence regarding the irreversible and irretrievable
53
Wetovick v. County of Nance, 279 Neb. 773, 782 N.W.2d 298 (2010). See,
Pallas v. Dailey, 169 Neb. 533, 100 N.W.2d 197 (1960); Eggleston v.
Quinn, 88 Neb. 775, 130 N.W. 428 (1911).
54
Lincoln Fire Fighters Assn. v. City of Lincoln, 198 Neb. 174, 252 N.W.2d
607 (1977).
55
§ 57-1407(4)(a).
- 908 -
Nebraska Supreme Court A dvance Sheets
303 Nebraska R eports
IN RE APPLICATION NO. OP-0003
Cite as 303 Neb. 872
commitments of land areas and connected natural
resources and the depletion of beneficial uses of the natu-
ral resources.56
The evidence demonstrated that a large percentage of the land
crossed by the pipeline is agricultural in nature and that the
impacts of construction will be temporary.
The MAR avoids the Nebraska Sandhills, which provides
several advantages as compared to the PR, when considering
impacts on natural resources. As the PSC found, compared
to the PR, the MAR will involve “one fewer river crossing,
fewer wells within 500 feet of the pipeline, fewer acres of
pivot irrigated . . . land crossed, fewer crossing of intermit-
tent and perennial streams . . . , fewer miles of pipeline placed
in areas with shallow groundwater, and fewer state highways
and natural gas facilities to be crossed.” The MAR “would
impact 84.6 fewer miles of whooping crane migratory path
as compared to the [PR],” as well as impact “fewer miles of
the ranges” of other “threatened and endangered species.” The
natural resources intervenors’ witness Hayes noted this fact in
his conclusion that “the [MAR’s] impact upon federally listed
species is significantly less than that of the [PR].”
Hayes testified that, compared to the PR, the MAR substan-
tially decreases the overall impact of the pipeline and stated
that “irreparable damage to important natural resources, includ-
ing native soils and grasslands, is proportionally reduced.”
TransCanada’s witness Schmidt agreed that the MAR “ha[d]
potential environmental benefits due to its co-location with
[Keystone I].” Beaver, the senior reclamation specialist on the
project, testified that construction of the pipeline would not
significantly increase the impermeability of the soil.
The PSC requested the DEQ to analyze the environmental
impact of the MAR. The DEQ responded that based on the
mitigation commitments and reclamation procedures within
the application, the MAR “would have minimal environmental
56
§ 57-1407(4)(b).
- 909 -
Nebraska Supreme Court A dvance Sheets
303 Nebraska R eports
IN RE APPLICATION NO. OP-0003
Cite as 303 Neb. 872
impacts in Nebraska.” The DEQ then followed up with the
PSC after further analyzing the relevant soils and sediment,
groundwater, surface water, air, hazardous materials, and emis-
sions, and again concluded that the MAR “would have minimal
permanent environmental impacts in Nebraska.” The record
concerning § 57-1407(4)(b) supports the PSC’s finding that
TransCanada met its burden of proof.
(c) Mitigation of Potential Impacts
The PSC shall evaluate “[e]vidence of methods to minimize
or mitigate the potential impacts of the major oil pipeline to
natural resources.”57 TransCanada provided a CMRP containing
“construction, operation, and maintenance measures that are
designed to reduce the likelihood and severity of impacts along
the pipeline construction corridor and during operations.” The
CMRP outlines procedures for soil protection, water-crossing
methods, vegetation reclamation, and aquatic resources protec-
tion. The CMRP was developed in consultation with the NRCS
and experts from the University of Nebraska. The CMRP pro-
cedures will be used to minimize the environmental impact
of the MAR and return the land disturbed by construction as
close as possible to its preconstruction condition. The PSC
concluded that TransCanada’s procedures “conform to industry
standards and are reasonable.” Project manager Fuhrer testified
that TransCanada will be accountable for production losses and
other costs resulting from pipeline maintenance and damage to
the land throughout the useful life of the pipeline.
The landowners noted that the CMRP has not been updated
since 2012. However, the DEQ advised the PSC that the geology
has not changed. The landowners emphasized that the CMRP
allows TransCanada to deviate from the plan at its discretion.
The PSC found that in the event a dispute arises regarding
reclamation and mitigation efforts, the parties will consult the
NRCS as a resource and follow the NRCS’ advice. We agree
57
§ 57-1407(4)(c).
- 910 -
Nebraska Supreme Court A dvance Sheets
303 Nebraska R eports
IN RE APPLICATION NO. OP-0003
Cite as 303 Neb. 872
this resolution process is adequate. Because the NRCS helped
formulate the CMRP and is familiar with the best reclamation
and mitigation practices, the NRCS shall be consulted in any
instance in which a dispute arises and TransCanada has devi-
ated from the CMRP. The record concerning § 57-1407(4)(c)
supports the PSC’s finding that TransCanada met its burden
of proof.
(d) Social and Economic Impacts
The PSC shall evaluate “[e]vidence regarding the economic
and social impacts of the major oil pipeline.”58
(i) Economic Impacts
Goss’ report found that the pipeline project would consti-
tute an economic benefit to Nebraska and would contribute to
the state and local tax bases. He found that the pipeline proj-
ect would result in positive tax revenue to exceed $264 mil-
lion through the year 2034. His report assumed that only 10
percent of pipeline work in Nebraska would be conducted by
Nebraska residents and that 7.3 percent of related pipeline
work in Montana and South Dakota would be conducted by
Nebraska residents. The report indicated that Goss’ estimates
were conservative. The analysis did not include taxes gener-
ated from the cost and installation of replacement materials or
TransCanada’s preconstruction spending. In addition, the dol-
lar figures were not adjusted for inflation, but were discounted
to the equivalent of “2015 dollars.”
The unions also presented evidence of positive economic
impacts. Barnett testified that UA has worked with TransCanada
on recent projects and estimated that UA could expect 564
jobs for its members. Gerhard of LiUNA stated the project
presents significant opportunity for the creation of several dif-
ferent types of energy-related jobs. O’Hara, the professor who
analyzed the economic impact of the proposed pipeline, testi-
fied that the project would not provide long-term tax benefits,
58
§ 57-1407(4)(d).
- 911 -
Nebraska Supreme Court A dvance Sheets
303 Nebraska R eports
IN RE APPLICATION NO. OP-0003
Cite as 303 Neb. 872
would create few permanent jobs, and would adversely impact
property values. However, O’Hara’s analysis predominantly
focused on issues of safety. O’Hara admitted that TransCanada
will pay significant sales and use taxes. In addition, O’Hara’s
conclusions regarding tax benefits assume that, contrary to
the evidence, TransCanada will seek exemptions under the
Nebraska Advantage Act. The PSC found that TransCanada
“shall comply with its commitment to not use the Nebraska
Advantage Act in any form in connection with the Keystone
XL Project.”
Nebraska’s Department of Revenue found that during con-
struction, TransCanada or its contractors would incur sig-
nificant sales and use tax liabilities, and that Nebraska would
experience an increase in individual income tax revenue. The
DEQ and the Department found that the pipeline was not
expected to have an impact on residential or agricultural prop-
erty values and would generate a substantial amount of new
economic activity, millions of dollars in annual property tax
revenue, and hundreds of jobs for Nebraskans. O’Hara opined
that property values would decrease by 15 percent and that
property taxes would decrease over the life of the pipeline.
The PSC found that “much of the economic testimony was
conflicting,” but concluded that the pipeline would accrue an
economic benefit in Nebraska, and that Nebraska will “benefit
from the investment and activity that is associated with the
pipeline construction and operation.”
(ii) Social Impacts
The evidence of social impacts primarily concerned impacts
on cultural resources and impacts from a temporary camp for
pipeline workers that may be built in Holt County. MOPSA
does not specifically state that the PSC must evaluate impacts
on cultural resources. As noted, § 57-1407(4)(d) states the PSC
shall consider “[e]vidence regarding the economic and social
impacts of the major oil pipeline.” The parties and the PSC
understood the cultural resources issue to be a piece of the
PSC’s obligation to consider evidence of social impacts. The
- 912 -
Nebraska Supreme Court A dvance Sheets
303 Nebraska R eports
IN RE APPLICATION NO. OP-0003
Cite as 303 Neb. 872
parties and the PSC generally understood “cultural resources”
to mean “physical evidence of culturally and historically val-
ued aspects of the human and natural environment on the land-
scape,” as defined by the DEQ.
The preservation of historic resources is a matter of federal
law governed by the National Historic Preservation Act. The
Department has been designated the federal agency respon-
sible for the review of TransCanada’s permit, which has
been determined to be a federal undertaking. Nebraska pro-
vides resources in coordination with this effort. Pursuant to
Neb. Rev. Stat. § 82-118 (Reissue 2014), the Nebraska State
Historical Society, under the direction of the Nebraska State
Historic Preservation Officer, is the state agency responsible
for carrying out the purposes and objectives of the National
Historic Preservation Act.
Pursuant to the National Historic Preservation Act, Pub. L.
No. 89-665, § 106, 80 Stat. 917, the Department, the Nebraska
State Historic Preservation Officer, TransCanada, and vari-
ous other state and federal agencies entered into an amended
PA in December 2013. According to the Nebraska State
Historical Society, a § 106 review identifies “arch[a]eologi-
cal or historic resources . . . listed or eligible for listing in
the National Register of Historic Places.” The PA requires
TransCanada to complete cultural resources surveys on all
areas that would potentially be impacted by the proposed
undertaking and to provide adequate mitigation in consultation
with the Department, state and federal agencies, and Indian
tribes. The PA requires TransCanada to avoid, when possible,
adverse effects on known cultural resources. When unantici-
pated cultural resources are discovered, all construction within
a 100-foot radius must cease and may only resume after the
resources are evaluated and protected according to the require-
ments under the PA. The PA includes a “Tribal Monitoring
Plan” that allows “tribal monitors with experience in the iden-
tification of cultural resources to monitor construction along
the pipeline route.” The CMRP also contains a commitment to
- 913 -
Nebraska Supreme Court A dvance Sheets
303 Nebraska R eports
IN RE APPLICATION NO. OP-0003
Cite as 303 Neb. 872
comply with any PA in order to minimize the impact on cul-
tural sites along the route.
Ponca’s witness Wright stated that construction of the pipe-
line could damage or destroy historic sites, but he acknowl-
edged this concern would be addressed if TransCanada adhered
to the PA. Ponca stated that the Ponca Trail of Tears would not
be included within the PA’s protections, because the trail is not
listed on the National Register of Historic Places. However, the
PA applies to any historical site eligible for inclusion on the
national register, and furthermore, the PA commits TransCanada
to protecting known cultural sites. TransCanada presented evi-
dence that it is prepared to address the issue. TransCanada’s
application states that it intends to avoid culturally significant
sites by rerouting the pipeline “to the extent practicable.”
Testimony at the hearing reflected that TransCanada has suc-
cessfully avoided every eligible cultural site it has encountered
thus far. TransCanada will have the opportunity to complete
further cultural surveys prior to construction and to implement
the necessary procedures under the PA.
Ponca assigns error to the PSC’s determination that the
preservation of cultural issues is a matter of federal law and
argues that MOPSA requires an analysis with greater focus
on Nebraska’s cultural resources. We disagree with Ponca’s
characterization that the PSC did not evaluate the impact
on Nebraska’s cultural resources. In its analysis, the PSC
articulated features of the federal scheme that are available to
address the risks to local cultural resources. The PSC found
that TransCanada’s record of compliance with the PA and
the National Historic Preservation Act showed TransCanada’s
compliance would likely continue and that the Department will
require compliance with federal law. The PSC concluded that
these safeguards “help to assure that the route of the pipeline
will be in the public interest.”
The Nebraska State Historical Society, the state agency
responsible for preserving historic resources, informed the
PSC that, according to the processes outlined in the PA,
- 914 -
Nebraska Supreme Court A dvance Sheets
303 Nebraska R eports
IN RE APPLICATION NO. OP-0003
Cite as 303 Neb. 872
TransCanada is required to “complete cultural resources sur-
veys on all areas that would be potentially impacted,” “make
recommendations on National Register of Historic Places eli-
gibility,” and “provide adequate mitigation in consultation with
the Department . . . , state and federal agencies, and Indian
tribes.” The Nebraska State Historical Society advised that
these processes protect cultural resources.
Moreover, existing state laws protect cultural resources.
Under Nebraska law, it is a crime to knowingly and will-
fully appropriate, excavate, injure, or destroy an archaeological
resource on public land without written permission from the
State Archaeology Office.59 Neb. Rev. Stat. § 12-1205 (Cum.
Supp. 2018) makes it a crime to knowingly fail to report the
encounter of an unmarked human burial, and it requires the
cessation of any activity that may disturb the burial. Neb. Rev.
Stat. § 28-1301 (Reissue 2016) describes the offense of remov-
ing, abandoning, or concealing human skeletal remains or
burial goods. TransCanada must comply with these laws.
The temporary camps for pipeline workers do not make
approving the MAR contrary to the public interest. All such
camps must be permitted, constructed, and operated consist­
ent with applicable county, state, and federal regulations.
TransCanada must require camp residents to comply with a
written code of conduct and potentially expel those found in
violation. The camps will be fenced and secured with video
surveillance and a guardhouse, staffed at all times. Only autho-
rized personnel will be granted access to the camps; no visi-
tors will be permitted. The record concerning § 57-1407(4)(d)
supports the PSC’s finding that TransCanada met its burden
of proof.
(e) Other Utility Corridors
The PSC must evaluate “[w]hether any other utility cor-
ridor exists that could feasibly and beneficially be used for
59
Neb. Rev. Stat. § 82-507 (Reissue 2014).
- 915 -
Nebraska Supreme Court A dvance Sheets
303 Nebraska R eports
IN RE APPLICATION NO. OP-0003
Cite as 303 Neb. 872
the route of the major oil pipeline.”60 The PSC interpreted the
phrase “utility corridor” to mean “a passageway for facilities
providing public services.” The PSC gave significant weight to
the fact that the MAR “was developed to maximize the length
of co-location with [Keystone I]” and takes advantage of the
fixed entry point in Keya Paha County. The PSC found the
MAR to be the most beneficial route, because the PR failed
to take advantage of an existing utility corridor. The appel-
lants urged approval of the I-90 Route, but the PSC rejected
that proposal based on the lack of a feasible entry point. Upon
de novo review, we are persuaded that the MAR’s co-location
with Keystone I maximizes efficiency and reduces impacts to
undeveloped land and natural resources.
The PSC evaluated the eight public interest factors under
§ 57-1407(4) and was persuaded by the evidence in favor
of the MAR under § 57-1407(4)(e). The PSC’s reasoning is
compelling, because the record shows that by satisfying the
considerations under § 57-1407(4)(e), the MAR’s co-­location
with Keystone I enhances the overall strength of the route
application and serves other public interest factors under
§ 57-1407(4). There is evidence to support the PSC’s reason-
ing in giving great weight to TransCanada’s evidence under
§ 57-1407(4)(e) in deciding that the MAR, rather than the PR
or I-90 Route, is in the public interest. The record concerning
§ 57-1407(4)(e) supports the PSC’s finding that TransCanada
met its burden of proof.
(f) Impact on Orderly Development of Area
The PSC must evaluate “[t]he impact of the major oil
pipeline on the orderly development of the area around the
proposed route of the major oil pipeline.”61 There was a lack
of evidence that significant restrictions on development would
occur. The PSC observed that while future developments
60
§ 57-1407(4)(e).
61
§ 57-1407(4)(f).
- 916 -
Nebraska Supreme Court A dvance Sheets
303 Nebraska R eports
IN RE APPLICATION NO. OP-0003
Cite as 303 Neb. 872
would need to avoid the pipeline, “similar restrictions on
development occur in areas near other infrastructure, i.e.,
roads, bridges, dams, power lines, etc.” The MAR mitigates
interference with orderly development by co-locating with
Keystone I. In addition, the CMRP’s mitigation procedures
address possible impacts of construction. The PSC’s consult­
ants concluded that the pipeline would “play an ‘insignificant
role in residential value, crop production, invasive species,
and land development.’” We agree with the PSC that the
impact on development of the area seems minimal. The record
concerning § 57-1407(4)(f) supports the PSC’s finding that
TransCanada met its burden of proof.
(g) State Agency Reports
The PSC must evaluate “[t]he reports of the agencies filed
pursuant to subsection (3) of this section.”62 The PSC consulted
all nine agencies listed within § 57-1407(3) on both the PR and
the MAR. The agencies were familiar with the project based
on prior efforts and did not express any concerns about the
approval, denial, or relocation of either route.
As already noted, Nebraska’s Department of Revenue found
that the pipeline will generate revenue from sales taxes, use
taxes, property taxes, and income taxes. The Nebraska State
Historical Society stated that the necessary measures for pro-
tecting cultural resources are in place. The Nebraska Game
and Parks Commission explained that it would help “avoid
and minimize impacts on species and their habitats.” And we
­reiterate the DEQ’s finding that the MAR “would have minimal
environmental impacts in Nebraska.” The record concerning
§ 57-1407(4)(g) supports the PSC’s finding that TransCanada
met its burden of proof.
(h) Views of Counties and Municipalities
The PSC must evaluate “[t]he views of the governing bod-
ies of the counties and municipalities in the area around the
62
§ 57-1407(4)(g).
- 917 -
Nebraska Supreme Court A dvance Sheets
303 Nebraska R eports
IN RE APPLICATION NO. OP-0003
Cite as 303 Neb. 872
proposed route of the major oil pipeline.”63 The PSC sent let-
ters soliciting input to 18 counties and 32 cities along both
the PR and the MAR. Boone, Nance, Saline, and Seward
Counties expressed their approval; Boyd and Holt Counties
expressed their opposition. The PSC received no input from
Butler, Colfax, Madison, Platte, or Stanton Counties. Seward,
Nebraska, and Steele City submitted favorable responses. The
record concerning § 57-1407(4)(h) supports the PSC’s finding
that TransCanada met its burden of proof.
We find that the PSC—after months of investigation review-
ing extensive pleadings, exhibits, and reports from consultants;
holding public meetings and a public hearing; considering
written and oral arguments; deliberating; and issuing its opin-
ion and findings—did not err in concluding that TransCanada
proved by a preponderance of the evidence that approval of the
MAR is in the public interest.
3. PSC Properly Considered MAR
[13] In the appellants’ next assignment of error, they argue
that the PSC was not authorized to approve the MAR, because
TransCanada applied for approval of only the PR, and that the
notice requirements for the MAR were not met. While it is true
that TransCanada requested in its application “an order from
the PSC that the [PR] is in the public interest,” we nevertheless
find it indisputable that TransCanada included the MAR in its
application and that the parties were on notice that the MAR
was at issue. The rules of pleading are not applied in admin-
istrative proceedings as strictly as they are in court proceed-
ings.64 Administrative pleading rules require simply that the
parties be sufficiently apprised of the nature of the proceedings
so that there is no unfair surprise.65
The hearing officer for the PSC devoted a separate sec-
tion of its intervention order to the MAR and made clear
63
§ 57-1407(4)(h).
64
See In re Appeal of Bonnett, 216 Neb. 587, 344 N.W.2d 657 (1984).
65
Id.
- 918 -
Nebraska Supreme Court A dvance Sheets
303 Nebraska R eports
IN RE APPLICATION NO. OP-0003
Cite as 303 Neb. 872
that the merits of the MAR would be considered. The order
stated that the SAR would not be considered and informed
the parties that they should be prepared to address the MAR
by granting them leave to designate an additional witness
and offer exhibits pertaining to the MAR. There was no
objection to the MAR section of the order. The case manage-
ment order stated that “any/all Hearing Officer Orders . . .
will apply to and bind all parties, will control the course of
the proceedings, and may be modified only by order of the
Hearing Officer.”
Following a prehearing conference, the hearing officer mod-
ified the intervention order by allowing each intervenor group
to present testimony from two witnesses, “in addition to the
ability to bring an additional witness regarding the [MAR]
as detailed in the [intervention order].” The PSC’s Rules of
Commission Procedure provide that once an order is entered
“a reasonable time will be allowed for the parties to present
objections . . . . Thereafter, the terms of the order . . . determine
the subsequent course of the proceedings . . . .”66 Generally,
the failure to object to the specifications in the pretrial order
waives any right to claim error in that regard.67 The pretrial
order is binding upon the parties. The issues set out in a pre-
trial order supplant those raised in the pleadings.68
[14] The appellants also contend that the PSC denied them
procedural due process. Due process requires notice and an
opportunity for a full and fair hearing at some stage of the
agency proceedings.69 Contrary to the intervenors’ assertions,
66
291 Neb. Admin. Code, ch. 1, § 020.04 (1992).
67
See Hillcrest Country Club v. N.D. Judds Co., 236 Neb. 233, 461 N.W.2d
55 (1990).
68
See, Hall v. County of Lancaster, 287 Neb. 969, 846 N.W.2d 107 (2014),
overruled on other grounds, Davis v. State, 297 Neb. 955, 902 N.W.2d
165 (2017); Cotton v. Ostroski, 250 Neb. 911, 554 N.W.2d 130 (1996).
See, Kustom Kreations v. Duxbury, 216 Neb. 99, 342 N.W.2d 656 (1983);
Jonas v. Willman, 27 Neb. Ct. App. 251, 930 N.W.2d 60 (2019).
69
Stoneman v. United Neb. Bank, 254 Neb. 477, 577 N.W.2d 271 (1998).
- 919 -
Nebraska Supreme Court A dvance Sheets
303 Nebraska R eports
IN RE APPLICATION NO. OP-0003
Cite as 303 Neb. 872
the PSC’s decision to approve the MAR is a reflection of
the evidence and arguments presented. As already discussed,
MOPSA “is intended to deal solely with the issue of sit-
ing or choosing the location of the route.”70 MOPSA allows
Nebraska to exercise its sovereign authority “to protect its
land and natural resources . . . by regulation through approval
or disapproval of major oil pipeline siting and the location of
routes.”71 MOPSA grants the PSC the authority to consult state
agencies “regarding the advisability of approving, denying,
or modifying the location of the proposed route of the major
oil pipeline.”72 As explained, among the factors the PSC must
evaluate is “[w]hether any other utility corridor exists that
could feasibly and beneficially be used for the route of the
major oil pipeline.”73
The record contained extensive evidence concerning the
MAR. There was significant overlap in the evidence concern-
ing the routes; much of the evidence concerning the PR and
Keystone I equally applied to the MAR. The PR and the MAR
are the same route for the first 110 miles and approximately 97
of the MAR’s remaining 170 miles co-locate with Keystone I.
Several witnesses addressed these routes and the differences
between them in their testimony.
Hayes testified that compared to the PR, the MAR substan-
tially decreases the overall negative impacts of the pipeline.
Kothari testified that the MAR was beneficial and feasible.
Schmidt was questioned at length and in detail about the
MAR to draw out comparisons between the MAR, the PR,
and the I-90 Route. Wright provided testimony concerning
the MAR. The consultants advised the PSC that there is
little difference in soil characteristics between the PR and
the MAR.
70
§ 57-1402(2).
71
§ 57-1403(1).
72
§ 57-1407(3).
73
§ 57-1407(4)(e).
- 920 -
Nebraska Supreme Court A dvance Sheets
303 Nebraska R eports
IN RE APPLICATION NO. OP-0003
Cite as 303 Neb. 872
The DEQ evaluated the MAR and informed the PSC that the
MAR would have minimal permanent environmental impacts
in Nebraska. The PSC heard evidence that TransCanada modi-
fied the MAR to avoid wellhead protection areas based on the
DEQ’s recommendations. Seward’s city council recognized
this and approved the MAR on that basis. Thus, the suggestion
that the appellants were not afforded notice and an opportunity
to be heard on the MAR disregards considerable portions of
the record. Fundamental issues before the PSC were whether
or not to approve the PR or the MAR.
Ponca argued that “the PSC could decide it preferred the
[MAR] based on the evidence, but it was required to deny
the [a]pplication for the [PR] and invite TransCanada to
file a new application for the [MAR].”74 Ponca’s argument
referred to § 57-1408(4), which provides in part that “[i]f the
commission denies the application, the pipeline carrier may
amend the denied application in accordance with the find-
ings of the commission and submit the amended application
within sixty days after the issuance of the order denying the
application.” (Emphasis supplied.) The record makes clear
that the PSC granted the application, approved the MAR,
and determined that amendment pursuant to § 57-1408(4)
was unnecessary when it overruled TransCanada’s motion
for reconsideration. The PSC’s decision was consistent with
the policy under MOPSA to “[e]nsure that a coordinated and
efficient method for the authorization of such construction
is provided.”75 There was no need to amend the application,
because the application was supplanted by the hearing offi-
cer’s orders concerning the MAR when no party objected
to the orders. The parties effectively tried the matter as
one seeking approval of the MAR. Moreover, there was no
need for the PSC to grant the motion to amend, because in
the civil context courts have the power to constructively
74
Reply brief for appellee Ponca on cross-appeal at 7 (emphasis supplied).
75
§ 57-1402(1)(e).
- 921 -
Nebraska Supreme Court A dvance Sheets
303 Nebraska R eports
IN RE APPLICATION NO. OP-0003
Cite as 303 Neb. 872
amend pleadings in order to render a decision consistent with
the trial.76
Neither do we find a basis to reverse the PSC’s decision
due to a failure to satisfy MOPSA’s notice requirements. The
PSC published notice of the public hearing on TransCanada’s
application in newspapers in general circulation along both
the PR and the MAR. The PSC sent letters to the governing
bodies along both routes and advised them that a copy of the
application is available online at the PSC’s website. The PSC
released additional press releases at the time the application
was filed and provided notice of several public meetings and
the public hearing.
[15,16] Furthermore, these intervenors waived the right to
object based on lack of notice. It is generally held that par-
ticipation in the hearing waives any defect in the notice.77 If
notice is materially lacking, then a timely objection will permit
the public body to promptly remedy the defect and defer for-
mal action until the required public notice can be given.78 The
intervenors failed to raise the issue of notice in response to the
prehearing orders, at the public hearing, or in their motions
for reconsideration. An appellate court will not consider an
issue on appeal that was not presented to or passed upon by
the administrative agency.79 This assignment of error is with-
out merit.
4. Participation Claim Without Merit
Ponca and Yankton Sioux argue that the PSC improperly
limited their participation to social and cultural issues. They
76
See, Denali Real Estate v. Denali Custom Builders, 302 Neb. 984, 926
N.W.2d 610 (2019); Zelenka v. Pratte, 300 Neb. 100, 912 N.W.2d 723
(2018); Blinn v. Beatrice Community Hosp. & Health Ctr., 270 Neb. 809,
708 N.W.2d 235 (2006).
77
See, Hansen v. City of Norfolk, 201 Neb. 352, 267 N.W.2d 537 (1978);
Alexander v. School Dist. No. 17, 197 Neb. 251, 248 N.W.2d 335 (1976).
78
See Witt v. School District No. 70, 202 Neb. 63, 273 N.W.2d 669 (1979).
79
Betterman v. Department of Motor Vehicles, 273 Neb. 178, 728 N.W.2d
570 (2007).
- 922 -
Nebraska Supreme Court A dvance Sheets
303 Nebraska R eports
IN RE APPLICATION NO. OP-0003
Cite as 303 Neb. 872
argue that their petitions alleged governmental and territorial
interests and that the PSC’s regulations allow the intervenors
to present evidence on any express interest stated in a petition
for intervention. They argue that the PSC improperly ordered
them to combine their witnesses and cross-examination time.
Yankton Sioux argues that the conditions imposed by the PSC
violated its equal protection rights. TransCanada argues that
this court lacks appellate jurisdiction to consider the interve-
nors’ arguments, because the intervenors did not appeal from
the PSC’s order on petitions for intervention. The intervenors
argue the intervention order was not a final order, because the
order did not deny intervention.
(a) Final Order
Before reaching the legal issues presented for review, it
is the duty of an appellate court to determine whether it has
jurisdiction over the matter before it.80 The jurisdictional issue
before us is whether the intervenors’ objections to the scope
of their participation may be reviewed after their appeal from
the PSC’s judgment on the merits or whether the intervenors
were required to appeal from the PSC’s order on petitions
for intervention.
[17] We have consistently held that an order denying inter-
vention is a final order for purposes of appeal.81 Here, the
PSC’s intervention order did not deny intervention, but, rather,
granted petitions for intervention and imposed conditions on
the scope of intervention. Such an order is not final in the
traditional sense in that the order is not a final determination
of the parties’ rights. Moreover, agency orders granting peti-
tions for intervention subject to conditions are interlocutory in
80
In re Grand Jury of Douglas Cty., supra note 21.
81
Streck, Inc. v. Ryan Family, 297 Neb. 773, 901 N.W.2d 284 (2017); Basin
Elec. Power Co-op v. Little Blue N.R.D., 219 Neb. 372, 363 N.W.2d 500
(1985). See, Wayne L. Ryan Revocable Trust v. Ryan, 297 Neb. 761, 901
N.W.2d 671 (2017); Spear T Ranch v. Knaub, 271 Neb. 578, 713 N.W.2d
489 (2006); Shold v. Van Treeck, 82 Neb. 99, 117 N.W. 113 (1908).
- 923 -
Nebraska Supreme Court A dvance Sheets
303 Nebraska R eports
IN RE APPLICATION NO. OP-0003
Cite as 303 Neb. 872
nature. Under the APA and Nebraska’s Model Rules of Agency
Procedure, an agency may modify an order imposing condi-
tions on intervention at any time.82
The U.S. Supreme Court held in Stringfellow v. Concerned
Neighbors in Action 83 that an order granting permissive inter-
vention, subject to conditions, and denying intervention as of
right was not an appealable order. The Court explained that
an order denying intervention is subject to appellate review
by necessity, because the petitioner has no right to appeal
from any subsequent order or judgment in the proceeding.84
Conversely, the imposition of conditions on intervention can
be reviewed on appeal from a final judgment. Here, the PSC’s
intervention order did not deny the petitions for intervention
and therefore was not a final order. The intervenors properly
appealed from the PSC’s judgment on the merits, and we have
jurisdiction in such an appeal to consider their objections to the
order which placed conditions on their participation.
(b) Merits
[18] Agency regulations properly adopted and filed with
the Secretary of State of Nebraska have the effect of statutory
law.85 Statutory language is to be given its plain and ordinary
meaning, and we will not resort to interpretation to ascertain
the meaning of statutory words which are plain, direct, and
unambiguous.86
Pursuant to its authority under § 57-1410, the PSC adopted
rules and regulations to carry out MOPSA. Under 291 Neb.
Admin. Code, ch. 9, § 023.06 (2013), “The filing of petitions
for intervention . . . and the conduct of the hearing shall be
82
§ 84-912.02(4); 53 Neb. Admin. Code, ch. 4, § 003.04 (1994).
83
Stringfellow v. Concerned Neighbors in Action, 480 U.S. 370, 107 S. Ct.
1177, 94 L. Ed. 2d 389 (1987).
84
Id.
85
Tran v. State, ante p. 1, 926 N.W.2d 641 (2019).
86
Id.
- 924 -
Nebraska Supreme Court A dvance Sheets
303 Nebraska R eports
IN RE APPLICATION NO. OP-0003
Cite as 303 Neb. 872
governed by the Rules of Commission Procedure.” Under the
PSC’s Rules of Commission Procedure, any person who has an
interest in a proceeding before the PSC, who does not desire to
file a formal protest, may file a petition of formal intervention
and shall become a party to the proceeding.87 Generally, one
who intervenes becomes a party to the litigation and has all the
rights of a party.88 An intervenor can engage in discovery, file
motions, introduce evidence, and examine witnesses, and file
an appeal.89
The PSC’s regulations further provide:
A formal intervenor shall be entitled to participate in
the proceeding to the extent of his/her express interest
in the matter. Such participation shall include, without
limitation, presentation of evidence and argument, cross-
examination of witnesses and submission of rebuttal evi-
dence. As a party, a formal intervenor shall have the right
of appeal.90
The PSC is also an “agency” within the meaning of the APA,
and the APA’s provisions apply to the PSC.91 The PSC has
authority to take actions affecting parties subject to its juris-
diction if such action is taken pursuant to a statute.92 The APA
grants the PSC the power to impose conditions upon an inter-
venor’s participation, and this action is distinct from granting
or denying a petition for intervention.93 Section 84-912.02(3)
of the APA states in pertinent part:
87
291 Neb. Admin. Code, ch. 1, § 015.01 (1992).
88
See Brown v. Jacobsen Land & Cattle Co., 297 Neb. 541, 900 N.W.2d 765
(2017).
89
Id.
90
291 Neb. Admin. Code, ch. 1, § 015.01C (1992).
91
Nebraska Pub. Serv. Comm. v. Nebraska Pub. Power Dist., 256 Neb. 479,
590 N.W.2d 840 (1999). See Yellow Cab Co. v. Nebraska State Railway
Commission, 175 Neb. 150, 120 N.W.2d 922 (1963).
92
See, Neb. Rev. Stat. § 75-110(1) (Reissue 2018); In re Application No.
C-1889, supra note 36.
93
See, § 75-110(2); § 84-912.02.
- 925 -
Nebraska Supreme Court A dvance Sheets
303 Nebraska R eports
IN RE APPLICATION NO. OP-0003
Cite as 303 Neb. 872
If a petitioner qualifies for intervention, the hearing offi-
cer or designee may impose conditions upon the interve-
nor’s participation in the proceedings, either at the time
that intervention is granted or at any subsequent time.
Conditions may include:
....
(b) Limiting the intervenor’s use of discovery, cross-
examination, and other procedures so as to promote the
orderly and prompt conduct of the proceedings; and
(c) Requiring two or more intervenors to combine their
presentation of evidence and argument, cross-­examination,
discovery, and other participation in the proceedings.
The PSC granted the petitions for formal intervention filed
by Ponca and Yankton Sioux in recognition of their interests
in the case, then limited the scope of their participation to
the issues of impacts on social and cultural resources, as rel-
evant under § 57-1407(4)(d) of MOPSA. The PSC stated it
imposed these conditions “in order to balance the statutorily
truncated timeframe [and] the need to consider certain statu-
torily required issues, with the parties’ due process interests
in being heard, and in the interest of maintaining an orderly
proceeding.”
The intervenors argue the conditions imposed by the PSC
violated the PSC’s own regulations. Ponca asserts that “the
language [of the regulation] is clear — the evidence, argu-
ment, and cross-examination ‘shall’ be ‘without limitation.’”94
However, Ponca’s argument departs from the plain mean-
ing and organization of the language used in the regula-
tion. The language provides that an intervenor’s “participation
shall include, without limitation, presentation of evidence and
argument, cross-examination of witnesses and submission of
rebuttal evidence.”95 We interpret this language according to
its plain and ordinary meaning. Here, the phrase “without
94
Brief for appellee Ponca on cross-appeal at 16.
95
291 Neb. Admin. Code, ch. 1, § 015.01C.
- 926 -
Nebraska Supreme Court A dvance Sheets
303 Nebraska R eports
IN RE APPLICATION NO. OP-0003
Cite as 303 Neb. 872
limitation” indicates that an intervenor is entitled to engage
in each form of participation listed in that sentence, i.e., the
intervenor will participate in the “presentation of evidence and
argument, cross-examination of witnesses and submission of
rebuttal evidence.” In this context, “without limitation” does
not mean, as Ponca argues, that an intervenor’s participation
shall be unlimited. Taken to its logical conclusion, the inter-
venors’ position would eliminate basic procedural norms. For
example, the intervenors’ reading would eliminate a hearing
officer’s ability to “exclude evidence which is cumulative
or repetitious.”96 The intervenors’ interpretation of “without
limitation” is unreasonable, would yield absurd results, and is
contrary to MOPSA.
The PSC advised the parties in numerous orders of its
obligation to bring the proceedings to a timely resolution.
Working under strict time restraints, the PSC had a managerial
responsibility to oversee approximately 100 petitions for inter-
vention; organize a representative presentation of evidence;
acquire input from the public, agencies, local governments, and
consultants; and issue a written order disposing of the case.
The PSC would be unable to carry out these duties if it were
required to afford unbounded participation to every intervenor.
“[I]ntervention is a useful tool, but [one] which must be used
carefully[,] lest the manageable lawsuit become an unmanage-
able cowlick.”97 Upon de novo review, we find no error in the
PSC’s interpretation of its own regulations or its actions taken
pursuant to the APA.
The intervenors failed to show that the hearing officer’s
decisions violated their due process or equal protection rights.
The intervenors presented evidence and argument, cross-­
examination, and redirect; had the opportunity for rebuttal;
and filed briefs. The hearing officer gave the intervenors
96
291 Neb. Admin. Code, ch. 1, § 016.05 (1992).
97
Wilderness Society v. Morton, 463 F.2d 1261, 1263 (D.C. Cir. 1972)
(Tamm, Circuit Judge, concurring).
- 927 -
Nebraska Supreme Court A dvance Sheets
303 Nebraska R eports
IN RE APPLICATION NO. OP-0003
Cite as 303 Neb. 872
opportunities to bring out the differences in their positions
regarding the pipeline, but they failed to form questions that
were not redundant. The hearing officer explained to the inter-
venors that they had “asked the same questions of virtually
every witness.” The hearing officer received no substantive
offer of proof to justify modifying the conditions and there-
fore adhered to the prehearing order. The intervenors’ cross-­
examination time was not restricted. The parties never reached
their 1-hour time limit for cross-examination. Additionally,
they failed to call a witness allotted to address the MAR. The
PSC did not act contrary to its own regulations or impose
procedural conditions beyond its authority under the APA and
Nebraska’s Model Rules of Agency Procedure, and its deci-
sions did not injure the intervenors’ substantive rights. This
assignment of error is without merit.
5. MOPSA Evidence Not Hearsay
[19,20] The intervenors next argue that the PSC erred in
receiving into evidence public comments, transcripts of public
meetings, and the consultants’ reports. The intervenors argue
that by including these materials in the record, the PSC vio-
lated their due process rights, because the evidence was inad-
missible hearsay. It is undisputed that the Nebraska Evidence
Rules applied to the proceedings. The Nebraska Evidence
Rules provide that hearsay is admissible when authorized by
the statutes of the State of Nebraska.98 The legislative branch
has the right to prescribe the admissibility of certain categories
of evidence, but it is solely a judicial function to determine the
weight, if any, to be given such evidence.99
Section 57-1407(2) permits the PSC to hold public meet-
ings for the purpose of receiving public input at locations near
the route and requires the PSC to “make the public input part
of the record.” Section 57-1407(3) allows the PSC to request
98
Neb. Rev. Stat. § 27-802 (Reissue 2016).
99
See State ex rel. Veskrna v. Steel, 296 Neb. 581, 894 N.W.2d 788 (2017).
- 928 -
Nebraska Supreme Court A dvance Sheets
303 Nebraska R eports
IN RE APPLICATION NO. OP-0003
Cite as 303 Neb. 872
state agencies to file a report “regarding information within the
respective agencies’ area of expertise relating to the impact of
the major oil pipeline.” Neb. Rev. Stat. § 57-1412 (Cum. Supp.
2018) enables the PSC to retain consultants “to assist with
reviewing applications under [MOPSA].”
[21] The PSC included in the record evidence from public
meetings held in York, O’Neill, Norfolk, and Ralston; reports
from agencies listed under § 57-1407(3); and reports from
consultants. The landowners objected on hearsay grounds and
moved for a “mistrial,” which the hearing officer overruled.
The hearing officer’s decision was correct because, assuming
that the evidence in question was hearsay, the evidence was
admissible by operation of MOPSA and § 27-802. Even if the
PSC erred by admitting this evidence, the intervenors made no
showing that they were unfairly prejudiced by the admission
of the evidence. In a civil case, the admission or exclusion of
evidence is not reversible error unless it unfairly prejudiced a
substantial right of the complaining party.100 This assignment of
error lacks merit.
6. R emaining A rguments Not Properly
R aised in MOPSA Proceeding
Lastly, the intervenors raise constitutional challenges to vari-
ous statutes. We conclude that these arguments are improperly
raised in a MOPSA proceeding before the PSC, because the
intervenors’ arguments do not relate to whether or not the PSC
should grant an application for a major oil pipeline route.
[22-24] As stated above, the intervenors have the full rights
of original parties in a case. However, our jurisprudence rec-
ognizes some practical limitations on the right to intervene.
The intervenors can raise only issues that sustain or oppose the
respective contentions of the original parties.101 An intervenor
100
Reiber v. County of Gage, ante p. 325, 928 N.W.2d 916 (2019).
101
Streck, Inc. v. Ryan Family, supra note 81; Wayne L. Ryan Revocable Trust
v. Ryan, supra note 81.
- 929 -
Nebraska Supreme Court A dvance Sheets
303 Nebraska R eports
IN RE APPLICATION NO. OP-0003
Cite as 303 Neb. 872
who is not an indispensable party cannot change the position of
the original parties or change the nature and form of the action
or the issues presented therein.102 “‘[I]t is fundamental that an
intervenor takes the action as he finds it and cannot secure relief
that is foreign or extraneous to the action.’”103 In other words,
an intervenor cannot widen the scope of the issues, broaden the
scope or function of the proceedings, or raise questions which
might be the subject of litigation but which are extraneous to
the controlling question to be decided in the case.104 Here, the
intervenors improperly sought to alter the scope and nature of
a MOPSA proceeding by raising challenges to the constitu-
tionality of various statutes, in particular §§ 57-1101, 57-1401,
57-1403, 57-1407(2) and (3), and 57-1408.
The original parties in a MOPSA proceeding are the appli-
cant and the PSC. The PSC is a party in a MOPSA proceeding,
because the PSC acts as more than a neutral factfinding body;
the PSC is in charge of serving the public interest105 and has
investigative responsibilities.106 The original parties did not
challenge the constitutionality of MOPSA’s provisions, but
instead conducted the proceedings in recognition of their statu-
tory obligations.
The intervenors’ challenge to § 57-1101 miscomprehends
condemnation proceedings. A condemnation proceeding is an
102
Gilbert v. First National Bank, 154 Neb. 404, 48 N.W.2d 401 (1951);
State ex rel. Nelson v. Butler, 145 Neb. 638, 17 N.W.2d 683 (1945). See,
Chandler Co. v. Brandtjen, Inc., 296 U.S. 53, 56 S. Ct. 6, 80 L. Ed. 39
(1935); John P. Lenich, Nebraska Civil Procedure § 16:9 (2019).
103
Harleysville Ins. Group v. Omaha Gas Appliance Co., 278 Neb. 547, 552,
772 N.W.2d 88, 93 (2009), quoting Arnold v. Arnold, 214 Neb. 39, 332
N.W.2d 672 (1983).
104
Id. See, State ex rel. Nelson v. Butler, supra note 102; First Nat. Bank of
Neligh v. Lancaster, 54 Neb. 467, 74 N.W. 858 (1898).
105
See, § 84-917(2)(a)(i); Shaffer v. Nebraska Dept. of Health & Human
Servs., 289 Neb. 740, 857 N.W.2d 313 (2014).
106
See In re Application of Metropolitan Util. Dist., 270 Neb. 494, 704
N.W.2d 237 (2005). See, also, e.g., §§ 57-1407(2) and (3) and 57-1412.
- 930 -
Nebraska Supreme Court A dvance Sheets
303 Nebraska R eports
IN RE APPLICATION NO. OP-0003
Cite as 303 Neb. 872
action brought by a condemning authority in the exercise of its
power of eminent domain.107 In other words, eminent domain
is the right or power to take private property for a public use
and condemnation is the procedure whereby this power is exer-
cised.108 In a condemnation action, some right in property must
be taken or damaged to afford a basis for relief.109 The deter-
mination of compensation to the owner of property condemned
for public use, by ascertaining the value of property taken or
damaged, is a judicial function.110 MOPSA proceedings merely
concern what route, if any, should be approved, and as such,
concern antecedent issues. The intervenors’ concerns regarding
§ 57-1101 are premature and would be more properly raised
in subsequent condemnation proceedings. After reviewing the
record, we find no plain error and no merit to any assignment
of error.
V. CONCLUSION
In summary, the PSC is an elected body created by the
Nebraska Constitution to serve the public interest. In § 57-1403
of MOPSA, the Legislature determined that “[t]he construction
of major oil pipelines in Nebraska is in the public interest . . . .”
The Legislature designated the PSC as the agency responsible
for determining which pipeline route is in the public interest.
After months of careful consideration, the PSC determined that
the evidence showed that the MAR is in the public interest.
Upon de novo review, we find there is sufficient evidence to
support the PSC’s determination that the MAR is in the public
interest. The assignments of error are without merit.
A ffirmed.
107
See Henderson v. City of Columbus, 285 Neb. 482, 827 N.W.2d 486
(2013).
108
Van Patten v. City of Omaha, 167 Neb. 741, 94 N.W.2d 664 (1959).
109
Lockard v. Nebraska Pub. Power Dist., 249 Neb. 971, 546 N.W.2d 824
(1996).
110
See Webber v. City of Scottsbluff, 155 Neb. 48, 50 N.W.2d 533 (1951).