10th Cir. Rejects Request to Temporarily Halt Keystone XL

Last week, the Tenth Circuit Court of Appeals affirmed a lower court's ruling when they refused to temporarily halt construction of the Keystone XL pipeline, reports The Associated Press. The pipeline would carry Canadian TransCanada's tar-sands oil from Oklahoma all the way to refineries along the Gulf Coast.

The plaintiffs, the Sierra Club, Clean Energy Future of Oklahoma, and the East Texas Sub Regional Planning Commission sued the U.S. Army Corps of Engineers, alleging that their approval of the construction of an oil pipeline violated the National Environment Policy Act (NEPA), the Clean Water Act (CWA), and the Administrative Procedure Act (APA), posing environmental hazards.

They sought a preliminary injunction to prevent the construction until the resolution of their suit was reached. However, the district court denied it.

Four Factor Test for a Preliminary Injunction

The district court applied a four-part test that a party seeking a preliminary injunction must meet, as cited in Beltronics USA, Inc. v. Midwest Inventory Distrib., LLC, by showing the following four factors:

1. That it is substantially likely to succeed on the merits;
2. that it will suffer irreparable injury if the injunction is denied;
3. that its threatened injury outweighs the injury the opposing party will suffer under the injunction; and
4. that the injunction would not be adverse to the public interest.

Balancing Injuries

The court ultimately based their determination on the third prong of the test -- whether or not the threatened injury outweighs the injury the opposing party would suffer due to the injunction. The Tenth found that, through their balancing test, the harm that an injunction on the pipeline would cause was more significant. The financial loss that TransCanada would incur would be great -- nearly hundreds of thousands of dollars every day.

In 2-1 decision, the decision ultimately sided with TransCanada (and the U.S. Army Corps by extension), in balancing the financial harm against the threatened environmental injuries, which consisted of potentially incalculable damage.

In favor of TransCanada, the court pointed out that Sierra Club, et al failed to demonstrate how the pipeline would have a significant impact. The Tenth affirmed the district court's denial of the plaintiffs' request for a preliminary injunction.

Related Resources:

• Sierra Club v. U.S. Army Corps of Engineers (Tenth Circuit Court of Appeals)
• TransCanada says Keystone leg to start on time; Brent premium shrinks (Reuters Canada)
• Environmental Groups Sue Over TransCanada Pipeline (FindLaw's Courtside)