Save Our Illinois Land v. Illinois Commerce Comm'n

2023 IL App (4th) 221038 FILED
June 13, 2023
NO. 4-22-1038 Carla Bender
4th District Appellate
IN THE APPELLATE COURT Court, IL
OF ILLINOIS

FOURTH DISTRICT

SAVE OUR ILLINOIS LAND and WILLIAM ) Appeal from an Order of the
KLINGELE, ) Illinois Commerce Commission
Appellants, )
v. )
THE ILLINOIS COMMERCE COMMISSION; )
DAKOTA ACCESS, LLC; ENERGY TRANSFER ) Docket No. 19-0673
CRUDE OIL COMPANY, LLC; INTERNATIONAL )
)
BROTHERHOOD OF ELECTRICAL WORKERS,
)
LOCAL 702; LABORERS’ INTERNATIONAL )
UNION OF NORTH AMERICA; SOUTHWESTERN )
ILLINOIS LABORERS’ DISTRICT COUNCIL; )
GREAT PLAINS LABORERS’ DISTRICT )
COUNCIL; and SOUTHERN AND CENTRAL )
ILLINOIS LABORERS’ DISTRICT COUNCIL AND )
)
ITS AFFILIATED LOCAL UNIONS 231, 622, 773,
)
AND 1197, )
Appellees. )
)

JUSTICE CAVANAGH delivered the judgment of the court, with opinion.
Justices Harris and Steigmann concurred in the judgment and opinion.

OPINION

¶1 Pursuant to section 8-503 of the Public Utilities Act (Act) (220 ILCS 5/8-503 (West

2020)), Dakota Access, LLC (Dakota Access), and Energy Transfer Crude Oil Company, LLC

(Energy Transfer) (hereinafter, “the carriers”), petitioned the Illinois Commerce Commission

(Commission) for authorization to construct additional pumping stations on the Illinois portion of

their crude-oil pipelines. The Commission granted their petition. Save Our Illinois Land and
William Klingele (hereinafter, “the objectors”) appeal. We affirm the Commission’s decision. The

Commission could reasonably find that the proposed pumping stations were “necessary” “to

promote the security or convenience of *** the public.” Id.

¶2 I. BACKGROUND

¶3 The carriers are in the business of shipping crude oil by the Bakken pipeline system.

The Dakota Access pipeline begins in the Bakken, Three Forks, and Williston oil fields of

northwest North Dakota and runs southeast through North Dakota, South Dakota, and Iowa; enters

Illinois at Hamilton; and continues running southeast through Illinois to the crude-oil terminal and

hub at Patoka. There the Energy Transfer pipeline connects to the Dakota Access pipeline; runs

southwest to Joppa; and then continues southwest through Kentucky, Tennessee, Mississippi,

Arkansas, and Louisiana to the crude-oil terminals at Nederland, Texas, on the Gulf Coast. Since

December 2015, the carriers have had certificates in good standing, pursuant to section 15-401 of

the Act (id. § 15-401), to operate the Illinois portion of their pipelines.

¶4 In June 2019, the carriers filed with the Commission a joint petition under section

8-503 (id. § 8-503) to build new pumping stations and new pumps on their pipelines so as to

increase the throughput of the pipelines from 570,000 barrels per day to 1.1 million barrels per

day. Specifically, the carriers sought authorization to (1) build a new pump station in Hancock

County, along the Dakota Access pipeline, (2) install two new pumps and replace two pumps at

an existing pump station in Patoka, and (3) build a new pump station along the Energy Transfer

pipeline in Massac County. No eminent domain would be necessary for this pumping-station

project. The expected cost of the Illinois portion of the project would be $190 million to $200

million. The carriers informed the Commission that they had entered into long-term transportation

shipping agreements with shippers that committed them—both the carriers and the shippers—to

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sending greater volumes of oil through the Illinois pipelines than the pipelines could handle

without the additional pumping capacity.

¶5 For essentially three reasons, the objectors opposed the proposed improvements.

First, the objectors argued there was no need for an increase in throughput, considering that the

COVID-19 pandemic had greatly reduced the worldwide demand for oil and that refineries were

already operating at close to full capacity. Second, in the objectors’ view, an increase in throughput

would be of no benefit to the Illinois public but, instead, would benefit a relatively small group of

market players. Third, the objectors predicted adverse environmental consequences from the

additional pumps and pumping stations. The objectors warned that increasing the throughput of

the pipelines by some 500,000 barrels per day would make a pipeline leak, should one ever occur,

all the more calamitous. Also, in the objectors’ view, the additional pumping capacity would have

the effect of accelerating climate change.

¶6 On October 14, 2020, after evidentiary hearings, the Commission authorized the

proposed project. In the Commission’s view, the long-term shipping contracts, together with the

carriers’ willingness to spend hundreds of millions of dollars on additional pumping stations and

pumps, tended to prove a demand for increased throughput. The carriers’ pipelines met federal

safety standards. Finally, the Commission reasoned that it would be less damaging to the climate,

and would be safer for the Illinois public, if the additional 500,000 barrels of crude oil per day

were transported through the carriers’ rural pipelines instead of by trains and trucks, which would

pass back and forth through populated areas.

¶7 The carriers appealed. See id. § 10-201(a). We vacated the Commission’s decision

and remanded the case to the Commission with directions to issue a new decision. Save Our Illinois

Land v. Illinois Commerce Comm’n, 2022 IL App (4th) 210008, ¶ 188. We disavowed any

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intention to express a view on whether permission to make the proposed improvements should be

granted. Id. But we directed that, this time, instead of regarding “the public” in section 8-503 (220

ILCS 5/8-503 (West 2020)) as being the world, the Commission regard “the public” “as being, at

its broadest, the people of the United States.” Save Our Illinois Land, 2022 IL App (4th) 210008,

¶ 188. Also, we directed the Commission to take into consideration the regulatory violations that

the operator of the carriers’ pipelines, Sunoco, had committed in Pennsylvania—evidence that the

Commission had previously ruled to be irrelevant. Id.

¶8 In September 2022, on remand, the Commission issued a new decision that

complied with our directions. In its decision on remand, the Commission again authorized the

construction of the proposed pumping stations and pumps.

¶9 The objectors appeal.

¶ 10 II. ANALYSIS

¶ 11 In deciding whether to authorize a proposed addition to the physical property of a

“public utility,” which is defined to include the owner of a pipeline (see 220 ILCS 5/3-105(a)(3)

(West 2020)), the Commission must consider whether the addition is “necessary and ought

reasonably to be made” and whether the addition would “promote the security or convenience of

*** the public.” (Emphasis added.) Id. § 8-503. In our previous decision in this case, we concluded

that “the public,” in section 8-503, could not be plausibly interpreted as meaning the world. Save

Our Illinois Land, 2022 IL App (4th) 210008, ¶ 74. We concluded, instead, that “the public” meant

the Illinois public. Id. ¶ 161. The Commission, an Illinois administrative agency, “was created to

serve the Illinois public.” Id.

¶ 12 In the next sentence of our previous decision, however, we qualified our Illinois-

centric interpretation by cautioning that a decision by the Commission may not unconstitutionally

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burden interstate commerce. Id. As we explained, “the needs and benefits of the American public

could be indirectly relevant, considering that, under the dormant commerce clause (U.S. Const.,

art. I, § 8, cl. 3), ‘the burden imposed on [interstate] commerce’ cannot be ‘clearly excessive’

compared to the ‘putative local benefits.’ ” Id. ¶ 161 (quoting Lakehead Pipeline Co. v. Illinois

Commerce Comm’n, 296 Ill. App. 3d 942, 952 (1998)). This elucidation of the dormant commerce

clause came ultimately from Pike v. Bruce Church, Inc., 397 U.S. 137, 142 (1970), in which the

United States Supreme Court held:

“Where the statute regulates even-handedly to effectuate a legitimate local public

interest, and its effects on interstate commerce are only incidental, it will be upheld

unless the burden imposed on such commerce is clearly excessive in relation to the

putative local benefits. [Citation.] If a legitimate local purpose is found, then the

question becomes one of degree. And the extent of the burden that will be tolerated

will of course depend on the nature of the local interest involved, and on whether it

could be promoted as well with a lesser impact on interstate activities.”

¶ 13 If we had interpreted section 8-503 as invariably conditioning the approval of a

project on whether the project would benefit the Illinois public, regardless of the effect on interstate

commerce, the statute would have conflicted with Pike. Under Pike, the incidental burden on

interstate commerce must “effectuate a legitimate local public interest.” Id. That is, not the project

but the burden on interstate commerce from rejecting the project must “effectuate a legitimate local

public interest.” Id. Thus, the Commission would be unable to defend an incidental burden on

interstate commerce by arguing that removing the burden, i.e., approving the project, would yield

no benefit to the Illinois public. If rejecting the proposed pumping stations would incidentally

burden interstate commerce, the rejection could not be justified by asserting the lack of evidence

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that the pumping stations would “promote the security or convenience of *** the [Illinois] public.”

220 ILCS 5/8-503 (West 2020). To prevent section 8-503 from inflicting the “economic

Balkanization” that the commerce clause is supposed to prevent, we interpret “the public” to be as

broad as the United States whenever interstate commerce is implicated. (Internal quotation marks

omitted.) Oregon Waste Systems, Inc. v. Department of Environmental Quality of Oregon, 511

U.S. 93, 98 (1994); see also Davis v. Brown, 357 Ill. App. 3d 176, 182 (2005) (observing that a

statute should be interpreted so as to make it constitutional, provided that such an interpretation is

reasonable). Section 8-503 should not be interpreted as encouraging violations of the dormant

commerce clause. See Lakehead Pipeline Co., 296 Ill. App. 3d at 952 (agreeing with the appellant

that “requiring proof of a local public need” as a condition of issuing a certificate in good standing

“would conflict with the commerce clause”). We interpret the statutory phrase “the security or

convenience of *** the public” as incorporating Pike. See 220 ILCS 5/8-503 (West 2020). Inherent

in the commerce clause is the public-policy judgment that the free flow of goods from one state to

another benefits the American public.

¶ 14 Thus, even if the objectors are right that Illinois, without any significant benefit to

itself, merely accommodates a conduit for the interstate movement of crude oil, the conduit is

constitutionally protected. Because interstate commerce is implicated, it is irrelevant whether the

proposed pumping stations would benefit the Illinois public. When the free flow of goods across

state lines is at stake, the meaning of “the public” in section 8-503 expands to the United States

public, the beneficiary of unimpeded interstate commerce. See Merriam-Webster Online

Dictionary, https://www.merriam-webster.com/dictionary/public (last visited May 26, 2023)

[https://perma.cc/6X5U-5MJU] (listing “POPULACE” as a synonym for the noun “public”);

Merriam-Webster Online Dictionary, https://www.merriam-webster.com/dictionary/populace

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(last visited May 26, 2023) [https://perma.cc/765N-QYH9] (noting that “[p]opulace is usually

used to refer to all the people of a country” (emphasis in original)). The dormant commerce clause

prohibits Illinois from gratuitously “burden[ing] or imped[ing]” the flow of goods across state lines

or from “impair[ing] the usefulness of [the] facilities for” the interstate flow of goods. Illinois

Central R.R. Co. v. Illinois, 163 U.S. 142, 154 (1896). If Illinois imposes an incidental burden on

the conduit, the burden must be beneficial to the people of the state, and “the burden imposed on

such commerce” must not be “clearly excessive in relation to the putative local benefits.” Pike,

397 U.S. at 142.

¶ 15 A burden on interstate commerce is a “barrier[ ] to the free flow of interstate

commerce.” Raymond Motor Transportation, Inc. v. Rice, 434 U.S. 429, 440 (1978). In this case,

the flow is literal. Denying permission to install the additional pumping stations would erect a

barrier to the free flow of about half a million barrels of crude oil per day from North Dakota to

Texas. Such a denial would be an incidental burden on interstate commerce.

¶ 16 A burden on interstate commerce is incidental if the burden is nondiscriminatory.

Discrimination “means differential treatment of in-state and out-of-state economic interests that

benefits the former and burdens the latter,” in contrast to state laws that “regulate[ ] evenhandedly

with only incidental effects on interstate commerce.” (Internal quotation marks omitted.) Oregon

Waste Systems, 511 U.S. at 99. A ban on additional pumping stations and pumps would be

nondiscriminatory; it would not treat in-state and out-of-state interests differently. Nevertheless,

as the Supreme Court held in Raymond, even a nondiscriminatory burden on interstate commerce

must be justified by a “legitimate local purpose”—and then “the extent of the burden that will be

tolerated will *** depend on the nature of the local interest involved, and on whether it could be

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promoted as well with a lesser impact on interstate activities.” (Internal quotation marks omitted.)

Raymond, 434 U.S. at 441.

¶ 17 In Raymond, a Wisconsin statute provided that any person who would operate a

truck longer than 55 feet on a Wisconsin highway had to obtain a permit from the state highway

commission. Id. at 432. Because the statute applied to all trucks, regardless of whether they were

from Wisconsin or from any other state, the statute was facially nondiscriminatory. The statute,

however, imposed an incidental burden on interstate commerce. For the trucking companies who

appealed in Raymond, it was cheaper and more efficient to use double-trailer units, which were 65

feet long, than to use single-trailer units, which were 55 feet long. Id. at 438. Double-trailer units

were what the trucking companies typically used in surrounding states. Because of the Wisconsin

ban, interstate doubles had to detach one of their trailers upon reaching the Wisconsin border, hitch

the trailer to another tractor, pull the trailers separately across Wisconsin, and then reunite the

trailers after leaving Wisconsin. Id. Alternatively, doubles had to be diverted through Missouri and

Nebraska. Id. Because the trucking companies could not obtain permits from the state highway

commission (see id. at 435), detachment or diversion were the only options. The evidence was

uncontradicted that Wisconsin’s regulation disrupted operations of the trucking companies, raised

their costs, and slowed their service. Id. at 438.

¶ 18 This burden on interstate commerce lacked any proven justification. Wisconsin

adduced no evidence that its double-trailer ban made highways safer. Id. at 437-38. In fact, the

trucking companies “presented a great deal of evidence supporting their allegation that 65-foot

doubles [were] as safe as, if not safer than, 55-foot singles when operated on limited-access, four-

lane divided highways.” Id. at 436. The only reason that Wisconsin gave for the ban was the state

highway commission’s “belief that the people of the State did not want more vehicles over 55 feet

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long on the State’s highways.” Id. at 437. It was uncontradicted, though, that the double-trailer ban

“impose[d] a substantial burden on the interstate movement of goods” by slowing the movement

and increasing its cost, without any benefit to highway safety. Id. at 445. Therefore, the Supreme

Court held that “the challenged regulations unconstitutionally burden[ed] interstate commerce.”

Id. at 444.

¶ 19 Just as the double-trailer ban in Raymond caused a bottleneck in the interstate

movement of goods by road, a train-car limitation in Southern Pacific Co. v. Arizona ex rel.

Sullivan, 325 U.S. 761 (1945), caused a bottleneck in the interstate movement of goods by rail. In

Southern Pacific, the Supreme Court considered the constitutionality of an Arizona statute

forbidding, within the state, the operation of a train having more than 14 passenger cars or more

than 70 freight cars. Id. at 763. This statute made Arizona an outlier. “[O]ver the main lines of the

railroads of the United States,” it was “standard practice” to operate trains having more than 14

passenger cars or more than 70 freight cars. Id. at 771. Longer trains were cheaper to operate than

shorter trains. Id. at 772. Arizona’s train-limit law cost “the two railroads traversing that state” an

additional $1 million a year. Id. The Supreme Court continued:

“The reduction in train lengths also impedes efficient operation. More locomotives

and more manpower are required; the necessary conversion and reconversion of

train lengths at terminals and the delay caused by breaking up and remaking long

trains upon entering and leaving the state in order to comply with the law, delays

the traffic and diminishes its volume moved in a given time, especially when traffic

is heavy.” Id.

“[T]he enforcement of the Arizona statute result[ed] in freight trains being broken up and reformed

at the California border and in New Mexico, some distance from the Arizona line.” Id. at 774.

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Thus, “[t]he practical effect of such regulation [was] to control train operations beyond the

boundaries of the state exacting it.” Id. at 775.

¶ 20 The Supreme Court in Southern Pacific acknowledged the “residuum of power in

the state to make laws governing matters of local concern which nevertheless in some measure

affect[ed] interstate commerce.” Id. at 767. But the local concern that the train-limit law addressed

was faint or nonexistent, whereas the impediment to “the free flow of commerce from state to

state” was substantial. Id. The trial court had “found that the Arizona law had no reasonable

relation to safety” and that, in fact, the law “made train operation more dangerous.” Id. at 775.

Evidence showed that as the number of trains increased, so did the number of accidents. Id.

¶ 21 The “decisive question,” then, was

“whether in the circumstances the total effect of the law as a safety measure in

reducing accidents and casualties [was] so slight or problematical as not to

outweigh the national interest in keeping interstate commerce free from

interferences which seriously impede[d] it and subject[ed] it to local regulation

which [did] not have a uniform effect on the interstate train journey which it

interrupt[ed].” Id. at 776-77.

To that question, the Supreme Court answered yes. Id. at 781. “[T]he state interest [was]

outweighed by the interest of the nation in an adequate, economical[,] and efficient railway

transportation service, which [had to] prevail.” Id. at 783-84. In short, Arizona’s train-limit law

violated the dormant commerce clause.

¶ 22 If the Commission had denied the carriers permission to install additional pumping

stations and pumps on the Illinois portion of their crude-oil pipelines, the denial would have been

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comparable, in three ways, to the double-trailer ban in Raymond and to the train-limit law in

Southern Pacific.

¶ 23 First, denying permission to install the pumping stations on the Illinois portion of

the interstate pipelines would have made Illinois an outlier, causing a bottleneck comparable to

that in Raymond or Southern Pacific. The carriers argued to the Commission:

“[R]efusing to approve the installation of the improvements in Illinois to increase

the pipeline’s capacity and daily throughput capabilities, which every other state

[that the carriers’] pipelines traverse has either formally approved or did not require

any separate approval, would clearly interfere with the flow of interstate commerce

among these states.”

We quote from the decision the Commission issued on remand, in which the Commission

summarized the parties’ positions.) The objectors do not appear to dispute that argument by the

carriers. Denying permission to install the new pumping stations would cause the Illinois portion

of the carriers’ pipelines to have less throughput capacity than the out-of-state portions of the

carriers’ pipelines. Illinois would be, in a manner of speaking, a partial obstruction to an otherwise

unobstructed pipeline system.

¶ 24 Second, the Commission found that denying permission to install the pumping

stations would make the interstate transportation of some half a million barrels per day of crude

oil slower, more costly, less efficient, and less safe. We deem this finding to be, prima facie, true

and correct. See 220 ILCS 5/10-201(d) (West 2020). The objectors have not shown this finding to

be against the manifest weight of the evidence. See Cinkus v. Village of Stickney Municipal

Officers Electoral Board, 228 Ill. 2d 200, 210 (2008). It is undisputed that the pumping stations

would increase the throughput of the carriers’ pipelines from 570,000 barrels per day to a

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maximum of 1.1 million barrels per day. The Commission reasonably found that “there [was] a

demand to transport an additional 500,000 [barrels per day] from the Bakken-Three Forks region

to Patoka, Illinois[,] or Nederland, Texas,” and that “the pipeline [was] currently operating at

capacity.” We defer to the Commission’s reasoning that the long-term shipping contracts, together

with the carriers’ willingness to spend $190 million to $200 million on the construction of the

pumping facilities, tend to prove “a supply of crude oil at one end of the pipeline and a purchaser

for the crude oil at the other end.” The Commission observed, “There is no dispute that the pipeline

is currently operating at capacity and [that] the transportation of crude oil from the Bakken-Three

Forks region will occur, if not on [the carriers’] pipelines, then by rail or truck.” In other words,

the half a million barrels of crude oil per day that, because of the lack of additional pumping

capacity, the carriers’ pipelines would be unable to handle would be transported from North

Dakota to Texas by truck and rail. We accept, as true and correct on its face, the Commission’s

finding that transporting this oil by the rural pipelines would be safer, more efficient, and less

damaging to the environment than transporting it by trucks and trains, which would continually

travel back and forth, through populated areas, between North Dakota and Gulf Coast. We likewise

defer to the Commission’s factual finding that the cost of shipping the crude oil by pipeline would

range from $2 to $5 per barrel compared to $10 to $15 per barrel by train and $10 to $20 per barrel

by truck. All of these findings are supported by substantial evidence in the record (see Central

Illinois Public Service Co. v. Illinois Commerce Comm’n, 268 Ill. App. 3d 471, 476 (1994)), and

they suggest that rejecting the additional pumping stations and pumps would impose a significant

burden on interstate commerce.

¶ 25 Third, as in Raymond and Southern Pacific, the putative local benefits from

burdening interstate commerce are unproven. Avoiding risk from a design vulnerability of the

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pipelines cannot serve as a benefit, for interstate oil-pipeline safety is federally preempted. See

Save Our Illinois Land, 2022 IL App (4th) 210008, ¶ 90. As for pipeline-operator safety, the

Commission found:

“The evidence shows that Sunoco’s safety record has improved significantly. The

[carriers’ Illinois] pipelines have been in service since 2017 and have had a good

safety record. The Commission notes that [the objectors] did not present any

evidence taking issue with Sunoco’s operations of the [carriers’] pipelines in

Illinois. Many of the issues that are present in Pennsylvania are not present with

[the carriers’] pipeline in Illinois.”

We are unable to say that those findings are against the manifest weight of the evidence. See

Cinkus, 228 Ill. 2d at 210. Consequently, there would be no “putative local benefits” (Pike, 397

U.S. at 142) to justify the “substantial burden on the interstate movement of goods”—in this case,

crude oil (Raymond, 434 U.S. at 445).

¶ 26 In sum, when deciding whether to approve the addition of pumping stations and

pumps to the Illinois portion of a pipeline that begins in North Dakota and runs to Texas, the

Commission could not legitimately ignore the implications for interstate commerce. The

Commission could reasonably find that denying the carriers permission to install additional

pumping stations on their pipeline would burden or slow down interstate commerce (see id.) or

would “erect[ ] [a] barrier[ ] to the free flow of interstate commerce” (id. at 440). Finally, the

Commission could reasonably find that there are no “legitimate state interests” to minimally justify

such a burden. See id. We defer, therefore, to the Commission’s conclusion that the installation of

the proposed additional pumping stations and pumps is “necessary and ought reasonably to be

made” for “the security or convenience of *** the public.” 220 ILCS 5/8-503 (West 2020).

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¶ 27 III. CONCLUSION

¶ 28 For the foregoing reasons, we affirm the Commission’s decision.

¶ 29 Affirmed.

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 Save Our Land v. Illinois Commerce Comm’n, 2023 IL App (4th) 221038

Decision Under Review: Petition for review of order of Illinois Commerce Commission,
No. 19-0673.

Attorneys William M. Shay and Rhonda L. Heinz, of Westervelt, Johnson,
for Nicoll & Keller, LLC, of Peoria, for appellants.
Appellant:

Attorneys Robert W. Funk, Brian J. Dodds, and Thomas R. Stanton, Special
for Assistant Attorneys General, of Chicago, for appellee Illinois
Appellee: Commerce Commission.

Jeff Naville, of Attorney Laborers’ Midwest Region, of
Springfield, and Patrick K. Shinners, of Schuchat, Cook &
Werner, of St. Louis, Missouri, for appellees International
Brotherhood of Electrical Workers, Local 702; Laborers’
International Union of North America; Southwestern Illinois
Laborers’ District Council; Great Plains Laborers’ District
Council; and Southern and Central Illinois Laborers’ District
Council and Its Affiliated Local Unions, 231, 622, 773, 1197.

Claire A. Manning, of Brown Hay & Stephens, LLP, of
Springfield, Owen MacBride, Amy Antoniolli, and Meera Gorjala,
of ArentFox Schiff LLP, of Chicago, and Bret Dublinske, of
Fredrikson & Byron, P.A., of Des Moines, Iowa, for other
appellees.

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