* 7th Circuit gives Enbridge ( ENB ) a grace period to reroute Line

5 pipeline

* Damages must be recalculated to avoid 'double-counting'

* Rights-of-way under tribal land expired in 2013

By Jonathan Stempel

July 30 (Reuters) - A U.S. appeals court found Enbridge ( ENB )

liable for trespass for running a pipeline under land

belonging to a northern Wisconsin tribe, but gave the Canadian

energy company more time to reroute the pipeline and ordered a

recalculation of damages.

Thursday's decision by the 7th U.S. Circuit Court of Appeals

in Chicago addressed appeals from a federal district judge's

June 2023 order that Enbridge ( ENB ) pay the Bad River Band of the Lake

Superior Tribe of Chippewa Indians $5.15 million in restitution

plus an additional sum for ongoing trespass, and move the

pipeline within three years.

That deadline expired last month, but had been put on hold.

Circuit Judge Michael Scudder urged the district judge to adopt

measures to ensure that Enbridge ( ENB ) reroute the pipeline "as soon

as possible."

Enbridge ( ENB ) had no immediate comment. Josh Handelsman, a lawyer

for the tribe, said his client is reviewing the decision.

Built in 1953, the Line 5 pipeline carries up to 540,000

barrels of oil per day through the Great Lakes region from

Canada, including about 12 miles (19 km) under the Bad River

Reservation.

U.S. District Judge William Conley in Madison, Wisconsin,

awarded damages and ordered a reroute following a non-jury

trial. Bad River Band had warned a shutdown was needed because

spring rains had eroded a riverbank protecting the pipeline.

DELAY 'DOES NOT REFLECT OUR APPROVAL'

Writing for a three-judge panel, Scudder said the three-year

timetable to move the pipeline was too aggressive, but a

shutdown risked harming consumers, sparking international

fallout with Canada, and violating a 1977 U.S.-Canadian treaty

governing transit pipelines.

"Make no mistake: Enbridge ( ENB ) must remove the pipeline from the

[tribe's land]," Scudder wrote. "The grace period we direct the

district court to afford Enbridge ( ENB ) is the product of the broader

public context in which the pipeline operates, and it does not

reflect our approval of the company's behavior."

As to damages, Scudder said Conley abused his discretion for

"double-counting," by taking into account Enbridge's ( ENB ) profits

attributable to the trespass as well as the company's economic

benefit from deferring expenses for a reroute.

A recalculation should consider the ongoing nature of

Enbridge's ( ENB ) trespass, interest that may be owed, and both sides'

conduct concerning a reroute, Scudder said.

The appeals court refused to hold Enbridge ( ENB ) liable for

nuisance, saying federal law preempted the tribe's claim.

Though Enbridge's ( ENB ) easement for the pipeline over some tribal

land parcels ran through 2043, its rights-of-way over other

parcels expired in 2013.

The tribe sued in 2019 after out-of-court negotiations

failed.