Permit Isn’t a Contract

In 1949, a pipeline company received a grant from the Board of Mississipi Levee Commissioners to build and operate two crude oil pipelines in Issaquena County, Mississippi (the least populated county in the U.S. located to the east of the Mississippi River). A dispute arose over permitting fees, and the pipeline company sued the Levee Board for, inter alia, violating the Contract Clause of the U.S. Constitution.

The Fifth Circuit affirmed dismissal: “Despite its significant investment in its pipelines, including their 2007 relocation, Mid Valley does not identify any affirmative or mutual obligations the Levee Board owed stemming from the 1949 Permit—because none are apparent in its express terms.” Accordingly, the Court distinguished this situation, where the permit clearly left complete discretion with the Board, from other permitting cases that did create some consideration / mutuality of obligation. Mid Valley Pipeline Co., LLC v. Rodgers, No. 23-60536 (June 5, 2024).