For the Nebraska Public Service Commission to act, state lawmakers may have to pass a new pipeline-sitting law. Staff members were still reviewing the ruling Wednesday, said Angela Melton, the commission's attorney.
The landowners believe they may have a better chance at blocking the pipeline if it's the commission that must approve the route, though the panel's five members haven't given an indication as to how they might rule. The commission was created in 1890s to prevent governors from granting political favors to railroad executives who wanted to expand through private property, and its members are elected on a regional basis.
Randy Thompson, a Nebraska rancher and a leading plaintiff in the lawsuit, became involved in the dispute after he was notified that the original Keystone XL route would have crossed his parents' 400-acre farm in Merrick County. He said he doesn't think TransCanada should be able to force landowners to sign pipeline contracts using eminent domain.
"They came out here like a bunch of bullies and tried to force it down our throats," Thompson said. "They told us there was nothing we could do to stop it."
Meanwhile, the decision on a federal permit for the northern leg of the route still rests with Obama, five years after backers first asked his administration for approval.
Obama blocked the Keystone XL pipeline in January 2012, saying he did not have enough time for a fair review before a looming deadline forced on him by congressional Republicans. But late last month, the U.S. State Department released an environmental analysis that raised no major environmental objections to the $7 billion pipeline, though opponents disagree.
U.S. State Department spokesman Douglas Frantz said officials were aware of the Nebraska ruling but would not comment because the case was ongoing.
Daniel J. Weiss, senior fellow and director of climate strategy with left-leaning think tank Center for American Progress, said Obama and Secretary of State John Kerry will probably wait until Nebraska has legally approved the pipeline route before making any decision on whether to approve the permit.
"This court decision provides more uncertainty for pipeline proponents, and more time to organize for pipeline opponents," Weiss said.
Associated Press writers Josh Funk in Omaha, Neb., Rob Gillies in Toronto and Matthew Daly in Washington contributed to this report.