PORTLAND PIPE LINE CORPORATION et al v. CITY OF SOUTH PORTLAND et al
ORDER denying 16 Defendants' Motion to Dismiss Complaint. By JUDGE JOHN A. WOODCOCK, JR. (MFS)
UNITED STATES DISTRICT COURT
DISTRICT OF MAINE
PORTLAND PIPE LINE
CORPORATION, et al.,
CITY OF SOUTH PORTLAND,
ORDER ON DEFENDANTS’ MOTION TO DISMISS
South Portland enacted an Ordinance prohibiting the loading of crude oil in
Portland Harbor. The Ordinance’s practical effect is to prevent Portland Pipe Line
from using its infrastructure to transport oil by pipeline from north to south, i.e., from
Canada to South Portland. Portland Pipe Line brought suit seeking declaratory and
injunctive relief, and South Portland moved to dismiss the suit on the justiciability
grounds that the suit was unripe, that Portland Pipe Line lacked standing, and that
the Court must not render an advisory opinion. The Court, however, finds the dispute
to be ripe because Portland Pipe Line has expressed its intention to import oil and
cannot do so as long as the Ordinance remains in place. Other approvals may be
required, but Portland Pipe Line has won these approvals in the past and should not
be made to pursue them again while the question of the Ordinance’s legality remains
unanswered. The Defendants’ standing and advisory opinion claims are similarly
unavailing. The Court denies South Portland’s motion to dismiss.
On February 6, 2015, Portland Pipe Line Corporation (PPLC) and The
American Waterways Operators (AWO) filed a nine-count complaint in this Court
against the city of South Portland (South Portland or City) and Patricia Doucette
(Doucette), South Portland’s Code Enforcement Officer. The Complaint contains nine
counts: (1) Supremacy Clause preemption of the Ordinance by the Pipeline Safety Act
(PSA), 49 U.S.C §§ 60101 et seq.; (2) Supremacy Clause preemption of the Ordinance
under the President’s foreign affairs power; (3) Supremacy Clause preemption of the
Ordinance by the Ports and Waterways Safety Act, 33 U.S.C. Ch. 25 and 46 U.S.C.
Ch. 37; (4) preemption of the Ordinance under Article III, Section 2 of the United
States Constitution and the Constitution’s embedded principle of federal maritime
governance; (5) violation of the Commerce Clause of the Constitution; (6) violation of
the Due Process and Equal Protection Clauses; (7) deprivation of rights under the
Civil Rights Act, 42 U.S.C. § 1983; (8) inconsistency of the Ordinance with South
Portland’s comprehensive plan under Maine law, 30-A M.R.S. § 4352; and (9)
preemption of the Ordinance by Maine’s Oil Discharge Prevention Law, 38 M.R.S. §
556. Compl. for Declaratory and Injunctive Relief (ECF No. 1) (Compl.).
On March 31, 2015, South Portland and Ms. Doucette filed a motion to dismiss
the Complaint. Defs.’ Mot. to Dismiss the Compl. Pursuant to Rule 12(b)(1) (ECF No.
16); Mem. of Law in Supp. Of Defs.’ Mot. to Dismiss Pursuant to Rule 12(b)(1) (ECF
No. 17) (Defs.’ Mot.). The Plaintiffs responded on April 21, 2015. Pls.’ Opp’n to Defs.’
Mot. to Dismiss Pursuant to Rule 12(b)(1) (ECF No. 18) (Pls.’ Opp’n). The Defendants
replied on May 5, 2015. Reply Mem. of Law in Supp. of Defs.’ Mot. to Dismiss
Pursuant to Rule 12(b)(1) (ECF No. 19) (Defs.’ Reply). On May 12, 2015, the Plaintiffs
filed an unopposed motion for oral argument, Pls.’ Req. for Oral Argument (ECF No.
20), which the Court granted on May 14, 2015. Order Granting Without Obj. Mot. for
Oral Argument/Hr’g (ECF No. 21).
On January 21, 2016, the Court held oral argument on the motion to dismiss.
Min. Entry (ECF No. 24). At oral argument, the Plaintiffs brought to the Court’s
attention a case the First Circuit decided after the parties submitted their written
argument: Town of Barnstable v. O’Connor, 786 F.3d 130 (1st Cir. 2015). The Court
asked the parties to brief Barnstable.
The Defendants filed a memorandum on
Barnstable on January 28, 2016, Post-Hr’g Mem. in Supp. of Defs.’ Mot. to Dismiss
Pursuant to Rule 12(b)(1) (ECF No. 25) (Defs.’ Post-Hr’g Mem.), and the Plaintiffs did
so on February 2, 2016. Pls.’ Resp. to Defs.’ Post-Hr’g Mem. in Supp. of Defs.’ Mot. to
Dismiss Pursuant to Rule 12b(1) (Pls.’ Post-Hr’g Mem.).
The Court has federal question jurisdiction over this action pursuant to 28
U.S.C. § 1331 and pendant jurisdiction over the Maine law claims pursuant to 28
U.S.C. § 1367.
THE FACTUAL ALLEGATIONS OF THE COMPLAINT
PPLC is a Maine corporation with its principal place of business in South
Portland. Compl. ¶ 3. It is a wholly-owned subsidiary of Montreal Pipe Line Limited,
a privately-held corporation located in Canada, and is engaged in the international
transportation of hydrocarbons via pipeline and associated facilities located in a
continuous transportation corridor running from the harbor in South Portland,
Maine, through three states, across the Canadian border, to facilities located in
Montreal, Quebec.1 Id.
PPLC owns and operates the United States portion of a transportation system
that includes, without limitation, 12-inch diameter, 18-inch diameter, and 24-inch
diameter pipelines and associated facilities extending from South Portland, Maine to
Montreal, Quebec. Id. ¶ 11. PPLC’s transportation system was first established with
the construction of the 12-inch diameter pipeline in 1941 during World War II for
national security purposes to transport crude oil by pipeline as an alternative to
direct international marine shipments by crude oil tankers. Id. ¶ 16. The 18-inch
diameter pipeline, built in 1950, transported oil until 1986, when it converted to
natural gas transmission, importing gas from Canada to the United States pursuant
to Executive Order 10485 (Sept. 3, 1953) and Executive Order 12038 (Feb. 3, 1978).
Id. In 1999, the 18-inch diameter pipeline converted back to oil transportation, as
authorized by a Presidential Permit issued in accordance with Executive Order 11423
(August 16, 1968), Executive Order 12847 (May 17, 1993), and Department of State
(“State Department”) Delegation of Authority No. 118-1 (April 11, 1973). Id. The 24inch diameter pipeline was built pursuant to a Presidential Permit issued January
Montreal Pipe Line Limited is owned by four entities: McColl-Frontenac Petroleum, Inc.;
Imperial Oil Limited; Suncor Energy, Inc.; and Shell Canada Limited—all Canadian corporations. Id.
¶ 4. Each of these entities, directly or through affiliates, produces, transports by pipeline, and refines
crude oil in Canada, including crude oil derived from oil sands, which includes bitumen. Id.
13, 1965. Id. PPLC’s Presidential Permits and approvals were issued as an exercise
of the President’s authority over foreign affairs and as Commander in Chief, and are
consistent with, advance, and are issued as an exercise of United States foreign policy
and to facilitate the cross-border trade in hydrocarbons between Canada and the
United States. Id. ¶ 17.
Currently, approximately forty-eight ships offload at PPLC annually, and
PPLC transports crude oil to Quebec via pipeline and associated facilities at a rate of
approximately 2.4 million barrels of oil per month. Id. ¶ 11. PPLC holds submerged
land leases with the state of Maine upon which are located two piers it owns at the
harbor in South Portland. Id. ¶ 12. PPLC’s pipeline transportation system includes,
without limitation, one of the two piers (Pier 2), tanks located both at the waterfront
and at a tank farm within South Portland, as well as the pipes, additional
infrastructure, and facilities needed to transport petroleum products from tankers
berthing at Pier 2 to their ultimate cross-border destination. Id.
AWO is a national trade association for the nation’s inland and coastal tugboat,
towboat, and barge industry. Id. ¶ 5. The industry employs more than 33,000
American seamen and owns and operates over 4,000 tugboats and towboats and more
than 27,000 barges throughout the country. Id. AWO represents the largest segment
of the U.S.-flag domestic fleet. Id. Its 350 member companies carry more than 800
million tons of domestic cargo every year, operating vessels on the inland rivers,
Atlantic Ocean, Pacific Ocean, the Gulf Coast, the Great Lakes, and in ports and
harbors around the country, including the Portland Harbor, incorporating the harbor
in South Portland. Id. AWO’s member companies operate numerous vessels licensed
by the United States Coast Guard to engage in coastwise trade, such as the
transportation of crude oil products. Id. AWO has consistently supported federal
control over harbor-related activities, noting that to move critical cargo in interstate
and international commerce safely and efficiently, the maritime industry needs
uniform safety and environmental standards established by one engaged and
experienced federal agency, the United States Coast Guard, and that subjecting
vessel operators to duplicative or conflicting federal and state standards creates
confusion, adds inefficiency, and increases costs to shippers who rely on water
transportation. Id. By prohibiting the loading of crude oil at the harbor in South
Portland, the Ordinance interferes and conflicts with its members’ federal licenses;
eliminates a market for its member vessels’ services in transporting such products
from the harbor; and sets a precedent for inconsistent local harbor regulation that
could cripple import and export activities nationally and invite reciprocal commerce
curtailment from other nations. Id.
The city of South Portland is a municipality located in Cumberland County,
Maine, on Portland Harbor. Id. ¶ 6. Portland Harbor is the second largest oil port
on the east coast of the United States, serving as a key center for shipping by both
land and sea. Id. The Harbor has the capability of handling some of the largest and
deepest draft marine tankers on the east coast, with up to fifty-two feet of draft and
170,000 deadweight tons of cargo. Id. ¶ 10.
Patricia Doucette, is South Portland’s code enforcement director, and is
charged under South Portland Code Sec. 27-131 with enforcing the City’s ordinances,
including the Ordinance at issue in this case. Id. ¶ 7.
The Harbor and its Role in Regional and International
The petroleum-handling facilities and operations on South Portland’s
waterfront constitute a vital hub for the interstate and international delivery of
petroleum products, providing the interstate region with a reliable supply of products
necessary for heating homes and businesses, among other uses.
Id. ¶ 36.
curtailing oil-handling activities at the South Portland waterfront, and by permitting
the importation but prohibiting the exportation of petroleum products, contrary to
market conditions, the Ordinance cripples the commercial activities not only of the
named plaintiffs but of all harbor-related actors. Id. By purposely and effectively
legislating that crude oil may be imported but may not be exported, the Ordinance,
as intended, precludes any such exportation commerce in the harbor and affects
petroleum-based commerce outside South Portland, outside Maine, across the
interstate region, and across the United States-Canada border, and, if copied in other
United States harbor municipalities, would have profound adverse precedential
A recent economic report provided that the total impact of commercial
petroleum-handling activities on just South Portland and its regional economy
amounts to over $64 million in sales, supporting 335 jobs earning over $20 million in
pay and benefits, and that the oil terminal industry serves as the anchor for the entire
Port of Portland, accounting for 84% of the port’s cargo vessels and 94% of its total
cargo. Id. ¶ 35.
Oil cargo is transferred from a tank vessel to the pipeline and is overseen by
the Coast Guard’s Captain of the Port (COTP).
Id. ¶ 14.
This process entails
hydraulically connecting pipeline equipment at a flange on the ship, with the oil
pumped from the ship. Id.
The tank and pipeline equipment used is tested and inspected by the Coast
Guard, must adhere to Coast Guard regulations, and the transfer operations and
activities are regulated and overseen by the Coast Guard. Id. The same regulatory
framework applies to loading a tank vessel as applies to unloading; Coast Guard
regulations apply to cargo “transfer,” i.e., loading and unloading, and adjustments to
operations and equipment with respect to the transfer would be overseen and
regulated by the Coast Guard. Id. ¶ 15.
Next, the oil is pumped using pump stations located along the route from South
Portland to Montreal, spaced twenty-five to forty miles apart. Id. ¶ 13. These six
pump stations are located in South Portland, Raymond, and North Waterford, Maine;
Shelburne and Lancaster, New Hampshire; and Sutton, Vermont. Id.
In a Transit Pipe-lines Agreement (TPA) between the United States and
Canada, effective October 1, 1977, 28 UST 7449, TIAS 8720, both governments agreed
to measures designed to ensure the uninterrupted transmission of hydrocarbons,
including crude oil, by pipeline through the territory of one country for delivery to the
territory of the other. Id. ¶ 18. In Article II of the TPA, the two countries expressly
promised: “No public authority in the territory of either [country] shall institute any
measures, other than those provided for in Article V [relating to emergencies], which
are intended to, or which would have the effect of, impeding, diverting, redirecting or
interfering with in any way the transmission of hydrocarbons in transit.” Id. ¶ 19.
At a subsequent summit in Quebec, the President and the Canadian Prime
Minister signed Joint Canada-United States Declarations on Trade and International
Security, dated March 18, 1985, agreeing to strengthen Canada-United States energy
trade “by reducing restrictions, particularly those on petroleum imports and exports,
and by maintaining and extending open access to each other’s energy markets,
including oil.” Id. ¶ 20. The President further entered findings confirming “the
objective of liberalizing energy trade, including crude oil, between the United States
and Canada. Id. Both Governments recognized that substantial benefits would
ensue from broadened crude oil transfers and exchanges between these two historic
trading partners and allies. Id. These benefits would include increased availability
of reliable energy sources, economic efficiencies, and material enhancements to the
energy security of both countries.” Id.
Changing Market Conditions and PPLC’s Request to Reverse
the Flow of the Pipeline
No crude oil is produced within the state of Maine. Id. ¶ 23. Currently, PPLC
uses its 24-inch diameter pipeline, with a capacity of 410,000 barrels a day, to
transport crude oil unloaded from oil tankers at the harbor in South Portland north
to Canada in far smaller amounts than its capacity can serve. Id. PPLC’s pipelines
are currently underutilized due to market conditions that favor the transportation of
oil south from Canada to the United States and other international markets, instead
of from Portland Harbor north to Canada. Id. For example, the 18-inch diameter
pipeline is currently idle and being maintained to protect the integrity of the pipeline
in a condition that allows PPLC to return the line to service when market demands
so warrant. Id.
In 2008, PPLC requested authorization from the State Department to reverse
the flow of the 18-inch diameter international pipeline, in order to transport oil south
from Canada to be loaded onto tankers in Portland Harbor, instead of transporting
oil north to Canada, as had occurred since the conversion from natural gas back to oil
in 1999. Id. ¶ 21. The State Department responded that PPLC’s 1999 Presidential
Permit was sufficient, so that no further approvals or amendments were needed, and
the State Department has continued thereafter to monitor PPLC’s pipeline activities.
Id. Recent correspondence from the State Department asks that PPLC keep the
department informed as to PPLC’s pipeline operations, noting that such information
“will assist the Department in carrying out its policies, as they relate to pipeline
considerations.” Id. ¶ 22.
As the historical use of PPLC’s pipelines reflect, in order to react promptly to
international and national market conditions in the cross-border trade of
hydrocarbons, the type of and the direction in which hydrocarbons may flow through
PPLC’s pipelines changes, as overseen by the President implementing his foreign
affairs powers given, inter alia, national strategic interests surrounding the crossborder flow of hydrocarbons. Id. ¶ 24. The Ordinance’s interference with these
foreign affairs powers and with the exclusive federal authority over the flow of
hydrocarbons through its pipelines adversely affects PPLC’s ability to respond to
market conditions and to facilitate the cross-border flow of hydrocarbons as supported
by international treaty and presidential findings. Id.
By limiting the direction in which bulk oil may flow through PPLC’s pipelines,
the Ordinance immediately and currently reduces the current market value of
PPLC’s pipelines and hinders its ability to engage in interstate and international
commerce. Id. ¶ 25. The Ordinance purposefully and effectively prohibits all use of
PPLC pipelines for the transportation of oil from Canada to the United States, to the
detriment of PPLC’s ability to offer its transportation services to the national and
international export market. Id.
PPLC’s shareholders actively market their crude oil to markets in the United
States and other countries.
Id. ¶ 26.
The Ordinance prohibits them from
transporting its product to market through the harbor in South Portland and via
PPLC’s pipelines, which could handle hundreds of thousands of barrels of their
products a day. Id. By prohibiting the loading of oil onto marine vessels in South
Portland, the Ordinance further forecloses the Harbor as a means of export for their
product, however that product arrives, whether by pipeline, ship, or rail. Id. The
inability to use the Harbor and existing commerce avenues has a depressive impact
on the value of these shippers’ crude oil, and the precedential impact of the
Ordinance, if copied in other U.S. harbor municipalities, would have a profound
impact on shippers’ ability to engage in international commerce. Id.
The current transportation of tankers into the Harbor is threatened by the lack
of economics in transporting crude oil from south to north. Id. ¶ 27. Conversely,
PPLC’s unused capacity is such that, if oil could be transported from Canada through
PPLC’s pipelines and loaded onto ships in the harbor in South Portland at an
economically rational cost, the commercial activities of the AWO and its members
stand to benefit from increased traffic and shipping opportunities. Id. Allowing the
import of oil, but not its export, through the Harbor restricts the ability of AWO’s
members from engaging in interstate and international commerce. More broadly, the
precedential impact of the Ordinance, if copied in other United States harbor
municipalities, would have a profound impact on the ability of marine vessels to
engage in international commerce and undermines the uniformity of international
and national vessel regulation, to the detriment of AWO members’ interests. Id.
MARPOL and its Regulatory Scheme
The United States has adopted the International Convention for the
Prevention of Pollution from Ships (MARPOL), including Annex VI and Regulation
15 thereto. Id. ¶ 28. Regulation 15 applies to the emissions of volatile organic
compounds (VOCs) in cargo transfer operations between tankers and port facilities—
the purported concern of the Ordinance. Id. ¶ 29. The first paragraph of Regulation
15 provides: “If the emissions of VOCs from a tanker are to be regulated in a port or
ports or a terminal or terminals under the jurisdiction of a Party, they shall be
regulated in accordance with the provisions of this regulation.”
Id. ¶ 30.
remainder of Regulation 15 obligates parties to MARPOL to notify the International
Maritime Organization (“IMO”), an agency of the United Nations, before the party
imposes vapor emission control requirements, and to take into account safety
guidance developed by the IMO in doing so. Id.
In forwarding MARPOL to the Senate for approval on May 15, 2003, the
President noted that ratification of the Convention and Annex VI “will demonstrate
U.S. commitment to an international solution” for air emissions from tankers. Id. ¶
31. In the Secretary of State’s Letter of Submittal of MARPOL, submitted to the
Senate in 2003 during the ratification process, the Secretary of State explained that:
[T]he United States has basic and enduring national interests related to
the oceans and U.S. port regions, and has consistently taken the position
that the full range of these interests is best protected through a widely
accepted international framework governing uses of the sea. A workable
international regime for the prevention of air pollution from ships is in
the best interests of all States because it will subject international
shipping to a uniform standard that is environmentally protective.
Id. Consistent with its treaty adoption of MARPOL, the United States has adopted
VOCs emission control regulations for tanker loading operations and requires vapor
emission control systems, and pursuant to Regulation 15.6 and consistent with IMO
Resolution MEPC 185(59), tankers follow VOC management plans required under
Regulation 15. Id. ¶ 32.
Canada and the United States act cooperatively consistent with MARPOL
regulation and the United States’ goal of acting on an international level in regulating
tanker activity and emissions, VOCs and otherwise. Id. ¶ 33. One illustrative
example is these two countries’ joint proposal to the IMO pursuant to MARPOL
Annex VI, Appendix III of a North American Emission Control Area surrounding
their coastlines, subsequently adopted by the IMO to reduce SOx, NOx, and
particulate matter emissions. Id. In proposing this Emission Control Area, the two
countries noted that they “have an obvious common interest in addressing emissions
from ships operating off their coasts given their geographic proximity and the nature
of their markets.” Id.
AWO members comply with MARPOL and the federal regulations adopted
consistent with MARPOL. Id. ¶ 34. The Ordinance’s attempt to add another layer of
regulation and to ban loading altogether impairs their ability to engage in
transportation activities in the harbor in South Portland, and the precedential impact
of the Ordinance, if copied in other United States harbor municipalities, would have
a profound impact on tankers’ ability to engage in national and international
commerce by eliminating the uniformity of international maritime regulation sought
by the United States in its federal treaties and statutes. Id.
The History and Development of the Ordinance
The Waterfront Protection Ordinance
The first incarnation of the Ordinance emerged as a citizen initiative in 2013
referred to as the Waterfront Protection Ordinance (WPO). Id. ¶ 40. Proponents of
the WPO articulated that the main objective of the WPO was to prevent the
transportation of Canadian oil through PPLC’s pipelines due to perceived dangers
from products derived from oil-sands-derived crude oil. Id. ¶ 41. An organization
called “Protect South Portland” collected the signatures to place the WPO on the
ballot. Id. ¶ 42. Before the 2013 vote on the WPO, Protect South Portland posted
fact sheets on its website stating that an ordinance was needed to protect “Casco Bay
from spills of toxic tar sands from tankers” and exhorted the electorate to “Vote for
the Waterfront Protection Ordinance to stop out-of-state big oil companies from
building a tar sands export terminal in South Portland.” Id. Proponents of the WPO
attended a July 23, 2013 meeting of the South Portland Planning Board, in which
they advocated for ordinance enactment, arguing that: (1) the transport of oil derived
from tar sands “isn’t consistent with sustainability”; (2) the WPO will “help us protect
the earth” and “help us protect our children and our grandchildren”; (3) asserting that
there were “catastrophic risks involved with tar sands oil”; (4) “we cannot afford to
have a spill in South Portland”; (5) citizens had been “alerted to unacceptable risks
involved in carrying tar sands through our community”; (6) tar sands “create lakes
of toxic waste”; (7) there is “no place to put the waste in Canada”; (8) tar sands are
“destroying the land”; and (9) “our whole way of life and our economy is in jeopardy.”
Id. ¶ 43. They stated that they “ask nothing but to prevent tar sands from being
pumped from Canada to South Portland.” Id.
At an August 13, 2013 meeting of the South Portland Planning Board,
proponents of the Ordinance argued that tar sands will “poison our school, children,
and teachers” and will be pumped through “very old pipes that are unmapped,” and
that PPLC wanted to “pump tar sands into our community.” Id. ¶ 44.
At an August 19, 2013 meeting of the South Portland City Council, David
Lourie, an attorney for Concerned Citizens of South Portland (the predecessor to
Protect South Portland) and the original drafter of the WPO, stated that “South
Portland has a unique ability to stop the flow of tar sands into the state of Maine.”
Id. ¶ 45. Proponents of the Ordinance argued that it would “protect our community
from multiple threats,” including “fouling our drinking water”; that “with a 64 year
old pipeline that is used to supporting crude oil, it is only a matter of time before it
leaks”; and that the “[WPO] will prevent our community from becoming the North
American tar sands oil shipping point.” Id. One proponent said that “the core intent
of the [WPO] is to prevent tar sands from flowing from Canada to our community and
being exported around the world,” noting “South Portland’s unique proximity to
Canada,” and that “Alberta, Canada is the beginning of our connection to tar sands.”
Id. Another proponent explained, “[w]e do not want to pollute the working waterfront
with out of state interests.” Id. Another stated that “if tar sands is so safe, let Canada
export it through its own shores.” Id. Proponents argued that PPLC wanted “to
expand operations in Alberta to include tar sands and they need the pipeline in South
Portland to transport to places like China,” and that an ordinance was needed
because PPLC wants to “facilitate the flow of tar sands from Canada to South
Portland and out to the greater world.” Id.
Shortly before the vote on the WPO, an opinion piece published in the Bangor
Daily News entitled “Climate Change is here; now what will Maine do about it?”
advocated for passage of the WPO because “tar sands are terrible for the climate, with
significantly higher emissions of the pollution that causes global warming than
conventional oil. Big Oil’s push for tar sands is a national issue that touches us right
here in Maine, and we can do something about that.” Id. ¶ 46.
In addition to language prohibiting the unloading of petroleum products, the
WPO included broader language freezing existing petroleum-related operations in
South Portland. Id. ¶ 47.
At the November 2013 election, voters rejected the WPO 51% to 49%. Id. ¶ 48.
Ordinance proponents attributed the WPO’s defeat to the broader provision freezing
existing petroleum-related operations, and immediately vowed to re-draft the
ordinance to more narrowly target the importation of oil from Canada. Id. ¶ 49. The
spokesperson for Protect South Portland stated that the organization was “more
committed than ever to keeping tar sands out of South Portland.” Id.
Strategy Following Defeat of the WPO and Creation of a
Draft Ordinance Committee
After the defeat of the WPO, the strategy to prohibit importation of oil from
Canada into the United States included circumvention of the electorate via ordinance
initiation not by citizen initiative as with the WPO, but rather enactment through a
vote of the City Council alone. Id. ¶ 50. City Councilor and Mayor Gerard Jalbert
stated that “[p]eople’s feelings are clear” that “[t]hey don’t want to be known as the
tar sands capital of the United States.” Id. City Councilor Tom Blake stated that
having a South Portland committee draft the ordinance banning the flow of oil
derived from oil sands through PPLC pipelines would protect the City, and that he
was assured that all councilors opposed tar sands coming into the City. Id.
Within hours of the WPO’s defeat at the ballot box, City officials introduced
and held a workshop on a moratorium to prevent the transportation of “oil sands/tar
sand products” onto vessels in Portland Harbor, applicable as of that day, and
subjecting any person engaged in “the loading of oil sands/tar sands products onto
marine tank vessels docking in South Portland” to immediate fines and penalties.
Id. ¶ 51.
While the moratorium was in place, the City appointed a Draft Ordinance
Committee (DOC) charged with drafting an ordinance to stop the flow of “tar sands”
oil through South Portland.
Id. ¶ 52.
South Portland repeatedly and publicly
acknowledged that this was the DOC’s charge.
The City’s public written
solicitation for members for the DOC stated that “[t]he committee has a City Council
charge of exploring the development of ordinance language to address development
proposals involving oil sands/tar sands production.” Id.
Ordinance proponents again publicly noted their goal of blocking export venues
for petroleum products derived from Canadian oil sands, and said that preventing
PPLC from reversing its flow would empower local resistance to “tar sands”
Id. ¶ 53.
Media reports are replete with citations confirming the
universal understanding that the Ordinance was written “to target tar sands oil from
Canada.” Id. PPLC asked to be a member of the DOC, but the City Council rejected
its request. Id. Instead, the City appointed a three-member DOC that included a
litigation attorney, Russell Pierce, who represents the environmental organization
the National Resource Council of Maine (NRCM), which vigorously supported the
WPO. Id. Mr. Pierce’s law firm newsletter described his task at the time of the
appointment to the DOC as “to serve as one of three members of a special Draft
Ordinance Committee to propose ordinance language for waterfront protection and
land use planning in the context of a petroleum pipeline project transporting tar
sands oil from western Canada to Portland Harbor.” Id. ¶ 54. Mr. Pierce thereafter
engaged in multiple extended ex parte communications with the NRCM and another
environmental group, the Conservation Law Foundation (“CLF”), when drafting the
Ordinance. Id. ¶ 53.
During the debate over the WPO, opponents warned that the measure violated
numerous federal and state constitutional and statutory provisions. Id. ¶ 54. Those
warnings were renewed before the City Council during its deliberations over the
Ordinance. Id. At a January 13, 2014 workshop, legal counsel for the City stated
that the charge to the DOC would provide it with “maximum flexibility” to reach its
objective, given that this stated intent of “banning tar sands” would likely face “legal
Tasked with the mission of crafting an anti-“tar sands” ordinance that would
pass legal scrutiny while banning the export of Canadian petroleum products derived
from oil sands through the harbor in South Portland, the DOC issued requests for
information, including questions such as “[W]hat are the physical capacities (average
and peak flow-rates) of the Portland Pipe Line Corporation’s pipelines for carrying
unrefined oil products, including diluted bitumen, from Montreal to South Portland?”
Id. ¶ 55. The City also sought responses as to the “boundaries between local, state
and federal authorities/jurisdictions.” Id.
Summary notes from the DOC’s meetings indicate that its goals included
having language that “stands up to any legal challenges”. Id. ¶ 56. In a March 24,
2014 workshop, Jeffrey Edelstein, the facilitator working with the DOC, told the City
Council that because the City could not legally ban oil derived from oil sands, the
DOC was working to “thread the needle” to withstand a legal challenge while
accomplishing the goal of preventing the flow of such oil through PPLC’s pipeline. Id.
The Council responded positively, with one Councilor stating that she liked the DOC’s
methodology, as “[i]t gets us where we need to be.” Id.
Ultimately, in an attempt to evade legal limitations, the DOC, supported by
submissions and communications from NRCM and CLF, labeled the Ordinance a
“Clear Skies” ordinance, and included a very long preamble to the Ordinance reciting
purported zoning and air concerns about the loading (yet not unloading) of petroleum
products onto marine vessels in the Harbor. Id. ¶ 57. The express charge of the DOC
to enact an anti-“tar sands” ordinance is nowhere mentioned in the Ordinance, as
noted with puzzlement by one Councilor.
One public commentator in a
communication dated June 3, 2014 similarly stated: “I am probably not the only one
to point out what might have been an oversight in the draft ordinance: that the term
‘tar sands’ is conspicuously absent from the document altogether,” observing that the
DOC’s charge “is wrapped up in the term ‘tar sands’ under the aegis of a moratorium
that is also centered on ‘tar sands’ prohibition.” Id. The City’s legal counsel also
noted in a written memorandum that the unusually long (ten-page) preamble of
“findings” was not normally a part of a Maine ordinance. Id.
At a June 25, 2014 workshop, Mr. Edelstein again candidly explained that the
committee put an air emissions spin on what it did because “one of the places where
the city is permitted to act is in the regulation of air emissions.” Id. ¶ 58. As to the
lengthy findings, Mr. Pierce stated that “we can’t predict whether all of this will
survive a challenge and so we felt let’s put as much belt and suspenders on here as
we can.” Id. Natalie West, the attorney representing “Protect South Portland,”
explained in a July 1, 2014 email to the City legal counsel that the findings were
“legal strategy.” Id. Michael Conathan, another committee member chosen by the
City, and the Director of Ocean Policy at the Center for American Progress, which
had previously characterized Canadian extraction from oil sands as “polluting” and
“destructive,” said that the DOC’s charge was to “address the potential throughput of
tar sands or oil sands through the City of South Portland.” Id. When presenting the
draft Ordinance publicly, Mr. Pierce stated that “federal preemption and the dormant
commerce clause were part of our thinking throughout this process.” Id. ¶ 59.
In other statements, City Councilors further confirmed that the purposes of
the Ordinance were to address health and safety concerns about pipeline
transportation, and to have an extraterritorial impact to stop the global
transportation and delivery of oil from Canada. Id. ¶ 60. For example, Mayor Jalbert
noted that PPLC’s pipelines passed through the Sebago Lake watershed, where the
City obtains its drinking water, and Councilor Cohen stated that he did not want tar
sands in South Portland. Id. Councilor Smith stated that the committee came up
with a compromise to thread the needle that would “protect the health and safety of
our residents and potentially the health and safety of global residents.” Id. Councilor
Linscott stated: “This ordinance is a lot bigger than us.” Id. In a recorded interview,
Mayor Jalbert explained that the Ordinance was “in essence [to] prevent the flow of
Canadian tar sands crude oil through South Portland as an export.” Id.
Anticipating legal difficulties, the City has approved the establishment of a
legal defense fund to solicit to provide financial resources to defend the Ordinance.
Id. ¶ 61. A spokesperson for Protect South Portland stated: “We may be a small city,
but, boy, we’ve done a big thing.” Id.
In so enacting the Ordinance, the City rejected the position of the Alberta
representative in the Canadian Embassy, who spoke against the Ordinance before
the City Council, noting, among other things, that one-third of the oil imported into
the United States comes from Canada, that Canada respects the environment and
existing regulations are in place, and that the Ordinance reflects a misunderstanding
of Canada’s oil sands product. Id. ¶ 62.
The text of the Ordinance prohibits all “bulk loading” of crude oil at the harbor
in South Portland and prohibits the installation, construction, reconstruction,
modification, or alteration of new or existing facilities, structures, or equipment for
the purpose of bulk loading of crude oil onto any marine tank vessel in the harbor in
South Portland, thus precluding the use of PPLC’s pipelines or other means for the
importation of oil to be loaded at the harbor in South Portland for further
transportation in national and international commerce, and thus prohibiting all
activities related to the importation of such oil by pipeline or other transportation
methods for export. Id. ¶ 38.
The history of the Ordinance reflects that both the purpose and the effect of
the Ordinance is to regulate interstate and international commerce so as to preclude
the importation of Canadian products derived from oil sands.
Id. ¶ 39.
Ordinance is based on purported safety concerns as to the transportation of such
products via pipelines and otherwise, and on the objective of affecting United States
foreign policy as to the importation of Canadian products derived from oil sands. Id.
THE CLAIMS IN THE COMPLAINT
Citing the Supremacy Clause, U.S. CONST. art VI, cl. 2, the Plaintiffs claim the
Pipeline Safety Act (PSA), 49 U.S.C. §§ 60101-60140, “preempt[s] the entire field of
interstate pipeline safety for exclusively federal regulation.
attempts to regulate pipeline safety in purpose and effect and intrudes into the
federally preempted field of interstate pipeline safety. The Ordinance is preempted
under the PSA and associated federal regulations.” Id. ¶ 69-71.
The Plaintiffs rely on Article II, Sections 2 and 3 of the U.S. Constitution as
“provid[ing] broad and exclusive power to the President and federal authorities over
foreign affairs.” Id. ¶ 73. They argue the “Ordinance’s design and intent—to impose
a policy against the development and exportation of products from Canada and to
become an exemplar for other localities to do the same—intrudes into the exclusively
federal field of foreign affairs and policy. The Ordinance is preempted under the
President’s foreign affairs policy.” Id. ¶ 82-83.
Again citing on the Supremacy Clause, U.S. CONST. art VI, cl. 2, the Plaintiffs
claim Title I of the Ports and Waterways Safety Act (PWSA), 33 U.S.C. §§ 1221-1236,
authorizes the Secretary of Homeland Security to regulate oil transportation matters,
and that it “preempts all state or local regulations that conflict with federal
regulations or which the Secretary [of Homeland Security] has concluded should not
be the subject of federal regulations” except for “state or local regulations . . . based
on the peculiarities of local waters . . . .” Id. ¶ 86, 88. The Plaintiffs further claim
Title II of PWSA, 46 U.S.C. §§ 3701-3719, “create[s] uniform national tanker
standards . . . , and leave[s] no room for the states to impose different or stricter
requirements than those which Congress has enacted.” Id. ¶ 89. Accordingly, the
Plaintiffs argue the Ordinance’s prohibition on loading crude oil and on adding or
altering facilities related to loading operations “impermissibly conflict[s]” with Titles
I and II of PWSA and regulations without qualifying for an exception. Id. ¶ 92.
Relying on an array of authorities, chiefly Article III, Section 2 of the U.S.
Constitution, the Plaintiffs state that “federal judicial power extends to all cases of
admiralty and maritime jurisdiction” and that “uniformity” is a constitutional
requirement in this area of law. Id. ¶ 98. They also point to federal licensing
provisions for “vessels engaged in coastwise trade” that “preclude state and local
government authorities from banning such trade.” Id. ¶ 102 (citing 46 U.S.C. § 9101;
46 C.F.R. § 154.1800-154.1872). Thus, they argue the Ordinance is “preempted under
Art. III, Section 2 of the Constitution and the Constitution’s embedded principal of
federal maritime governance.” Id. ¶ 106.
The Plaintiffs argue the Ordinance violates the Commerce Clause, U.S. CONST.
art. I, § 18, cl. 3, in several ways, including, inter alia, “impermissibly discriminat[ing]
against and/or excessively burden[ing] foreign commerce between the United States
and Canada,” “impermissibly discriminating against and/or excessively burden[ing]
interstate commerce among the states,” and “attempt[ing] to regulate in a sphere of
commerce requiring a uniform national rule.” Id. ¶ 112-13, 115.
The Plaintiffs point out that “bulk loading,” which the Ordinance prohibits, is
left undefined. Id. ¶ 121-22. They argue the Hazardous Materials Transportation
Act, 49 U.S.C. §§ 5101-5128, regulates “bulk package[s]” and thus preempts the
Ordinance to the extent that the terms “bulk package” and “bulk loading” amount to
the same thing. Id. ¶ 124. They contend that the Ordinance violates the Due Process
Clause, U.S. CONST. amend. XIV, § 1, “if it fails to provide people of ordinary
intelligence a reasonable opportunity to understand what conduct it prohibits.” Id. ¶
125. Citing the Maine Constitution, ME. CONST. art. III, §§ 1-2, they challenge the
Ordinance as an excessive delegation because it lacks “standards sufficient to guide
administrative action.” Id. ¶ 126. Moreover, they maintain that the Ordinance
violates the Equal Protection Clause, U.S. CONST. amend. XIV, § 1, as “there is no
rational basis to permit unloading but not loading of oil . . . .” Id. ¶ 130-31.
Re-alleging earlier facts and legal claims, the Plaintiffs assert a deprivation of
their federal constitutional rights under color of state law. Id. ¶ 134 (citing 42 U.S.C.
The Plaintiffs allege South Portland’s Comprehensive Plan and the Ordinance
conflict with each other, which they claim violates a state statute requiring
consistency between municipal comprehensive plans and municipal ordinances. Id.
¶ 136-39 (citing 30-A M.R.S. § 4352).
The Plaintiffs point to the Maine Oil Discharge Prevention Law, 38 M.R.S. §
556, which allows for municipal ordinances in furtherance of—while at the same time
preempting ordinances in direct conflict with—actions taken pursuant to the law. Id.
¶ 141. Given the Maine Department of Environmental Protection (MDEP) issued a
license to PPLC that approved loading and unloading of crude oil, and the Ordinance
prohibits loading, the Plaintiffs allege the Ordinance is preempted. Id. ¶ 143.
THE PARTIES’ POSITIONS
The Defendants’ Motion to Dismiss
The Defendants emphasize the Plaintiffs may not reverse the pipeline flow and
bulk crude oil in South Portland “without first acquiring an assortment of
government approvals under the terms of its existing permits and a variety of federal,
state and local laws regulating its operations.”
Defs.’ Mot. at 4.
according to the Defendants, the Plaintiffs would require State Department approval
for “any meaningful change in operations,” MDEP approval for the construction of
“large new vapor combustion units (with two 70-foot high smokestacks),” City
Planning Board and Building Instructor approval for other constructions that would
be necessary (e.g., “pump buildings, new storage tanks”), and—using catch-all
language—“a host of studies, applications, submissions, and permits likely requiring
prior approval by the U.S. Department of Homeland Security, U.S. Department of
the State Department,
Environmental Protection Agency . . .
, and/or the South Portland Harbor
Commission.” Id. at 5-6. The Defendants further note the Plaintiffs went so far as
to obtain three such necessary approvals only to let them lapse. Id. at 7-8.
The Defendants assert the Plaintiffs’ claim is unripe. To determine ripeness,
courts examine “the fitness of the issues for judicial decision and the hardship to the
parties of withholding court consideration.” Id. at 10 (citing City of Fall River v.
FERC, 507 F.3d 1, 6 (1st Cir. 2007) (quoting Abbott Labs. v. Gardner, 387 U.S. 136,
149 (1967), overruled on other grounds by Califano v. Sanders, 430 U.S. 99 (1997)).
Regarding the first ripeness prong, the Defendants argue “Plaintiffs’ claims are not
fit for judicial review because they rest on a chain of contingencies, including whether
PPLC ever decides to bulk load crude oil in the City and whether it initiates a process
for federal, state and local approvals that may conflict with the Ordinance.” Id. at
11. Regarding the second, the Defendants argue “[t]he Ordinance has had no present
effect on Plaintiffs, other than a threadbare claim of an economic uncertainty that is
inherent in any matter requiring complex permitting, and thus they have suffered no
hardship.” Id. at 14.
The Defendants similarly argue that the Plaintiffs lack standing and request
an advisory opinion. Standing and ripeness have a “close affinity” and may even
“overlap” with each other. Id. at 17 (citations omitted). On standing, the Defendants
state: “Plaintiffs have not alleged an actual and imminent injury sufficient to
demonstrate Article III standing where they have no plans to engage in any conduct
implicated by the Ordinance.” Id. at 17. On the purportedly advisory nature of the
relief sought, the Defendants state: “Plaintiffs’ allegation of generalized and potential
future harm does not constitute a sufficiently live controversy.” Id. at 18.
Finally, the Defendants argue the Plaintiffs’ claims based on international
treaties are not justiciable, id. at 19, and if those federal claims were dismissed, there
could be no pendent jurisdiction over state-law claims. Id. at 20.
The Plaintiffs’ Opposition
The Plaintiffs stress that there is “nothing particularly complicated about
reversing the direction that oil goes through a pipeline,” and that “similarly . . . it is
not difficult to obtain any properly required approvals.” Pls.’ Opp’n at 5. Moreover,
they assert that they are “ready, willing and able to use [their] existing infrastructure
to meet current market conditions and to pursue its plan to market its pipeline
infrastructure for north-to-south transportation.” Id. at 6.
The Plaintiffs argue their claim is ripe. In applying the two-part Abbott Labs.
test, they focus on the fitness factor and treat the hardship factor as prudential. Id.
at 7 (citing Mangual v. Rotger-Sabat, 317 F.3d 45, 59 (1st Cir. 2003)). The Plaintiffs
put forth the view that “it is immaterial for justiciability purposes whether a plaintiff
must obtain additional approvals. It is enough if, as here, eliminating the Ordinance
would remove one obstacle.” Id. (citing Mass. Delivery Ass’n v. Coakley, 769 F.3d 11,
17 (1st Cir. 2014); Antilles Cement Corp. v. Fortuno, 670 F.3d 310 (1st Cir. 2012);
Weaver’s Cove Energy, LLC v R.I. Coastal Res. Mgmt. Council, 589 F.3d 458, 467 (1st
Cir. 2009)). The Plaintiffs perceive a “Catch-22” aspect to the notion their claim is
unripe due to their failure to allege they have a contract to ship oil in the precise way
proscribed by the Ordinance. Id. at 8 (citing Riva v. Massachusetts, 61 F.3d 1003,
1010-11 (1st Cir. 1995)), and they argue, to the contrary, that their claim is
“particularly well suited for decision . . . because . . . they present legal questions
unrelated to any further factual development,” id. (citing Pac. Gas & Elec. Co. v. State
Energy Res. Conservation & Dev. Comm’n, 461 U.S. 190, 200 (1983); Skull Valley
Band of Goshute Indians v. Nielson, 376 F.3d 1223, 1237-39 (10th Cir. 2004); City of
Auburn v. Qwest Corp., 260 F.3d 1160, 1171 (9th Cir. 2001), overruled on other
grounds by Sprint Telephony PCS, L.P. v. Cty. of San Diego, 543 F.3d 571 (9th Cir.
2008)). On hardship, the Plaintiffs argue that “under the City’s argument, no one
could ever challenge this Ordinance—the Ordinance prevents PPLC from obtaining
contracts to ship oil north-to-south, and, according to the City, PPLC cannot challenge
the Ordinance until it obtains a contract to ship oil north-to-south.” Id. at 9.
The Plaintiffs argue they have standing.
Their arguments for standing
resemble their arguments for ripeness, as they assert that “[i]f a challenged ordinance
is a factor in causing plaintiff’s injury, this is enough to obtain standing.” Id. at 10
(citing Weaver’s Cove, 589 F.3d at 469). Moreover, the Plaintiffs make several other
arguments for standing: that their “interests lie in not being regulated locally in the
area of pipeline safety and port operations at all”; that “under the commerce clause,”
they are “barred from responding to current market demand”; and that their standing
is underscored by “the fact that this Ordinance was enacted for the very purpose of
preventing [them from] reversing the flow of [their] pipeline.” Id. at 10-12.
The Plaintiffs believe the Defendants misconstrue their reliance on
international treaties, which the Defendants cast as non-justiciable, as Plaintiffs
“do not assert a private right of action under any treaty,” rather they “allege that
the Ordinance is federally preempted . . . .” Id. at 16 (citation omitted).
The Defendants’ Reply
The Defendants state “the opposition confirms that [Plaintiffs] ha[ve] no
present plans to bulk load crude oil.” Defs.’ Reply at 2. Though they concede there
may exist a “gray area” regarding how far plans must progress before achieving
ripeness, they present this as an easy case: “[Plaintiffs] must have at least taken some
affirmative step toward the bulk loading of crude oil.” Id.
The Defendants also state “the lack of physical plans render[s] Plaintiffs’
claims incapable of judicial review.” Id. at 4. In particular, the Defendants point to
the Commerce Clause and preemption claims as areas requiring facts in order to
apply properly the relevant legal tests. Id. at 4-5.
Finally, the Defendants contend that “Plaintiffs conflate ripeness and
standing, but under either standard, their claims are not justiciable because bulk
loading of crude oil is not imminent.” Id. at 6.
The Defendants’ Post-Hearing Memorandum
In their post-hearing memorandum, the Defendants assert that Barnstable
“reinforces the rigor of the first prong of the First Circuit’s ripeness test”: fitness.
Defs.’ Post-Hr’g Mem. at 1. Fitness “holds that a case is not ‘fit for review’ if it
‘involves uncertain and contingent events that may not occur as anticipated or may
not occur at all,’” id. (quoting Barnstable, 786 F.3d at 143), and the Defendants
identify what they consider to be three such events: (1) the State Department
requiring changes “to the 2008 iteration of the project that render it uneconomical, or
could prohibit it entirely”; (2) amendments to the Clean Air Act’s New Source Review
Regulations “requir[ing] PPLC to make substantial physical modifications or
mak[ing] it more difficult to receive an air emissions permit from the Maine
Department of Environmental Protection”; (3) market conditions “render[ing] the
project infeasible.” Id. at 2-3. Thus, the Defendants conclude that the Plaintiffs have
not met the “threshold constitutional requirement” of ripeness doctrine. Id. at 4.
The Plaintiffs’ Post-Hearing Memorandum
Meanwhile, the Plaintiffs take from Barnstable “the principle that a matter is
ripe if the suit removes one barrier, although other barriers may exist in achieving
the plaintiff’s goal.” Pls.’ Post-Hr’g Mem. at 1 (quoting Barnstable, 786 F3d at 143).
They also believe that the Defendants have implicitly acknowledged hardship, and
with regard to fitness, they argue that as in Barnstable the resolution of their legal
claim hinges upon “an assessment of events that have already occurred”—here, the
enactment of the Ordinance. Id. at 2-3 (quoting Barnstable, 786 F3d at 143). Of the
Defendants’ three “uncertain and contingent events” that make the claim unfit, the
Plaintiffs argue that “[n]one of this speculation relates to a contingent event affecting
the viability of the claims asserted in this action.” Id. at 3. In addition to addressing
the relevance of Barnstable, the Plaintiffs took the opportunity to remind the Court
of several “updates” they discussed at oral argument. Id. at 3-4.
Standard of Review
Under Rule 12(b)(1), a court must dismiss a case over which it lacks subject
matter jurisdiction. FED. R. CIV. P. 12(b)(1). The plaintiff, as the party asserting
subject matter jurisdiction, has the burden of demonstrating its existence. Aversa v.
United States, 99 F.3d 1200, 1209 (1st Cir. 1996). Here, the Plaintiffs bear the burden
of establishing both standing and ripeness. Lujan v. Defenders of Wildlife, 504 U.S.
555, 561 (1992) (standing); R.I. Ass’n of Relators v. Whitehouse, 199 F.3d 26, 30 (1st
Cir. 1999) (“The burden of establishing standing rests with the party who invokes
federal jurisdiction”); id. at 33 (“[T]he plaintiff must adduce facts sufficient to
establish both fitness and hardship”). In determining whether jurisdiction is proper,
a court must construe the alleged facts in the plaintiff’s favor, and it may consider
extrinsic materials. Aversa at 1209-10 (“In ruling on a motion to dismiss for lack of
subject matter jurisdiction under Rule 12(b)(1), the district court must construe the
complaint liberally, treating all well-pleaded facts as true and indulging all
reasonable inferences in favor of the plaintiff. In addition, the court may consider
whatever evidence has been submitted . . . .” (citations omitted).
In ruling on this motion, the Court considered the allegations in the Complaint,
the four attachments to the Defendants’ motion, and the Declaration of Thomas A.
Hardison, Vice President of PPLC, that the Plaintiffs attached to their response.
Compl.; Defs’ Mot. Attachs. 1-4 (ECF No. 16); Pls.’ Resp. Attach. 1 Decl. of Thomas A.
Hardison (ECF No. 18) (Hardison Decl.).
“If standing is a question of who, then ripeness—which shares standing’s
constitutional and prudential pedigree—is a question of when.” Whitehouse, 199 F.3d
at 33 (citations omitted). The United States Supreme Court has explained that the
basic function of ripeness is “to prevent the courts, through avoidance of premature
adjudication, from entangling themselves in abstract disagreements.” Abbott Labs.,
387 U.S. at 148. “While the doctrine has a prudential flavor, a test for ripeness is
also mandated by the constitutional requirement that federal jurisdiction extends
only to actual cases or controversies.” Ernst & Young v. Depositors Econ. Prot. Corp.,
45 F.3d 530, 535 (1st Cir. 1995) (citing U.S. CONST. art. III, § 2; Pub. Serv. Comm’n of
Utah v. Wycoff Co., 344 U.S. 237, 242-45 (1952)).
“To determine whether a case is ripe for review, a federal court must evaluate
the fitness of the issue presented and the hardship that withholding immediate
judicial consideration will work.” Whitehouse, 199 F.3d at 33 (citing Abbott Labs.,
387 U.S. at 149). The First Circuit has observed that fitness and hardship “are
related but distinct.” Id. (citing Ernst & Young, 45 F.3d at 535). Fitness, the First
Circuit has written, “typically involves subsidiary queries concerning finality,
definiteness, and the extent to which resolution of the challenge depends upon facts
that may not yet be sufficiently developed.” Ernst & Young, 45 F.3d at 535 (citing
W.R. Grace & Co. v. EPA, 959 F.2d 360, 364 (1st Cir. 1992)).
turns on whether the challenged action creates a direct and immediate dilemma for
the parties.” Id. (quoting W.R. Grace, 959 F.2d at 360).
Preliminarily, there is no dispute among the parties that the South Portland
Ordinance at issue effectively abrogates PPLC’s right to reverse the flow of crude oil
in the pipeline that runs from South Portland to Montreal and export crude oil from
South Portland. Indeed, the history of the Ordinance set forth in the Complaint
suggests that the City’s motive in enacting the Ordinance was to do just that. In
other words, if today PPLC were to reverse the pipeline flow and begin unloading
crude oil onto tankers in South Portland for export, PPLC would be violating the
provisions of the Ordinance. In some ripeness cases, the parties disagree about
whether the future event, if it occurs, constitutes an actual case or controversy.
Indeed, the First Circuit has written that fitness “centers upon ‘whether the claim
involves uncertain and contingent events that may or may not occur as anticipated
or may not occur at all.’” Barnstable, 786 F.3d at 143 (quoting Ernst & Young, 45
F.3d at 536). In the case at hand, the Plaintiffs challenge an Ordinance that has
already been enacted and that presently stands as a barrier to the north-to-south
operation of their pipeline infrastructure.
The narrow questions before the Court are (1) whether PPLC has presented
sufficient evidence for the Court to conclude that it intends to proceed with acts that
would violate the Ordinance, namely the reversal of the flow of the pipeline and
offloading onto vessels in South Portland; and (2) assuming PPLC has demonstrated
that it intends to proceed, whether other hurdles make the likelihood that it will ever
obtain the necessary approvals so remote that the enforceability of the South
Portland Ordinance will never realistically be tested.
Finality, Definitiveness, and Sufficiently Developed
In their motion, the Defendants assert that the Plaintiffs have made clear in
their Complaint that PPLC “has no current or specific plans capable of evaluation.”
Defs.’ Mot. at 4 (citing Compl. Attach. 4 Letter from Robert F. Cekuta, Principal
Deputy Assistant Sec’y, Bureau of Energy Res. to David H. Coburn, Att’y, Steptoe &
Johnson (Aug. 13, 2013), at 1 (ECF No. 1) (“no current plans”); Mot. Attach. 1 PPLC
Air Emissions License A-197-77-M, at 5 (ECF No. 17) (“no plans”)). By contrast, in
their response, the Plaintiffs assert that PPLC “would very much like to serve this
market right now, and would be taking steps right now to respond to existing market
demand were the service PPLC seeks to market not illegal under the Ordinance.”
Pls.’ Opp’n at 8 (emphasis in original).
On this issue, the Court concludes that the Plaintiffs have the better argument.
First, in making this determination, the Court must view the facts in the light most
favorable to the Plaintiffs, not the Defendants. Benjamin v. Aroostook Med. Ctr., 57
F.3d 101, 104 (1st Cir. 1995) (in evaluating standing, courts must “employ an
approach that, in practice, differs little from that used to review motions to dismiss
under Fed. R. Civ. P. 12(b)(6)”) (citing United States v. AVX Corp., 962 F.2d 108, 114
(1st Cir. 1990)).
The sworn declaration of Mr. Hardison of PPLC confirms that the extraction
of oil in Canada has changed the market. Mr. Hardison observes that the “extraction
of domestic Canadian oil has increased significantly in recent years” and “the need to
import oil to Canada for use in Canadian refineries in Montreal, generally, and doing
so via PPLC’s pipelines, specifically, has dramatically declined.” Hardison Decl. ¶ 5.
In fact, Mr. Hardison says that PPLC’s “18-inch pipeline currently sits completely
empty because there is so little need for oil shippers to transport oil north to Canada,”
and for the same reason, “PPLC’s 24-inch pipeline currently is transporting far less
oil than it is capable of transporting.” Id. ¶ 6. Mr. Hardison predicts that PPLC “will
not receive any new crude oil to ship north-bound through its pipelines after July 1,
2015; it is more likely than not that this will be the case by the end of 2015; and it is
a near certainty that this will be the case within the next two (2) years.” Id. ¶ 8. Mr.
Hardison further predicts that “[i]f PPLC is not legally permitted to transport crude
oil from north to south, based on PPLC’s current and anticipated future revenues,
PPLC’s existence as a going concern will be imperiled by the end of 2017.” Id. ¶ 9.
Mr. Hardison opines that “PPLC’s ability to survive requires an ability for it to
transport crude oil north from Canada south out the Portland Harbor in South
Further, Mr. Hardison posits several factors that make the PPLC pipeline a
cost-effective means for bringing crude oil from Canada to Maine for export. First,
the South Portland location is ice-free. Id. ¶ 14. Second, South Portland is located
“close to markets for Canadian oil in the United States, Europe, and the Canadian
maritime provinces . . . .” Id. Third, the current pipeline has “sufficient capacity to
accommodate the need to transport crude oil from north to south.” Id. Fourth,
PPLC’s pipelines are “the only ones that currently operate between Canada and the
eastern seaboard.” Id. ¶ 15. To reverse the flow from north to south would require
only “[m]inor modifications.” Id. ¶ 16.
Mr. Hardison concludes by stating that absent the Ordinance, PPLC “would be
ready, willing, and able to pursue its plan to market its pipeline infrastructure and
to make the changes necessary to meet these current and future market demands.”
Id. ¶ 18.
Next, although the Defendants correctly point out that PPLC has not
presented “current or specific plans capable of evaluation,” Defs.’ Mot. at 4, PPLC
properly notes that as a practical matter, before presenting such detailed plans, it
would be required to test the market for exported crude oil offloaded in South
Portland and it is unable to market a product that South Portland has made it illegal
to export. See Pls.’ Opp’n at 6 n.5. The Court accepts PPLC’s argument that the
South Portland Ordinance places PPLC in a classic Catch-222: South Portland
demands that PPLC produce plans for the export of crude oil, but PPLC is unable to
develop such plans because South Portland has made illegal the export of crude oil.
Id. at 8. In Mr. Hardison’s succinct words, “PPLC simply cannot market a service
that is illegal.” Hardison Decl.¶ 26.
Finally, the Court observes that PPLC’s stated intentions do not come from a
plaintiff merely musing about trying a new venture. PPLC is now in the oil pipeline
business. It owns two active pipelines that run from South Portland to Montreal. Id.
¶ 4. It has reversed the pipeline flow in the past, from 1987 to 1999, when oil flowed
from Canada to South Portland, returning the flow from South Portland to Montreal
in 1999, when market conditions changed. Id. ¶¶ 19-21. More recently, in 2008, it
obtained the necessary permits to allow reversal but decided not to proceed due to
the “world-wide economic crisis.” Id. ¶¶ 22-24.
Based on these facts and viewing them in the light most favorable to the
Plaintiffs, the Court concludes that the Plaintiffs have sufficiently demonstrated that
JOSEPH HELLER, CATCH-22 (1961).
but for the Ordinance, PPLC would commence plans to reverse the flow of crude oil
and would begin marketing that oil to purchasers in the Canadian Maritimes,
Europe, and the United States. These cumulative facts, in the Court’s view, sustain
PPLC’s burden to demonstrate that the controversy satisfies this portion of the
Not Sufficiently Developed Facts
Another requirement for justiciability is that the Plaintiffs present a factual
record sufficient to allow a court to draw legal conclusions. Pac. Gas, 461 U.S. at 201.
South Portland cogently argues that because PPLC failed to be more specific about
its plans, this Court will be unable to resolve some of the legal issues before it. Defs.’
Reply at 4-6. Absent PPLC’s “actual physical construction proposals,” the Defendants
maintain the Court will be without an adequate basis to analyze such issues as the
dormant commerce clause and federal preemption. Id. at 4. The Plaintiffs see the
issue completely differently. Pls.’ Opp’n at 8 (“The claims presented in the Complaint
. . . are particularly well suited for decision now under the fitness criterion because,
among other things, they present legal questions unrelated to any further future
In Ernst & Young, the First Circuit summarized the dilemma:
The notion that disputes which turn on purely legal questions are
always ripe for judicial review is a myth. Even when the “legal”
emphasis of a particular claim is sufficient to mask gaps in the factual
record, a court will find ripeness lacking if the anticipated events and
injury are simply too remote to justify contemporaneous adjudication.
45 F.3d at 537 (citing Hodel v. Va. Surface Mining & Reclamation Ass’n, Inc., 452
U.S. 264, 304 (1981); Lincoln House, Inc. v. Dupre, 903 F.2d 845, 847 (1st Cir. 1990);
Benson v. Super. Ct. Dep’t of Trial Ct., 663 F.2d 355, 360-61 (1st Cir. 1981)). At this
stage it remains to be seen whether PPLC will amass a set of facts sufficient for the
Court to make its legal determinations, but given the current state of the record, the
Court is unwilling to conclude PPLC will be unable to do so. Unlike Ernst & Young,
the Court does not view PPLC’s challenge as presenting a hypothetical project that
“depends on serendipitous events that may not occur as anticipated—or may not
occur at all.” Id. at 538.
Hardship, the First Circuit has written, “turns on ‘whether granting relief
would serve a useful purpose, or, put another way, whether the sought-after
declaration would be of practical assistance in setting the underlying controversy to
rest.’” Barnstable, 786 F.3d at 143 (quoting Verizon New England, Inc. v. Int’l Bhd.
of Elec. Workers, Local No. 2322, 651 F.3d 176, 188 (1st Cir. 2011)).
Direct and Immediate Dilemma
The hardship prong requires a “direct and immediate dilemma.” Ernst &
Young, 45 F.3d at 535 (quoting W.R. Grace, 959 F.2d at 365). To support their
opposing positions, the Plaintiffs and the Defendants cite two seminal First Circuit
cases: City of Fall River v. Federal Energy Regulatory Commission, 507 F.3d 1 (1st
Cir. 2007) and Weaver’s Cove Energy v. Rhode Island Coastal Resource Management
Council, 589 F.3d 458 (1st Cir. 2009).
In the 2007 decision City of Fall River,
addressing a proposal to build a liquefied natural gas terminal in Fall River,
Massachusetts, the First Circuit found no fitness for review of a challenged
conditional approval for Weaver’s Cove because “it [wa]s expressly conditioned on
approval” by two other bodies. 507 F.3d at 7. Two years later in Weaver’s Cove, again
addressing the liquefied natural gas terminal proposal in Fall River, the First Circuit
found the case ripe because two hurdles (the Coastal Resource Management Council’s
consistency review and the Category B Assent requirements) “would cease to be
barriers to ultimate approval of the project.” 589 F.3d at 468-69. The resolution of
this motion requires a close reading of these two cases.
In Fall River, Weaver’s Cove Energy (WCE) sought approval from the Federal
Energy Regulatory Commission (FERC) to site, construct, and operate a liquefied
natural gas terminal in Fall River. 507 F.3d at 3. FERC granted conditional approval
subject to “a number of stipulations, including approval of the vessel transportation
plan by the United States Coast Guard and consistency with the Wild and Scenic
Rivers Act, as determined by the Department of the Interior.” Id. A number of
plaintiffs, including the city of Fall River, filed suit seeking judicial reversal of the
FERC conditional permit. Id.
The First Circuit “decline[d] to review the merits of FERC’s project approval
because it [was] not yet ripe for review.” Id. at 6. The Fall River Court characterized
the conditions that FERC had imposed on the project’s authorization as “significant
hurdles.” Id. at 5. The First Circuit discussed the first condition—Coast Guard
approval—and observed that, according to the Coast Guard itself, WCE’s plan
required vessels to perform “an extraordinary navigational maneuver,” leaving “no
margin for error.” Id. Similarly, the First Circuit noted that the Department of the
Interior had “announced new restrictions that would limit dredging of the necessary
waterways to a few months a year, likely delaying the completion of the project from
2010 to 2015.” Id. The First Circuit took a “pragmatic view of the facts in this case .
. . .” Id. at 7. It concluded that neither the Coast Guard nor the Department of the
Interior had given final approval of WCE’s proposal and “each has expressed serious
reservations about the project.” Id. Because “decisive questions remain open,” the
First Circuit concluded that it is “wiser to allow the agencies to continue their
decision-making process at least until final authorization is granted by all three
agencies.” Id. at 7-8. Until these agencies approved the project, the First Circuit
concluded that its “review would be advisory, and likely irrelevant to the ultimate
approvability of the project.” Id. at 8 (citing Nat’l Wildlife Fed’n v. Goldschmidt, 677
F.2d 259, 263 (2d Cir. 1982)).
Two years later, WCE’s liquefied natural gas terminal proposal returned to the
First Circuit. Weaver’s Cove, 589 F.3d at 461. This time the question was whether
WCE had to comply with the two regulatory barriers imposed by the Rhode Island
Coastal Resources Management Council (CRMC) in order to commence construction
of the terminal. Id. WCE argued that because the CRMC had failed to act within a
deadline established by the Natural Gas Act, CRMC’s concurrence with WCE’s
dredging plans must be conclusively presumed. Id. at 469-72. The First Circuit found
that the case was ripe because the “plaintiff’s requested relief would be final.” Id. at
469. The First Circuit explained that “CRMC’s consistency review and Category B
Assent requirements would cease to be barriers to ultimate approval of the project.”
Id. The Weaver’s Cove Court noted that “the other relevant agencies have expressly
declined to resolve the issue raised by this appeal on the grounds that they have no
authority to do so.” Id. Finally, the First Circuit observed that “[i]t is true that
resolutions of these issues might not secure the project’s ultimate approval, but it
would neither be ‘advisory’ nor ‘irrelevant.’” Id.
In this Court’s view, the PPLC case stands closer to Weaver’s Cover than Fall
River. First and most obviously, if the Court concludes that the South Portland
Ordinance is enforceable, PPLC’s proposal to reverse the flow is doomed. Thus, at
least under one scenario, a “subsidiary quer[y] concerning finality [and] definiteness”
has been satisfied. Ernst & Young, 45 F.3d at 535 (citing W.R. Grace, 959 F.2d at
364). By contrast, if PPLC prevails here, it is true that PPLC will be required to
obtain additional approvals, and it is possible that it will be unsuccessful in obtaining
those approvals. But, under Weaver’s Cove, the fact that the court’s resolution of the
issues before it “might not secure the project’s ultimate approval” does not necessarily
deprive the court of the authority to resolve those issues. 589 F.3d at 469. At the
same time, if the Court dismissed the lawsuit for a lack of justiciability and PPLC
obtained the other necessary approvals, the South Portland Ordinance would
effectively prevent PPLC from realizing its plans and this lawsuit would then be
inevitable. Unlike Fall River, where the First Circuit concluded that the agencies
which had not yet approved the project had “expressed serious reservations about the
project,” 507 F.3d at 7, PPLC represents that in 2008, it “sought and obtained the
necessary permits to allow it to execute a flow reversal.” Hardison Decl. ¶ 23. If past
is prologue, PPLC will be able to secure again the necessary permits from the relevant
Finally, applying the First Circuit directive in Fall River to take a “pragmatic
view of the facts,” 507 F.3d at 3, the Court sees the resolution of this case as a
critical—and perhaps the most critical step—for PPLC in securing the approvals
necessary for its proposal. As PPLC must start somewhere, it is sensible for PPLC to
know whether, having gone to the expense and time of re-securing all previously
obtained permits, the South Portland Ordinance would in any event bar the project.
See Pac. Gas, 461 U.S. at 201 (“[F]or the utilities to proceed in hopes that, when the
time for certification came, either the required findings would be made or the law
would be struck down, requires the expenditures of millions of dollars over a number
of years, without any certainty of recovery if certification were denied”) (footnote
omitted); Riva, 61 F.2d at 1010 (“And, even when the direct application of such a
statute is subject to some degree of contingency, the statute may impose sufficiently
serious collateral injuries that an inquiring court will deem the hardship component
satisfied. In general, collateral effects can rise to this level when a statute indirectly
permits private action that causes present harm, or when a party must decide
currently whether to expend substantial resources that would be largely or entirely
wasted if the issue were later resolved in an unfavorable way”) (citing Pac. Gas, 461
U.S. at 201; Duke Power Co. v. Caroline Envtl. Study Grp., Inc., 438 U.S. 59, 81-82
(1978)). As in Barnstable, then, if the Ordinance were declared invalid, PPLC “would
undoubtedly act differently tomorrow, and be able to spend their resources with less
risk of waste . . . .” 786 F.3d at 143 (citing Weaver’s Cove, 589 F.3d at 468-69).
Again, looking at the facts in the light most favorable to the Plaintiffs, the
Court concludes that the Plaintiffs have demonstrated a “‘direct and immediate’
dilemma” sufficient for ripeness purposes. Ernst & Young, 45 F.3d at 535 (quoting
W.R. Grace, 959 F.2d at 364).
Other Justiciability Doctrines
Having answered ripeness’s question of “when” a lawsuit may be brought, the
Court turns to standing’s question of “who” may bring the lawsuit. Whitehouse, 199
F.3d at 33. “In general, standing and ripeness inquiries overlap.” McInnis-Misenor
v. Me. Med. Center, 319 F.3d 63, 69 (1st Cir. 2003). They are nonetheless distinct
lines of inquiry, as standing is “a threshold question in every case,” id. at 67, by which
courts determine “whether the plaintiff has ‘alleged such a personal stake in the
outcome of the controversy’ as to warrant his invocation of federal-court jurisdiction
. . . .” Warth v. Seldin, 422 U.S. 490, 498-99 (1975) (quoting Baker v. Carr, 369 U.S.
186, 204 (1962)). The plaintiff bears the burden of showing: (1) “a concrete and
particularized injury in fact”; (2) “a causal connection that permits tracing the
claimed injury to the defendant’s actions”; (3) “a likelihood that prevailing in the
action will afford some redress for the injury.” Weaver’s Cove, 589 F.3d at 467
(quoting City of Bangor v. Citizens Commc’ns Co., 532 F.3d 70, 92 (1st Cir. 2008)).
The dispute in this case focuses on injury, the doctrinal area in which the
overlap between standing and ripeness is “most apparent.” McInnis-Misenor, 319
F.3d at 69 (citing 13A CHARLES A. WRIGHT, ARTHUR R. MILLER & EDWARD H. COOPER,
FEDERAL PRACTICE AND PROCEDURE § 3531.12 (2d ed. 1984)). As the Defendants see
it, “Plaintiffs present this Court with nothing more than an alleged injury based on
what at best can be characterized as a future intention.” Defs. Mot. at 18; see Clapper
v. Amnesty Int’l USA, 133 S. Ct. 1138 (2013) (injury too speculative for plaintiffs who
feared their communications with foreign nationals might be intercepted pursuant to
the Foreign Intelligence Surveillance Act); Lujan, 504 U.S. 555 (1992) (injury too
conjectural for plaintiffs who announced their intention, but lacked concrete plans, to
visit foreign countries to see endangered species). Here, however, PPLC owns the
pipeline and supporting infrastructure that the Ordinance directly targets. Unlike
the plaintiffs in Clapper who might or might not have been subject to surveillance
under a specific statute, and unlike the plaintiffs in Lujan who might or might not
have been deprived of seeing certain animals, the Plaintiffs on these facts confront—
and seek to challenge—a barrier that the Defendants have erected to keep them from
doing what they have otherwise resolved to do: bring oil from Canada to South
Portland. The Court finds that the Plaintiffs have suffered an injury. Moreover, the
Ordinance is the cause of the injury, and its invalidation would redress the injury.
Accordingly, the Plaintiffs have standing.
As their final justiciability argument, the Defendants assert that a decision on
the merits would constitute an unconstitutional advisory opinion. Defs.’ Mot at 1819. In support of their argument, the Defendants cite Aetna Life Insurance Company
v. Haworth, 300 U.S. 227 (1937), which upheld the Declaratory Judgment Act. But
the Defendants themselves concede that the ban on advisory opinions is a “lens”
through which courts can view the related doctrines of ripeness and standing. Defs.’
Mot. at 18. Indeed, Professor Chemerinsky has written that “it is because standing,
ripeness, and mootness implement the policies and requirements contained in the
advisory opinion doctrine that it is usually unnecessary for the Court to separately
address the ban on advisory opinions.” ERWIN CHEMERINSKY, FEDERAL JURISDICTION
§ 2.2 (6th ed. 2012); see also Daggett v. Devine, 973 F. Supp. 203, 204 (D. Me. 1997)
(“Ripeness and standing doctrines in the federal courts are designed to ensure
justiciability—to satisfy the constitutional and prudential requirements that derive
from the mandate of Article III of the Constitution that federal courts decide only
‘cases or controversies’”) (quoting U.S. CONST. art. III, § 2, cl. 1). Cognizant of the
potential irony of writing unnecessarily on the topic of advisory opinions, the Court
reiterates its finding that it has before it “a real and substantial controversy
admitting of specific relief through a decree of a conclusive character, as
distinguished from an opinion advising what the law would be upon a hypothetical
state of facts.” Aetna Life Ins., 300 U.S. at 241 (citations omitted).
International Treaty Interpretation
In their motion, the Defendants urge the Court to “dismiss any claims based
on rights PPLC alleges are conferred by international treaties.” Defs.’ Mot. at 19.
They cite Supreme Court and First Circuit authority to the effect that international
agreements do not create rights or provide for private causes of action in domestic
courts. Medellín v. Texas, 552 U.S. 491, 506 n.3 (2008); United States v. Moloney (In
re Price), 685 F.3d 1, 12 (1st Cir. 2012). The Court accepts, as it must, this teaching.
However, the Plaintiffs respond that they do not assert a private right of action
under any treaty. Pls.’ Opp’n at 16. Citing United States v. Locke, 529 U.S. 89, 10203 (2000), the Plaintiffs point out that, like the United States Supreme Court in
Locke, they have referred to the international treaties of the United States not to
enforce the terms of the treaties but to establish that the federal government has
preempted the area that South Portland is attempting to regulate through its
Ordinance. Pls.’ Opp’n at 16.
The Court need not resolve at this stage this issue by issuing broad
declarations. Rather, it will address the significance, if any, of international treaties
in the specific context of future arguments.
The Court DENIES Defendants’ Motion to Dismiss the Complaint Pursuant to
Rule 12(b)(1) (ECF No. 16).
/s/ John A. Woodcock, Jr.
JOHN A. WOODCOCK, JR.
UNITED STATES DISTRICT JUDGE
Dated this 11th day of February, 2016
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