National Steel Corp. v. Michigan Public Service Com'n, 89-2363

• Decision Date: 09 October 1990
• Docket Number: No. 89-2363,89-2363
• Citation: 919 F.2d 38
• Parties: , 119 P.U.R.4th 573 NATIONAL STEEL CORPORATION; Dome Petroleum Limited; Dow Chemical Canada, Inc.; Nova, an Alberta Corporation; Petro-Canada, Inc.; Shell Canada, Ltd.; Dome NGL Pipeline, Ltd.; Dome Pipeline Corporation, Plaintiffs-Appellants, v. MICHIGAN PUBLIC SERVICE COMMISSION, Defendant, William E. Long; Edwyna G. Anderson; Matthew E. McLogan, Defendants-Appellees, Michigan Consolidated Gas Co.; Michigan Gas Utilities Company, Intervening Defendants-Appellees.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 38

919 F.2d 38

59 USLW 2339, 119 P.U.R.4th 573

NATIONAL STEEL CORPORATION; Dome Petroleum Limited; Dow

Chemical Canada, Inc.; Nova, an Alberta Corporation;

Petro-Canada, Inc.; Shell Canada, Ltd.; Dome NGL Pipeline, Ltd.; Dome Pipeline Corporation, Plaintiffs-Appellants, v. MICHIGAN PUBLIC SERVICE COMMISSION, Defendant, William E. Long; Edwyna G. Anderson; Matthew E. McLogan,

Defendants-Appellees,

Michigan Consolidated Gas Co.; Michigan Gas Utilities

Company, Intervening Defendants-Appellees.

No. 89-2363.

United States Court of Appeals, Sixth Circuit.

Oct. 9, 1990.

Decided Nov. 16, 1990.

Jean G. Schtokal (argued), Douglas H. West, Hill, Lewis, Adams, Goodrich & Tait, Detroit, Mich., Pat D. Conner, Conner, Harbour & Green, Ann Arbor, Mich., for plaintiffs-appellants.

Donald L. Keskey, Asst. Atty. Gen., Office of the Atty. Gen. of Michigan, Lansing, Mich., for defendant.

Donald L. Keskey, Henry J. Boynton (argued), Asst. Attys. Gen., Office of the Atty. Gen. of Michigan, Lansing, Mich., for defendants-appellees.

Glen A. Schmiege, William K. Fahey, Foster, Swift, Collins & Coey, Daniel J. Demlow, James A. Ault, Honigman, Miller, Schwartz & Cohn, Lansing, Mich., William F. Brauninger, Monroe, Mich., for intervening defendants-appellees.

Before MARTIN and NORRIS, Circuit Judges, and WISEMAN, Chief District Judge. ^*

BOYCE F. MARTIN, Jr., Circuit Judge.

National Steel Corporation appeals from the district court's grant of summary judgment, 718 F.Supp. 622, in favor of the Michigan Public Service Commission and presents this Court with two challenging constitutional issues: First, did Congress, through the Interstate Commerce Act, intend to regulate the entire field of interstate oil transportation by pipeline and, thus, preempt Michigan Public Act 69; second, is the Michigan Public Service Commission's certification requirement, established by Michigan Public Act 69, prohibited by the Commerce Clause's implied limitation on the power of states to impose burdens on interstate commerce? 1929 Mich.Pub.Acts 69. We affirm the district court's grant of summary judgment. The purpose of the Act 69 certification requirement is to enable the Michigan Public Service Commission to prevent the needless multiplication of facilities, an essentially local interest ignored in the Interstate Commerce Act.

The material facts are not disputed. National operates a steel mill near Detroit, Michigan. In order to meet the mill's needs for liquid ethane, National has entered into an agreement to purchase ethane in Canada and to have it delivered by pipeline. The ethane sellers, which are also plaintiffs, are Dome Petroleum Ltd., Dow Chemical Canada, Inc., NOVA, Petro-Canada, Inc., and Shell Canada, Inc.

The ethane is to be transported from Windsor, Ontario by Dome Pipeline Corporation and Dome NGL Pipeline over their Eastern Delivery System to a point approximately 2800 feet from National's mill. At this point, National plans to construct interconnecting tap facilities and a lateral service pipeline over easements it has obtained. The Michigan Public Service Commission would seek to regulate the construction and operation of the tap facility and lateral service pipeline as well as the delivery of the ethane at that tap facility from Dome Pipeline to National should the transaction progress further.

The proposal to build a pipeline to National's mill is not the only effort by Dome Pipeline to provide ethane to industrial customers over the Eastern Delivery System. Dome's attempt to furnish ethane to Guardian Industries Corporation, which operates a large glass manufacturing plant in Carlton, Michigan, was the subject of an extensive proceeding before the Michigan Public Service Commission. Re Dome Pipeline Corporation, 78 P.U.R. 4th 1 (M.P.S.C.1986). The Great Lakes Steel Division of National was an intervenor in that proceeding which dealt with, among other arguments, the claim that the Michigan Public Service Commission's jurisdiction under Act 69 was preempted by the Interstate Commerce Act and the claim that the Michigan Public Service Commission's effort to regulate was in violation of the Commerce Clause. The Michigan Public Service Commission rejected these Constitutional arguments. Their order was upheld by the Michigan Court of Appeals in Dome Pipeline Corp. v. Public Service Comm., 176 Mich.App. 227, 439 N.W.2d 700 (1989). A leave to appeal that decision was denied by the Michigan Supreme Court. Dome Pipeline Corp. v. Public Service Comm., 434 Mich. 888 (1990).

Recognizing that the Michigan Public Service Commission's decision with respect to Guardian Industries' transaction would be applicable to the proposed transaction involving National, the Appellants brought a declaratory action requesting injunctive relief against the Michigan Public Service Commission in the United States District Court. This action again raised the Supremacy and Commerce Clause arguments and again the arguments failed. This appeal followed.

In Louisiana Public Service Comm'n v. Federal Communications Comm'n, 476 U.S. 355, 368-69, 106 S.Ct. 1890, 1898-99, 90 L.Ed.2d 369 (1986), the Supreme Court put forth a number of ways in which Congress can be understood to have preempted state law:

Pre-emption occurs when Congress, in enacting a federal statute, expresses a clear intent to pre-empt state law ... when there is outright or actual conflict between federal and state law ... where compliance with both federal and state law is in effect physically impossible ... where there is implicit in federal law a barrier to state regulation ... where Congress has legislated comprehensively thus occupying an entire field of regulation and leaving no room for the States to supplement federal law ... or where the state law stands as an obstacle to the accomplishment and execution of the full objectives of Congress.... Pre-emption may result not only from action taken by Congress itself; a federal agency acting within the scope of its congressionally delegated authority may preempt state regulation.

(Citations omitted).

Appellants arg...