Norfolk Southern Corp. v. Oberly, 86-5322

Citation822 F.2d 388
Decision Date30 June 1987
Docket NumberNo. 86-5322,86-5322
Parties, 1987 A.M.C. 2896, 56 USLW 2016, 17 Envtl. L. Rep. 20,941 NORFOLK SOUTHERN CORPORATION and Norfolk Southern Marine Services, Inc. and Lamberts Point Barge Co., Inc., Coastal Barge Corporation, Coal Logistics Corporation and Coastal Carriers Corporation v. Charles M. OBERLY, III, and John E. Wilson, III, Secretary of Department of Natural Resources and Environmental Control, State of Delaware, Delaware Saltwater Sportfishing Association, Inc., Kent County Levy Court, Natural Resources Defense Council, Inc., National Audubon Society and the Sierra Club, Intervening Defendants. Appeal of NORFOLK SOUTHERN CORPORATION, Norfolk Southern Marine Services, Inc., Lamberts Point Barge Company, Inc., Coastal Barge Corporation, Coal Logistics Corporation, and Coastal Carriers Corporation.
CourtUnited States Courts of Appeals. United States Court of Appeals (3rd Circuit)

Jeffrey S. Berlin (argued), David E. Menotti, Russell E. Pommer, Mark J. Andrews, William F. Pedersen, Mark E. Martin, Donna L. Isaacks, Verner, Liipfert, Bernhard, McPherson and Hand, Chartered, Washington, D.C., David S. Swayze, Duane, Morris & Heckscher, Wilmington, Del., Robert J. Katzenstein, Lassen, Smith, Katzenstein & Furlow, Wilmington, Del. A. Gayle Jordan, Norfolk Southern Corp., Norfolk, Va., for appellants.

Fred S. Silverman, State Solicitor, Regina M. Mullen (argued), John J. Polk, Deputy Attys. Gen., Dept. of Justice, Wilmington, Del., for appellees.

Lynne T. Edgerton (argued), Sarah Chasis, Donald S. Strait, Natural Resources Defense Council, Inc., Joel B. Harris, William J.J. Cullen, Thacher Proffitt & Wood, New York City, for intervening defendants-appellees.

Edward W. Cooch, Jr., Cooch & Taylor, Wilmington, Del., Gregory A. Inskip, Potter Anderson & Corroon, Wilmington, Del., for Delaware Wild Lands, Inc. and Delaware Nature Edu., Society, Inc. as Amici Curiae.

David C. Slade, Coastal States Organization, Washington, D.C., for the States of Alaska, Connecticut, Florida, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, North Carolina, Oregon, South Carolina, Washington, and The Coastal States Organization as amici curiae.

Anthony G. Flynn, Counsel to the Governor, Office of the Governor, Dover, Del., for the U.S. Congressional Delegation From The State of Delaware and the Governor of Delaware as amici curiae.

James W. Patterson, Rubin, Quinn & Moss, Philadelphia, Pa., for Concerned U.S.

Senators, Paul S. Trible, Jr. and John W. Warner, and Representatives, Frederick C. Boucher, Herbert B. Bateman, Alan B. Mollohan, Nick Joe Rahall, II, Norman Sisisky, and Harley O. Staggers, Jr. as amici curiae

John K. Van De Kamp, Atty. Gen. of California, N. Gregory Taylor, Asst. Atty. Gen., John A. Saurenman, Deputy Atty. Gen., Los Angeles, Cal., for the State of California acting by and through the California Coastal Com'n as amicus curiae.

William C. Carpenter, Jr., U.S. Atty., Wilmington, Del., F. Henry Habicht II, Asst. Atty. Gen., Arthur E. Gowran, Ann S. Almy, Attorneys, Dept. of Justice, Washington, D.C., for the U.S. as amicus curiae.

G. William Frick, James K. Jackson, Philip A. Cooney, Washington, D.C., for American Petroleum Institute as amicus curiae.

D. Donald Jamieson, Gary L. Azorsky, Mesirov, Gelman, Jaffe, Cramer & Jamieson, Philadelphia, Pa., for the Delaware River Port Authority as amicus curiae.

Before HIGGINBOTHAM and STAPLETON, Circuit Judges, and CONABOY, District Judge *.


STAPLETON, Circuit Judge.

Appellants, six co-venturers seeking to initiate a coal lightering service in Delaware Bay, claim that Sec. 7003 of the Delaware Coastal Zone Act (CZA), which bans bulk product transfer facilities in Delaware's coastal zone, violates the dormant Commerce Clause. Appellees, two Delaware officials and five intervenors, argue that the federal Coastal Zone Management Act (CZMA), under which the Sec. 7003 ban has been approved, constitutes Congressional consent for the ban, immunizing it from dormant Commerce Clause scrutiny. In the alternative, appellees contend that the CZA does not offend the Commerce Clause. The district court granted summary judgment for appellees on the basis of consent. Norfolk Southern Corp. v. Oberly, 632 F.Supp. 1225 (D.Del.1986).

We hold that the CZMA does not authorize states to engage in otherwise impermissible regulation, and thus we find no consent. Appellants have failed, however, to allege any burden on interstate or international commerce cognizable in dormant Commerce Clause analysis. For this reason, we hold that Sec. 7003 of the CZA does not offend the dormant Commerce Clause and we affirm, on different grounds, the district court's order granting summary judgment to appellees.


At this point in time, coal exports from the East Coast of the United States cannot be shipped in fully loaded supercolliers because the available port facilities are too shallow. 1 Appellants 2 (referred to collectively as "Norfolk Southern") seek to initiate a coal lightering, or "top-off," service at Big Stone Anchorage in Delaware Bay which would enable deep draft supercolliers to sail fully loaded. Norfolk Southern's plan envisions supercolliers being partially loaded at East Coast ports, moved to the Big Stone Anchorage, and there filled to capacity by transferring coal from Norfolk Southern's coal barges. Because coal is most cost-effectively transported overseas by fully loaded supercolliers, the top-off service would reduce average shipping costs and presumably render United States coal more competitive in overseas markets.

The Big Stone Anchorage, an area of approximately thirteen square miles in lower Delaware Bay, is critical to the Norfolk Southern project because it is the only naturally protected anchorage between Maine and Mexico that is deep enough to accommodate fully loaded supercolliers. App. at 354-55. The anchorage is now used for oil lightering, with supertankers transferring imported oil to vessels with shallower drafts for delivery to East Coast ports. 3

The challenged law, the Delaware Coastal Zone Act, was enacted in 1971. The CZA imposed strict regulation on all new industrial activity in the coastal zone. Section 7003 of the CZA prohibits in the coastal zone all heavy industry not in operation as of June 28, 1971. This ban includes facilities such as oil refineries and steel, chemical and paper plants. 7 Del. Code Ann. Sec. 7002(c) (1983). Section 7004 provides that any other manufacturing facilities not in operation as of June 28, 1971, and any extension or expansion of nonconforming uses are allowed in the coastal zone by permit only. Most important to this case, Sec. 7003 of the CZA provides that "offshore gas, liquid, or solid bulk product transfer facilities which are not in operation on June 28, 1971, are prohibited in the coastal zone, and no permit may be issued therefor." Id. Sec. 7003 (Supp.1986). 4 The definition of bulk product transfer facilities excludes docking facilities in the port of Wilmington and docking facilities serving single industrial facilities that have been granted a permit or are nonconforming uses. Id. Sec. 7002(f) (1983). The Big Stone Anchorage is within Delaware's territorial limits and is included in the coastal zone as defined by the CZA. Id Sec. 7002(a).

In 1972, Congress enacted the Coastal Zone Management Act, which provides funding for the development and implementation of state coastal zone management plans. Pub.L. No. 92-583, 86 Stat. 1280 (1972) (codified as amended at 16 U.S.C. Secs. 1451-1464). The CZMA delegates responsibility for administering the CZMA grant-in-aid programs and, in particular, for approving state coastal management programs to the Secretary of Commerce. 5 Between 1974 and 1979, Delaware received federal funds for the development of the Delaware Coastal Management Plan (DCMP). The DCMP was approved in 1979, enabling Delaware to qualify for CZMA funding of program implementation. The DCMP was reapproved in 1980, 1982, and 1984. The DCMP states as Delaware policy that:

New offshore gas, liquid, or solid bulk product transfer facilities shall be prohibited in the coastal strip. Such facilities are docks or port facilities, whether artificial islands or attached to shore by any means, for transfer of bulk quantities of any substance from vessel to onshore facility or vice versa. However, a docking facility or pier for a single industrial or manufacturing facility and docking facilities located in the City of Wilmington for the port of Wilmington, shall not be prohibited.

App. at 557. The CZA is the legal authority relied upon to support this DCMP policy. App. at 558.

In 1983, the Coast Guard, with jurisdiction over navigational safety, redesignated the Big Stone Anchorage as a "general anchorage," a designation that permits coal lightering. 48 Fed.Reg. 23,636-37 (May 26, 1983). Prior to that time, use of the Big Stone Anchorage was limited to tanker lightering. The redesignation was promulgated in response to requests by the Delaware River Port Authority and the Delaware River and Bay Authority, and the main reason for their requests was to permit use of the anchorage to top-off deep draft colliers. The redesignation was objected to on the basis of environmental concerns by the State of Delaware. 48 Fed.Reg. at 23,637 (May 26, 1983).

In 1984, Norfolk Southern sought a formal determination of whether coal lightering was banned by Sec. 7003 of the CZA. The Delaware Department of Natural Resources and Environmental Conservation (DNREC) concluded that the proposed top-off service was not a "bulk product transfer facility" and thus was not barred by Sec. 7003 of the CZA. This decision was appealed to the Coastal Zone Industrial Control Board, which reversed the Secretary and found that the project was barred. The Superior Court and then the Supreme Court upheld the Board's decision. Coastal Barge Corp. v. Coastal Zone...

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