Olympic Pipe Line Co. v. City of Seattle
| Decision Date | 11 March 2004 |
| Docket Number | No. C03-2343L.,C03-2343L. |
| Citation | 316 F.Supp.2d 900 |
| Parties | OLYMPIC PIPE LINE CO., Plaintiff, v. CITY OF SEATTLE, Defendant. |
| Court | U.S. District Court — Western District of Washington |
Arthur W. Harrigan, Jr., G. Val Tollefson, Danielson Harrigan & Tollefson, Seattle, WA, for Plaintiff.
Engel E. Lee, William H. Patton, Seattle City Attorney's Office, Jerret E. Sale, Joseph John Straus, Troy D. Greenfield, Bullivant Houser Bailey, Seattle, WA, Karen Elsa Kirkpatrick, Patricia Ann Richardson, Federal Way City Attorney, Federal Way, WA, for Defendant.
ORDER GRANTING MOTION FOR SUMMARY JUDGMENT
This matter comes before the Court on a motion for summary judgment (Dkt. # 40) filed by plaintiff Olympic Pipe Line Company ("Olympic"). Defendant City of Seattle ("Seattle" or "the City") opposes the motion and requests that the Court grant summary judgment in its favor. (Response at 1). For the foregoing reasons, the Court grants Olympic's motion for summary judgment.
On July 16, 2003, Olympic brought this action seeking declaratory judgment as follows:
(a) That the federal Pipeline Safety Act, 49 U.S.C. §§ 60101 et seq., and Washington State Pipeline Safety Act, RCW 81.88 et seq., preempt defendants' attempts to control, regulate, or otherwise interfere with matters relating to the safety, design, construction, installation, testing, inspection, training, staffing, maintenance, and operations of Olympic's pipeline, and preclude enforcement of any municipal code provisions with respect to safety and other operational aspects of Olympic's pipeline.
(b) That defendants' efforts to control areas that are preempted by federal law constitute a violation of the federal and state Pipeline Safety Acts.
(c) That any termination or denial of a franchise with respect to the present interstate route of the Olympic pipeline would be in violation of the Commerce Clause.
(d) That the franchise fees sought by defendants are arbitrary and unreasonable.
(Complaint (Dkt. # 1) at 15). Olympic also seeks injunctive relief restraining Seattle from ordering the portion of the Olympic Pipeline at issue here (the "Seattle Lateral") to be shut down. Id. at 16.
Olympic filed this action after it received three letters from the City of Seattle. A June 27, 2003 letter from Grace Crunican, the Director of the Seattle Department of Transportation, invoked Seattle's rights under its franchise agreement with Olympic and Seattle's "police and regulatory powers" to direct Olympic to cease operation of the Seattle Lateral. See Talley Preliminary Injunction Decl. Ex. 5. A letter from Seattle Mayor Greg Nickels, also dated June 27, 2003, requested that Olympic conduct two inspection digs and conduct a hydrostatic test to confirm that the pipeline could be operated safely. See Talley Preliminary Injunction Decl. Ex. 6. The City previously had requested that Olympic undertake thirty-one specific actions to allay its concerns about the pipeline. See Talley Preliminary Injunction Decl. Ex. 4 (). Each of those requested actions concerned pipeline safety. See id.
On August 21, 2003, this Court issued an Order Granting Motion for Preliminary Injunction (the "Preliminary Injunction Order") (Dkt. # 31). In that Order, the Court found that Olympic was likely to prevail on the merits in this matter and that Olympic established the possibility of irreparable injury if an injunction were not issued, making issuance of a preliminary injunction appropriate. See Preliminary Injunction Order at 13-14. The Court enjoined "Seattle from any efforts or attempts to shut down or otherwise interfere with the operation of the Seattle Lateral until such time as the Court has ruled on the merits of Olympic's claims." Id. at 14. The Court also ordered Olympic to abide by the Corrective Action Order issued by the Office of Pipeline Safety and to operate the Seattle Lateral at no more than eighty percent of the maximum operating pressure during the pendency of this action. Id.
On November 21, 2003, Olympic brought this motion for summary judgment.
Other facts relevant to this motion are set forth in the Preliminary Injunction Order. See id. at 1-3.
Summary judgment is proper if the moving party shows that "there is no genuine issue as to any material fact and that [it] is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c).
Once the moving party has demonstrated the absence of a genuine issue of material fact, the non-moving party must designate "specific facts showing that there is a genuine issue for trial." Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); see also Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586-87, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) ().
On a motion for summary judgment all reasonable inferences must be drawn in favor of the non-moving party. O'Day v. McDonnell Douglas Helicopter Co., 79 F.3d 756, 761 (9th Cir.1996).
In the Preliminary Injunction Order, the Court found that Olympic was likely to prevail on its claim that Seattle's attempted regulation of the Seattle Lateral is preempted by federal law. See Preliminary Injunction Order at 8 (). Olympic contends that "Seattle agrees that it is preempted from regulating the safety of the Seattle Lateral Pipe Line." (Reply at 1 (citing Response at 3)). Although Seattle contends that it may order Olympic to take certain actions with respect to the Seattle Lateral for other reasons, Seattle does admit that safety regulation of interstate petroleum pipelines has been preempted by federal law since 1979. (Response at 3). Seattle also admits that the Pipeline Safety Act of 1992 limited safety regulation by state agencies (which may include municipalities) to those agencies that have been certified or authorized to do so by the Secretary of Transportation. Id. (citing 49 U.S.C. § 60104(c)). Seattle has not received such certification or authorization.1 Id.
For the reasons more fully set forth in the Preliminary Injunction Order, the Court finds that Seattle is preempted by federal law from prescribing and enforcing safety standards and practices on Olympic's operation of the Seattle Lateral, whether the pipeline is considered interstate or intrastate.2 See Preliminary Injunction Order at 5-10; see also 49 U.S.C. § 60104(c) ( ).
The Court must determine whether Olympic waived the right to invoke preemption and is contractually bound to follow Seattle's safety directives.
Seattle contends that Olympic is contractually obligated to abide by the City's orders regarding reconstruction, repair, or removal of the Seattle Lateral.3 Seattle originally granted Olympic a franchise to run the Seattle Lateral through the City in 1966, (Talley Preliminary Injunction Decl. ¶ 19). The Seattle City Council adopted the most recent franchise as Ordinance No. 116331, effective January 1, 1991.4 Id. That agreement expired on December 31, 2000.
The January 1, 1991 franchise provides that Seattle's Director of Engineering may order Olympic to reconstruct, repair, or relocate the pipeline at Olympic's expense. (Richmire Preliminary Injunction Decl. Ex. C § 5). Additionally, in 1992, Olympic entered an indemnity agreement with Seattle that provided that "[u]pon notice and reasonable opportunity for consultation ... Olympic Pipe Line shall immediately comply with any reasonable request ... including ... suspension or closure of the Pipeline, when the City, in its sole discretion, deems such request or order necessary to protect human health or safety, or the environment." (Richmire Preliminary Injunction Decl. Ex. D § 9.B).
Seattle notes that after the pipeline rupture in Bellingham, Washington, the City of Bellingham threatened to shut down the pipeline. See Asmundson Preliminary Injunction Decl. Ex. A (Press Release announcing 60-day Pipeline Termination Notice). Olympic and Bellingham then reached a series of interim agreements, which included safety and inspection provisions, to permit Olympic to continue to operate the pipeline. See Asmundson Preliminary Injunction Decl. Exs. B-D. The negotiations between Olympic and Bellingham culminated in renewal of the franchise agreement and a "special safety agreement" between the parties. See Asmundson Preliminary Injunction Decl. Exs. F-G.
Seattle argues that just as Olympic knew safety regulation of its pipeline was preempted, yet entered safety agreements with Bellingham after the pipeline rupture, Olympic knew or should have known that safety regulation of the Seattle Lateral by Seattle was preempted, yet voluntarily agreed in the Franchise Agreement and Indemnity Agreement to allow Seattle to exercise certain safety control over the pipeline.5 Seattle contends that "[p]rinciples of waiver, equity and estoppel preclude Olympic from now arguing that its contractual commitment to Seattle in the form of the Indemnity Agreement is preempted by federal law." (Response at 10). Seattle cites Legal Aid...
To continue reading
Request your trial
-
Olympic Pipe Line Co. v. City of Seattle
...the Commerce Clause; and (3) the franchise fees sought by Seattle were arbitrary and unreasonable. See Olympic Pipe Line Co. v. City of Seattle, 316 F.Supp.2d 900, 901 (W.D.Wash.2004). On August 21, 2003, the district court granted Olympic's motion for a preliminary injunction, enjoining Se......