Pac. Merch. Shipping Ass'n v. Goldstene

• Decision Date: 28 March 2011
• Docket Number: No. 09–17765.,09–17765.
• Citation: 639 F.3d 1154
• Parties: PACIFIC MERCHANT SHIPPING ASSOCIATION, Plaintiff–Appellant,v.James GOLDSTENE, in his official capacity as Executive Officer of the California Air Resources Board, Defendant–Appellee.Natural Resources Defense Council, Inc.; Coalition for Clean Air, Inc.; South Coast Air Quality Management District, Defendant–Intervenors–Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

639 F.3d 1154

11 Cal. Daily Op. Serv. 3678

2011 Daily Journal D.A.R. 4461

PACIFIC MERCHANT SHIPPING ASSOCIATION, Plaintiff–Appellant,

v.James GOLDSTENE, in his official capacity as Executive Officer of the California Air Resources Board, Defendant–Appellee.Natural Resources Defense Council, Inc.; Coalition for Clean Air, Inc.; South Coast Air Quality Management District, Defendant–Intervenors–Appellees.

No. 09–17765.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted Dec. 9, 2010.Filed March 28, 2011.

Aleksandrs Drumalds & Erich Wise (argued), Flynn, Delich & Wise, Long Beach, CA, for the appellant.

Nicholas Stern (argued), Office of the California Attorney General, Sacramento, CA; for appellee James Goldstene; Melissa Lin Perrella & David Richard Petit; National Resources Defense Council, Santa Monica, CA, for appellees National Resources Defense Council, Inc. and Coalition for Clean Air, Inc.; Barbara B. Baird (argued), South Coast Air Quality Management District, Diamond Bar, CA, for appellee South Coast Air Quality Management District.Appeal from the United States District Court for the Eastern District of California, Morrison C. England, Jr., District Judge, Presiding. D.C. No. 2:09–cv–01151–MCE–EFB.Before: ROBERT E. COWEN,^* A. WALLACE TASHIMA, and BARRY G. SILVERMAN, Circuit Judges.

OPINION

COWEN, Circuit Judge:

In this interlocutory appeal, Plaintiff Pacific Merchant Shipping Association (“PMSA”) appeals from the District Court's denial of its motion for summary judgment in its action against Defendant James Goldstene, the Executive Officer of the California Air Resources Board (“CARB”). PMSA has challenged, on federal statutory and constitutional grounds, California fuel use regulations (known as the “Vessel Fuel Rules”) insofar as they purport to apply to sea-going vessels located more than 3 miles from the California coast. We will affirm.

I.

On April 16, 2009, CARB transmitted the “Vessel Fuel Rules” to the California Secretary of State for filing pursuant to state law, and the regulations went into effect as planned on July 1, 2009. As the District Court noted, the express purpose of the Vessel Fuel Rules “is to reduce air pollutants affecting the State of California by requiring ocean-going vessels to use cleaner marine fuels.” (ER24 (footnote added).) The regulations were adopted only after a lengthy process that included consultation with the public, state and local agencies, and the federal government.

The Vessel Fuel Rules mandate that vessel operators “use cleaner marine fuels in diesel and diesel-electric engines, main propulsion engines, and auxiliary boilers on vessels operating within twenty-four nautical miles off the California coastline.” ( Id. (citing Cal.Code Regs. tit. 13, § 2299.2(a); Cal.Code Regs. tit. 17, § 93118.2(a)).) Specifically, the regulations apply to a geographical region known as “Regulated California Waters,” which includes the waters within 24 nautical miles of the state's shoreline. Cal.Code Regs. tit. 13, § 2299.2(b); Cal.Code Regs. tit. 17, § 93118.2(b). This area evidently encompasses approximately 14,000 square miles of ocean beyond the 3–mile zone immediately adjacent to the coast. In general, the Vessel Fuel Rules only cover vessels calling at a California port, and they accordingly contain an express exemption for vessels simply traveling through the region (known as “innocent passage”). There are two phases of implementation: (1) “Initially, beginning in July 2009, vehicle operators must use either marine gas oil (which typically averages 0.3% sulfur and is capped at 1.5%), or marine diesel oil with a sulfur limit of 0.5% or less;” and (2) “Thereafter, by January 2012, both fuels must not exceed 0.1% sulfur.” (ER24 (citing Cal.Code Regs. tit. 13, § 2299.2(a); Cal.Code Regs. tit. 17, § 93118.2(a)).) The regulations also require vessel owners and operators to keep detailed records, and non-compliance could subject such owners and operators to a wide range of sanctions, including fines, injunctive relief, and criminal prosecution. The Vessel Fuel Rules contain an express “sunset” clause, providing for their termination when CARB's Executive Officer makes a finding that the federal government has adopted and is enforcing requirements that will achieve equivalent emission reductions.

Prior to the 2009 adoption and implementation of the Vessel Fuel Rules, CARB previously adopted a set of emission standards for ocean-going vessels. In PMSA v. Goldstene, 517 F.3d 1108 (9th Cir.2008), we observed that CARB on January 1, 2007 began enforcing its “Marine Vessel Rules,” limiting “emissions from the auxiliary diesel engines of ocean-going vessels within twenty-four miles of California's coast,” id. at 1109. PMSA claimed that the Marine Vessel Rules were preempted by two federal statutes: the Clean Air Act and the Submerged Lands Act (“SLA”). Id. at 1109–13. Affirming the district court's ruling and reinstating the injunction entered against the regulations' enforcement, we held that the Marine Vessel Rules were emission standards (as opposed to otherwise permissible in-use fuel requirements) and thereby were preempted by the Clean Air Act. Id. at 1109–15. We accordingly found “it unnecessary to decide whether the Submerged Lands Act also preempts the state rules at issue.” Id. at 1115. In turn, CARB carefully drafted the current Vessel Fuel Rules to require the use of particular fuels in order to correct the deficiency we identified in Goldstene.

With respect to these Vessel Fuel Rules, the District Court as well as the parties have addressed in some detail the serious environmental problems giving rise to these regulations as well as the various positive and negative effects of this regulatory scheme.

Initially, the ports of Long Beach and Los Angeles collectively constitute the largest port in the United States, with some 40% of all national imports entering the country through these two huge facilities. In 2006 alone, there were approximately 11,000 vessel “calls” at California ports, and this number is expected to increase significantly in the future.

CARB estimated that compliance with the Vessel Fuel Rules would cost ship operators $30,000.00 per California port “call,” amounting to an industry-wide aggregate incremental cost of approximately $360 million annually and $1.5 billion through the end of 2014. On the other hand, it does not appear that such compliance would be technically impossible or even especially challenging. As the District Court emphasized in its decision, “any increased cost associated with compliance is less than one percent of the typical cost of a trans-Pacific voyage.” (ER36 (citing SER42).) “That cost has been estimated by CARB to amount to only a $6.00 increase per 20–foot shipping container, a sum that would equate to only an extra 12.5 cents in the cost of a plasma TV” or about 0.14 cents for a pair of athletic shoes ( Id. (citing same).)

It appears uncontested that ocean-going vessels have long been a leading source of air pollution in California, due in large part to the widespread use of low-grade bunker fuel. Bunker fuel consists primarily of a thick and tar-like residual formulated from the residues remaining after primary fuel distillation. Because of its high viscosity, this fuel has to be heated before it can be pumped and injected into an engine. It contains an average of approximately 25,000 parts per million (“ppm”) of sulfur. In contrast, the diesel fuel used for trucks and other motor vehicles is limited to just 15 ppm of sulfur.

2006 data from CARB indicated that ocean-going vessels traveling within 24 nautical miles of the California coast generate per day approximately 15 tons of diesel particulate matter (“PM”), 157 tons of nitrogen oxides (“NOx”), and 117 tons of sulfur oxides (“SOx”). In fact, their emissions constitute the single largest source of SOx emissions in the state, responsible for 40% of all such emissions. Furthermore, both NOx and SOx are precursors to PM2.5, or fine particulate pollution. It was estimated that the vessels' daily PM emissions represent the equivalent of approximately 150,000 big rig trucks traveling 125 miles per day. It appears that emissions are likely to be blown on-shore from beyond the geographical area actually covered by the Vessel Fuel Rules.

It is likewise undisputed that 27 million Californians (80% of the state's population) are exposed to emissions from ocean-going vessels and that these emissions have a number of harmful effects. In particular, diesel emissions are known to cause cancer and respiratory illnesses like aggravated asthma as well as to increase the risk of heart disease. CARB specifically estimated that the vessels' direct PM emissions cause 300 premature deaths across the state every single year, even after excluding cancer effects.

These various public health problems are especially severe in the area of Southern California known as the South Coast Air Basin (which encompasses all of Orange County as well as the non-desert portions of Los Angeles, Riverside, and San Bernardino Counties). For instance, over 80% of the population in the South Coast Air Basin is exposed to PM2.5 levels exceeding federal ambient air quality standards.

Implementation of the Vessel Fuel Rules should reduce PM emissions by approximately 13 tons per day, NOx emissions by 10 tons per day, and SOx emissions by 109 tons per day. Upon full implementation, the amount of SOx in the air should be cut by approximately 90%. In addition to anticipated health care savings and similar financial benefits, research indicated that the Vessel Fuel Rules should prevent, between 2009 and 2015, approximately 3,500 premature deaths and nearly 100,000 asthma attacks as well as reduce cancer risks.

The South Coast Air Basin has long been unable to meet federal air quality standards. As a practical matter, the Vessel Fuel Rules appear to be critical to ongoing efforts...