Portland Pipe Line Corp. v. City of S. Portland

• Decision Date: 29 October 2020
• Docket Number: Docket: Fed-20-40
• Citation: 240 A.3d 364
• Parties: PORTLAND PIPE LINE CORPORATION et al. v. CITY OF SOUTH PORTLAND et al.
• Court: Maine Supreme Court

240 A.3d 364

PORTLAND PIPE LINE CORPORATION et al.

v.CITY OF SOUTH PORTLAND et al.

Docket: Fed-20-40

Supreme Judicial Court of Maine.

Argued: September 16, 2020

Decided: October 29, 2020

John J. Aromando, Esq., Matthew D. Manahan, Esq., and Nolan L. Reichl, Esq. (orally), Pierce Atwood LLP, Portland, for appellants Portland Pipe Line Corporation and American Waterways Operators

Sally J. Daggett, Esq., Jensen Baird Gardner & Henry, Portland, and Jonathan M. Ettinger, Esq. (orally), Euripides Dalmanieras, Esq., and Jesse H. Alderman, Esq., Foley Hoag LLP, Boston, Massachusetts, for appellees City of South Portland and Matthew LeConte

Patrick Strawbridge, Esq., Consovoy McCarthy PLLC, Boston, Massachusetts, for amici curiae Chamber of Commerce of the United States of America, Portland Pilots, Inc., Maine Energy Marketers Association, Associated General Contractors of Maine, and Association of Oil Pipe Lines

Aaron M. Frey, Attorney General, and Laura E. Jensen, Asst. Atty. Gen., Office of the Attorney General, Augusta, for amicus curiae State of Maine

Susanne F. Pilgrim, Esq., Maine Municipal Association, Augusta, and Sarah J. Fox, Esq., Northern Illinois University College of Law, DeKalb, Illinois, for amici curiae International Municipal Lawyers Association, Sara Bronin, Nestor Davidson, Keith Hirokawa, Ashira Ostrow, Dave Owen, Laurie Reynolds, Jonathan Rosenbloom, and Sarah Schindler

Sean Mahoney, Esq. and Phelps Turner, Esq., Conservation Law Foundation, Portland for amici curiae Conservation Law Foundation and Protect South Portland

Panel: MEAD, GORMAN, JABAR, HUMPHREY, and HORTON, JJ.

MEAD, J.

[¶1] Portland Pipe Line Corporation's (PPLC's) plan to pipe crude oil from its facility in Canada to the City of South Portland, where it then would be loaded onto tankers in the City's harbor, was thwarted when the City enacted a "Clear Skies Ordinance," amending the City's zoning ordinance by prohibiting the "[b]ulk loading of crude oil onto any marine vessel." South Portland, Me., Ordinance 1-14/15 § 3 (July 7, 2014); see Portland Pipe Line Corp. v. City of South Portland , 947 F.3d 11, 13-14 (1st Cir. 2020). After the United States District Court for the District of Maine (Woodcock, J. ) entered summary judgment against PPLC and American Waterways Operators¹ (collectively PPLC) on their complaint seeking a declaration that, inter alia, the Ordinance was preempted by 38 M.R.S. § 556 (2020), Portland Pipe Line Corp. v. City of South Portland , 288 F. Supp. 3d 321, 456-58 (D. Me. 2017), PPLC appealed to the United States Court of Appeals for the First Circuit, which has certified three questions of state law to us pursuant to 4 M.R.S. § 57 (2020) and M.R. App. P. 25 :

(1) Is PPLC's license an "order," as that term is used in [ 38 M.R.S.] § 556 ?

(2) If PPLC's license is an order, is the City of South Portland's Clear Skies Ordinance preempted by [ 38 M.R.S.] § 556 of Maine's Coastal Conveyance Act?

(3) Independent of [ 38 M.R.S.] § 556, is there any basis for finding that Maine's Coastal Conveyance Act impliedly preempts the City of South Portland's Clear Skies Ordinance?

Portland Pipe Line Corp. , 947 F.3d at 18-19.

[¶2] We answer the first and third questions in the negative and decline to answer the second question.

I. FACTS AND PROCEDURE

[¶3] In its opinion certifying the three questions now before us, the Court of Appeals stated that the relevant facts and procedural background are "undisputed." Id. at 13. For years, PPLC unloaded crude oil from ships in South Portland's harbor, stored it in above-ground tanks, and then sent it via a largely underground pipeline to Montréal. Id. Due to a change in demand, beginning in or around 2007, PPLC began to seek necessary approvals to reverse the flow of oil in the pipeline so that it could send oil from Montréal to South Portland and from there load it onto ships in the City's harbor for distribution in the United States. Id.

[¶4] After PPLC received approval for the change from the federal government, id. , in 2010 the Maine Department of Environmental Protection (MDEP) renewed PPLC's marine oil terminal facility license, originally issued in 1979, noting that

PPLC is proposing a change in its operations in the renewal application. PPLC is proposing to reverse one of its underground pipe lines to transport oil from its terminal in Montreal Canada to its terminal in South Portland, Maine. The oil would be stored in the above ground tanks prior to being loaded on vessels at the South Portland pier for transport to refineries and terminals outside the [S]tate of Maine.

The City's Planning Board also approved the change. Id. at 14. In a subsequent renewal of PPLC's license, the MDEP restated that the license "allows PPLC to receive oil from Montreal, Canada by underground and aboveground pipe lines to the South Portland oil terminal facility for storage prior to being loaded onto vessels."

[¶5] Despite receiving regulatory approval in 2010, PPLC halted the reversal project, "choosing instead to wait out the economic decline precipitated by the Great Recession." Id. PPLC revived the project in 2012 and 2013 as economic conditions improved, but the enactment of the Ordinance by the City in 2014 effectively halted further operations. Id.

[¶6] In 2015, PPLC filed suit against the City and its code enforcement director (collectively the City) in the United States District Court for the District of Maine, seeking to bar enforcement of the Ordinance on largely federal grounds. Id. at 14 & n.5. Relevant to the First Circuit's certification, Count IX of the complaint alleged that the Ordinance is preempted by Maine's Coastal Conveyance Act (the Act),² 38 M.R.S. §§ 541 - 560 (2020), specifically section 556 (the statute).³ Id.

[¶7] After the City unsuccessfully moved to dismiss the complaint, the parties filed cross-motions for summary judgment. Portland Pipe Line Corp. , 947 F.3d at 15. The District Court granted the City's motion as to all but one count and entered summary judgment for the City on, inter alia, Count IX. Id. ; see Portland Pipe Line Corp. , 288 F. Supp. 3d at 458-59. After the remaining count was dismissed following trial, PPLC appealed. Portland Pipe Line Corp. , 947 F.3d at 15.

[¶8] Concluding that answers in the affirmative "would resolve the state law preemption claim [stated in Count IX] and this matter as a whole," and that "the case lacks controlling precedent and presents close and difficult legal issues that warrant certification to the Law Court," id. (alteration and quotation marks omitted), the First Circuit certified to us the three questions that we now address. Id. at 15, 18-19 ; supra ¶ 1.

II. DISCUSSION

A. Acceptance of the Certified Questions

[¶9] Because " 4 M.R.S. § 57 authorizes, but does not require, us to consider a certified question of state law posed by a federal court in certain circumstances," Scamman v. Shaw's Supermarkets, Inc. , 2017 ME 41, ¶ 7, 157 A.3d 223 (quotation marks omitted), "[a] threshold issue is whether we will agree to consider the certified questions," Doherty v. Merck & Co., Inc. , 2017 ME 19, ¶ 8, 154 A.3d 1202. We have said that

we may consider the merits of a certified question from the [federal court] and, in our discretion, provide an answer if (1) there is no dispute as to the material facts at issue; (2) there is no clear controlling precedent; and (3) our answer, in at least one alternative, would be determinative of the case.

Doherty , 2017 ME 19, ¶ 8, 154 A.3d 1202 (alteration and quotation marks omitted).

[¶10] Here, the First Circuit stated that the material facts are "undisputed" and that, were we to hold that Maine law preempts the Ordinance, that determination would "resolve ... this matter as a whole." Portland Pipe Line Corp. , 947 F.3d at 13, 15. We have not had occasion to construe 38 M.R.S. § 556. Accordingly, we agree to consider the certified questions. See Doherty , 2017 ME 19, ¶ 8, 154 A.3d 1202.

B. Question One

[¶11] The statute provides:

Nothing in [the Coastal Conveyance Act] may be construed to deny any municipality, by ordinance or by law, from exercising police powers under any general or special Act; provided that ordinances and bylaws in furtherance of the intent of [the Act] and promoting the general welfare, public health and public safety are valid unless in direct conflict with [the Act] or any rule or order of the board or commissioner adopted under authority of [the Act].

38 M.R.S. § 556. The first certified question asks us whether PPLC's MDEP license is a Departmental "order" within the meaning of the statute. Portland Pipe Line Corp. , 947 F.3d at 18.

[¶12] We conclude that it is not. That said, we note that the court's certification went further than a request for a bare "yes" or "no" answer in saying, "We would welcome further guidance from the Law Court on any other relevant aspect of Maine law that it believes would aid in the proper resolution of the issues before us." Id. at 19. We accept the First Circuit's invitation to expound on our answer to the first question because we also conclude that the Ordinance is not "in direct conflict with" the MDEP license granted to PPLC, even if the license were, arguendo, an "order." 38 M.R.S. § 556.

[¶13] The Legislature explicitly declared its intent in enacting the Coastal Conveyance Act:

The Legislature intends by the enactment of this legislation to exercise the police power of the State through the Department of Environmental Protection by conferring upon the department the power to deal with the hazards and threats of danger and damage posed by [oil] transfers and related activities; to require the prompt containment and removal of pollution occasioned thereby; to provide procedures whereby persons suffering damage from those occurrences may be promptly made whole; and to establish a fund to provide for the inspection and supervision of those activities and guarantee the prompt payment of reasonable damage claims resulting therefrom.

38 M.R.S. § 541....