Portland Pipe Line Corp. v. City of Portland

• Decision Date: 11 February 2016
• Docket Number: 2:15-cv-00054-JAW
• Citation: 164 F.Supp.3d 157
• Parties: Portland Pipe Line Corporation, et al., Plaintiffs, v. City of South Portland, et al., Defendants.
• Court: U.S. District Court — District of Maine

164 F.Supp.3d 157

Portland Pipe Line Corporation, et al., Plaintiffs,

v.City of South Portland, et al., Defendants.

2:15-cv-00054-JAW

United States District Court, D. Maine.

Signed February 11, 2016

Catherine R. Connors, Matthew D. Manahan, Eric J. Wycoff, Nolan L. Reichl, Pierce Atwood LLP, Portland, ME, for Plaintiffs.

Mark A. Bower, Sally J. Daggett, Jensen Baird Gardner & Henry, Portland, ME, Jesse Harlan Alderman, Jonathan M. Ettinger, Foley Hoag LLP, Boston, MA, for Defendants.

ORDER ON DEFENDANTS' MOTION TO DISMISS

JOHN A. WOODCOCK, JR.

, UNITED STATES DISTRICT JUDGE

South Portland enacted an Ordinance prohibiting the loading of crude oil in Portland Harbor. The Ordinance's practical effect is to prevent Portland Pipe Line from using its infrastructure to transport oil by pipeline from north to south, i.e., from Canada to South Portland. Portland Pipe Line brought suit seeking declaratory and injunctive relief, and South Portland moved to dismiss the suit on the justiciability grounds that the suit was unripe, that Portland Pipe Line lacked standing, and that the Court must not render an advisory opinion. The Court, however, finds the dispute to be ripe because Portland Pipe Line has expressed its intention to import oil and cannot do so as long as the Ordinance remains in place. Other approvals may be required, but Portland Pipe Line has won these approvals in the past and should not be made to pursue them again while the question of the Ordinance's legality remains unanswered. The Defendants' standing and advisory opinion claims are similarly unavailing. The Court denies South Portland's motion to dismiss.

I. BACKGROUND

A. Procedural History

On February 6, 2015, Portland Pipe Line Corporation (PPLC) and The American Waterways Operators (AWO) filed a nine-count complaint in this Court against the city of South Portland (South Portland or City) and Patricia Doucette (Doucette), South Portland's Code Enforcement Officer. The Complaint contains nine counts: (1) Supremacy Clause preemption of the Ordinance by the Pipeline Safety Act (PSA), 49 U.S.C §§ 60101 et seq .

; (2) Supremacy Clause preemption of the Ordinance under the President's foreign affairs power; (3) Supremacy Clause preemption of the Ordinance by the Ports and Waterways Safety Act, 33 U.S.C. Ch. 25 and 46 U.S.C. Ch. 37; (4) preemption of the Ordinance under Article III, Section 2 of the United States Constitution and the Constitution's embedded principle of federal maritime governance; (5) violation of the Commerce Clause of the Constitution; (6) violation of the Due Process and Equal Protection Clauses; (7) deprivation of rights under the Civil Rights Act, 42 U.S.C. § 1983 ; (8) inconsistency of the Ordinance with South Portland's comprehensive plan under Maine law, 30–A M.R.S. § 4352 ; and (9) preemption of the Ordinance by Maine's Oil Discharge Prevention Law, 38 M.R.S. § 556. Compl. for Declaratory and Injunctive Relief (ECF No. 1) (Compl. ).

On March 31, 2015, South Portland and Ms. Doucette filed a motion to dismiss the Complaint. Defs.' Mot. to Dismiss the Compl. Pursuant to Rule 12(b)(1) (ECF No. 16); Mem. of Law in Supp. Of Defs.' Mot. to Dismiss Pursuant to Rule 12(b)(1) (ECF No. 17) (Defs.' Mot. ). The Plaintiffs responded on April 21, 2015. Pls.' Opp'n to Defs.' Mot. to Dismiss Pursuant to Rule 12(b)(1) (ECF No. 18) (Pls.' Opp'n ). The Defendants replied on May 5, 2015. Reply Mem. of Law in Supp. of Defs.' Mot. to Dismiss Pursuant to Rule 12(b)(1) (ECF No. 19) (Defs.' Reply ). On May 12, 2015, the Plaintiffs filed an unopposed motion for oral argument, Pls.' Req. for Oral Argument (ECF No. 20), which the Court granted on May 14, 2015. Order Granting Without Obj. Mot. for Oral Argument/Hr'g (ECF No. 21).

On January 21, 2016, the Court held oral argument on the motion to dismiss. Min. Entry (ECF No. 24). At oral argument, the Plaintiffs brought to the Court's attention a case the First Circuit decided after the parties submitted their written argument: Town of Barnstable v. O'Connor , 786 F.3d 130 (1st Cir.2015)

. The Court asked the parties to brief Barnstable. The Defendants filed a memorandum on Barnstable on January 28, 2016, Post-Hr'g Mem. in Supp. of Defs.' Mot. to Dismiss Pursuant to Rule 12(b)(1) (ECF No. 25) (Defs.' Post-Hr'g Mem. ), and the Plaintiffs did so on February 2, 2016. Pls.' Resp. to Defs.' Post-Hr'g Mem. in Supp. of Defs.' Mot. to Dismiss Pursuant to Rule 12b(1) (Pls.' Post-Hr'g Mem. ).

The Court has federal question jurisdiction over this action pursuant to 28 U.S.C. § 1331

and pendant jurisdiction over the Maine law claims pursuant to 28 U.S.C. § 1367.

II. THE FACTUAL ALLEGATIONS OF THE COMPLAINT

A. The Parties

PPLC is a Maine corporation with its principal place of business in South Portland. Compl. ¶ 3. It is a wholly-owned subsidiary of Montreal Pipe Line Limited, a privately-held corporation located in Canada, and is engaged in the international transportation of hydrocarbons via pipeline and associated facilities located in a continuous transportation corridor running from the harbor in South Portland, Maine, through three states, across the Canadian border, to facilities located in Montreal, Quebec.¹ Id.

PPLC owns and operates the United States portion of a transportation system that includes, without limitation, 12-inch diameter, 18-inch diameter, and 24-inch diameter pipelines and associated facilities extending from South Portland, Maine to Montreal, Quebec. Id. ¶ 11. PPLC's transportation system was first established with the construction of the 12-inch diameter pipeline in 1941 during World War II for national security purposes to transport crude oil by pipeline as an alternative to direct international marine shipments by crude oil tankers. Id. ¶ 16. The 18-inch diameter pipeline, built in 1950, transported oil until 1986, when it converted to natural gas transmission, importing gas from Canada to the United States pursuant to Executive Order 10485 (Sept. 3, 1953)

and Executive Order 12038 (Feb. 3, 1978). Id . In 1999, the 18-inch diameter pipeline converted back to oil transportation, as authorized by a Presidential Permit issued in accordance with Executive Order 11423 (August 16, 1968), Executive Order 12847 (May 17, 1993), and Department of State (“State Department”) Delegation of Authority No. 118–1 (April 11, 1973). Id . The 24-inch diameter pipeline was built pursuant to a Presidential Permit issued January 13, 1965. Id. PPLC's Presidential Permits and approvals were issued as an exercise of the President's authority over foreign affairs and as Commander in Chief, and are consistent with, advance, and are issued as an exercise of United States foreign policy and to facilitate the cross-border trade in hydrocarbons between Canada and the United States. Id. ¶ 17.

Currently, approximately forty-eight ships offload at PPLC annually, and PPLC transports crude oil to Quebec via pipeline and associated facilities at a rate of approximately 2.4 million barrels of oil per month. Id. ¶ 11. PPLC holds submerged land leases with the state of Maine upon which are located two piers it owns at the harbor in South Portland. Id. ¶ 12. PPLC's pipeline transportation system includes, without limitation, one of the two piers (Pier 2), tanks located both at the waterfront and at a tank farm within South Portland, as well as the pipes, additional infrastructure, and facilities needed to transport petroleum products from tankers berthing at Pier 2 to their ultimate cross-border destination. Id.

AWO is a national trade association for the nation's inland and coastal tugboat, towboat, and barge industry. Id. ¶ 5. The industry employs more than 33,000 American seamen and owns and operates over 4,000 tugboats and towboats and more than 27,000 barges throughout the country. Id. AWO represents the largest segment of the U.S.-flag domestic fleet. Id . Its 350 member companies carry more than 800 million tons of domestic cargo every year, operating vessels on the inland rivers, Atlantic Ocean, Pacific Ocean, the Gulf Coast, the Great Lakes, and in ports and harbors around the country, including the Portland Harbor, incorporating the harbor in South Portland. Id. AWO's member companies operate numerous vessels licensed by the United States Coast Guard to engage in coastwise trade, such as the transportation of crude oil products. Id. AWO has consistently supported federal control over harbor-related activities, noting that to move critical cargo in interstate and international commerce safely and efficiently, the maritime industry needs uniform safety and environmental standards established by one engaged and experienced federal agency, the United States Coast Guard, and that subjecting vessel operators to duplicative or conflicting federal and state standards creates confusion, adds inefficiency, and increases costs to shippers who rely on water transportation. Id. By prohibiting the loading of crude oil at the harbor in South Portland, the Ordinance interferes and conflicts with its members' federal licenses; eliminates a market for its member vessels' services in transporting such products from the harbor; and sets a precedent for inconsistent local harbor regulation that could cripple import and export activities nationally and invite reciprocal commerce curtailment from other nations. Id.

The city of South Portland is a municipality located in Cumberland County, Maine, on Portland Harbor. Id. ¶ 6. Portland Harbor is the second largest oil port on the east coast of the United States, serving as a key center for shipping by both land and sea. Id. The Harbor has the capability of handling some of the largest and deepest draft marine tankers on the east coast, with up to fifty-two feet of draft and 170,000 deadweight tons of cargo. Id. ¶ 10.

Patricia Doucette, is South Portland's code enforcement director, and is charged under South Portland Code Sec. 27-131 with enforcing the City's ordinances, including the Ordinance at issue in this...