Portland Pipe Line Corp. v. City of Portland, No. 18-2118

• Decision Date: 10 January 2020
• Docket Number: No. 18-2118
• Citation: 947 F.3d 11
• Parties: PORTLAND PIPE LINE CORPORATION; The American Waterways Operators, Plaintiffs, Appellants, v. CITY OF SOUTH PORTLAND; Matthew Leconte, in his official capacity as Code Enforcement Director of South Portland, Defendants, Appellees.
• Court: U.S. Court of Appeals — First Circuit

947 F.3d 11

PORTLAND PIPE LINE CORPORATION; The American Waterways Operators, Plaintiffs, Appellants,

v.CITY OF SOUTH PORTLAND; Matthew Leconte, in his official capacity as Code Enforcement Director of South Portland, Defendants, Appellees.

No. 18-2118

United States Court of Appeals, First Circuit.

January 10, 2020

Catherine R. Connors, with whom John J. Aromando, Matthew D. Manahan, Nolan L. Reichl, and Pierce Atwood LLP, Portland, ME, were on brief, for appellants.

Jonathan M. Ettinger, with whom Euripides Dalmanieras, Jesse H. Alderman, Foley Hoag LLP, Boston, MA, Sally J. Daggett, and Jensen Baird Gardner & Henry, Portland, ME, were on brief, for appellees.

David H. Coburn, Joshua H. Runyan, Washington, DC, and Steptoe & Johnson LLP were on brief, for American Fuel & Petrochemical Manufacturers, American Petroleum Institute, Association of Oil Pipe Lines, International Liquid Terminals Association, National Association of Manufacturers, and National Mining Association, amici curiae.

Twain Braden and Thompson Bowie & Hatch, LLC, Portland, ME, were on brief, for Portland Pilots, Inc., Maine Energy Marketers Association, and Associated General Contractors of Maine, amici curiae.

Samuel D. Adkisson, Patrick Strawbridge, Consovoy McCarthy Park PLLC, Steven P. Lehotsky, Michael B. Schon, and U.S. Chamber Litigation Center were on brief, for U.S. Chamber of Commerce, amicus curiae.

Maura Healey, Attorney General for the Commonwealth of Massachusetts, Seth Schofield, Senior Appellate Counsel, Turner Smith, Assistant Attorney General, and Office of the Attorney General of Massachusetts were on brief, for Massachusetts, California, Connecticut, Delaware, Maine, Maryland, Minnesota, New York, Oregon, Pennsylvania, Rhode Island, Vermont, Washington, and the District of Columbia, amici curiae.

Sarah J. Fox, Northern Illinois University College of Law, Lisa C. Goodheart, William L. Boesch, C. Dylan Sanders, and Sugarman Rogers Barshak & Cohen, P.C., Boston, MA, were on brief, for International Municipal Lawyers Association and Legal Scholars, amicus curiae.

Sean Mahoney, Conservation Law Foundation, Jan E. Hasselman, Seattle, WA, Earth Justice, Kenneth J. Rumelt, and Vermont Law School were on brief, for Conservation Law Foundation, Natural Resources Council of Maine, and Protect South Portland, amici curiae.

Before Torruella, Thompson, and Barron, Circuit Judges.

Per Curiam.

This case involves a clash between Portland Pipe Line Corporation ("PPLC"), a Maine corporation engaged in the international transportation of oil, and the City of South Portland (the "City"), which enacted a municipal zoning ordinance prohibiting the bulk loading of crude oil onto vessels in the City's harbor. The practical effect of the ordinance at issue, known as the Clear Skies Ordinance (the "Ordinance"), is to prevent PPLC from using its infrastructure to transport oil from Montréal, Québec, Canada to South Portland, Maine via a system of underground pipelines. On appeal, PPLC and the American Waterways Operators, a national trade organization whose industry members employ thousands of seamen (and women) who would be negatively impacted by the loss of port traffic associated with PPLC's pipeline system, argue, in part, that the Ordinance is preempted by Maine's Coastal Conveyance Act ("CCA") and runs afoul of federal constitutional law.

In accordance with well-settled constitutional avoidance doctrine, see Vaquería Tres Monjitas, Inc. v. Pagan, 748 F.3d 21, 26 (1st Cir. 2014), we sidestep the federal quagmire for the moment. This dispute raises important questions of state law preemption doctrine and statutory interpretation that (in our view) are unresolved and may prove dispositive. We therefore certify three questions to the Maine Law Court. See Fortin v. Titcomb, 671 F.3d 63, 64 (1st Cir. 2012) (certifying questions to the Law Court where there were "no clear controlling [state law] precedents" (quoting Me. Rev. Stat. tit. 4, § 57 )). Some context for those questions, along with the questions themselves, follow.

I. Background

We begin by reciting the undisputed facts and procedural background germane to the issues of state law presented herein. PPLC and its parent company, Montreal Pipe Line Limited, operate the Portland-Montreal Pipe Line, a mostly underground pipeline system that primarily transports oil from South Portland, Maine, through three states, across the Canadian border, to the system's northern terminus in Montréal, Québec. In connection with this work, PPLC has for years obtained the state and federal regulatory approvals necessary to unload crude oil from tanker vessels in the City's harbor to be held in above-ground storage facilities pending transport to Canada via the pipeline system.

Beginning in or around 2007, to accommodate purported changes in demand, PPLC made efforts to reverse the flow of oil along the pipeline system such that oil would flow southbound from Montréal to South Portland, where it would then be loaded onto tankers in the City's harbor for distribution in the United States. Over the next few years, PPLC requested and received permission to proceed with the reversal project from federal, state, and municipal agencies. On July 18, 2008, for example, the U.S. Department of State approved the reversal project after concluding it did not represent a substantial deviation from the work previously approved by the federal government pursuant to a Presidential Permit issued to PPLC in 1999.¹ Less than a year later, on August 25, 2009, PPLC obtained an air emissions license from Maine's Department of Environmental Protection ("MDEP"), the agency charged with enforcing the state's environmental laws. Additionally, as is relevant to the certification questions presented here, on December 20, 2010, MDEP renewed PPLC's existing oil terminal facility license under the authority granted to MDEP by the CCA.² The license application summary, criteria for renewal, findings of fact, and formal approval of the renewal license are memorialized in an MDEP document titled "Department Order," which acknowledges and approves PPLC's plans to "reverse one of its underground pipe lines" and "store[ ] [oil] in ... above ground tanks prior to being loaded onto vessels at the South Portland pier for transport to refineries and terminals outside the state of Maine."³ At the local level, PPLC sought and received zoning approval from the City's Planning Board. Despite receiving these and other necessary regulatory approvals, PPLC halted its plans prior to implementation, choosing instead to wait out the economic decline precipitated by the Great Recession.

As economic conditions improved in 2012 and 2013, PPLC revived the pipeline reversal project. Around the same time, however, environmental interest groups began lobbying for a municipal referendum that would (among other things) bar a key component of the project: the transportation of Canadian oil sands (or, as environmentalists call it, "tar sands") via pipeline to South Portland, where PPLC planned to load the same onto vessels in the City's harbor. City residents voted against this citizen-initiated referendum on November 5, 2013. But South Portland's City Council subsequently created a draft ordinance committee to consider changes to City code that, according to the City, would "protect the public health and welfare from adverse or incompatible land uses, or adverse impacts to local air, water, aesthetic, recreational, natural, or marine resources" caused by the loading of unrefined petroleum products, like Canadian oil sands, onto marine tank vessels docking in South Portland's harbor. After a months-long drafting and review process conducted by the draft ordinance committee, the City Council passed Ordinance No. 1-14/15, the Clear Skies Ordinance, on July 21, 2014. The Ordinance prohibits the "bulk loading of crude oil onto any marine tank vessel," South Portland, ME, Ordinance #1-14/15, nipping PPLC's reversal project in the bud.

According to PPLC (and as disputed by the City), if it cannot move forward with the reversal project, it likely cannot survive as a business.⁴ As PPLC tells it, one of the system's two pipelines has been completely idle as a result of insufficient demand for northbound shipping and the Ordinance's impediment to southbound shipping. The other pipeline, while still active, transports what amounts to a "trickle" of oil.

Deprived of the means and method by which it intended to transport oil from Canada into the United States as part of the reversal project, PPLC filed suit against the City and the City's code enforcer in U.S. District Court for the District of Maine on February 6, 2015. Count IX of PPLC's nine-count complaint alleges the Ordinance is preempted by the CCA and, in particular, a provision of the statute that prohibits municipal activity which directly conflicts with a MDEP rule or order, including (as PPLC views it) the 2010 MDEP renewal license authorizing PPLC's reversal project in a document titled "Department Order." The complaint's remaining claims primarily concern the Ordinance's alleged violation of various federal laws and federal preemption doctrine.⁵

The City filed a motion to dismiss, which was denied on February 11, 2016. The parties subsequently filed cross-motions for summary judgment, which culminated with the district court dismissing all but one of PPLC's claims on December 29, 2017. In dispensing with PPLC's state law preemption claim, in particular, the district court concluded the 2010 MDEP renewal license document titled "Department Order" is not an "order" with preemptive effect under the CCA and, even if it is, the Ordinance does not directly conflict with the CCA to the extent the statute leaves room for local zoning restrictions like the Ordinance. PPLC's remaining claim after summary judgment was dismissed on August 27, 2018, following a four-day bench trial.⁶

PPLC timely appealed to this Court on November 7, 2018. The Court...