Norfolk Southern Corp. v. Oberly

594 F. Supp. 514, 1984 U.S. Dist. LEXIS 23304
CourtDistrict Court, D. Delaware
DecidedSeptember 25, 1984
DocketCiv. A. 84-330
StatusPublished
Cited by11 cases

This text of 594 F. Supp. 514 (Norfolk Southern Corp. v. Oberly) is published on Counsel Stack Legal Research, covering District Court, D. Delaware primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Norfolk Southern Corp. v. Oberly, 594 F. Supp. 514, 1984 U.S. Dist. LEXIS 23304 (D. Del. 1984).

Opinion

OPINION

LONGOBARDI, District Judge.

The Plaintiffs, Norfolk Southern Corporation (“Norfolk Southern”) and Norfolk Southern Marine Services, Inc. (“Marine Services”), seek a preliminary injunction against John E. Wilson (“Wilson”), Delaware’s Secretary of the Department of Natural Resources and Environmental Con *516 trol (“DNREC”), and Charles M. Oberly, III (“Oberly”), Attorney General of the State of Delaware. More particularly, Plaintiffs seek to enjoin the Defendants and their agents and employees from enforcing that portion of the Delaware Coastal Zone Act (“CZA”), 7 Del.C., Ch. 70, that has been held applicable to their proposed vessel-to-vessel coal top-off project in the Delaware Bay and requiring Wilson to process their pending applications for air pollution control permits under Delaware Environmental Protection Law, 7 Del. C., Ch. 60. They contend the CZA is unconstitutionally violative of the commerce clause.

CZA was enacted by the Delaware Legislature in 1971 and the avowed purpose of the Act was to control the location, extent and type of industrial development in Delaware’s coastal areas. The control of such industrialization, it was hoped, would better protect the natural environment of the bay and coastal areas and safeguard their use primarily for recreation and tourism. 7 Del.C. § 7001. Section 7001 also provided:

... that offshore bulk product transfer facilities represented a significant danger of pollution to the coastal zone and generate pressure for the construction of industrial plants in the coastal zone, which construction is declared to be against public policy. For these reasons, prohibition against bulk product transfer facilities in the coastal zone is deemed imperative, (emphasis added).

“Bulk product transfer facility” is defined as “any port or dock facility, whether an artificial island or attached to shore by any means, for the transfer of bulk quantities of any substance from vessel to onshore facility or vice versa. Not included in this definition is a docking facility or pier for a single industrial or manufacturing facility for which a permit is granted or which is a nonconforming use. Likewise, docking facilities for the Port of Wilmington are not included in this definition.” 7 Del.C. § 7002. Administration of the Act is by the Secretary of DNREC, Wilson, and appeals from his decisions are heard first by the State Coastal Zone Industrial Control Board (“Board”), section 7007(a), whose decisions are binding on all the agencies of the State of Delaware. Under section 7010, the Attorney General, Oberly, is responsible for enforcing the CZA, for using cease and desist orders and for recovering monetary penalties that can go as high as $50,000 per day of violation.

Appeals from the Board are heard by the Superior Court of Delaware and appeals from that court are heard in the Supreme Court of Delaware.

The Plaintiffs became interested parties in a proposal to transport and sell coal on the international market. Existing port facilities on the East Coast, however, allow only the loading of ordinary sized colliers or partial loading of super colliers. Super colliers are ships with coal carrying capacities ranging from 100,000 to more than 160,000 deadweight tons (“DWT”). Super colliers are obviously much more cost effective to operate than smaller vessels provided they are fully loaded. Because the super colliers cannot be fully loaded from any East Coast port, they would have to be “topped-off”, the loading of additional coal to ship’s capacity, in deeper water away from the existing ports. Big Stone Anchorage is the sole naturally protected anchorage with a depth of 55 feet or more between Maine and Mexico. It lies within the Delaware Bay and well within the zone protected by CZA. The anchorage is presently utilized for oil lightering, the transfer of oil from super tankers to smaller vessels capable of navigating East Coast rivers and harbors.

Plaintiffs’ plan is to partially load super colliers at existing ports and then move the ships to Big Stone Anchorage. Two specially constructed, fully loaded coal barges, part of the top-off project, will then deliver their coal to the holds of the super colliers. After unloading, the barges will return to local ports for loading preparatory to the next top-off job at Big Stone Anchorage. It is estimated by the Plaintiffs that each of the two barges will be capable of making 60 such trips per year and, when the *517 project is fully established, the top-off project will be handling 3,000,000 tons of coal annually from Big Stone Anchorage. These are necessarily projections only because there is no comparable service elsewhere in the United States which could provide the basis for empirical data. The volume of tonnage is contested by the Defendants who have supplied the Court with articles denigrating the value of a top-off project in the United States. The reports are skeptical that there will be a substantial foreign market for American coal. Among the premises for the conclusion is that costs of mining and interstate shipment, primarily by companies like those associated with Norfolk Southern, push the costs of American coal beyond the competitive world-wide market. Interestingly, the conclusions are reached without material regard to cost of international shipping, a premise that strikes at the heart of Plaintiffs’ projections for a world market for American coal shipped from Big Stone Anchorage.

Pursuant to 33 U.S.C. § 471, Big Stone Anchorage is subject to the jurisdiction of the United States Coast Guard. In 1982, it proposed to change the designation of Big Stone Anchorage to a “general anchorage.” Previously, the “specific” purpose of the anchorage was to allow deep draft tankers to anchor and lighter their cargoes of imported oil. The new Rule was designed to permit “shippers transporting commodities other than oil to use [Big Stone Anchorage] as both a holding anchorage and an anchorage for lightering.” 33 C.F.R. 110.157. In response to the notice, the Governors of Delaware, Maryland and Pennsylvania endorsed the proposed change and specifically endorsed the coal top-off project. Comments in support of the proposal were filed by affiliates of the Plaintiffs, operators of railroads and by exporters of coal. DNREC did not endorse the proposal, noting that vessel-to-vessel coal transfer posed the potential for water pollution and suggesting that the Coast Guard determine the environmental impact of coal top-off operations at the anchorage. The Coast Guard formally changed the designation of Big Stone Anchorage to a “general anchorage” in May, 1983. 48 Fed.Reg. 23,636 (1983).

It is not absolutely clear from the present record but there are indications that what prompted the Coast Guard to change the designation of the anchorage could have been based in part on the efforts by one J. Patrick Dowd, a Vice-President of Coastal Barge Corporation (“Coastal Barge”) and President of Coal Logistics Corporation (“Coal Logistics”). Dowd and the corporations are not parties to this litigation but they play a major role in the scenario that covers this federal action.

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594 F. Supp. 514, 1984 U.S. Dist. LEXIS 23304, Counsel Stack Legal Research, https://law.counselstack.com/opinion/norfolk-southern-corp-v-oberly-ded-1984.