United States Court of Appeals For the First Circuit
No. 18-2118
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.
APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MAINE
[Hon. John A. Woodcock, Jr., U.S. District Judge]
Before
Torruella, Thompson, and Barron, Circuit Judges.
Catherine R. Connors, with whom John J. Aromando, Matthew D. Manahan, Nolan L. Reichl, and Pierce Atwood LLP were on brief, for appellants. Jonathan M. Ettinger, with whom Euripides Dalmanieras, Jesse H. Alderman, Foley Hoag LLP, Sally J. Daggett, and Jensen Baird Gardner & Henry were on brief, for appellees. David H. Coburn, Joshua H. Runyan, 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 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. were on brief, for International Municipal Lawyers Association and Legal Scholars, amicus curiae. Sean Mahoney, Conservation Law Foundation, Jan E. Hasselman, 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.
January 10, 2020 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
- 3 - 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
- 4 - 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
1The State Department followed up with PPLC on August 13, 2013, instructing PPLC to provide more information about the changes in advance of implementing the flow reversal.
2As explained in more detail later, the CCA imbues MDEP with authority to issue licenses to oil terminal facilities and to adopt rules and regulations concerning their operations. See Me. Rev. Stat. tit. 38, §§ 544, 546. 3MDEP renewed PPLC's license pursuant to a second document titled "Department Order," dated September 11, 2015.
- 5 - 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
- 6 - 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
4 PPLC contends that the flow reversal project is a necessary response to the recent increase in the production of Canadian oil sands, which has reduced demand for northward flow on PPLC's pipelines.
- 7 - 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
5 PPLC's federal claims are as follows: (Count I: Preemption - Pipeline Safety Act, 49 U.S.C. §§ 60101 et seq.); (Count II: Preemption - Foreign Affairs Doctrine, U.S. Const., art. 2, §§ 2, 3); (Count III: Preemption - The Ports and Waterways Safety Act, 33 U.S.C. §§ 1225(a)(1), 1225(a)(2)(A)); (Count IV: Preemption - Maritime Law, U.S. Const., art. 3, § 2); (Count V: Commerce Clause Violation, U.S. Const., art. 1, § 18); (Count VI: Due Process and Equal Protection Clause Violations, U.S. Const., amend. XIV, § 1); and (Count VII: Civil Rights Act Violation, 42 U.S.C. § 1983).
We should also note the complaint alleges as Count VIII that the Ordinance is inconsistent with the City's Comprehensive Plan enacted and amended under the authority granted municipalities pursuant to Me. Rev. Stat. tit. 30-A, § 4352. Because PPLC does not press this claim in earnest on appeal, we do not seek analysis of the same from the Law Court.
- 8 - 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 heard oral argument on July 23, 2019. We then invited
the parties and the State of Maine, which (along with other amici)
had filed an amicus brief on behalf of the City, to file
supplemental briefs on the following questions that (if answered
in the affirmative) would resolve the state law preemption claim
and this matter as a whole: (1) whether the 2010 MDEP renewal
license is an order with preemptive effect under the CCA; and (2),
if the renewal license is an order, whether the Ordinance directly
conflicts with the same. Even after careful review of the parties'
proffers, we believe the case lacks controlling precedent and
presents "close and difficult legal issue[s]" that warrant
certification to the Law Court. In re Engage, Inc., 544 F.3d 50,
53 (1st Cir. 2008). We have recognized that certification may be
an appropriate option even where, as here, the parties have not
requested it. See Me. Drilling & Blasting, Inc. v. Ins. Co. of N.
Am., 34 F.3d 1, 3 (1st Cir. 1994) (noting that the Court on occasion
certifies "questions to a state's highest court upon our own
motion").
6On October 10, 2018, the district court entered an amended judgment clarifying that Count VII of the complaint was dismissed without prejudice.
- 9 - II. The Issues
With the relevant facts and procedural background
covered, we turn to the state law questions for which we seek
certification. We begin our discussion with a review of the
relevant provisions of the CCA.
A. The Coastal Conveyance Act
In enacting the CCA, the Maine legislature declared that
the "highest and best" uses of the state's seacoast include public
and private recreation, fishing, lobstering, and "gathering other
marine life used and useful in food production and other commercial
activities." Me. Rev. Stat. tit. 38, § 541. To preserve the
integrity of Maine's coastline for such uses, state lawmakers,
through the enactment of the CCA, conferred upon MDEP "the power
to deal with the hazards and threats of danger and damage" posed
by transfers of oil, petroleum products, and their by-products
between vessels and onshore oil facilities in state waters. Id.
The CCA imposes a licensure requirement on anyone who wishes to
perform oil transfers in or around state waters, see id. § 545
(prohibiting the "operat[ion]" of any "oil terminal
facility . . . without a license"), and vests MDEP with the
authority to issue such licenses, id. § 544(2). The CCA also
grants MDEP the "power to adopt rules and regulations" for
"[o]perating and inspection requirements for facilities, vessels,
personnel and other matters relating to licensee operations." Id.
- 10 - § 546(4). MDEP, in turn, has developed regulations governing
marine oil terminals and oil transfers.
Although the CCA acknowledges the potential for
municipal activity within the sphere of the CCA's (and, by
extension, MDEP's) authority, it includes the following limitation
in the case of conflict between the two:
Nothing in this subchapter 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 this subchapter and promoting the general welfare, public health and public safety are valid unless in direct conflict with this subchapter or any rule or order of the board or commissioner adopted under authority of this subchapter.
Id. § 556 (emphasis added).
With this regulatory framework in mind, we turn to the
state law questions, covering whether MDEP's December 2010 renewal
license constitutes an "order" with preemptive effect and then
discussing whether the Ordinance is preempted by the text of § 556
and whether, independent of any express preemption powers set forth
in § 556, preemption may be otherwise implied by the CCA.
1. Whether the MDEP License Is an Order.
PPLC's license renewal application sought authorization
to reverse the flow of one of PPLC's underground pipelines and to
store oil in above-ground tanks prior to being loaded onto vessels
in the City's harbor. After concluding that PPLC's operations
satisfied statutory and regulatory criteria, MDEP's Acting
- 11 - Commissioner approved the application and issued PPLC a license in
a document titled "Department Order." Notwithstanding MDEP's
review and approval of PPLC's reversal operations, the City enacted
the Ordinance, which serves as a blanket prohibition on all
unrefined oil-loading activity in the harbor.
PPLC has argued that MDEP licenses issued pursuant to
the CCA are considered orders with preemptive effect. According
to PPLC, to decide otherwise would render meaningless certain MDEP
enforcement powers outlined in the CCA. PPLC argues, for example,
that distinguishing orders from licenses could subject MDEP's
licensure decisions to procedural delays that would impede the
department's ability to quickly respond to potentially dangerous
activity. See Me. Rev. Stat. tit. 38, § 557 (explaining that MDEP
"orders" cannot be stayed pending appeal, which PPLC cites for the
proposition that MDEP's licensure decisions would not be entitled
to procedural safeguards against delay if the Court determines
such licenses are distinct from orders). The City and the State
of Maine, on the other hand, argue that nothing in the text of the
MDEP renewal license at issue suggests that it is an order with
preemptive effect, and the use of the letterhead "Department
Order," without more, does not bestow upon a license the power of
preemption. Neither appeal to plain language wins the day in our
view. The parties' attempts to define the term "order" by cherry-
picking relevant provisions of the CCA are similarly unavailing.
- 12 - We therefore seek clarification from the Law Court. In
so doing, we respectfully ask the Law Court to consider, as the
district court did, whether interpreting "order" to include MDEP
licenses infringes upon "home rule" authority reserved for the
state's municipalities. See Portland Pipe Line Corp. v. City of
S. Portland, 288 F. Supp. 3d 321, 457 (D. Me. 2017) (explaining
that "[t]here is no indication in the [CCA] that the State intended
to remove local home rule authority over facility siting and use
prohibitions through these [M]DEP licenses"); id. at 458
(observing that "[i]f the licenses had the preemptive effect PPLC
claims, there is virtually no room for local regulation in this
realm at all, since every single transfer facility must have a
license"); see also Me. Rev. Stat. tit. 30-A, § 3001 (implementing
home rule authority, which reserves for municipalities power that
is "not denied either expressly or by clear implication").
2. Whether the Ordinance Is Expressly or Impliedly Preempted.
Next up, we welcome analysis from the Law Court on
whether the CCA expressly or by implication preempts the Ordinance.
First, assuming the 2010 MDEP renewal license is an "order" under
§ 556, we seek guidance regarding whether § 556 of the CCA
expressly preempts the Ordinance. As mentioned, the parties
disagree as to whether the license is an order such that § 556
applies here. The parties also disagree about whether, even if
the license is an order, the terms of § 556 are such that the
- 13 - Ordinance is expressly preempted. In support of their arguments,
the parties offer competing interpretations of "in furtherance of
the intent of this subchapter" and "direct conflict," as those
terms appear in the text of § 556.
Second, even if the text of § 556 does not require express
preemption here, the question remains whether the CCA, independent
of any express preemption that it effects in consequence of § 556,
impliedly preempts the Ordinance. Under Maine law, ordinances are
preempted by implication only where "state law is interpreted to
create a comprehensive and exclusive regulatory scheme
inconsistent with the local action" or where "the municipal
ordinance prevents the efficient accomplishment of a defined state
purpose." Dubois Livestock, Inc., 103 A.3d at 561 (citations
omitted) (first quoting Sawyer Envtl. Recovery Facilities, Inc. v.
Town of Hampden, 760 A.2d 257, 264 (Me. 2000) and then quoting E.
Perry Iron & Metal Co. v. City of Portland, 941 A.2d 457, 462 (Me.
2008)). According to the City and the State of Maine, the
Ordinance is not inconsistent with a "comprehensive and exclusive
regulatory scheme," because the CCA -- in § 556 -- expressly
contemplates local regulation. The City and the State also argue
the Ordinance does not "prevent[] the efficient accomplishment of
a defined state purpose," but they diverge as to why. PPLC, by
contrast, argues both that the Ordinance intrudes into the CCA's
comprehensive and exclusive regulatory scheme and that, because
- 14 - the Ordinance's blanket prohibition on loading crude oil restricts
the transfer of the same, the Ordinance prevents the efficient
accomplishment of the CCA.
The district court and the parties rely primarily on the
Law Court's implied preemption analysis in Sawyer, 760 A.2d 257
(Me. 2000) and Smith v. Town of Pittston, 820 A.2d 1200 (Me. 2003).
In Sawyer, a municipal zoning ordinance prohibited the expansion
of a solid waste facility after the expansion was approved by MDEP
pursuant to state waste management laws. Sawyer, 760 A.2d at 265–
66. Specifically, the ordinance was found to be preempted because
its "absolute prohibition of the expansion prevent[ed] the
'efficient accomplishment' of the 'defined state purpose'" of
Maine's Hazardous Waste, Septage and Solid Waste Management Act
("WMA"), Me. Rev. Stat. tit. 38, §§ 1301-1319. Id. at 265. In
Smith, the Law Court considered whether a municipal septage
ordinance was preempted by an MDEP-issued septage spreading permit
that the plaintiff received shortly after the ordinance at issue
was enacted. See Smith, 820 A.2d at 1208-09. In concluding there
was no preemption, the Law Court found that the ordinance did not
frustrate the purpose of the WMA since it prohibited only one
method of septage disposal while leaving other methods authorized
by the WMA intact. Id. at 1208. Indeed, the Law Court explicitly
recognized that "[i]f the Town's ordinance prohibited all methods
of septage disposal, [the plaintiff] would have a stronger argument
- 15 - that the purposes of [the WMA] are frustrated." Id. The district
court nevertheless let Smith, rather than Sawyer, guide its
application of the Law Court's state law preemption analysis. See
Portland Pipe Line Corp., 288 F. Supp. 3d at 458 ("As in Smith,
this statute contemplates local zoning prohibitions and neither
the statute nor [M]DEP review process involves the kind of local
land use and impact considerations typically left to
localities.").
We need not necessarily opine on the soundness of the
district court's reasoning right now because the assertedly
preemptive state statute at issue in Smith and Sawyer was the WMA,
not the CCA, and thus those cases are not on all fours with the
matter currently before us. In addition to serving a purpose
distinct from that set forth in the CCA, the WMA includes an
express ceiling on local regulation that would interfere with an
activity authorized under the statute. See Me. Rev. Stat. tit.
38, § 1310-U (prohibiting municipalities "from enacting stricter
standards than those [in the WMA] governing the hydrogeological
criteria for siting or designing solid waste disposal facilities"
and giving municipalities a limited role in the state licensing
process). The CCA is not similarly expressive in outlining the
contours of permissible municipal action. See Me. Rev. Stat. tit.
38, § 556 (providing that "ordinances and bylaws in furtherance of
the intent of this subchapter . . . are valid unless in direct
- 16 - conflict with this subchapter or any rule or order of the [MDEP]").
Thus, the Law Court's preemption analysis in Smith and Sawyer is
not controlling here, where we must consider the scope of the CCA's
regulatory regime to determine whether and to what extent it leaves
room for municipal conduct. We are not aware of any decision of
the Law Court that resolves whether the CCA preempts (either
expressly or by implication) the Ordinance at issue here. Because
there are no clear controlling precedents, the state law preemption
questions (as set forth below) require certification.
The uniquely local policy interests at stake here also
support certification. This is "not a case in which the 'policy
arguments line up solely behind one solution.'" In re Engage, 544
F.3d at 57 (quoting Boston Gas Co. v. Century Indem., 529 F.3d 8,
14 (1st Cir. 2008)). This case will impact the day-to-day
licensure procedures of a state agency, the future of a local
business that has been operating in the area for the better part
of seventy-five years, and the City's authority to protect against
perceived environmental threats to its coastline. The Law Court
is better suited for the challenge of balancing these interests to
the extent allowed by applicable state law preemption doctrine.
- 17 - III. Certification
For the reasons set forth herein, we certify the
following three questions to the Maine Law Court:
(1) Is PPLC's license an "order," as that term is used in Me. Rev. Stat. tit. 38, § 556?
(2) If PPLC's license is an order, is the City of South Portland's Clear Skies Ordinance preempted by Me. Rev. Stat. tit. 38, § 556 of Maine's Coastal Conveyance Act?
(3) Independent of Me. Rev. Stat. tit. 38, § 556, is there any basis for finding that Maine's Coastal Conveyance Act impliedly preempts the City of South Portland's Clear Skies Ordinance?
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.
The Clerk of this Court is directed to forward to the
Maine Supreme Judicial Court, under the official seal of this
Court, a copy of the certified questions, along with the merits
briefs and appendices filed by the parties and the State of Maine
as amici, as well as the supplemental briefs filed by the parties
and the State of Maine pursuant to this Court's order dated
September 23, 2019.
- 18 -