Lighthouse Resources Inc. v. Inslee

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In a lawsuit challenging the State of Washington’s denials of approvals needed for development of a coal export terminal, the federal district court for the Western District of Washington denied a motion for entry of final judgment with respect to two orders issued in 2018. One of the 2018 orders dismissed the State’s Commissioner of Public Lands as a defendant; the other order dismissed preemption claims under the Interstate Commerce Commission Termination Act and the Ports and Waterways Safety Act. In April 2019, the court stayed the action on Pullman abstention grounds due to pending state court challenges to the State’s denials. The plaintiffs (coal companies and the companies that propose to develop the coal export facility) and an intervenor railroad company have appealed both 2018 orders and the April 2019 stay order. The plaintiffs argued in their motion that the stay order was final and appealable and indicated that the motion for entry of final judgment on the 2018 orders was merely a “precautionary measure.” The district court concluded that judicial administrative interests and equities did not favor certifying the 2018 orders as final.

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On April 11, 2019, the federal district court for the Western District of Washington stayed a lawsuit challenging Washington State’s denial of a water quality certification for a coal export facility on and in the Columbia River. The court concluded that the case satisfied the three elements for Pullman abstention, which allows federal courts to postpone exercise of jurisdiction “when a federal constitutional issue might be mooted or presented in a different posture by a state court determination of pertinent state law.” First, the district court said the complaint touched on “a sensitive area of social policy” upon which it should not enter since a viable state court alternative was available—i.e., the pending challenges in state court to the denial of the water quality certification. Second, the district court found that the Commerce Clause issues raised by the plaintiffs “plainly” could be avoided “depending on the degree to which Plaintiffs may prevail in the state court.” Third, the court found that the determination of the state law issues—including whether Washington could deny a permit with prejudice and whether it could base the denial on considerations other than water quality—was in doubt.

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The court dismissed foreign affairs doctrine claims, rejecting arguments that the denial of the water quality certification intruded on federal power to deal with foreign nations and was therefore preempted.

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On January 24, 2019, both the state defendants and environmental groups that had intervened on their behalf filed motions for summary judgment seeking dismissal of the rail company’s claim that denial of the water quality certification was preempted by U.S. foreign policy favoring expansion of coal exports.

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The federal district court for the Western District of Washington dismissed preemption claims challenging the State of Washington’s denial of a water quality certification for a coal export facility. The court found that neither the facility’s developer nor the rail company that would transport coal to the facility had standing for the preemption claims. Because a ruling in the plaintiffs’ favor on the preemption issue could have invalidated only some of the grounds for the denial of the water quality certification, the plaintiffs could not show that a ruling in their favor would redress their injury. The court also found that even if the plaintiffs had standing, neither the Interstate Commerce Commission Termination Act nor the Ports and Waterways Safety Act preempted the denial of the water quality certification.

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The federal district court for the Western District of Washington dismissed the Washington Commissioner of Public Lands from a lawsuit challenging Washington State agencies’ denials of approvals for a coal export terminal on and in the Columbia River, including denial of a request for approval of a sublease of State-owned aquatic lands. The federal court concluded that the Eleventh Amendment barred the plaintiffs from pursuing their claims against the commissioner because the relief sought “would functionally prevent Washington State’s officers from exercising their authority over Washington’s sovereign lands.” The court noted that a state forum was available to hear the plaintiffs’ challenge.

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The federal district court for the Western District of Washington granted the Washington Environmental Council’s and others’ (WEC’s) motion for a protective order in a lawsuit brought by Lighthouse Resources, Inc. and other companies (Lighthouse) to challenge Washington State officials’ efforts to block a coal export terminal. WEC—a coalition of organizations opposed to the terminal—contested Lighthouse’s request for internal documents relating to its strategies, campaigns, plans, or policies regarding the coal export terminal. The court found that Lighthouse met the low threshold for establishing that the internal documents were relevant because such documents could support Lighthouse’s theory that WEC and the State coordinated to block the project due to their shared animus towards coal and its export. The court concluded, however, that protective relief should be granted based on First Amendment protections for freedom of association. The court found that since the project was still underway and campaigns were ongoing, requiring discovery could chill speech immediately. The court also found that the internal documents were not “highly relevant” to Lighthouse’s case and that Lighthouse had not “carefully tailored” its request “to avoid unnecessary interference with protected activities.” The court also said the risk of interference with campaigners’ associational rights was unrefuted, even if the documents produced were protected from public disclosure, given WEC’s “concern that handing over internal documents would give the proverbial fox the keys to the henhouse.” The court also found that a determination of whether the documents were otherwise unavailable would be premature. The court said it would not reach the issue of whether the discovery requests imposed an “undue burden” on WEC but indicated that it would not have granted protective relief on such grounds because WEC had not demonstrated undue burden with any specificity.

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BNSF Railway Company (BNSF), which intervened as a plaintiff, argued that the defendants were misusing state law to justify regulating rail and interstate and international commerce, and to interfere with foreign affairs. BNSF contended that their claims were not related just to a single coal terminal but to the defendants’ targeting of the coal supply chain “as part of a broader effort to stop coal use everywhere.”

The plaintiffs—the operators of a “coal energy supply chain company”—asserted that their claims did not threaten to divest Washington State of its sovereignty; that the Interstate Commerce Commission Termination Act preempted the State actions, which would “unduly interfere with rail transportation as a matter of fact”; that the Ports and Waterways Safety Act claims could not be dismissed because the defendants were blocking the terminal based on vessel traffic and safety concerns; and that abstention was inappropriate since the plaintiffs were not pursuing their federal claims in state court.

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In their motion for partial dismissal and motion for abstention, the defendants argued that neither the Interstate Commerce Commission Termination Act (ICCTA) nor the Ports and Waterways Safety Act preempted the State actions and that the State commissioner of public lands was immune from all the claims asserted in the lawsuit because they concerned her management of State-owned aquatic lands of a “unique and fundamentally sovereign nature.” The defendants also argued that the federal court should apply Pullman or Colorado River abstention doctrine to allow parallel state court lawsuits to proceed.

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