Montana v. City of Portland

The federal district court for the District of Oregon adopted a magistrate judge’s April 2025 findings and recommendation and dismissed a dormant Commerce Clause challenge to the City of Portland’s restrictions on the construction of new or expanded bulk fossil fuel terminals. The court found that the plaintiffs—the State of Montana, trade groups, and a distributor of fuels, lubricant, and propane—did not adequately allege that the Portland law’s provisions were driven by economic protectionism or otherwise discriminated against interstate commerce on their face. In addition, the court found that the plaintiffs did not plausibly allege that the law’s effects on the interstate fuel supply were discriminatory, and that they did not sufficiently allege that the law placed an undue burden on interstate commerce.

A magistrate judge in the federal district court for the District of Oregon recommended that the district court dismiss an amended complaint in a lawsuit challenging the City of Portland’s restrictions on the construction of new or expanded bulk fossil fuel terminals. The plaintiffs—the State of Montana, trade groups, and a distributor of fuels, lubricant, and propane—filed the amended complaint after the district court dismissed their claims in July 2024. The plaintiffs conceded dismissal of their Foreign Commerce Clause, due process, and preemption claims, and the magistrate concluded that the plaintiffs again failed to state a dormant Commerce Clause claim because their allegations did not show that the city law’s restrictions discriminated against or imposed an undue burden on interstate commerce.

The federal district court for the District of Oregon found that at least one plaintiff had standing to challenge City of Portland land use restrictions on new or expanded bulk fossil fuel terminals but granted the City’s motion to dismiss for failure to state a claim. The court agreed with a magistrate judge’s recommendation that the plaintiffs’ allegations were not sufficient to state a dormant Commerce Clause or Foreign Commerce Clause claim, that the plaintiffs failed to state a claim for preemption under the Interstate Commerce Commission Termination Act, and that they failed to allege a substantive due process claim. The district court declined to adopt two aspects of the magistrate judge’s dormant Commerce Clause analysis.

A magistrate judge in the federal district court for the District of Oregon recommended that the court dismiss a lawsuit challenging a City of Portland ordinance restricting construction or expansion of bulk fossil fuel terminals. The lawsuit was brought by the State of Montana, several trade groups, and a Washington-based fuel distributor. Although the magistrate recommended that the court find that the distributor had standing based on the ordinance’s alleged negative impact on property value, the magistrate concluded that the plaintiffs failed to state any claims. The magistrate found that the ordinance did not discriminate against interstate commerce, that neither the Foreign Commerce Clause nor other federal law displaced or preempted the ordinance, and that the ordinance did not violate plaintiffs’ substantive due process rights.

The State of Montana, several trade groups, and a Washington-based fuel distributor filed a lawsuit in the federal district court for the District of Oregon challenging City of Portland laws and policies that allegedly prohibit new fuel-export infrastructure in the City. The plaintiffs asserted that the laws and policies “intentionally discriminate in favor of local users, unreasonably burden interstate commerce, interfere with intermodal/rail transportation, and serve no legitimate local purpose” and therefore violate the Dormant Commerce Clause, Foreign Commerce Clause, and Due Process Clause, and are preempted by the Interstate Commerce Commission Termination Act of 1995. The complaint’s allegations included that the City’s “categorical prohibition on all new infrastructure for transportation of combustible fuel” was intended to advance an illegitimate extraterritorial goal of decreasing global emissions but that the prohibition did not advance this goal because it applied overbroadly to fuel that is “transitional, clean, renewable, and/or results in lower emissions.” The plaintiffs also alleged that that the laws and policies would not lower emissions within the City because they did not limit distribution and use of fuel within the City and surrounding areas.