Portland Pipe Line Corp. v. City of South Portland

The federal district court for the District of Maine ruled that the City of South Portland’s ordinance prohibiting the loading of crude oil onto tankers and related activities and structures did not violate the dormant Commerce Clause or the Foreign Commerce Clause. The ordinance, known as the “Clean Skies Ordinance,” was adopted after a pipeline operator (the plaintiff in this case) made plans to reverse the flow in a pipeline that extended from the harbor in South Portland to refineries in Quebec so that instead of transporting crude oil from the harbor to the refineries, the pipeline could transport crude oil from Canada to the harbor for shipment. Concerns regarding local pollution and other local impacts were raised in response to these plans, as well as concerns regarding climate change. The Clear Skies Ordinance’s stated purposes are to “encourage the most appropriate use of land throughout the municipality”; “to protect citizens and visitors from harmful effects caused by air pollutants”; “to promote a wholesome home environment”; and “to conserve natural resources.” The district court found that the ordinance did not regulate extraterritorially even if it had effects on the functions of the pipeline company’s infrastructure outside the city. The court was not persuaded by the pipeline operator’s arguments that the ordinance had an “extraterritorial purpose,” including arguments that members of the public had cited the pipeline’s potential impacts outside the city, including concerns about continued reliance on fossil fuels causing global climate change. The court said the “vast majority” of evidence regarding support of the ordinance focused on local impacts and that “[c]ourts have upheld other statutes more clearly motivated by extraterritorial concerns, as long as the regulatory effect did not control out-of-state transactions.” The court also found that the ordinance did not discriminate against interstate or foreign commerce on its face or in practical effect and that the operator had not shown that the primary purpose of the ordinance was to discriminate against such commerce. In making this finding, the court noted that while several members of the City Council had “expressed their desire to see reduced reliance on fossil fuels in the economy in general through more renewables,” they “also disclaimed an ability to accomplish that goal with an ordinance … and focused their comments on the developmental impacts within South Portland.” The court also found that the ordinance did not impose burdens on foreign or interstate commerce that were clearly excessive in relation to the putative local benefit. Finally, the court found that the ordinance did not impermissibly interfere with the federal government’s ability to speak with “one voice” when regulating commerce with foreign governments.

A federal district court in Maine ruled for the City of South Portland on all but one claim brought by a pipeline operator to challenge the City’s “Clear Skies” ordinance, which prohibits loading crude oil on tankers in South Portland harbor. The pipeline operator currently pumps oil from South Portland to Montreal to bring the oil to refineries but asserted that it had plans to reverse the flow of oil. The pipeline operator said the City’s prohibition on loading crude oil on tankers would prevent it from implementing those plans. While the Clear Skies ordinance’s legislative findings focused on local air quality and land use impacts, City Council members also cited the need to take local action to address climate change and the ordinance’s potential effects on “the health and safety of other global residents.” The court ruled that the prohibition on loading crude oil was not preempted by the Pipeline Safety Act (because the prohibition was not a safety standard), by the Port and Waterways Safety Act, or by maritime law. The court also found that the prohibition did not impermissibly intrude on the federal government’s federal affairs power. In addition, the court rejected a class-of-one equal protection claim and a claim that the ordinance violated the Due Process clause based on the void-for-vagueness doctrine. The court also concluded that the City could rationally have concluded that the ordinance was consistent with its comprehensive plan and ruled that Maine’s Oil Discharge Prevention Law did not preempt the ordinance. The court concluded, however, that genuine disputes of material fact regarding the ordinance’s purpose and practical effects on interstate and foreign commerce prevented summary judgment on the plaintiffs’ dormant Commerce Clause claim.