332 F. Supp. 3d 264
D. Me.2018Background
- Portland Pipe Line Corp. (PPLC) operates pipelines between South Portland, ME and refineries in Montreal; it sought to reverse flow and load crude onto tank vessels in South Portland, proposing associated infrastructure (e.g., VDUs/VRUs).
- South Portland enacted the "Clear Skies" Ordinance prohibiting bulk loading of crude oil onto marine tank vessels and construction/modification of facilities to enable such loading in certain zoning districts, citing air quality, health, aesthetics, redevelopment, and spill risks.
- PPLC and American Waterways Operators sued, alleging violations of the dormant Commerce Clause, the Foreign Commerce Clause (including "one-voice" concerns), and federal preemption; most preemption claims were resolved at summary judgment, leaving Commerce Clause challenges for trial.
- After a four-day bench trial, the district court found extensive legislative history and expert evidence on both sides about market feasibility, environmental/health impacts, and local redevelopment interests.
- The court applied the modern dormant Commerce Clause framework (extraterritoriality, discrimination, Pike balancing for incidental burdens, and the "one-voice" foreign-commerce concern) and upheld the Ordinance.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Extraterritoriality | Ordinance effectively controls out-of-city/state/foreign commerce by blocking reversal and southbound trade. | Ordinance regulates only in-city land uses; similar to ordinary zoning; extraterritorial cases are mainly price-control contexts. | No extraterritorial reach; ordinance applies within city borders and does not compel out-of-state conduct. |
| Discrimination (facial/effect/purpose) | Ordinance targets loading (which would chiefly affect Canadian-origin flows) and thus discriminates against foreign commerce; purpose was to block tar sands. | Ordinance is evenhanded, applies to any crude regardless of origin, and chiefly advances local health, aesthetic, and redevelopment goals. | Not discriminatory: facially neutral, no similarly situated in-state competitors, and legislative record supports legitimate local purposes. |
| Excessive burden (Pike balancing) | Burden on interstate/foreign commerce is severe (could block exports and PPLC's business); benefits are illusory or pretextual and less restrictive alternatives exist. | Local benefits (air quality, health, aesthetics, redevelopment, spill risk reduction) are legitimate; burdens speculative and primarily fall on local businesses. | Under Pike, benefits are legitimate and not clearly outweighed by burdens; ordinance survives balancing. |
| Dormant Foreign Commerce Clause – "One voice" | Local prohibition interferes with federal uniformity and foreign-relations/commercial policy re cross-border pipeline operations. | Ordinance does not single out foreign nations, Presidential Permits contemplate local controls, and there is no realistic risk of international discord or conflicting federal policy. | No interference with federal "one voice": no diplomatic friction or necessary federal uniformity implicated; ordinance permissible. |
Key Cases Cited
- Healy v. Beer Inst., 491 U.S. 324 (1989) (extraterritoriality test: statute invalid if it controls commerce beyond state boundaries)
- Pike v. Bruce Church, Inc., 397 U.S. 137 (1970) (balancing test for nondiscriminatory laws with incidental burdens on interstate commerce)
- Oregon Waste Sys., Inc. v. Dep't of Envtl. Quality, 511 U.S. 93 (1994) (discrimination in effect/purpose under dormant Commerce Clause)
- Japan Line, Ltd. v. Los Angeles Cty., 441 U.S. 434 (1979) (dormant Foreign Commerce Clause and the "one voice" federal-uniformity concern)
- New Energy Co. of Indiana v. Limbach, 486 U.S. 269 (1988) (dormant Commerce Clause forbids economic protectionism)
- Kraft Gen. Foods, Inc. v. Iowa Dep't of Revenue & Finance, 505 U.S. 71 (1992) (Foreign Commerce Clause can forbid state measures that differentiate domestic from foreign commerce)
- City of Philadelphia v. New Jersey, 437 U.S. 617 (1978) (state law banning importation of out-of-state waste invalidated for protectionist discrimination)
- PhRMA v. Concannon, 249 F.3d 66 (1st Cir. 2001) (extraterritoriality and discrimination analyses in dormant Commerce Clause context)
- All. of Auto. Mfrs. v. Gwadosky, 430 F.3d 30 (1st Cir. 2005) (dormant Commerce Clause framework and purpose/effect inquiry)