The federal government’s recent argument that neither federal law nor the U.S. Constitution preempted a municipal ordinance in South Portland, ME demonstrates the sometimes-complex relationship between federal, state, and local laws.
Overview. The Portland Pipe Line Company had plans to reverse the oil flow in a pipeline from Canada to South Portland and construct 70-foot-tall facilities to support loading oil aboard ships for export out of Maine by sea. After public opposition, the South Portland City Council passed the “Clear Skies Ordinance,” which banned loading oil onto tankers in parts of the city’s harbor and changed the zoning of the waterfront facility. The City Council claimed it did so because Portland Pipe Line’s activities would increase air and other forms of pollution. Portland Pipe Line sued, alleging the city’s actions were pretextual and precluded by state law, federal law, and the U.S. Constitution. A district court judge dismissed most of these claims in 2017,[1] and the remainder were dismissed in 2018.[2]
Portland Pipe Line appealed to the First Circuit, which certified the state preemption issue. The Maine Supreme Judicial Court held that state law does not preempt the Clear Skies Ordinance.[3] The First Circuit then asked the federal government to comment on Portland Pipe Line’s claims. In a brief authored by the Department of Justice and joined by the Department of State, Department of Transportation, and the U.S. Coast Guard, the federal government agreed with the district judge’s determination that there were no federal preemption concerns. Specifically, the federal government argued that the Clear Skies Ordinance did not run afoul of the Pipeline Safety Act or the Ports and Waterways Safety Act. Furthermore, the federal government asserted there was no constitutional foreign affairs powers concern because the statute neither targeted any specific foreign country nor conflicted with any foreign affairs policy. The brief also noted that the ordinance limited itself to police powers historically recognized as belonging to the individual states. Lastly, the federal government concurred with the district court’s determination that the Clear Skies Ordinance did not violate the commerce clause under the U.S. Constitution because the ordinance did not (1) improperly regulate outside of Maine, (2) discriminate against interstate or foreign commerce, (3) excessively burden interstate or foreign commerce, or (4) interfere with the federal government’s ability to regulate foreign commerce.
Our Take. Portland Pipe Line spent approximately 15 years engaged with city, state, and federal regulators from the time it began plans to reverse the pipeline flow in 2007. Federal law, including Pipeline Safety Act and the U.S. Constitution, contains strong longstanding preemption language — upheld by the courts — where states or local authorities attempt to regulate pipeline safety or where they may have an undue burden on interstate commerce. The appeal remains pending before the First Circuit. This case highlights continued state and local efforts to oppose, delay, and obstruct energy infrastructure projects. When faced with the complex intersection of federal, state, and local laws, companies pursuing large energy projects should consult early and often with attorneys well-versed in this subject matter, such as energy and maritime regulations.
[1] See Portland Pipe Line Corp. v. City of S. Portland, 288 F. Supp. 3d 321 (D. Me. 2017).
[2] See Portland Pipe Line Corp. v. City of S. Portland, 2 F. Supp. 2d 332 (D. Me. 2018).
[3] See Portland Pipe Line Corp. v. City of S. Portland, 240 A.3d 364 (Me. 2020).
