Oil and Water: South Portland’s Battle Royale Between Local Police Powers and Constitutional Supremacy

Benjamin T. McCall, J.D. Candidate, 2016

On February 6, the Portland Pipeline Corporation (PPLC) was joined by the American Waterways Operators, a national trade organization for barge and tugboat operators, in bringing suit against the City of South Portland, seeking to enjoin the enforcement of the city’s “Clear Skies Ordinance.”  Complaint at 1, PPLC, et al. v. South Portland, No. 2015-cv-00054 (D. Me. Feb. 6, 2014).  Passed by the City Council in June of 2014, the Ordinance amends a number of city zoning ordinances — governing acceptable uses in industrial zones — to prohibit the loading of crude oil in bulk by any vessel.  See, e.g., South Portland, Me., Code §§ 27-780, 27-922, 27-944 (2014).

The lawsuit shouldn’t shock many who had observed the situation closely.  Local activists in South Portland had become increasingly concerned about the possibility that PPLC, who had for many years piped offloaded oil in South Portland for transport into Canada, would eventually reverse the flow of their pipes, opening up their business to the export of plentiful “tar sands oil” reserves from western reserves.  The company had long argued that they had no immediate intention to pursue such a course of action, but a change in policy by the Province of Alberta, as well as PPLC’s receiving an air emissions permit from the Maine Department of Environmental Protection, added enough fuel to the fire, to lead the city to act.  As such, the passing of the ordinance was seen by most as a preemptive strike to prevent the possible importation of this heavier petroleum product from reaching the Maine coast.

From a sociological perspective, the lawsuit encapsulates the growing tension in South Portland between an increasingly active group of environmentally-concerned residents, and those who make their livelihood from South Portland’s industrial waterfront.  But from a legal perspective, the suit presents a test case in how the Courts will resolve the tension between local governments utilizing their traditional police powers to insulate against local concerns and large companies, and potentially the federal government, attempting to quell these efforts under the auspice of interstate commerce.

PPLC’s complaint explains this dichotomy in depth.  “The purpose of the ordinance,” PPLC contends, is to stymie “international and interstate commerce and to discriminate against Canadian interests by prohibiting the loading of Canadian crude oil at the through-point of the harbor in South Portland.”  Complaint at 1, supra.  On the other hand, the City couches its argument by calling on its comprehensive plan, which seeks to promote mixed-uses on the waterfronts, and by taking traditionally-accepted actions to protect its own population.

“Whereas, the City under its broad home rule authority and general police powers as otherwise provided by law, has the ability to impose reasonable restrictions, conditions, and limitations on development, for the benefit of the public health and welfare; and Whereas, the City intends to protect its citizens and visitors from the harmful effect of air pollutants . . . .”

South Portland, Me. Clear Skies Ordinance at 6 (Jun. 20, 2014).

In the end, the lawsuit may hinge on a close reading of specific federal law, or on a technicality.  Yet at its heart, the case is a test for how far a municipality’s police powers may stretch — and specifically whether they may at all impinge traditional areas of federal interest.

Generally, the United States Supreme Court has favored a broad interpretation of local police powers, especially when used to regulate noxious and nuisance-causing uses.  Seminal property and land use cases like Mugler v. Kansas, 123 U.S. 623 (1887), and Hadacheck v. Sebastian, 239 U.S. 394 (1915) have afforded local ordinances a strong presumption of validity to police power actions, particularly when being used to protect public welfare.

Nonetheless, PPLC is hanging their hat on the Federal government’s authority to engage in unified trade deals with foreign powers, as well as the supremacy of federal law in the area of interstate pipeline regulation.  Not only is PPLC’s business with Canada governed by international trade agreements, Complaint at 6-7, but it argues that South Portland’s effort to modify their business is preempted by numerous federal laws relating to pipeline safety and maintenance.  Complaint at 24-27.

Perhaps of more interest, at least to burgeoning Constitutional scholars, is PPLC’s argument that the prohibition of the export of Canadian tar sands oil through South Portland has the effect of inhibiting the flow of interstate commerce.  Complaint at 29-30.  Not only does the Ordinance have the potential to inhibit commerce between the “several states,” but PPLC argues that the ordinance has both the purpose and the effect to interfere with the federal government’s business of conducting the trade of petroleum products with Canada, a “foreign nation” under Art. I, Sec. 18, cl. 3 of the United States Constitution.

On its face, it would appear that even under the narrower interpretation of the Commerce Clause favored by the current Supreme Court, see U.S. v. Lopez, 514 U.S. 549, 558 (1995) (holding that Congress retained power under the Commerce Clause to regulate the use, channels, instrumentalities, and things having a “substantial effect” on interstate commerce), Congress would retain the ability to regulate how oil passes through states, and between the United States and Canada.  However, the calculus may well change when this broad federal power collides with the equally powerful role reserved for states and municipalities.  See id. at 567-68 (rejecting the notion that the Commerce Clause was intended to give provide Congress with a federal police power).

Unfortunately, the outcome is far from clear.  Given the traditional preference for avoiding the resolution of unnecessary Constitutional questions, the case may ultimately be decided on a far narrower ground.  Nonetheless, the question will persist — to what extent can towns and states take actions to protect themselves against new pollutants?  Is the police power strong enough to allow dissenting towns to force a potentially significant area of commerce to move elsewhere?  Reasonable persons will certainly disagree, but the fact remains that the outcome will be significant – for our towns, our air quality, and the future of our national energy industry.


Note: for more professorial take on the issue, take a look at Maine Law Professor Dave Owen’s recent post on the Environmental Law Prof Blog.  Professor Owen, a current resident of South Portland, teaches Environmental Law, Natural Resources Law, and Legislation & Administrative Law, and is also the faculty advisor to MLR.