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Norfolk Southern Corp. v. Oberly

argued: February 9, 1987.

NORFOLK SOUTHERN CORPORATION AND NORFOLK SOUTHERN MARINE SERVICES, INC. AND LAMBERTS POINT BARGE CO., INC., COASTAL BARGE CORPORATION, COAL LOGISTICS CORPORATION AND COASTAL CARRIERS CORPORATION
v.
CHARLES M. OBERLY, III, AND JOHN E. WILSON, III, SECRETARY OF DEPARTMENT OF NATURAL RESOURCES AND ENVIRONMENTAL CONTROL, STATE OF DELAWARE, DELAWARE SALTWATER SPORTFISHING ASSOCIATION, INC., KENT COUNTY LEVY COURT, NATURAL RESOURCES DEFENSE COUNCIL, INC., NATIONAL AUDOBON SOCIETY AND THE SIERRA CLUB INTERVENING DEFENDANTS; NORFOLK SOUTHERN CORPORATION NORFOLK SOUTHERN MARINE SERVICES, INC., LAMBERTS POINT BARGE COMPANY, INC., COASTAL BARGE CORPORATION, COAL LOGISTICS CORPORATION, AND COASTAL CARRIERS CORPORATION, APPELLANTS



On Appeal from the United States District Court For the District of Delaware, D.C. Civil No. 84-0330.

Author: Stapleton

BEFORE: HIGGINBOTHAM and STAPLETON, Circuit Judges, and CONABOY, District Judge*fn*

Opinion OF THE COURT

STAPLETON, Circuit Judge.

Appellants, six co-venturers who seek to initiate a coal lightering service in Delaware Bay, claim that § 7003 of the Delaware Coastal Zone Act (CZA), which bans bulk produce transfer facilities in Delaware's coastal zone, violates the dormant Commerce Clause. Appellees, two Delaware officials and five intervenors, argue that the federal Coastal Zone Management Act (CZMA), under which the § 7003 ban has been approved, constitutes Congressional consent for the ban, immunizing it from dormant Commerce Clause scrutiny. In the alternative, appellees contend that the CZA does not offend the Commerce Clause. The district court granted summary judgment for appellees on the basis of consent. Norfolk Southern Corp. v. Oberly, 632 F. Supp. 1225 (D. Del. 1986).

We hold that the CZMA does not authorize states to engage in otherwise impermissible regulation, and thus we find no consent. Appellants have failed, however, to allege any burden on interstate or international commerce cognizable in dormant Commerce Clause analysis. For this reason, we hold that § 7003 of the CZA does not offend the dormant Commerce Clause and we affirm, on different grounds, the district court's order granting summary judgment to appellees.

I. BACKGROUND

At this point in time, coal exports from the East Coast of the United States cannot be shipped in fully loaded supercolliers because the available port facilities are too shallow.*fn1 Appellants*fn2 (referred to collectively as "Norfolk Southern") seek to initiate coal lightering, or "top-off," service at Big Stone Anchorage in Delaware Bay which would enable deep draft supercolliers to sail fully loaded. Norfolk Southern's plan envisions supercolliers being partially loaded at East Coast ports, moved to the Big Stone Anchorage, and there filled to capacity by transferring coal from Norfolk Southern's coal barges. Because coal is most cost-effectively transported overseas by fully-loaded supercolliers, the top-off service would reduce average shipping costs and presumably render United States coal more competitive in overseas markets.

The Big Stone Anchorage, an area of approximately thirteen square miles in lower Delaware Bay, is critical to the Norfolk Southern project because it is the only naturally protected anchorage between Maine and Mexico that is deep enough to accommodate fully-loaded supercolliers. App. at 354-55. The anchorage is now used for oil lightering, with supertankers transferring imported oil to vessels with shallower drafts for delivery to East Coast ports.*fn3

The challenged law, the Delaware Coastal Zone Act, was enacted in 1971. The CZA imposed strict regulation on all new industrial activity in the coastal zone. Section 7003 of the CZA prohibits in the coastal zone all heavy industry not in operation as of June 28, 1971. This ban includes facilities such as oil refineries and steel, chemical and paper plants. 7 Del. Code Ann. § 7002(c) (1983), Section 7004 provides that any other manufacturing facilities not in operation as of June 28, 1971, and any extension or expansion of nonconforming uses are allowed in the coastal zone by permit only. Most important to this case, § 7003 of the CZA provides that "offshore gas, liquid, or solid bulk product transfer facilities which are not in operation on June 28, 1971, are prohibited in the coastal zone, and no permit may be issued therefor," Id. § 7003 (Supp. 1986).*fn4 The definition of bulk product transfer facilities excludes docking facilities in the port of Wilmington and docking facilities serving single industrial facilities that have been granted a permit or are nonconforming uses. Id. § 7002(f) (1983). The Big Stone Anchorage is within Delaware's territorial limits and is included in the coastal zone as defined by the CZA, Id. § 7002(a).

In 1972, Congress enacted the Coastal Zone Management Act, which provides funding for the development and implementation of state coastal zone management plans. Pub. L. No. 92-583, 86 Stat. 1280 (1972) (codified as amended at 16 U.S.C. §§ 1451-1464). The CZMA delegates responsibility for administering the CZMA grant-in-aid programs and in particular, for approving state coastal management programs to the Secretary of Commerce.*fn5 Between 1974 and 1979, Delaware received federal funds for the development of the Delaware Coastal Management Plan (DCMP). The DCMP was approved in 1979, enabling Delaware to qualify for CZMA funding of program implementation. The DCMP was reapproved in 1980, 1982, and 1984. The DCMP states as Delaware policy that:

New offshore gas, liquid, or solid bulk product transfer facilities shall be prohibited in the coastal strip. Such facilities are docks or port facilities, whether artificial islands or attached to shore by any means, for transfer of bulk quantities of any substance from vessel to onshore facility or vice versa. However, a docking facility or pier for a single industrial or manufacturing facility and docking facilities located in the City of Wilmington for the port of Wilmington, shall not be prohibited.

App. at 557. The CZA is the legal authority relied upon to support this DCMP policy. App. at 558.

In 1983, the Coast Guard, with jurisdiction over navigational safety, redesignated the Big Stone Anchorage as a "general anchorage," a designation that permits coal lightering. 48 Fed. Reg. 23,636-37 (May 26, 1983). Prior to that time, use of the Big Stone Anchorage was limited to tanker lightering. The redesignation was promulgated in response to requests by the Delaware River Port Authority and the Delaware River and Bay Authority, and the main reason for their requests was to permit use of the anchorage to top-off deep draft colliers. The redesignation was objected to on the basis of environmental concerns by the State of Delaware. 48 Fed. Reg. at 23,637 (May 26, 1983).

In 1984, Norfolk Southern sought a formal determination of whether coal lightering was banned by § 7003 of the CZA. The Delaware Department of Natural Resources and Environmental Conservation (DNREC) concluded that the proposed top-off service was not a "bulk product transfer facility" and thus was not barred by § 7003 of the CZA. This decision was appealed to the Coastal Zone Industrial Control Board, which reversed the Secretary and found that the project was barred. The Superior Court and then the Supreme Court upheld the Board's decision. Coastal Barge Corp. v. Coastal Zone Industrial Control Board, 492 A.2d 1242 (Del.1985).

Norfolk Southern filed suit in federal district court, seeking a declaration that the CZA was unconstitutional as applied to its coal lightering proposal and an injunction against state enforcement of § 7003 against Norfolk Southern . The defendants were Delaware Attorney General Oberly and Secretary Wilson of the DNREC (referred to collectively as "the State"). Five parties intervened as defendants*fn6 (referred to as "intervenors"). Norfolk Southern claimed that the CZA, as applied to its project, violated the dormant Commerce Clause. The State and intervenors argued that the CZA ban on bulk product transfer facilities was immunized from dormant Commerce Clause review because it was part of the coastal management program that had been approved under the CZMA. Alternatively, they argued that the CZA did not offend the Commerce Clause. After discovery, both sides moved for summary judgment.

Chief Judge Schwartz denied summary judgment to both Norfolk Southern and appellees on dormant Commerce Clause ground because he found that there were disputed issues of material fact relating to: 1) the purpose of the Delaware legislature in enacting the bulk product transfer facility ban, 632 F. Supp. at 1238, 2) the economic impact of banning this project, id. at 1242, and 3) the environmental impacts of going forward with the project. Id. at 1243. The court found, however, that Congress, through the CZMA and the Secretary's approval of the DCMP, had consented to the CZA and thus the CZA was immune from Commerce Clause scrutiny. On this basis, summary judgment was granted to defendants. This appeal followed.

II. CONGRESSIONAL CONSENT

"The Commerce Clause grants to Congress the power 'to regulate Commerce . . . among the several States.' U.S. Const., Art. 1, § 8, cl. 3. Although the Clause thus speaks in terms of powers bestowed upon Congress, the [Supreme] Court long has recognized that it also limits the power of the States to erect barriers against interstate trade." Lewis v. BT Investment Managers, Inc., 447 U.S. 27, 35, 100 S. Ct. 2009, 64 L. Ed. 2d 702 (1980). The dormant Commerce Clause, as the term "dormant" implies, limits the powers of the states in areas where Congress has not affirmatively acted to either authorize or forbid the challenged state activity.

One defense to a dormant Commerce Clause challenge is Congressional consent. By its actions, "Congress may 'redefine the distribution of power over interstate commerce' by 'permit[ting] the states to regulate the commerce in a manner which would otherwise not be permissible.'" South-Central Timber Development, Inc. v. Wunnicke, 467 U.S. 82, 87-88, 81 L. Ed. 2d 71, 104 S. Ct. 2237 (1984) (quoting Southern Pacific Co. v. Arizona, 325 U.S. 761, 769, 89 L. Ed. 1915, 65 S. Ct. 1515 (1945)). Thus, the limitations on state authority created by the Commerce Clause cannot be ascertained without reference to the relevant federal law.

The Supreme Court has found consent only where Congress has "affirmatively contemplate[d] otherwise invalid state legislation," South-Central Timber, 467 U.S. at 91-92, and "where state or local government action is specifically authorized by Congress." White v. Massachusetts Council of Construction Employers, Inc., 460 U.S. 204, 213, 75 L. Ed. 2d 1, 103 S. Ct. 1042 (1983). "For a state regulation to be removed from the reach of the dormant Commerce Clause, congressional intent must be unmistakably clear." South-Central Timber, 467 U.S. at 91. "When Congress has not 'expressly stated its intent and policy' to sustain state legislation from attack under the Commerce Clause, Prudential Ins. Co. v. Benjamin, 328 U.S. 408, 427, 431, 90 L. Ed. 1342, 66 S. Ct. 1142 (1946), we have no authority to rewrite its legislation based on mere speculation as to what Congress 'probably had in mind.'" New England power Co. v. New Hampshire, 455 U.S. 331, 343, 71 L. Ed. 2d 188, 102 S. Ct. 1096 (1982).

Appellees urge that consent for the § 7003 ban on offshore bulk product transfer facilities, which, as an element of the DCMP, has been approved by the Secretary of Commerce, can be found in the CZMA. Appellees acknowledge that any consent found in the CZMA is conditioned on Secretarial approval. While the existence of conditions subsequent amy add a step to our consent analysis by requiring the court to determine whether the conditions were indeed satisfied, it does not fundamentally alter our analysis of Congressional intent. Congressional intent, whether conditional or unconditional, must be unambiguous.*fn7

The burden of presenting unambiguous evidence of Congressional intent falls on the parties claiming consent. We look first to the text of the CZMA and the legislative history, and then consider the gloss provided by the case law.

A. The CZMA

The Coastal Zone Management Act's statements of findings and purpose suggest that Congress did not intend to authorize expansion of state powers. Congress found that the coastal zone was an important environmental resource which faced enormous development pressures, and that the existing system of local land use regulation was inadequate to protect coastal resources.

The key to more effective protection and use of the land and water resources of the coastal zone is to encourage the states to exercise their full authority over the lands and waters in the coastal zone by assisting the states . . . in developing land and water use programs for the coastal zone, including unified policies, criteria, standards, methods, and process for dealing with land and water use decisions of more than local significance.

16 U.S.C. § 1451(i) (1982) (emphasis added). Congress' specific purpose in enacting the CZMA was

to encourage and assist the states to exercise effectively their responsibilities in the coastal zone through the development and implementation of management programs to achieve wise use of the land and water resources of the coastal zone, giving full consideration to ecological, cultural, ...


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