Preemption Once More: Washington's Tanker Law Enjoined But Stays Afloat

Substantial risks of environmental damage from oil spills are associated with ocean transport of oil by tanker. These risks have been magnified with the advent of the behemoths known as "supertankers," which can carry up to twelve times as much oil as ordinary tankers. Collision or grounding of tankers is more likely to occur close to shore, where tanker navigation can be especially difficult. Puget Sound, a unique (and narrow) coastal estuary in Washington, poses just such navigation difficulties for the tankers that service refineries located adjacent to the Sound.

Recognizing these risks, the State of Washington in 1975 enacted the Tanker Law,¹ which prohibits the passage of supertankers and regulatesthe navigation of other oil tankers in Puget Sound. Atlantic Richfield, an oil company and owner of one of the refineries, and Seatrain Lines, a shipbuilding and ship-operating company, filed suit to enjoin the statute's effect, claiming that federal law preempts state regulation of oil tankers and that the state statute conflicted with the exclusive federal power in the areas of commerce and foreign affairs. On September 23, 1976, in Atlantic Richfield Company v. Evans,² a three-judge federal district court declared Washington's Tanker Law void as preempted by federal law, primarily the Ports and Waterways Safety Act (PWSA).³ The court later issued a permanent injunction against enforcement of the Tanker Law on November 12, but stayed its effect until December 15. Washington appealed to the Supreme Court and Justice Rehnquist, as Circuit Justice, continued the stay pending a hearing on the state's application before the entire Court.⁴

[7 ELR 10013]

The stage is thus set for the Supreme Court to analyze the preemption doctrine in the context of a state environmental statute. Very recent Supreme Court rulings in this area have struck down state laws, but the rulings were based on unique factual and legal backgrounds.⁵ ARCO v. Evans gives the Burger Court an opportunity to articulate its current thoughts about preemption in the welter of federal laws touching water pollution, vessel regulation, coastal zone management, and national petroleum policy. The result of this analysis will likely determine the scope and efficacy of state environmental management for many years.

Washington's Tanker Law

The state statute is intended to protect Puget Sound from oil spills should a large oil tanker, whose limited maneuverability is further lessened within the narrow channels of the Sound, run aground or collide with another tanker. Puget Sound supports a myriad of activities: wildlife refuges, water recreation, shellfish beds, scientific research, and recreation on adjoining public lands, estimated by the state to be worth at least $2 billion. In order to lessen the risk of oil damage to these resources and activities, § 2 of the Tanker Law requires oil tankers over 50,000 deadweight tons (dwt)⁶ to carry a Washington state licensed pilot while navigating Puget Sound. Section 3(1) prohibits tankers of more than 125,000 dwt (supertankers) from entering the Sound. Section 3(2) requires tankers between 40,000 and 125,000 dwt to posses the particular design features of a certain shaft horsepower, twin screws, double bottoms, and twin radars. A proviso exempts the 40,000 to 125,000 dwt tankers from the design restrictions if they employ tugboat escorts while navigating Puget Sound.

Several New England states have similarly enacted laws which confer power to require equipment on tankers or to exclude them from certain state waters.⁷ Washington's law may, however, be of greater impact, in both a factual and a legal sense. Factually, the flow of oil from the Alaskan pipeline is scheduled to start within the next year and is headed for West Coast refineries. The Tanker Law thus impinges on possible oil company plans to employ supertankers to transport Alaskan oil. Legally, the Tanker Law's flat prohibition on a form of interstate and foreign commercial activity — supertanker carriage — drives a wedge into a critical chink in national energy policy: in a federal system, what authority does an individual state have to manage its critical natural resources, or, from another perspective, to affect national energy goals and programs?

District Court Decision and Preemption Theory

ARCO's complaint asserted that Washington's Tanker Law violated the national policy to encourage use of supertankers in oil transport (over which, ARCO asserted, the Coast Guard has preemptory regulatory jurisdiction), interfered with Congress' power to regulate interstate commerce, and impinged on the federal treaty-making power. The three-judge district court ruled that federal law, primarily through the Ports and Waterways Safety Act, totally preempted Washington's attempt to regulate supertankers.⁸

The per curiam opinion is a model of brevity, but, unfortunately, it suffers from meager analysis. After summarizing the Tanker Law, the court immediately launched into an examination of each subsection of the Law, without setting forth its conceptual understanding of the preemption doctrine. The court cited no legislative history to buttress its conclusion that the PWSA embodies a preemptive national policy concerning tanker regulation. Similarly, it ignored other federal statutes that deal with oil pollution and transportation of oil.

In particular, the court neglected to discuss the Tanker Law's supertanker prohibition, which arguably is most repugnant to federal authority over vessel navigation. Apart from its very specific holding regarding state control of pilots, the court relied on a single declaratory subsection⁹ of the PWSA, which grants authority to the Coast Guard to restrict vessel operations [7 ELR 10014] under hazardous conditions, to nullify the Tanker Law.

The preemption doctrine operates on several levels. The Supremacy Clause¹⁰ declares that federal law supersedes state law; Congress can, and has, declared specifically that state regulation is prohibited in a specific environmental area where Congress has acted.¹¹ Even without a specific congressional directive, state law that directly conflicts with federal law is invalid under the Supremacy Claust.¹² More generally, in the absence of a congressional pronouncement regarding the validity of similar state law or direct conflict, courts have fashioned the doctrine of "implied preemption" in which several factors are judicially examined to determine if federal law preempts state law. As developed in the two most famous environmental cases in this area, Northern States Power Company v. Minnesota¹³ and City of Burbank v. Lockheed Air Terminal, Inc.,¹⁴ four criteria apply in implied preemption cases: (1) the federal legislative history, (2) the pervasiveness of the federal scheme, (3) the need for exclusive (uniform) federal regulation, and (4) state interference with a congressional purpose.

Express Preemption and Conflict with Federal Law

These factors are enumerated here in order to show their absence in the ARCO opinion. The court said generally that the PWSA "establishes a comprehensive federal scheme for regulating the operations, traffic routes, pilotage, and safety design specifications of tankers."¹⁵ Although ARCO had strenuously argued that a PWSA section that allowed state regulation only of land-based safety structures expressly preempted similar regulation over vessels,¹⁶ the court said nothing concerning the PWSA's express preemptive effect. Indeed, it could not, because the PWSA contains no language of express preemption. An examination of the PWSA makes ARCO's argument somewhat suspect, because § 1222(c), which authorizes the Coast Guard to incorporate state regulations in establishing vessel safety systems, necessarily assumes that states have authority to regulate vessels.

As for the less specific standard of state conflict with federal law, the court could point only to one small area of conflict. The Tanker Law's provision that all tankers employ state-licensed pilots arguably conflicts with two ancient federal statutes¹⁷ that prohibit states from requiring state pilots on vessels "enrolled in the coastwise trade." "Enrolled" vessels call only at United States ports. Thus, these statutes have been construed not to apply to "registered" vessels that engage in foreign commerce.¹⁸ In practical terms, this holding is of narrow scope. It could concern only those tankers built expressly for transporting Alaskan pipeline oil to Washington, which, in view of their additional utility in carrying foreign oil, seems a doubtful occurrence.¹⁹ Moreover, the court should have hesitated to rule on this problem until faced with an actual conflict, since ARCO has voluntarily been using state-licensed pilots on all tankers entering Puget Sound²⁰ and a private company plans to build a supertanker terminal at Port Angeles, outside the jurisdiction of the Tanker Law, that could service all the Puget Sound refineries.²¹ The Supreme Court disfavors judicial resolution of preemption challenges where only potential conflict exists.²² Thus, this portion of the ARCO opinion seems, at the least, suspect.

Design Standards and Tug Escorts

In reference to the Tanker Law's design requirements, the court dryly stated that Title II of the PWSA²³ empowers the Coast Guard to promulgate design regulations for tankers and that this regulatory authority must be exercised uniformly. Therefore, according to the court, "balkanization" of this area by the Tanker Law is prohibited. Without more, however, the need for uniform regulation cannot preempt state laws, especially, as here, when the Coast Guard design standards are intended to be minimum, not exclusive, standards. Notably, the design features involved in the Tanker Law are ultimately less extensive than the smoke abatement requirements for vessels upheld in Huron Portland Cement Co. v. City of Detroit,²⁴ which provided no alternative means of compliance. Two other facts bear mention. First, ARCO and the other oil companies have been shipping oil through Puget Sound in tankers that do not meet the Tanker Law's design standards ever since the Tanker Law became effective.²⁵ Secondly, before the Coast Guard's current design proposals²⁶ can supplant state regulation, their environmental merits [7 ELR 10015] must survive a pending challenge by the Natural Resources Defense Council²⁷ that they inadequately protect the marine environment.

The defendants and the environmental intervenors vigorously argued that the design standards represented merely one alternative method of complying with the Tanker Law. Section 3(2) provides that the design specifications may be waived (for non-supertankers) if the tanker employs a tugboat escort while navigating Puget Sound. The court swept these arguments away with a coarse brush, saying that the Coast Guard's mere consideration²⁸ of requiring tug escorts preempted the Tanker Law proviso. Unadorned, this conclusion is insufficient. Unimplemented federal power cannot preempt state law in the absence of other compelling reasons of either express preemption or the nature of the subject matter.²⁹ Furthermore, in view of the plaintiffs' use of non-complying tankers (implying their use of tug escorts), any conflict between state and federal law has not yet materialized to warrant judicial intervention. Plaintiffs relied heavily³⁰ on the Coast Guard's establishment of a vessel traffic system for Puget Sound under the PWSA,³¹ but, upon examination, that system is limited to establishing communication systems, governing vessel movement, and requiring vessel reports. Thus, these regulations do not control the same conduct regulated by the Tanker Law.

Refined Preemption Analysis

The court noted finally that Department of Commerce approval on June 1, 1976 of Washington's Coastal Zone Management Program did not "waive" federal preemption, saying that Commerce's "consideration" of Coast Guard views, as required by the Coastal Zone Management Act,³² was irrelevant to preemption analysis. One can only presume that the court meant that the state could not interfere with the pervasive federal scheme of tanker regulation.

What the court failed to discuss, though, was the complete scope of the federal "scheme." This issue of scope is especially important in the environmental area, where federal laws assert overlapping jurisdictions. In the case of the Coastal Zone Management Act, protection and management of the coast may be impossible without concomitant regulation of offshore activities such as oil drilling or tanker movement. Thus, the federal "scheme" under the PWSA cannot be functionally divorced from federal programs in other waterrelated areas. Consultation requirements, such as that contained in the Coastal Zone Management Act, recognize this need.³³

Preemption analysis of the federal environmental "scheme" requires a court to look beyond single statutes. The PWSA does not embody the entire federal authority over supertankers. The Deepwater Port Act³⁴ specifically allows coastal state veto over adjacent deepwater ports, which are designed to unload supertankers. Therefore, the Tanker Law merely implements the broader federal policy that supertankers not navigate possibly dangerous anchorages such as Puget Sound. In addition, de facto federal policy regarding supertanker use is that they be employed for long-haul trips — from the Persian Gulf rather than for the Alaska run.³⁵

Analyzing this broader federal environmental scheme requires more than the mechanical response of the three-judge court in ARCO. Courts must realize that, quite often, states are put in the uncomfortable position of having to reconcile federal authority that is internally conflicting and very likely ad hoc. This fact calls for greater attention to federal-state interaction by Congress, but it nevertheless does not excuse state provincialism. The federal system cannot allow states to isolate and insulate their problems from the remainder of the nation. But in the absence of clear congressional direction, it is essential that states be given latitude to fashion rational protective devices to solve local problems.

Future Action

Chances seem very promising that the Supreme Court will hear Washington's appeal from the district court decision. Justice Rehniquist noted in his opinion that "the issues involved are of sufficient complexity, and their resolution sufficiently uncertain, to warrant full consideration by the full court."³⁶ The Court's recent trend toward reconciliation of federal and state regulation,³⁷ coupled with the change in personnel since the Burbank decision, indicate that a substantial review [7 ELR 10016] of the preemption doctrine in the environmental area may be in the offing.

In any event, the supertanker controversy will not soon subside. A recent report that Canada may not allow supertankers into Canadian waters to reach a proposed refinery on a sheltered harbor in Maine indicates the federal supertanker policy may soon be tested in an international context.³⁸

Finally, Congress may have the last word in the ARCO decision. Senator Warren Magnuson (D-Wash.) announced that if the Supreme Court upholds the district court decision, he will introduce legislation to give coastal states appropriate regulatory authority over supertankers to protect local interests.³⁹

1. Wash. Rev. Code §§ 88.16.170 et seq.

2. 7 ELR 20071 (W.D. Wash. Sept. 23, 1976), injunction stay continued pending appeal sub nom. Evans v. Atlantic Richfield Co., No. A-456, 45 U.S.L.W. 3430 (Rehnquist, Circuit Justice, Dec. 9, 1976).

3. 33 U.S.C. §§ 1221-1227, ELR 41718.

4. Evans v. Atlantic Richfield Co., supra note 2.

5. City of Burbank v. Lockheed Air Terminal, Inc., 411 U.S. 624, 3 ELR 20393 (1973) (aircraft flight regulation); Northern States Power Co. v. Minnesota, 447 F.2d 1143, 1 ELR 20451 (8th Cir. 1971), aff'd mem., 405 U.S. 1035 (1972) (nuclear effluent limitations).

6. Deadweight tons equals a vessel's cargo-carrying capacity, including fuel oils, stores, and potable water, as expressed in long tons (2240 pounds equals one long ton). One long ton equals 302 gallons of oil. Plaintiff claimed that the Tanker Law's size limitation was arbitrary, Atlantic Richfield Co. v. Evans, No. C75-648, Plaintiff's Trial Brief 3 (W.D. Wash., filed Apr. 30, 1976), ELR Doc. 470-B, ELR 65297, but experts differ on the efficacy of the Law's requirements. Id., Pretrial Order PP119-121 (W.D. Wash., filed Apr. 6, 1976).

7. Conn. Gen. Stat. Ann. § 25-54cc (equipment onboard vessels to contain oil spills); Me. Rev. Stat. Ann. tit. 38, § 560(3) (authority to prohibit anchorage of oil tankers); N.H. Rev. Stat. Ann. § 145-A:11 (operation and equipment of vessels approaching and departing from terminals, facilities and refineries). The oil spill liability provisions of Maine's statute were upheld in Portland Pipe Line Corp. v. Environmental Improvement Comm'n, 307 A.2d 1, 3 ELR 20616 (Me. 1973), appeal dismissed, 414 U.S. 1035 (1973).

8. The court did not reach plaintiffs' Commerce Clause and foreign affairs power challenges. The oil pollution and supertanker issues are of international proportions, see Wood, Toward Compatible International and Domestic Regimes of Civil Liability for Oil Pollution of Navigable Waters, 5 ELR 50116 (1975), but international issues are beyond the scope of this Comment.

9. Section 101 of the Ports and Waterways Safety Act says, in part:

In order to prevent damage to, or the destruction or loss of any vessel … on or in the navigable waters of the United States …; and to protect the navigable waters and the resources therein from environmental harm resulting from vessel or structure damage, destruction, or loss, the Secretary of the department in which the Coast Guard is operating may —

(3) control vessel traffic in areas which he determines to be especially hazardous, or under conditions of reduced visibility, adverse weather, vessel congestion, or other hazardous circumstances by —

(iv) restricting vessel operation, in a hazardous area or under hazardous conditions, to vessels which have particular operating characteristics and capabilities which he considers necessary for safe operations under the circumstances; …

33 U.S.C. § 1221, ELR 41718.

10. U.S. Const. art VI, cl. 2.

11. Clean Air Act § 209(a), 42 U.S.C. § 1857f-6a(a), ELR 41214; Noise Control Act § 6(e)(1), 42 U.S.C. § 4905(e)(1), ELR 41503.

12. Florida Lime & Avocado Growers, Inc. v. Paul, 373 U.S. 132 (1963).

13. 447 F.2d 1143, 1 ELR 20451 (8th Cir. 1971), aff'd mem., 405 U.S. 1035 (1972).

14. 411 U.S. 624, 3 ELR 20393 (1973).

15. 7 ELR at 20071.

16. Plaintiff's Trial Brief, supra note 6, at 18-22.

17. 46 U.S.C. §§ 215, 364.

18. Anderson v. Pacific Coast Steamship Co., 225 U.S. 187 (1912).

19. In any event, federal subsidies for increased vessel construction apply only to vessels used in U.S.-foreign trade. Owners must refund the subsidies if vessels are used in the coastwise trade. Pretrial Order, supra note 6, at PP57-58. Thus, most new tankers will likely be registered and thus may be required to carry state pilots.

20. Pretrial Order, supra note 6, at P74.

21. Id. at P26.

22. Askew v. American Waterways Operators, Inc., 411 U.S. 325, 3 ELR 20362 (1973). The Seventh Circuit has stated that "in any case involving environmental legislation it is actual conflict, not potential conflict that is relevant." Proctor & Gamble Co. v. City of Chicago, 509 F.2d 69, 77, 5 ELR 20146, 20149 (7th Cir. 1975).

23. 46 U.S.C. § 391a.

24. 362 U.S. 440 (1960).

25. Pretrial Order, supra note 6, at PP13, 79.

26. 33 C.F.R. pt. 157, 40 Fed. Reg. 48379 (Oct. 14, 1975). See also 41 Fed. Reg. 1479 (Jan. 8, 1976) (amendments). See generally United States Coast Guard, Final Environmental Impact Statement — Regulations for Tank Vessels Engaged in the Carriage of Oil in Domestic Trade (Aug. 15, 1975).

27. Natural Resources Defense Council, Inc. v. Coleman, No. 76-0181, Complaint (D.D.C., filed Feb. 2, 1976), ELR Doc. 412-A, ELR 65327.

28. Final Environmental Impact Statement, supra note 26, at 71.

29. Florida Lime & Avocado Growers, Inc. v. Paul, 372 U.S. 132, 142 (1963).

30. Plaintiff's Trial Brief, supra note 6, at 12.

31. 33 C.F.R. pt. 161 subpart B.

32. 16 U.S.C. §§ 1451-1464, ELR 41700:1.

33. 16 U.S.C. § 1456(b). Interestingly, consultation does not always achieve its purpose of federal program coordination. The Tanker Law was enacted in May 1975. However, the Coast Guard, in commenting on Commerce's draft environmental impact statement in the same month, took no notice of this state challenge to its regulation. U.S. Department of Commerce, National Oceanic and Atmospheric Administration, Office of Coastal Zone Management, Final Environmental Impact Statement — State of Washington Coastal Zone Management Program X-99 (Apr. 9, 1976). Thus, Commerce consultation with the Coast Guard may have been fruitless in this instance.

34. § 4(c)(9), 33 U.S.C. § 1503(c)(9), ELR 41706. See generally Note, The Deepwater Ports Act of 1974: Half Speed Ahead, 5 ELR 10043 (1975). On December 17, the Secretary of Transportation announced his approval of the two controversial deepwater port applications discussed in Comment, Florida Denied Adjacent Coastal State Status in Gulf Deepwater Ports Decision, 6 ELR 10123 (June 1976). See Jones, Superports Approved by Coleman, Washington Post, Dec. 18, 1976, at A1, col. 4.

35. Federal Maritime Administration, Final Environmental Impact Statement on Tanker Construction Program IV-153, IV-156 (May 30, 1973).

36. Evans v. Atlantic Richfield Co., No. A-456, 45 U.S.L.W. 3430 (Rehniquist, Circuit Justice, Dec. 9, 1976).

37. See generally Comment, Fallout from the California Nuclear Initiative, 6 ELR 10174 (Aug. 1976); Note, The Preemption Doctrine: Shifting Perspectives on Federalism and the Burger Court, 75 Colum. L. Rev. 623 (1975).

38. Weisenthal, Dispute on Access to Strait: Key to Fate of Oil Refinery in Maine, Washington Post, Dec. 5, 1976, at A17, col. 1.

39. 122 Cong. Rec. S17575 (daily ed. Oct. 1, 1976).