Omya, Inc. v. Vermont

32 ELR 20652 | Environmental Law Reporter | copyright © 2002 | All rights reserved


Omya, Inc. v. Vermont

No. 01-7445 (33 Fed. Appx. 581) (UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT April 25, 2002)

The court holds that a Vermont Environmental Board Act 250 (Act 250) permit that restricted truck travel through a village does not violate the U.S. Commerce Clause or the Supremacy Clause. A company whose goods were transported through the village challenged the board's application of Act 250 arguing that the permit restriction discriminates against interstate commerce and is preempted under the Supremacy Clause. The court first holds that the company failed to show that either Act 250 or the permit restriction specifically discriminated facially or in practical effect against interstate commerce or that either imposed differential treatment of in-state and out-of-state economic interests. Act 250 does not have a disparate effect on interstate commerce, and even if it did, the burden imposed on interstate commerce is not excessive in relation to the local benefit of enhancing aesthetics and historic preservation and reducing traffic congestion. The court also holds that 49 U.S.C. § 14501 does not preempt the permit restriction and, thus, the permit restriction is not invalid under the Supremacy Clause. Although 49 U.S.C. § 14501 prohibits states and political subdivisions from enacting regulations having the force or effect of law on truck transportation routes, prices, or service, § 14501 is intended to preempt state economic regulation. Act 250 does not speak directly to prices, routes, or services of motor carriers. It is a land use statute, intended to protect Vermont's environmental resources. The permit restriction seeks to achieve noneconomic goals that bear no relationship to the regulation of competition.

Counsel for Plaintiff
Edward V. Schwiebert
Rieber, Kenlan, Schwiebert, Hall & Facey
71 Allen St., Rutland VT 05702
(802) 773-3300

Counsel for Defendants
Rebecca M. Ellis
Attorney General's Office
109 State St., Montpelier VT 05609
(802) 828-3171

Graafeiland, Katzmann, and Korman,1 JJ.

1. The Honorable Edward R. Korman of the United States District Court for the Eastern District of New York, sitting by designation.

[32 ELR 20652]

Graafeiland, Katzmann, and Korman,1 JJ.:

SUMMARY ORDER

ON CONSIDERATION WHEREOF, IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that the judgment of the District Court be and it hereby is AFFIRMED.

Plaintiff appeals the dismissal, pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, of its challenge to the imposition by the Vermont Environmental Board (the "Board") of restrictions on the number of daily round-trips permitted tractor-trailer trucks transporting plaintiff's goods through Brandon, Vermont on U.S. Route 7. In the District Court, plaintiff alleged that the restrictions, promulgated pursuant to the Board's authority under Vermont's Land Use and Development Law, 10 V.S.A. §§ 6001-6108 ("Act 250"), violated the Supremacy, Commerce, Equal Protection, and Due Process Clauses of the United States Constitution. The District Court dismissed all of these claims. On appeal, the plaintiff contends that the District Court erred in dismissing its Commerce Clause and Supremacy Clause claims.

We review de novo the decision of the District Court granting the motion to dismiss the plaintiff's claims, and we "accept[] all allegations in the complaint as true and draw[] all inferences in favor of the plaintiff." ICOM Holding, Inc. v. MCI Worldcom, Inc., 238 F.3d 219, 221 (2d Cir. 2001). For the reasons that follow, we affirm the judgment of the District Court.

Plaintiff argues that the permit restriction represents the kind of affirmative discrimination against interstate commerce that warrants heightened Commerce Clause review. However, plaintiff has failed to show that either Act 250 or the permit restriction specifically discriminates either facially or "in practical effect" against interstate commerce, Maine v. Taylor, 477 U.S. 131, 138, 106 S. Ct. 2440, 91 L. Ed. 2d 110 (1986), or that either imposes "differential treatment of in-state and out-of-state economic interests that benefits the former and burdens the latter." Automated Salvage Transport v. Wheelabrator, 155 F.3d 59, 74 [29 ELR 20171] (2d Cir. 1998). The mere fact that plaintiff alone has been burdened by the scheme is not sufficient to trigger heightened review. See Exxon Corp. v. Governor of Md., 437 U.S. 117, 127-28, 98 S. Ct. 2207, 57 L. Ed. 2d 91 (1978) ("the Clause protects the interstate market, not particular interstate firms, from prohibitive or burdensome regulations."). Moreover, even the less heightened standard of review prescribed in Pike v. Bruce Church, Inc., 397 U.S. 137, 142, 90 S. Ct. 844, 25 L. Ed. 2d 174 (1970), applies only where nondiscriminatory regulations have a disparate impact on interstate commerce. Where there is such an impact, the regulation cannot survive only if "the burden imposed on such commerce is clearly excessive in relation to the putative local benefits." Id. "Thus, the minimum showing required to succeed in a Commerce Clause challenge to a state regulation is that it have a disparate impact on interstate commerce. The fact that it may otherwise affect commerce is not sufficient." Automation Salvage Transport, 155 F.3d at 74 (internal quotations and citations omitted).

Act 250 does not have a disparate effect on interstate commerce. Even if it had such an effect here, the burden imposed on interstate commerce is not "clearly excessive in relation to the putative local benefits" to these benefits. In this case, the permit restriction significantly enhances aesthetic and historic preservation goals, and helps reduce traffic congestion. Any marginal burden imposed on interstate commerce is unquestionably not "clearly excessive in relation" to these benefits. We therefore affirm the District Court's dismissal of plaintiff's Commerce Clause claim.

Plaintiff contends that the permit restriction is preempted by 49 U.S.C. § 14501(c)(1) ("Section 14501"), and is thus invalid under the Supremacy Clause of the United States Constitution. "Consideration of issues arising under the Supremacy Clause starts with the assumption that the historic police powers of the States are not to be superseded by . . . Federal Act unless that is the clear and manifest purpose of Congress. Accordingly, the purpose of Congress is the ultimate touchstone of preemption analysis." Cipollone v. Liggett Group, 505 U.S. 504, 516, 112 S. Ct. 2608, 120 L. Ed. 2d 407 (1992) (internal quotations and citations omitted). Section 14501 targets state economic regulation—i.e., regulation designed to regulate competition—and seeks to place the "motor carrier" industry on equal footing with the "air carrier" industry, which had enjoyed the benefits of federal pre-emption of state regulation for many years prior to the enactment of Section 14501. See H.R. Conf. Rep. No. 103-677, 103rd Cong., 2d Sess. 84 (1994), reprinted in 1994 U.S.S.C.C.A.N. 1715, 1755 ("The central purpose of this legislation is to extend to all affected carriers, air carriers and carriers affiliated with direct air carriers through common controlling ownership on the one hand and motor carriers on the other, the identical intrastate preemption of prices, routes, and services as that originally contained in . . . the Federal Aviation Act [for air carriers].").

Indeed, Section 14501 is modeled after the preemption provision of the Airline Deregulation Act ("ADA"), and closely parallels it. H.R. Conf. Rep. No. 103-677, at 1757 (Section 14501 "is identical to the preemption provision deregulating air carriers . . . and is intended to function in the exact same manner with respect to its preemptive effects."); Deerskin Trading Post, Inc. v. United Parcel Service of America, Inc., 972 F. Supp. 665, 668-69 (N.D. Ga. 1997) (tracing legislative history of Section 14501 and concluding that "Congress intended for [Section 14501] to be applied in an identical manner as the preemption provision of the ADA."). The Supreme Court has noted that the ADA preemption provision was specifically concerned with state economic regulation. See American Airlines, Inc. v. Wolens, 513 U.S. 219, 229 n.5, 115 S. Ct. 817, 130 L. Ed. 2d 715 (1995) ("the ban on enacting or enforcing any law 'relating to rates, routes, or services' is most sensibly read, in light of the ADA's overarching deregulatory purpose, to mean states may not seek to impose their own public policies or theories of competition or regulation on the operations of an air carrier") (internal quotation and citation omitted).

Section 14501 thus aims to preempt state economic regulation. Act 250 does not speak directly to prices, routes, or services of motor carriers, and is a land use statute intended "to protect Vermont's environmental resources with an eye towards . . . preserving lands, when [32 ELR 20653] possible, that have special values to the public." Southview Associates, Ltd. v. Bongartz, 980 F.2d 84, 89 [23 ELR 20132] (2d Cir. 1992). The permit restriction imposed on plaintiff seeks to achieve non-economic goals that bear no relationship to the regulation of competition. We cannot conclude that it was "the clear and manifest purpose of Congress," Cipollone, 505 U.S. at 516, in enacting Section 14501 to preempt a non-economic regulation with the limited impact on "route" that the permit restriction imposes. Accordingly, we affirm the District Court's dismissal of plaintiff's Supremacy Clause claim.

The judgment of the district court is AFFIRMED.

1. The Honorable Edward R. Korman of the United States District Court for the Eastern District of New York, sitting by designation.


32 ELR 20652 | Environmental Law Reporter | copyright © 2002 | All rights reserved