United States District Court, D. Maine
ORDER ON DEFENDANTS' RENEWED MOTION TO
A. WOODCOCK, JR. UNITED STATES DISTRICT JUDGE
city of South Portland filed another motion to dismiss this
case following news that another pipeline company,
TransCanada, announced that it will not pursue construction
of its proposed Energy East pipeline. Despite the recent
announcement, the Court still finds that if it is legally
permitted to do so, Portland Pipe Line Corporation intends to
and is sufficiently likely to be able to reverse the flow of
oil in its South Portland to Montreal pipelines from
northbound to southbound to make its claim challenging the
legality of the City's Clear Skies ordinance justiciable.
order for a federal court to hear and decide a case, there
must be a real dispute. In this case, Portland Pipe Line
Corporation (PPLC) brought suit to challenge the legality of
the city of South Portland's (the City) so-called Clear
Skies ordinance (the Ordinance), which prohibits all bulk
loading of crude oil at South Portland harbor and the
improvement of existing or the installation of new facilities
for the purpose of bulk loading of crude oil onto any marine
tank vessel in South Portland harbor.
owns two pipelines that run from South Portland, Maine to
Montreal, Quebec. Currently PPLC pumps oil south to north,
beginning in South Portland and ending in Montreal, where it
is brought to refineries. The premise of PPLC's lawsuit
is that it has concrete plans to reverse the flow of oil in
its pipeline, and that the Ordinance prohibits the loading of
oil onto ships in South Portland harbor, thereby effectively
barring the pipeline reversal.
November 17, 2016, the City moved to dismiss PPLC's
lawsuit under Federal Rule of Civil Procedure 12(b)(1).
Defs.' Consolidated Mot. to Dismiss Pursuant to Rule
12(b)(1) and Mot. for Summ. J. (ECF No. 88).
Specifically, the City challenged whether PPLC will actually
do what it claims it will do: whether-if the Ordinance were
not an obstacle-PPLC will, in fact, reverse the flow of the
pipeline, because in the City's view to do so would be
not just non-economical, but impossible. This is true, the
City said through its expert, Sarah Emerson, because the oil
from the oil-producing areas in the west of Canada and in the
northern mid-west of the United States has to run through the
so-called Enbridge Line 9, and virtually all the pipeline
capacity in Enbridge Line 9 is already spoken for. The City
maintains that the available capacity in the pipeline would
be insufficient to supply PPLC with enough oil to make
shipping out of South Portland harbor economically feasible.
disagrees. On December 20, 2016, PPLC filed a response to the
City's motion. Pls.' Mem. in Opp'n to
Defs.' Mot. to Dismiss and for Summ. J. (ECF No.
127). It pointed out that the City's ordinance prevents
PPLC from seeking potential shippers and while the Ordinance
stands, PPLC “cannot arrange its future.”
Id. at 3. It also disputes the City's contention
that the reversal project is economically unsound, given the
bleak outlook PPLC faces if it continues to transport oil
northbound. Id. at 2-53.
11, 2017, the Court issued an interim order on the
Defendants' consolidated motion to dismiss under Rule
12(b)(1). Interim Order at 1-12 (ECF No. 156). In
that Order, the Court mandated further proceedings to resolve
whether it had subject matter jurisdiction in this case.
Id. at 1, 11-12. The Court held a hearing on the
justiciability motion on August 9, 2017. Min Entry
(ECF No. 179). PPLC presented the testimony of Thomas
Hardison, its President and Chief Executive Officer, and the
City presented the testimony of its expert, Sarah Emerson.
August 24, 2017, the Court issued an order denying the
City's motion to dismiss. Order on Defs.'
Consolidated Mot. to Dismiss Under Rule 12(b)(1) (ECF
No. 185) (Order). The Court concluded that the case
was justiciable. Id. at 1. The Court credited Mr.
Hardison's testimony and found that PPLC intends to
pursue the reversal if its challenge to the Ordinance is
successful. Id. at 7. It also determined that PPLC
may be able to accomplish the flow reversal despite Ms.
Emerson's testimony about the current unfavorable market
conditions. Id. at 7-9. The Court pointed to at
least four reasons that PPLC's project is not so unlikely
to succeed as to make the case unripe. Id. One
reason was the volatility of the oil markets and PPLC's
reasonable desire to place a bet that future events will
break in its favor. Id. at 8-9. As one example of
that volatility and potentially favorable future events, the
Court mentioned the scheduled completion of TransCanada's
Energy East pipeline. Id. at 9 (“For example,
Mr. Hardison said that TransCanada is scheduled to complete
its Energy East pipeline project by 2021 and, once completed,
Mr. Hardison thought it would free up volumes of oil for
transport down the PPLC pipeline to South Portland”).
After concluding the case was ripe, the Court set about
resolving the long-pending cross motions for summary
judgment. Id. at 11.
October 5, 2017, the City made an emergency filing asking the
Court to stay the pending summary judgment proceedings.
Defs.' Emergency Mot. for Temporary Stay of
Summ. J. Proceedings (ECF No. 186). The City presented
new evidence that TransCanada had cancelled its plans for the
Energy East pipeline. Id. Attach 1. At a telephone
conference on October 6, 2017, the City indicated that it
intended to file another motion to dismiss. Min.
Entry (ECF No. 188). The Court stated that it would
allow oral arguments on that new motion to dismiss, but it
denied the motion for a stay of the summary judgment
proceedings. Oral Order (ECF No. 189).
October 20, 2017, the City filed its renewed motion to
dismiss. Defs.' Renewed Mot. to Dismiss Pursuant to
Rule 12(b)(1) (ECF No. 194) (Defs.' Mot.).
PPLC filed its response on November 2, 2017. Pls.'
Obj. to Defs.' Third Mot. to Dismiss Pursuant to Rule
12(b)(1) (ECF No. 195) (Pls.' Opp'n).
The City filed its reply on November 10, 2017. Reply Mem.
in Supp. of Defs.' Renewed Mot. to Dismiss Pursuant
to Rule 12(b)(1) (ECF No. 196) (Defs.
Reply). The Court heard oral arguments on November 21,
2017. Min. Entry (ECF No. 198).
THE PARTIES' POSITIONS
Untimely Motion to Reconsider
argues that the City's new motion to dismiss is, in
truth, an untimely motion to reconsider the Court's
August 24, 2017 Order on the City's old motion to
dismiss. Pls.' Opp'n at 4. PPLC explains
that the City only mentions the Energy East announcement in
two paragraphs of its 20-page motion, and the balance of the
document repeats the same justiciability arguments from prior
motions and orders. Id. Citing the time-restricted
provision for motions for reconsideration in the
District's Local Rules, PPLC maintains that the
City's new motion to dismiss is time-barred because the
City filed the motion more than 14 days from the date of the
contested order. Id. at 5 (citing D. Me. Local R.
City replies that parties can challenge subject matter
jurisdiction at any point during the litigation and they
cannot waive the issue. Defs. Reply at 5-6. The City
also contends that, even if the motion to dismiss were
actually a motion for reconsideration under Local Rule 7(g),
the 14-day deadline contains an exception for newly available
material evidence like the cancellation of the Energy East
pipeline. Id. At oral argument, the City insisted
that its motion is truly a new motion to dismiss, not a
motion for reconsideration dressed as a motion to dismiss.
The City's Motion
City begins by restating the standards for ripeness and
standing. Defs.' Mot. at 10-12. The City
reiterates the obstacles to PPLC's accomplishing flow
reversal, namely that it needs financing for the
approximately $125-to-$185 million reversal project, that it
needs to attract committed volumes from potential shippers to
get that financing, and that there are no available
uncommitted volumes from the only other pipeline in
operation, Enbridge Line 9. Id. at 12-14. The City
also argues that PPLC does not actually intend to imminently
pursue the reversal project because it “resolved in
June 2013 not to market any such project until the success of
Enbridge Line 9 and Energy East were both
‘assured'” and Energy East is now canceled.
Id. at 14-16.
City likens this case to McDonough v. City of
Portland, 855 F.3d 452 (1st Cir. 2017). Defs.'
Mot. at 16-17 (citing McDonough, 855 F.3d at
453-54). In McDonough, the First Circuit required
the plaintiff to prove there was more than a
“possibility” that the plaintiff would compete
for the permit at issue in the case, but rather, there must
be a “likelihood” that he ...