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Alaska v. Kerry

United States District Court, D. Alaska

September 17, 2013

STATE OF ALASKA et al., Plaintiffs,
v.
JOHN F. KERRY et al., Defendants

Page 1112

For State of Alaska, Plaintiff: Seth M. Beausang, LEAD ATTORNEY, State of Alaska, Department of Law (Anch - suite 200), Anchorage, AK.

For Resource Development Council for Alaska Inc, Intervenor Plaintiff: Stephen M. Rummage, LEAD ATTORNEY, Robert J. Maguire, Davis Wright Tremaine LLP (Seattle), Seattle, WA.

For United States Environmental Protection Agency, Lisa P. Jackson, in her official capacity as Administrator, United States Environmental Protection Agency, United States Department of Homeland Security, Janet Napolitano, in her official capacity as Secretary, United States Department of Homeland Security, United States Coast Guard, Admiral Robert J. Papp, Jr., in his official capacity as Commandant of the United States Coast Guard, Defendants: Gary M. Guarino, U.S. Attorney's Office (Anch), Anchorage, AK; Kate R. Bowers, U.S. Department of Justice, ENRD, Law and Policy Section, Washington, DC; Mark A. Nitczynski, U.S. Department of Justice (Denver, CO), Denver, CO.

For John F Kerry, in his official capacity as United States Secretary of State, Defendant: Gary M. Guarino, LEAD ATTORNEY, U.S. Attorney's Office (Anch), Anchorage, AK; Kate R. Bowers, LEAD ATTORNEY, U.S. Department of Justice, ENRD, Law and Policy Section, Washington, DC; Mark A. Nitczynski, LEAD ATTORNEY, U.S. Department of Justice (Denver, CO), Denver, CO.

For Center for Biological Diversity, Environmental Defense Fund, Friends of the Earth, Natural Resources Defense Council, Intervenor Defendants: Sarah Helen Burt, LEAD ATTORNEY, Earthjustic (CA), San Francisco, CA; Colin Casey O'Brien, Earthjustice (Anch), Anchorage, AK.

For South Coast Air Quality Management District, Intervenor Defendant: Barbara Beth Baird, William Bullitt Wong, South Coast Air Quality Management District, Diamond Bar, CA; Rebecca Louise Bernard, Bessenyey & Van Tuyn, LLC, Anchorage, AK.

For Santa Barbara Air Pollution Control District, Intervenor Defendant: William M. Dillon, LEAD ATTORNEY, Santa Barbara County Counsel's Office, Santa Barbara, CA; Barbara Beth Baird, South Coast Air Quality Management District, Diamond Bar, CA; Rebecca Louise Bernard, Bessenyey & Van Tuyn, LLC, Anchorage, AK.

For Puget Sound Clean Air Agency, Intervenor Defendant: Barbara Beth Baird, South Coast Air Quality Management District, Diamond Bar, CA; Jennifer A. Dold, Puget Sound Clean Air Agency, Seattle, WA; Rebecca Louise Bernard, Bessenyey & Van Tuyn, LLC, Anchorage, AK.

OPINION

Page 1113

ORDER RE ALL PENDING MOTIONS

Sharon L. Gleason, United States District Judge.

INTRODUCTION

The State of Alaska, later joined by the Resource Development Council for Alaska as a plaintiff-intervenor, initiated this action to challenge the federal enforcement of low-sulfur fuel requirements for marine vessels operating in certain Alaskan coastal waters.

The low-sulfur requirements were implemented pursuant to the United States' obligations as a party country to the International Convention for the Prevention of Pollution from Ships, known as MARPOL. Annex VI of MARPOL designates certain emission control areas (" ECAs" ) in which sulfur, nitrogen, and other vessel emissions

Page 1114

are regulated more strictly than in other areas. In April 2009, the United States and Canada jointly proposed amending MARPOL to include a North American ECA, which includes the Southeast and Southcentral coasts of Alaska. The ECA amendment was adopted and became part of MARPOL in March 2010. The Secretary of State subsequently accepted the amendment for the United States on August 1, 2011.

One year later, on August 1, 2012, the Environmental Protection Agency (" EPA" ) and the U.S. Coast Guard began jointly enforcing low-sulfur vessel fuel requirements in the North American ECA. As of that date, marine vessels within the North American ECA were required to use fuel with a sulfur content that does not exceed 10,000 parts per million (" ppm" ). Beginning in 2015, marine vessels within the North American ECA will be required to use fuel with a sulfur content that does not exceed 1,000 ppm.[1]

Currently pending before the Court are the State's Motion for Preliminary Injunction and two motions to dismiss filed by the Federal Defendants. For the reasons discussed below, the Court grants the motions to dismiss and denies the motion for preliminary injunctive relief.

FACTUAL AND PROCEDURAL BACKGROUND

I. MARPOL.

MARPOL is a convention of the International Maritime Organization (" IMO" ), a specialized United Nations agency.[2] MARPOL was adopted in 1973 and amended in 1978.[3] The convention's purpose is to reduce marine pollution by ships.[4]

MARPOL currently contains six annexes, each of which addresses a different type of marine pollution.[5] Annex VI, the annex implicated in this litigation, addresses air pollution.[6] It was adopted by the IMO in 1997.

Annex VI designates ECAs, a term which it defines as:

an area where the adoption of special mandatory measures for emissions from ships is required to prevent, reduce and control air pollution from NOx or SOx and particulate matter or all three types of emissions and their attendant adverse impacts on human health and the environment. Emission control areas shall include those listed in, or designated under, regulations 13 and 14 of this Annex.[7]

Regulation 14 of Annex VI provides standards for sulfur oxides (Sox) emissions. It specifies that the sulfur content of fuel used on board ships in all areas shall not exceed " 4.50% m/m prior to 1 January 2012," " 3.50% m/m on and after 1 January 2012," and " 0.50% m/m on and after 1 January 2020." [8] More stringent requirements apply within the ECAs identified in Regulation 14. In those areas, the sulfur content of fuel shall not exceed

Page 1115

" 1.50% m/m prior to 1 July 2010," " 1.00% m/m on and after 1 July 2010," and " 0.10% m/m on and after 1 January 2015." [9]

II. United States' Adoption and Implementation of MARPOL.

In 1980, MARPOL was approved by two-thirds of the Senate. Later that same year, Congress passed the Act to Prevent Pollution from Ships (" APPS" ) to implement MARPOL.[10] In April 2006, the Senate again approved MARPOL, including Annex VI. In 2008, Congress amended APPS to implement Annex VI.[11] The North American ECA was added to Annex VI in 2010.[12]

III. Amendment of MARPOL to Include the North American ECA.

Appendix III to Annex VI was implemented by Congress in the 2008 amendments to APPS and sets forth criteria and procedures for designating ECAs.[13] Appendix III states that an ECA " should be considered for adoption by the [IMO] if supported by a demonstrated need to prevent, reduce and control emissions of NOx or SOx and particulate matter . . . from ships." [14] It outlines the process for adopting an ECA: a party to MARPOL submits an ECA proposal; the IMO assesses the proposal, taking into account a specified set of criteria; if the proposal passes muster, it is adopted and brought into force by means of an amendment to Annex VI.[15]

MARPOL directs that a proposal for the designation of an ECA include the following:

o a description of the human populations and environmental areas at risk from the impacts of ship emissions;
o an assessment that emissions from ships operating in the proposed area of application are contributing to ambient concentrations of air pollution or to adverse environmental impacts. Such assessment shall include a description of the impacts of the relevant emissions on human health and the environment, such as adverse impacts to terrestrial and aquatic ecosystems, areas of natural productivity, critical habitats, water quality, human health, and areas of cultural and scientific significance, if applicable. The sources of relevant data including methodologies used shall be identified;
o relevant information, pertaining to the meteorological conditions in the proposed area of application, to the human populations and environmental areas at risk, in particular prevailing wind patterns, or to topographical, geological, oceanographic, morphological or other conditions that contribute to ambient concentrations of air pollution or adverse environmental impacts;
o the nature of the ship traffic in the proposed emission control area, including

Page 1116

the patterns and density of such traffic;
o a description of the control measures taken by the proposing Party or Parties addressing land-based sources of NOx, SOx and particulate matter emissions affecting the human population and environmental areas at risk that are in place and operating concurrent with the consideration of measures to be adopted in relation to provisions of regulations 13 and 14 of Annex VI; and
o the relative costs of reducing emissions from ships when compared with land-based controls, and the economic impacts on shipping engaged in international trade.[16]

Appendix III also provides that " [t]he geographical limits of an emission control area will be based on the relevant criteria . . . including emissions and deposition from ships navigating in the proposed area, traffic patterns and density, and wind conditions." [17]

On April 2, 2009, the United States and Canada submitted a 74-page joint petition to the IMO to create the following North American ECA, which would include certain designated Alaskan coastal waters[18]:

The petition referenced a Technical Support Document (" TSD" ) that had been published by the EPA in April 2009.[19]

Article 16 of MARPOL outlines the IMO's procedure for amending the convention.[20] After being " adopted by a two-thirds majority of only the Parties to the

Page 1117

Convention present and voting," the amendment is communicated to all parties to MARPOL and deemed accepted unless certain types of objections are made.[21] Once the amendment has been accepted, it becomes effective six months later with respect to parties that have accepted it, but not with respect to parties that declared they did not accept it or those that declared their express approval was necessary.[22]

In March 2010, the IMO voted to amend Annex VI to designate the North American ECA.[23] As a result, the ECAs listed in Regulation 14 of Annex VI now include " the North American area as described by the coordinates provided in appendix VII to this Annex." [24] Appendix VII describes the North American ECA by a listed series of geographic coordinates, and, as noted above, it includes Southeast and Southcentral Alaskan coastal waters.[25]

The ECA amendment was circulated to all MARPOL parties for acceptance. The United States Secretary of State did not reject the amendment, nor did any other party to MARPOL. As a result, the North American ECA entered into force as a matter of international law with respect to the United States and all other parties to MARPOL on August 1, 2011.[26]

IV. EPA Action.

In January 2009, before the United States and Canada submitted their joint ECA petition to the IMO, EPA issued a Regulatory Update entitled " Frequently Asked Questions about the Emission Control Area Application Process" that expressed its intention to include the designated portion of Alaska in the North American ECA.[27] The Regulatory Update includes the following:

Will the coasts of Alaska and Hawaii (and other U.S. territories) be included in the application? If not, can they be included in the future?
Ideally, we would like to include all of the U.S. coasts in our application for ECA designation, including Alaska, Hawaii, and the U.S. territories. To do so, however, we will have to provide information that demonstrates a need for control, as specified in the criteria for ECA designation. This is challenging because, although our emissions modeling includes all 50 states, our air quality modeling does not extend beyond the 48 contiguous states. Therefore, it will be necessary to find other ways to measure the health and environmental impacts of marine emissions on health and human welfare outside the continental United States.

Page 1118

We have not made a final determination on whether the coasts of Alaska and Hawaii will be included in the initial U.S./Canada ECA application. We are working with the Alaska DEC and Hawaii DOH to generate information that would better inform us of the health and environmental impacts that shipping may have in these states. We have not yet engaged other U.S. territories on this issue.
We intend to submit an application for ECA designation at the earliest possible date covering the areas for which we have the strongest case. If the case for controlling additional areas is compelling, such areas would be included in a future, supplemental application for ECA designations.[28]

On August 28, 2009, after the ECA petition had been submitted but before the IMO had voted to amend Annex VI, EPA published a Notice of Proposed Rulemaking (" NPRM" ) that included proposed rules to implement MARPOL's low-sulfur requirements in the proposed North American ECA, including Alaskan coastal waters.[29] During the one-month comment period, EPA received comments on the NPRM from sources including the Resource Development Council for Alaska, Alaska Governor Sean Parnell, and Alaska Senators Lisa Murkowski and Mark Begich.[30] In December 2009, EPA responded to the comments and published a Regulatory Impact Analysis.[31] On April 30, 2010, after Annex VI had been amended by the IMO but before the North American ECA went into force, EPA published its Final Rule (" Marine Diesel Rule" ) and indicated that the Rule adopted " emission standards . . . equivalent to those adopted in the amendments to Annex VI to . . . MARPOL," including the effective dates for when the new sulfur limits would become applicable in the North America ECA.[32]

V. Procedural History.

The State of Alaska filed its initial Complaint in this action on July 13, 2012, followed by an Amended Complaint on July 16, 2012, and a Second Amended Complaint (" SAC" ) on September 18, 2012.[33] The SAC names as Defendants the Secretary of State, EPA and its Administrator, the Department of Homeland Security and its Secretary, and the Coast Guard and its Commandant (collectively, " Federal Defendants" ). The SAC asserts four claims for relief: (1) the Secretary of State's decision to accept the ECA amendment violated the Administrative Procedure Act (" APA" ) and APPS and should be set aside; (2) enforcement of the ECA amendment as domestic federal law violates the Treaty Clause and separation of powers; (3) EPA's Marine Diesel Rule violated the APA's notice-and-comment rulemaking requirements; and (4) applying the ECA to foreign-flagged ships exceeds EPA's authority under the APA and APPS.[34] The State has subsequently abandoned its third cause of action.[35]

Page 1119

The SAC alleges that enforcement of the ECA in the waters off the coast of Alaska will raise costs for marine vessels and that those higher costs will cause economic harm to the State.[36] The SAC seeks declaratory relief as to the invalidity of the North American ECA, as well as an injunction preventing the Defendants from enforcing the ECA in Alaska.

The Resource Development Council for Alaska (" RDC" ) intervened as a Plaintiff and two groups of entities intervened as Defendants: the Center for Biological Diversity, Environmental Defense Fund, Friends of the Earth, and Natural Resources Defense Council (collectively, " Environmental Defendants" ) and the South Coast Air Quality Management District, Santa Barbara Air Pollution Control District, and Puget Sound Clean Air Agency (collectively, " Clean Air Defendants" ).[37]

RDC is a statewide nonprofit membership organization whose members include individuals and companies from Alaska's oil and gas, mining, forest products, tourism, and fisheries industries.[38] The Environmental Defendants are all nonprofit organizations devoted to protecting marine and coastal ecosystems and to preserving air quality for the health of coastal communities through participation in the administrative process, litigation, and public education.[39] The Clean Air Defendants are all clean air agencies charged with attaining health-based air quality standards in their respective localities, as required by the Clean Air Act.[40]

The State filed a Motion for Preliminary Injunction on September 28, 2012, which was subsequently supported by RDC and opposed by all Defendants.[41] The Federal Defendants filed a Motion to Dismiss the Second Amended Complaint on November 9, 2012, which was opposed by the State.[42]

RDC filed its Intervenor Complaint on November 21, 2012. The Intervenor Complaint names all Defendants in this action, incorporates many of the facts alleged in the SAC by reference, and asserts three claims for relief that overlap with those asserted by the State in the SAC: (1) violation of the Treaty Clause, (2) violation of the nondelegation doctrine, and (3) violation of the separation of powers doctrine.[43] It seeks a declaration that the North American ECA designation violates the Constitution and an injunction preventing the EPA from enforcing the ECA in Alaska.[44] The Federal Defendants filed a Motion to Dismiss RDC's Intervenor Complaint on December 20, 2012, which was opposed by RDC.[45]

Briefing on all three motions concluded on March 12, 2013. Oral argument was not requested by any party and is not necessary to the Court's determination of the motions.

DISCUSSION

The Court turns first to the Federal Defendants' Motions to Dismiss, which

Page 1120

seek dismissal of the State's and RDC's Complaints. Both motions were filed pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6), and assert that this Court lacks subject matter jurisdiction over this action and that the State and RDC have each failed to state a claim upon which relief can be granted.[46]

I. Dismissal Standard.

A. Civil Rule 12(b)(1).

Federal Rule of Civil Procedure 12(b)(1) allows a party to seek dismissal of a complaint for lack of subject matter jurisdiction. " Whenever it appears by suggestion of the parties or otherwise that the court lacks jurisdiction of the subject matter, the court shall dismiss the action." [47] When faced with a challenge to its subject matter jurisdiction under Rule 12(b)(1), a court must resolve that issue before determining whether a complaint states a cause of action under Rule 12(b)(6).[48]

" A federal court is presumed to lack jurisdiction in a particular case unless the contrary affirmatively appears." [49] The party asserting jurisdiction bears the burden of establishing subject matter jurisdiction on a motion to dismiss under Rule 12(b)(1).[50]

Challenges to subject matter jurisdiction can take two forms, facial and factual, which the Ninth Circuit has explained as follows:

In a facial attack, the challenger asserts that the allegations contained in a complaint are insufficient on their face to invoke federal jurisdiction. By contrast, in a factual attack, the challenger disputes the truth of the allegations that, by themselves, would otherwise invoke federal jurisdiction.[51]

Here, Defendants have presented factual challenges to the Court's subject matter jurisdiction over certain of the claims asserted. When ruling on a factual challenge to subject matter jurisdiction, the Court may consider material outside the pleadings.[52]

B. Civil Rule 12(b)(6).

Federal Rule of Civil Procedure 12(b)(6) permits a party to seek dismissal of an action for failure to state a claim upon which relief can be granted. Under the " facial plausibility" pleading standard established by the Supreme Court in Ashcroft v. Iqbal, " a complaint must contain sufficient factual matter, accepted as true, to 'state a claim for relief that is plausible on its face.'" [53] For purposes of the Federal

Page 1121

Defendants' 12(b)(6) arguments to dismiss the SAC and the Intervenor Complaint, the Court accepts as true the material factual allegations contained in the complaints and draws all reasonable ...


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