9th Circuit upholds California's Vessel Fuel Rules in face of constitutional challenge

9th Circuit upholds California's Vessel Fuel Rules in face of constitutional challenge

Prior posts have noted that California issued Vessel Fuel Rules designed to reduce air pollution created by ships moving along the coast.  The Pacific Merchant Shipping Assoc. sued, alleging that it was unconstitutional to apply such rules to shipping more than 3 miles from the California Coast.  The District Court denied a MSJ by plaintiff.  The 9th Cir. just affirmed at 2011 U.S. App. LEXIS 6239 (3/28/11).

The association contended that the regulations were preempted by the Submerged Lands Act ("SLA") which provided for a three-mile offshore limit to the state's coastal boundary, that the dormant Commerce Clause of the U.S. Constitution, Art. 1, Section 8, Cl. 3, precluded the state's extraterritorial regulation of commerce, and that the federal maritime jurisdiction under U.S. Constitution, Art. III, Section 2, Cl. 2, precluded the regulations.

The 9th Circuit held, however, that the association failed to show that the state lacked authority to implement the regulations.  Given the state's police power to prevent air pollution and the presumption against field preemption, the SLA did not preempt the state from regulating the effects of extraterritorial activity on the state, and it remained to determine the health effects of maritime fuel use on state residents and the impact upon maritime commerce.  Further, the extraterritorial application of the regulations did not discriminate unfairly in favor of state residents to the detriment of out-of-state interests and only incidentally burdened commerce, and thus there was no direct conflict with federal interests in interstate commerce and maritime regulation.

One can reasonably anticipate that cert will be sought from the U.S. Supreme Court.