Portland Pipe Line Corp. v. City of Portland

PORTLAND PIPE LINE CORPORATION, et al., Plaintiffs, v. CITY OF SOUTH PORTLAND, et al., Defendants.

2:15-cv-00054-JAW

UNITED STATES DISTRICT COURT DISTRICT OF MAINE

May 11, 2017

INTERIM ORDER

The Court orders further proceedings under Federal Rule of Civil Procedure 12(b)(1) to resolve whether the Court has subject matter jurisdiction.

I. BACKGROUND

On February 6, 2015, Portland Pipe Line Corporation (PPLC) and the American Waterways Operators (AWO) (collectively, Plaintiffs) filed a nine-count complaint in this Court, challenging the constitutionality of a municipal ordinance that prohibits the "bulk loading" of crude oil onto marine vessels in the harbor of South Portland, Maine. Compl. for Declaratory and Injunctive Relief (ECF No. 1) (Compl.). PPLC owns and operates the United States portion of a transportation system that includes 12-inch diameter, 18-inch diameter, and 24-inch diameter pipelines and associated facilities extending from South Portland, Maine to Montreal, Quebec. Id. ¶ 11. At the time of the filing of the Complaint in February 2015, approximately forty-eight ships offloaded at South Portland annually, and PPL transported crude oil to Quebec via pipeline at a rate of approximately 2.4 million barrels of oil per month. Id. The practical effect of the Ordinance is to prevent PPLC from reversing the flow of its existing pipeline infrastructure to transport oil south from Montreal, Quebec, to vessels in the South Portland harbor.

On March 31, 2015, the city of South Portland and its code enforcement officer (collectively, Defendants) filed a motion to dismiss for lack of subject matter jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(1), arguing, inter alia, that the Plaintiffs' claims are unripe and that the Plaintiffs lack standing. Defs.' Mot. to Dismiss the Compl. Pursuant to Rule 12(b)(1) (ECF No. 16); Mem. of Law in Supp. of Defs.' Mot. to Dismiss Pursuant to Rule 12(b)(1) (ECF No. 17). Specifically, the Defendants argued that the Plaintiffs have no concrete plan to reverse the flow of oil and thereby violate the Ordinance, that the present effect of the Ordinance on the Plaintiffs consists of a "threadbare claim of economic uncertainty," and that the Plaintiffs' claims rest on a "chain of contingencies, including whether PPLC ever decides to bulk load crude oil in the City and whether it initiates a process for federal, state and local approvals that may conflict with the Ordinance." Id. at 11-18.

On February 11, 2016, the Court issued an order denying the Defendants' Motion to Dismiss. Order on Defs.' Mot. to Dismiss (ECF No. 29). Viewing the facts in the light most favorable to the Plaintiffs, the Court concluded that "but for the Ordinance, PPLC would commence plans to reverse the flow of crude oil and would begin marketing that oil." Id. at 38-38. However, the Court cautioned that "itremains to be seen whether PPLC will amass a set of facts sufficient for the Court to make its legal determinations [regarding justiciability] . . . ." Id. at 40.

Subsequent to the Court's Order, the parties engaged in discovery, and on November 17, 2016, the parties filed cross motions for summary judgment with supporting statements of material facts. Pls.' Mot. for Summ. J. (ECF No. 87); Pls.' Statement of Material Facts (ECF No. 89); Defs.' Consolidated Mot. to Dismiss Pursuant to Rule 12(b)(1) and Mot. for Summ J. (ECF No. 88) (Defs.' Mot.); Defs.' Rule 12(b)(1) and Loc. R. 56(b) Statement of Undisputed Material Facts [Redacted Verion] (ECF No. 95). As part of their motion for summary judgment, the Defendants also renewed their motion to dismiss for lack of subject matter jurisdiction pursuant to Rule 12(b)(1). Defs.' Mot. at 2-3. In their motion, the Defendants contend:

Now that discovery is complete, it is plain that the [Defendants'] initial arguments were correct and that, in denying the [Defendants'] initial motion, the Court was misled by statements and arguments by the Plaintiffs that are demonstrably untrue. Specifically, contrary to Plaintiffs' representations, PPLC has no current plans to reverse the flow of oil in its pipeline . . . , did not receive all of the permits necessary to reverse the flow . . . and, in fact, has full knowledge that there is not sufficient volume of crude oil available in the existing west-to-east pipeline network [which would supply PPLC] to make its project viable. . . . Thus, the [Defendants] renew[] [their] motion to dismiss based upon ripeness and standing.

Id.

II. FACIAL VERSUS FACTUAL RULE 12(b)(1) CHALLENGES

Under Rule 12(b)(1), a court must dismiss a case over which it lacks subject matter jurisdiction. FED. R. CIV. P. 12(b)(1), (h)(2). Rule 12(b)(1) is a "large umbrella, overspreading a variety of different types of challenges to subject-matterjurisdiction," including ripeness and standing. Valentin v. Hosp. Bella Vista, 254 F.3d 358, 362-63 (ripeness); see Blum v. Holder, 744 F.3d 790, 795-96 (1st Cir. 2014) (standing). The plaintiff, as the party asserting subject matter jurisdiction, has the burden of demonstrating its existence. Aversa v. United States, 99 F.3d 1200, 1209 (1st Cir. 1996).

The First Circuit has established two ways to challenge a court's subject matter jurisdiction under Rule 12(b)(1): facial challenges and factual challenges. In a facial challenge, the defendant "accepts the plaintiff's version of the jurisdictionally-significant facts as true and addresses their sufficiency, thus requiring the court to assess whether the plaintiff has propounded an adequate basis for subject matter jurisdiction." Id. at 363. In performing this task, the court must proceed as it would under Rule 12(b)(6), accepting the well-pleaded facts contained in the complaint as true and drawing all reasonable inferences in favor of the plaintiff. Id.

When mounting a factual challenge, by contrast, the defendant controverts "the accuracy (rather than the sufficiency) of the jurisdictional facts asserted by the plaintiff and proffer[s] materials of evidentiary quality in support of that position." Id. Faced with a factual challenge, the court must first "determine whether the relevant facts, which would determine the court's jurisdiction, also implicate the elements of the plaintiff's cause of action." Torres-Negron v. J&N Records, LLC, 504 F.3d 151, 163 (1st Cir. 2007). If the court determines that the disputed jurisdictional facts are intertwined with the merits of the case, then "the district court shouldemploy the standard applicable to a motion for summary judgment." Id. (quoting Autery v. United States, 424 F.3d 944, 956 (9th Cir. 2005)).

If, however, the court determines that the contested jurisdictional facts are not intertwined with the elements of the plaintiff's cause of action, then the court "must address the merits of the jurisdictional claim by resolving the factual disputes between the parties." Valentin, 254 F.3d at 363. This is because "at issue in a factual 12(b)(1) motion is the trial court's jurisdiction—its very power to hear the case . . . ." Torres-Negron, 504 F.3d at 163 (quoting Lawrence v. Dunbar, 919 F.2d 1525, 1529 (11th Cir. 1990)); see also Valentin, 254 F.3d at 364 ("A court's authority to hear a particular case is a necessary precondition to the proper performance of the judicial function"). When resolving the factual disputes, the court "may proceed as it never could under [Rule 12(b)(6) or Rule 56]." Torres-Negron, 504 F.3d at 163 (alteration added). The plaintiff's factual allegations are entitled to no presumptive weight; rather, the court is free to weigh the evidence and "enjoys broad authority to order discovery, consider extrinsic evidence, and hold evidentiary hearings in order to determine its own jurisdiction." Valentin, 254 F.3d at 363; see also Hernandez-Santiago v. Ecolab, Inc., 397 F.3d 30, 33 (1st Cir. 2005); Nulankeyutmonen Nkihtaqmikon, 462 F. Supp. 2d. 86, 90 (D. Me. 2006) (internal quotations marks and citation omitted), rev'd on other grounds 503 F.3d 18 (1st Cir. 2007); 2 JAMES WM. MOORE, MOORE'S FEDERAL PRACTICE § 12.30[4] (3d ed. 2016) ("Because a factual Rule 12(b)(1) motion involves the court's very power to hear the case, the Court may weigh the evidence to confirm its jurisdiction. No presumptive truthfulness attaches toplaintiff's allegations, and the existence of disputed material facts does not preclude the trial court from evaluating for itself the merits of the jurisdictional claim").

III. THE DEFENDANTS' FACTUAL RULE 12(b)(1) CHALLENGE

In this case, the Defendants label their present Rule 12(b)(1) motion as a "factual challenge."¹ Defs.' Mot. at 10 (citing Valentin, 254 F.3d at 362-65). The Plaintiffs do not appear to disagree with this designation; rather, they argue that the Defendants should not be entitled to a second bite at the Rule 12(b)(1) apple, especially because the Defendants could have requested the evidentiary record two years ago when it filed its first motion. Pls.' Mem. in Opp'n to Defs.' Mot. to Dismiss and for Summ. J. at 2 (ECF No. 127) (Pls.' Opp'n). The Court agrees with thePlaintiffs that it would have been better practice for the Defendants to request preliminary jurisdictional discovery earlier in the case.²

However, the Defendants cannot waive subject matter jurisdiction—as the Plaintiffs seem to suggest. The First Circuit has written that "lack of subject matter jurisdiction can be noticed at any time and cannot be waived." Plumbers' Union Local No. 12 Pension Fund v. Nomura Asset Acceptance Corp., 632 F.3d 762, 767 (1st Cir. 2011); see also Mach. Project, Inc. v. Pan Am. World Airways, Inc., 199 F. Supp. 3d 382, 386 (D. Mass. 2016) (citing Aversa v. United States, 99. F.3d 1200, 1209 (1st Cir. 1996)) (holding that a challenge to the existence of federal subject matter jurisdiction "may be raised at any point during the litigation pursuant to Fed. R. Civ. P. 12(b)(1)"). This is because, as noted earlier, "[a] court's authority to hear a particular case is a...