As it stands, the largely favorable lower court decisions have clarified the powers of local governments to protect their residents from the dangers of the fossil fuel industry.

Last week, climate activists cheered the news that the Western States Petroleum Association declined to pursue an appeal of Portland’s Fossil Fuel Terminal Zoning Amendments to the United States Supreme Court. After losing Dormant Commerce Clause challenges at the Oregon Court of Appeals (January, 2018) and Oregon Supreme Court (July, 2018), it seemed likely that the fossil fuel industry representative would continue to fight. However, the December 21, 2018 deadline passed without a filing.

The City of Portland is now free to reinstitute the Fossil Fuel Terminal Zoning Amendments, which prohibited new and expanded large-scale fossil fuel infrastructure in Portland. CSE and our partners will be there to ensure that this process begins immediately.

Case Background

In January, 2017, the Western States Petroleum Association (WSPA), Portland Business Alliance, Columbia Pacific Building Trades, and the Working Waterfront Coalition filed a petition for review in the Land Use Board of Appeals (LUBA), arguing that the City of Portland’s amendments violated Oregon’s state land use planning goals as well as the Dormant Commerce Clause of the Constitution. In response, several advocacy groups who supported the passage of the Fossil Fuel Terminal Zoning Amendments — including Columbia Riverkeeper, Oregon Physicians for Social Responsibility, Audubon Society of Portland, and the Center for Sustainable Economy — intervened to defend the code from the challenge. These advocacy groups were represented by non-profit law firm, the Crag Law Center.

Industry won the first round on July 19, 2017, with LUBA ruling that the Fossil Fuel Terminal Zoning Amendments were inconsistent with comprehensive plan provisions, statewide planning goals, Metro regional plan provisions, and statewide transportation plans. In addition, LUBA found that the amendments violated the Dormant Commerce Clause of the U.S. Constitution, which prevents state and local governments from regulating in a way that discriminates against interstate commerce. Importantly, two of three LUBA hearings officers recused themselves from the decision because of conflicts of interest, so the decision was issued by only one hearings officer.

On August 2nd, 2017, Portland City Council voted unanimously to appeal LUBA’s ruling to the Oregon Court of Appeals. Speaking to his “aye” vote, Mayor Ted Wheeler stated, “The community expects us to defend this policy.” Commissioner Chloe Eudaly added, “I am ready and willing to fight back against the state interfering in our ability to protect our environment and to protect our residents and make what we think are the best decisions for our city. We need them to set standards that protect people and not profits.” Columbia Riverkeeper, Oregon Physicians for Social Responsibility, Audubon Society of Portland, and the Center for Sustainable Economy also appealed LUBA’s decision, again represented by Crag Law Center.

On January 4, 2018, the Oregon Court of Appeals released its decision in Columbia Pacific v. City of Portland, 289 Or App 739 (2018), which overruled some of LUBA’s rulings, and, most importantly, held that Portland’s Fossil Fuel Terminal Zoning Amendments do not violate the Dormant Commerce Clause of the U.S. Constitution. The Court found that “discrimination” under the Dormant Commerce Clause “simply means differential treatment of in-state and out-of state economic interests that benefit the former and burdens the latter.” Id. at 745. Because neither Portland or Oregon have in-state economic entities that are involved in the refining or distribution of fossil fuels, there could be no discrimination between substantially similar out-of-state and in-state economic entities. Id. at 748. In rejecting the idea that Portland was simply preventing unwanted commerce, the Court found that the amendments do not prohibit fuel exports to or through Portland, but place restrictions on the size of certain fuel terminals that may be used as export facilities, which is lawful activity under the circumstances. Id. at 750.

The Court also concluded that

the amendments provide legitimate putative local benefits, which include limiting the number of very large fossil-fuel terminals in a moderate- to high-risk earthquake liquefaction zone. The amendments also seek to reduce the risk of potential explosions, accidents, and fire at large fossil-fuel terminals and to reduce the similar risk of a catastrophic accident from the larger trains that transport fossil fuels to the terminals. In addition, the amendments seek to protect local public health and limit exposure to coal containing heavy metals linked to cancer, birth defects, and other problems. In considering the amendments, the city noted the recent 2016 derailment of a train carrying oil through the Columbia Gorge, which led to a large oil spill, fire, and the evacuation of a significant portion of the City of Mosier. […] [T]he amendments do seek to “effectuate [ ] legitimate local public interest[s]” in placing some limits on the extent of that risk and seeking to promote local health and safety.

Id. at 752.

Because the City of Portland identified legitimate local benefits and the challengers could not demonstrate how the absence of large fossil-fuel terminals used for international or national export purposes would affect interstate commerce in fossil-fuel distribution, or how that burden compares to the benefits in reducing risks associated with large terminals, the Court reversed LUBA’s decision and ruled that the Fossil Fuel Terminal Zoning Amendments do not violate the Dormant Commerce Clause of the U.S. Constitution. Id. at 753-4.

In response to the adverse decision, WSPA and others appealed the decision to the Oregon Supreme Court. On July 26, 2018, the Oregon Supreme Court declined to review the case, affirming the appeals court ruling as Oregon law.