United States: Supreme Court Circumscribes State Authority Over Shipping

The U.S. Supreme Court has overturned the lower court decisions in the cases of United States v. Locke and the International Association of Independent Tanker Owners (INTERTANKO) v. Locke, ___ U.S., ____ (March 6, 2000). Gary Locke is the Governor of the State of Washington. INTERTANKO brought suit against the state after the state promulgated a series of regulations imposing different equipment and operating standards on vessels navigating state waters than those imposed by international conventions or federal regulations. The United States later intervened in support of INTERTANKO. Both the district court and the court of appeals largely upheld the position of the State of Washington.

The U.S. Supreme Court reversed and remanded. The Court held that state regulations dealing with general watch procedures, crew English language skills, and training and drills were subject to field preemption under Title II of the Ports and Waterways Safety Act (PWSA). The state regulation requiring the reporting of certain marine casualties regardless of where in the world they occurred was found to be preempted by the U.S. Coast Guard marine casualty reporting requirements. The Court remanded the issues concerning the remaining Washington State regulations for further consideration by the lower courts in light of its rulings on the first four regulations.

Title II of the PWSA, now codified largely at 46 U.S.C. § 3703, directs the U.S. Coast Guard to promulgate regulations addressing the design, construction, alteration, repair, maintenance, operation, equipping, personnel qualification, and manning of tank vessels on the navigable waters of the United States. In the 1978 case of Ray v. Atlantic Richfield Company, the Supreme Court held that the PWSA and Coast Guard regulations promulgated thereunder preempted state pilotage regulations, limitations on tanker size, and tanker design and construction rules. The state regulation concerning tug escort was upheld.

Following the oil spill from the M/V Exxon Valdez in Alaska in 1989, Congress enacted the Oil Pollution Act of 1990 (OPA 90), expanding the authority of the U.S. Coast Guard to regulate tankers and other vessels navigating the waters of the United States to reduce the risk of future oil spills. The State of Washington enacted similar, but different, legislation. The U.S. Coast Guard promulgated regulations implementing OPA 90. Regulations were also promulgated by the State of Washington to implement the state statutes. The state regulations differed from the Coast Guard regulations and were more expansive.

The issue was whether the state regulations were preempted by federal requirements, even though it was not impossible to comply with both.

Reinforcing the Ray decision, the Court held that, if the matter came within the ambit of Title II of the PWSA, the doctrine of field preemption applied and the states are prohibited from legislating in that area or field. If the matter came within Title I of the PWSA or some other federal law or regulation, the doctrine of conflict preemption applied.

Conflict preemption requires a more complicated analysis than does field preemption. On the other hand, field preemption in this situation is narrower, applying only to tank vessels. Conflict preemption applies to all vessels subject to regulation by the U.S. Coast Guard. States are allowed to regulate vessels, in accordance with the doctrine of conflict preemption, unless those state regulations run counter to an exercise of federal authority. This conflict may arise in two modes. First, the state regulation may make it impossible to also comply with the federal requirements. The more difficult situation occurs when the state regulation stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.

The original challenge was against 16 Washington State regulations. The District Court upheld all 16. The Court of Appeals struck down one ? the requirement that tankers be equipped with global positioning system (GPS) receivers, two radar systems, and an emergency towing system. The U.S. Supreme Court dealt directly with four of the remaining regulations. The Court remanded the cases to the lower courts to address those remaining regulations in light of this decision. The first three of the regulations struck down by the Court, as noted above, were done in by the doctrine of field preemption.

The reasoning of the Court in striking down the fourth regulation is significant, because that reasoning will undoubtedly be relied upon by the lower courts not only in resolving the remaining 11 Washington State regulations, but also in reviewing laws and regulations promulgated by other states, such as Maine and Rhode Island.

The inquiry regarding conflict preemption (other than a direct conflict, which is easily recognized and struck down) starts with whether the Coast Guard has promulgated its own requirement on the subject or has decided that no such requirement should be imposed at all. While a state has some discretion with regard to local matters, the Coast Guard, with an overview of all possible ramifications of a particular requirement may be in the best position to balance all competing interests. On the other hand, a state regulation based on such local conditions as water depth or width of a channel may be within a state's residual power if it has limited extraterritorial effect, not requiring the vessel to modify its primary conduct outside the specific body of water purported to justify the local rule.

Thus, local speed limits, which have been used by states and other local governments for many years, will not be impacted by this decision. On the other hand, a state regulation requiring a ship owner to maintain written training records of the crew will undoubtedly not survive, even though it merely supplements federal and international requirements. The appropriate inquiry in the latter case is whether the purposes and objectives of the federal statutes and regulations, including the intent to establish a workable, uniform system, are consistent with the concurrent state regulation. It is ineffective for the state in such a situation to contend that its regulation is coincidental with the federal objectives. The problem arises exactly because the state intends to go further than Congress and the Coast Guard have seen fit to go. [If interested in a further discussion of this case in general and the preemption issue in particular, your attention is invited to the brief submitted by this firm in amici curiae on behalf of the Baltic and International Maritime Council (BIMCO) and the Chamber of Shipping of America. The firm's brief focussed exclusively on the preemption issue. The issue of field preemption was not addressed in the brief submitted by the federal government.

Having largely resolved the legal issues, the Court then expressed, in dicta, its concern for the marine environment and the task ahead for all involved parties. The Court stated:

"When one contemplates the weight and immense mass of oil ever in transit by tankers, the oil's proximity to coastal life, and its destructive power even if a spill occurs far upon the open sea, international, federal, and state regulation may be insufficient protection. Sufficiency, however, is not the question before us. The issue is not adequate regulation but political responsibility; and it is, in large measure, for Congress and the Coast Guard to confront whether their regulatory scheme, which demands a high degree of uniformity, is adequate. States, as well as environmental groups and local port authorities, will participate in the process."

The Supreme Court has handed the federal government and those concerned with national and international uniformity in maritime commerce a significant victory over local interests. With the victory comes a heavy responsibility for the safety of our waterways. It is now incumbent upon Congress and, especially, the U.S. Coast Guard to accept that responsibility by carefully reviewing the current regulatory scheme and making value-added improvements where appropriate. This review must be made in conjunction with the numerous stakeholders, which include, but are not limited to, ship owners and operators, flag states, classification societies, marine insurers, shipyards, maritime unions, state and local governments, port authorities, environmental advocates, the general citizenry, the International Maritime Organization, and, most importantly, the professional crews of merchant vessels. It is a daunting task, but working cooperatively, the risk of marine casualties can be further reduced in a safe and sane manner.