Stretching the Bounds of State Sovereignty

By Jeffrey S. Moller, Blank Rome LLP
Wednesday, September 21, 2011

The operation of vessels in international commerce has never been more complicated than it is today, particularly from the standpoint of regulatory compliance.  A vessel operator must be cognizant of international, national, state and local regulatory requirements.  In an ideal world, the regulations of subjects such as navigation safety, crew licensure or pollution would be uniform so that an operator could understand the law and more easily comply.  In cases where the requirements of one jurisdiction differ from those of another, it would certainly be helpful to know where the line of demarcation between one jurisdiction and another could be firmly drawn.
The regulation of air pollution emitted from large oceangoing vessels has been the subject of an international treaty for many years.  The International Convention for the Prevention of Pollution from Ships, 1973 (known as “MARPOL”) at Annex VI contains a standard on permissible levels of nitrogen oxide (“NOx”) emissions and a general limitation on the sulfur content of vessel fuels.  In 2006, the U.S. Senate consented to participation by the United States as a signatory to Annex VI.  Two years later, Congress instructed the U.S. Environmental Protection Agency (“EPA”) to administer and enforce the specific MARPOL Annex VI regulations for U.S. waters.  And in April 2009, the United States and Canada jointly proposed so-called Emissions Control Areas (“ECA”) along both the Atlantic and Pacific coasts as a prelude to the eventual imposition in those ECAs of the MARPOL Annex VI regulations.  The agreed-upon ECAs will go into effect on August 1, 2012.  From that date until January 1, 2015, ships travelling within 200 nautical miles of the coast of either the United States or Canada will, as a matter of U.S. and Canadian law, be required to use fuel with the maximum sulfur content of 1.0%.  After January 1, 2015, the sulfur content limit will fall to 0.1%.
In the midst of all this international and national regulatory activity, the State of California nevertheless decided to wade in.  Although EPA regulations and the ECA for the Pacific coast would cover all waters of California subject to navigability in interstate commerce, i.e., all of the waters where large oceangoing vessels could operate within or adjacent to the state, the California Air Resources Board (“CARB”) adopted rules which impose NOx emission and sulfur fuel restrictions on all vessels operating not only within the territorial waters of California but extending out 24 additional nautical miles beyond the California baseline into the high seas.  The CARB regulations imposed a 0.1% sulfur restriction on marine fuels effective July 1, 2009.  Therefore, even at the point when the U.S. law takes effect in August 2012, the CARB rules will be stricter and will apply outside of California’s territorial waters until at least January 1, 2015.  Even after January 1, 2015, the CARB rules could remain in effect until the Executive Officer of CARB decides that the federal requirements will “achieve equivalent emissions reductions” and are in fact being effectively enforced within the waters governed by the CARB rules.
In April 2009, the Pacific Merchant Shipping Association (PMSA), whose members include foreign and domestic vessel owners and operators that are commercial cargo and passenger carriers in both foreign and coastwise trade, filed a lawsuit in federal court seeking to prevent the enforcement of the CARB rules.  Unfortunately, the federal district court denied PMSA its requested relief, which denial was upheld on appeal earlier this year by the U.S. Court of Appeals for the Ninth Circuit.  PMSA is determined to remedy the situation, however, and has recently submitted a petition to the U.S. Supreme Court.  The Supreme Court is not obligated to accept the case, however.  As things now stand, the State of California has received permission from the federal judiciary to regulate the conduct and operation of vessels bound for ports of California while those vessels are up to 24 miles outside of the State’s traditional territorial jurisdiction. 
The U.S. Constitution contains an important provision with respect to the superiority of federal and international law known as the “Supremacy Clause.”  That clause, found at Article I, Section 8, reads as follows: 
“This Constitution, and the Laws of the United States which shall be made in pursuance thereof; and all treaties made, or which shall be made, under the authority of the United States, shall be the supreme law of the land; and the judges in every State shall be bound thereby, anything in the Constitution or laws of any State to the contrary notwithstanding.”
The MARPOL Annex VI treaty, as adopted by the United States and put into place by various federal statutes and international agreements, would certainly seem to qualify as “the supreme law of the land” with respect to pollution from ships, and therefore superior to those of any state.  The U.S. Submerged Lands Act states that the seaward boundary of a state’s jurisdiction is at the three mile limit.  Nevertheless, it will take a reversal by the U.S. Supreme Court to prevent the CARB rules, which conflict with the program, timetable and substance of the MARPOL Annex VI regulations, subsequent agreements and statutes, and arguably the Submerged Lands Act, from being enforced. 
The CARB rules are not the first foray by a state into the regulation of vessels engaged in foreign commerce.  In fact, the regulation of and licensure of pilots for service upon foreign vessels has been largely left to the province of the states since the earliest days of the republic.  An unsuccessful challenge to state pilot regulations gave rise to one of the seminal U.S. Supreme Court cases with respect to the interpretation of the Supremacy Clause, known as Cooley v. Board of Wardens of the Port of Philadelphia, decided in 1851.  Of course, regulation of pilots on U.S. flag vessels involved in coastwise trade has been retained by the federal government.  The Supreme Court has looked with favor upon state regulation of the shipping industry in other circumstances where there were gaps in the federal law or the subject of the regulation was, like pilotage, seen to be uniquely local in character.  But the U.S. Supreme Court has never approved the enforcement of a state regulation beyond the limit of the territorial sea.  The authority to regulate interstate commerce was specifically given in the U.S. Constitution to the federal government because the Founding Fathers recognized that uniformity of law in matters of commerce was absolutely essential in order to avoid conflicts among bordering states and difficulties with foreign countries.  The operation of oceangoing vessels is, of course, the essence of commerce.  Uniform regulations with respect to environmental protection are also essential because full protection of the global environment can only be achieved through international cooperation, which cooperation is less likely to be attained if each coastal state imposes unique requirements.
California rightly takes pride in its leading role with respect to protection of the environment, and its air pollution problems, particularly in the South Coast area, have been extraordinary.  But the importance of uniformity of law with respect to international shipping, recognized as a founding principle of our Constitution in order to avoid both internal difficulties and conflicts in foreign relations, must be given overarching precedence.  It is to be hoped that the U.S. Supreme Court will take on PMSA’s appeal and decide to restrict the enforcement of the CARB rules so that the principle of uniformity will be respected and strengthened.

Mr. Moller serves as chairman of the Committee on Regulation of Vessel Operation of the Maritime Law Association of the United States, which has submitted an amicus curiae brief in the case of Pacific Merchant Shipping Association vs. Goldstene urging the U.S. Supreme Court to hear the case.

(As published in the August 2011 edition of Maritime Reporter & Engineering News - www.marinelink.com)

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