Shippers’ Case Law
Hoping for uniformity
Eight U.S. states and Ontario border the Great Lakes, so it's natural that ship owners would like to have uniformity in laws governing how they operate there.
But a federal appeals court has upheld a Michigan requirement that ships obtain a state permit to discharge ballast water (Fednav Ltd. v. Chester, No.07-2083, Sixth Cir., Nov. 21, 2008).
Stuart Theis, executive director of the U.S. Great Lakes Shipping Association (USGLSA), said a group of ship agents for operators of 'salties' – ships that come to the Great Lakes from abroad – Minnesota has implemented a similar law, and other states are developing legislation.
But Theis was hopeful Environmental Protection Agency requirements for permits for ballast water discharges – due to be implemented on Dec. 19 on orders by a California court – might be widely adopted by states, saving ship owners the difficulty of having to struggle with a patchwork of regulations.
In this case, the plaintiffs – the USGLSA, shipping companies, a port terminal and dock operator, and other associations – appealed a district court's dismissal of their constitutional challenges to the so-called Michigan Ballast Water Statute.
Congress passed the Nonindigenous Aquatic Nuisance Prevention and Control Act of 1990 to combat the problem of invasive species that can be introduced when ballast water is discharged by vessels from abroad.
Without natural predators or other controls, 'aquatic nuisance species' (ANS) can run amok in U.S. waterways, causing damage and hurting native fisheries. The court noted that 'Congress predicted in 1990 that – wholly apart from ecological harm – economic harm from the zebra mussel alone could total $5 billion by the year 2000.'
Under the 1990 law, the Coast Guard issued regulations in 1993 that required vessels traveling to the Great Lakes and carrying ballast water from beyond the 200-mile exclusive economic zone to employ one of three 'ballast water management practices:'
' Exchange any fresh water ballast with seawater beyond the EEZ. The theory is any foreign organisms are dumped at sea and killed by the salt water, and any organisms picked up in high seas are accustomed to high levels of salt would not be able to survive in fresh water if ballast is discharged on the Great Lakes.
' Retain the ballast water onboard the vessel.
' Discharge ballast water to reception facilities ashore, or treat it with heat, chemicals, ultraviolet light, filters or deoxygenating.
The rules were later reauthorized and revised regulations were issued in 2004.
Theis noted that in the past year the U.S. and Canadian coast guards, as well as their St. Lawrence Seaway agencies, have conducted ship inspections to make sure ballast water has the proper levels of salinity.
The court said, 'This case ultimately arises from the fact that the Coast Guard's ballast-water regulations contain, for lack of a better term, a loophole' because they don't apply to ships that declare they have no ballast on board. Yet the Coast Guard said such ships may carry invasive species via sediment or residual ballast water.
Theis explained that because many ships come to the Great Lakes loaded with heavy products such as steel, they often need ballast water on their inward voyage. But as ships discharge and load cargo, they may take on and discharge ballast water for stability.
Recognizing this threat, the Coast Guard announced in 2004 that it would establish 'ballast-water-discharge standards and evaluating shipboard treatment technologies,' but has not yet done so.
Michigan took action on its own in 2005 by passing a law requiring all oceangoing vessels engaging in port operations to obtain a permit after Jan. 1, 2007 that would be issued only if the ship could demonstrate it would not discharge aquatic nuisance species or use treatment methods on ballast water it had approved such as hypochlorite, chlorine dioxide, ultraviolet light and filtering or deoxygenating to kill any critters.
The plaintiffs sued in federal district court, seeking an injunction against enforcement of the law and a declaration that it was unconstitutional. They claimed it was preempted by federal law, violated the commerce clause, the due process clause of the 14th Amendment, and various provisions of the Michigan constitution. A judge granted the government's motion to dismiss the complaint and the Sixth Circuit appeal followed.
The appeals court noted treatment systems, like those Michigan requires, 'cost upwards of a half-million dollars per vessel,' and it should have been easy for plaintiffs to show they were harmed by the treatment requirement to allege an injury in fact, but it said no plaintiff made such an allegation in the complaint.
The plaintiffs' argument that since the 'overwhelming majority' of their vessels do not discharge ballast water in Michigan means there must be a few that do, did not impress the court. 'We simply will not strain to construe the complaint to say by negative implication what it very simply could have said directly,' it said. Nor does the mere existence of a statute, which may or may not ever be applied to the plaintiffs confer standing, the court added.
The court said it had jurisdiction only over the claim involving the permit requirement. The court didn't agree with the appellant that it was subject to preemption by two federal laws, the Nonindigenous Aquatic Nuisance Prevention and Control Act of 1990 and the National Invasive Species Act, which reauthorized and amended it in 1996. The 1996 law's purpose was two-fold: to prevent introduction of nuisance species into the Great Lakes and control them after they've been introduced. The Michigan law was aimed at prevention, the court noted, but 'says nothing about controlling them after introduction.'
The Sixth Circuit said the text of the federal law reveals that 'Congress expressly contemplated ANS prevention measures – in the 'Great Lakes region' no less,' and in fact encouraged them. It added the plaintiffs 'identified no federal interest that supports a finding that Congress intended to preempt the field of ANS prevention.
'Michigan, for undisputedly legitimate reasons, has enacted legislation of a type expressly contemplated by Congress. We have no basis to disrupt the result of those democratic processes,' it concluded.
But Theis noted that in July the Ninth Circuit upheld a decision that will end an exemption that ballast water discharges have normally had from the federal Clean Water Act. When that happens on Dec. 19, large commercial vessels will have to obtain federal permits for ballast water and other sorts of discharges.
He hopes states will find federal requirements acceptably stringent and eliminate any state rules. He noted this happened when Congress adopted the Oil Pollution Act of 1990, allowing ship owners to grapple with a single, albeit stringent, law rather than a crazy quilt of regulations.