Case 2:09-at Document 1 Filed 04/27/2009 Page 1 of 15

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1 Case :0-at-00 Document Filed 0//0 Page of ( - 0 Erich P. Wise/State Bar No. Nicholas S. Politis/State Bar No. Aleksandrs E. Drumalds/State Bar No. 0 Telephone: ( - Facsimile: ( - James B. Nebel/State Bar No. Conte C. Cicala/State Bar No. One California Street, Suite 0 San Francisco, California Telephone: ( - Facsimile: ( -00 Attorneys for Plaintiff PACIFIC MERCHANT SHIPPING ASSOCIATION, a California Mutual Benefit Corporation UNITED STATES DISTRICT COURT EASTERN DISTRICT OF CALIFORNIA - SACRAMENTO PACIFIC MERCHANT SHIPPING ASSOCIATION, a California Mutual Benefit Corporation, vs. Plaintiff, JAMES GOLDSTENE, in his official capacity as Executive Officer of the California Air Resources Board, Defendant. Case No.: COMPLAINT FOR INJUNCTIVE AND DECLARATORY RELIEF - -

2 Case :0-at-00 Document Filed 0//0 Page of ( - 0 For its complaint in the captioned matter, PACIFIC MERCHANT SHIPPING ASSOCIATION ( PMSA, a California Mutual Benefit Corporation, alleges and avers as follows: I. PRELIMINARY STATEMENT. This complaint asks the Court to enjoin the Executive Director of the California Air Resources Board ( CARB from enforcing either section. of Title or section. of Title of the California Code of Regulations ( CCR and to declare the regulations unconstitutional and contrary to federal law insofar as those regulations impose requirements on vessels operating seaward of California s three-mile boundary. The regulations require persons owning, operating or chartering any ocean going commercial vessel calling at California ports, including ship owner and operator members of the PMSA, to use fuels specified by CARB for the operation of any main propulsion or auxiliary diesel engine or diesel electric and any auxiliary boiler within nautical miles of the California coast. They require ship operators to maintain detailed records regarding both the internal operations of their vessels and the purchase and quality of fuel oil used by those vessels. They impose substantial fines and penalties and allow for unspecified injunctive relief against the vessels and their owners in the event of non-compliance. CARB has adopted the challenged regulations and is scheduled to begin enforcing them on July, 0, for main propulsion diesel engines and on an earlier effective - -

3 Case :0-at-00 Document Filed 0//0 Page of ( - 0 date for diesel electric and auxiliary diesel engines when approved and transmitted by the California Office of Administrative Law to the California Secretary of State.. CCR. and CCR. contravene the Supremacy Clause of the United States Constitution because they conflict are preempted by the federal Submerged Lands Act, U.S.C. 0- and impermissibly regulate navigation and foreign and domestic commerce outside of the State s territorial jurisdiction in violation of Article I, Section, Clause of the United States Constitution.. PMSA s members will be required to comply with these unlawful regulations and will be subject to fines, penalties, and potential exclusion from the ports of California if they fail to do so. They will suffer immediate and irreparable harm if required to comply with the regulations because they will incur the substantial and immediate additional expense of purchasing and using fuels that comply with the CARB regulations and these expenses are not and will not be recoverable from defendant, CARB, the State of California or any other entity. Furthermore, unless enforcement of the regulations is enjoined, important interests of the United States in the national and international uniformity of laws and standards applicable to interstate and foreign maritime commerce will be compromised. // // - -

4 Case :0-at-00 Document Filed 0//0 Page of ( - 0. By this complaint, therefore, the PMSA seeks a permanent injunction against enforcement of the regulations more than three geographical miles seaward of California s coastal baseline and a declaratory judgment that they are unlawful and unconstitutional to the extent they regulate the conduct of ships outside California s territorial limits. II. JURISDICTION. This is an action arising under the Constitution and laws of the United States, including Article VI, cl. (Supremacy Clause of the Constitution and the Submerged Lands Act, U.S.C. 0 et seq. This court has original jurisdiction over the case pursuant to the federal question, maritime and admiralty, and commerce regulation jurisdictional statutes, U.S.C.,, and, and the power to issue declaratory relief pursuant U.S.C.. III. VENUE. Venue is proper in the Eastern District of California pursuant to U.S.C. (b. James Goldstene, sued in his official capacity as the Executive Officer of CARB, is the only defendant in this matter and resides within this District. A substantial part of the events giving rise to this action, including the adoption of the challenged regulation by CARB, has occurred in Sacramento, and the regulations - -

5 Case :0-at-00 Document Filed 0//0 Page of ( - 0 will be enforced against vessels that call within this district at the Ports of Stockton and Sacramento. IV. THE PARTIES. Plaintiff PMSA is a mutual benefit corporation that is organized and existing under the laws of the State of California. Its principal purposes include representation and promotion of its members interests in legislative, legal, and administrative matters affecting its members in the State of California. The members of the PMSA include twenty-two companies that own or operate foreign and United States-flagged ocean-going commercial vessels in foreign and interstate maritime commerce within twenty-four miles of the California coastline and in ports in California. These PMSA members are subject to the CARB regulations at issue. The PMSA s ship owner/operator members use main propulsion and auxiliary diesel and diesel electric engines and auxiliary boilers during navigation within miles of the California coast, and they will be subject to CCR. and CCR. when enforcement of the regulations begins. The vessel owner/operator members of the PMSA are the express subjects of the challenged regulations.. Defendant James Goldstene is the Executive Officer of CARB. Pursuant to California Health & Safety Code, and, he is charged as Executive Officer with enforcement of regulations adopted by CARB. By its Board Resolution No. 0-, CARB specifically directed Mr. Goldstene, as the Board s - -

6 Case :0-at-00 Document Filed 0//0 Page of ( - 0 Executive Officer, to enforce CCR. and CCR. outside the territorial limits of the State of California. He is sued in his official capacity of Executive Officer of CARB. V. CLAIM FOR RELIEF [For Declaratory And Injunctive Relief Based On Preemption By The Submerged Lands Act, U.S.C. 0 et seq.]. Plaintiff realleges and incorporates by reference the allegations of Paragraphs through of this Complaint as if set out here in full. 0. On July, 0, CARB approved Board Resolution 0-- adopting two regulations, CCR. and CCR.. CARB subsequently proposed modifications to the approved regulations and made such modified versions available for public comment on February, 0. Plaintiff PMSA participated in the administrative proceedings held by CARB regarding the proposed regulations and timely provided extensive written comments on the regulations.. On April, 0, CARB certified and transmitted the regulations as modified to the California Office of Administrative Law ( OAL for review, approval and transmittal to the California Secretary of State for filing pursuant to California Government Code.. Under. of the California Government Code, approval and transmittal of the regulations by the OAL to the Secretary of State are ministerial and non-discretionary acts which will occur on or - -

7 Case :0-at-00 Document Filed 0//0 Page of ( - 0 before the effective and enforcement date of the regulations. As provided for in the regulations, the regulations will become effective upon OAL s approval and transmittal of the final regulations to the California Secretary of State. Such approval and transmittal will occur prior to July, 0. By the terms of the regulations, enforcement will commence on July, 0 for the main propulsion diesel engines and auxiliary boilers and, for diesel electric and auxiliary diesel engines, upon OAL approval and filing with the California Secretary of State.. Both regulations require the owners, operators and charterers of ocean-going U.S. and foreign-flag commercial vessels to use the fuels specified by the regulations to operate the ships main and auxiliary engines and auxiliary boilers whenever the ships are within twenty-four nautical miles of the base low water line along the California coast. The substance of both regulations is the same.. Subsection (e of the regulations: A. Provides: ( Fuel Sulfur Content Limits (A Auxiliary Diesel Engines i. Except as provided in subsections (c and (h, upon the effective date of this regulation as approved by the Office of the Administrative Law, a person subject to this section shall operate any auxiliary diesel engine, while the vessel is operating in Regulated California Waters, with either marine gas oil (MGO, with a maximum of. percent sulfur by weight, or marine diesel oil (MDO,with a maximum of 0. percent sulfur by weight, rounded as specified in subsection (i(; ii. Except as provided in subsections (c and (d, beginning January,, a person subject to this - -

8 Case :0-at-00 Document Filed 0//0 Page of ( - 0 section shall operate any auxiliary diesel engine, while the vessel is operating in Regulated California Waters, with either marine gas oil (MGO, with a maximum of 0.% sulfur by weight, or marine diesel oil (MDO with a maximum of 0.% sulfur by weight, rounded as specified in subsection (i (. (B Main Engines and Auxiliary Boilers i. Except as provided in subsections (c and (h, beginning July, 0, a person subject to this section shall operate any main engine or auxiliary boiler, while the vessel is operating in Regulated California Waters, with either marine gas oil (MGO, with a maximum of. percent sulfur by weight, or marine diesel oil (MDO, with a maximum of 0. percent sulfur by weight, rounded as specified in subsection (i (; ii. Except as provided in subsections (c and (h, beginning January,, a person subject to this section shall operate any main engine or auxiliary boiler, while the vessel is operating in Regulated California Waters, with marine gas oil (MGO with a maximum of 0.% sulfur by weight or marine diesel oil (MDO with a maximum of 0.% sulfur by weight, rounded as specified in subsection (i (. B. Requires vessel owners and operators subject to the regulations to maintain records that contain the type of fuel used in each main and auxiliary engine and auxiliary boiler operated within twenty-four nautical miles of the California baseline, the types, amounts, and the actual percent by weight sulfur content of all fuels purchased for use on the vessel, and the date, local time and position of each vessel:. Upon entry into and departure from within twenty-four nautical miles of the California baseline; and - -

9 Case :0-at-00 Document Filed 0//0 Page of ( - 0. At the initiation and completion of any fuel switching procedures used to comply with the section prior to entry into or within the twenty-four nautical mile zone.. Pursuant to their subsection (b, the regulations apply to any person who owns, operates, charters, rents or leases any large ocean-going commercial vessel as defined by the regulations that is registered in, flagged in, or operating under the authority of the United States or any other country.. Subsection (f( of the regulations provides for imposition of penalties, injunctive relief, and other remedies specified in [California] Health and Safety Code, -, and 00 et seq., other applicable sections in the Health and Safety Code; and other applicable provisions as provided under California law for each violation. Such penalties, relief and remedies include, among other things, injunctive relief, misdemeanor prosecution, civil and criminal fines of $,000 to $,000 for every day of non-compliance, and imprisonment for up to one year for each day of non-compliance to secure payment of civil penalties. Subsection (f( of the regulations provides that [a]ny failure to meet any provision, standard, criteria, or requirement of the regulations shall constitute a single, separate violation of this section for each hour that a person operates an ocean going vessel within twenty-four nautical miles of the California coast until such provision, standard, criteria, or requirement has been met.. The territorial jurisdiction and boundary of the State of California is limited by the federal Submerged Lands Act, U.S.C. 0,, and, to a - -

10 Case :0-at-00 Document Filed 0//0 Page 0 of ( - 0 line within three geographical miles of the California coast line. Under the Submerged Lands Act, the State of California has no jurisdiction to regulate the conduct of persons owning or operating vessels engaged in international or interstate maritime commerce in waters that are seaward from California s territorial boundary of three geographical miles from its coast line. provides that:. Pursuant to U.S.C. (a, the Submerged Lands Act also The United States retains all its navigational servitude and rights in and powers of regulation and control of said lands and navigable waters for the constitutional purposes of commerce, navigation, national defense, and international affairs, all of which shall be paramount to, but shall not be deemed to include, proprietary rights of ownership, or the rights of management, administration, leasing, use, and development of the lands and natural resources which are specifically recognized, confirmed, established, and vested in and assigned to the respective States and others by section of this title.. By Presidential Proclamations (promulgated December, and (promulgated August,, the United States has extended its territorial sea to nautical miles from the baselines of the United States determined in accordance with international law, and its contiguous zone to miles from the baselines of the United States determined in accordance with international law. By Proclamation, the United States of America has extended its national sovereignty and jurisdiction to the twelve mile limit to - 0 -

11 Case :0-at-00 Document Filed 0//0 Page of ( - 0 advance the national security and other significant interests of the United States. Proclamation states: Nothing in this Proclamation: (a extends or otherwise alters existing Federal or State law or any jurisdiction, rights, legal interests, or obligations derived therefrom. The establishment of the -mile contiguous zone was accomplished by Proclamation for the purpose of exercising control by the national government necessary to prevent infringement of its customs, fiscal, immigration, or sanitary laws within its territory or territorial sea, and to punish infringement of the above laws and regulations within its territory or territorial sea. Proclamation states: Nothing in this Proclamation: (a amends existing Federal or State law.. The United States is a signatory to the International Convention for the Prevention of Pollution from Ships,, including the MARPOL Protocol and Annex VI thereto which governs, among other things, emissions from and the content of fuels used on vessels engaged in maritime commerce, including the vessels subject to CCR. and CCR.. The United States Senate has ratified the United States participation in Annex VI to the MARPOL Protocol. By 0 amendments to U.S.C. 0 et seq., the United States has implemented that participation. This enabling statute provides the federal - -

12 Case :0-at-00 Document Filed 0//0 Page of ( - 0 Environmental Protection Agency the exclusive authority to administer, enforce, and adopt regulations to implement the MARPOL Annex VI with respect to vessels calling at ports of the United States, reflecting the exclusive federal interest in the regulation of all matters governed by the MARPOL Annex VI. The Convention currently provides for limitations on the sulfur content of fuel used on vessels flagged by nations that are signatories to the Convention and for certification of certain emissions characteristics of the vessels subject to the Convention.. On March, 0, in accordance with procedures established by the International Maritime Organization, the entity charged by international law with the administration of MARPOL Annex VI, Canada and the United States jointly proposed that an Emissions Control Area be established pursuant to the Convention. This proposal is pending approval by the IMO and would impose uniform emissions standards and international limitations on the sulfur content of fuel used aboard ships that are subject to the terms of MARPOL Annex VI while they are in waters extending to an outer boundary 0 nautical miles seaward of the territorial sea baselines of Canada and the United States. The limitations on fuel sulfur content and emissions standards applicable in the Emissions Control Area proposed by the U.S. and Canada are significantly more stringent than those imposed by the general Global limitations presently in effect in the United States and Canada under the Convention. CCR. and CCR. are different than and conflict with the present Global MARPOL Annex VI requirements regarding sulfur content - -

13 Case :0-at-00 Document Filed 0//0 Page of ( - 0 of fuel used by ocean going vessels and certification of the emissions characteristics of engines on such vessels. They also are different than and conflict with the requirements submitted to the IMO by the United States and Canada for vessels while in proposed Emissions Control Area.. Adoption and enforcement of CCR. and CCR. by CARB is contrary to the important interests of the United States in the uniformity of national and international standards regulating interstate and foreign maritime commerce and navigation, the sovereignty of the United States in the regulation and control of such commerce and navigation to the exclusion of the various States within the territorial seas of the United States declared by Presidential Proclamation No. and within the contiguous zone declared by President Proclamation No., and the participation of the United States in MARPOL Annex VI.. Based on the foregoing, because the CARB regulations purport to regulate and control the conduct of vessels and vessel owners operating in interstate and international commerce and navigation outside of California s boundaries, they contravene the three-mile limit on the State s territorial jurisdiction established by the Submerged Lands Act and conflict with the express retention of the national government s powers of regulation for purposes of commerce, navigation, national defense and international affairs pursuant to U.S.C. (a( and Article I, Section, Clause of the United States Constitution. The CARB regulations are, - -

14 Case :0-at-00 Document Filed 0//0 Page of ( - 0 therefore, preempted by the Submerged Lands Act and contravene the Supremacy Clause of the United States Constitution.. Accordingly, the PMSA is entitled to a judgment that enjoins defendant Goldstene from giving effect to or enforcing CCR. and CCR. seaward of California s boundary as established by the Submerged Lands Act and declares these regulations preempted by the Commerce Clause and the Submerged Lands Act, and contrary to the Supremacy Clause of the United States Constitution. relief as follows: PRAYER FOR RELIEF WHEREFORE, Plaintiff Pacific Merchant Shipping Association prays for A. For a declaration that, insofar as they regulate conduct seaward of California s there-mile boundary: CCR. and CCR. are unlawful and preempted by the Submerged Lands Act, U.S.C. 0 et seq.; CCR. and CCR. are unlawful and impermissibly regulate navigation and foreign and domestic commerce as delegated to the United State Congress by Article I, Section, Clause of the Constitution of the United States; and, it is contrary to law for Defendant Goldstene to enforce CCR. and CCR.; - -

15 Case :0-at-00 Document Filed 0//0 Page of ( - 0 B. For a permanent injunction that bars Defendant Goldstene from implementing or enforcing CCR. and CCR. or equivalent regulations, with respect to conduct seaward of California s three mile boundary; and proper. C. For costs and attorneys fees as allowed by law; D. For such other, further or different relief as this Court may deem just Signed at Long Beach, California this th day of April, 0. /s/ ERICH P. WISE Erich P. Wise Nicholas S. Politis Aleksandrs E. Drumalds Flynn, Delich & Wise LLP erichw@fdw-law.com James B. Nebel Conte C. Cicala Flynn, Delich & Wise LLP One California Street, Suite 0 San Francisco, California Attorneys for Plaintiff PACIFIC MERCHANT SHIPPING ASSOCIATION, a California Mutual Benefit Corporation - -