(CN) - California air-quality rules can require ships to use cleaner fuels within 24 miles of the coast as they move through the state's busy ports, the 9th Circuit ruled.
The three-judge appeals panel in San Francisco acknowledged that the state's Vessel Fuel Rules amount to an "expansive and even possibly unprecedented state regulatory scheme," but found that California has a right to mitigate its environmental problems, which "are themselves unusual and even unprecedented," according to the ruling Monday.
The Pacific Merchant Shipping Association sued the head of the California Air Resources Board over the vessel fuel rules in 2009, arguing that such regulations were pre-empted by the federal Submerged Lands Act and the U.S. Constitution's commerce and supremacy clauses.
California's board estimates that the rules will cost the shipping industry some $1.5 billion through the end of the 2014, according to the ruling. At the same time, the panel found that "it appears uncontested that ocean-going vessels have long been a leading source of air pollution in California, due in large part to the widespread use of low-grade bunker fuel."
Data shows that ocean-going vessels traveling within 24 nautical miles of the California coast spew about 15 tons of diesel particulate matter per day, as well as 157 tons of nitrogen oxides and 117 tons of sulfur oxides, the ruling states. The vessel fuel rules are expected to significantly reduce such harmful emissions and "should prevent, between 2009 and 2015, approximately 3,500 premature deaths and nearly 100,000 asthma attacks as well as reduce cancer risks," according to the ruling.
U.S. District Judge Morrison England Jr. had denied the shipping association's request for summary judgment on its pre-emption claims, and the 9th Circuit unanimously affirmed on appeal.
"Given the circumstances, we do believe that the regulatory scheme at issue here pushes a state's legal authority to its very limits, although the state had clear justifications for doing so," according to the opinion authored by Senior Judge Robert Cowen, who was sitting by designation from the 3rd Circuit.
The panel found that the shipping association had read too much into the 1953 Submerged Lands Act (SLA), which granted states the rights to all of their coastal lands within 3 nautical miles of the continent. The association argued that the law prohibits California from regulating a ship's emissions within 24 nautical miles from the coast, as is called for in the vessel fuel rules.
Cowen wrote that there is a basis for the extended reach, and that other courts have rejected challenges to state laws despite the 3-mile regulatory limit. "Applying this effects test to the vessel fuel rules, we conclude that there are genuine issues of material fact with respect to both the effects of the fuel use governed by California's regulations on the health and well-being of the state's residents as well as the actual impact of these regulations on maritime and foreign commerce," the decision states.
The panel also rejected the two hypothetical situations that association submitted to argue that the vessel fuel rules ran afoul of the commerce and supremacy clauses. One situation contemplated a hypothetical California regulatory scheme requiring cars driving from Arizona to switch to certain kinds of fuel 24 miles from the California border, and the other described a regulation governing fuel use in Shanghai harbor.