COLUMBIA PACIFIC BUILDING TRADES COUNCIL, Portland Business Alliance, Western States Petroleum Association, and Working Waterfront Coalition, Respondents,
CITY OF PORTLAND, Respondent-below, and COLUMBIA RIVERKEEPER, Oregon Physicians for Social Responsibility, Portland Audubon Society, and Center for Sustainable Economy, Petitioners. COLUMBIA PACIFIC BUILDING TRADES COUNCIL, Portland Business Alliance, Western States Petroleum Association, Respondents, and WORKING WATERFRONT COALITION, Intervenor-Petitioner below,
CITY OF PORTLAND, Petitioner, and COLUMBIA RIVERKEEPER, Oregon Physicians for Social Responsibility, Portland Audubon Society, and Center for Sustainable Economy, Intervenors-Respondents below.
Or.App. 740] Argued and submitted October 13, 2017.
Use Board of Appeals 2017001
C. Fahey argued the cause for petitioners Columbia
Riverkeeper, Oregon Physicians for Social Responsibility,
Portland Audubon Society, and Center for Sustainable Economy.
With her on the brief were Scott Hilgenberg and Crag Law
M. Vannier argued the cause for petitioner City of Portland.
With him on the brief were Linly F. Rees, Maja K. Haium, and
Lauren A. King.
L. Campbell and William L. Rasmussen argued the cause for
respondents Columbia Pacific Building Trades Council,
Portland Business Alliance, and Western States Petroleum
Association. With them on the brief were Steven G. Liday and
Miller Nash Graham & Dunn LLP.
appearance for respondent Working Waterfront Coalition.
Auerbach and Philip Thoennes fled the brief amicus curiae for
League of Oregon Cities.
Armstrong, Presiding Judge, and Tookey, Judge, and Shorr,
Summary: The City of Portland (city) and Columbia Riverkeeper
(Riverkeeper), among others, petition for judicial review of
an order by the Land Use Board of Appeals (LUBA) that
reversed City Ordinance No. 188142 (the ordinance). That
ordinance amended the city's zoning code and, with some
exceptions, prohibited new fossil-fuel terminals and caps the
size of existing terminals within the city. On judicial
review, the city and Riverkeeper argue that LUBA erred in
concluding that the ordinance violates the dormant Commerce
Clause of the United States Constitution; Statewide Planning
Goal 2, OAR 660-015-0000(2); and Statewide Planning Goal 12,
OAR 660-015-0000(12). Held: First, LUBA erred in
concluding that the ordinance violated the dormant Commerce
Clause. The ordinance did not discriminate between in-state
and out-of-state economic actors, and respondents failed to
meet their burden to demonstrate that the ordinance's
burdens on interstate commerce were clearly excessive in
relation to its putative local benefits. LUBA also erred in
holding that the ordinance violated Goal 12. LUBA concluded
that the ordinance did not degrade the performance of an
existing or planned transportation facility such that it
would not meet the performance standards identified in the
city's transportation system plan (TSP) in violation of
OAR 660-012-0060, but nevertheless then incorrectly concluded
that the ordinance still potentially affected whether that
TSP remained in compliance with Goal 12. Finally, LUBA did
not error in concluding that the ordinance [289 Or.App. 741]
violated Goal 2. Nothing in the record was so at odds with
LUBA's conclusion that the Court of Appeals could infer
that LUBA misunderstood or misapplied the substantial
and remanded in part.
Or.App. 742] SHORR, J.
review of an order by the Land Use Board of Appeals (LUBA),
we first consider whether certain zoning code amendments
enacted by the City of Portland violate the dormant Commerce
Clause of the United States Constitution. The amendments were
designed to stop the expansion of existing fossil-fuel
terminals and limit the size of some new terminals within the
city. Contrary to LUBA's opinion and order, we conclude
that the amendments do not violate the dormant Commerce
Clause. The other issues, more traditional to land use
disputes, are whether the amendments are inconsistent with
Statewide Planning Goal 2, OAR 660-015-0000(2), and Statewide
Planning Goal 12, OAR 660-015-0000(12). As to those issues,
we conclude, first, that LUBA's order is not unlawful in
substance when it concludes that the amendments violated Goal
2. However, we conclude that the portion of LUBA's order
indicating that the city did not comply with Goal 12 is
unlawful in substance. As a result, we reverse LUBA's
opinion and order as it relates to the dormant Commerce
Clause and Goal 12 and otherwise affirm.
BASIC PROCEDURAL HISTORY
city and Columbia Riverkeeper (Riverkeeper), among others,
petition for judicial review of a LUBA order that reversed
City Ordinance No. 188142 (the ordinance).That ordinance
amends the city's zoning code and, with some exceptions,
prohibits new fossil-fuel terminals and caps the size of
existing terminals within the city. After the city enacted the
ordinance, respondents, including the Columbia Pacific
Building Trades Council (Columbia Pacific), appealed to LUBA.
Among other things, Columbia Pacific argued that the
amendments violate the dormant Commerce Clause and are
inconsistent with Statewide Planning Goals 2 and 12. LUBA,
sitting as a one-member [289 Or.App. 743] panel,
agreed and concluded that the amendments violate the dormant
Commerce Clause and Goals 2 and 12.
BACKGROUND FACTS AND AMENDMENTS
begin with a background of the relevant material facts and
the amendments. The following facts and background are taken
from the LUBA opinion,  the relevant city ordinance, the
amendments, and the Portland City Council resolution.
is one of the largest ports on the West Coast, located at the
confluence of the Columbia and Willamette Rivers. In 2015,
there were industry proposals to build large fuel
distribution terminals in the Pacific Northwest, including in
an industrial area of the city, to facilitate the
distribution of fossil fuels throughout the West Coast and to
export markets. Besides Portland, there were proposals to
build at least eight other large export terminals in other
parts of the Pacific Northwest for distribution to export
November 2015, the Portland City Council unanimously passed
Resolution 37168. Because of the city council's concerns
regarding, among other things, (1) the risks of the location
of fossil-fuel infrastructure in an earthquake zone and (2)
reducing the city's contribution to greenhouse gasses,
pollution, and climate change, the city council stated that
it would "actively oppose expansion of infrastructure
whose primary purpose is transporting or storing fossil fuels
in or through Portland or adjacent waterways." The
resolution directed the Bureau of Planning and Sustainability
(BPS) to develop proposed zoning code amendments to advance
the policies in the resolution.
in June 2016, the city adopted a new comprehensive plan. That
plan included a new policy, Policy 6.48, which states that it
is city policy to "[l]imit fossil fuel distribution and
storage facilities to those necessary to serve the regional
market." That policy did not take effect until January
2018. However, the city cited it as guidance when adopting
Or.App. 744] In response to Resolution 37168, BPS prepared
the draft amendments and the city council then unanimously
adopted them with some changes. The amendments amend the city
zoning code to create a new land use category called
"Bulk Fossil Fuel Terminals." The amendments
identify the areas in which bulk fossil-fuel terminals are
permitted. The amendments permit all "Existing Bulk
Fossil Fuel Terminals, " but those facilities cannot
expand beyond the storage capacity that they had as of the
effective date of the amendments. The amendments also
prohibit new "Bulk Fossil Fuel Terminals, "
essentially prohibiting new fossil-fuel terminals that store
more than 2 million gallons of fossil fuel, but permitting
those that store 2 million gallons or fewer. There are seven
exceptions, discussed later in this opinion, that permit the
construction of new bulk terminals that hold more than 2
million gallons. Those exceptions include allowances for
construction of new bulk terminals in places like airports
that store airplane fuel, retail gas stations, and terminals
built for distributors and wholesalers who receive and
deliver fuel solely by trucks.
existing terminals consist of 10 petroleum terminals and one
natural gas terminal clustered in industrial northwest
Portland. Those are centrally located near the terminus of
the Olympic Pipeline, which delivers petroleum products from
refineries in the Puget Sound that are bound for markets in
Oregon and southwest Washington. The terminals sit in an area
that is in a moderate- to high-risk earthquake liquefaction
zone. In enacting the amendments, the city noted that
Portland had experienced numerous earthquakes in the past,
ranging from magnitude 4.5 to 9.0, and that it is certain to
experience seismic events in the future. Many of the
individual storage tanks were built before seismic design
requirements were adopted.
existing terminals hold from 11.6 to 67 million gallons and
supply approximately 90 percent of the fossil fuel for
Oregon. The terminals have approximately 300 tanks that store
petroleum products and gas, which are typically transloaded
into other modes of transportation (trucks, trains,
pipelines) for delivery throughout Oregon. As noted, much of
the petroleum and gas coming through Portland is bound for
Oregon, but some of the products [289 Or.App. 745] go outside
the state to places such as Washington. While Oregon is an
importer of fossil fuels and gas, no fossil-fuel sources or
refineries exist either in Portland or more generally in
Oregon. As discussed more fully below, Oregon does not have
companies or individuals who are competitors in the market
for the export of fossil fuels to other states or countries.
Oregon is not a participant in that export market.
AMENDMENTS DO NOT VIOLATE THE DORMANT COMMERCE CLAUSE
city and Riverkeeper contend that LUBA erred when it
concluded that the amendments violate the dormant Commerce
Clause. As discussed below, we agree.
reverse a LUBA order if we determine "[t]he order to be
unlawful in substance." ORS 197.850(9)(a). The city and
Riverkeeper contend that LUBA incorrectly applied the law
when it held that the amendments violate the dormant Commerce
Clause. Thus we turn to the law. As suggested by its title,
the dormant Commerce Clause is not expressly stated
in the United States Constitution. The Commerce Clause
provides Congress the power "[t]o regulate Commerce * *
* among the several States." U.S. Const, Art I, §
8, cl 3. The dormant Commerce Clause is the negative
implication of that provision, as developed through case law,
that "denies the States the power unjustifiably to
discriminate against or burden the interstate flow of
articles of commerce." Oregon Waste Systems, Inc. v.
Department of Environmental Quality of Ore., 511 U.S.
93, 98, 114 S.Ct. 1345, 128 L.Ed.2d 13 (1994).
dormant Commerce Clause applies equally to state and local
laws. C & A Carbone, Inc. v. Clarkstown, 511
U.S. 383, 389, 114 S.Ct. 1677, 128 L.Ed.2d 399 (1994). When
applying the dormant Commerce Clause to a particular local
law, "the first step *** is to determine whether [the
law] regulates evenhandedly with only incidental effects on
interstate commerce, or discriminates against interstate
commerce." Oregon Waste Systems, Inc., 511 U.S.
at 99 (internal quotation marks omitted).
"Discrimination" under the dormant Commerce Clause
"simply means ...