Opinion ID: 201086
Heading Depth: 2
Heading Rank: 2

Heading: Dismissal of Ten Taxpayer's Complaint

Text: Having determined that the case was properly removed to federal court, we turn to the question whether the district court properly dismissed Ten Taxpayer's complaint under Fed. R. Civ. P. 12(b)(6). Once again, our review is de novo. Peña-Borrero v. Estremeda, 365 F.3d 7, 11 (1st Cir. 2004). 10 Because we hold that Ten Taxpayer's claims arise directly under federal law, we do not decide whether the so-called Smith doctrine, see Smith v. Kansas City Title & Trust Co., 255 U.S. 180, 199 (1921), or the doctrine of complete preemption, see Beneficial Nat'l Bank v. Anderson, 539 U.S. 1, 6-7 (2003), would support federal jurisdiction in this case. -19- The district court dismissed the complaint on the ground that the Magnuson-Stevens Act did not grant to the Commonwealth sufficiently broad authority to regulate the construction of a tower in federal waters in Nantucket Sound. See Ten Taxpayers, 278 F. Supp. 2d at 100-01 (Congress did not delegate its complete sovereign authority over the pocket of federal waters in Nantucket Sound to the Commonwealth, but only that part necessary to establish consistent fishing regulations throughout the Sound.). On appeal, the parties devote considerable attention to the same question. Ten Taxpayer says that by placing Nantucket Sound under the jurisdiction and authority of Massachusetts for the purposes of the Magnuson-Stevens Act, see 16 U.S.C. § 1856(a)(2), Congress must have intended to empower the Commonwealth to regulate activities on the seabed of Nantucket Sound that, like the SMDS, have the potential to affect fishing. Cape Wind responds, inter alia, that the purposes of the Magnuson-Stevens Act do not include regulation of structures attached to the seabed. We frame the issue differently. Whatever Congress meant by its reference to the purposes of the Magnuson-Stevens Act in § 1856(a)(2),11 the Massachusetts statutes at issue here are 11 Congress may not have intended the phrase as a substantive restriction. Section 1856(a)(2) defines the term jurisdiction and authority of a State. In that context, a natural interpretation of the phrase [f]or the purposes of this chapter is simply that Congress wanted the definition stated in § 1856(a)(2) to apply throughout the Magnuson-Stevens Act. Congress employed similar language in definitional clauses elsewhere in the Magnuson-Stevens -20- available on the outer Continental Shelf in any event as surrogate federal law, provided they are not inconsistent with other applicable federal law. 43 U.S.C. § 1333(a)(2). So the critical question for this court is not whether Congress gave Massachusetts the authority to regulate on Horseshoe Shoals. Rather, we must decide (1) whether the Massachusetts statutes in question apply, by their own terms, to activities on Horseshoe Shoals; and (2) if they do apply, whether their application to Cape Wind's construction of the SMDS would be inconsistent with federal law. We conclude that Ten Taxpayer's complaint falters on both grounds.
First, we are extremely doubtful that the Massachusetts statutes on which Ten Taxpayer relies apply to the SMDS site. Obviously, no permit was required for the SMDS if Massachusetts has not purported to regulate activities on that site. Ten Taxpayer asserts claims under three Massachusetts statutes: Mass. Gen. Laws chapters 91, 130, and 132A. On our reading of Massachusetts law, none of those statutes applies to the erection of a tower on Horseshoe Shoals. In Count I of its complaint, Ten Taxpayer asserts that Cape Wind failed to comply with Mass. Gen. Laws ch. 130. Ten Taxpayer is correct that chapter 130, which regulates fishing and Act. See, e.g., 16 U.S.C. § 1802(11); id. § 1821(e)(2)(A); id. § 1823(c)(2). -21- marine fisheries in Massachusetts, applies broadly to all marine fisheries and fish within the jurisdiction of the commonwealth. Id. § 1. Ten Taxpayer's claim, however, arises under § 16, which is considerably more narrow: Any occupation under this chapter of tide waters or any work done therein, shall be subject to the pertinent [permitting and licensing] provisions of chapter ninetyone. Significantly, the term tide waters is not defined in chapter 130 or in the implementing regulations, and there are no published Massachusetts cases interpreting § 16. Ten Taxpayer argues that tide waters embraces all waters subject to the rise and fall of the tides –- a definition that, it says, includes Horseshoe Shoals, where Coast Guard records indicate that the sea depth varies by as much as three feet between high and low tides. In our view, that interpretation is too broad. Massachusetts cases referring to tide waters, tidal waters, tidewaters, and the like invariably concern developments in harbors or along the shoreline. See, e.g., Trio Algario, Inc. v. Comm'r of Dep't of Envtl. Prot., 795 N.E.2d 1148, 1151-53 (Mass. 2003) (discussing wharves and other occupations of tide waters); Boston Waterfront Dev. Corp. v. Massachusetts, 393 N.E.2d 356, 358 (Mass. 1979) (describing the shores of the sea as tidal areas); Comm'r of Pub. Works v. Cities Serv. Oil Co., 32 N.E.2d 277, 281 (Mass. 1941) (discussing the construction of piers and wharves as -22- the erection of structures in tide waters). At most, the term refers to the waters belong[ing] to the Commonwealth. Trio Algario, 795 N.E.2d at 1153 n.9. Ten Taxpayer relies on the ancient case of Commonwealth v. Vincent, 108 Mass. 441 (1871), which opines that tide waters means waters, whether salt or fresh, wherever the ebb and flow of the tide from the sea is felt. Id. at 447. On its facts, however, that case involved only the question whether a pond on the mainland qualified as tide waters by virtue of a narrow channel connecting it to the sea. Notwithstanding the broad dictum, we do not think Vincent supports Ten Taxpayer's sweeping notion that tide waters embraces any location where the depth of the sea is affected by the tides, even in waters that do not belong to the Commonwealth. We conclude that Mass. Gen. Laws ch. 130, § 16 is inapplicable to the SMDS site by its own terms. In any event, even if § 16 were applicable on Horseshoe Shoals, we would still conclude that no permit was required. That is because § 16 merely subjects structures erected in the tide waters to the pertinent provisions of Mass. Gen. Laws ch. 91. Chapter 91 requires a license from the Massachusetts Department of Environmental Protection (DEP) for structures built in protected waters. See Mass. Regs. Code tit. 310, § 9.05(1)(a). The DEP's regulations, however, limit this licensing and permitting requirement to activities in waterways and filled tidelands. -23- Id. § 9.04. Neither of those terms, as defined in the regulations, embraces Horseshoe Shoals.12 Consequently, Cape Wind was not obligated to seek a permit for its data tower under Mass. Gen. Laws ch. 91. Finally, Ten Taxpayer asserts in Count II of its complaint that Cape Wind was required to obtain approval for the SMDS under the Massachusetts Ocean Sanctuaries Act, Mass. Gen. Laws ch. 132A. Chapter 132A expressly provides that Nantucket Sound is within the Cape and Islands Ocean Sanctuary. See id. § 13(c). With few exceptions, the statute prohibits the building of any structure on the seabed in any ocean sanctuary. Id. § 15. From this, Ten Taxpayer concludes that Cape Wind erected the SMDS in violation of chapter 132A. The problem with this theory is that the Massachusetts Department of Environmental Management (DEM), which is charged with implementing the Ocean Sanctuaries Act, id. § 12C, including the care, oversight and control of ocean sanctuaries, id. § 14; Mass. Regs. Code tit. 302, § 5.09, has expressly disclaimed authority 12 Under DEP regulations, waterway means any area of water and associated submerged land or tidal flat lying below the high water mark of any navigable river or stream, any Great Pond, or any portion of the Atlantic Ocean within the Commonwealth. Mass. Regs. Code tit. 310, § 9.02 (emphasis added). Horseshoe Shoals is not within the Commonwealth under the SLA, and nothing in the Magnuson-Stevens Act alters that fact. Similarly, the SMDS is not located on filled tidelands, which are defined as former submerged lands and tidal flats which are no longer subject to tidal action due to the presence of fill. Id. -24- over Horseshoe Shoals. In a letter to counsel for Ten Taxpayer dated January 24, 2002, Myron Gildesgame, the DEM's director of the Office of Water Resources and the agency's official Ocean Sanctuaries Coordinator,13 explained that the Cape and Islands Ocean Sanctuary is not considered to include the Horseshoe Shoals area. Although chapter 132A purports to include Nantucket Sound in that sanctuary, that legislation was passed prior to the Supreme Court's decision in Maine II. Now, he concluded, jurisdiction over the central portion of the Sound, including Horseshoe Shoals, is with the federal government. Gildesgame was even more explicit in response to a subsequent letter from Ten Taxpayer: While I appreciate your legal research . . . relative to state jurisdiction claims, the Department and the Ocean Sanctuaries Program have not claimed jurisdiction over the area of the sound which includes Horseshoe Shoals, and respectfully decline to seek to expand our current jurisdiction. That is the end of the matter. Because the responsible Massachusetts agency has disclaimed regulatory authority over the 13 The Ocean Sanctuaries Coordinator is a position created under the DEM's regulations. See Mass. Regs. Code tit. 302, § 5.09(3). The Coordinator is charged with carrying out the responsibilities of the DEM under the Ocean Sanctuaries Act and is authorized to perform or order investigations to determine whether particular activities are consistent with chapter 132A. Id. -25- SMDS site,14 we hold that Cape Wind was not required to seek approval for the project under Mass. Gen. Laws. ch. 132A.
There is a second reason why the district court was correct to dismiss Ten Taxpayer's complaint. Even if our interpretation of state law is incorrect and one or more of the cited Massachusetts statutes does require a permit for the SMDS, there is a further question: whether that requirement should be incorporated and enforced as federal law under 43 U.S.C. § 1333(a)(2)(A). We conclude that it should not. Under § 1333(a)(2)(A), the Massachusetts statutes cited by Ten Taxpayer apply on the outer Continental Shelf, if at all, solely as surrogate federal law. Id.; see also Gulf Offshore, 453 U.S. at 480 (All law applicable to the Outer Continental Shelf is federal law . . . .). But under the OCSLA, state laws are not 14 We recognize that under DEM regulations, it is the Commissioner of the DEM and not the Ocean Sanctuaries Coordinator who is formally empowered to make determinations regarding the applicability of permit requirements to particular situations. See Mass. Regs. Code tit. 302, § 5.09(4). Nevertheless, we are satisfied that Gildesgame's letters to counsel for Ten Taxpayer represent the official position of the DEM concerning the Commonwealth's jurisdiction over Horseshoe Shoals. Ten Taxpayer has not disputed that the letters represent the agency's position. Moreover, prior to filing the instant lawsuit, Ten Taxpayer notified both the Commissioner of the DEM and the Massachusetts Attorney General of its intent to sue. See Mass. Gen. Laws ch. 214, § 7A (requiring such notice). Despite this notice, neither the Commissioner nor the Attorney General sought to intervene in this action or initiate an enforcement proceeding against Cape Wind. -26- adopted as surrogate federal law to the extent that they are inconsistent with [the OCSLA] or with other Federal laws . . . . Id.; see also Rodrigue, 395 U.S. at 355-56 (explaining that state law applies to fixed structures on the outer Continental Shelf only as federal law and then only when not inconsistent with applicable federal law). In our view, the OCSLA leaves no room for states to require licenses or permits for the erection of structures on the seabed on the outer Continental Shelf. Congress retained for the federal government the exclusive power to authorize or prohibit specific uses of the seabed beyond three miles from shore. See § 1333(a)(3) (The provisions of this section for adoption of State law as the law of the United States shall never be interpreted as a basis for claiming any interest in or jurisdiction on behalf of any State for any purpose over the seabed and subsoil of the outer Continental Shelf . . . .). If adopted and enforced on the outer Continental Shelf, statutes like Mass. Gen. Laws chs. 91 and 132A, which require the approval of state agencies prior to construction, would effectively grant state governments a veto power over the disposition of the national seabed. That result is fundamentally inconsistent with the OCSLA. See id. § 1332(3) (declaring it to be the policy of the United States that the outer Continental Shelf is a vital national reserve held by the Federal Government for the public, which should be made available for expeditious and orderly -27- development, subject to environmental safeguards, in a manner which is consistent with the maintenance of competition and other national needs (emphasis added)). Ten Taxpayer contends that the Magnuson-Stevens Act, which was enacted after the OCSLA, changed this calculus by defining the body of water commonly known as Nantucket Sound to be within the jurisdiction and authority of Massachusetts. See 16 U.S.C. § 1856(a)(2)(B). Yet nothing in the Magnuson-Stevens Act purports to repeal or amend the OCSLA. Cf. Passamaquoddy Tribe v. Maine, 75 F.3d 784, 790 (1st Cir. 1996) (implied repeal of federal statutes is disfavored). On the contrary, the two statutes can readily coexist: the Magnuson-Stevens Act authorizes Massachusetts to regulate fishing-related conduct throughout Nantucket Sound, but the subsoil and seabed of the outer Continental Shelf, and artificial islands and fixed structures erected thereon, 43 U.S.C. § 1333(a)(2)(A), remain the exclusive province of the federal government. Congress was perfectly clear in the Magnuson-Stevens Act that it did not intend to alter the rights of the United States in the outer Continental Shelf. See 16 U.S.C. § 1801(c)(1) (declaring it to be the policy of Congress in the Magnuson-Stevens Act to maintain without change the existing territorial or other ocean jurisdiction of the United States for all purposes other than the conservation and management of fishery resources). -28- We conclude that any Massachusetts permit requirement that might apply to the SMDS project is inconsistent with federal law and thus inapplicable on Horseshoe Shoals under the OCSLA. The district court did not err in dismissing Ten Taxpayer's complaint.