Ten Taxpayer Citizens Group v. Cape Wind Associates, LLC ( 2004 )

United States Court of Appeals
For the First Circuit
No. 03-2323
TEN TAXPAYER CITIZENS GROUP; CAPE COD MARINE TRADES ASSOCIATION,
INC.; RAOUL D. ROSS; THE MASSACHUSETTS BOATING AND YACHT CLUBS
ASSOCIATION, INC.,
Plaintiffs, Appellants,
v.
CAPE WIND ASSOCIATES, LLC,
Defendant, Appellee.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Joseph L. Tauro, U.S. District Judge]
Before
Torruella, Circuit Judge,
Coffin, Senior Circuit Judge,
and Lynch, Circuit Judge.
John W. Spillane, with whom Spillane & Spillane, LLP was on
brief, for appellants.
Kurt W. Hague, with whom Timothy J. Dacey and Goulston &
Storrs, P.C. were on brief, for appellee.
June 28, 2004
LYNCH, Circuit Judge. This appeal is an early round in
the legal battle over whether a commercial wind energy farm may be
built in Nantucket Sound.
In October 2002, Ten Taxpayer Citizens Group and several
additional plaintiffs (together, Ten Taxpayer) filed a lawsuit in
Massachusetts state court to prevent Cape Wind Associates from
erecting a 197-foot data collection tower in Nantucket Sound. The
complaint alleged that Massachusetts state courts had jurisdiction
over the project and that Cape Wind had failed to obtain the
necessary permits under state law. Cape Wind removed the action to
federal court and Ten Taxpayer moved to remand. After denying the
motion to remand, the district court dismissed the complaint on
August 19, 2003.
On appeal, Ten Taxpayer argues that the district court
was obligated to remand the case to state court for lack of federal
subject-matter jurisdiction. Ten Taxpayer also challenges the
court's dismissal of the complaint. We affirm.
I.
The facts underlying this case are essentially
undisputed. Where the parties disagree, we accept as true the
well-pleaded factual allegations in the plaintiffs' complaint,
drawing all reasonable inferences in their favor. Soto-Negron v.
Taber Partners I, 339 F.3d 35, 38 (1st Cir. 2003).
-2-
Cape Wind is a limited liability corporation based in
South Yarmouth, Massachusetts. Its goal is to construct a
commercial windmill farm on Horseshoe Shoals, a shallow area of
Nantucket Sound more than three miles offshore. The proposed
windmill farm includes at least 130 industrial wind turbines, each
470 feet tall. If it is completed as presently envisioned, the
facility will spread across 28 square miles of Nantucket Sound and
will be visible from shore. The project is the first of its kind
in North America.
To construct the wind farm, Cape Wind needs extensive
meteorological and oceanographic data concerning conditions on
Horseshoe Shoals. For that purpose, Cape Wind in late 2001
announced plans to build a "scientific measurement device station"
(SMDS) on Horseshoe Shoals. Intended as a temporary facility, the
SMDS was designed to collect data for five years. It would consist
of a data tower rising approximately 200 feet in the air, supported
by three steel pilings driven 100 feet into the seabed. Together
with its tripodal support structure, the tower would occupy about
900 square feet of ocean surface.
On August 19, 2002, the United States Army Corps of
Engineers issued a permit to Cape Wind under § 10 of the Rivers and
Harbors Act of 1899, 33 U.S.C. § 401 et seq., for construction of
-3-
the SMDS.1 Cape Wind neither sought nor obtained permits for the
SMDS project under Massachusetts law. A few weeks later, the Coast
Guard issued a public notice that construction of the data tower
would commence on or about October 11, 2002. Construction was
briefly delayed when Ten Taxpayer obtained a temporary restraining
order from a state court in a related lawsuit. Ten Taxpayer
voluntarily dismissed that suit, however, and the temporary
restraining order lapsed by its own terms. On October 27, 2002,
Cape Wind began construction of the SMDS. It is now complete and
in operation.2
Ten Taxpayer filed this action in Barnstable Superior
Court on October 16, 2002, shortly before construction of the data
tower began. In its complaint, Ten Taxpayer acknowledged that the
SMDS site is more than three miles from the nearest Massachusetts
shoreline and that, accordingly, the location falls under the
jurisdiction of the federal government. Nevertheless, Ten Taxpayer
contended, Cape Wind could not build the SMDS without regulatory
approval from Massachusetts because Congress has ceded to
Massachusetts the power to regulate any activity affecting fishing
in Nantucket Sound. Under the Massachusetts laws regulating
1
We express no view concerning the validity of this permit,
which is the subject of a separate appeal in this court. See
Alliance to Protect Nantucket Sound, Inc. v. U.S. Dep't of the
Army, No. 03-2604 (1st Cir. docketed Nov. 24, 2003).
2
See generally http://capewind.whgrp.com (last visited June
22, 2004) (reporting real-time data from the SMDS).
-4-
fisheries and fish habitats, administrative approval is required
for structures erected on the seabed. Because Cape Wind did not
obtain such approval, Ten Taxpayer alleged, the SMDS project was in
violation of Massachusetts law. Ten Taxpayer sought an injunction
blocking construction of the SMDS or, if the court would not enjoin
construction, a $25,000 fine for every day that the SMDS remained
on Horseshoe Shoals.
Cape Wind immediately removed the case to federal court,
asserting that federal jurisdiction was proper because Ten
Taxpayer's complaint, on its face, states a federal question --
i.e., whether Congress has in fact delegated to Massachusetts the
necessary regulatory authority over Nantucket Sound. In the
alternative, Cape Wind argued that regardless of what Ten Taxpayer
actually pleaded in its complaint, deciding Ten Taxpayer's state
claims would require resolution of a substantial question of
federal law, cf. Almond v. Capital Props., Inc., 212 F.3d 20, 23
(1st Cir. 2000) (describing so-called Smith jurisdiction), and that
federal law completely preempts state law beyond three miles from
the coast, cf. Beneficial Nat'l Bank v. Anderson, 539 U.S. 1, 6-7
(2003) (describing the "complete preemption" doctrine). Ten
Taxpayer moved to remand.
On November 14, 2002, the district court denied the
motion to remand without opinion. Ten Taxpayer appealed that
-5-
order, but this court dismissed the appeal on the ground that it
was not a final judgment.
Meanwhile, on November 6, 2002, Cape Wind filed a motion
in federal court to dismiss Ten Taxpayer's complaint. Cape Wind
attached to its motion two letters from the Massachusetts
Department of Environmental Management indicating that, at least
under Mass. Gen. Laws ch. 132A, Massachusetts does not claim
regulatory authority over activities on Horseshoe Shoals. Cape
Wind also argued that Ten Taxpayer lacks standing to assert the
Commonwealth's regulatory interest in offshore lands.
On August 19, 2003, the district court granted Cape
Wind's motion to dismiss. Ten Taxpayers Citizen Group v. Cape Wind
Assocs., LLC, 278 F. Supp. 2d 98, 101 (D. Mass. 2003). The court
concluded that although Congress did delegate to Massachusetts the
power to regulate fishing in Nantucket Sound, that grant did not
confer on the Commonwealth a general warrant to "polic[e] the
entire Nantucket Sound for environmental disturbances that could
impact fishing." Id. Massachusetts had no authority over the
construction of the SMDS, and thus no state permits were required.
Id.Ten Taxpayer filed this timely appeal.
II.
This case implicates the complex and rather obscure body
of law that divides regulatory authority over Nantucket Sound
-6-
between the state and federal governments. Because that body of
law is essential to our disposition of this appeal, we summarize it
briefly.
A. Regulation of the Seabed and Attached Structures
As a general rule, "paramount rights to the offshore
seabed inhere in the Federal Government as an incident of national
sovereignty." United States v. Maine (Maine I), 420 U.S. 515, 524
(1975). In a series of cases beginning in 1947, the Supreme Court
established that the United States enjoys exclusive title in the
lands underlying the sea, regardless of a state's historical claims
to the waters off its coast. See United States v. Texas, 339 U.S.
707, 719-20 (1950); United States v. Louisiana, 339 U.S. 699, 705-
06 (1950); United States v. California, 332 U.S. 19, 29-39 (1947).
Together, those cases established that the "control and
disposition" of the seabed is "the business of the Federal
Government rather than the States." Maine I, 420 U.S. at 522.
That background rule, however, has been modified by
Congress in several significant respects. Most importantly,
Congress in 1953 passed the Submerged Lands Act (SLA), 43 U.S.C.
§ 1301 et seq., which grants to the states full title to the seabed
within three geographical miles of their shores.3 See 43 U.S.C. §§
1301, 1311. Moreover, Congress expressly recognized that three-
3
The three-mile boundary is subject to certain exceptions not
relevant here. E.g., 43 U.S.C. § 1301(b).
-7-
mile line as the official seaward boundary of the coastal states.
Id. § 1312.
Shortly thereafter, however, Congress enacted the Outer
Continental Shelf Lands Act of 1953 (OCSLA), 43 U.S.C. § 1331 et
seq. A major purpose of the OCSLA was to specify that federal law
governs on the "outer Continental Shelf" -- defined as all
submerged lands under U.S. sovereign control lying seaward of the
three-mile boundary, see 43 U.S.C. § 1331(a) -- and on any fixed
structures attached to the outer Continental Shelf. Rodrigue v.
Aetna Casualty & Surety Co., 395 U.S. 352, 355 (1969); see also 43
U.S.C. § 1332 (declaring it to be "the policy of the United States
that . . . the subsoil and seabed of the outer Continental Shelf
appertain to the United States and are subject to its jurisdiction,
control, and power of disposition"). The OCSLA makes the
Constitution, laws, and civil and political jurisdiction of the
United States fully applicable to the outer Continental Shelf. 43
U.S.C. § 1333(a)(1). It also establishes nationwide rules for the
leasing and development of natural resources in the seabed outside
of state territory. Id. § 1337. Further, the OCSLA provides a
federal cause of action for any person aggrieved by a violation of
those rules, id. § 1349(a)(1), and grants the federal district
courts jurisdiction to hear such cases, id. § 1349(b). It is, in
short, a sweeping assertion of federal supremacy over the submerged
lands outside of the three-mile SLA boundary. See id. § 1332
-8-
(declaring it to be "the policy of the United States that . . . the
outer Continental Shelf is a vital national resource reserve held
by the Federal Government for the public" (emphasis added)).
In 1975, the Supreme Court confirmed this broad
understanding of the OCSLA in Maine I. The United States had
brought an original complaint in the Supreme Court against thirteen
states bordering the Atlantic Ocean, alleging that each state had
claimed some right or title in the outer Continental Shelf that was
inconsistent with federal interests. 420 U.S. at 516-17. In
reply, the defendant states (including Massachusetts) had denied
the United States's title in the outer Continental Shelf, asserted
a variety of historical claims to the seabed beyond the SLA's
three-mile boundary, and urged the Court to overrule its decisions
in California, Louisiana and Texas. Id. at 517-19. The Supreme
Court ruled for the United States, reaffirming that "paramount
rights" in the seabed belong to the federal government as national
sovereign. Id. at 524. The SLA, the Court acknowledged, had
transferred title to the states in a narrow band of the seabed.
But that statute did not alter the federal government's rights
outside of that narrow band. Id. at 526. On the contrary, the
Court explained, Congress in the OCSLA had "emphatically
implemented its view that the United States has paramount rights to
the seabed beyond the three-mile limit." Id.B. Regulation of Fishing and Marine Fisheries
-9-
With the framework for regulating the seabed thus
settled, Congress in 1976 enacted the Magnuson (now Magnuson-
Stevens) Fishery Conservation and Management Act, 16 U.S.C. § 1801et seq.
Like the OCSLA, the Magnuson-Stevens Act asserts federal
control over the waters outside of the three-mile limit of state
jurisdiction. The Act creates a "national framework for conserving
and managing marine fisheries." S. Rep. No. 104-276, at 2 (1996)
(describing the history and purposes of the Act). It claims for
the federal government "exclusive fishery management authority" in
outer Continental Shelf waters within and beyond the United
States's "exclusive economic zone," which extends approximately 197
nautical miles seaward from the three-mile boundary of state
jurisdiction.4 See 16 U.S.C. § 1811. Within that exclusive
economic zone, the Act further claims for the United States
"sovereign rights . . . over all fish, and all Continental Shelf
fishery resources."5 Id. § 1811(a); see also id. § 1801(c)(1)
4
The Magnuson-Stevens Act does not create this "exclusive
economic zone," but rather incorporates by reference the 200-
nautical mile exclusive economic zone that President Reagan created
by executive order in 1983. See 16 U.S.C. § 1802(11); Proclamation
No. 5030, 48 Fed. Reg. 10,605 (Mar. 14, 1983). Congress, however,
modified that zone for purposes of the Magnuson-Stevens Act,
defining it to include only that portion of the original exclusive
economic zone that is seaward of the SLA boundary of state
jurisdiction. See § 1802(11); Massachusetts ex rel Div. of Marine
Fisheries v. Daley, 170 F.3d 23, 25 (1st Cir. 1999).
5
There is an exception, not relevant in this case, for the
regulation of "highly migratory" fish species. See 16 U.S.C.
-10-
(declaring Congress's intent "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").
At the same time, the Magnuson-Stevens Act establishes
that the states enjoy the power to regulate fishing activities
within their borders, including within the three-mile SLA boundary:
"[N]othing in this chapter shall be construed as extending or
diminishing the jurisdiction or authority of any State within its
boundaries."6 16 U.S.C. § 1856(a)(1). By so providing, Congress
"confirmed state jurisdiction over fisheries within a State's
internal waters and, for coastal states, out to the three-mile
limit." Davrod Corp. v. Coates, 971 F.2d 778, 786 (1st Cir. 1992);
see also Massachusetts ex rel Div. of Marine Fisheries v. Daley,
170 F.3d 23, 25 (1st Cir. 1999) (Magnuson-Stevens Act, with limited
exceptions, does not apply within state territorial waters).
C. Federal vs. State Jurisdiction in Nantucket Sound
Nantucket Sound, where the disputed tower has been built,
presents special difficulties in distinguishing the respective
spheres of state and federal jurisdiction. Nantucket Sound is
almost completely enclosed by Massachusetts's territorial sea; only
§ 1812.
6
Once again, there are certain exceptions not relevant in the
present case. E.g., 16 U.S.C. § 1856(b).
-11-
at the extreme eastern end of the Sound does a channel of federal
water approximately one mile wide connect it to the open ocean.
But the Sound is a large body of water, and its center portion --
including the site of Cape Wind's data tower on Horseshoe Shoals --
is more than three miles from any coast.
Despite that fact, Massachusetts in the early 1970s took
the position that all of Nantucket Sound, including Horseshoe
Shoals, is within Massachusetts's territorial jurisdiction under
the doctrine of "ancient title." The Supreme Court rejected that
claim in United States v. Maine (Maine II), 475 U.S. 89 (1986),
holding that the Commonwealth did not inherit title to the Sound
from the British Crown. Id. at 103. After Maine II, it is
incontrovertible that Cape Wind's data tower is located on the
outer Continental Shelf, outside of Massachusetts's territorial
jurisdiction. 43 U.S.C. § 1331(a).
But there is a complication. In 1984 -- while the Maine
II litigation was pending -- Congress passed a bill defining all of
Nantucket Sound to be within the "jurisdiction and authority" of
Massachusetts "[f]or the purposes of" the Magnuson-Stevens Act.
See Pub. L. No. 98-623, § 404(4), 98 Stat. 3394, 3408 (Nov. 8,
1984) (codified at 16 U.S.C. § 1856(a)(2)(B)). In Davrod Corp. v.
Coates, supra, this court held that § 1856(a)(2)(B) "expressly
confirms" Massachusetts's power to regulate the length of fishing
vessels in Nantucket Sound. See 971 F.2d at 786. In this case,
-12-
Ten Taxpayer contends that the same provision authorizes
Massachusetts to regulate the construction of Cape Wind's data
tower, which Ten Taxpayer claims has the potential to affect
fishing and fish habitats.
III.
A. Removal
With that background in mind, we turn to Ten Taxpayer's
arguments on appeal. The first question is whether the district
court should have remanded this case to the Barnstable Superior
Court for lack of federal subject-matter jurisdiction.7 Our review
is de novo. Mass. Sch. of Law at Andover, Inc. v. Am. Bar Ass'n,
142 F.3d 26, 33 (1st Cir. 1998).
Removal is permitted under 28 U.S.C. § 1441 in civil
actions over which the district courts have "original
jurisdiction." The Supreme Court has interpreted that requirement
to bar removal unless the state action could have been filed in
federal court in the first instance. Sygenta Crop Protection, Inc.
7
Cape Wind also renews its argument that the plaintiffs lack
standing to bring this suit. We disagree. A Massachusetts statute
expressly allows groups like Ten Taxpayer to bring suit to enjoin
environmental harms under any "statute, ordinance, by-law or
regulation the major purpose of which is to prevent or minimize
damage to the environment," Mass. Gen. Laws ch. 214, § 7A, and the
plaintiffs here (all of whom reside in towns bordering Nantucket
Sound and many of whom work in the Sound itself) allege
sufficiently concrete and personal injuries from Cape Wind's
activities to support standing. In addition, no party has
suggested that the appeal is moot because the SMDS has already been
built; indeed, Ten Taxpayer says that Massachusetts regulatory
clearance for the project remains both available and required.
-13-
v. Henson, 537 U.S. 28, 33 (2002); Okla. Tax Comm'n v. Graham, 489
U.S. 838, 840 (1989) (per curiam); see also BIW Deceived v. Local
56, 132 F.3d 824, 830 (1st Cir. 1997). Here, the most obvious
bases for federal subject-matter jurisdiction are lacking: the
parties are nondiverse, and Ten Taxpayer's complaint does not (at
least on its face) assert a cause of action based on federal law.
The question, accordingly, is whether any of several
alternative bases for subject-matter jurisdiction applies. We
reject the primary argument for removal offered by Cape Wind, but
find removal proper on a different ground.
1. Delegation of Regulatory Authority Under the
Magnuson-Stevens Act
Cape Wind first relies on federal preemption under the
Magnuson-Stevens Act. It argues that Ten Taxpayer's claims "arise
under" federal law, and thus support removal under § 1441, because
Ten Taxpayer cannot prevail without showing that Congress in fact
granted to Massachusetts the authority to regulate on Horseshoe
Shoals. This, Cape Wind argues, constitutes a "federal question"
on the face of Ten Taxpayer's well-pleaded complaint under 28
U.S.C. § 1331.
We disagree. In this posture, the contention that
federal law does not authorize Ten Taxpayer's claims is simply a
federal preemption defense available to Cape Wind. It is hornbook
law that a federal defense does not confer "arising under"
jurisdiction, regardless whether that defense is anticipated in the
-14-
plaintiff's complaint. Beneficial Nat'l Bank, 539 U.S. at 6;
Louisville & Nashville R. Co. v. Mottley, 211 U.S. 149, 152 (1908).
That is generally true even where the asserted defense is the
preemptive effect of a federal statute. Franchise Tax Bd. v.
Constr. Laborers Vacation Tr., 463 U.S. 1, 12 (1983) (well-pleaded
complaint rule may bar removal even where the only question for
decision is the viability of a federal preemption defense).
Cape Wind argues that the case at bar is distinguishable
from an ordinary case involving a federal preemption defense
because the question is not whether Congress precluded state
regulation, but whether it affirmatively permitted it. The Supreme
Court rejected that precise argument in Gully v. First Nat'l Bank,
299 U.S. 109 (1936). In Gully, a state tax collector sued to
collect taxes from a national bank. Id. at 111. The bank tried to
remove the case, arguing that if the state government had the power
to collect taxes from a national bank, it enjoyed that power only
to the extent conferred by federal statute. Id. at 112.
Therefore, the bank argued, removal was proper because the state
tax collector necessarily relied on federal law in bringing the
suit. Id. The Supreme Court rejected that reasoning:
The argument . . . proceeds on the assumption that,
because permission is at times preliminary to action, the
two are to be classed as one. But the assumption will
not stand . . . . Here, the right to be established is
one created by the state. If that is so, it is
unimportant that federal consent is the source of state
authority. To reach the underlying law we do not travel
back so far. By unimpeachable authority, a suit brought
-15-
upon a state statute does not arise under an act of
Congress or the Constitution of the United States because
prohibited thereby. With no greater reason can it be
said to arise thereunder because permitted thereby.
Id. at 116 (citations omitted). The same reasoning applies here.
No matter how the argument is framed, Cape Wind's contention that
Massachusetts has no power to regulate on Horseshoe Shoals does not
support removal.
2. Federal Incorporation of State Law on the Outer
Continental Shelf
For an entirely different reason, however, we hold that
Ten Taxpayer's claims do arise under federal law. That is because
Congress has explicitly incorporated state law on the outer
Continental Shelf as federal law:
To the extent they are applicable and not inconsistent
with this subchapter . . . , the civil and criminal laws
of each adjacent State, now in effect or hereinafter
adopted . . . are declared to be the law of the United
States for that portion of the subsoil and seabed of the
outer Continental Shelf, and artificial islands and fixed
structures erected thereon, which would be within the
area of the State if its boundaries were extended seaward
to the outer margin of the outer Continental Shelf . . .
. All of such applicable laws shall be administered and
enforced by the appropriate officers and courts of the
United States.
43 U.S.C. § 1333(a)(2) (emphasis added). Interpreting this
provision, the Supreme Court has held that "federal law is
'exclusive' in its regulation of this area, and . . . state law is
adopted only as surrogate federal law." Rodrigue, 395 U.S. at 357;
see also Gulf Offshore Co. v. Mobil Oil Corp., 453 U.S. 473, 480
(1981) ("All law applicable to the Outer Continental Shelf is
-16-
federal law, but to fill the substantial 'gaps' in the coverage of
federal law, OCSLA borrows the 'applicable and not inconsistent'
laws of the adjacent States as surrogate federal law.").
The consequence for Ten Taxpayer's complaint is clear.
The SMDS is a "fixed structure[] erected" on the "subsoil and
seabed of the outer Continental Shelf" in territory adjacent to
Massachusetts. As a result, the Massachusetts statutes and
regulations at issue in this case are, by federal statute, treated
as federal law to the extent that they apply on Horseshoe Shoals.
See Union Texas Petroleum Corp. v. PLT Engineering, Inc., 895 F.2d
1043, 1047 (5th Cir. 1990).
In its supplemental brief,8 Ten Taxpayer opposes this
interpretation of the OCSLA. It contends that § 1333(a)(2) merely
specifies the rule of decision that should apply in cases brought
under 43 U.S.C. § 1349(b)(1), the provision that grants the
district courts subject-matter jurisdiction to hear cases arising
from certain activities on the outer Continental Shelf. Moreover,
Ten Taxpayer says, the OCSLA is predominantly concerned with oil
and gas exploration on the outer Continental Shelf, and the Act's
incorporation of state law must be understood in that context.
8
At oral argument, the court invited the parties to file
supplemental briefs directed to whether 43 U.S.C. § 1333(a)(2)
supports federal subject-matter jurisdiction in this case. Both
parties accepted the invitation.
-17-
These arguments are unfounded. The text of § 1333(a)(2)
is unequivocal: on the seabed of the outer Continental Shelf and
on any fixed structures attached thereto, the "civil and criminal
laws of each adjacent State . . . are declared to be the law of the
United States." No reference is made to actions brought under
§ 1349(b)(1). On the contrary, Congress's explicit reference to
state criminal laws belies any suggestion that § 1333(a)(2) merely
defines the rule of decision for civil actions brought under
§ 1349. And Congress left no doubt that it expected the federal
courts to have control over the administration of adopted state
laws on the outer Continental Shelf. See § 1333(a)(2) ("All such
applicable laws shall be administered and enforced by the
appropriate officers and courts of the United States.").
Likewise, nothing in § 1333(a)(2) limits the
incorporation of state law to activities involved in exploring for
oil and gas.9 Nor is there any reason to infer such a limitation,
as Congress had good reason to adopt state law in its entirety
(except where inconsistent with federal law). Federal law is
interstitial by its nature, and no other body of law applies on the
outer Continental Shelf. So rather than legislate for every
conceivable circumstance that might arise, Congress simply
incorporated state law, thereby simultaneously retaining federal
9
We express no view as to whether other provisions of the
OCSLA are so limited. That question is implicated in a related
appeal pending before this court. See supra note 1.
-18-
control over the outer Continental Shelf and ensuring that a
comprehensive body of substantive law will be available to resolve
disputes. See Gulf Offshore, 453 U.S. at 480; Chevron Oil Co. v.
Huson, 404 U.S. 97, 103 (1971); Rodrigue, 395 U.S. at 357.
We hold that Ten Taxpayer's claims, though ostensibly
premised on Massachusetts law, arise under the "law of the United
States" under § 1333(a)(2). A federal question thus appears on the
face of Ten Taxpayer's well-pleaded complaint. See 28 U.S.C.
§ 1331. Accordingly, the case was properly removed. Id.§ 1441(b); see Hufnagel v. Omega Serv. Indus., Inc., 182 F.3d 340,
351 (5th Cir. 1999) (allowing removal because the plaintiff's state
statutory claim was incorporated as federal law under the OCSLA);
Hodges v. Shell Oil Co., No. Civ. A. 97-1573, 1997 WL 473809, at
*3-*5 (E.D. La. Aug. 19, 1997) (same).10
B. Dismissal of Ten Taxpayer's Complaint
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.
1. Scope of the Asserted Massachusetts Statutes
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 ninety-
one."
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.
2. Inconsistency with Federal Law
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.
IV.
The judgment of the district court is affirmed. Costs
are awarded to Cape Wind.
-29-