A Court Win for Manufacturing Exports and Energy Production

The National Association of Manufacturers’ (NAM) Manufacturers’ Center for Legal Action (MCLA) helped deliver a victory for manufacturers in a key case that tests the limits on state power to interfere with exports.

The case involves a harbor owner’s plan to construct a $680 million coal export terminal along the Washington coast. Washington Gov. Jay Inslee’s administration refused to grant permits necessary to construct the terminal. The denials cited environmental concerns despite the terminal’s strong proposed protections for air and water quality. In numerous public statements about the proposed terminal, the governor and his staff made clear their political opposition to coal exports. It appears the permits were denied because the governor simply does not like coal.

The harbor owner and a coal producer sued the governor in a federal district court in Washington. The governor asked the court to dismiss the litigation, arguing the case against him is too weak to proceed. If the court had granted the governor’s request, it would have spelled the end of new coal exports from Washington.

The precedent of such a ruling would also have given other state governors a green light to block free trade and discriminate against products they disfavor. California, for example, might be emboldened to deny port access for the export of genetically modified foods. New York might restrict the export of goods whose manufacture does not comply with the governor’s conception of “fair” labor practices.

The potential patchwork of state-by-state restrictions could strangle the arteries of free trade and exports. That is why the NAM’s MCLA filed a legal brief in support of the plaintiffs. We asserted that state interference with free trade hurts manufacturers and the national economy, and that the permit denials violate the U.S. Constitution by usurping the federal government’s exclusive role in regulating trade.

Apparently recognizing the strength of the plaintiff’s claims and the MCLA’s arguments, the court last week denied the governor’s request to dismiss the case. The MCLA will continue to engage in this case to help ensure the plaintiffs ultimately prevail at the trial stage.

Peter Tolsdorf

Peter Tolsdorf is the vice president of litigation and deputy general counsel at the National Association of Manufacturers.

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