A federal court denied the state of Washington's motion to dismiss a case challenging the denial of necessary permits for a proposed coal export facility, clearing the way for the suit to proceed.
The suit filed Jan. 3 by project backers Lighthouse Resources Inc and its subsidiaries, including Millennium Bulk Terminals-Longview LLC, alleges that Washington Gov. Jay Inslee, the director of the Washington Department of Ecology and the state's commissioner of public lands violated the U.S. Constitution's dormant commerce clause, the federal ICC Termination Act and the federal Ports and Waterways Safety Act when they denied the permits.
A number of states and trade organizations have filed amicus briefs in support of Lighthouse in the U.S. District Court for the Western District of Washington.
Washington's motion to dismiss was filed May 24 and included challenges to the suit's jurisdiction and underlying arguments, suggesting that state courts could address any concerns with the permitting process.
Shortly after, Lighthouse responded by arguing that the "defendants failed to meet their burden to show that the Commerce Clause claims set forth in Lighthouse's Complaint are of the rare and extraordinary type that would support abstention."
During a May 30 hearing, the court sided with Lighthouse, setting a trial date for May 2019, according to local news reports.
A Lighthouse spokesperson praised the court's decision, saying, "we are pleased that the case is moving forward as it raises important questions about the state defendants' compliance with federal law and the Constitution's Commerce Clause, which we will now have the opportunity to fully explore."
Tara Lee, a spokesperson for Inslee's office, told S&P Global Market Intelligence they would not be able to comment on pending litigation, but "we are confident in the state's case moving forward."
The decision marks another positive step for West Coast coal export projects that have faced a litany of regulatory and legal setbacks in recent years, limiting access for U.S. producers to the Asian market. A recent federal court decision overturned a coal ban introduced by the Oakland, Calif., City Council. The ban was intended to limit or halt the flow of coal through a proposed port redevelopment project in the city, providing access to the export market for Utah coal producers.
