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Millennium

Millennium Bulk Terminals is located at the former Reynolds Metals plant west of Longview.

Bill Wagner, The Daily News

The legal battle over the proposed Millennium coal export terminal in Longview widened into a much broader national issue Tuesday.

Six states filed an amicus brief in support of a federal lawsuit that accuses Washington Gov. Jay Inslee’s administration of interfering with foreign and interstate trade by denying permits for the controversial project.

Attorneys general in Montana, Wyoming, South Dakota, Utah, Kansas and Nebraska argued in the brief that Inslee and state regulators are holding coal-producing states hostage. In essence, the states claim that Washington is holding coal to a higher standard than other types of business and commerce.

The suit was brought in January by Lighthouse Resources, Inc., the parent company behind Millennium’s $680 million export proposal at the old Reynolds Metals aluminum plant in Longview.

At its core, the complaint raises fundamental questions about how states’ rights should be weighed against powers granted to the federal government by the U.S. Constitution.

Attention on the case has intensified as a growing number of parties — including Cowlitz County and four national trade groups — recently submitted briefs in support of Lighthouse’s claims. A coalition of environmental groups has intervened on the state’s side, while BSNF Railway has intervened on the side of the plaintiffs.

The proposed terminal would allow Lighthouse to ship coal to Asia from its vast coal mines in the Powder River Basin, which stretches from southeast Montana to northeast Wyoming. The 15 million-acre expanse of land produces about 40 percent of all coal mined in the United States. At full buildout, the terminal would export up to 44 million metric tons of coal per year.

“Governor Inslee has made his ideological opposition to coal abundantly clear over the years, proving pro-coal projects will never get a fair shake by his administration,” Montana Attorney General Tim Fox said in a statement Wednesday. “Fortunately, the law is on our side.”

The brief filed Tuesday accuses Inslee, state Department of Ecology Director Maia Bellon and state Commissioner of Public Lands Hilary Franz of having “a long-documented public opposition to fossil fuels, and coal in particular.”

By denying permits for the project, Washington is essentially forcing its policy preferences regarding coal on other states, the brief argues.

The coal project has suffered a series of setbacks over the past 17 months, including the denial of an aquatic lands sublease by the state Department of Natural Resources in January 2017 and the denial of a water quality certification from Ecology last fall. A Cowlitz County hearing examiner also denied Millennium’s application for a pair of key shoreline permits last September. But a Cowlitz County judge in December overruled DNR’s rejection of the sublease, calling the decision “arbitrary and capricious.” Challenges to the permitting decisions are now at various stages of appeal.

Defendants in the federal case have argued the permits were denied because Millennium failed to show the project could comply with local and state environmental protection laws. Lawyers representing the Inslee administration have asked U.S. District Court Judge Robert J. Bryan to pause the federal lawsuit to allow the state-level legal challenges to play out.

But the six states argue that Lighthouse’s claims have precedence over state-level proceedings because the federal government has an “overwhelming interest” in the result. The six attorney generals specifically cite previous court decisions that have found the U.S. Constitution’s Commerce Clause prohibits states from discriminating against interstate commerce.

As part of its requested relief, Lighthouse is specifically asking for a court order requiring state regulators to apply the same standards to Millennium’s applications as to non-coal projects.

“Today it is coal, tomorrow it could be natural gas or non-organic produce,” the brief states. “The interests of interior states in developing foreign trade are now subject to the barriers erected by the policy whims of states that control access to international markets through their ports.”

Meanwhile, defendants have argued Lighthouse’s requested relief would interfere with Washington’s sovereign rights as a state.

The effect of the relief, if granted, “would be to remove the state’s management discretion over its aquatic lands,” defendants argue.

Inslee’s lawyers also argue that state regulators acting in their official capacity are immune from federal lawsuits under the Eleventh Amendment of the U.S. Constitution. The amendment limits and restricts federal courts from hearing lawsuits against any state’s government that are brought by citizens of another state or foreign country.

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