United States District Court, E.D. Michigan, Southern Division
OPINION AND ORDER DENYING PLAINTIFF'S MOTION FOR
PRELIMINARY INJUNCTION 
J. MICHELSON U.S. DISTRICT JUDGE
the United States Environmental Protection Agency designated
southeast Michigan as not in attainment of national
air-quality standards, Michigan came up with a plan to
improve air quality in the region. This included enacting
Michigan Compiled Laws § 290.650d. That statutory
provision requires dispensing facilities in southeast
Michigan to sell gasoline with a Reid Vapor Pressure of no
more than 7.0 pounds per square inch during the summer. As
Ammex, Inc.'s gas station is located in southeast
Michigan, the Michigan Department of Agriculture & Rural
Development intends to enforce § 290.650d against Ammex
Ammex's gas station is located in southeast Michigan, the
station is more precisely located right before the Ambassador
Bridge connecting the United States and Canada. In fact, the
station is located beyond what United States Customs and
Border Protection considers the “exit point” from
the United States. Moreover, the station is part of a
duty-free store and for a duty-free store to sell gasoline
tax free, the gasoline must come from a foreign country (or
foreign trade zone), stay beyond the exit point, and be sold
to people leaving the United States. Indeed, the physical
design of Ammex's gas station ensures that those who
refuel there must immediately head into Canada. For these and
related reasons, Ammex believes that MDARD would violate the
Federal Constitution if it enforced Michigan Compiled Laws
§ 290.650d against it.
parties' disagreement, coupled with Ammex's present
inability to find a foreign source of 7.0 RVP gasoline, led
to this lawsuit. Ammex asks this Court to enjoin MDARD from
enforcing § 290.650d (and associated laws) against it
and to declare that § 290.650d cannot be lawfully
applied to it. Moreover, with summer imminent, Ammex has
sought a preliminary injunction. (R. 8.)
be explained in detail below, the Court finds that Ammex is
not likely to show that either the Supremacy Clause or the
Foreign Commerce Clause bars MDARD from enforcing a 7.0 RVP
standard against Ammex. As such, the Court will deny
Ammex's motion for preliminary relief.
bonded warehouses have existed in America for over 170 years.
See Xerox Corp. v. Harris Cty., Tex., 459 U.S. 145,
150-51 & n.7 (1982) (discussing Warehousing Act of 1846).
They come in different varieties, but, speaking generally,
they help ease the burden of federal import duties. In
particular, a merchant engaged in international trade can
store his goods in a customs bonded warehouse and either
defer the import duty until he puts the goods into the stream
of United States commerce or avoid the import duty entirely
by taking his goods from the warehouse to another country.
See 19 U.S.C. § 1557(a)(1); Xerox, 459
U.S. at 150-51 & n.7. And, depending on the type of
customs bonded warehouse, the merchant may organize,
repackage, and even transform his goods into new ones while
they are warehoused. See 19 C.F.R. § 19.1.
Thus, the purpose of customs bonded warehouses, or a key one
at least, is “to encourage merchants here and abroad to
make use of American ports.” Xerox, 459 U.S.
duty-free store, while still considered a customs bonded
warehouse, see 19 U.S.C. § 1555(b); 19 C.F.R.
§ 19.1(a)(9), operates somewhat differently: the
store's owner sells merchandise to those leaving the
United States, see 19 C.F.R. § 19.35(a). Like
proprietors of other customs bonded warehouses, the owner of
a duty-free store does not pay an import duty on the goods he
brings into his store from a foreign country (or foreign
trade zone). Moreover, he can sell his goods free of federal,
and at least in some instances, state taxes. See 19
U.S.C. § 1555(b)(8)(D), (E); Ammex, Inc. v.
Dep't of Treasury, 726 N.W.2d 755, 766-69 (Mich. Ct.
App. 2006). That makes items that are heavily taxed, such as
liquor and cigarettes, popular at duty-free stores. And, in
Congress' view, lower-cost goods not only “play a
significant role in attracting international passengers to
the United States, ” Pub. Law 100-418 (1988), they
“induce foreign visitors to increase their expenditures
for goods in the United States, ” S. Rep. 100-71
Ammex, Inc. operates a duty-free store near the Ambassador
Bridge that connects Detroit, Michigan to Windsor, Canada.
While Ammex's store is in Wayne County, Michigan, it is
“beyond the exit point” established by the United
States Customs and Border Protection. (R. 20, PID 732).
“Exit point, ” for CBP purposes, is not the
“actual exit” from the United States but near the
actual exit, see 19 C.F.R. §§ 19.1(a)(9),
19.35(d), 101.1(e); it is the point where a departing
individual has “no practical alternative” other
than to continue to a foreign country or return to this one
through a CBP inspection facility, 19 C.F.R. § 19.35(d).
Ammex sells goods commonly found at duty-free stores, since
the late 1990s Ammex has also sold gasoline. (See R.
29, PID 852.) Ammex's gas station is designed to ensure
that cars that refuel there continue onto Canada afterwards.
(R. 8, PID 94); see also Ammex, Inc. v. United
States, 419 F.3d 1342, 1343 (Fed. Cir. 2005).
Apparently, tax-free gas is popular: Ammex sells 400, 000
gallons a month. (See R. 29, PID 852-53.)
1970, dissatisfied “with earlier efforts at air
pollution abatement, ” Congress made major changes to
the Clean Air Act. Friends of the Earth v. Carey,
535 F.2d 165, 168-69 (2d Cir. 1976). In particular, Congress
directed the United States Environmental Protection Agency to
establish National Ambient Air Quality Standards. Train
v. Nat. Res. Def. Council, Inc., 421 U.S. 60, 65 (1975).
But Congress did not intend the Environmental Protection
Agency to battle air-pollution alone; instead, it directed
each state to submit a plan-known as a state implementation
plan or SIP-for implementing, maintaining, and enforcing the
NAAQS. See id.; 42 U.S.C. § 7410(a)(1). The
states' implementation plans were subject to EPA
approval, as were any post-approval changes to the plans.
See N. Ohio Lung Ass'n v. E.P.A., 572 F.2d 1143,
1147 (6th Cir. 1978). That is still true today. See
42 U.S.C. § 7410(k), (l).
1990, Congress again made major changes to the Clean Air Act.
For one, Congress set a national Reid Vapor Pressure standard
for gasoline. See 42 U.S.C. § 7545(h). In
particular, Congress ordered the EPA to promulgate
regulations prohibiting anyone (in the “48 contiguous
States”) from selling-or even
“supply[ing]”-gasoline with an RVP higher than
9.0 pounds per square inch. See 42 U.S.C. §
7545(h)(1), (6). Moreover, it appears that Congress
prohibited states from holding gasoline to a different RVP
standard, see § 7545(c)(4)(A)(ii), unless the
EPA both found the state's RVP standard was
“necessary” to achieve a NAAQS and approved it as
part of the state's implementation plan, see 42
U.S.C. § 7545(c)(4)(C)(i); 71 Fed. Reg. 46879, 46880
(Aug. 15, 2006).
2004, the EPA designated eight counties in southeast Michigan
as in “nonattainment” of the NAAQS for ozone. 71
Fed. Reg. 46879, 46880 (Aug. 15, 2006). This included Wayne
County where Ammex is located. (R. 18, PID 562.)
forced Michigan to come up with a strategy to bring southeast
Michigan into attainment. (See R. 18, PID 562.) Part
of the strategy was to require gas stations to use lower RVP
gasoline in the summer months. (R. 18, PID 562; see
also R. 18, PID 537, 542). In particular, Michigan
enacted House Bill 5508, which says in part, “Beginning
June 1 through September 15 of 2007 and for that period of
time each subsequent year, the vapor pressure standard shall
be 7.0 psi for dispensing facilities in Wayne” and
seven other counties in southeast Michigan. (R. 18, PID 542.)
And the Bill defined “dispensing facilities” as
“a site used for gasoline refueling.” (R. 18, PID
537.) Those two provisions of House Bill 5508 are now found
in Michigan Compiled Laws § 290.650d and § 290.642,
respectively. The Court will refer to § 290.650d, §
290.642, and associated state laws and regulations (e.g.,
Michigan Compiled Laws § 290.645(10) and Michigan
Administrative Code Rules 285.561.1-3) as the
2006, Michigan asked the EPA to approve most of House Bill
5508, including the 7.0 RVP standard and the associated
enforcement provisions, as a revision to its state
implementation plan. See (R. 18, PID 529); 71 Fed.
Reg. 46879, 46880 (Aug. 15, 2006). The EPA reviewed
Michigan's request to revise its implementation plan and
found that it was consistent with the requirements of the
Clean Air Act and that Act's implementing regulations. 71
Fed. Reg. 46879, 46881 (Aug. 15, 2006). But it did more.
Because House Bill 5508 set an RVP for gasoline different
than the national standard set by Congress, the EPA also
found that the 7.0 RVP was “necessary” to achieve
NAAQS. 71 Fed. Reg. 46879, 46881 (Aug. 15, 2006); 72 Fed.
Reg. 4432, 4433 (Jan. 31, 2007). Upon making those findings,
the EPA proposed to approve Michigan's SIP revision and
solicited comments to the contrary. See 72 Fed. Reg.
4432, 4433-34 (Jan. 31, 2007). Ammex provided none. See
January 31, 2007, the EPA found Michigan's 7.0 RVP
standard “necessary for Southeast Michigan to achieve
the 8-hour NAAQS for ozone” and “approv[ed] [the]
SIP revision submitted by the State of Michigan . . .
establishing a 7.0 psi RVP fuel requirement for gasoline
distributed in Southeast Michigan.” 72 Fed. Reg. 4432,
4434 (Jan. 31, 2007). The EPA further amended the Code of
Federal Regulations to “incorporat[e] by
reference” “House Bill 5508.” Id.
summer of 2012, the Michigan Department of Agriculture &
Rural Development- the Michigan entity responsible for
enforcing the Summer-Fuel Laws-tested gasoline Ammex was
selling, found that it had an RVP of more than 7.0 psi, and
thus issued Ammex a “Stop Sale Order.” (R. 13,
parties' dispute ended up in state court, but was
resolved-for a time. Under a settlement, Ammex agreed to sell
gas that complied with the 7.0 RVP standard “[b]etween
June 1 and September 15 of each year.” (R. 13, PID
226.) The settlement contained a “retention of
jurisdiction” provision giving MDARD three years to
return to the state court where it filed suit to enforce the
settlement agreement. (R. 13, PID 227.)
with the settlement agreement, during the summers of 2013,
2014, 2015, 2016, and 2017, Ammex sold duty-free gasoline
that had a RVP of 7.0 psi during the summer months.
Ammex says it cannot do that this upcoming summer. In
particular, Ammex's foreign (or, more precisely, foreign
trade zone) supplier has an issue with one of its tanks. And
while there are other foreign sources where Ammex could
obtain gasoline, Ammex claims that none of those sell 7.0 RVP
gasoline. And while there are domestic sources that sell 7.0
RVP gasoline, buying from those would preclude Ammex from
selling gasoline tax-free. In any event, says Ammex, domestic
gasoline would have to be stored in different tanks which
would be cost prohibitive. But see 19 C.F.R. §
19.36(e)(2). This rock and a hard place, coupled with
MDARD's indication that it will require Ammex to comply
with the 7.0 RVP standard this summer (R. 1, PID 4-5),
prompted Ammex to file this lawsuit.
complaint consists of two counts. In Count I, Ammex says that
the dormant side of the Foreign Commerce Clause prevents Wenk
from enforcing the Summer-Fuel Laws against it. (R. 1, PID
12-14.) From Ammex's perspective, if Wenk enforced those
laws, Michigan would be unconstitutionally discriminating
against foreign commerce, regulating commerce beyond its
borders, and infringing on Congress' right to be the
“one voice” for the Nation on foreign commerce.
(See R. 8, PID 82-86.) In Count II, Ammex asserts
that the Supremacy Clause prevents Wenk from enforcing the
Summer-Fuel Laws against it. (R. 1, PID 14-15.) From
Ammex's perspective, Congress and U.S. Customs and Border
Protection regulate the entire field of products sold at
duty-free shops so Michigan laws that affect what can be sold
are preempted. (See R. 8, PID 81-82.) Ammex also
claims the Summer-Fuel Laws are preempted because they
conflict with Congress' goals for duty-free shops.
(Id.) For these reasons, Ammex asks this Court to
enjoin MDARD's director, Gordon Wenk, from enforcing the
Summer-Fuel Laws against it. (R. 1, PID 14-15.)
Ammex asks this Court to do so in a hurry. Ammex stresses
that June 1, 2018 (the date when the Summer-Fuel Laws come
into effect) is looming and that without an injunction in
place it will either have to sell gas in violation of the 7.0
standard or simply not sell gas at all. It thus seeks a
preliminary injunction. (R. 8.)
argues that this Court does not have subject-matter
jurisdiction over Ammex's complaint for two reasons:
because he, as a state official sued in his official
capacity, is immune from suit in federal court and because
the Clean Air Act requires Ammex to pursue relief in the
Court of Appeals for the Sixth Circuit. (R. 7, PID 49-53.)
The Court disagrees with Wenk.
often referred to as Eleventh Amendment immunity, sovereign
immunity extends beyond the text of the Eleventh Amendment
and “limits the grant of judicial authority in Art.
III.” Pennhurst State Sch. & Hosp. v.
Halderman, 465 U.S. 89, 98 (1984); N. Ins. Co. of
New York v. Chatham Cty., Ga., 547 U.S. 189, 193 (2006)
(“Eleventh Amendment immunity . . . is convenient
shorthand but something of a misnomer[.]” (internal
quotation marks omitted)). Under the doctrine of sovereign
immunity, absent waiver by Michigan or abrogation by
Congress, Michigan and its instrumentalities cannot be sued
in a federal court. See Pennhurst, 465 U.S. at
98-100; Regents of the Univ. of California v. Doe,
519 U.S. 425, 429 (1997). Moreover, a suit against a state
official in his official capacity, like Ammex's suit
against Wenk, is treated as a suit against the state itself.
Kentucky v. Graham, 473 U.S. 159, 166 (1985).
said, some types of official-capacity suits can proceed in
federal court under the Ex parte Young exception to
sovereign immunity. The idea (courts sometimes call it a
“fiction”) behind the Ex parte Young
exception is that when a state law is contrary to federal
law, any attempt by the official to enforce the state law is
not on behalf of the state. See Virginia Office for Prot.
& Advocacy v. Stewart, 563 U.S. 247, 254 (2011).
Thus, under Ex parte Young, a plaintiff may sue a
state official in his official capacity in federal court so
long as the plaintiff seeks to enjoin the official from
violating federal law now and in the future. See Edelman
v. Jordan, 415 U.S. 651, 667-68 (1974); Diaz v.
Michigan Dep't of Corr., 703 F.3d 956, 964 (6th Cir.
says that is not what Ammex is seeking to do. In Wenk's
view, House Bill 5508 and its 7.0 RVP standard are federal
law. (R. 7, PID 41, 43.) So, says Wenk, Ammex's suit is
not to prevent him from violating federal law but to avoid
its own violation of federal law this summer. (R. 7, PID 50.)
“This, ” says Wenk, “turns the Ex parte
Young exception on its head.” (R. 7, PID 50.)
“In determining whether the doctrine of Ex parte
Young avoids an Eleventh Amendment bar to suit, a court
need only conduct a straightforward inquiry into whether
[the] complaint alleges an ongoing violation of federal law
and seeks relief properly characterized as
prospective.” Verizon Maryland, Inc. v. Pub. Serv.
Comm'n of Maryland, 535 U.S. 635, 645 (2002)
(internal quotation marks and citation omitted). So the
right-side-up view of the issue is not whether Ammex seeks to
avoid complying with federal law but whether Ammex seeks to
enjoin a state official from violating federal law. And in
deciding whether Ammex has pled a violation of federal law,
the Court need not assess (at any depth at least) the merits
of Ammex's claims. See Muscogee (Creek) Nation v.
Pruitt, 669 F.3d 1159, 1167 (10th Cir. 2012) (finding
district court erred in applying Twombly and
Iqbal's plausibility standard to conclude that
Ex parte Young exception did not apply). Instead,
for jurisdiction purposes, this Court merely determines
whether Ammex has “state[d] a non-frivolous,
substantial claim for relief against the [s]tate officers
that does not merely allege a violation of federal law solely
for the purpose of obtaining jurisdiction.”
Id. (internal quotation marks omitted).
has. As described in some detail above, Ammex has pled that
if Wenk were to enforce the Summer-Fuel Laws against it this
summer, he would violate the Federal Constitution.
(See R. 1, PID 12-15.) Right or wrong, these claims
are neither frivolous nor made solely for the purpose of
manufacturing jurisdiction. As such, Michigan's sovereign
immunity does not prevent a federal court from deciding
Ammex's claims against Wenk. See Muscogee (Creek)
Nation, 669 F.3d at 1167.
also claims that the Clean Air Act's judicial-review
provision strips this Court of jurisdiction. (R. 7, PID 52.)
That statutory provision provides, in relevant part,
“[a] petition for review of the Administrator's
action in approving or promulgating any
implementation plan under section 7410 of this title . . . or
any other final action of the Administrator under
this chapter which is locally or regionally applicable may be
filed only in the United States Court of Appeals for the
appropriate circuit.” 42 U.S.C. § 7607(b)(1)
(emphasis added). It further states that any such petition
for review must “be filed within sixty days from the
date notice of such promulgation, approval, or
action appears in the Federal Register, except that if
such petition is based solely on grounds arising after such
sixtieth day, then any petition for review under this
subsection shall be filed within sixty days after such
grounds arise.” Id. (emphasis added). Wenk
believes that Ammex challenges the EPA's approval of
Michigan's revision to its SIP in 1997. (R. 7, PID 52.)
Thus, in Wenk's view, Ammex filed this suit “two
decades too late and in the wrong court.” (R. 7, PID
Court disagrees with Wenk.
initial matter, it seems that the relevant EPA action was in
2007, not 1997. In 1997, the EPA merely approved a
“summertime gasoline RVP limit of 7.8 psi for
gasoline sold in Wayne” and other counties. 62 Fed.
Reg. 24341, 24342 (May 5, 1997) (emphasis added). It was not
until 2007 that EPA approved RVP of 7.0: “What action
is EPA taking today? EPA is approving a SIP revision . . .
establishing a 7.0 psi RVP fuel requirement for gasoline
distributed in Southeast Michigan.” 72 Fed. Reg. 4432,
4434 (Jan. 31, 2007).
whether the relevant EPA action is the 1997 approval or the
2007 approval, what is not debatable is that the
judicial-review provision's “any other final
action” clause does not apply. See 42 U.S.C.
§ 7607(b)(1). That clause appears to be a catchall.
See Id. And so it would only apply if none of the
clauses that preceded it did. But one does. The first clause
of the judicial review says, “[a] petition for review
of the Administrator's action in approving or
promulgating any implementation plan under section
7410 . . . .” See 42 U.S.C. §
7607(b)(1) (emphasis added). Section 7410 provides for EPA
approval of revisions to state implementation plans and that
is just what the EPA did in both 1997 and 2007.
question then is whether Ammex's complaint seeks
“review of the Administrator's action in approving
. . . any implementation plan.” 42 U.S.C. §
7607(b)(1). If yes, then Ammex should have pursued relief in
the Court of Appeals (and done so long ago); if no, then
Ammex's suit is properly filed here.
answer is “no.” Ammex's lawsuit is limited to
claims that the Summer-Fuel Laws cannot be enforced against
it without violating the Constitution. Ammex is not saying
that the EPA was wrong to “approv[e]” House Bill
5508 as a revision to Michigan's SIP. That is, Ammex
neither claims that the EPA failed to follow proper
procedures in approving a SIP revision nor claims that
EPA's approval of a SIP revision was arbitrary or
capricious. Instead, Ammex merely claims that the Summer-Fuel
Laws cannot be lawfully applied to it. See Utah Power
& Light Co. v. Envtl. Prot. Agency, 553 F.2d 215,
218 (D.C. Cir. 1977) (“Only by straining the meaning of
the words ‘approving' and ‘promulgating'
could it be said that challenges to interpretations or
applications of EPA regulations constitute attacks on
‘the Administrator's action in approving or
promulgating' any state implementation plan.”);
In re Volkswagen “Clean Diesel” Marketing,
Sales Practices, and Products Liability Litigation, 264
F.Supp.3d 1040, 1047 (N.D. Cal. 2017) (finding that a
“challenge to ‘a particular interpretation or
application' of a SIP, which if accepted would not
invalidate the SIP[, ] . . . is properly considered by the
arguing for a different result, Wenk primarily relies on
California Dump Truck Owners Ass'n v. Nichols,
784 F.3d 500 (9th Cir. 2015), and decisions by the Fourth and
Eighth Circuits discussed in Dump Truck Owners. But
the plaintiffs' claims in those three cases are
materially different from Ammex's claims in this case.
Dump Truck Owners, an association of dump-truck
operators sought to enjoin the California Air Resources Board
(CARB) from enforcing a state law regulating heavy-duty truck
emissions. See 784 F.3d at 503, 507. The association
claimed that the state law was preempted by federal law.
Id. While the association's suit was pending in
district court, the EPA approved the state law as a revision
to California's SIP. Id. at 504. The association
argued that the EPA's approval did not mean that the
Clean Air Act's judicial-review provision stripped the
district court of jurisdiction. According to the association,
it was only challenging the state law and not the EPA's
approval of the state law as a SIP revision. Id. at
505. And, the association argued, it was not challenging any
provision of the SIP. ...