Ten Taxpayer Citizens Group v. Cape Wind Associates, LLC

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

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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).

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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

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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

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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

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(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

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 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. § 1801

et 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.

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(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).

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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,

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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

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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

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 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

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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.

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 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.

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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.

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 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

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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).

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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

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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."

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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.

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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.

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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.

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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

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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").

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 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.

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