SOUTH PORTLAND — The Maine Supreme Judicial Court will hear oral arguments Friday in a dispute between the city and its insurance carrier over who must pay legal fees to defend against a federal lawsuit filed against South Portland by Portland Pipe Line Corp.

The arguments come on the coattails of PPL’s filing for summary judgment in the suit challenging the city’s Clear Skies Ordinance. The findings of fact were heard in U.S. District Court in Portland on Nov. 17. 

In the state court case, the Maine Municipal Association has refused to pay the city’s legal defense fees in the PPL lawsuit. The city is appealing a Maine Superior Court ruling in MMA’s favor earlier this year. The appeals court hearing is scheduled for 10:40 a.m. Dec. 2 at Cumberland County Courthouse in Portland. 

Portland Pipe Line sued the city in February 2015 to overturn the city’s July 2014 adoption of the Clear Skies Ordinance. The ordinance is a set of zoning amendments designed to keep PPL from reversing the flow of unrefined crude oil piped from South Portland to Montreal, and the bulk-loading of crude oil onto tankers. 

The lawsuit, filed by PPL and American Waterways Operators, a national advocate for the tugboat, barge and towboat industry, claims the city overstepped its municipal regulatory power and interfered with state and federal trade and commerce laws. 

The city has raised more than $100,000 in donations to defend against the lawsuit, and has accumulated about $750,000 in legal fees for a trial that hasn’t yet started. 

The city’s statement of facts includes nearly 180 reasons why it believes the court should dismiss the lawsuit and allow the city to retain the parameters set by the Clear Skies Ordinance.

They include the position that the ordinance “promotes economic redevelopment of the city’s waterfront,” as opposed to crude oil operations, which city officials feel would inhibit the goal of transforming the zone into a “robust waterfront center for office complexes, commercial uses, traditional marine uses, residential development, integrated light industrial and tourist activity.”

The city also argues that because of “the extreme proximity of (Portland Pipe Line’s) emission sources to schools, neighborhoods and parks, adverse health conditions will be most acutely experienced by … children, low-income and elderly residents.”

PPL claims its lawsuit has merit because fliers circulated by citizen groups in favor of a Waterfront Protection Ordinance – which later morphed into the Clear Skies Ordinance – sensationalized the impact and risks of PPL’s use of crude oil, which is “sometimes pejoratively referred to as ‘tar sands.'”

PPL also cites several instances when elected city officials discussed why and how the city should prevent PPL from operating, and quotes members of the public and elected officials who advocated against transporting crude oil in the city and the risk factors associated with it. 

The company also said if the city prevails, Portland Pipe Line, which operates the only oil pipeline on the eastern seaboard, would effectively be forced out of business; 28 employees would lose their jobs and the city would lose $44.7 million in pipeline assets. 

Alex Acquisto can be reached at 781-3661 ext. 106 or aacquisto@theforecaster.net. Follow Alex on Twitter: @AcquistoA. 

Fryeburg resident Nickie Sekena, left, her son Luke Sekena-Flanders and Porter resident Doug Bowen were among about two dozen people protesting the proposed flow of Canadian oil extracted from tar sands into South Portland in January 2013 at the headquarters of Portland Pipe Line Corp. on Hill Street in South Portland.