Air India v. Brien

• Decision Date: 17 March 2003
• Docket Number: No. 00 CV 1707.,00 CV 1707.
• Citation: 261 F.Supp.2d 134
• Parties: AIR INDIA, et al., Plaintiffs, v. Una BRIEN, et al., Defendants.
• Court: U.S. District Court — Eastern District of New York

Page 134

261 F.Supp.2d 134

AIR INDIA, et al., Plaintiffs, v. Una BRIEN, et al., Defendants.

No. 00 CV 1707.

United States District Court, E.D. New York.

March 17, 2003.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Scott Dunn, Esq., Assistant U.S. Attorney, Eastern District of New York, Brooklyn.

Christina Hagan, Esq., Hagan, Coury & Associates, New York.

MEMORANDUM & ORDER

GLASSER, District J.

This action involves the validity, interpretation and application of certain INS regulations that may require aliens lawfully admitted for permanent residence who are returning from abroad ("special immigrants," see 8 U.S.C. § 1101(a)(27)(A)) to present certain reentry documents, and the propriety of fining airlines who transport those lacking such documents. For a thorough review of the factual and procedural history of this litigation, see this Court's Memorandum and Order dated February 14, 2002.

Defendants now move pursuant to Fed. R.Civ.P. 59(e) for an order amending that decision. In it, the Court granted summary judgment to plaintiffs on their claim that 8 CFR § 211.1, as amended in 1966 (the "1966 regulation"), was void for having been promulgated without the "notice and comment" period required by the Administrative Procedure Act, 5 U.S.C. § 553(b), (c) ("APA").¹ Defendants argue that this claim is barred by the six year statute of limitations set out in 28 U.S.C. § 2401(a), and seek reversal of the grant of summary judgment to plaintiffs and of the revocation of certain fines levied under the regulation. For the reasons that follow, the motion is granted, but, as explained below, not so as to afford the government the relief it seeks.

DISCUSSION

I. Standard of Review

Under Fed.R.Civ.P. 59(e), the court may reconsider its prior decision 1) because of an intervening change in controlling law, 2) due to new evidence, 3) to correct clear error or 4) to prevent manifest injustice. While the Rule may not be used to raise an argument that could have been raised on the prior motion, Wright & Miller, Federal Practice & Procedure, § 2810.1 (1995), it may "point to controlling decisions ... that the court overlooked." Shrader v. CSX Transportation, 70 F.3d 255, 257 (2d Cir.1995).

II. Untimeliness of Procedural Challenge to the 1966 Regulation

On this motion to amend, defendants for the first time raise the defense of the statute of limitations. They point out, correctly, that 28 U.S.C. § 2401(a) bars actions against the United States which are not brought within six years of the date the cause of action accrued, and applies to challenges to regulations promulgated pursuant to the APA. Polanco v. U.S. DEA, 158 F.3d 647, 652 (2d Cir.1998); Fogel v. Dept. of Defense, 169 F.Supp.2d 140, 149 (E.D.N.Y.2001). Furthermore, this defense cannot be waived, as compliance with the statute is a jurisdictional predicate for the court's ability to entertain the claim. See Christian Beacon v. U.S., 322 F.2d 512, 514 (3d Cir.1963); U.S. v. One 1961 Red Chevrolet Impala Sedan, 457 F.2d 1353, 1357 (5th Cir.1972); Ippoli-to-Lutz, Inc. v. Harris, 473 F.Supp. 255, 260 (S.D.N.Y.1979). In determining whether plaintiffs challenge to the regulation is timely, it is therefore crucial to determine when that cause of action accrued.

In the case of procedural challenges, i.e., challenges to the manner in which a regulation was promulgated under the APA, the circuit courts which have considered the question are unanimous in holding that the cause of action accrues when the final regulation is published in the Federal Register. See Dunn-McCampbell Royalty v. Nat'l Park Service, 112 F.3d 1283, 1287 (5th Cir.1997); Commonwealth of Penn. Dept. of Welfare v. U.S. Dept. of HHS, 101 F.3d 939, 947 (3d Cir.1996); Shiny Rock Mining Corp. v. U.S., 906 F.2d 1362, 1364 (9th Cir.1990); Public Citizen v. NRC, 901 F.2d 147, 152 (D.C.Cir.1990); see also JEM Broadcasting Co. v. FCC, 22 F.3d 320, 325 (D.C.Cir. 1994) (for purposes of a procedural challenge, Hobbs Act's 60-day time limit ran from when rule promulgated). Indeed, Congress has provided that publication in the Federal Register "is sufficient to give notice of the contents of the document to a person subject to or affected by it." 44 U.S.C. § 1507; see Federal Crop Ins. Corp. v. Merrill, 332 U.S. 380, 385, 68 S.Ct. 1, 92 L.Ed. 10 (1947).

Plaintiffs were therefore on notice of the challenged regulation when it was published in 1966. Further, considering that the text of the regulation plainly required special immigrants to present reentry documents, it was foreseeable that the INS might at least attempt to subject airlines to fines for transporting undocumented special immigrants to this country. Plaintiffs therefore could and likely should have challenged the promulgation of the regulation within 6 years of its publication. If they had any doubt as to the ripeness of such a challenge at that time, they should still have brought suit since "if there is any doubt about the ripeness of a claim, [parties] must bring their challenge in a timely fashion or risk being barred." Eagle-Picher v. U.S. Envir. Prot. Agency, 759 F.2d 905, 913 (D.C.Cir.1985) (emphasis in original).

III. Relief under Rule 59(e)

Ordinarily, the court would not grant Rule 59(e) relief based upon an argument that the moving party could have raised on the prior motion. See Wright & Miller, supra p. 137. However, "the subject matter jurisdiction of the federal courts is too basic a concern to the judicial system to be left to the ... litigants." Wright, Miller and Cooper, Federal Practice and Procedure § 3522 (2d Ed.1984). Rather, lack of subject matter jurisdiction may not be waived by the parties and the court must dismiss a claim "[w]henever" it becomes apparent that it is lacking. Fed. R.Civ.P. 12(h)(3). Since the six-year statute of limitations deprived this Court of subject matter jurisdiction to entertain plaintiffs' procedural challenge, it is obliged to amend its prior order and hold that plaintiffs' procedural challenge to the 1966 regulation is time-barred.

IV. Substantive Challenges to the 1966 Regulation

The court's determination of that issue, however, does not resolve the matter, since rejection of plaintiffs' procedural challenge requires the court to reconsider their substantive challenge(s) to the regulation. It is undisputed that a substantive challenge to a regulation, which is based on the claim that the regulation as applied exceeds constitutional or statutory authority or is arbitrary, capricious or an abuse of discretion, 5 U.S.C. § 706(2)(A-C), accrues on the date the agency takes final action in applying the regulation to the plaintiff(s). See Dunn-McCampbell, 112 F.3d at 1287; Wind River Mining Corp. v. U.S., 946 F.2d 710, 715 (9th Cir.1991); Public Citizen, 901 F.2d at 152; see also Commonwealth of Penn., 101 F.3d at 944-947 (applying rule that claim accrues when regulation published to procedural claims but not to substantive claims); Sierra Club v. Penfold, 857 F.2d 1307, 1315-16 (9th Cir.1988) (same). Since all plaintiffs herein filed suit within six years of a final agency action subjecting them to a fine, their substantive challenges to the 1966 regulation are timely.

In the order which defendants seek to amend, the court addressed and rejected several such challenges raised by the plaintiffs, stating that "if the Court were to consider only the text of the Regulation, ... the fines imposed by the INS would be proper." Air India v. Brien, No. 00-1707, slip. op. at 16 (E.D.N.Y. February 14, 2002). The court did not, however, consider plaintiffs' claim that imposition of fines under the regulation was improper in that it violated the stated intent of the Attorney General in promulgating the amendment, an argument which does not rely on the text of the regulation.

Normally, an agency's interpretation of its regulation is entitled to substantial deference. See Martin v. Occupational Safety and Health Review Comm'n, 499 U.S. 144, 150, 111 S.Ct. 1171, 113 L.Ed.2d 117 (1991). It is nevertheless true that such an interpretation may be rejected when it contravenes the intent of the person or entity that promulgated it. "The Court must defer to the agency's interpretation unless an `alternative reading is compelled by the regulation's plain language or by other indications of the [promulgating authority's] intent at the time of the regulation's promulgation."' La Plaza Defense League v. Kemp, 742 F.Supp. 792, 803 (S.D.N.Y.1990) (quoting Gardebring v. Jenkins, 485 U.S. 415, 430, 108 S.Ct. 1306, 99 L.Ed.2d 515 (1988)). In the case of the publication of the 1966 regulation, the Notice and Comment section stated expressly that the regulation was not subject to the "notice and comment" requirement because it "confers benefits on persons affected thereby." 31 Fed.Reg. 13387 (October 15, 1966). This clear expression of intent refutes the argument that the regulation was intended to impose liability on the airlines when none had existed under the prior version of the regulation as amended in 1957. This holds true despite the plain language of the regulation, which would support the imposition of fines, for, as Learned Hand noted, "[c]ourts have not stood helpless ... the decisions are legion in which they have refused to be bound by the letter, when it frustrates the patent purpose of the whole [regulation]." Cabell v. Markham, 148 F.2d 737, 739 (2d Cir.1945).

Further, the fact that the INS did not seek to impose fines for the first 22 years that the 1966 regulation was in place, when such fines appear to be mandatory upon the finding of a violation, see 8 U.S.C. § 1323(b),² suggests that the INS itself did not interpret the 1966 regulation as providing a basis for the imposition of fines. The INS has provided no rational explanation of what happened in 1988 to change their view of the regulation. The Court notes, however, that the change took place in 1988, just after the User Fee Statute was...