Am. Great Lakes Ports Ass'n v. Zukunft

• Decision Date: 09 March 2021
• Docket Number: Civil Action No.: 16-1019 (RC)
• Parties: AMERICAN GREAT LAKES PORTS ASSOCIATION, et al., Plaintiffs, v. ADMIRAL PAUL F. ZUKUNFT, Commandant, United States Coast Guard, et al., Defendants.
• Court: U.S. District Court — District of Columbia

AMERICAN GREAT LAKES PORTS ASSOCIATION, et al., Plaintiffs, v. ADMIRAL PAUL F. ZUKUNFT,¹ Commandant,United States Coast Guard, et al., Defendants.

Civil Action No.: 16-1019 (RC)

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

March 9, 2021

Re Document No.: 46

MEMORANDUM OPINION

DENYING PLAINTIFF'S MOTION FOR FEES AND EXPENSES

I. INTRODUCTION

Plaintiffs, representatives of the commercial shipping community, brought suit against Admiral Paul F. Zukunft in his official capacity as Commandant, United States Coast Guard and the United States Coast Guard (collectively, "Defendants") challenging Defendants' 2016 Rulemaking setting pilotage rates in the Great Lakes as arbitrary and capricious. After determining that Defendants acted arbitrarily and capriciously in two ways, this Court remanded the rule to the Coast Guard without vacatur, and the Court of Appeals affirmed. Petitioner, the Shipping Federation of Canada ("Plaintiff" or "Plaintiff SFC")—one of the original plaintiffs—now seeks an award of attorney's fees, expenses, and costs incurred in litigation under the Equal Access to Justice Act, 28 U.S.C § 2412(d)(1)(a). Because the Court finds that Plaintiff was not a prevailing party, the Court denies Plaintiff's Motion for Fees and Expenses.

II. FACTUAL BACKGROUND

The Court presumes familiarity with its prior Opinions. See Am. Great Lakes Ports Ass'n v. Zukunft, 296 F. Supp. 3d 27 (D.D.C. 2017) ("Great Lakes I"), ECF No. 34 (determining compliance with APA); Am. Great Lakes Ports Ass'n v. Zukunft, 301 F. Supp. 3d 99 (D.D.C. 2018) ("Great Lakes II"), ECF No. 41 (determining remedy). Accordingly, this Opinion will only describe the facts and allegations relevant to the pending motion.

Plaintiff filed suit against Defendants in 2016, seeking review of the Coast Guard's 2016 Rulemaking under the Administrative Procedure Act ("APA"). See Compl. ¶ 1, ECF No. 1. Specifically, Plaintiff challenged the methodology used to calculate Great Lakes pilotage rates for the 2016 navigation season. Id. ¶¶ 1-5. Of the five arguments that Plaintiff advanced, the Court found two to be meritorious at the liability phase of litigation. See Great Lakes I, 296 F. Supp. 3d at 56.

First, the Court held that Defendants failed to engage in reasoned decision-making when they imposed a ten-percent increase to Great Lakes pilots' benchmark compensation rate. Id. at 46-48. Rather than relying on proposals, data, and analysis submitted by commenters, the Coast Guard used the Canadian compensation rate as a benchmark and increased it by ten-percent, a methodology that came from unidentified comments during a Great Lakes Pilotage Advisory Committee (GLPAC) meeting. Id. Finding the ten-percent increase "entirely detached from any data or analysis," the Court held that Defendants "arrived at the ten-percent adjustment without engaging in reasoned decision-making, and therefore [the] decision was arbitrary and capricious in violation of the APA." Id. at 47-48.

Second, the Court found that Defendants failed to adequately consider the impact of weighting factors on anticipated revenues.² Id. at 52. Although commenters suggested that the Coast Guard consider weighting-factors, the Coast Guard "declined to even consider the issue," even though it recognized the "potential merit" to the suggestion. Id. at 52. The Court reasoned that rational decision-making "requires giving present consideration to important aspects of problems—not merely promising to consider those matters at some point in the future." Id. (emphasis in original). The failure to consider weighting factors was arbitrary and capricious, as weighting factors "represent[] an important aspect of the revenue streams that [the Coast Guard] was attempting to estimate." Id. (internal quotations omitted).

Vacatur is the typical remedy for arbitrary and capricious agency action. Am. Bioscience, Inc. v. Thompson, 269 F.3d 1077, 1084 (D.C. Cir. 2001). Courts in this Circuit have held, however, that "inadequately supported rule[s] need not necessarily be vacated." Great Lakes II, 301 F. Supp 3d. at 103 (quoting Allied-Signal, Inc. v. U.S. Nuclear Reg. Comm'n, 988 F.2d 146, 150 (D.C. Cir. 1993). Finding that vacatur would create significantly disruptive consequences for the shipping industry, the Court held that "the appropriate remedy is to remand the matter to the Coast Guard and for the Coast Guard to evaluate and justify an appropriate adjustment to benchmark compensation for its ratemaking methodology going forward." Id. at 105. On appeal, the Court of Appeals affirmed the decision in full. Am. Great Lakes Ports Ass'n v. Schultz, 962 F.3d 510, 520 (D.C. Cir. 2020) ("Great Lakes III").

Before the Court is Plaintiff's motion for attorney's fees and costs under the Equal Access to Justice Act. See Pet. of Pl. for Attorney's Fees & Expenses ("Pl.'s Mot.") at 2, ECFNo. 46. Defendants oppose this motion. See Defs.' Opp'n to Pl.'s Mot. for Attorney's Fees & Other Expenses ("Defs.' Opp'n"), ECF No. 53. Three Intervenors also oppose Plaintiff's motion for fees and expenses. See Opp'n of Def.-Intervenors to Pet.'s Request for an Award of Fees & Costs, ECF No. 55.³ Defendant-Intervenors are non-governmental entities and are not liable for the costs requested. Id. at 1-2. The arguments they present reflect the arguments posed by Defendants, and therefore the Court will address these arguments through discussion of Defendant's positions. The motion is fully briefed and ripe for decision.

III. ANALYSIS

A. Equal Access to Justice Act

The Equal Access to Justice Act ("EAJA") allows a plaintiff "to obtain expenses in litigation against the federal government" when certain circumstances are met. Select Milk Producers, Inc. v. Johanns, 400 F.3d 939, 941 (D.C. Cir. 2005). The EAJA provides that:

[A] court may award reasonable fees and expenses of attorneys . . . to the prevailing party in any civil action brought by or against the United States or any agency. . . unless the court finds that the position of the United States was substantially justified or that special circumstances make an award unjust.

28 U.S.C. § 2412(a)(1), (d)(1)(A). A claimant must meet four conditions to be eligible for an award under the EAJA: "(1) that the claimant be a 'prevailing party'; (2) that the government's position was not 'substantially justified'; (3) that no 'special circumstances make an award unjust'; and, (4) that pursuant to 28 U.S.C. § 2412(d)(2)(B), plaintiffs satisfy all of the EAJA's threshold eligibility requirements." Ctr. for Food Safety v. Burwell, 126 F. Supp. 3d114, 119 (D.D.C. 2015) (quoting Ass'n of Am. Physicians & Surgeons, Inc. v. U.S. Food & Drug Admin., 391 F. Supp. 2d 171, 175 (D.D.C. 2005)).

1. Plaintiff is Not a Prevailing Party

The Supreme Court has held that a prevailing party "is one who has been awarded some relief by the court." Buckhannon Bd. & Care Home, Inc. v. W. Va. Dep't of Health and Hum. Res., 532 U.S. 598, 603 (2001). The D.C. Circuit has set out a three-factor test, holding that a litigant is a prevailing party when "(1) there [is] a court ordered change in the legal relationship of the parties; (2) the judgment [is] in favor of the party seeking the fees; and (3) the judicial pronouncement [is] accompanied by judicial relief." SecurityPoint Holdings, Inc. v. Transp. Sec. Admin., 836 F.3d 32, 36 (D.C. Cir. 2016); see also Thomas v. Nat'l Sci. Found., 330 F.3d 486, 492-93 (D.C. Cir. 2003).

Plaintiff contends that it is the prevailing party because it succeeded on the merits of two claims, the weighting factor issue and the benchmark compensation issue. See Pl.'s Mot. at 8. Defendants claim that Plaintiff has not prevailed on any claims because Plaintiff did not obtain its requested relief. See Defs.' Mot. at 7. The Court agrees that Plaintiff is not a prevailing party because Plaintiff did not obtain relief at the remedy phase of litigation and thus fails to satisfy the third factor of the prevailing-party test.

a. Plaintiff Obtained a Court Ordered Change in the Legal Relationship of the Parties withRegard to One Claim

Under the first factor of the prevailing party analysis, a party must show a court-ordered change in the legal relationship of the parties. See Thomas, 330 F.3d at 492-93. This factor cannot be fulfilled as a result of another party's voluntary change in conduct. See Buckhannon, 532 U.S. at 605 ("a defendant's voluntary change in conduct . . . lacks the necessary judicialimprimatur on the change") (emphasis in original); True the Vote, Inc. v. Internal Revenue Serv., No. 13-cv-734, 2019 WL 2304659 at *5 (D.D.C. 2019) (finding plaintiffs achieved court ordered change in relationship when terms of agreement were formalized in Consent Order); Burwell, 126 F. Supp. 3d at 120. For a court order to sufficiently alter the legal relationship of parties, the order must require a concrete action, or cessation of an action, on the part of the non-prevailing party. Thomas, 330 F.3d at 494. A remand can fulfill this factor and sufficiently alter the legal relationship of the parties when a petitioner "secures a remand terminating the case and requiring further administrative proceedings in light of agency error . . . [even] without regard to the outcome on remand." SecurityPoint, 836 F.3d at 39. Additionally, an order "requir[ing] an agency to fulfill its existing legal obligations" that an uncooperative agency had previously sought to avoid also constitutes a "court-ordered change in the legal relationship between the plaintiff and defendant." Campaign for Responsible Transplantation v. FDA, 511 F.3d 187, 195 (D.C. Cir. 2007) (citing Buckhannon, 532 U.S. at 604).

Plaintiff achieved a court-ordered change in the legal relationship with regard only to the benchmark compensation issue. The Court found that Defendant violated the APA by failing to consider weighting factors and failing to provide a reasoned decision behind its ten-percent benchmark increase. Great Lakes II, 301 F. Supp. 3d...