Atlantic Sea Island Group LLC v. Connaughton, 08-259 (RWR).

• Decision Date: 08 December 2008
• Docket Number: No. 08-259 (RWR).,08-259 (RWR).
• Parties: ATLANTIC SEA ISLAND GROUP LLC, Plaintiff, v. Sean T. CONNAUGHTON, et al., Defendants.
• Court: U.S. District Court — District of Columbia

Page 1

592 F.Supp.2d 1

ATLANTIC SEA ISLAND GROUP LLC, Plaintiff, v. Sean T. CONNAUGHTON, et al., Defendants.

Civil Action No. 08-259 (RWR).

United States District Court, District of Columbia.

December 8, 2008.

COPYRIGHT MATERIAL OMITTED

John F. Cooney, Venable, LLP, Washington, DC, for Plaintiff.

Beverly Maria Russell, U.S. Attorney's Office for D.C., Washington, DC, for Defendants.

MEMORANDUM OPINION

RICHARD W. ROBERTS, District Judge.

Atlantic Sea Island Group LLC ("ASIG") brings this action against Sean T. Connaughton, the Administrator of the Maritime Administration, and Mary E. Peters, the Secretary of the Department of Transportation ("DOT"), alleging that the Administrator's decision under the Deepwater Port Act ("DWPA"), 33 U.S.C. §§ 1501-1524, to designate New Jersey as an additional adjacent coastal state with respect to ASIG's application for a license to construct and operate the Safe Harbor Energy Liquified Natural Gas Deepwater Port ("Safe Harbor Port") was unlawful. ASIG has filed a motion for a preliminary injunction to enjoin the defendants from enforcing the Administrator's decision and to order the defendants to continue processing ASIG's license. New Jersey has moved to intervene, and the defendants have filed a motion to dismiss ASIG's complaint under Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). Because New Jersey is entitled to intervene, its motion will be granted. Because the Administrator had legal authority to designate New Jersey, and because the Administrator's decision was not arbitrary or capricious and was valid even if issued outside of the statutory time frame, defendants' motion to dismiss under Rule 12(b)(6), treated as a motion for summary judgment, will be granted and ASIG's motion for a preliminary injunction will be denied as moot.

BACKGROUND

The DWPA "authorize[s] and regulate[s] the location, ownership, construction, and operation of deepwater ports in waters beyond the territorial limits of the United States" through the issuance of licenses for "the ownership, construction, and operation of a deepwater port." 33 U.S.C. §§ 1501(a), 1503. A license may not be issued under the DWPA unless the governor of an adjacent coastal state approves the issuance of the license. 33 U.S.C. §§ 1503(c)(8); 1508(b)(1). There are three ways a state can be designated as an adjacent coastal state for a pending license. Under 33 U.S.C. § 1508(a)(1), the Secretary "shall designate as an `adjacent coastal State' any coastal State which (A) would be directly connected by pipeline to [the proposed] deepwater port . . . or (B) would be located within 15 miles of [the] proposed deepwater port." 33 U.S.C. § 1508(a)(1). Alternatively, the Secretary shall, upon request of a State, and after having received the recommendations of the Administrator of the National Oceanic and Atmospheric Administration ["NOAA"], designate such state as an "adjacent coastal State" if [s]he determines that there is a risk of damage to the coastal environment of such State equal to or greater than the risk posed to a State directly connected by pipeline to the proposed deepwater port.

33 U.S.C. § 1508(a)(2). A state seeking to be designated as an adjacent coastal state under § 1508(a)(2) must request designation within fourteen days after notice of an application for a proposed deepwater port is published in the Federal Register. Id. The statute further provides that the Secretary "shall make the designation . . . not later than the 45th day after the date [she] receives such a request from a State." Id.

ASIG is a Delaware corporation "engaged in the business of owning, constructing, and operating . . . the Safe Harbor Energy port[ ] that will receive, store, and re-vaporize liquified natural gas." (Compl. ¶ 1.) On May 8, 2007, ASIG submitted an application to the Coast Guard and the Maritime Administration for a license under the DWPA to construct and operate the Safe Harbor Port. (Id. ¶ 31.) The proposed port is to be located approximately 13.5 miles off the coast of New York and 19 miles off the coast of New Jersey. (Id.)

On August 27, 2007, the Maritime Administration published a notice that the ASIG license application was deemed complete. 72 Fed. Reg. 49,041 (Aug. 27, 2007). In that notice, the Maritime Administration designated New York as an adjacent coastal state. Id. In response to the notice of ASIG's application, the Governor of New Jersey submitted a letter dated September 6, 2007 to the Administrator and the Commandant of the Coast Guard requesting that New Jersey be designated as an additional coastal state for the Safe Harbor Port. (R. at 25-27.) The Secretary solicited the recommendation of the NOAA, which questioned the sufficiency of New Jersey's submission and suggested that the Administrator request additional information from New Jersey. (R. at 59-60.) In response to NOAA's concerns, New Jersey submitted an additional letter in support of its application. (R. at 70-72.) On November 2, 2007, the Administrator sent a letter to the Governor of New Jersey informing the Governor that he had designated New Jersey as an additional adjacent coastal state for the Safe Harbor Port. (R. at 74-75.) ASIG subsequently requested that the Administrator reconsider his decision to designate New Jersey as an additional adjacent coastal state. (R. at 77-78.) After further submissions from ASIG, New Jersey, and other interested third parties, the Administrator denied ASIG's request for reconsideration in a letter dated February 8, 2008 and affirmed his decision to designate New Jersey as an additional coastal state. (R. at 112-17.)

ASIG filed this action alleging that the Maritime Administrator's designation of New Jersey as an adjacent coastal state was unlawful for the following reasons: (1) the Administrator did not have legal authority to do so under the controlling statute and regulations; (2) the Administrator's decision violated the mandatory statutory deadline for making an adjacent coastal state designation; (3) the Administrator did not apply the standard for designating an adjacent coastal state found in 33 U.S.C. § 1508(a)(2); and (4) the factual record does not support the conclusion that New Jersey is an adjacent coastal state. (Compl. ¶ ¶ 51-57.) ASIG also has filed a motion for a preliminary injunction to enjoin the Administrator from permitting New Jersey to participate in the review of ASIG's license application as an adjacent coastal state and to compel the Administrator to continue the application process. The state of New Jersey has moved to intervene as of right under Rule 24(a)(2). The defendants have filed a motion to dismiss all claims under Rules 12(b)(1) and 12(b)(6).¹

DISCUSSION

I. STANDING

The defendants contend that the complaint should be dismissed under Rule 12(b)(1) for lack of jurisdiction because ASIG does not have constitutional standing to bring its claims. (Defs.' Mem. in Support of its Mot. to Dismiss and Opp'n to Pl.'s Mot. for a Prelim. Inj. ("Defs.' Mem") at 16-17.) "On a motion to dismiss for lack of subject-matter jurisdiction pursuant to Rule 12(b)(1), the plaintiff bears the burden of establishing that the court has subject-matter jurisdiction." Shuler v. United States, 448 F.Supp.2d 13, 17 (D.D.C.2006) (citing Lujan v. Defenders of Wildlife, 504 U.S. 555, 561, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992)). In reviewing the motion, a court accepts as true all of the factual allegations contained in the complaint, see Lujan, 504 U.S. at 560, 112 S.Ct. 2130, and may also consider "undisputed facts evidenced in the record." Coal. for Underground Expansion v. Mineta, 333 F.3d 193, 198 (D.C.Cir.2003); see also Tootle v. Sec'y of the Navy, 446 F.3d 167, 174 (D.C.Cir.2006) (explaining that a court may look to certain materials beyond the pleadings to resolve disputed jurisdictional facts when considering a motion to dismiss under Rule 12(b)(1)). The "nonmoving party is entitled to all reasonable inferences that can be drawn in [its] favor." Artis v. Greenspan, 158 F.3d 1301, 1306 (D.C.Cir.1998).

To satisfy the constitutional standing inquiry, ASIG "must show: (1) injury-in-fact; (2) causation, and (3) redressability." Fund for Animals, Inc. v. Norton, 322 F.3d 728, 732-33 (D.C.Cir.2003) (citing Lujan, 504 U.S. at 560-61, 112 S.Ct. 2130). The alleged injury-in-fact must be "concrete and particularized" and "actual or imminent," and the injury must be "`fairly . . . trace[able] to the challenged action of the defendant[.]'" Lujan, 504 U.S. at 560-61, 112 S.Ct. 2130 (quoting Simon v. E. Ky. Welfare Rights Org., 426 U.S. 26, 41-42, 96 S.Ct. 1917, 48 L.Ed.2d 450 (1976)). Further, "it must be `likely,' as opposed to merely `speculative,' that the injury will be `redressed by a favorable decision.'" Am. Library Ass'n v. FCC, 401 F.3d 489, 493 (D.C.Cir.2005) (quoting Simon, 426 U.S. at 41-42, 96 S.Ct. 1917). The defendants contend that ASIG's alleged injury-in-fact is only hypothetical because New Jersey has not yet imposed any conditions on ASIG's license application or expressed any disapproval, and if New Jersey were to take such actions, ASIG's injury would be traceable to New Jersey's actions, rather than the Administrator's. (Defs.' Mem. at 18-19.)

Under the DWPA, ASIG's license may not be issued without the approval of the governors of each adjacent coastal state. 33 U.S.C. §§ 1503(c)(8), 1508(b)(1). Further, under 33 U.S.C. § 1504(g), a public hearing on a pending license application must be held in each adjacent coastal state before a license may be issued. ASIG contends, and the defendants do not dispute, that based on its experience with New York, ASIG will be required to bear costs in preparation for New Jersey's hearing and for any other negotiations with New Jersey necessary to obtain New Jersey's approval of its license. (Pl.'s Reply in Support of its Mot. for a Prelim. Inj. at 22-23.) Thus, ASIG has sufficiently established a concrete, imminent...