Canadian Transport Co. v. U.S., 77-1693

• Decision Date: 05 September 1980
• Docket Number: No. 77-1693,77-1693
• Parties: CANADIAN TRANSPORT COMPANY, a division of MacMillan Bloedel (Alberni) Limited Bocimar N.V. et al., Appellants, v. UNITED STATES of America.
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 1081

663 F.2d 1081

214 U.S.App.D.C. 138

CANADIAN TRANSPORT COMPANY, a division of MacMillan Bloedel

(Alberni) Limited Bocimar N.V. et al., Appellants, v. UNITED STATES of America.

No. 77-1693.

United States Court of Appeals, District of Columbia Circuit.

Argued Oct. 19, 1978.

Decided Sept. 5, 1980.

Appeal from the United States District Court for the District of Columbia (D.C. Civil Action No. 76-0636).

Carroll E. Dubuc, Washington, D. C., for appellants.

Frederic D. Cohen, Atty., Dept. of Justice, Washington, D. C., with whom Earl J. Silbert, U. S. Atty., Washington, D. C., at the time the briefs were filed, Barbara Allen Babcock, Asst. Atty. Gen., and William Kanter, Atty., Dept. of Justice, Washington, D. C., were on the brief, for appellee.

Also Mary Gallagher, Atty., Dept. of Justice, Washington, D. C., entered an appearance for appellee.

Before ROBINSON, MacKINNON and ROBB, Circuit Judges.

ROBB, Circuit Judge:

Appellants Canadian Transport Company and Bocimar, N.V. sued the United States in the District Court, seeking damages for the refusal of the Coast Guard to permit M/V TROPWAVE to enter the port of Norfolk, Virginia on or about April 20, 1974. The ground of the refusal was that the master and officers of TROPWAVE were Polish nationals whose presence posed a risk to national security. Appellants asserted three causes of action in their complaint. The first alleged the tort of intentional interference with contract rights and was based upon the Suits in Admiralty Act, 46 U.S.C. § 741 et seq. (1976). The second, based on 28 U.S.C. § 1350 (1976), alleged that the Coast Guard's action violated the treaty obligations of the United States. Finally, appellants asserted that they had been deprived of their property without due process of law in violation of the Fifth Amendment. ¹ On the parties' cross motions for summary judgment, the District Court granted the motion of the United States and dismissed all three counts for failure to state a claim upon which relief may be granted. ² Plaintiffs appeal.

I.

TROPWAVE was owned by Tropwood A. G. Zug Switzerland, and chartered to appellant Canadian Transport. Canadian Transport in turn subchartered it to appellant Bocimar, N.V., a Belgian corporation. TROPWAVE flew the flag of Singapore and had a multinational crew, which included a Polish master and Polish officers.

On or about April 11, 1974 TROPWAVE sailed from Rotterdam, bound for Norfolk to secure a load of coal for delivery to Spain. At about the time of departure, James Cleary, ³ Canadian Transport's agent in the United States, received information from TROPWAVE's owner that Norfolk was a restricted area and that a 14-day pre-clearance might be required to enter the area. ⁴ Cleary immediately requested Coast Guard Headquarters in Washington to grant permission for TROPWAVE to enter Norfolk. ⁵ After numerous phone The Coast Guard's decision to bar TROPWAVE from Norfolk harbor was made pursuant to the Special Interest Vessel (SIV) Program. This program is administered by the Coast Guard under regulations issued by the Secretary of the Treasury. The Secretary's authority to prescribe these regulations derives from the Magnuson Act, which authorizes him to "make rules and regulations governing the anchorage and movement of any vessels, foreign or domestic, in the territorial waters of the United States" when the President "declares a national emergency to exist by reason of actual or threatened war, insurrection, or invasion, or disturbance or threatened disturbance of the international relations of the United States." 50 U.S.C. § 191 (1976). In addition, the Act gives the President authority to issue regulations governing the anchorage and movement of "foreign flag vessels" whenever he finds that "the security of the United States is endangered by reason of actual or threatened war, or invasion, or insurrection or subversive activity...." Id. In 1950, President Truman issued Executive Order 10173, reprinted in 3 C.F.R. 356 (1949-53 Comp.), in which he stated that "the security of the United States is endangered by reason of subversive activity", and prescribed various regulations pursuant to section 191. The Secretary of the Treasury, relying upon this proclamation, adopted additional regulations, including the SIV program. ⁶ The SIV regulations are classified in the interest of national security. No publication of the ports to which it applies or its criteria for denying a vessel access to a port has been made.

calls between Mr. Cleary and officers in Coast Guard Headquarters, the Coast Guard denied the request on April 19. Cleary was subsequently informed that entry would be allowed when all Communist-bloc personnel were disembarked. Accordingly, TROPWAVE sailed to Baltimore, discharged its Polish officers, and returned to Norfolk to load coal. After loading, TROPWAVE returned to Baltimore, replaced the original crew, and delivered its load of coal to Spain. Appellants seek to recover almost $93,000 in damages allegedly caused by the Baltimore detours.

II.

Appellants first allege that the Coast Guard's actions amount to an intentional interference with their contract rights under the charter and subcharter agreements. They characterize this cause of action as a tort suit ⁷ brought under the Suits in Admiralty Act. That Act provides: "In cases where if such vessel ⁸ were privately owned or operated, or if such cargo were privately owned or possessed, or if a private person or property were involved, a proceeding in admiralty could be maintained, any appropriate nonjury proceeding in personam may be brought against the United States...." 46 U.S.C. § 742 (1976). Because "(i)n a suit against the United States there cannot be a right to money damages without a waiver of sovereign immunity," United States v. Testan, 424 U.S. 392, 400, 96 S.Ct. 948, 954, 47 L.Ed.2d 114 (1976), the question presented for our decision is whether the Suits in Admiralty Act's waiver of sovereign immunity extends to the Coast Guard's actions.

If it does not, the District Court correctly dismissed the complaint.

A. The Discretionary Function Exemption.

The government contends that the Coast Guard was engaged in the performance of a "discretionary function" and that the United States is therefore completely immune from suit in this case. Appellants note that the Suits in Admiralty Act contains no express exception for discretionary functions. By contrast, the Federal Tort Claims Act explicitly provides such an exemption:

The provisions of this chapter and section 1346(b) of this title shall not apply to-

(a) Any claim based upon an act or omission of an employee of the Government, exercising due care, in the execution of a statute or regulation, whether or not such statute or regulation be valid, or based upon the exercise or performance or the failure to exercise or perform a discretionary function or duty on the part of a federal agency or an employee of the Government, whether or not the discretion involved be abused.

28 U.S.C. § 2680 (1976).

Appellants argue that the failure of Congress to include such language in the Suits in Admiralty Act indicates its intent that no similar exception apply in admiralty cases brought against the United States. This view has been explicitly adopted by the Court of Appeals for the Fourth Circuit ⁹ and endorsed in dictum by the Court of Appeals for the Fifth Circuit, ¹⁰ but rejected by the Court of Appeals for the First Circuit. ¹¹

We believe that respect for the doctrine of separation of powers requires that in cases arising under the Suits in Admiralty Act, courts should refrain from passing judgment on the appropriateness of actions of the executive branch which meet the requirements of the discretionary function exception of the FTCA. Accordingly, we align ourselves with the views expressed in the Gercey case and hold that a discretionary function exemption is implicit in the Suits in Admiralty Act.

Unfortunately, the legislative history of the Suits in Admiralty Act is not helpful in deciding this question. The words "if a private person or property were involved", were added to the Suits in Admiralty Act in 1960 by Pub.L. 86-770, 74 Stat. 912. This act also repealed the limitation of the Suits in Admiralty Act to suits involving only vessels employed as merchant vessels. ¹² As the Supreme Court noted in United States v. United Continental Tuna Corp., 425 U.S. 164, 96 S.Ct. 1319, 47 L.Ed.2d 653 (1976), the 1960 amendment was intended to eliminate "serious uncertainties about the reach of the Suits in Admiralty and Public Vessels Act on the one hand, and the Tucker Act on the other...." Id. at 173, 96 S.Ct. at 1325. The problem was that the Public Vessels Act, 46 U.S.C. §§ 781 et seq. (1976) and the Suits in Admiralty Act "were not generally interpreted to encompass all actionable maritime claims against the United States. Maritime tort claims deemed beyond the reach of both Acts could be brought only on the law side of the district courts under the Federal Tort Claims Act.... More importantly, ... contract claims not encompassed by either Act fell within the Tucker Act, which lodged exclusive jurisdiction in the Court of Claims for claims exceeding $10,000. 28 U.S.C. §§ 1346(a)(2), 1491." 425 U.S. at 172, 96 S.Ct. at 1324. As a result, persons with maritime contract claims against the United States had to choose between proceeding in the district courts or in the court of claims, with the court's jurisdiction dependent upon whether a To alleviate this problem, the 1960 bill authorized transfers of cases between the court of claims and the district courts. The Senate Judiciary Committee, however, looked upon the transfer provisions as only a "partial solution of the existing difficulties", and stated that it would be preferable to eliminate the cause of the problem. S.Rep.No.1894, 86th Cong., 2d Sess. (1960) at 6. Accordingly, it recommended that the bill be amended...