Detroit Int'l Bridge Co. v. Gov't of Can.

• Citation: 133 F.Supp.3d 70
• Decision Date: 30 September 2015
• Docket Number: Civil Action No. 10–476 (RMC)
• Parties: Detroit International Bridge Company, et al., Plaintiffs, v. Government of Canada, et al., Defendants.
• Court: U.S. District Court — District of Columbia

133 F.Supp.3d 70

Detroit International Bridge Company, et al., Plaintiffs,

v.Government of Canada, et al., Defendants.

Civil Action No. 10–476 (RMC)

United States District Court, District of Columbia.

Signed September 30, 2015

Amy Lynn Neuhardt, Hamish P.M. Hume, Kathleen Simpson Kiernan, Boies, Schiller & Flexner, LLP, Washington, DC, Patrick A. Moran, Detroit International Bridge Company, Warren, MI, Heather M. King, Theranos, Inc., Palo Alto, CA, Robert Allen Sedler, Wayne State University Law School, Detroit, MI, for Plaintiffs.

Douglas A. Dozeman, Eugene E. Smary, Scott M. Watson, Warner Norcross & Judd LLP, Grand Rapids, MI, Sarah Catherine Lindsey, Warner Norcross & Judd LLP, Southfield, MI, Brian Matthew Collins, Davene Dashawn Walker, U.S. Department of Justice, Washington, DC, Peter Christopher Whitfield, Baker Hostetler, Washington, DC, for Defendants.

OPINION

ROSEMARY M. COLLYER, United States District Judge

The Ambassador Bridge spans the Detroit River between Detroit, Michigan and Windsor, Ontario and carries more than one-quarter of the total commercial traffic between the United States and Canada. The Bridge is privately owned by the Detroit International Bridge Company (DIBC) and its wholly-owned subsidiary, the Canadian Transit Company (CTC). However, the Ambassador Bridge is more than eighty years old. Its owners want to construct an adjacent twin spin (New Span) to serve customers while major work is performed on the Ambassador Bridge. To their dismay, however, a cross-border partnership of government entities has proposed the construction of a new publicly-owned bridge, the New International Transit Crossing/Detroit River International Crossing (NITC/DRIC), which would compete with the Ambassador Bridge and destroy the financial basis for the New Span.

Plaintiffs sue Federal Defendants for allegedly violating Plaintiffs' exclusive franchise right to own and operate a bridge between Detroit and Windsor and violating Plaintiffs' franchise right to build the New Span by promoting the publicly-owned NITC/DRIC and preventing progress on the New Span for over a decade. The Court already dismissed Count 4 of the Third Amended Complaint, which alleged that the United States Coast Guard violated the Administrative Procedure Act, 5 U.S.C. §§ 701–06, by intentionally delaying and failing to issue a navigational permit for the New Span. Federal Defendants move to dismiss the remaining eight counts. For the reasons below, the Court will grant in part and deny in part Federal Defendants' Motion to Dismiss.

I. FACTS¹

A. The Ambassador Bridge

In 1909, the United States and the United Kingdom of Great Britain and Ireland, which at that time was responsible for Canada's foreign affairs, signed and ratified a treaty addressing, among other things, the construction of bridges and other impediments to navigation across the waters separating the United States and Canada. See Boundary Waters Treaty, U.S.-Gr. Brit. (for Can.), Jan. 11, 1909, 36 Stat. 2448 (Boundary Waters Treaty). The Boundary Waters Treaty governs the construction of new bridges over the boundary waters between the United States and Canada. 3rd Am. Compl. [Dkt. 105] ¶ 56. The Treaty authorizes the construction of new bridges pursuant to "special agreements" and specifies that "concurrent or reciprocal" legislation by the United States Congress and the Canadian Parliament would constitute such a "special agreement." Id. (citing Boundary Waters Treaty Art. XIII). Except when authorized by such a "special agreement," any new uses, obstructions, or diversions of boundary waters require approval by an International Joint Commission. Id. (citing Boundary Waters Treaty Art. III).

The American Transit Company (ATC), predecessor to DIBC, was established in 1920 to build a suspension bridge between Detroit and Ontario, Canada. 3rd Am. Compl. ¶ 23. For clarity's sake (and because the difference is irrelevant), this Opinion refers to ATC and DIBC as DIBC, irrespective of time period. In 1921, the U.S. Congress and the Canadian Parliament separately passed legislation granting DIBC and CTC, respectively, rights to construct, operate, and collect tolls on an international bridge between Detroit and Windsor. Id. ¶ 57. The U.S. statute was passed on March 4, 1921 and reads as follows:

CHAP. 167.—An Act [t]o authorize the construction and maintenance of a bridge across Detroit River within or near the city limits of Detroit, Michigan.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled. That the consent of Congress is hereby granted to American Transit Company, its successors and assigns, to construct, maintain, and operate a bridge and approaches thereto across Detroit River at a point suitable to the interests of navigation, within or near the city limits of Detroit, Wayne County, Michigan, in accordance with the provisions of the Act entitled "An Act to regulate the construction of bridges over navigable waters," approved March 23, 1906: Provided, That before the construction of the said bridge shall be begun all proper and requisite authority therefor shall be obtained from the Government of the Dominion of Canada.

SEC. 2. That this Act shall be null and void if actual construction of the bridge herein authorized be not commenced within three years and completed within seven years from the date of approval hereof.

SEC. 3. That the right to alter, amend, or repeal this Act is hereby expressly reserved.

Approved, March 4, 1921.

Act of March 4, 1921, 66th Cong., ch. 167, § 1, 41 Stat. 1439 (1921) (DIBC Act).² Soon thereafter, on May 3, 1921, the Canadian Parliament enacted a similar statute, which provided in relevant part that CTC could:

construct, maintain and operate a railway and general traffic bridge across the Detroit river from some convenient point, at or near Windsor in the province of Ontario, to the opposite side of the river in the state of Michigan, and may lay, maintain and use tracks on the said bridge for the passage of steam, electric or other locomotive engines, railway trains, and rolling stock, with all necessary approaches, terminal facilities, machinery and appurtenances required for the said bridge.

Act of May 3, 1921, 11–12 Geo. V ch. 57 (Can.) (CTC Act).³ The "effectiveness of the [DIBC] Act was expressly conditioned on the passage of reciprocal legislation by Canada, and the effectiveness of the [CTC] Act was expressly conditioned on the passage of reciprocal legislation by the U.S. Congress." 3rd Am. Compl. ¶ 58.

In 1927, ATC transferred all of its rights and assets to DIBC, which, in turn, merged into the present-day DIBC in 1979. Id. ¶ 23. CTC is and has been a wholly-owned subsidiary of DIBC since 1927. Id. ¶ 25. By letter in 1927, the United States Department of State (USDS or State) advised DIBC that because the DIBC Act and CTC Act constituted a "special agreement" under the Boundary Waters Treaty, the construction of the Ambassador Bridge would not require the approval of the International Joint Commission. Id. ¶ 60.⁴

DIBC "raised money by selling bonds, acquired the necessary land, and constructed the Ambassador Bridge and its accompanying facilities." Id. ¶ 68. The Bridge first opened for traffic on November 11, 1929. Id. ¶ 71. Since then, DIBC has invested "hundreds of millions of dollars into building, maintaining, operating, and upgrading the Ambassador Bridge." Id. ¶ 74. The principal value of Plaintiffs' right to own and operate the Ambassador Bridge stems from the right to collect tolls from vehicles. Id. ¶ 75. The U.S. Congress designated the Ambassador Bridge as part of the national highway system in 1995. Id. ¶ 132. Since 1998, Congress "authorized and appropriated more than $230 million for the U.S. part of the Ambassador Bridge Gateway Project, which was a highway expansion to connect the Ambassador Bridge directly to the Interstate Highway and State Highway Systems in Michigan." Id. ¶ 132.

B. 1972 International Bridge Act

Interstate and international bridge construction in this country has been a direct concern of the U.S. Congress since the mid–19th century. SeeDetroit Int'l Bridge Co. v. Gov't of Canada, 53 F.Supp.3d 1, 6 (D.D.C.2014)judgment entered, 53 F.Supp.3d 28 (D.D.C.2015). Congress forewent its role in approving interstate bridges in 1946 but retained its right to approve international bridges (between the United States and Canada or Mexico) until it enacted the International Bridge Act of 1972, 33 U.S.C. §§ 535–535i (IBA). Id. at 7. The IBA for the first time granted congressional consent for the construction, maintenance, and operation of international bridges without specific congressional legislation. The IBA requires that the foreign country consent, the proposed bridge comply with the 1906 Bridge Act, Act of Mar. 23, 1906, ch. 1130, 34 Stat. 84, and the proposed bridge obtain a set of Executive Branch approvals. 33 U.S.C. § 535. Specifically, the IBA allows:

a State ... to enter into agreements (1) with the Government of Canada, a Canadian Province, or a subdivision or instrumentality of either, in the case of a bridge connecting the United States and Canada ... for the construction, operation, and maintenance of such bridge in accordance with the applicable provisions of this subchapter. The effectiveness of such agreement shall be conditioned on its approval by the Secretary of State.

33 U.S.C. § 535a. Notably, the IBA requires presidential approval for an international bridge and provides that "[i]n the course of determining whether to grant such approval, the President shall secure the advice and recommendation of ... the heads of such departments and agencies of the Federal Government as he deems appropriate to determine the necessity of such bridge." Id. § 535b. The legislative history of the statute makes clear that it is "not [to] be construed to adversely affect the rights of those operating bridges previously authorized by Congress to repair,...