Independent U.S. Tanker Owners Committee v. Dole, s. 85-6068
| Decision Date | 16 January 1987 |
| Docket Number | 85-6134,Nos. 85-6068,85-6069,s. 85-6068 |
| Parties | INDEPENDENT U.S. TANKER OWNERS COMMITTEE, Appellant, v. Elizabeth H. DOLE, Secretary, U.S. Department of Transportation, et al. ALASKA BULK CARRIERS, INC., et al., Appellants, v. Elizabeth H. DOLE, Secretary, U.S. Department of Transportation, et al. INDEPENDENT U.S. TANKER OWNERS COMMITTEE, Seatrain Lines, Inc., Appellant, v. Elizabeth H. DOLE, Secretary, U.S. Department of Transportation, et al. ALASKA BULK CARRIERS, INC., et al. Seatrain Lines, Inc., Appellant, v. Elizabeth H. DOLE, Secretary, U.S. Department of Transportation, et al. FIRST ATTRANSCO TANKER CORP., et al. v. SEATRAIN LINES, INC., Appellant, Elizabeth H. Dole, Secretary, U.S. Department of Transportation, et al. OVERSEAS SHIPBUILDING GROUP, INC., Seatrain Lines, Inc., Appellant, v. Elizabeth H. DOLE, Secretary, U.S. Department of Transportation, et al. OVERSEAS SHIPBUILDING GROUP, INC., Appellant, v. Elizabeth H. DOLE, Secretary, U.S. Department of Transportation, et al. FIRST ATTRANSCO TANKER CORP., et al., Appellants, v. Elizabeth H. DOLE, Secretary, U.S. Department of Transportation, et al. to 85-6138 and 85-6163. |
| Court | U.S. Court of Appeals — District of Columbia Circuit |
Appeals from the United States District Court for the District of Columbia (Civil Action Nos. 85-01555, 85-01740, 85-01752 and 85-1771).
Joseph A. Klausner, with whom Allan A. Tuttle, Washington, D.C., was on brief for appellant, Independent U.S. Tanker Owners Committee in Nos. 85-6068 and 86-6134.
Amy Loeserman Klein, with whom William E. Cohen and Marc A. Bernstein, New York City, were on brief for appellants First Attransco Tanker Corp., et al. in Nos. 85-6136 and 85-6163.
Daniel P. Levitt, with whom Richard J. Wertheimer, Washington, D.C., was on brief for appellant, Overseas Shipbuilding Group, Inc. in No. 85-6138.
Robert J. Blackwell, Anne E. Mickey, Jeffrey R. Masi and Linda L. Martin, Washington, D.C., were on brief for appellant, Alaska Bulk Carriers, Inc., et al. in No. 85-6069.
William E. McDaniels, Kevin T. Baine and Jonathan Blank, Washington, D.C., were on brief for appellant, Seatrain Lines, Inc. in Nos. 85-6134, 85-6135, 85-6136 and 85-6137.
Kenneth N. Weinstein, Deputy Asst. Gen. Counsel for Litigation, Dept. of Transp., with whom Richard K. Willard, Asst. Atty. Gen., Dept. of Justice, was on brief for appellees, Secretary of Transp., et al. in Nos. 85-6068, et al. Michael Kimmel and Robert S. Greenspan, Attys., Dept. of Justice, Washington, D.C., entered appearances for appellees.
Roy G. Bowman and Richard H. Saltsman, Washington, D.C., were on brief for appellee, American Petrofina Inc. in Nos. 85-6068, et al.
Michael Joseph, Mark P. Schlefer, Thomas L. Mills and Donald M. Squires, Washington, D.C., were on brief for appellees, Atlantic Richfield Co., et al. in Nos. 85-6068, et al.
Before EDWARDS and BORK, Circuit Judges, and SWYGERT, * Senior Circuit Judge.
Opinion for the Court filed by Circuit Judge BORK.
These consolidated cases are before us on appeal from a decision of the district court, 620 F.Supp. 1289 (1985), which sustained the validity of a rule promulgated by the Secretary of Transportation. Appellants challenge the rule as exceeding the Secretary's statutory authority and as arbitrary and capricious agency action; they also raise a battery of specific procedural objections to the manner in which the rule was promulgated. We find that the Secretary was well within her statutory authority in promulgating the rule, but that she failed to provide an adequate account of how the rule serves the objectives set out in the governing statute, the Merchant Marine Act of 1936, ch. 858, 49 Stat. 1985 ().
The rulemaking that gives rise to this case is the latest of numerous attempts by the Congress, the Maritime Administration, and the Department of Transportation to address the recurrent problems of the United States merchant marine fleet. The American fleet has had great difficulty competing in foreign commerce. American ships typically have higher construction and operating costs than their foreign competitors, not only because they typically must meet more stringent environmental and safety standards, but also because foreign ships often are subsidized and otherwise assisted by their own governments. Congress confronted these problems in 1936 and authorized the United States government to pay up to half the construction costs of American ships that will operate in foreign commerce. 46 U.S.C. Secs. 1151-1152 (1982). In addition, Congress authorized the government to subsidize the operating costs of these ships where necessary to meet foreign competition. Id. Secs. 1171-1172. Despite these provisions, American ships have continued to fare poorly against their competitors in foreign commerce.
Merchant ships that operate in the domestic shipping market do not receive these government subsidies. They are protected from the rigors of foreign competition however, by the Jones Act, which requires all cargo transported between points in the United States to be carried on ships built in the United States, registered in the United States, and owned by American citizens. 46 U.S.C. Sec. 883 (1982). 1 They are also protected from having to compete against any of the ships that have received construction subsidies or operating subsidies from the government, except in a few specific and very limited instances. 2 Since the Trans-Alaska Pipeline opened in 1977, however, the domestic fleet has been unable to satisfy the great new demand for large tankers to carry Alaskan oil to other points in the country. The Maritime Administration has responded to this situation by invoking its statutory authority to allow certain subsidized ships to operate in the domestic market for up to six months in a given year if the ships repay a proportional share of the construction subsidy that they have received. 46 C.F.R. Part 250 (1984). Yet this step has only partly solved the problem.
The rule at issue in this case permitted tanker vessels built with the assistance of a federal construction-differential subsidy, which had been barred from competing in domestic trade on account of that subsidy, to undertake domestic operations if they agreed to repay the unamortized portion of the subsidy plus interest during a period that began on June 6, 1985, and closed one year later. See Construction-Differential Subsidy Repayment; Total Payment Policy, 50 Fed.Reg. 19,170 (1985) (codified at 46 C.F.R. Sec. 276.3 (1985)) (hereafter the "payback rule"). This rule addressed problems in both the foreign and domestic markets by providing an opportunity for ships that are not competitive in foreign commerce to enter the domestic market where the demand for their services has increased, but only by agreeing to relinquish their financial advantage over unsubsidized ships. The Maritime Administration has considered proposals for individual ships to repay their subsidies at least since 1964. In 1977, several owners of unsubsidized ships challenged the Administration's approval of repayment by one vessel in particular. The Supreme Court upheld the government's authority to approve subsidy repayment in exchange for permission to enter the domestic market. See Seatrain Shipbuilding Corp. v. Shell Oil Co., 444 U.S. 572, 100 S.Ct. 800, 63 L.Ed.2d 36 (1980). Shortly thereafter, the Administration established an interim rule that extended this authorization to undertake domestic shipping, upon repayment of the full subsidy plus interest, to a limited class of large tankers whose owners demonstrated "exceptional circumstances" of dismal prospects in foreign commerce to justify the application of the rule. See 45 Fed.Reg. 68,393 (1980). The interim rule was challenged, and this court invalidated it, finding that although the Administration had statutory authority to promulgate the rule, it had acted arbitrarily and capriciously by providing an inadequate discussion of the basis and purpose of the rule. See Independent U.S. Tanker Owners Comm. v. Lewis, 690 F.2d 908, 918-20 (D.C.Cir.1982). At that point, the Secretary of Transportation proposed the payback rule. This rule is similar to the earlier proposed interim rule except that it covers all tankers and does not require tankers to make any showing of "exceptional circumstances" to qualify for the benefits of subsidy repayment.
Appellants initially question the Secretary's statutory authority to promulgate the payback rule. In Seatrain, however, the Supreme Court expressly recognized the government's authority under the Merchant Marine Act to approve the repayment of a ship's construction subsidy in return for the lifting of restrictions on domestic operations by that ship. 444 U.S. at 588, 100 S.Ct. at 809. Although in Seatrain the subsidy repayments were granted on an individualized basis and on a showing of exigent circumstances that justified the need for the government's action, the Court did not rely on either of these facts. Instead, the Court rested its conclusion on "the Secretary's broad contracting powers and discretion to administer the Act," especially the power to approve measures that "directly further the general goals of the Act." Id. In particular, the Court stressed the difference between a permanent release from the foreign-trade-only requirement, which requires a vessel to repay its subsidy before it can enter the domestic market, and a temporary release that might render a subsidized ship "capable of taking advantage of every shift in trade and profitability, skimming the cream and leaving what remains to those less mobile." Id. The Court stated that a temporary release would be very problematic, but a permanent release was not, at least insofar as it was conditioned on "full repayment" of the subsidy so as to...
To continue reading
Request your trial
-
Nat'l Parks Conservation Ass'n v. Jewell, Civil Action No. 09–00115 BJR
...an agency's rules, the vacatur restores the status quo before the invalid rule took effect.” (citing Indep. U.S. Tanker Owners Comm. v. Dole, 809 F.2d 847, 854 (D.C.Cir.1987) ); see also Humane Soc'y of U.S. v. Kempthorne, 579 F.Supp.2d 7, 21 (D.D.C.2008) (“Little confusion or inefficiency ......
-
Cape Cod Hosp. v. Sebelius, Civil Action No. 08-1751 (RCL).
...... 9, 35-36 (D.C.Cir.1977)); see also Independent U.S. Tanker Owners Comm. v. Dole, 809 F.2d 847, ... See McBryde v. Committee to Review Circuit Council Conduct, 264 F.3d 52, ......
-
Oakbrook Land Holdings, LLC v. Comm'r
...argue use different "tests" for determining whether a comment requires an agency's response. See, e.g. , Indep. U.S. Tanker Owners Comm. v. Dole , 809 F.2d 847, 852 (D.C. Cir. 1987) ; Home Box Office, Inc. , 567 F.2d at 35 n.58 ; United States v. Nova Scotia Food Prods. Corp. , 568 F.2d 240......
-
Ogden Projects, Inc. v. New Morgan Landfill Company, Inc., Civ. A. No. 94-3048.
...to deprive of force; to make of no authority or validity; to set aside") (citations omitted); see also Independent U.S. Tanker Owners Committee v. Dole, 809 F.2d 847, 855 (D.C.Cir.1987) (noting that vacating a regulation returns the conditions to the status quo ante), cert. denied, 484 U.S.......
-
Interpreting regulations.
...COlmection to statute). 112. 5 U.S.C. [section] 553(c). (112.) 5 U.S. [section] 553 (c) (113.) Indep. U.S. Tanker Owners Comm. v. Dole, 809 F.2d 847, 853 (D.C. Cir. 1987) (vacating agency rule for failure to provide adequate statement of basis and purpose); Indep. U.S. Tanker Owners Comm. v......
-
Structural overdelegation in criminal procedure.
...(2006) (requiring agencies to publish statements of basis and purpose when issuing regulations); Indep. U.S. Tanker Owners Comm. v. Dole, 809 F.2d 847, 851-52 (D.C. Cir. 1987) (reversing an agency rule because the agency did not adequately explain why the rule served the governing statute's......