Lil' Man in the Boat, Inc. v. City & Cnty. of S.F.

• Decision Date: 15 July 2021
• Docket Number: No. 19-17596,19-17596
• Parties: LIL’ MAN IN THE BOAT, INC., a California Corporation, Plaintiff-Appellant, v. CITY AND COUNTY OF SAN FRANCISCO ; San Francisco Port Commission, operating under the title Port of San Francisco; Elaine Forbes, Interim Executive Director; Peter Daley, Deputy Director, Maritime the San Francisco Port; Jeff Bauer, Deputy Director of Real Estate, the San Francisco Port; Joe Monroe, Harbormaster, South Beach Harbor, Pier 40, Defendants-Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

5 F.4th 952

LIL’ MAN IN THE BOAT, INC., a California Corporation, Plaintiff-Appellant,

v.CITY AND COUNTY OF SAN FRANCISCO ; San Francisco Port Commission, operating under the title Port of San Francisco; Elaine Forbes, Interim Executive Director; Peter Daley, Deputy Director, Maritime the San Francisco Port; Jeff Bauer, Deputy Director of Real Estate, the San Francisco Port; Joe Monroe, Harbormaster, South Beach Harbor, Pier 40, Defendants-Appellees.

No. 19-17596

United States Court of Appeals, Ninth Circuit.

Argued and Submitted December 8, 2020 San Francisco, California

Filed July 15, 2021

Lawrence D. Murray (argued), Murray & Associates, San Francisco, California; Steven E. Bers (argued), Whiteford Taylor & Preston LLP, Baltimore, Maryland; for Plaintiff-Appellant.

Tara M. Steeley (argued) and Wayne Snodgrass, Deputy City Attorneys; Dennis J. Herrera, City Attorney; Office of the City Attorney, San Francisco, California; for Defendants-Appellees.

Before: Mary H. Murguia and Morgan Christen, Circuit Judges, and William K. Sessions III,^* District Judge.

CHRISTEN, Circuit Judge:

Plaintiff Lil’ Man in the Boat (Lil’ Man) seeks reversal of a district court order granting summary judgment on its claim that several municipal entities and officials (collectively, defendants) violated the Rivers and Harbors Act, 33 U.S.C. § 5(b)(2) (RHA), by imposing landing fees on commercial charters operating out of South Beach Harbor Marina in San Francisco Bay. The district court concluded that Congress did not intend the RHA to restrict the type of fees defendants imposed. We affirm the district court's order dismissing Lil’ Man's RHA claim on alternate grounds: we see no indication that Congress intended to create a private right of action in § 5(b)(2).

I

Lil’ Man is a commercial charter business that provides transportation and hospitality services in San Francisco Bay. Lil’ Man uses South Beach Harbor as a base for its commercial enterprises. Defendants are the City and County of San Francisco; the San Francisco Port Commission; Port officials Elaine Forbes, Peter Daley, and Jeff Bauer; and Harbormaster Joe Monroe. Together, the defendants own, operate, and regulate the Port of San Francisco and the South Beach Harbor.

Until 2016, Lil’ Man paid a landing fee of $80 per docking to load and unload passengers at the South Beach Harbor. In 2016, defendants increased the landing fee to $110 and asked Lil’ Man and all other commercial vessels to sign a Landing Agreement that altered the terms of the contract for using the marina. In addition to increasing the landing fee, the Landing Agreement required a "gross revenue fee" that applied only in months the vessel docked at the port. The gross revenue fee was to be 7% of the user's monthly gross revenues, in any month that 7% of the user's gross revenues exceeded the user's monthly landing fees.¹ Lil’ Man refused to sign the Landing Agreement but twice paid the gross revenue fee for charters booked prior to implementation of the Agreement.

Lil’ Man brought suit in the Northern District of California pursuant to 42 U.S.C. § 1983, alleging the Landing Agreement violated the Tonnage Clause, the dormant Commerce Clause, the First Amendment, and § 5(b) of the RHA, 33 U.S.C. § 5(b). Though Lil’ Man's complaint did not specify a particular sub-section of § 5(b), it expressly incorporated the language of § 5(b)(2). Specifically, the complaint alleged the new fees violated the RHA because they were "not reasonable and [were] not charged on a fair and equitable basis;" were "used for purposes other than to pay for the cost of services" to vessels; did not "enhance the safety and efficiency of interstate commerce;" and "impose[d] burdens on interstate commerce." 33 U.S.C. § 5(b)(2)(A)–(C). These allegations make plain that Lil’ Man's RHA claim is premised on § 5(b)(2), which allows for the imposition of "reasonable fees charged on a fair and equitable basis."

The First Amendment claim asserted that the Landing Agreement violated Lil’ Man's right to petition the government because the Agreement included a provision waiving the right to challenge the fees. The district court granted defendants’ motion for judgment on the pleadings with respect to this claim because Lil’ Man had not signed the Landing Agreement. After the parties engaged in discovery, they filed cross-motions for summary judgment on Lil’ Man's remaining claims.

The district court granted defendants’ motion for summary judgment. The court relied on Asante v. California Department of Health Care Services , 886 F.3d 795 (9th Cir. 2018), and American Trucking Ass'ns v. City of Los Angeles , 569 U.S. 641, 133 S.Ct. 2096, 186 L.Ed.2d 177 (2013), to conclude the Landing Agreement did not violate the dormant Commerce Clause because defendants, through the Port, operated as market participants subject to market pressures, and were therefore "exempt from the dormant Commerce Clause." The court ruled that the landing fees did not violate the Tonnage Clause because the fees were charged in exchange for services provided to vessels and not for general revenue-raising purposes. See Clyde Mallory Lines v. Alabama ex rel. State Docks Comm'n , 296 U.S. 261, 265–66, 56 S.Ct. 194, 80 L.Ed. 215 (1935) ; see also Polar Tankers, Inc. v. City of Valdez , 557 U.S. 1, 10, 129 S.Ct. 2277, 174 L.Ed.2d 1 (2009).

Turning to the RHA claim, the district court concluded that Congress intended § 5(b) "to clarify existing law with respect to Constitutionally permitted fees and taxes on a vessel, and to prohibit fees and taxes on a vessel simply because that vessel sails through a given jurisdiction." The court granted summary judgment to defendants on the § 5(b)(2) claim because it concluded Congress did not intend § 5(b)(2) to apply to the fees imposed by the Landing Agreement. Lil’ Man appeals only the dismissal of this claim and an evidentiary ruling excluding former harbor attendant Paul Dima's declaration from consideration at the summary judgment stage.² We have jurisdiction pursuant to 28 U.S.C. § 1291.

II

We review de novo a district court's order granting summary judgment. L.F. ex rel. v. Lake Washington Sch. Dist. #414 , 947 F.3d 621, 625 (9th Cir. 2020). We must "determine, viewing the evidence in the light most favorable to the nonmoving party, whether there are any genuine issues of material fact and whether the district court correctly applied the relevant substantive law." Id. (quoting Wallis v. Princess Cruises, Inc. , 306 F.3d 827, 832 (9th Cir. 2002) ). "There is no genuine issue of fact if, on the record taken as a whole, a rational trier of fact could not find in favor of the party opposing the motion." West v. State Farm Fire & Cas. Co. , 868 F.2d 348, 350 (9th Cir. 1989). Questions of statutory interpretation are addressed de novo. United States v. Northrop Corp. , 59 F.3d 953, 959 (9th Cir. 1995). We may affirm the district court's order on any basis supported by the record. McSherry v. City of Long Beach , 584 F.3d 1129, 1135 (9th Cir. 2009).

III

A

33 U.S.C. § 5, commonly known as the Rivers and Harbors Act of 1884, prohibits tolls and operating charges for vessels passing through any lock, canal, canalized river, "or other work for the use and benefit of navigation" belonging to the United States. See 33 U.S.C. § 5, 23 Stat. 147 (July 5, 1884). Section 5 has been modestly amended on several occasions, but it was significantly revised in 2002 in conjunction with amendments to the Maritime Transportation Security Act (MTSA) as part of a comprehensive overhaul of the Merchant Marine Act of 1936. See MTSA, Pub. L. No. 107-295, § 101(13), 116 Stat. 2064 (2002); H.R. Rep. No. 108-334, at 180 (2003) (Conf. Rep.). Congress took this step following the September 11, 2001 terrorist attacks on the World Trade Center out of concern that United States ports were vulnerable to security breaches. See MTSA, Pub. L. No. 107-295, § 101(6)–(13), 116 Stat. 2064 (2002). Through the MTSA, Congress established a program that balanced the nation's concern for increased port security with the need to ensure the free flow of interstate and foreign commerce. See id.

The 2002 amendment modified § 5 ’s prohibition of tolls and operating charges and allowed the imposition of some charges, consistent with Tonnage Clause and Commerce Clause case law. See 33 U.S.C. § 5(b). The current version of § 5(b) provides:

(b) No taxes, tolls, operating charges, fees, or any other impositions whatever shall be levied upon or collected from any vessel or other water craft, or from its passengers or crew, by any non-Federal interest, if the vessel or water craft is operating on any navigable waters subject to the authority of the United States, or under the right to freedom of navigation on those waters, except for

(1) fees charged under section 2236 of this title;

(2) reasonable fees charged on a fair and equitable basis that--

(A) are used solely to pay the cost of a service to the vessel or water craft;

(B) enhance the safety and efficiency of interstate and foreign commerce; and

(C) do not impose more than a small burden on interstate or foreign commerce; or

(3) property taxes on vessels or watercraft, other than vessels or watercraft that are primarily engaged in foreign commerce if those taxes are permissible under the United States Constitution.

33 U.S.C. § 5(b).

As several courts have observed, the 2002 amendment codified Commerce Clause and Tonnage Clause common law.³ A few courts have considered § 5(b) challenges to fees imposed upon vessels,⁴ but we are aware of just one that has squarely considered whether § 5(b)(2) includes a private right of action. See Cruise Lines Int'l Ass'n Alaska v. City & Borough of Juneau , 356 F. Supp. 3d 831, 845–47 (D. Alaska 2018).

In the district court, Lil’ Man argued that the fee imposed by the Landing Agreement violates § 5(b)(2) because it was calculated as a percentage of vessels’ gross revenues, and not solely to pay for services provided to vessels....