Matson Navigation Co. v. U.S. Dep't of Transp.
| Decision Date | 19 August 2022 |
| Docket Number | Civil Action 22-1975 (RDM) |
| Parties | MATSON NAVIGATION COMPANY, INC.,Plaintiff, v. U.S. DEPARTMENT OF TRANSPORTATION, et al., Defendants. |
| Court | U.S. District Court — District of Columbia |
This case is the latest in a series of disputes between Plaintiff Matson Navigation Company, Inc. (“Matson”) Defendant Maritime Administration (“MARAD”), and IntervenorDefendant APL Maritime, Ltd. (“APL”) regarding MARAD's approval of various APL-owned vessels for inclusion in Maritime Security Program (“MSP”). See, e.g., Matson Navigation Co. v. U.S. Dep't of Transp., 466 F.Supp.3d 177 (D.D.C. 2020) (“Matson II”), vacated in part as moot, No 20-5219, 2021 WL 3140374 (D.C. Cir. July 15, 2021); Matson Navigation Co. v. U.S. Dep't of Transp. No. 21-cv-1606, 2022 WL 3139004 (D.D.C. Aug. 4, 2022) (“Matson IV”). Here, as before, Matson contends that a MARAD order approving inclusion of an APL vessel in the MSP fleet-this time, the CMA CGM DAKAR (the “DAKAR”)-was unlawful. According to Matson, the order is unlawful for two reasons: first, Matson argues that the DAKAR is not a “replacement vessel” within the meaning of the statute and thus may not engage in any form of domestic trade, and, second, it argues that the DAKAR engages in trade between the Northern Mariana Islands and other portions of the United States and thus is not engaged exclusively in foreign trade or authorized mixed foreign and domestic trade within the meaning of the governing statute. Dkt. 1 at 33, 36 (Compl. ¶¶ 198, 221).
Matson takes a different approach in this case than in its earlier challenges and, for the first time, seeks a preliminary injunction. Dkt. 7. Although aware of the high hurdle it faces in moving for that extraordinary relief, Matson says that it has no choice because, every time that it has achieved a legal victory over the past five years, “MARAD and APL have worked together to find an end run and [the agency has] reinstate[d] or replace[d] the challenged vessels so as to avoid meaningful judicial review.” Dkt. 26 at 9. This pattern, Matson contends, has caused “irreparable harm to its business relationships and reputation.” Id. Only a preliminary injunction, in Matson's view, can remedy the “unfair playing field in the U.S.-Guam/Saipan trade” created by MARAD's allegedly “unlawful . . . subsid[ization]” of APL's vessels. Id. at 42.
Matson's experience over the past five years, however, has also taught it that the jurisdictional divide between this Court and the courts of appeals is perilous. Matson brought its first set of challenges in the D.C. Circuit pursuant to the Hobbs Act, which vests the courts of appeals with “exclusive jurisdiction to enjoin, set aside, suspend, . . . or to determine the validity of . . . final orders of . . . the Secretary of Transportation issued pursuant to section 50501 . . . of title 46.” 28 U.S.C. § 2342(3)(A). At that time, Matson argued that the challenged orders fell within the scope of the Hobbs Act because they “involve[d] regulations and programs that are ‘interrelated' with citizenship determinations in 46 U.S.C. § 50501.” Matson Navigation Co. v. U.S. Dep't of Transp., 895 F.3d 799, 804 (D.C. Cir. 2018) (“Matson I”) (some internal quotation marks omitted). The D.C. Circuit, however, declined to adopt that sweeping view of its jurisdiction, holding instead that “[a]bsent explicit reference or its functional equivalent . . . to a statute listed in the Hobbs Act,” the courts of appeals lack original jurisdiction over challenges to MARAD orders. Id. at 806. In response, Matson changed course and, since then, has argued that the district courts-and not the courts of appeals-have exclusive jurisdiction over MARAD orders like the one at issue here, even when those orders make “explicit reference” to § 50501.
Following this path, Matson has continued to face rough waters, including two decisions from this Court declining to exercise jurisdiction over challenges to MARAD orders that made explicit reference to § 50501. Now, hoping to avoid any further jurisdictional shoals, Matson has not only simultaneously filed suit in this Court and filed a petition for review in the D.C. Circuit, but it has also asked this Court and the court of appeals simultaneously to adjudicate parallel motions for preliminary relief. See Pet'r's Mot. to Stay Order Pending Review and to Expedite Proceedings, Matson Navigation Co. v. U.S. Dep't of Transp., No. 22-1150 (D.C. Cir. July 8, 2022) (“Matson VII”).
For the reasons explained below (and explained in two prior opinions from this Court), the Court concludes that the D.C. Circuit-rather than this Court-has jurisdiction to consider Matson's current challenge. That is enough to resolve Matson's motion for a preliminary injunction; without jurisdiction-or even a showing that it is “likely” that this Court has jurisdiction-the Court cannot enjoin MARAD from implementing its administrative order. It makes little sense, moreover, for this Court to decide precisely the same dispute that is now pending before the D.C. Circuit. Notwithstanding the Court's conclusion that it lacks jurisdiction, however, it will abstain from dismissing Matson's suit at this time and will, instead, hold the case in abeyance pending the D.C. Circuit's disposition of Matson VII. If the D.C. Circuit agrees with this Court's jurisdictional analysis or concludes that the courts of appeals and the district courts have concurrent jurisdiction, the Court will then dismiss this case, either for lack of jurisdiction or as duplicative. But if the D.C. Circuit disagrees and concludes that the district courts are vested with exclusive jurisdiction over disputes like this one, the Court will permit Matson to renew its motion for a preliminary injunction.
In the Maritime Security Act of 1996, Pub. L. No. 104-239, 110 Stat. 3118, Congress provided for the establishment by “[t]he Secretary of Transportation, in consultation with the Secretary of Defense” of “a fleet of active, commercially viable, militarily useful, privately owned vessels to meet national defense and other security requirements and maintain a United States presence in international commercial shipping.” 46 U.S.C. § 53102(a). This Maritime Security Fleet “consist[s] of privately owned, United States-documented vessels for which there are in effect operating agreements.” Id. Pursuant to the Maritime Security Act, the Secretary established the Maritime Security Program (“MSP”), see 46 U.S.C. §§ 53101-53111, and delegated its administration to the Maritime Administrator, who heads MARAD, see 49 C.F.R. § 1.93(a). To enroll their vessels in the program, contractors must enter into “operating agreements” with MARAD that cover vessels subject to the MSP. See 46 U.S.C. § 53103(a); 46 C.F.R. § 296.2 (). These agreements are, with limited exception, “effective only for 1 fiscal year” but are “renewable,” 46 U.S.C. § 53104(a), and they obligate the Secretary to make fixed payments to the contractors for each vessel enrolled in the program, id. § 53106(a)(1)(A) ().
For a vessel to participate in the MSP, it must meet several eligibility requirements. One such requirement is that the vessel must be “operated . . . in providing transportation in foreign commerce.” Id. § 53102(b). Before the passage of the National Defense Authorization Act for Fiscal Year 2018 (the “2018 NDAA”), Pub. L. No. 115-91 (2017), 131 Stat. 1283 (codified in relevant part at 46 U.S.C. § 53105(a)(2)), another subsection of the statute, now 46 U.S.C. § 53105(a)(1), provided that “[a]n operating agreement under this chapter shall require that . . . the vessel . . . shall be operated exclusively in the foreign commerce or . . . in mixed foreign commerce and domestic trade allowed under a registry endorsement issued under [§] 12111 of [title 46]; and . . . shall not otherwise be operated in coastwise trade.” 46 U.S.C. § 53105(a)(1). A registry endorsement under § 12111(b), in turn, authorizes vessels to engage in trade with Guam, American Samoa, Wake, Midway, or Kingman Reef, all of which are unincorporated territories of the United States. The 2018 NDAA, however, amended that section to restrict the extent to which new vessels may operate in trade between the United States and its territories. Id. § 53105(a)(2). Under the current version of the law, a vessel “first covered by an [MSP] operating agreement after the date of the enactment of the National Defense Authorization Act for Fiscal Year 2018” may not “operate[] in the transportation of cargo between points in the United States and its territories” unless the vessel is a “replacement vessel” under § 53105(f), id. -that is, unless it replaces an existing vessel already subject to an operating agreement, id. § 53105(f).
Vessels in the MSP must also meet certain ownership and operator requirements detailed in 46 U.S.C. § 53102(c). Id. § 53102(b)(1). Most relevant here is paragraph (2)(A) of § 53102(c), which requires that a vessel be “owned by a person that is a citizen of the United States under section 50501 of this title or that is a United States citizen trust,” id. § 53102(c)(2)(A)(i) and demise chartered to a “documentation citizen”-i.e., one who, among other things, is eligible to document the vessel under 46 U.S.C. §§ 12101-12152, id. § 53102(c)(2)(A)(ii)(I). Section 50501, in turn, provides that “a corporation, partnership, or association is deemed to be a citizen of the United States...
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