Matson Navigation Co. v. U.S. Dep't of Transp.
| Docket Number | Civil Action 21-1606 (RDM) |
| Decision Date | 04 August 2022 |
| Parties | MATSON NAVIGATION COMPANY, INC., Plaintiff, v. U.S. DEPARTMENT TRANSPORTATION, et al., Defendants. |
| Court | U.S. District Court — District of Columbia |
Plaintiff Matson Navigation Company, Inc. (“Matson”) seeks review of Defendant Maritime Administration's (“MARAD”) decision approving the replacement of a vessel operating under the Maritime Security Program-the APL Guam-with another vessel-the Herodote-owned by Intervenor-Defendant APL Maritime, Ltd. (“APL”). Dkt. 1. (Compl.). Matson contends that MARAD's approval order violates the Administrative Procedure Act (“APA”), 5 U.S.C. § 706(2)(A), because it is arbitrary, capricious, and not in accordance with law. Dkt. 1 at 33, 34 (Compl. ¶¶ 184, 197). Defendants have moved to dismiss Matson's complaint on the ground that MARAD's invocation of 46 U.S.C. § 50501 as a partial basis for its order vested exclusive jurisdiction to review that order in the court of appeals. Dkt. 15-1 at 1; Dkt. 17 at 1-2. Because this case presents the same jurisdictional issues that the Court resolved in its prior decision in Matson Navigation Co. v. United States Department of Transportation 466 F.Supp.3d 177 (D.D.C. 2020) (“Matson II”), the Court will GRANT Defendants' motions and DISMISS the case for lack of jurisdiction.
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 this authority, 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). For a vessel to participate in the MSP, it must meet several eligibility requirements that advance the purposes of the MSP, including requirements concerning the vessel's ownership and documentation, its commercial viability, its suitability for national defense or military purposes, and its operation in foreign commerce. See 46 U.S.C. § 53102(b). Contractors must enter into “operating agreements” with MARAD that cover vessels subject to the Program. See Id. § 55103; 46 C.F.R. § 296.2 (). Operating agreements are “effective only for 1 fiscal year” but are “renewable.” 46 U.S.C. § 53104(a). The Secretary makes fixed payments to the contractors under the operating agreements.
See 46 U.S.C. § 53106(a)(1)(A) ().
The statute also provides a mechanism for replacing vessels subject to MSP agreements with new vessels. Under 46 U.S.C. § 53105(f), “[a] contractor may replace a vessel under an operating agreement with another vessel that is eligible to be included in the Fleet under section 53102(b), if the Secretary, in conjunction with the Secretary of Defense, approves the replacement of the vessel.” Section 53102(b), as discussed, sets forth numerous requirements for vessels to be eligible to join the MSP. This case chiefly concerns one such requirement: that a “vessel meets the requirements of paragraph (1), (2), (3), or (4) of [§ 53102(c)].” Id. § 53102(b)(1). Section 53102(c) outlines certain requirements related to the ownership or operation of MSP vessels. As relevant here, paragraphs (1), (2), and (4) of § 53102(c) require, as one of the conditions of their fulfillment, that a vessel be owned by, operated by, or chartered to “a person that is a citizen of the United States under section 50501.” Id. § 53102(c)(1), (2)(A)(i), (4)(B). Section 50501, in turn, provides that “a corporation, partnership, or association is deemed to be a citizen of the United States only if the controlling interest is owned by citizens of the United States,” with the caveat that, “if the corporation, partnership, or association is operating a vessel in the coastwise trade, at least 75 percent of the interest must be owned by citizens of the United States.” Id. § 50501(a).
In January 2005, the Secretary of Transportation entered into nine agreements with APL, permitting nine APL vessels to operate as part of the MSP. See Matson II, 466 F.Supp.3d at 183. In December 2014, APL applied to MARAD for authorization to replace two of those vessels. Id. On October 22, 2015, MARAD approved APL's application to replace the APL Cyprine with the APL Guam in the MSP fleet (the “2015 Approval Order”). Dkt. 1 at 14 (Compl. ¶ 71). In December 2016, MARAD approved APL's application to replace the APL Agate with the APL Saipan (the “2016 Approval Order”). Id. at 15-16 (Compl. ¶¶ 80-83).
Plaintiff Matson provides ocean freight carrier services in the Pacific region and serves several of the same routes as APL. Id. at 5, 6 (Compl. ¶ 23, 26). Shortly after MARAD's approval of the replacement vessels, Matson filed an administrative protest with MARAD in which it challenged the vessels' eligibility for the MSP. Matson Navigation Co., Inc. v. U.S. Dep't of Transp., 895 F.3d 799, 802-03 (D.C. Cir. 2018) (“Matson I”). MARAD rejected Matson's appeal, concluding that APL's vessels met the relevant statutory criteria. Id. at 803. On June 2, 2017, Matson sought review of MARAD's approvals in the D.C. Circuit. Id. Following briefing and oral argument, the D.C. Circuit dismissed Matson's petition for lack of jurisdiction. Id. at 806. With respect to Matson's challenge to MARAD's 2015 Approval Order, the court of appeals held that it lacked jurisdiction because Matson failed to file a timely petition for review. Id. at 804-05. And with respect to the 2016 Approval Order, the D.C. Circuit held that it lacked jurisdiction because MARAD's order “did not make an explicit finding” or the “functional equivalent” of an explicit finding “that the entities involved were U.S. citizens within the meaning of [46 U.S.C. §] 50501,” and thus the order was not made “pursuant to” § 50501-a criterion that the court deemed necessary for it to exercise jurisdiction over Matson's challenge under the Administrative Orders Review Act (also known as the “Hobbs Act”), 28 U.S.C. § 2342(3)(A). Id. at 805-06.
Following the D.C. Circuit's dismissal, Matson challenged the approval orders in this Court. See Matson II, 466 F.Supp.3d at 185. APL intervened, and the parties cross-moved for summary judgment. Id. at 180. MARAD also moved to dismiss Matson's challenge to the 2015 Approval Order, arguing that because that order was made, in part, “pursuant to” 46 U.S.C. § 50501, the Hobbs Act vested the courts of appeals with exclusive jurisdiction to review it. Id. at 180-81.
This Court agreed with MARAD and granted MARAD's motion to dismiss with respect to Matson's challenge to the 2015 Approval Order. Id. at 181. The Court concluded that because the 2015 Approval Order made “explicit reference” to § 50501, the order was made “pursuant to” that section and thus triggered the court of appeals' Hobbs Act jurisdiction over the entire order. Id. at 188-89. The Court then considered “whether the district courts have concurrent jurisdiction to review those portions of a multiple-authority agency order that turn on statutory provisions not listed in the Hobbs Act,” id. at 190, and determined that the answer was no, id. at 192. The Court observed that although the “D.C. Circuit has not expressly answered the question, . . . [s]everal D.C. Circuit decisions[,] . . . along with out-of-circuit precedents, support the conclusion that the courts of appeals have exclusive jurisdiction to review multipleauthority orders.” Id. at 190; see also id. at 190-91 (collecting cases). Applying the test articulated by the Second Circuit in Sutton v. United States Department of Transportation, 38 F.3d 621 (2d Cir. 1994), the Court concluded that, “[b]ecause MARAD's citizenship determination under § 50501 was ‘a necessary predicate to' the challenged determination that the APL Guam was eligible to participate in the MSP as a replacement vessel, the courts of appeals have exclusive jurisdiction to review the entire determination.” Matson II, 466 F.Supp.3d at 191 (quoting Sutton, 38 F.3d at 625). The Court also found instructive the plain text of the Hobbs Act itself, which “grants the courts of appeals exclusive jurisdiction over the entirety of ‘final orders' and not merely those portions of final orders that implicate § 50501.” Id. (quoting 28 U.S.C. § 2342(3)(A)) (internal quotation marks omitted). Based on these considerations, the Court held that “it lack[ed] jurisdiction to consider Matson's challenge to MARAD's 2015 Approval Order authorizing the substitution of the APL Guam for the existing MSP vessel.” Id. at 192.
Fast forward seven months. On January 12, 2021, APL applied to replace the APL Guam with a different vessel-the Herodote-as part of the MSP fleet. Dkt. 1 at 20 (Compl. ¶ 112). MARAD found that the Herodote met the MSP requirements under 46 U.S.C. § 53102(b) and 46 C.F.R. § 296.11 and approved APL's application on April 26, 2021 (the “2021 Approval Order”). Id. at 20-23 (Compl. ¶¶ 114-21); see also Dkt. 1-25. Among other things, that order expressly found that ...
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