Milena Ship Management Co. v. Newcomb
| Decision Date | 28 September 1992 |
| Docket Number | Civ. A. No. 92-2535. |
| Citation | 804 F. Supp. 859 |
| Parties | MILENA SHIP MANAGEMENT CO., et al. v. R. Richard NEWCOMB, et al. |
| Court | U.S. District Court — Eastern District of Louisiana |
John Harold Clegg, Douglas L. Grundmeyer, Daphne P. McNutt, Chaffe, McCall, Phillips, Toler & Sarpy, New Orleans, La., for plaintiffs.
Nancy Ann Nungesser, U.S. Attorney's Office, New Orleans, La., for defendants.
ORDER AND REASONS
The plaintiffs move for summary judgment in the form of declaratory relief and a permanent injunction in an action to review a governmental administrative order blocking the plaintiffs' ships as assets controlled or owned by the Yugoslavian government. For the reasons that follow, the motion is DENIED. The facts have twice been stated in other written opinions, and need not be repeated here.
Federal Rule of Civil Procedure 56 instructs that summary judgment is proper if the record discloses no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. No genuine issue of fact exists if the record, taken as a whole could not lead a rational trier of fact to find for the nonmoving party. See Matsushita Elec. Indus. Co. v. Zenith Radio., 475 U.S. 574, 587, 106 S.Ct. 1348, 1356, 89 L.Ed.2d 538 (1986). A genuine issue of fact exists only "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986). The mere argued existence of a factual dispute does not defeat an otherwise properly supported motion. See id. Therefore, "if the evidence is merely colorable, or is not significantly probative," then summary judgment is appropriate. Id. at 249-50, 106 S.Ct. at 2511 (citations omitted).
A.
The standards for summary judgment are not the only ones having an impact on this case.1 The plaintiffs in this action are challenging the decisions of an administrative agency of the United States government. This Court's scope of review under the Administrative Procedure Act, 5 U.S.C. § 551 et seq, of an administrative agency's decision is very narrow indeed. That decision, in fact, must be sustained unless the Court finds that it is "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." 5 U.S.C. § 706(2)(A). See Department of Banking and Consumer Finance v. Clarke, 809 F.2d 266, 271 (5 Cir.1987), citing Camp v. Pitts, 411 U.S. 138, 93 S.Ct. 1241, 36 L.Ed.2d 106 (1973). Inherent in the standard is a high degree of deference to the agency's decision, bordering on a presumption that the action taken is valid. See Citizens to Preserve Overton Park v. Volpe, 401 U.S. 402, 415, 91 S.Ct. 814, 823, 28 L.Ed.2d 136 (1971); American Financial Services v. F.T.C., 767 F.2d 957, 985 (D.C.Cir.1985). When reviewing an agency's decision, the Court may neither substitute its judgment for that of the agency, Overton Park, 401 U.S. at 416, 91 S.Ct. at 824, nor "weigh alternatives available to an agency and then determine which is more reasonable." Soler v. G. & U., Inc., 833 F.2d 1104, 1107 (2 Cir.1987) cert. denied, 488 U.S. 832, 109 S.Ct. 88, 102 L.Ed.2d 64 (1988). In fact, even if this Court disagrees with the agency's decision, the judicial role is relegated to affirming the agency's decision so long as a rational basis is presented for the decision reached. See United Neighbors Civic Ass'n of Jamaica v. Pierce, 563 F.Supp. 200, 205 (E.D.N.Y. 1983) citing Bowman Transportation, Inc. v. Arkansas-Best Freight System, Inc., 419 U.S. 281, 290, 95 S.Ct. 438, 444, 42 L.Ed.2d 447 (1974). And so, in this setting, summary judgment criteria are informed by these clear instructions regarding review of agency actions.
The Fifth Circuit has held that the determination as to whether an agency's factual findings are arbitrary and capricious "must be made on the basis of the administrative record." Dep't of Banking and Consumer Finance, 809 F.2d at 271, citing Camp v. Pitts, 411 U.S. 138, 93 S.Ct. 1241, 36 L.Ed.2d 106 (1973). In this case, two decisions are at the core of the administrative record: the June 19 decision by OFAC to block these vessels and the more recent decision of September 18 denying the plaintiffs petition to unblock the vessels.2 Judicial review "is to be based on the full administrative record that was before the administrative officer ... at the time he made his decision." Overton Park, 401 U.S. at 420, 91 S.Ct. at 825. If this record is inadequate or incomplete in some respect, this Court can "obtain from the agency, either through affidavits or testimony, such additional explanation of the reasons for the agency decision as may prove necessary." Camp v. Pitts, 411 U.S. at 142, 93 S.Ct. at 1244. The record in this case is extensive and impressive. It has been given exacting scrutiny by this Court. And it is a role model of completeness and high-minded scholarship.
The administrative record is essentially the evidentiary basis on which the agency makes its decision. In this case, the record shows that the plaintiffs have had several opportunities to plead their case to OFAC since the June 19 order blocking the vessels. Both Captain Samardzic, the managing director of Milena, and plaintiffs' counsel have actively pursued the unblocking of the vessels. OFAC had access to statements by three of plaintiffs' experts on Yugoslavian law, as well as an article on privatization in Yugoslavia written under the auspices of the United Nations.3 Additionally, OFAC was provided with copies of the plaintiffs' articles of incorporation, documents relating to the registration of the vessels in Malta, and documents relating to bank accounts and insurance held by the plaintiffs. Judging from the correspondence in the record, it is evident that representatives of the plaintiffs and defendants have held meetings and had many telephone conversations. And, of course, the preliminary injunction hearing held by this Court provided OFAC with yet another opportunity to consider the plaintiffs' arguments and evidence, in particular the testimony of Captain Samardzic. Nothing suggests that OFAC has declined to accept any submissions from the plaintiffs; and although they accuse OFAC of intentional delay, plaintiffs have not presented any proof that the record is, in any respect, fatally incomplete.4 A review of the record betrays such a suggestion.
But to say that the record is complete does not end this Court's analysis. The Court must determine whether the agency decision was "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with the law." 5 U.S.C. 706(2)(A). To do this, this Court must inquire into the factual basis for the decision and determine whether a clear error of judgment has occurred or whether the agency misapplied or misinterpreted the law. In this case, the Court finds that OFAC's decisions to block the vessels and then to deny the plaintiffs' petition for an unblocking were well within the bounds of reasonableness under the circumstances and thus do not constitute a reversible administrative determination.
OFAC's September 18 Agency Decision denying the plaintiffs' petition to unblock the vessels is, in many respects, the culmination of OFAC's involvement in this matter, and thus provides the best summary of OFAC's justifications for the blocking. In that decision, OFAC suggests three bases for its denial of the plaintiffs' petition to unblock the vessels: first, the August 22 U.N. Sanctions Committee ruling; second, OFAC's interpretation of Yugoslavian law; and finally, JOP's status under that law.
The initial reason for OFAC's denial of the petition to unblock the vessels is that the UN Sanctions Committee issued a ruling that stated the "continued operation and associated transfers of funds or resources to the owners of four ships controlled and managed by the Milena Ship Management Company of Malta ... would be in violation of the sanctions established under resolution 757."5 Resolution 757 is clear. It animates the President's orders. OFAC interprets this ruling to mean "that the release of the vessels would constitute a prohibited transfer of an economic resource both to the Government of Yugoslavia and a `person' within Yugoslavia, namely, JOP."6 That does not seem to this Court to be an unreasonable interpretation of U.N. expression. Neither the government nor this Court, however, seems legally bound by an opinion of the U.N. Sanctions Committee; such opinions are, nevertheless, advisory and provide the legal norm for the President's orders. See e.g., Committee of U.S. Citizens in Nicaragua v. Reagan, 859 F.2d 929 (D.C.Cir. 1988); Diggs v. Shultz, 470 F.2d 461 (D.C.Cir.1972). But in the final analysis, the only laws that could cause the blocking of the vessels are Executive Order 12808 and 12810, not the U.N. resolutions.
Next, OFAC's Agency Decision is anchored to its interpretation of Yugoslavian law. That it is a matter of interpreting law instead of findings facts shifts somewhat the parameters of judicial review. The plaintiffs assert that because OFAC has interpreted Yugoslavian law, plaintiffs are entitled to a de novo review of OFAC's conclusions under Fed.R.Civ.P. 44.1. It is the defendants' contention, invoking Bamberger v. Clark, 390 F.2d 485, 488 (D.C.Cir. 1968), that as long as OFAC's...
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