Nederland Shipping Corp. v. United States
| Decision Date | 27 April 2020 |
| Docket Number | Civil Action No. 19-1302-RGA |
| Parties | NEDERLAND SHIPPING CORP. and Chartworld Shipping Corp., Plaintiffs, v. UNITED STATES of America, Defendant. |
| Court | U.S. District Court — District of Delaware |
Anne Kai Seelaus, BARNARD MEZZANOTTE PINNIE AND SEELAUS, LLP, Wilmington, DE; George M. Chalos (argued) and Briton P. Sparkman, CHALOS & CO., P.C., Oyster Bay, NY, Attorneys for Plaintiffs.
David C. Weiss, Laura D. Hatcher, UNITED STATES ATTORNEY'S OFFICE, Joseph H. Hunt, Michael A. DiLauro and Kalynn E. Hughes (argued), UNITED STATES DEPARTMENT OF JUSTICE, Attorneys for Defendant.
Before me is the Government's Motion to Dismiss. (D.I. 11). I have reviewed the parties’ additional briefing. (D.I. 14, 15). I heard a helpful telephonic oral argument on March 23, 2020. Because I do not find that Plaintiffs have established subject matter jurisdiction, I will grant the Government's motion.
Plaintiffs are shipping corporations that own and operate the M/V Nederland Reefer. On or about February 20, 2019, the M/V Nederland Reefer arrived in the Delaware Bay. (D.I. 1 at ¶13). On February 22, 2019, in connection with an inspection of the ship and subsequent investigation relating to certain deficiencies suspected onboard, the Captain of the Port issued a letter indicating that the ship was required to remain in the Delaware Bay, pursuant to 33 U.S.C. § 1908(e) of the Act to Prevent Pollution from Ships ("APPS"). (Id. at ¶ 19). The letter stated that departure clearance from Customs and Border Patrol, a necessary prerequisite to release of the ship, could be obtained upon the issuance of a surety bond as part of an Agreement on Security. (Id. ).
An Agreement on Security acts as a substitute for the presence of a vessel by ensuring that jurisdiction will be retained over criminal defendants and by guaranteeing that funds will be available to pay any civil or criminal penalty that might be assessed against the vessel's owner or operator. See Fed. R. Civ. P. Supp. Admiralty and Maritime Rule E; cf. 33 U.S.C. § 1908(d) (vessel liability). Another purpose of the Agreement is to ensure that crew members who remain in the United States are adequately provided for. See D.I. 11 at 4 n. 4.
Plaintiffs contend that when they attempted to arrange for security, they were informed on February 23, 2019, that "the United States was unable to articulate a demand for surety." (Id. at ¶ 20). On March 7, 2019, Plaintiffs received notice that the investigation of the ship had been referred to the Department of Justice for criminal prosecution and that departure clearance from Customs and Border Patrol could be obtained upon the issuance of a surety bond as part of an Agreement on Security. (Id. at ¶ 21). The Agreement on Security was executed and signed on March 8, 2019, and a surety bond of $1,000,000 was posted the same day. (Id. at ¶¶ 24-25, Ex. 1). Although the Captain of the Port Letter withholding the M/V Nederland Reefer's departure clearance was rescinded, the ship was unable to leave the port for another nineteen days. (Id. at ¶ 27).
The Agreement on Security stated, "(c) Owner and Operator agree that the Vessel shall not depart forthwith for the remainder of its voyage until the aforementioned ship's officers and crewmembers of the Vessel have been granted immigration status necessary to enable them to remain in the United States." (Id. , Ex. 1 at ¶ 3(c)). The crewmembers had been subpoenaed as part of the related criminal investigation and were thus required to remain in the United States. (Id. at ¶¶ 26, 28). On March 27, 2019, the crew members who had been subpoenaed were granted parole to remain in the United States. (Id. at ¶¶ 28, 55, Ex. 20).
Defendants contend that the United States failed to take the necessary steps to arrange for the parole of the crew into the United States in a timely fashion, with the result that the M/V Nederland Reefer was delayed in being allowed to depart from the Delaware Bay. Defendants seek a declaratory judgment that the Agreement on Security is null and void ab initio , damages for breach of contract, and compensation for unreasonable delay in allowing the M/V Nederland Reefer's departure. The Government moves to dismiss the case for failure to state a claim and for lack of subject matter jurisdiction.
Rule 12(b)(1) of the Federal Rules of Civil Procedure permits the dismissal of an action for "lack of subject matter jurisdiction." A Rule 12(b)(1) motion may be treated as either a facial or factual challenge to the court's subject matter jurisdiction. See Constitution Party of Pa. v. Aichele , 757 F.3d 347, 357-58 (3d Cir. 2014). In reviewing a facial attack, "the court must only consider the allegations of the complaint and documents referenced therein and attached thereto, in the light most favorable to the plaintiff," and the standards relevant to Rule 12(b)(6) apply. Id. at 358.
In reviewing a factual challenge to the Court's subject matter jurisdiction, the Court is not confined to the allegations of the complaint, and the presumption of truthfulness does not attach to the allegations in the complaint. Mortensen v. First Fed. Sav. & Loan Ass'n , 549 F.2d 884, 891 (3d Cir. 1977). Instead, the Court may consider evidence outside the pleadings, including affidavits, depositions, and testimony, to resolve any factual issues bearing on jurisdiction. Gotha v. United States , 115 F.3d 176, 179 (3d Cir. 1997). Once the Court's subject matter jurisdiction over a complaint is challenged, the plaintiff bears the burden of proving that jurisdiction exists. Mortensen , 549 F.2d at 891.
Rule 12(b)(6) permits a party to move to dismiss a complaint for failure to state a claim upon which relief can be granted. Fed. R. Civ. P. 12(b)(6). When considering a Rule 12(b)(6) motion to dismiss, the court must accept as true all factual allegations in the complaint and view them in the light most favorable to the plaintiff. Connelly v. Lane Constr. Corp. , 809 F.3d 780, 790-91 (3d Cir. 2016).
To state a claim upon which relief can be granted pursuant to Rule 12(b)(6), a complainant must provide "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). A Rule 12(b)(6) motion may be granted only if, accepting the well-pleaded allegations in the complaint as true and viewing them in the light most favorable to the complainant, a court concludes that those allegations "could not raise a claim of entitlement to relief." Bell Atl. Corp. v. Twombly , 550 U.S. 544, 558, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007).
"Though ‘detailed factual allegations’ are not required, a complaint must do more than simply provide ‘labels and conclusions’ or ‘a formulaic recitation of the elements of a cause of action.’ " Davis v. Abington Mem'l Hosp. , 765 F.3d 236, 241 (3d Cir. 2014) (quoting Twombly , 550 U.S. at 555, 127 S.Ct. 1955 ). I am "not required to credit bald assertions or legal conclusions improperly alleged in the complaint." In re Rockefeller Ctr. Props., Inc. Sec. Litig. , 311 F.3d 198, 216 (3d Cir. 2002). A complaint may not be dismissed, however, "for imperfect statement of the legal theory supporting the claim asserted." See Johnson v. City of Shelby , 574 U.S. 10, 11, 135 S.Ct. 346, 190 L.Ed.2d 309 (2014).
A complainant must plead facts sufficient to show that a claim has "substantive plausibility." Id. at 12, 135 S.Ct. 346. That plausibility must be found on the face of the complaint. Ashcroft v. Iqbal , 556 U.S. 662, 663, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). A claim is facially plausible when the factual allegations allow the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. Id. ; Twombly , 550 U.S. at 555-56, 127 S.Ct. 1955. Deciding whether a claim is plausible will be a "context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Iqbal , 556 U.S. at 663-64, 129 S.Ct. 1937.
Although the M/V Nederland Reefer's departure clearance was restored on March 8, 2019, the ship still could not sail. (D.I. 1 at ¶ 27). Thirteen crew members identified in the Agreement on Security had not been granted the immigration status necessary to allow them to leave the ship, and the Agreement specified that the ship could not depart until they disembarked. (Id. , Ex. 1 at 7).
Plaintiffs represent, "Arrangements for the necessary immigration status or parole into the United States takes no more than a few hours and can [be] (and often is) completed quicker." (D.I. 1 at ¶ 31). Plaintiffs conclude that the nineteen-day delay in this case is unprecedented and unreasonable. (Id. at ¶¶ 32-57). Plaintiffs argue that 1) the Court should enter a declaratory judgment finding the Agreement on Security void ab initio (id. at ¶¶ 59-61); 2) the Government did not process the parole applications quickly enough, causing a breach of the Agreement with consequent damages (id. at ¶¶ 62-66); and 3) Plaintiffs are entitled to compensation due to the ship's "unreasonable" delay in departing (id. at ¶¶ 67-70).
In moving to dismiss, the Government contends, "There is no statute, regulation, or agency policy that requires that a ship's departure clearance be returned within a particular period of time, nor is there a deadline by which the government had to grant the witness crew members’ parole, allowing them to come ashore." (D.I. 11 at 1). The Government asserts there has been no waiver of sovereign immunity in this case and Plaintiffs cannot circumvent the jurisdiction of the U.S. Court of Federal Claims by crafting their suit as a request for declaratory judgment.
Before reaching the merits of Plaintiffs’ claims, I first consider the Government's facial challenge to this Court's subject matter jurisdiction over this case. Essentially, I need to...
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