Shipbuilders Council of America v. U.S., s. 88-5095

• Decision Date: 03 March 1989
• Docket Number: Nos. 88-5095,88-5119,s. 88-5095
• Parties: SHIPBUILDERS COUNCIL OF AMERICA, et al. v. UNITED STATES of America, et al., Appellants.
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 452

868 F.2d 452

276 U.S.App.D.C. 123

SHIPBUILDERS COUNCIL OF AMERICA, et al. v. UNITED STATES of America, et al., Appellants.

Nos. 88-5095, 88-5119.

United States Court of Appeals, District of Columbia Circuit.

Argued Feb. 3, 1989.

Decided March 3, 1989.

On Appeal from the United States District Court for the District of columbia.

Robert M. Loeb, Atty., Dept. of Justice, with whom John R. Bolton, Asst. Atty. Gen., Jay B. Stephens, U.S. Atty., and Leonard Schaitman, Atty., Dept. of Justice, Washington, D.C., were on the brief, for federal appellants.

R. Craig Lawrence and George P. Williams, Asst. U.S. Attys., also entered appearances for appellants in No. 88-5095 and for appellees in No. 88-5119. John D. Bates, Asst. U.S. Atty., Washington, D.C., also entered an appearance for appellants in No. 85-5095.

Charles D. Tetrault, with whom Theodore W. Kassinger, Washington, D.C., was on the brief, for intervenor/appellant, Marathon LeTourneau Company.

Michael Joseph, with whom Thomas L. Mills and Tyler J. Wilson, Washington, D.C., were on the brief, for appellees.

Marie Louise Hagen also entered an appearance for appellees Shipbuilders Council of America, et al. in No. 88-5119.

Before RUTH BADER GINSBURG, SILBERMAN and BUCKLEY, Circuit Judges.

Opinion for the court filed by Circuit Judge RUTH BADER GINSBURG.

RUTH BADER GINSBURG, Circuit Judge:

As plaintiffs in the district court, the Shipbuilders Council of America and the Transportation Institute sought, in 1987, a declaration that the United States Customs Service (Customs) had erred, over eighteen months earlier, in ruling that a particular "dry-docking" operation could be performed using foreign barges without violating the Shipping Act of 1920 (Jones Act). The district court, as plaintiffs requested, granted the declaratory judgment and ordered Customs to issue no further rulings inconsistent with the court's declaration. Defendants in that action, the United States, the Secretary of the Treasury, and the Commissioner of Customs, joined on appeal by a private intervenor, challenge the district court order on the merits and also raise issues of justiciability and standing.

Plaintiffs, now appellees, assert that the particular "dry-docking" movement mentioned in their complaint is merely one example of the "controversy" they brought to court. Their plea is for judicial rejection of an administrative interpretation repeated in a series of rulings over the course of several years. They present no timely challenge to any specific agency adjudication, rulemaking, or other administrative order. In essence, they seek judicial attention and advice, the court's judgment on the merits of a line of current agency precedent. Because their complaint tenders no matter meet for judicial consideration and, moreover, fails to allege facts sufficient to show article III standing, they should have foundered in the first instance. Accordingly, we vacate the judgment of the district court and remand with instructions to dismiss the actions for lack of a judicially-cognizable complaint.

I. BACKGROUND

The Jones Act provides in relevant part:

No merchandise shall be transported by water, or by land and water, on penalty of forfeiture of merchandise ..., between points in the United States ... embraced within the coastwise laws 46 U.S.C.App. Sec. 883 (1982). To enforce this proscription, Customs promulgated regulations regarding "Coastwise Procedure," including section 4.80b(a):

in any other vessel than a vessel built in and documented under the laws of the United States and owned by persons who are citizens of the United States ....

A coastwise transportation of merchandise takes places [sic], within the meaning of the coastwise laws, when merchandise laden at a point embraced within the coastwise laws ("coastwise point") is unladen at another coastwise point, regardless of the origin or ultimate destination of the merchandise.

19 C.F.R. Sec. 4.80b(a) (1988).

In September 1985, a United States corporation, Marathon LeTourneau Company (Marathon), arranged for the use of two Canadian submersible barges to "dry-dock" an oil drilling rig, so that the rig could be repaired. Marathon planned to station the rig in deep water adjacent to its ship repair yard, submerge the barges, and then raise them with the rig aboard, thus lifting the rig out of the water. The resulting "dry-docking" unit would be floated alongside the dock in the shipyard. There, workers would repair the rig without removing it from the barges. The unit would then float back to the deep-water point where the operation began, the barges would submerge, and the rig would dismount.

On September 12, 1985, Marathon sought approval from Customs for this projected dry-docking operation, inquiring whether the arrangement for the use of Canadian barges would violate the Jones Act. The next day, September 13, Customs ruled by telex:

Foreign-flag barge may be used as described without violating coastwise laws assuming drilling rig is loaded aboard and discharged from foreign-flag barge at same location in United States. Incidental shifting of barge within shypyard [sic] is not violative of coastwise laws, provided no cargo loaded aboard barge at one point is discharged from barge at different point in United States.

Customs regulations provide that each ruling letter "will be applied only with respect to transactions involving operations identical to those set forth in the ruling letter." 19 C.F.R. Sec. 177.9(b)(4) (1988). No one, other than "the person to whom the letter was addressed," "should rely on the ruling letter or assume that the principles of that ruling will be applied in connection with any transaction other than the one described in the letter." Id. Sec. 177.9(c). Such letters, however, can have precedential value for other parties or other activities: "In the absence of a subsequent change of practice or other modification or revocation which affects the principle of the ruling set forth in the ruling letter, that principle may be cited as authority in the disposition of transactions involving the same circumstances." Id. Sec. 177.9(a).

Over eighteen months after the Marathon ruling, on April 7, 1987, counsel for the Shipbuilders Council of America, an association of United States shipbuilders, and the Transportation Institute, an association of operators of U.S.-flag vessels qualified to engage in coastwise trade, wrote a letter to Customs seeking reversal of the Marathon ruling, and overruling of a similar June 8, 1981 permission. Letter from Thomas L. Mills to Kathryn C. Peterson, Chief, Carrier Rulings Branch, Office of Regulations and Rulings, U.S. Customs Service (Apr. 7, 1987) [hereinafter April 7, 1987 letter]. The next day, April 8, 1987, the same two trade associations filed a complaint in the district court, citing the September 13, 1985 Marathon ruling and stating that the dry-docking operation had occurred "[d]uring 1986." Complaint for Declaratory Judgment at 2. The complaint sought: (a) a declaration that dry-docking operations like the one in Marathon's case violate section 883, and (b) an order directing defendants to issue no similar rulings in the future. Id. at 3.

On June 25, 1987, the district court ordered a stay of the civil action pending Customs' ruling on plaintiffs' April 7, 1987 letter. Customs dispatched a detailed response letter dated September 14, 1987. In that letter, Customs stated why it believed that the September 13, 1985 telex ruling On January 14, 1988, the district court granted plaintiffs' motion for summary judgment, denied defendants' motion to affirm the Customs' decision, and declared that dry-docking operations of the kind arranged by Marathon collide with section 883; the court ordered that Customs "issue no further rulings inconsistent with the foregoing declaration and ... advise those likely to act in reliance upon its prior inconsistent rulings that such rulings are no longer effective." Shipbuilders Council of America v. United States, Civil Action No. 87-0972, order at 2 (D.D.C. Jan. 14, 1988). The district court characterized the definition of "coastwise transportation of merchandise" in section 4.80b(a) as "a useful description" but "not all-inclusive" and, indeed, offensive to the Jones Act "when applied to the situation presented by this case." Id. at 1. On March 14, 1988, defendants filed a notice of appeal. On March 30, 1988, the district court granted Marathon's motion to intervene as a defendant, and Marathon filed a notice of appeal the next day. This Court consolidated the two appeals.

                and similar prior rulings, correctly interpreted the Jones Act.  Letter from Edward B. Gable, Jr., Director, Carriers, Drawback and Bonds Division, U.S. Customs Service, to Thomas L. Mills (Sept. 14, 1987).  Customs quoted section 4.80b(a), in which " 'coastwise transportation of merchandise' " is defined to take place " 'within the meaning of the coastwise laws, when merchandise laden at a point embraced within the coastwise laws ("coastwise point") is unladen at another coastwise point.' "    Id. at 6 (quoting 19 C.F.R. Sec. 4.80b(a))
                

II. DISCUSSION

Appellees claim that the Customs "interpretation of the statute ... is the basis of this dispute." Brief for Appellees at 19. They explain that the Marathon ruling is "merely one example of how Customs' interpretation will allow foreign vessels to displace vessels operated by members of one of the plaintiff associations or prevent the building of vessels that would otherwise be built by members of the other plaintiff association." Id. Their complaint, filed in April 1987, alleged that the transportation in question had been completed "[d]uring 1986," Complaint for Declaratory Judgment at 2, and expressly sought a ruling from the district court applicable only to future transactions, id. at 3. In their contemporaneous letter to Customs, appellees similarly disavowed any interest in...