Watervale Marine Co. v. U.S. Dep't of Homeland Sec.

• Decision Date: 18 July 2014
• Docket Number: Civil Action No. 12–cv–0105 KBJ
• Parties: Watervale Marine Co., Ltd., as owner of the M/V Agios Emilianos, et al., Plaintiffs, v. United States Department of Homeland Security, et al., Defendants.
• Court: U.S. District Court — District of Columbia

55 F.Supp.3d 124

Watervale Marine Co., Ltd., as owner of the M/V Agios Emilianos, et al., Plaintiffs

v.United States Department of Homeland Security, et al., Defendants.

Civil Action No. 12–cv–0105 KBJ

United States District Court, District of Columbia.

Signed July 18, 2014

William Bruce Pasfield, Alston & Bird LLP, Washington, DC, Brian T. McCarthy, Law Office of Brian Thomas McCarthy, PLLC, Melville, NY, George K. Kontakis, Michael G. Chalos, K & L Gates LLP, New York, NY, for Plaintiffs.

Michael Anthony Dilauro, U.S. Department of Justice, Washington, DC, for Defendants.

MEMORANDUM OPINION

KETANJI BROWN JACKSON, United States District Judge

This case presents an issue of first impression regarding the United States Coast Guard's statutory authority to impose non-financial conditions for the release of a foreign-flagged vessel that the agency has detained at a United States port due to suspected violations of federal and international environmental law. Plaintiffs in this case are the owners and operators of four foreign-flagged merchant vessels that the Coast Guard held at United States ports for investigation of criminal violations and later released, but only after Plaintiffs had each posted a bond and executed a “security agreement” that contained various non-financial conditions. By their complaint filed on January 23, 2012 (Compl., ECF No. 1), Plaintiffs have brought this action against the Coast Guard and the United States Department of Homeland Security (“DHS”) (collectively, “Defendants”) under the Administrative Procedure Act (“APA”), 5 U.S.C. §§ 701 –706 (2014), challenging the non-financial security agreements that the Coast Guard required them to execute as a condition of their ships' departure clearance on the ground that the Coast Guard lacked statutory authority to require any such condition prior to releasing the vessels. (Id. ¶¶ 107–114.)

Before this Court at present are Defendants' motion for summary judgment (U.S. Mot. for Summ. J. (“U.S. Mot.”), ECF No. 13) and Plaintiffs' cross-motion for summary judgment (Pls.' Cross–Mot. for Summ. J. (“Pls.' Mot.”), ECF No. 16). Plaintiffs ask the Court to vacate the security agreements and to enjoin the Coast Guard from demanding anything other than a bond or financial surety as a condition of departure clearance in the future. (Pls.' Resp. in Opp'n to the Defs.' Mot. for Summ. J. & Pls.' Cross–Mot. for Summ. J. (“Pls.' Mem.”), ECF No. 16–1, at 40–41.) Defendants argue that the exercise of the Coast Guard's discretion to require Plaintiffs to execute non-financial security agreements is nonjusticiable, and in any event, the security agreements were entirely proper as a matter of law. (U.S. Mem. in Supp. of its Mot. for Summ. J. (“U.S. Mem.”), ECF No. 13–1, at 2–3.)

This Court has now considered the cross-motions, the oppositions thereto, and several rounds of supplemental briefing.¹

Because this Court agrees with Defendants that section 1908(e) of Title 33 of the U.S.Code commits entirely to the agency's discretion the matter of when and under what circumstances the Coast Guard may grant departure clearance to a vessel detained under that statute, the Court concludes that the Coast Guard's decision to require the challenged security agreements is nonjusticiable. Therefore, as set forth in the separate order accompanying this opinion, the Defendants' motion for summary judgment will be GRANTED , and Plaintiffs' cross-motion for summary judgment will be DENIED.

BACKGROUND FACTS

The underlying facts are not in dispute. Plaintiffs are the owners and operators of four foreign-flagged oceangoing bulk carriers: the M/V AGIOS EMILIANOS (“Agios Emilianos”), the M/V STELLAR WIND (“Stellar Wind”), the M/V GAURAV PREM (“Gaurav Prem”), and the M/V POLYNEOS (“Polyneos”) (collectively, “Plaintiffs' vessels”). (Compl. ¶¶ 13, 24, 34, 43.)² Plaintiffs' vessels periodically dock at U.S. ports to offload or obtain cargo. (See id. ¶¶ 21, 31, 41, 50; U.S. Mem. at 2, 8–9.) At various times between April and September of 2011, Coast Guard inspectors boarded Plaintiffs' vessels to investigate alleged violations of the Act to Prevent Pollution from Ships (“APPS”), 33 U.S.C. §§ 1901 –1915 (2014)—alleged violations that whistleblowers on board each ship had reported to Coast Guard authorities. (Compl. ¶¶ 14, 25, 35, 44.)

The Act To Prevent Pollution From Ships

The APPS is a federal statute that implements an international maritime treaty the goal of which is “to achieve the complete elimination of intentional pollution of the marine environment by oil and other harmful substances and the minimization of accidental discharge of such substances.” See Wilmina Shipping AS v. U.S. Dep't of Homeland Sec. (Wilmina Shipping II ), 934 F.Supp.2d 1, 6 (D.D.C.2013) (quoting United States v. Pena, 684 F.3d 1137, 1142 (11th Cir.2012) ); see also 33 U.S.C. § 1901(a)(4). The treaty, which the United States entered into along with other foreign nations, is called the International Convention for the Prevention of Pollution from Ships and is commonly known as “MARPOL” or the “MARPOL Protocol.” Among MARPOL's provisions are two requirements relevant to the case at bar: (1) that a vessel may only discharge oily water at sea if special equipment is used to contain most of the oil; and (2) that vessels are required to record all oil transfers and discharges in an oil record book that must be made available for the government to inspect. See Wilmina Shipping II, 934 F.Supp.2d at 6–7 (citing United States v. Ionia Mgmt., S.A., 555 F.3d 303, 306–07 (2d Cir.2009) ). Notably, the MARPOL Protocol is not self-executing; therefore, each signatory nation must implement the treaty by establishing rules that, among other things, sanction ships that violate any of MARPOL's provisions. See id. at 6.

The United States enacted the APPS in 1980 to implement MARPOL. The “APPS authorizes the Secretary [of DHS] to administer and enforce MARPOL and to issue regulations to implement the treaty's requirements.” Id. at 7 (citing 33 U.S.C. § 1903(a), (c)(1) ; 33 C.F.R. § 151.01 (2014) ; see also United States v. Sanford Ltd., 880 F.Supp.2d 9, 11–12 (D.D.C.2012). Under the APPS, “[i]t is unlawful to act in violation of the MARPOL Protocol ... or the regulations issued thereunder.” 33 U.S.C. § 1907(a) ; see also id. § 1908(a) (“A person who knowingly violates the MARPOL Protocol ... commits a class D felony.”). Among the various activities that constitute a knowing violation of MARPOL for the purpose of the APPS or its regulations is the keeping or maintaining of a false oil record book. See id. § 1908(b)(2); 33 C.F.R. § 151.25 (requiring vessels to maintain oil record books and to monitor and record all oily discharge). Maintaining a false oil record book is a criminal felony and may also give rise to civil liability. See, e.g., Sanford, 880 F.Supp.2d at 11 (individual defendants charged with seven felony counts under the APPS including maintaining a false oil record book); 33 U.S.C. § 1908(b) (setting forth the amount of fines that individuals must pay when found civilly liable for violations of MARPOL).

Under the APPS as well as certain other statutes, the Coast Guard is authorized to board and inspect ships that are docked at ports in the United States in order to detect potential violations of the APPS, MARPOL, and other environmental laws. 33 C.F.R. § 151.23(a) ; see also 14 U.S.C. § 89 (2014) (authorizing Coast Guard officers to board and inspect ships at ports). Pursuant to 46 U.S.C. § 60105(b) (2014), a foreign-flagged ship must obtain departure clearance from Customs and Border Protection (“Customs”) before it may depart a U.S. port, and under the APPS, government authorities are required to withhold such clearance for established or suspected APPS violations. See 33 U.S.C. § 1908(e). Moreover, federal officials have statutory authority to grant departure clearance for ships previously detained “upon the filing of a bond or other surety satisfactory to the Secretary.” Id. Specifically, the APPS provides:

If any ship subject to the MARPOL Protocol ... is liable for a fine or civil penalty under this section, or if reasonable cause exists to believe that the ship, its owner, operator, or person in charge may be subject to a fine or civil penalty under this section, the Secretary [of DHS] shall refuse or revoke the clearance required by section 60105 of Title 46. Clearance may be granted upon the filing of a bond or other surety satisfactory to the Secretary.

Id. (emphasis added).³

The Detention And Release Of Plaintiffs' Vessels

Beginning in the spring of 2011, the Coast Guard received various whistleblower complaints alleging that Plaintiffs' vessels had falsified oil record books, and the agency determined that it had reasonable cause to believe that the vessels' crewmembers had violated the APPS. Accordingly, pursuant to section 1908(e) of the APPS, the Coast Guard ordered that Customs withhold the vessels' departure clearance from ports in New Orleans, Louisiana (Agios Emilianos and Stellar Wind and Polyneos) and in Mobile, Alabama (Gaurav Prem). (Compl. ¶¶ 16, 27, 37, 46.) Customs complied with the Coast Guard's order and withheld the vessels' departure clearance. (id. ¶¶ 17, 28, 38, 47; see, e.g., AR Agios Emilianos 000043 (letter from Customs to Agios Emilianos indicating clearance was being withheld because the vessel was believed to be subject to a fine or penalty).)⁴ The absence of departure clearance prevented Plaintiffs' vessels from leaving the ports and returning to business at sea, a state of affairs that imposed significant costs on the vessel owners. The costs that resulted directly from the denial of departure clearance included “losing daily charter hire [and] delaying cargo vital to commerce,” and also “costs for wharfage, bunkers for auxiliary power, crew wages and maintenance, provisions, insurance, local agents expenses and port charges[.]” (Compl. ¶¶ 21, 31, 41, 50.) Moreover, the vessel owners incurred...