Western Hold. Group v. The Mayaguez Port Com'n

• Decision Date: 05 May 2009
• Docket Number: Civil No. 08-2335 (ADC).
• Citation: 611 F.Supp.2d 149
• Court: U.S. District Court — District of Puerto Rico
• Parties: WESTERN HOLDING GROUP, INC., et al., Plaintiffs, v. THE MAYAGÜEZ PORT COMMISSION, et al., Defendants.

Page 149

611 F.Supp.2d 149

WESTERN HOLDING GROUP, INC., et al., Plaintiffs, v. THE MAYAGÜEZ PORT COMMISSION, et al., Defendants.

Civil No. 08-2335 (ADC).

United States District Court, D. Puerto Rico.

May 5, 2009.

COPYRIGHT MATERIAL OMITTED

Jorge F. Blasini-Gonzalez, Jose Ramon Rivera-Morales, Jimenez, Graffam & Lausell, San Juan, PR, for Plaintiffs.

Edward W. Hill-Tollinche, Charles E. Vilaro-Valderrabano, Jose Raul Cancio-Bigas, Cancio Covas & Santiago, LLP, San Juan, PR, for Defendants.

ORDER

AIDA M. DELGADO-COLÓN, District Judge.

Plaintiffs, Western Holdings Group, Inc., Marine Express, Inc. and Corporación Ferries Del Caribe, Inc. ("plaintiffs"), brings suit against defendants, the Mayagüez Port Commission, Dennis Bechara, Alfredo Archilla, Enrique Gómez, William Phiths, Holland Group Port Investment (Mayagüez), Inc., José González-Freyre, Sergio Zeligman, and Antonio Jacobs (collectively, "defendants"). Docket No. 1. In addition to their numerous claims, plaintiffs seek a preliminary injunction. Docket No. 2. Plaintiffs' request for a preliminary injunction was referred to Chief Magistrate-Judge Justo Arenas ("Chief Magistrate-Judge") on December 1, 2008, for a report and recommendation. Docket No. 6. On April 17, 2009, after conducting hearings on January 16, 20, 26 and February 6, 2009, the Chief Magistrate-Judge issued a Report and Recommendation ("R & R") which recommended denying plaintiffs' motions for preliminary injunction. Docket No. 86. Objections to the R & R were due by May 4, 2009, but none were filed.¹

I. Standard of Review for Objections to A Report and Recommendation

A district court may refer pending motions to a magistrate-judge for a report and recommendation. 28 U.S.C. § 636(b)(1)(B); Fed.R.Civ.P. 72(b); L. Civ. R. 72(a). Any party adversely affected by the recommendation issued may file written objections within ten (10) days of being served with the report and recommendation. 28 U.S.C. § 636(b)(1). However, "[a]bsent objection by the plaintiffs, [a] district court ha[s] a right to assume that [a party] agree[s] to the magistrate's recommendation." Templeman v. Chris Craft Corp., 770 F.2d 245, 247 (1st Cir. 1985), cert. denied, 474 U.S. 1021, 106 S.Ct. 571, 88 L.Ed.2d 556 (1985). Accordingly, absent a proper objection, the court need only satisfy itself that there is no plain error in order to accept an unopposed Report and Recommendation. Pellot Bermúdez v. U.S., Civ. No. 04-1702(DRD), 2006 WL 3007480, *2 (D.P.R. Sept.22, 2006).

II. Discussion/Conclusion

Upon review of the R & R, the court finds no reason to depart from the Chief Magistrate-Judge's recommendation. Moreover, in light of plaintiffs' admission that the remedy sought in the preliminary injunction is no longer warranted, and their decision not to file an objection to the R & R, the court ADOPTS the R & R in full (Docket No. 86). Thus, plaintiffs' request for a preliminary injunction (Docket No. 2) is DENIED.

SO ORDERED.

MAGISTRATE JUDGE'S REPORT AND RECOMMENDATION ON MOTION FOR PRELIMINARY INJUNTION

JUSTO ARENAS, United States Chief Magistrate Judge.

Plaintiffs, allegedly common carriers within the meaning of the Shipping Act of 1984, bring this complaint against the defendants, who are allegedly marine terminal operators, for violations of the Shipping Act of 1984, 46 U.S.C. § 41102(c), violations which include unreasonable tariffs, their unjust, unreasonable and unlawful practices, (Docket No. 1, at 27, ¶ 89), unreasonable refusals to negotiate, and unreasonable discrimination, thus causing undue or unreasonable prejudice or disadvantages to plaintiffs in violation of 46 U.S.C. § 41106(1)-(3). Plaintiffs also allege violation of their Constitutional rights under the Foreign Commerce Clause, the Import-Export Clause, the Tonnage Clause, the right to travel under the Fifth Amendment Due Process Clause, the Taking Clause, the Substantive Due Process and Equal Protection Clauses.

This matter is before the court on Motion for Preliminary Injunction filed by plaintiffs Western Holding Group, Inc., Marine Express, Inc. and Corporación Ferries del Caribe, Inc., on November 25, 2008 (Docket No. 2) against defendants Mayagüez Port Commission and its members, Commissioners Dennis Bechara, Alfredo Archilla, Sergio Zeligman, Enrique Gómez and William Phiths, in their official capacity, and Holland Group Port Investment (Mayagüez), Inc., José González Freyre, and Antonio Jacobs, as administrators of the port of Mayagüez. For purposes of the preliminary injunction issue, plaintiffs are foregoing the constitutionbased attacks on the defendants' actions.

The parties are engaged in varying disputes before the Federal Maritime Commission, before this court, and before the defendant Mayagüez Port Commission. Plaintiffs are arguably common carriers and owners of the M/V Caribbean Express, a vessel which operates out of the port of Mayagüez. Plaintiffs operate a ferry service which transports goods and passengers to and from the Dominican Republic, something they have done for the last 15 years. The vessel has a capacity for 1,067 passengers, forty 45-feet containers, and fifty motor vehicles. Due to her particular design, the M/V Caribbean Express can apparently dock only at the port of Mayagüez of all the ports in Puerto Rico. The defendants are the owners and operators of the port of Mayagüez.

On November 14, 2008, the defendants were served with a copy of a verified complaint filed by plaintiffs with the Federal Maritime Commission requesting redress and damages under the Shipping Act. (Docket No. 1, at 23, ¶ 78); Fed.Reg. Vol. 73, No. 233, at 73655. The Federal Maritime Commission is the primary forum for resolving disputes between marine terminal operators and common carriers. In the matter before the Federal Maritime Commission, plaintiffs argue that the defendants have failed to honor the terms of Marine Express' existing lease, and further contend that their actions constitute violations of the Shipping Act, including unjust, unreasonable and unlawful practices in violation of 46 U.S.C. § 41102(c), and unreasonable refusals to negotiate, unreasonable discrimination and undue or unreasonable prejudice and disadvantages in violation of 46 U.S.C. § 41106(1)-(3). Plaintiffs ask the Federal Maritime Commission to order these defendants to cease and desist from violations of the Shipping Act, that it put in force such practices as the Federal Maritime Commission determines lawful and reasonable and pay plaintiffs reparations of $25,000,000.

Plaintiffs argue before this court that the defendants' predatory practices have the intention of driving them out of business while having a negative effect on an economically depressed area. The president of Holland Group is also charged with attempting to extortionately extract $600,000 from plaintiffs payable in any manner. Plaintiffs allege that the defendants have locked them out of the cargo operations area, have cancelled the terminal lease contract, have refused to negotiate, have arbitrarily and unreasonably imposed wharfage, demurrage and other penalties, have overcharged docking, and have increased the rent by 833%, all in violation of the Shipping Act of 1984. (Docket No. 2, at 3.) Plaintiffs conclude that the defendants' stated objective is to prohibit plaintiffs' vessel from docking at the port of Mayagüez. The defendants on the other hand riposte that plaintiffs have been subsidized by a previously non-profit port operation lacking in fiscal reality and that Holland Group has been willing to negotiate the terms of the new lease agreement but that plaintiffs are entrenched in keeping the old rate, a rate which does not reflect the realities of the expenses of the port. The defendants rely on the recently published tariff governing port operations, and the fact that there is no current valid lease with the plaintiffs.

The focus of the preliminary injunction request and indeed the complaint is to temporarily enjoin the defendants from actions that violate the Shipping Act while the Federal Maritime Commission adjudicates the complaint filed there. This is so because the Shipping Act does not grant the Federal Maritime Commission the authority to issue a preliminary injunction during the pendency of the proceedings before it. To the contrary, the district court is granted such jurisdiction to maintain the status quo while the administrative proceedings are concluded. See 46 U.S.C. § 41306.

At the hearings held on January 16, 20, 26, and February 6, 2009, plaintiffs were represented by Jorge Blasini and J. Ramón Rivera Morales, Esqs., appearing defendants Holland Group Port Investment (Mayagüez), Inc., José González Freyre, and Antonio Jacobs, as administrators of the port of Mayagüez by attorneys José Cancio Bigas and Charles Vilaro Valderrábano; attorney Ivonne M. Menéndez Calero, representing the port of Mayagüez, announced a stipulation in relation to the motion for preliminary injunction and other matters, which stipulation was approved on the morning of January 16, 2009. (Docket No. 52.) Comprehensive and thoughtful post-hearing memoranda have been filed by plaintiffs (Docket No. 73, dated February 23, 2009) and participating defendants (Docket No. 76, dated February 25, 2009).

TESTIMONY OF MARIBEL MÁS

Maribel Más Rivera testified that she lives in Mayagüez, has a bachelor's degree in accounting, has been a licensed C.P.A. since 1993, and holds a J.D. She is the vice-president of the three plaintiff corporations, Marine Express, Inc., Corporation Ferries del Caribe, Inc., and Western Holding Group, Inc. Sixteen years ago, she was part of the group that started Marine Express, which is dedicated to the transport of maritime container cargo between Santo Domingo and Puerto Rico. Corporación Ferries del Caribe began in 1998, and was dedicated to the transportation of passengers and cargo between Santo Domingo and Mayagüez. Western Holding Group owns and...