Angelex LTD. v. United States , 723 F.3d 500 ( 2013 )

PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 13-1610
ANGELEX LTD., as owner of the M/V Antonis G. Pappadakis,
and the M/V Antonis G. Pappadakis in rem,
Petitioner - Appellee,
v.
UNITED STATES OF AMERICA; UNITED STATES COAST GUARD; UNITED
STATES CUSTOMS AND BORDER PROTECTION AGENCY,
Respondents – Appellants.
Appeal from the United States District Court for the Eastern
District of Virginia, at Norfolk. Robert G. Doumar, Senior
District Judge. (2:13-cv-00237-RGD)
Argued: June 25, 2013 Decided: July 22, 2013
Before KING, FLOYD, and THACKER, Circuit Judges.
Reversed and remanded by published opinion. Judge Thacker wrote
the opinion, in which Judge King and Judge Floyd joined.
ARGUED: Douglas Neal Letter, UNITED STATES DEPARTMENT OF
JUSTICE, Washington, D.C., for Appellants. George Michael
Chalos, CHALOS & CO, P.C., Oyster Bay, New York, for Appellee.
ON BRIEF: Neil H. MacBride, United States Attorney, Alexandria,
Virginia, Stuart F. Delery, Acting Assistant Attorney General,
Matthew M. Collette, Anne Murphy, UNITED STATES DEPARTMENT OF
JUSTICE, Washington, D.C., for Appellants.
THACKER, Circuit Judge:
The United States of America, the United States Coast
Guard, and the United States Customs and Border Protection
Agency (collectively, “Respondents” or the “government”) appeal
the district court’s order, which, upon an emergency petition
filed in the Eastern District of Virginia, (1) altered the terms
of a bond the Coast Guard had fixed for the release of a
detained ship that was under investigation; and (2) restricted
the types of penalties the government could seek for the ship’s
potential violations of certain ocean pollution prevention
statutes. As explained below, this matter was not subject to
review in the district court because the Coast Guard’s actions
were committed to agency discretion by law. As a result, the
district court lacked jurisdiction to consider the petition and
we, therefore, reverse and remand for dismissal under Federal
Rule of Civil Procedure 12(b)(1).
I.
A.
We begin with the international and domestic legal
landscape underlying this matter. The United States is a
signatory to MARPOL, which is a multi-national treaty aimed at
“achiev[ing] the complete elimination of international pollution
of the marine environment by oil and other harmful substances
and the minimization of accidental discharge of such
2
substances[.]” 1 Protocol of 1978 Relating to the International
Convention for the Prevention of Pollution from Ships, Feb. 17,
1978, 1340 U.N.T.S. 61, 128. MARPOL requires member States to
prohibit violations of the treaty through domestic laws, and to
provide penalties “adequate in severity to discourage violations
of [MARPOL].” Id. at 186.
In fulfilling its obligations pursuant to MARPOL,
Congress enacted the Act to Prevent Pollution from Ships
(“APPS”). See 33 U.S.C. §§ 1901-15. According to APPS, “the
Secretary shall administer and enforce” MARPOL, as well as
statutes and regulations designed to preserve the marine
environment. Id. § 1903(a). The term “Secretary” is defined as
“the Secretary of the department in which the Coast Guard is
operating.” Id. § 1901(a)(11). At all times relevant to this
appeal, the Coast Guard operated under the Department of
Homeland Security (“DHS”).
The regulations attendant to APPS require, in relevant
part, that certain oil-carrying ships must “maintain” an Oil
Record Book (“ORB”), and
1
The term “MARPOL” refers to two international conventions:
the 1973 International Convention for the Prevention of
Pollution from Ships, and the Protocol of 1978 Relating to the
International Convention for the Prevention of Pollution from
Ships.
3
[e]ntries shall be made in the [ORB] . . . whenever
any of the following machinery space operations take
place on any ship to which this section applies -- (1)
Ballasting or cleaning of fuel oil tanks; (2)
Discharge of ballast containing an oily mixture or
cleaning water from fuel oil tanks; (3) Disposal of
oil residue; and (4) Discharge overboard or disposal
otherwise of bilge water that has accumulated in
machinery spaces.
33 C.F.R. § 151.25(a), (d); see also United States v. Ionia
Mgmt. S.A., 555 F.3d 303, 309 (2d Cir. 2009) (holding that “the
APPS’s requirement that subject ships ‘maintain’ an ORB, 33
C.F.R. § 151.25, mandates that these ships ensure that their
ORBs are accurate (or at least not knowingly inaccurate) upon
entering the ports or navigable waters of the United States”);
United States v. Jho, 534 F.3d 398, 403 (5th Cir. 2008) (“[W]e
read the requirement that an oil record book be ‘maintained’ as
imposing a duty upon a foreign-flagged vessel to ensure that its
oil record book is accurate (or at least not knowingly
inaccurate) upon entering the ports of navigable waters of the
United States.”). A person who knowingly violates APPS or its
attendant regulations commits a Class D felony. See 33 U.S.C.
§ 1908(a).
B.
There are two Petitioners in this appeal: the Antonis
G. Pappadakis (“Pappadakis” or “the vessel”), an ocean-going
bulk cargo carrier, which was built in 1995 and registered in
Malta; and Angelex Ltd. (“Angelex”), a company that purchased
4
the vessel on March 9, 2007. The vessel is Angelex’s sole
income-earning asset. Angelex contracted with a third party,
Kassian Maritime Navigation Agency, Ltd. (“Kassian”), a Greek
company, to serve as the vessel’s operator. Kassian also
operates several other cargo ships and is not a petitioner in
this appeal. 2
The events giving rise to this action began on April
14, 2013. On that day, the Pappadakis arrived at the Norfolk
Southern Terminal in Norfolk, Virginia, and loaded a cargo of
coal for delivery to a customer in Brazil. The next day, on
April 15, 2013, Coast Guard inspectors conducted a routine Port
State Control inspection of the Pappadakis. While Coast Guard
personnel were aboard the vessel, a crewmember passed a note to
one of the inspectors, which stated that the vessel’s oily water
separator had been bypassed and oily bilge water had been
discharged overboard. The letter also alleged that this
discharge was not reported in the ORB. Upon further inspection,
the Coast Guard discovered that the Pappadakis’s oily water
2
Kassian was previously prosecuted in 2007 for violating
APPS in materially identical circumstances to those presented
here. Kassian pleaded guilty, paid a fine of $1 million, and
received a sentence of 30 months probation. See United States
v. Kassian Maritime Navigation Agency, No. 3:07-cr-0048 (M.D.
Fla. Aug. 17, 2007), ECF No. 133.
5
separator was inoperable, the vessel had likely been discharging
bilge water overboard, and the ORB was incomplete or falsified,
in contravention of MARPOL and APPS.
The Coast Guard referred its findings to the
Department of Justice for possible prosecution. It also
informed Angelex that the Pappadakis’s clearance to depart
Norfolk had been withheld, and negotiations for a security
agreement between the Coast Guard and counsel for Angelex began. 3
After a few days, the negotiations stalled with the
Coast Guard requiring the posting of a $2.5 million bond, a
number of non-monetary obligations intended to ensure the
availability and cooperation of the crewmembers and officials,
and consent to the United States’s continued jurisdiction over
the matter. Unable to further negotiate with the Coast Guard,
and claiming to be losing money by the day, Angelex and the
3
APPS provides, as codified as 33 U.S.C. § 1908(e),
If any ship subject to the MARPOL Protocol . . . or
this chapter, its owner, operator, or person in charge
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 the Treasury, upon the
request of the Secretary [of the DHS], shall refuse or
revoke [departure] clearance . . . . Clearance may be
granted upon the filing of a bond or other surety
satisfactory to the Secretary.
33 U.S.C. § 1908(e) (emphasis supplied).
6
Pappadakis (in rem) then filed an emergency petition on April
25, 2013, in the Eastern District of Virginia, seeking immediate
release of the Pappadakis or imposition of an appropriate bond
(the “Petition”). 4
Specifically, the Petition asked the court “to fix an
amount of security for release of the [Pappadakis]” because (1)
the Coast Guard was not authorized and was wrongfully
withholding clearance; (2) the vessel was improperly detained;
(3) the amount of surety bond being demanded was “unjustified as
a matter of fact, law, equity and good conscience and beyond the
Coast Guard’s authority”; (4) such actions were “causing
serious, irreparable harm” to Angelex and the vessel; and (5)
the government was improperly making Angelex “act[] as the
government’s proxy in detaining [the crewmembers] for an
indefinite and unlimited amount of time, without lawful
authority and in violation of their rights to due process of
law.” J.A. 7.
4
The Petition, entitled “Emergency Petition and Motion for
Release of the Motor Vessel ‘Antonis G. Pappadakis,’ or
alternatively, to Fix an Appropriate Bond Amount for the
Immediate Release of the Vessel and to Protect the Rights,
Liberties and Freedoms of the Vessel’s Crew,” is found at J.A.
6-33. (Citations to the “J.A.” refer to the contents of the
Joint Appendix filed by the parties in this appeal.)
7
C.
The district court held a hearing on the Petition on
May 6, 2013. It recessed court and encouraged the parties to
come up with an agreeable bond determination. The parties met
for several hours and ultimately reached an agreement of $1.5
million bond and other agreed conditions, subject to approval
from the Coast Guard Headquarters in Washington, D.C.
(“Headquarters”). But when the court reconvened, the government
attorney advised that the settlement had been rejected by
Headquarters. According to the district court, that attorney
also advised that pursuant to guidance from Headquarters, the
Coast Guard “firmly refuses to accept less than the $2.5 million
bond it had previously offered.” J.A. 629. 5
On May 8, 2013, the district court filed a memorandum
opinion, explaining that it possessed subject matter
jurisdiction based on the Administrative Procedure Act, 5 U.S.C.
§§ 551, et seq. (the “APA”), and federal question jurisdiction,
28 U.S.C. § 1331; or, in the alternative, in rem admiralty
jurisdiction, 28 U.S.C. § 1333. It then determined that the
government had acted unconstitutionally and outside its
5
At oral argument, there was dispute amongst the parties as
to whether or not negotiations continued beyond the Coast
Guard’s take it or leave it offer of a $2.5 million bond.
Regardless, this debate does not alter our analysis.
8
statutory authority by demanding excessive bond for clearance
and by insisting that any security agreement include certain
non-monetary conditions. See Angelex Ltd. v. United States,
2:13-cv-00237 (E.D. Va. May 8, 2013), ECF No. 21 (J.A. 624-39).
In a contemporaneous four-page order, the district court set
forth new bond conditions. Specifically, the order directed
Angelex to post a surety bond in the sum of $1.5 million. The
order specified that the government could initiate either civil
or criminal proceedings, but not both, and established other
bond conditions, including the following:
[T]he owner will maintain in the Eastern District of
Virginia, at the owner’s cost and expense, [six named
officers and] crew members of said vessel for no
greater than one month, and said crew members shall be
functionally detained under material witness status so
that their deposition may be taken. . . .
[T]he owner will return, at its cost and expense,
Gerasimos Patsalias, Master of said vessel, for either
the civil or criminal proceedings (only one or the
other) brought against Petitioners under [APPS]. . . .
[T]he owner agrees to provide Lt. Elizabeth Oliveira,
of the United States Coast Guard, with the name,
address and telephone number of the hotel or other
place where each of said ship’s officers and crew
members may be located when housed pursuant to the
conditions of said bond in the Eastern District of
Virginia.
Upon the posting of . . . the said bond all parties to
this action shall take all actions necessary to
immediately release said vessel from arrest and allow
it to proceed from this port and issue any and all
permits that may be necessary to allow it to proceed
out of this port in its trade.
9
Id., ECF No. 20 at 2-3 (J.A. 621-22).
On May 9, 2013, the government requested that the
district court temporarily stay the order, simultaneously filing
a notice of appeal and requesting a stay from this court. The
district court denied the stay motion on May 10, 2013. That
same day, this court granted a stay that was extended, on May
16, 2013, to encompass the pendency of this appeal. Thereafter,
we implemented an expedited briefing schedule and heard argument
at the Greenbrier County Courthouse in Lewisburg, West Virginia,
on June 25, 2013. 6
Because the district court’s order enjoined the United
States to comply with the conditions set forth therein, we
possess jurisdiction pursuant to 28 U.S.C. § 1292(a)(1). In
addition, insofar as the order constitutes the final decision of
the district court, we possess jurisdiction pursuant to 28
U.S.C. § 1291.
6
On May 22, 2013, the grand jury in the Eastern District of
Virginia indicted Angelex, Kassian, and the vessel’s chief
engineer, Lambros Katsipis, on multiple charges, including
conspiracy to illegally discharge oily water into the sea,
presentation of a falsified ORB, and obstruction of justice.
See United States v. Kassian Maritime Navigation Agency, Inc.,
No. 2:13-cr-00070 (E.D. Va. May 22, 2013), ECF No. 12.
10
II.
In this appeal, the government challenges the subject
matter jurisdiction of the district court, an issue that we
review de novo. See Dixon v. Coburg Dairy, Inc., 369 F.3d 811,
815 (4th Cir. 2003) (en banc).
III.
The district court asserted jurisdiction over this
matter under the APA and pursuant to the court’s admiralty
jurisdiction. For the following reasons, neither provides the
court with the power to review the Coast Guard’s actions in this
case.
A.
The APA
1.
“Reviewability is a threshold jurisdictional question
that must be determined before the merits of the case may be
reached.” Sierra Club v. Larson, 882 F.2d 128, 130 (4th Cir.
1989). The APA “is not a jurisdiction-conferring statute.” Lee
v. U.S. Citizenship and Immigration Servs., 592 F.3d 612, 619
(4th Cir. 2010) (internal quotation marks omitted). “[T]he
jurisdictional source for an action under the APA is the federal
question statute,” and the APA’s judicial provisions provide “a
limited cause of action for parties adversely affected by agency
action.” Id. (citations and internal quotation marks omitted).
11
Because “reviewability is a threshold jurisdictional question,”
however, we must examine reviewability through the lens of the
APA to determine whether the district court properly exercised
its jurisdiction. Larson, 882 F.2d at 130.
The APA requires a reviewing court to “hold unlawful
and set aside agency action, findings, and conclusions found to
be . . . arbitrary, capricious, an abuse of discretion, or
otherwise not in accordance with law[.]” 5 U.S.C. § 706(2)(A).
The APA further provides, “[a]gency action made reviewable by
statute and final agency action for which there is no other
adequate remedy in a court are subject to judicial review.” Id.§ 704. 7 Of significance here, the APA provides two exceptions to
judicial review of agency actions: when “statutes preclude
judicial review,” or when “agency action is committed to agency
discretion by law.” Id. § 701(a)(2). The government argues
that both exceptions apply here, and in any event, there is no
“final agency action” of the Coast Guard.
Because the action that occurred in this case is
explicitly committed to the discretion of the Coast Guard
7
“Agency action” is defined as “the whole or part of an
agency rule, order, license, sanction, relief, or the equivalent
or denial thereof, or failure to act[.]” 5 U.S.C. § 551(13);
see also id. § 701(b)(2).
12
pursuant to APPS, we conclude that this matter was unreviewable,
and thus, the district court lacked subject matter jurisdiction.
a.
The idea that courts cannot review actions committed
to agency discretion by law was at the forefront of two seminal
Supreme Court cases: Citizens to Preserve Overton Park v.
Volpe, 401 U.S. 402 (1971), and Heckler v. Chaney, 470 U.S. 821(1985). Volpe explained that § 701(a)(2) “is a very narrow
exception” and “applicable in those rare instances where
statutes are drawn in such broad terms that in a given case
there is no law to apply.” Volpe, 401 U.S. at 410. Heckler
further elucidated, however, that “even where Congress has not
affirmatively precluded review, review is not to be had if the
statute is drawn so that a court would have no meaningful
standard against which to judge the agency’s exercise of
discretion” and “no judicially manageable standards . . . for
judging how and when an agency should exercise its
discretion[.]” 470 U.S. at 830.
Our resolution of this matter is further informed by
Speed Mining v. Federal Mine Safety & Health Review Commission,
528 F.3d 310 (4th Cir. 2008). Speed Mining, an owner-operator
of a coal mine in West Virginia, petitioned for review of a
decision from the Federal Mine Safety and Health Review
Commission, which upheld citations for a crane hoist accident
13
that were issued by the Secretary of Labor. Speed Mining argued
that, because the accident was caused by independent
contractors, the Secretary’s decision to cite Speed Mining
itself was an abuse of discretion. See id. at 311.
This court held,
It is settled law in this and other circuits that the
Secretary possesses the discretionary authority to
cite owner-operators . . . for safety violations
committed by independent contractors. Moreover, there
are no manageable standards in the Mine [Safety and
Health] Act that enable us to review the Secretary’s
discretionary exercise of her enforcement authority.
Speed Mining, 528 F.3d at 311. As a result, “the Secretary’s
discretionary decision to cite [Speed Mining] for the crane
hoist accident is ‘committed to agency discretion by law,’ and
therefore unreviewable.” Id. at 317. Additionally, “[t]he
discretionary decision as to which operator to cite for a Mine
Act violation rests on a ‘complicated balancing of a number of
factors which are peculiarly within’ the Secretary’s
expertise[.]” Id. at 318.
b.
The circumstances in this case substantially mirror
those described by the Supreme Court in Heckler and our court in
Speed Mining. By its Petition, Angelex asserts that the Coast
Guard acted “arbitrarily, capriciously, and unreasonably” in
detaining the Pappadakis, setting a bond which Angelex cannot
post, and demanding a security agreement with terms that are not
14
authorized by the operative statute, 33 U.S.C. § 1908(e). J.A.
7. But § 1908(e) grants the Coast Guard broad discretion to
deny bond altogether, and it can dictate the terms of any bond
that it may accept. See Giuseppe Bottiglieri Shipping Co. v.
United States, 843 F. Supp. 2d 1241, 1248 (S.D. Ala. 2012)
(“Congress did not require the Coast Guard to accept a bond or
other surety in any case,” or “grant an absolute right to a
vessel owner to obtain departure clearance[.]”).
Furthermore, the language of § 1908(e) does not
provide any “judicially manageable standards” by which to review
the Coast Guard’s actions. Heckler, 470 U.S. at 830. There are
no specific guidelines as to when clearance should or should not
be granted in APPS, and Congress did not “outline (even in the
broadest brushstrokes) the parameters for what form or amount a
bond or other surety should take.” Giuseppe, 843 F. Supp. 2d at
1248. The reasonableness of the Coast Guard’s decision cannot
be determined pro forma in a vacuum, but only in the context of
the standards intended by Congress. As a result, this is a
situation where the statute at issue is “‘drawn in such broad
terms that . . . there is no law to apply.’” Heckler, 470 U.S.
at 830 (quoting Volpe, 401 U.S. at 410); see also Larson, 882
F.2d at 132-33 (holding that federal court could not review
Federal Highway Administration’s (FHWA) decision not to enforce
certain provisions of the Highway Beautification Act (HBA),
15
explaining, “[t]he relevant question here is whether the HBA
provides standards for ascertaining when the FHWA should
recommend that formal enforcement proceedings be commenced or
when the Secretary is required to make a determination of
compliance or non-compliance or to institute an enforcement
action. As to these points, the statute is silent. Therefore,
there is no law to apply and appellant has failed to overcome
the presumption of unreviewability.”).
2.
Despite these bars to review, the district court
nonetheless decided it possessed jurisdiction to review the
Coast Guard’s bond determination because, even when Congress has
committed a specific decision to an agency’s discretion by law,
“the federal courts retain jurisdiction to review discretionary
agency actions for abuse of discretion.” J.A. 633 (citing
Elecs. of N.C., Inc. v. Se. Power Admin., 774 F.2d 1262, 1267
(4th Cir. 1985); Littell v. Morton, 445 F.2d 1207, 1211 (4th
Cir. 1971)). But, as the government points out, to adopt this
argument would be to “eliminate Section 701(a)(2) from the
statute, by providing ‘abuse of discretion’ review for all
discretionary agency decisions, regardless of whether Congress
has committed them exclusively to the agency or not.”
Appellant’s Br. 40. In fact, Heckler rejected this very
argument, explaining that even though the APA sets forth an
16
“abuse of discretion” review of agency action in 5 U.S.C. § 706,
the § 701(a)(2) exception for actions committed to agency
discretion still applies to “a separate class of cases,” as
here, in which a statute “is drawn so that a court would have no
meaningful standard against which to judge the agency’s exercise
of discretion.” Heckler, 470 U.S. at 830.
Angelex asserts, “the very purpose for Angelex’s
pursuit of judicial intervention -- and a significant basis for
the District Court’s decision -- was the Coast Guard’s actions
beyond its statutory authority and its violation of Angelex’s
constitutional due process rights.” Appellees’ Br. 33. Angelex
contends that because it raises the “indisputable existence of
specific statutory construction issues, various violations of
its due process rights, and other constitutional concerns as a
result of the Coast Guard’s overreaching of its statutory
authority,” there are clearly “manageable standard[s]” to apply
here. Id. at 36.
We are cognizant of this court’s declaration,
[E]ven where action is committed to absolute agency
discretion by law, courts have assumed the power to
review allegations that an agency exceeded its legal
authority, acted unconstitutionally, or failed to
follow its own regulations, but they may not review
agency action where the challenge is only to the
decision itself.
Elecs. of N.C., 774 F.2d at 1267 (internal quotation marks
omitted). Nonetheless, we disagree with Appellees’
17
characterization of the Petition as an attack on the statutory
authority or constitutionality of the Coast Guard’s actions.
First, Appellees cannot with a straight face argue that the
Coast Guard has acted outside the bounds of § 1908(e). Indeed,
those bounds are quite limitless. The Coast Guard may demand a
low bond, a high bond, or may refuse to grant clearance
altogether. See 33 U.S.C. § 1908(e) (“Clearance may be granted
upon the filing of a bond or other surety satisfactory to the
Secretary.” (emphases added)); see also 46 U.S.C. § 60105(b)
(“[A] vessel that is not a vessel of the United States shall
obtain clearance from the Secretary before proceeding from a
port of place in the United States.” (emphasis added)).
Further, once the Coast Guard makes its clearance determination,
the “Secretary of the Treasury, upon the request of the
Secretary [of the DHS], shall refuse or revoke [departure]
clearance[.]” Id. In other words, if the Coast Guard requests
that clearance be refused or revoked, it is mandatory that such
action occur. In this case, the Coast Guard requested that the
Customs and Border Protection (“CBP”) withhold the Pappadakis’s
departure clearance, and the “Customs hold was approved by CBP
on April 19, 2013.” J.A. 68. This action is specifically
permitted in the text of § 1908(e).
Likewise, Angelex’s attempt at turning this matter
into a constitutional challenge does not make the matter
18
reviewable and thus, vest the district court with jurisdiction.
Specifically, Angelex asserts that the government violated its
due process rights by indefinitely detaining the Pappadakis.
This attempt at bypassing the reviewability exception in
§ 701(a)(2) falls flat. As Appellants observed, Angelex’s case
is “nothing more than a direct review of the specific conditions
sought by the Coast Guard in order to allow departure,”
Appellant’s Rep. Br. 8, and we “may not review agency action
where the challenge is only to the decision itself,” Elecs. of
N.C., 774 F.2d at 1267. Furthermore, we reiterate that the
Coast Guard’s actions are specifically endorsed by the text of
§ 1908(e). The release of the vessel upon the filing of a bond
or other surety is permissive, not mandatory, and is contingent
only upon conditions “satisfactory to the Secretary.” 33 U.S.C.
§ 1908(e). In short, the Coast Guard’s stringent conformity to
§ 1908(e) simply does not give rise to a reviewable claim.
3.
Finally, APPS contains a built-in safeguard to
governmental abuses, which further convinces us that Angelex’s
Petition is out of place and time. In addition to the criminal
and civil penalties that APPS authorizes the United States to
seek, APPS provides for compensation for loss or damage as a
result of unreasonable detention by the Coast Guard. Section
1904(h) provides, “A ship unreasonably detained or delayed by
19
the Secretary acting under the authority of this chapter is
entitled to compensation for any loss or damage suffered
thereby.” 33 U.S.C. § 1904(h). This provision is, as the
government asserts, an “after-the-fact damages remedy against
the United States for unreasonable detention or delay.”
Appellant’s Br. 37. This safeguard gives Appellees a remedy,
distinct from the unauthorized injunctive relief they now seek.
For these reasons, the Coast Guard’s decisions
regarding bond conditions with regard to the Pappadakis are
unreviewable, and the district court thereby did not possess
subject matter jurisdiction under the APA.
B.
Admiralty Jurisdiction
Judicial review of the Coast Guard’s decision on bond
and withholding of clearance is likewise unavailable to Angelex
under the district court’s in rem admiralty jurisdiction. The
district court determined that the withholding of the Pappadakis
for an indefinite period of time, subject to unattainable bond
conditions “is tantamount to an arrest of the ship.” J.A. 634.
Likening such an arrest to a “proper maritime arrest,” the
district court asserted that the arrest of the vessel in rem
falls within its admiralty jurisdiction. Id.Pursuant to 28 U.S.C. § 1333(1), district courts have
jurisdiction over “[a]ny civil case of admiralty or maritime
20
jurisdiction[.]” Pursuant to the Supplemental Admiralty and
Maritime Claims Rule E, such admiralty jurisdiction “applies to
actions in personam with process of maritime attachment and
garnishment, actions in rem, and petitory, possessory, and
partition actions . . . .” Fed. R. Civ. P. Adm. Rule E(1)
(emphasis added). An “in rem suit against a vessel is . . .
distinctively an admiralty proceeding, and is hence within the
exclusive province of the federal courts.” Am. Dredging Co. v.
Miller, 510 U.S. 443, 446-47 (1994).
Appellees unreasonably stretch the law to classify
this matter as an in rem action. The Coast Guard’s withholding
of the Pappadakis’s departure clearance is not tantamount to an
attachment pursuant to a civil action, such as a maritime lien. 8
See California v. Deep Sea Research, Inc., 523 U.S. 491, 501
(1998) (observing that maritime jurisdiction encompasses
“maritime causes of action begun and carried on as proceedings
in rem, that is, where a vessel or thing is itself treated as
the offender and made the defendant by name or description in
order to enforce a lien” (internal quotation marks omitted)).
The Coast Guard is properly withholding the departure clearance
8
“A maritime lien is a special property right in a ship
given to a creditor by law as security for a debt or claim,” and
it attaches “the moment the debt arises.” Dresdner Bank AG v.
M/V Olympia Voyager, 465 F.3d 1267, 1272 (11th Cir. 2006)
(internal quotation marks and alterations omitted).
21
pursuant to its authority under § 1908(e), and not pursuant to
any rule governing admiralty actions in rem.
Appellees also stretch the facts. They first cite to
the Agreement, claiming that the demands therein “insist[] upon
. . . hav[ing] the surety bond stand in place of the Vessel for
the potential criminal fine or civil penalty imposed.”
Appellees’ Br. 43. There is simply no support for this; in
fact, the Agreement itself states, “[i]n consideration of the
Surety Bonds, the United States agrees not to cause the arrest
of the Vessel, nor the arrest, seizure or attachment or any
other vessel owned, operated, managed or chartered by the Owner
or Operator for the Alleged Violations[.]” J.A. 185.
Appellees then liken the Coast Guard’s withholding of
clearance to a “functional arrest” that was done in order to
“provide the government with the ability to obtain financial
security for a potential fine or penalty.” Appellees’ Br. 43
n.29. In so arguing, Appellees once again twist the facts such
that what is actually discretionary action on the part of the
Coast Guard under APPS is now considered an offense to the ship
itself. Further, the Coast Guard’s own regulations provide,
statutes authorizing the Coast Guard to request denial
or revocation of CBP clearance are not dependent on,
limited in scope by, or equivalent to, the laws and
procedures applicable to the assertion of an in rem
claim against the vessel. Therefore, applying rules
and practices developed with regard to asserting in
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rem claims against vessels under admiralty law is
inappropriate and not required.
69 Fed. Reg. 40400-01, 40401 (Jul. 2, 2004). In short, try as
they might to make it so, Appellees’ argument on this point
simply does not fit either the law or the facts.
IV.
Pursuant to the foregoing, we reverse and remand for
dismissal of the Petition for lack of subject matter
jurisdiction, pursuant to Federal Rule of Civil Procedure
12(b)(1).
REVERSED AND REMANDED
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