The opinion of the court was delivered by: HOGAN
THOMAS F. HOGAN, UNITED STATES DISTRICT JUDGE
On November 16, 1990, the Court heard argument on the motions of the defendants and defendant-intervenors to dismiss the above-captioned case. The Court granted those motions from the bench and issues this written opinion incorporating its bench ruling.
On October 11, 1990, Energy Transportation Group (ETG), initiated this action against the Secretary of the Department of Transportation (the Secretary) and the Administrator of the Maritime Administration of the United States Department of Transportation (MARAD). The complaint challenges the legality of a settlement agreement entered into between MARAD; Cabot LNG Shipping Corporation (Cabot); Argent Marine I, Inc.; Argent Marine II, Inc.; Argent Marine III, Inc.; Argent Marine Services, Inc.; Argent Marine Operations, Inc.; Argent Chartering I, Inc.; Argent Chartering II, Inc.; Argent Chartering III, Inc.; and Argent Management Company (the Argent companies); and Shell International Marine Limited; Shell Gas Nigeria, B.V.; Shell Bermuda (Overseas) Limited; and Shell International Gas Limited (Shell). The settlement agreement is the result of protracted litigation involving the disposal of three liquified natural gas (LNG) tankers by MARAD. The agreement provides for the sale of one vessel to Cabot, two vessels to the Argent companies, and the time charter of two of the vessels to Shell. The day after ETG initiated this action, Cabot, the Argent companies, and Shell filed motions to intervene. On October 15, 1990, this Court granted, as unopposed, the motions of Cabot and the Argent companies. On October 24, 1990, the Court granted Shell's opposed motion to intervene, holding that Shell satisfied the requirements for intervention as of right under rule 24(a)(2) of the Federal Rules of Civil Procedure.
This case has as its genesis MARAD's 1986 acquisition of three LNG vessels after the owner/obligor defaulted on loans made pursuant to the Federal Ship Mortgage Insurance program created by Title XI of the Merchant Marine Act of 1936, 46 U.S.C. app. § 1271, et seq. Because the vessels were built with Construction Differential Subsidies (CDS), under the Merchant Marine Act they may only be sold to U.S. citizens. MARAD solicited bids for the vessels in April 1986 and April 1987, but was unsuccessful in securing a satisfactory purchaser. In January 1987, Shell inquired about the vessels and MARAD's position regarding options. Shell's interest in the vessels stemmed from its involvement in a project to develop a Nigerian source of natural gas. Shell inspected one of the vessels, the GAMMA, in August 1987.
In September 1987, MARAD issued a third solicitation, seeking bids by October 12, 1987. The solicitation expressly required that bidders must qualify as U.S. citizens under 46 U.S.C. app. § 1244. Administrative Record in Cabot LNG Corp. v. Skinner, et al., No. 89-2711 (A.R. Cabot), at 9. On October 9, 1987, Shell submitted a proposal for a three-year purchase option on behalf of a U.S. citizen nominee to be named later. Id. at 10. Cabot also expressed interest before the October 12 deadline, but indicated that it was not yet ready to submit a firm bid. Id. ETG did not submit a bid or expression of interest in the vessels. On October 16, 1987, MARAD issued a follow-up solicitation, inviting interested parties to submit final offers by October 30, 1987. Id. at 11. Cabot again expressed an interest but did not make a firm offer. Id. at 12. ETG alleges that it did not receive this solicitation.
On January 14, 1988, MARAD issued another notice to interested parties, indicating that it had reached a "tentative agreement with one of the parties who has been able to meet all of the necessary requirements" and that unless another party could "fully meet the requirements . . . by January 22, 1988, Marad could likely accept an offer shortly thereafter." Id. at 15. ETG alleges that it did not receive this notice.
Not having received any substantive response to its January 14 notice, MARAD approved Shell's offer on February 17, 1988. MARAD announced that it would award the vessels to a U.S. citizen qualified under § 2 of the Shipping Act of 1916, 46 U.S.C. app. § 802, to be named by Shell. Id. at 17. On February 23, 1988, MARAD issued a notice that it had "accepted an offer and the Vessels are no longer available." Id. On May 31, 1988, MARAD amended its February 17, 1988 approval of Shell's offer to require the purchase option agreements with the U.S. citizen nominee to be entered into by October 31, 1988. Failing this, Shell would be required to make prepayments of option fees. Id. at 24. On June 16, 1988, Cabot submitted a firm offer for the vessels. Id. at 28. MARAD responded on July 1, 1988, stating that the vessels were no longer available. Id. Shell subsequently named the Argent companies as its U.S. citizen nominees and on October 18, 1988, MARAD and the Argent companies executed the purchase option agreements. Id. at 39.
On August 13, 1989, the Maritime Subsidy Board (MSB) approved the transfer of title to the vessels to the Argent companies, subject to the determination of MARAD's chief counsel that the Argent companies were U.S. citizens. Id. at 61. Shortly thereafter, Cabot petitioned the Secretary to review the MSB's decision, alleging that the Argent companies were not U.S. citizens and that the bidding procedures had been flawed. The Secretary allowed the time period for review to elapse and Cabot brought suit in this Court. Cabot LNG Corp. v. Skinner, et al., No. 89-2711 (filed September 29, 1989). The Argent companies were permitted to intervene. On October 31, 1989, MARAD initiated an investigation into the Argent companies' citizenship status. On March 5, 1990, MARAD issued a decision determining that the Argent companies had failed to maintain U.S. citizenship between October 1988 and December 15, 1988. MARAD therefore terminated the option agreements, effective April 5, 1990. The Argent companies appealed this decision to the U.S. Court of Appeals for the District of Columbia Circuit on March 22, 1990. Argent Marine I, Inc., et al. v. United States, No. 90-1147 (filed March 22, 1990). Shell did not join the Argent companies in their appeal; rather, it filed a separate lawsuit in this Court on April 4, 1990. Shell Int'l Marine Limited, et al. v. Maritime Administration of the United States, No. 90-0788 (filed April 4, 1990). This Court consolidated the Cabot and Shell cases on April 23, 1990.
Before MARAD issued its March 5, 1990 opinion, ETG had begun to express an interest in the vessels and in the Cabot litigation. On February 22, 1990, ETG wrote to the Maritime Administrator, Captain Warren Leback, advising him that ETG would be interested in purchasing the vessels if the sale to the Argent companies were cancelled. ETG stated that it would be willing to negotiate a price of up to $ 80 million per vessel. ETG's Proposed Findings of Fact and Conclusions of Law, Exhibit 16. Also in February, ETG filed its first motion to intervene in the Cabot litigation, alleging an interest in seeing that the vessels not be sold to a foreign competitor or controlled by a foreign competitor. While this motion was pending, MARAD issued its March 5, 1990 opinion that the Argent companies had failed to maintain citizenship. On March 22, 1990, at a status call and hearing on ETG's motion, MARAD represented to this Court that it was interested in rebidding the vessels. The Court then denied ETG's motion in part because of concerns about whether ETG's motion was timely, in part because of concerns about whether ETG had standing, and in part because the government represented to the Court that it would adequately represent ETG's interests.
On April 24, 1990, ETG filed its second motion to intervene, alleging the same interests. On May 17, 1990, the Court again denied ETG's motion on the same grounds of timeliness, standing, and adequate protection of ETG's interests. Meanwhile, ETG also attempted to intervene in the Argent companies' appeal to the District of Columbia Circuit. The appellate court denied intervention on July 16, 1990, on the grounds that ETG had not submitted a timely bid for the vessels and ETG's interests were protected by MARAD's position.
At a July 31, 1990 status conference, the parties to the Cabot and Shell consolidated action informed the Court that they were in the midst of settlement negotiations. On August 24, 1990, the parties filed a joint status report indicating that they had made substantial progress toward settlement and hoped to execute an agreement by September 12, 1990. ETG was not invited to participate in the settlement negotiations. Its attempts to meet with MARAD to bring about a public rebidding of the vessels or to pursue a purchase of the vessels were unsuccessful. On September 12, 1990, the parties submitted a second joint status report, indicating that settlement was nearly completed. On September 19, 1990, the parties presented the Court with a third status report and accompanying settlement agreement executed the previous day by all of the existing parties. The settlement agreement provides for MARAD to sell two of the LNG vessels to Argent and one to Cabot, for a price of about $ 15 million per vessel. It also provides for the time charter of two of the vessels to Shell. On October 10, 1990, ETG petitioned the Secretary for a review of MARAD's action. On October 25, 1990, ETG submitted a written bid for the vessels, offering to pay roughly $ 25 million per vessel. The offer stated that it would remain in effect until November 14, 1990, or the termination of the Secretary's review, whichever was earlier. The Secretary issued an opinion on November 14, 1990, denying review of MARAD's decision to enter into the settlement agreement. The Department of Justice also approved MARAD's entry into the agreement.
ETG's amended complaint
attacks the legality of the settlement agreement through four separate counts. First, it alleges that MARAD's entry into the settlement agreement on October 18, 1990 was arbitrary and capricious, an abuse of discretion, and otherwise not in accordance with law. Second, it alleges that the settlement would result in de facto ownership and control of the vessels by non-U.S. citizens, in violation of the Merchant Marine Act of 1936. Third, it alleges that the settlement agreement would result in an operator of the vessels being a noncitizen, also in violation of law. Finally, it alleges that the Department of Justice's conduct in approving the settlement agreement was arbitrary and capricious, an abuse of discretion, and otherwise not in accordance with law.
The defendants make a series of arguments for dismissal of ETG's complaint. First, they argue that ETG lacks standing to bring this complaint, just as it lacked standing to intervene in the litigation that resulted in the settlement agreement now being challenged. Second, they argue that the Secretary has complete discretion under the applicable statute to approve the sale of vessels acquired by default according to whatever terms he sets. Third, they argue that the Hobbs Act, 28 U.S.C. § 2342, vests exclusive jurisdiction over ETG's citizenship challenge in the court of appeals. Fourth, they argue that ETG's challenge to the citizenship of the operator of the vessels is moot because a new U.S.-citizen operator has been named. Finally, they argue that the decision of the Attorney General to approve settlements is nonreviewable because it is committed to the discretion of the executive branch.
The parties' dispute over standing is essentially a dispute over how to characterize the settlement agreement and resulting sale. ETG vociferously argues that MARAD's entry into the September 18, 1990 agreement constituted a negotiated sale that was "separate and distinguishable from the 1987-88 bidding and solicitation." ETG Opposition at 2. ETG refers to the settlement agreement as the "1990 sale" and argues that it has standing as both a "disappointed bidder" and as a "frustrated competitor." ETG argues that it is a disappointed bidder because it submitted an expression of interest and an actual bid to MARAD in 1990, both of which were rejected, and because it was precluded from participating in the settlement agreement and ...