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St. Lawrence Seaway Pilots' Association v. Collins

February 28, 2005


The opinion of the court was delivered by: Reggie B. Walton United States District Judge


This lawsuit was initiated by the St. Lawrence Seaway Pilots' Association ("SLSPA"),*fn1 the Lakes Pilots Association, Inc. ("LPA"),*fn2 and the Western Great Lakes Pilots Association ("WGLPA") (collectively "plaintiffs" or "pilots' association") pursuant to the Administrative Procedure Act ("APA"), 5 U.S.C. § 706(1).*fn3 Complaint Seeking Mandatory Injunctive Relief for Agency Action Unlawfully Withheld, Declaratory Relief, and Review of Agency Action ("Compl."). The plaintiffs allege that the defendant, Thomas H. Collins, Commandant of the United States Coast Guard, has violated the APA by "fail[ing] to discharge [his] legal duty to review and, where appropriate, recalculate pilotage rates annually pursuant to the Great Lakes Pilotage Act of 1960, 46 U.S.C. §§ 9301-9308." Compl. ¶ 1. Currently before the Court are dispositive motions filed by both parties.*fn4 For the reasons set forth below, this Court denies both the plaintiffs' motion for summary judgment and the defendant's motion to dismiss.

I. Background

(A) Statutory Background

Foreign ships engaged in foreign trade that travel on the Great Lakes must hire an experienced American or Canadian pilot to provide navigational services on such vessels as required by the Great Lakes Pilotage Act of 1960, codified at 46 U.S.C. §§ 9301-9309 (2000) ("GLPA"). The GLPA authorizes the Secretary of Homeland Security to license pilots and determine the rates that pilots may charge for their services. 46 U.S.C. § 9303(f). The Secretary has delegated this ratemaking authority to the Commandant of the Coast Guard ("Commandant") pursuant to 46 U.S.C. § 2104, who has in turn delegated his authority to the Director of the Great Lakes Pilotage Office ("Director" or "GLPO") to implement regulations found at 46 C.F.R. Parts 401-404.

The Act itself does not set forth a specific formula for calculating pilotage rates. Id. Rather, the methodology for calculating pilotage rates is set forth in a Final Rule and regulations issued by the Commandant in 1996. 61 Fed. Reg. 21,081 (1996). Under the regulations Great Lakes pilotage rates shall be reviewed annually in accordance with the procedures detailed in Appendix C.... [And] [t]he Director shall review Association audit reports annually and, at a minimum, the Director shall complete a thorough audit of pilot association expenses and establish pilotage rates in accordance with the procedures detailed in § 404.10 of this part at least once every five years. 46 C.F.R. § 404.1 (2005). Moreover, under this regulation, an interested party may petition to have a review of the rates conducted before the five-year period expires. Id. The appendices to part 404 detail two different comprehensive methodologies for determining pilotage rates pursuant to 46 C.F.R. § 404.1. A seven step ratemaking process is detailed in appendix A, which is used by the Director to determine base pilotage rates at least once every five years, while appendix C details an eight step process to be used in intervening years.*fn5 46 C.F.R. Pt. 404, App's A & C. The dispute in this case centers not around the substance of any particular rulemaking, but rather, whether the Director has unreasonably delayed completing the rulemakings required under 46 C.F.R. § 404.1. Specifically, the plaintiffs assert that a rulemaking commenced in December 2001 has been unreasonably delayed. Pls.' Mem. at 7.

(B) Factual Background

Under the applicable statutory and regulatory framework, base pilotage rates for Great Lake pilots were set in 1997. 62 Fed. Reg. 5917 (1997); see also Plaintiffs' Rule 56.1 Statement of Material Facts as to Which There is No Genuine Issue ("Pls.' Stmt.") ¶ 8. In 1998, after an annual review, "the Coast Guard concluded that no changes were necessary to the Great Lakes pilotage rates for the 1998 navigation season." 63 Fed. Reg. 68,697 (1998); see also Pls.' Stmt. ¶ 9. In April 2000, the Director proposed to "minimally change the rates for the 2000 season to prevent a large rate change in future years." 65 Fed. Reg. 20,110, 20,111. This review, conducted in 1999 and based on data from 1997, utilized the methodology in 46 C.F.R. Pt. 404, App. A (detailing the methodology for the five year review). See 65 Fed. Reg. 20,110, 20114-18 (2000); see also Pls.' Stmt. ¶ 11. These proposed changes were implemented in 2001. 66 Fed. Reg. 36,484 (2001); see also Pls.' Stmt. ¶ 12. The 2001 rulemaking was challenged in this and other Courts, and on April 3, 2003, this Court concluded that "certain aspects of the defendant's 2001 Final Rule [were] arbitrary and capricious" as it applied to the Lake Pilots Association. Lake Pilots Ass'n, Inc. v. United States Coast Guard, 257 F. Supp. 2d 148, 175 (D.D.C. 2003). Thus, this Court remanded to the Coast Guard the 2001 rulemaking for further proceedings consistent with the Court's opinion. Id. In light of this court's ruling, and other litigation that ensued as a result of the 2001 rulemaking, the Coast Guard in 2002, issued a temporary rule, which eliminated a 5% decrease that had been imposed on District Two pilots in 2001, 67 Fed. Reg. 47,464 (2002); see also Pls.' Stmt. ¶ 13, and indicated that the Coast Guard would soon be issuing notice of a new proposed rulemaking.

The Coast Guard has represented to this Court and others that it would issue a notice of proposed rulemaking but has failed to do so for a significant period of time. For example, on December 6, 2001, the Coast Guard represented to another member of this Court that "the proposed rate for next season will soon be published as a Notice of Proposed Rulemaking." Pls.' Mem, Ex. 4. Moreover, on May 13, 2002, the Director indicated that he planned to issue a Notice of Proposed Rulemaking that same month. 67 Fed. Reg. 33,413-14 (2002). Again in December 2002, a statement in the Federal Register indicated that the Notice of Proposed Rulemaking would be issued in November 2002. 67 Fed. Reg. 74,853 (2002). Despite these pronouncements, the Notice of Proposed Rulemaking was not issued until January 23, 2003. 68 Fed. Reg. 3202 (2003). This proposed rulemaking, utilizing the five-year methodology, projected a substantial rate adjustment for 2003. Id. at 3204-05. The defendant asserts that the delay in completing the rulemaking has been caused, in part, by the plaintiffs' failure to timely supply the necessary information for the defendant to calculate a new base pilotage rate. Def.'s Opp'n at 6. Thus, according to the defendant, the calculations for the new rate were not completed until November 30, 2002. Id.

Once the Coast Guard issued the notice of the proposed rulemaking, which purported to adjust the Great Lakes pilotage rates pursuant to the methodology in 46 C.F.R. Pt. 404, App. A (detailing the methodology for the five year review), the Coast Guard twice extended the period for comments to be submitted regarding the proposed rulemaking. See 68 Fed. Reg. 7489 (extending comment period until April 24, 2003); 68 Fed. Reg. 15,697 (extending comment period until May 1, 2003). The comment period finally closed on May 1, 2003. 68 Fed. Reg. 15,697. Over eighty of the comments submitted in response to the notice of the proposed rulemaking were received after April 25, 2003. See, e.g., Administrative Record ("A.R."), Ex. 79-131. In addition, many of the commenters suggested that the substantial size of the pilotage rate increase would have a negative economic impact on the maritime community in the Great Lakes region. See, e.g., A.R., Ex. 7-9. Thus, due to the concerns raised in the comments, the Coast Guard contracted with Martin Associates to conduct an economic analysis to assess the impact the rate increase would have. Def.'s Opp'n at 9. Rather than waiting for that report before taking action, the Coast Guard issued an interim rule, which contained new rates that took effect in January 2004. 68 Fed. Reg. 69,564 (2003). This interim rule was published "while the Coast Guard complete[d] its evaluation of issues raised in response to the [notice of the proposed rulemaking] and calculates a full rate adjustment." 68 Fed. Reg. 69,564 (2003).

To date, the final rule has not been issued. Based upon status reports provided to this Court, it appears that the final rule is still working its way through the administrative process. On June 22, 2005, the Office of Management and Budget determined that this rulemaking, which is the subject of this litigation, amounts to a "significant" rulemaking under Executive Order 12,866, which is entitled Regulatory Planning and Review. Defendant's Status Report of July 22, 2004 at 2.*fn6 As a result of this determination, additional staffing within the Coast Guard was required, including increased staffing levels in offices that had not previously reviewed the rule. Id. In addition, the defendant went on to inform the Court that this rulemaking still needed to be approved by the Commandant of the Coast Guard, the Department of Homeland Security, and the Department of Transportation before final OMB review could be conducted. Id. at 3.

II. The Parties' Positions

The pilots' associations have brought this lawsuit alleging that the defendant has been derelict in carrying out his responsibilities under the Great Lakes Pilotage Act of 1960. Namely, the plaintiffs argue that the "Coast Guard has failed to conduct annual reviews of, and make necessary adjustments to pilotage rates in most years since 1996." Compl. ¶ 21. Notably, the plaintiffs state that

[i]n the seven years since the requirement for such annual reviews was adopted in 1996, the Coast Guard has conducted the annual review only three times and made adjustments only twice. Pilotage rates on the Great Lakes have thus been adjusted only twice in the last decade, and the most recent of those adjustments was found to be "arbitrary and capricious" by this Court.

Id. The plaintiffs contend that the Coast Guard has repeatedly failed to adhere to the deadlines it has designated for the publication of a new rule.*fn7 Id. ¶ 30. And, despite the fact that the 2003 shipping season began on March 31, 2003, id. ¶ 32, in its May 27, 2003, semi-annual "regulatory review... [the Coast Guard] estimated [that] the final rule would be issued on 12/00/03" without providing a basis for this estimate. Id. ¶ 28. Additionally, the plaintiffs note that the defendant has not issued "any regulation correcting the errors [in the 2001 Rule] or responding in any way to [this Court's] remand." Id.

In an effort to force the defendant to publish a final rule expeditiously, the plaintiffs have filed the complaint in this action pursuant to the APA.*fn8 The plaintiffs contend that applying established precedent from the District of Columbia Circuit in Telecomms. Research & Action Ctr. ("TRAC") v. FCC, 750 F.2d (D.C. Cir. 1984) and MCI Telecomms. Corp. v. FCC, 627 F.2d 322 (D.C. Cir. 1980), it is clear that the defendants ...

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