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Horizon Lines, LLC v. United States

April 14, 2006

HORIZON LINES, LLC, PLAINTIFF,
v.
UNITED STATES OF AMERICA, ET AL., DEFENDANTS, AND AMERICAN SEAFOODS COMPANY LLC, DEFENDANT-INTERVENOR.



The opinion of the court was delivered by: Ellen Segal Huvelle United States District Judge

MEMORANDUM OPINION AND ORDER

This matter comes before the Court on defendant-intervenor American Seafoods Company's ("ASC") motion to alter or amend judgment. Plaintiff Horizon Lines' ("Horizon") lawsuit challenges a ruling by the Bureau of Customs and Border Protection ("Customs" or "CBP") interpreting the Third Proviso to Section 27 of the Merchant Marine Act of 1920 ("Jones Act"), ch. 250, 41 Stat. 988, codified as amended at 46 U.S.C. app. § 883 (2004), to permit the transportation of frozen fish from Alaska to the East Coast of the United States via a foreign port and over Canadian rail lines in a foreign-flagged vessel without filing rate tariffs with the Surface Transportation Board ("STB"). On February 10, 2006, the Court granted plaintiff's motion for summary judgment, finding Customs' ruling to be arbitrary and capricious under the Administrative Procedure Act ("APA"), 5 U.S.C. § 706. Horizon Lines LLC v. United States, No. 05-952 slip. op. at 7 (D.D.C. Feb. 10, 2006) ("February 10 Opinion"). ASC now asks the Court to reverse its decision to grant summary judgment for plaintiff. Because the Court did not commit clear error in its February 10 Opinion, it will deny defendant-intervenor's motion to alter or amend judgment.

BACKGROUND

The facts of this dispute are laid out in detail in the Court's February 10 Opinion. Id. at 2-7. Therefore, the Court will provide an abbreviated description of the events leading to the instant motion. The Jones Act restricts the transportation of goods in coastwise, i.e. domestic, trade:

No merchandise . . . shall be transported by water, or by land and water . . . between points in the United States . . . either directly or via a foreign port . . . for any part of the transportation, in a vessel other than a vessel built in and documented under the laws of the United States and owned by persons who are citizens of the United States.

46 U.S.C. app. § 883. Horizon is qualified under the Jones Act to engage in coastwise trade. (Buchanan Decl. ¶ 6(b).) ASC is not. Headquarters Ruling Letter ("HRL") 115124 (Aug. 11, 2000) ("ASC Ruling"). The Jones Act permits some exceptions to its blanket prohibition on coastwise trade by non-qualified vessels. The statutory exemption at issue in this case, known as the Third Proviso, permits non-qualified vessels to transport merchandise . . . between points within the continental United States, including Alaska, over through routes heretofore or hereafter recognized by the Surface Transportation Board for which routes rate tariffs have been or shall hereafter be filed with the Board when such routes are in part over Canadian rail lines and their own or other connecting water facilities.

46 U.S.C. app. § 883. Another non-qualified shipper, Sunmar Shipping, Inc. ("Sunmar"), sought and received a Ruling Letter from CBP authorizing it under the Third Proviso to ship frozen fish from Dutch Harbor, Alaska to Boston, Massachusetts via New Brunswick, Nova Scotia. HRL 115446 (Aug. 9, 2003) ("Sunmar I"). Upon arrival at Bayside, New Brunswick, approximately 6 miles south of the St. Stephen, New Brunswick / Calais, Maine point of entry, the goods were to be transported by truck and train over a 145 mile circuit before crossing into the United States at St. Stephen. Sunmar I at 1. Sunmar did not intend to file a rate tariff for any portion of the route. Customs approved Sunmar's proposal, notwithstanding the Third Proviso's rate tariff filing requirement, holding that "mechanistic adherence to that requirement in the present climate of deregulation would lead to an absurd result that cannot be justified." Sunmar I at 4 (internal quotation marks omitted).

On July 21, 2003, Horizon petitioned CBP to revoke or modify Sunmar I, arguing, inter alia, that its interpretation failed to give effect to the Third Proviso's tariff filing requirements. (AR 21.) Customs turned to the STB for guidance regarding the rate tariff filing requirement (AR 14), and was informed that, while rail carriers and motor carriers no longer filed rate tariffs, "water carriers operating in the U.S. noncontiguous domestic trade are required to file tariffs with the STB." (AR 12.) The STB noted that the tariff filing requirement was limited to "common carriers . . . that hold out their services to the public generally," and did not extend to "private carriage." (AR 12.) Based on the information provided by the STB, Customs changed the rationale for its decision in Sunmar I, but still denied Horizon's request for revocation. HRL 116021 (Jan. 21, 2004) ("Sunmar II"). Abandoning its position that "no tariffs may be filed to cover the movements," Sunmar I at 4, the agency found that "when a non-coastwise-qualified vessel" makes use of the Third Proviso, "rate tariffs should be filed with STB." Sunmar II at 4. Nevertheless, the agency approved Sunmar's proposal, finding that Sunmar was engaged in private carriage, and therefore "it was not possible for Sunmar to comply with the rate tariff filing requirements in the Third Proviso." Sunmar II at 4. Horizon sought further reconsideration, but Customs rejected the petition, returning to its position from Sunmar I that "if such STB-related requirements as contained in the text of the Third Proviso were to continue to be required, no carrier whatever would be entitled to use the proviso." HRL 116185 at 2 (Mar. 28, 2005) ("Sunmar III") (emphasis added).

Horizon brought suit in federal court on May 15, 2005, challenging CBP's Sunmar rulings as "arbitrary, capricious, an abuse of discretion or otherwise not in accordance with law" under § 706 of the APA. 5 U.S.C. § 706(2)(A). ASC's motion to intervene was granted to permit it to protect its interest in HRL 115124 (Aug. 11, 2000) ("ASC Ruling"), a decision identified by CBP as "nearly identical" to Sunmar I. Horizon Lines LLC v. United States, No. 05-952, slip op. at 2 (D.D.C. Sept. 23, 2005). After rejecting ASC's jurisdictional and standing arguments, the Court granted summary judgment on the merits in favor of Horizon, finding CBP's Sunmar rulings to be "arbitrary and capricious" under the APA. Feb. 10 Op. at 24. The Court reasoned that Customs "failed to adhere to accepted principles of statutory construction," and that "the persuasiveness of Customs' interpretation" of the Third Proviso was "undermined by factual flaws and inconsistencies." Feb. 10 Op. at 15. The Court found that Customs' assertion that "no carrier whatever would be entitled to use the proviso" if the rate tariff filing requirement was retained, Sunmar III at 2, was contradicted by the administrative record. Feb. 10 Op. at 17, 20. Therefore, the Court concluded, the agency's implied repeal of the tariff filing requirement "ignore[d] both the plain language of the statute and . . . [was] not necessary to avoid inconsistency" with statutes deregulating the shipping industry. ASC now brings a motion to alter or amend judgment under Fed. R. Civ. P. 59(e).

ANALYSIS

ASC seeks reconsideration of four rulings from the Court's February 10 Opinion: (1) its decision that jurisdiction over Horizon's claim properly lay in federal district court, rather than in the Court of International Trade ("CIT"); (2) that Horizon's competitive injury conferred standing to challenge CBP's Sunmar rulings; (3) that for non-contiguous domestic trade, the scope of the Third Proviso should be commensurate with the STB's current rate filing requirements; and (4) that the term "routes rate tariff" as used in the Third Proviso is equivalent to the "rate tariffs" currently accepted by the STB. (Def.'s Mot. for Reconsideration ("Def.'s Mot.") at 2-13.)

I. Standard of Review

Under Rule 59(e) "The district court has considerable discretion in ruling on a Rule 59(e) motion." Piper v. U.S. Dep't of Justice, 312 F. Supp.2d 17, 21 n.1 (D.D.C. 2004). Granting such a motion "is an unusual measure," Firestone v. Firestone, 76 F.3d 1205, 1208 (D.C. Cir. 1996) (per curiam), that occurs "only when the moving party establishes extraordinary circumstances." Niedermeier v. Office of Baucus, 153 F. Supp.2d 23, 28 (D.D.C. 2001). "Rule 59(e) motions 'need not be granted unless the district court finds that there is an intervening change of controlling law, the availability of new evidence, or ...


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