United States District Court, D. Columbia.
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For Detroit International Bridge Company, a Michigan corporation, Canadian Transit Company, a Canadian special act corporation, Plaintiffs: Amy Lynn Neuhardt, Hamish P.M. Hume, LEAD ATTORNEYS, Heather M. King, Kathleen Simpson Kiernan, BOIES, SCHILLER & FLEXNER, LLP, Washington, DC.
For Government of Canada, Defendant: Douglas A. Dozeman, Eugene E. Smary, Scott M. Watson, PRO HAC VICE, WARNER NORCROSS & JUDD LLP, Grand Rapids, MI; Sarah Catherine Lindsey, WARNER NORCROSS & JUDD LLP, Southfield, MI.
For United States Federal Highway Administration, Victor Mendez, in his official capacity as Administrator of the United States Federal Highway Administration, Ray Lahood, in his official capacity as Secretary of Transportation, United States Coast Guard, Janet A. Napolitano, in her official capacity as Secretary of Homeland Security, United States of America, Robert J. Papp, Jr. Adm., in his official capcity as Commandant of the United States Coast Guard, Defendants: Brian Matthew Collins, LEAD ATTORNEY, U.S. DEPARTMENT OF JUSTICE, Enrd, Washington, DC; Peter Christopher Whitfield, LEAD ATTORNEY, BAKER HOSTETLER, Washington, DC.
For United States Department of State, John Kerry, in his official capacity as Secretary of State, Defendants: Brian Matthew Collins, LEAD ATTORNEY, U.S. DEPARTMENT OF JUSTICE, Enrd, Washington, DC.
For Windsor-Detroit Bridge Authority, Defendant: Scott M. Watson, PRO HAC VICE, WARNER NORCROSS & JUDD LLP, Grand Rapids, MI.
For Michigan Department of Transportation, Interested Party: Michael James Dittenber, LEAD ATTORNEY, MICHIGAN ATTORNEY GENERAL'S OFFICE, Lansing, MI.
ROSEMARY M. COLLYER, United States District Judge.
The Ambassador Bridge spans the Detroit River between Detroit, Michigan and Windsor, Ontario and carries more than one-quarter of the total commercial traffic between the United States and Canada. The Bridge is privately owned by the Detroit International Bridge Company (DIBC, or Bridge Company) and its wholly-owned subsidiary, the Canadian Transit Company, which collect toll revenue for Bridge maintenance and profit. However, the Ambassador Bridge is more than eighty years old. Its owners want to construct a Twin Span immediately adjacent to the existing Bridge to service customers while maintenance work is performed on the Ambassador Bridge. To their dismay, however, a cross-border partnership of government entities has proposed the construction of a new publicly-owned bridge, which would compete with the Ambassador Bridge and possibly destroy the financial basis for the Twin Span. DIBC applied for a navigational permit from the U.S. Coast Guard approximately ten years ago, before the partnership was formed, but the Coast Guard has refused to process the application pending resolution of a local property rights dispute. DIBC sues the Coast Guard for, inter alia, its failure to issue a navigational permit for the Twin Span. The Coast Guard moves to dismiss this claim, and DIBC cross-moves for summary judgment. DIBC also moves to enjoin the Coast Guard from issuing a navigational permit for the competing government-owned bridge. For the reasons set forth below, the Court will deny Plaintiffs' Motion for a Preliminary Injunction and grant the Coast Guard's Motion to Dismiss Count IV of the Second Amended Complaint.
The instant dispute stems from the Coast Guard's refusal to issue a navigational permit for the Twin Span based on DIBC's failure to acquire certain local property rights. DIBC contends that the Coast Guard's refusal to grant a navigational permit constitutes arbitrary and capricious agency action, particularly in light of the Agency's pending approval for the government-owned " New International Trade Crossing/Detroit River International Crossing" (NITC/DRIC) (pronounced Nitsy-Drick) bridge. Specifically, DIBC argues that the Coast Guard's decision to
return its application is based on a regulation that either is invalid or has been improperly applied to the Twin Span. Because the Coast Guard is allegedly poised to grant the NITC/DRIC's permit application, DIBC also has moved for preliminary injunctive relief. See Mot. for Prelim. Inj. [Dkt. 143].
A. Statutory Framework for Navigational Permits
A bit of history is necessary to understand the dispute. In a series of Rivers and Harbors Acts in the 19th century, Congress delegated to the War Department  the authority to regulate navigable waters in the United States. One of the first of these statutes, enacted in 1880, directed the War Department to remove sunken vessels from waters to ensure their navigability. See Act of June 14, 1880, ch. 211, § 4, 21 Stat. 197 (1880). Four years later, Congress authorized the War Department to issue permits for approved bridges over navigable waters. See Act of July 5, 1884, ch. 229, § 8, 23 Stat. 133, 148 (1884) (empowering Secretary of War to review bridge proposals for projects that might obstruct navigation).
In 1899, Congress prohibited the construction of any new bridge extending over navigable waters without prior congressional approval. See Rivers and Harbors Act of 1899 (1899 Act), ch. 425, § 9, 30 Stat. 1121, 1151 (now codified at 33 U.S.C. § 401). The 1899 Act provided that:
[I]t shall not be lawful to construct or commence the construction of any bridge, dam, dike, or causeway over or in any port, roadstead, haven, harbor, canal, navigable river, or other navigable water of the United States until the consent of Congress to the building of such structures shall have been obtained and until the plans for the same shall have been submitted to and approved by the Chief of Engineers and the Secretary of War.
Id. By its terms, the 1899 Act applied to domestic and international bridges.
Notably, the 1899 Act required Congress to approve each and every proposed bridge over navigable waters during a time of extensive national growth and economic development. Congress established a process for the approval of bridge construction plans in 1906. See 1906 Bridge Act, ch. 1130, § 1, 34 Stat. 84 (1906) (now codified at 33 U.S.C. § § 491-498). The 1906 Bridge Act established uniform rules regarding the construction and operation of congressionally-authorized bridges over navigable waters. At its core, the 1906 Bridge Act ordered that bridges authorized by Congress
shall not be built or commenced until the plans and specifications for its construction, together with such drawings of the proposed construction and such map of the proposed location as may be required for a full understanding of the
subject, have been submitted to the Secretary of War and Chief of Engineers for their approval, nor until they shall have approved such plans and specifications and the location of such bridge and accessory works[.]
Thus, in 1906, Congress gave the Secretary of War and Chief of Engineers statutory authority to assess and approve proposed bridge plans. The 1906 Bridge Act was the last congressional enactment concerning international bridges until 1972, long after Congress had approved the Ambassador Bridge in 1921.
In 1946, Congress enacted the General Bridge Act of 1946, currently codified at 33 U.S.C. § § 525-534. The General Bridge Act of 1946 removed Congress from the process of approving individual domestic bridges and authorized all such bridges subject only to approval by the War Department. See Sisselman v. Smith, 432 F.2d 750, 753 (3d Cir. 1970) (holding that, with respect to domestic bridges, " [t]he General Bridge Authority Act was clearly intended to end piecemeal Congressional supervision of bridge construction by delegation of Congressional authority to an expert administrative agency" ). However, international bridges remained subject only to the 1906 Bridge Act. See 33 U.S.C. § 531 (providing that the General Bridge Act of 1946 " shall not be construed to authorize the construction of any bridge which will connect the United States, or any Territory or possession of the United States, with any foreign country" ).
In its most recent statute on bridges over navigable waters, Congress enacted the International Bridge Act of 1972, 33 U.S.C. § § 535-535i. By this enactment, Congress removed itself from the business of bridge approvals and gave advance consent to international bridges, subject to compliance with the 1906 Bridge Act, approval by the foreign government and U.S. federal officials, and compliance with all applicable technical requirements. 33 U.S.C. § 535.
Over time, Congress also has shifted the authority to approve bridges over navigable waters to different executive departments and constituent agencies. The War Department initially had been tasked with approving the plans, specifications, and locations of bridges. See 1906 Bridge Act, ch. 1130, § 1, 34 Stat. 84 (1906) (now codified at 33 U.S.C. § 491-498). The War Department existed until 1947, when the National Security Act of 1947 changed its title to the Department of the Army. See Act July 26, 1947, ch. 343, § 205(a), 61 Stat. 501 (repealed by Act of August 10, 1956, ch.1041, § 53, 70A Stat. 641). Thereafter, the Army Corp of Engineers was charged with reviewing and approving bridge permit applications. See id. In 1967, Congress created the Department of Transportation and transferred the Coast Guard to that newly-created Department. 49 U.S.C. § 1655(b) (1970). As part of the Transportation Act, Congress also transferred all authority to review and approve bridge permits from the Army Corps of Engineers to the Coast Guard. Id. § 1655(g) (1970). The Coast Guard remained within the Department of Transportation until 2002, when Congress transferred the Coast Guard and its authorities, functions, and personnel to the Department of Homeland Security (DHS). 6 U.S.C. § 468(b), (c). The Coast Guard is now a constituent agency of DHS with exclusive authority over navigational permits for bridges over domestic and international navigable waters. See 6 U.S.C. § 468(c).
B. Regulatory Framework for Navigational Permits
The Coast Guard has inherited rules and promulgated regulations concerning the
" [l]ocations and clearances of bridges and causeways over the navigable waters." See 33 C.F.R. § 114.01(a)(1). As explained by the Coast Guard:
The several bridge laws . . . are intended to prevent any interference with navigable waters of the United States . . . except by express permission of the United States. The decision as to whether a bridge permit or a drawbridge operation regulation will be issued or promulgated must rest primarily upon the effect of the proposed action on navigation to assure that the action provides for the reasonable needs of navigation after full consideration of the effect of the proposed action on the human environment. The Coast Guard is not responsible for any other permits that the applicant may need from other federal, state, or local agencies and issuance of a bridge permit does not affect flood control projects or other governmental programs.
33 C.F.R. § 114.10.
The parties dispute the scope of, and statutory authority for, a Coast Guard regulation entitled " Necessary Primary Authority," most particularly its last sentence:
For bridges constructed by State or municipal agencies, the primary authority will be presumed without proof. If the law of the State requires a license for or approval of the bridge from a constituted State agency, a copy of such license or approval will be required and may be accepted as evidence of the primary authority. If there is no State regulation of bridges in navigable waters, the necessary primary authority may be that granted in the charter of a corporation, or the authority inherent in the ownership of the land on which the structure is placed. The applicant will in such cases be required to furnish an extract from the charter, or a statement of ownership. Special care will be taken that Federal approval is not granted when there is doubt of the right of the applicant to construct and utilize the bridge.
33 C.F.R. § 115.05 (emphasis added). Part 115 of Title 33 is titled " Bridge Locations and Clearances; Administrative Procedures." It identifies its statutory authority as the 1899 Act, the 1906 Bridge Act, the General Bridge Act of 1946, and the 1972 International Bridge Act. See id. The parties dispute the meaning and scope of 33 C.F.R. § 115.05. While DIBC contends that the regulation applies exclusively to domestic bridges under the 1946 General Bridge Act, see Pls. MSJ [Dkt. 96-1] at 4, the Coast Guard responds that it applies to both domestic and international bridges under the 1906 Bridge Act, see Fed. Defs. Opp'n to MSJ [Dkt. 106] at 29-33.
Regulation 115.05 was not adopted in isolation. The War Department published its predecessor on September 11, 1946:
For works constructed by State or municipal agencies, the primary authority will be presumed without proof. If the law of the State requires a license for or approval of the work from a constituted State agency, a copy of such license or approval will be required and may be accepted as evidence of the primary authority. If there be no State regulation of structures in navigable waters, the necessary primary authority may be that granted in the charter of a corporation, or the authority inherent in the ownership of the land on which the structure is placed. The applicant will in such cases be required to furnish an
extract from the charter, or a statement of ownership. Especial care will be taken that Federal approval is not granted when there is doubt of the right of the builder to construct and utilize the work.
33 C.F.R. § 209.345 (1946) (emphasis added). Part 209 of Title 33 was titled " Rules Relating to Administrative Procedure." Regulation 209.120 provided that " the builder of a bridge must file an application . . . . [showing] . . . the waterway and location of the bridge; citation to the act of Congress or the State legislature authorizing the bridge; and be accompanied by a map of the location and plans of the bridge showing these features which affect navigation . . . ." In addition, 33 C.F.R. § 209.330 (1946) explained that:
(a) The decision as to whether a permit will be issued must rest primarily upon the effect of the proposed work on navigation. However, in cases where the structure is unobjectionable from the standpoint of navigation but when State or local authorities decline to give their consent to the work, it is not usual for the Department actually to issue a permit. This is for the reason that while the instrument merely expresses assent so far as concerns the public rights of navigation, it practically becomes of no value in the event of opposition by State or local authority and may be regarded by such authority as an act of discourtesy. In such cases the applicant is informed that the structure is unobjectionable from the standpoint of navigation and that permit would be issued were the consent of the local authority also forthcoming.
(b) In cases of conflicting property rights the Department cannot undertake to adjudicate rival claims.
Id. Thus, the predecessor War Department rules warned that local opposition might prevent a bridge proponent from acquiring a navigational permit.
In addition to 33 C.F.R. § 115.05, the Coast Guard has imposed other regulatory requirements on the permit application process. For instance, when the Coast Guard receives a navigational permit application, " the District Commander verifies the authority for construction of the bridge, reviews the application and plans for sufficiency, ascertains the views of local authorities and other interested parties, and ensures that the application complies with relevant environmental laws, regulations, and orders." 33 C.F.R. § 115.60(a).
C. The Ambassador Bridge and Proposed Twin Span
The American Transit Company (ATC), predecessor to DIBC, was established in 1920 to build a suspension bridge between Detroit, Michigan and Ontario, Canada. Congress approved the bridge construction project in 1921 and enacted a statute providing that " the consent of Congress is hereby granted to American Transit Company, its successors and assigns, to construct, maintain, and operate a bridge and approaches thereto across Detroit River at a point suitable to the interests of navigation, within or near the city limits of Detroit, Wayne County, Michigan, in accordance with the provisions of" the 1906 Bridge Act. Act of March 4, 1921, ch. 167, § 1, 41 Stat. 1439 (1921).
In 1927, ATC transferred all of its rights and assets to DIBC, which, in turn, merged into the present-day DIBC in 1979. ATC's corporate charter states that its purpose is to " carry on the construction, operation and development of bridges, tunnels, approaches and accessories thereto, and all ...