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Wilmina Shipping AS v. United States Dep't of Homeland Security

United States District Court, D. Columbia.

December 2, 2014

WILMINA SHIPPING AS, et al., Plaintiffs,

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[Copyrighted Material Omitted]

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For WILMINA SHIPPING AS, WILHELMSEN MARINE SERVICE AS, Plaintiffs: William Bruce Pasfield, LEAD ATTORNEY, ALSTON & BIRD LLP, Washington, DC; Brian T. McCarthy, Michael G. Chalos, PRO HAC VICE, CHALOS, O'CONNOR LLP, Port Washington, NY.


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AMY BERMAN JACKSON, United States District Judge.

In this action, plaintiffs Wilmina Shipping AS and Wilhelmsen Marine Services AS have challenged an order issued by the U.S. Coast Guard on May 21, 2010. Plaintiffs own and operate a Norwegian-flagged oceangoing tank vessel, the M/T Wilmina. The Coast Guard issued the order in question after inspecting the ship when it was docked in Corpus Christi, Texas. Based on the inspections, witness statements, and evidence collected from the Wilmina, the agency concluded that the ship's pollution control devices were inoperable or disarmed and that the ship had failed to comply with its own Safety Management System. It issued an order revoking the ship's Certificate of Compliance and ordered that the ship could not reenter U.S. waters for three years or until after plaintiffs had developed and implemented an acceptable Environmental Compliance Plan (" ECP" ) and had passed one year of satisfactory audits.

Plaintiffs sued, asserting that the agency did not have the statutory authority to issue the order and claiming due process violations. Compl. [Dkt. # 1]. They asked the Court to declare that the Coast Guard violated the Administrative Procedure Act (" APA" ), the Port and Waterways Safety Act (" PWSA" ), and the U.S. Constitution. Id. ¶ ¶ 145-58 and Prayer for Relief.

The Court bifurcated the proceedings in this case, directing the parties to brief the legal issues of the agency's authority and due process claims first. After receiving briefs and hearing oral argument on these issues,[1] the Court ruled that the Coast Guard did have the statutory authority to order plaintiffs to develop and implement an environmental compliance plan that was acceptable to the Coast Guard and to require a year of satisfactory audits before permitting the ship to reenter U.S. waters, but that it did not have the authority to

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simply ban the ship from U.S. waters for three years. Wilmina Shipping AS v. DHS, 934 F.Supp.2d 1 (D.D.C. 2013). The Court also held that plaintiffs' due process rights were not violated. Id.

Following that decision, defendants filed a motion for summary judgment on the merits, asserting that the Coast Guard's order was supported by the administrative record. Defs.' Mot. for Summ. J. on the Merits (" Defs.' Mot." ) and Mem. in Supp. (" Defs.' Mem." ) [Dkt. # 38] at 1, citing 5 U.S.C. § 706(2). Plaintiffs filed a cross-motion for summary judgment, presenting three arguments: (1) that the order is not severable, so the Court's finding that one part of the order was invalid makes the entire order invalid; (2) that the agency violated its own policies and procedures in issuing the order; and (3) that the evidence in the administrative record did not support the order. Pls.' Opp. and Cross-Mot. for Summ. J. [Dkt. ## 39, 40] (" Pls.' Opp. & Cross-Mot." ).

Upon consideration of the parties' arguments, the Court holds that the Coast Guard's order is severable, that the agency did not violate its policies and procedures in issuing the order, and that the evidence in the administrative record supports the order. Accordingly, the Court will grant defendants' motion for summary judgment and deny plaintiffs' cross-motion for summary judgment.


Summary judgment is appropriate " if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). The party seeking summary judgment bears the " initial responsibility of informing the district court of the basis for its motion, and identifying those portions of the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, which it believes demonstrate the absence of a genuine issue of material fact." Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) (internal quotation marks omitted). To defeat summary judgment, the non-moving party must " designate specific facts showing that there is a genuine issue for trial." Id. at 324 (internal quotation marks omitted). The existence of a factual dispute is insufficient to preclude summary judgment. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). A dispute is " genuine" only if a reasonable fact-finder could find for the non-moving party; a fact is only " material" if it is capable of affecting the outcome of the litigation. Id. at 248; Laningham v. U.S. Navy, 813 F.2d 1236, 1241, 259 U.S.App.D.C. 115 (D.C. Cir. 1987). In assessing a party's motion, the court must " view the facts and draw reasonable inferences 'in the light most favorable to the party opposing the summary judgment motion.'" Scott v. Harris, 550 U.S. 372, 378, 127 S.Ct. 1769, 167 L.Ed.2d 686 (2007) (alterations omitted), quoting United States v. Diebold, Inc., 369 U.S. 654, 655, 82 S.Ct. 993, 8 L.Ed.2d 176 (1962) (per curiam).

Under the Administrative Procedure Act, a court must " hold unlawful and set aside agency action, findings, and conclusions" that are " arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law," 5 U.S.C. § 706(2)(A); in excess of statutory authority, § 706(2)(C); or " without observance of procedure required by law." § 706(2)(D). But the scope of review is narrow. See Motor Vehicle Mfrs. Ass'n of U.S., Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43, 103 S.Ct. 2856, 77 L.Ed.2d 443 (1983). An agency's decision is presumed

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to be valid, see Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 415, 91 S.Ct. 814, 28 L.Ed.2d 136 (1971), and a court must not " substitute its judgment for that of the agency." Motor Vehicle Mfrs. Ass'n v. State Farm, 463 U.S. at 43. A court must be satisfied, though, that the agency has examined the relevant data and articulated a satisfactory explanation for its action, " including a rational connection between the facts found and the choice made." Alpharma, Inc. v. Leavitt, 460 F.3d 1, 6, 373 U.S.App.D.C. 65 (D.C. Cir. 2006) (citations omitted) (internal quotation marks omitted). The party challenging the agency action bears the burden of proof. Abington Crest Nursing & Rehab. Ctr. v. Sebelius, 575 F.3d 717, 722, 388 U.S.App.D.C. 19 (D.C. Cir. 2009).


Because many of the facts in this case were sets forth in the Court's earlier ruling, Wilmina Shipping AS v. DHS, 934 F.Supp.2d at 3-5, the Court will only recount the facts relevant to the parties' current motions.

On May 3, 2010, the day before the Wilmina was scheduled to arrive at the Port of Corpus Christi, the Coast Guard received a phone call from Robert Pabillar, a former crew member of the Wilmina. Pabillar told the Coast Guard that he had evidence that the crew was bypassing the ship's pollution control equipment and discharging oily bilge waste into the ocean. See Eckard Statement, Administrative Record (" AR" )[2] 15-17; Simser Statement, AR 18-20; Toepfer Statement, AR 21-26.

The next day, May 4, 2010, the Wilmina arrived at the port, and the Coast Guard boarded the ship to conduct its routine Port State Control Inspection. Port State Control Report of Inspection, AR 3-4. The agency issued a Certificate of Compliance (" COC" ), certifying that the vessel had " been examined and found to be in compliance with all applicable U.S. and international marine safety and environmental protection standards." Certificate of Compliance, AR 5-6. The COC stated that:

For this Certificate of Compliance to remain in effect, the vessel shall be maintained to the safety and construction standards as examined for compliance with applicable marine safety and environmental protection laws and international conventions. . . .
1. Entries shall be made on this certification in accordance with current instructions for the following types of foreign vessel examinations: . . .
Other compliance examinations (i.e. - MARPOL [the International Convention to Prevent Pollution from Ships], Ballast Water, etc.) or Deficiency checks . . . .

Id., AR 6.

During that inspection, Pabillar gave one of Coast Guard officers a flash drive with photos and video, which the inspectors viewed after returning to their office. Simser Statement, AR 18. According to a report from Coast Guard officer Chris Eckard:

The video clearly showed a[n] engine room where a bypass hose (magic pipe) was attached to an overboard discharge valve. The bonnet had been taken out of the valve and that is where the bypass

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hose had been attached with a flange made for this purpose. The bonnet and stem could be seen laying on the deck near the valve. A dark oil-like substance could be seen seeping out of the connection. The video also showed the entire length of the hose and it connected to the ship[']s piping underneath the deck plates. There was also a video showing the hiding location of the bypass hose. At this point it was determined that a MARPOL violation most likely had occurred and the decision was made to perform an expanded MARPOL inspection on the ship.

Eckard Statement, AR 15-17; AVI files, AR 766-68. As a result, the Coast Guard reboarded the ship later that same day to perform a second, expanded inspection. See AR 27.

At the expanded inspection, the Coast Guard interviewed Pabillar and other crew members, viewed the ship's pollution control and other systems, and collected samples and evidence from the ship. See Eckard Statement, AR 15-16; Simser Statement, AR 19. Pabillar, who had been terminated for cause from the ship's crew a few weeks earlier for poor work performance, told inspectors that the crew had discharged oily waste while in transit. See AR 19. He said that motorman Cesar Cruz told him that the ship's crew was bypassing the oily water separator. AR 15. Pabillar also told the inspector that he filmed the video provided to the Coast Guard with Cruz. AR 15-16.

Inspectors interviewed Caesar Cruz, who told them that he helped the ship's second engineer pump oily waste overboard at least four times, and that he thought another fitter, who was no longer a crew member, made the bypass hose about five months before. Eckard Statement, AR 16. Cruz identified the valves and pump used to pump oil sludge overboard. Toepfer Statement, AR 23; photos AR 794, 798-99, 801-03, 805, 808, 811. Cruz also said that the incinerator, which is supposed to burn oil sludge, had not worked properly for the past two months. Id. The Chief Engineer also stated he did not think the incinerator has been working. Id. at 15.

Three days later, on May 7, 2010, Coast Guard inspectors collected samples from the ship's bilge and sludge tanks, which were sent to a Coast Guard laboratory for analysis. See AR 179-84.

As a result of the second inspection, Coast Guard personnel identified a number of deficiencies in the ship's pollution control equipment and reporting protocols:

o The incinerator was not working properly. Eckard Statement, AR 15-17.
o The printer used to record alarms to notify crew of problems with the ship's pollution control equipment was not working. Toepfer Statement, AR 22; Eckard Statement AR 15.
o The crew was unfamiliar with the vessel's Safety Management System requirements for reporting equipment failures. Port State Control Report of Inspection-Form B, AR 8.

They summarized their findings as follows:

A boarding was conducted on the Tank Vessel, WILMINA, on 04 May 10, to conduct an expanded MARPOL inspection. The T/V WILMINA is [Norwegian] flagged, has a gross tonnage of 79,494 and was boarded in the Port of Corpus Christi, TX. During the inspection, it was found that oil had been pumped overboard, bypassing the oily water separator, before reaching U.S. waters. This was demonstrated by a video (CG-05) provided by a whistleblower and interviewing crewmembers (CG-06). Further investigation found oil in the overboard discharge valve and

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skin valve (CG-04), also demonstrating that oil had been pumped overboard. Upon being presented with the Oil Record Book (CG-01), it was found that there was no record of the oil being pumped overboard as required in 33 CFR 151.25(g). After thorough investigation it was also found that there was no record of unaccounted oil in the oil record book weekly soundings (CG-01). 2 crewmembers came forward and admitted to participating or witnessing the discharge.

Enforcement Summary, AR 27-32. The Coast Guard listed these deficiencies in the second Port State Control Report of Inspection issued that day. AR 7-9 (stating the ship's oily water separator, a device used to remove oil from the ship's bilge water, was inoperable; a discharge pipe, which was supposed to run between the oily water separator and through the ship's hull, had been removed; and parts of the oily water separator were found in a chemical locker; engine room alarms that were supposed to sound if the pollution control equipment detected a certain level of oil in the water to be discharged were inoperable; and the ship failed to maintain proper records in its oil record book).

On May 21, 2010, the Captain of the Port (" COTP" ) issued the disputed order, COTP Order No. 093-10, which set forth the agency's findings that the ship had " discharged oily contaminated bilge waste and/or sludge in contravention of MARPOL on several occasions and entered the United States port of Corpus Christi, Texas with a[n] oil record book with false entries." AR 1. The COTP stated: " the willful noncompliance with MARPOL and APPS[3] that occurred on board your vessel creates a threat to the marine environment. . . . Therefore, I am revoking your vessel's Certificate of Compliance in accordance with 46 U.S.C. § 3711(c)." AR 1-2. The order further provided:

Once your vessel departs port it may not enter the Sector Corpus Christi Marine Inspection Zone and Captain of the Port Zone, as defined in 33C.F.R. 3.40-35, for a period of three (3) years, or until the vessel has developed and successfully implemented an Environmental Compliance Plan (ECP) to the satisfaction of the U.S. Coast Guard (Commandant CG-5432), 2100 Second Street S.W. Stop 7581, Washington, DC 20593-7581. Successful implementation of an agreed upon ECP must include a period of satisfactory audits for at least a one (1) year period, after which I will consider allowing it to enter the Sector Corpus Christi Marine Inspection Zone and Captain of the Port Zone.

Order, AR 2.[4]


Plaintiffs have raised two threshold legal issues that they urge the Court to consider before going on to address defendants' argument on the merits that the administrative record supports the Coast Guard's order. They challenge the severability of the Coast Guard's order, and they also argue that the agency abused its discretion by departing from previously established regulations and policies in issuing the order. Pls.' Opp. & Cross-Mot. at 7-21.

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Defendants assert that the Court has already ruled on the scope of the agency's authority so the law-of-the-case doctrine applies, and the Court should not revisit these matters. Defs.' Reply to Pls.' Resp. & Resp. in Opp. to Pls.' Cross-Mot. for Summ. J. [Dkt. ## 42, 44] (" Defs.' Reply" ) at 3-5, citing Christianson v. Colt Indus. Operating Corp., 486 U.S. 800, 108 S.Ct. 2166, 100 L.Ed.2d 811 (1988). Under this doctrine, " courts generally to refuse to reopen what has been decided." Id. at 817, quoting Messenger v. Anderson, 225 U.S. 436, 444, 32 S.Ct. 739, 56 L.Ed. 1152, (1912). The Court did address the scope of the agency's statutory authority in its earlier ruling, and its ruling striking down only a portion of the order was an implicit recognition of its power to do so. But since neither the parties' prior briefs nor the ruling expressly addressed the question of the order's severability or whether the agency violated existing regulations and policies in issuing the order, the Court will take up those issues here.

I. The Coast Guard's Order is Severable.

The Court has ruled that the order's three-year ban of the Wilmina was invalid, but that its requirement that plaintiffs implement an ECP and complete a year of successful audits before being allowed back into U.S. waters " fell well within the scope of the Coast Guard's authority under the statute." Wilmina Shipping AS v. DHS, 934 F.Supp.2d at 13-15. Plaintiffs assert that because the Court found the first part of the agency's order to be invalid, the Court must declare the entire order invalid: according to plaintiffs, the Court " is not permitted to deconstruct a challenged agency action and uphold only those portions of the agency's actions which the Court finds to ...

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