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Detroit International Bridge Co. v. Government of Canada

United States District Court, District of Columbia

May 26, 2016

DETROIT INTERNATIONAL BRIDGE COMPANY, et al., Plaintiffs,
v.
GOVERNMENT OF CANADA, et al., Defendants.

          OPINION ON MOTION FOR PARTIAL RECONSIDERATION

          ROSEMARY M. COLLYER United States District Judge.

         Plaintiffs Detroit International Bridge Company and its wholly-owned subsidiary, the Canadian Transit Company (collectively DIBC), seek partial reconsideration of the Court’s September 30, 2015 Opinion and Order dismissing Counts 1, 2, 3, 5, 6, 8, and 9 of DIBC’s Third Amended Complaint (TAC), Dkt. 105. See Mot. for Reconsideration [Dkt. 233].[1] Specifically, DIBC asks the Court to reconsider its dismissal of Counts 2, 3, 6, and 9. Federal Defendants timely opposed the motion, see Dkt. 242, and DIBC replied, see Dkt. 258.

         The facts of this case are well known.[2] In 1921, U.S. Congress enacted a federal statute granting DIBC the rights “to construct, maintain, and operate” an international bridge between Detroit Michigan and Windsor Ontario. See Act of March 4, 1921, 66th Cong., ch. 167, § 1, 41 Stat. 1439 (1921) (DIBC Act).[3] The Canadian Parliament passed similar legislation. See Act of May 3, 1921, 11-12 Geo. V ch. 57 (Can.) (CTC Act). Pursuant to this authority, DIBC built the Ambassador Bridge over the Detroit River. DIBC wants to build an adjacent Twin Span to provide a modern bridge crossing while it repairs and upgrades the 87-year-old Ambassador Bridge. The financial viability of the Twin Span, which in turn allegedly affects the existence of the Ambassador Bridge, has been threatened by the proposed construction of a new publicly-owned bridge, the New International Transit Crossing/Detroit River International Crossing (NITC/DRIC).[4] DIBC contends that the NITC/DRIC will take away a substantial percentage of the commercial traffic between the United States and Canada from the Ambassador Bridge. DIBC has raised a plethora of arguments and claims against Federal Defendants to vindicate its right to build the Twin Span and prevent the construction of the NITC/DRIC. For the reasons that follow, the Court amends and expands upon some of its findings and analysis, but holds that Counts 2, 3, 6, and 9 must remain dismissed. DIBC’s Motion for Partial Reconsideration will be denied.

         I. LEGAL STANDARD

         Federal Rule of Civil Procedure 54(b) governs a motion for reconsideration of interlocutory orders. Rule 54(b) provides that “any order or other decision, however designated, that adjudicates fewer than all the claims or the rights and liabilities of fewer than all the parties. . . may be revised at any time before the entry of judgment adjudicating all the claims and all the parties’ rights and liabilities.” Fed.R.Civ.P. 54(b). Relief under Rule 54(b) is available “as justice requires.” DL v. District of Columbia, 274 F.R.D. 320, 324 (D.D.C. 2011). To determine what “justice requires, ” courts examine the relevant circumstances. Cobell v. Norton, 355 F.Supp.2d 531, 539 (D.D.C. 2005). Relevant circumstances include whether the court has “‘patently misunderstood a party, has made a decision outside the adversarial issues presented to the Court by the parties, has made an error not of reasoning, but of apprehension, or where a controlling or significant change in the law or facts [has occurred] since the submission of the issue to the Court.’” Ficken v. Golden, 696 F.Supp.2d 21, 35 (D.D.C. 2010) (quoting Cobell v. Norton, 224 F.R.D. 266, 272 (D.D.C. 2004)) (alterations in original). “[A]sking ‘what justice requires’ amounts to determining, within the Court’s discretion, whether reconsideration is necessary under the relevant circumstances.” Cobell, 224 F.R.D. at 272.

         II. ANALYSIS

         DIBC asks the Court to reconsider the dismissal of Counts 2, 3, 6, and 9. Specifically, DIBC argues, inter alia, that: (1) Federal Defendants violated DIBC’s right to maintain and operate the Ambassador Bridge and build the Twin Span; (2) Federal Defendants violated the constitutional doctrine of separation of powers because Congress has supported the Ambassador Bridge and its Twin Span; (3) the issuance of the NITC/DRIC Presidential permit is reviewable under the Administrative Procedure Act (APA), 5 U.S.C. § 706; and (4) Federal Defendants violated the Equal Protection Clause of the U.S. Constitution because they discriminated against DIBC’s Twin Span and in favor of the NITC/DRIC. Federal Defendants oppose DIBC’s motion arguing that “there is nothing in Plaintiffs’ Motion that amounts to anything more than a re-packaging of arguments they previously made or should have made.” Opp’n [Dkt. 242] at 2.

         DIBC concedes that “[i]n its zeal to assert every argument in defense of the Ambassador Bridge, [it] may have ‘overplay[ed its] hand.’” Mot. for Reconsideration at 1 (quoting Mem. Op. at 27). DIBC now seeks reconsideration of a “subset of those dismissed claims” because it may not have articulated some of them “as clearly as [it] should have . . . .” Id. The problem with DIBC’s arguments is not lack of clarity. Rather, the Court disagrees with most of DIBC’s legal conclusions.

         A. Count 2 - Statutory and Contractual Rights under DIBC Act

         In the DIBC Act of 1921, Congress authorized DIBC “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 . . . .” DIBC Act §1. In light of this language, the Court rejected DIBC’s argument that the DIBC Act conferred “an exclusive statutory and contractual franchise right.” Mem. Op. [Dkt. 222] at 27-32. The Court reasoned that Congress granted DIBC “a time-constrained right to build” a bridge in the vicinity of Detroit but by its plain terms “did not require DIBC to build or operate a bridge in fact.” Id. at 28 (citing DIBC Act § 1) (emphasis in original). Moreover, the Court noted that “the government should never be presumed to have relinquished its powers” and held that there was nothing in the language of the DIBC Act that could support an express or implied grant of exclusivity. Id. at 29 (citing Proprietors of Charles River Bridge v. Proprietors of Warren Bridge, 36 U.S. 420, 422 (1837)). On reconsideration, DIBC raises two arguments with respect to Count 2.

         1. Congressional Authorization Argument

         DIBC argues that this Court failed to address its alternative claim in Count 2 -- namely, that even if Congress did not “relinquish its powers” when it enacted the DIBC Act, DIBC still prevails because it has “the only franchise for a bridge between Detroit and Canada ‘unless and until’ Congress and the Canadian Parliament expressly authorize a second such bridge.” Mot. for Reconsideration at 17 (quoting TAC ¶ 312(c)) (emphasis added); see also Reply [Dkt. 258] at 10 (arguing that “only Congress can authorize a bridge that interferes with the Ambassador Bridge . . . .”). But this “alternative” claim is not new and has been thoroughly considered. The argument that DIBC has “the only franchise” for a bridge in that area of the Detroit River necessarily presupposes that the DIBC Act contained an implied grant of perpetual exclusivity. The language of the statute does not support this claim, see DIBC Act §1, and the Court has already rejected the argument. See Mem. Op. at 27-32.

         The crux of DIBC’s position is that Federal Defendants violated its franchise rights under the DIBC Act because Congress “never enacted a law that specifically authorize[d] the NITC/DRIC.” Mot. for Reconsideration at 17. Trying to conceal its dependence on a grant of exclusivity that never took place, DIBC relies on the fact that Charles River Bridge “involved two commensurate acts by the same sovereign legislature, each with equal specificity as to what that sovereign was authorizing.” Id. According to DIBC, the facts in Charles River Bridge require Congress to authorize the NITC/DRIC. The argument is a red herring. DIBC does not explain why this factual distinction is relevant, let alone dispositive.[5] Further, Congress did not have to authorize directly the construction of the NITC/DRIC because, in 1972, Congress consented to “the construction, maintenance, and operation of [all] international bridges” so long as the “foreign country consent[s], the proposed bridge compl[ies] with the 1906 Bridge Act, Act of Mar. 23, 1906, ch. 1130, 34 Stat. 84, and the proposed bridge obtain[s] a set of Executive Branch Approvals.” Mem. Op. at 5-6 (citing International Bridge Act of 1972 (IBA), 33 U.S.C. § 535 et seq.).

         The IBA governs the proposed construction of the NITC/DRIC and to require additional congressional action, as DIBC suggests, directly contravenes Congress’s clear intent in 1972 to remove itself from the individual approval of international bridges. See S. Rep. No. 92-1112, at 1 (1972), reprinted in 1972 U.S.C.C.A.N. 3399, 3399 (1972 S. Rep.) (“The philosophy of the bill, which will relieve the Congress of what has become a routine burden, follows that of the General Bridge Act of 1946 [33 U.S.C. § 525], from which so-called international bridges were exempted.”); see also Sisselman v. Smith, 432 F.2d 750, 753 (3d Cir. 1970) (holding that the General Bridge Act of 1946 “was clearly intended to end piecemeal Congressional supervision of [domestic] bridge construction by delegation of Congressional authority to an expert administrative agency”). Moreover, since there was no expressed or implied grant of exclusivity in favor of DIBC in 1921, Congress did not have “to alter, amend, or revoke” the DIBC Act for a new bridge between Detroit and Canada to be built pursuant to the IBA. DIBC Act § 3. Precisely because there was no grant of exclusivity, the fact that the new bridge might be built so close to the Ambassador Bridge does not state a cause of action. Consequently, DIBC’s “alternative” claim fails.

         2. Separation of Powers Argument

         DIBC also argues that Count 2 “encompasses a pure constitutional claim that the Executive Branch is violating the Separation of Powers through its approvals of the NITC/DRIC.” Mot. for Reconsideration at 19 (emphasis in original). DIBC claims that the Court failed to address this “constitutional claim” in its September 30, 2015 Opinion and that it should consider it now. However, such a claim is nowhere to be found in Count 2, TAC, or DIBC’s prior briefing. Count 2 focuses only on the alleged “violation of [DIBC]’s statutory and contractual franchise rights” under the DIBC Act. TAC ¶ 299; see Id. ¶¶ 305, 308, 311-12. Count 2 does not mention “separation of powers” and does not make any direct or indirect references to the U.S. Constitution.

         “Judges are not expected to be mindreaders. Consequently, a litigant has an obligation to spell out its arguments squarely and distinctly, or forever hold its peace.” United States v. Zannino, 895 F.2d 1, 17 (1st Cir. 1990). DIBC never articulated a separation of powers argument in Count 2 and “arguments that should have been previously raised, but are only raised for the first time in a motion for reconsideration, will not be entertained by this Court.” James v. England, 226 F.R.D. 2, 7 (D.D.C. 2004). Count 2 will remain dismissed.[6]

         B. Count 3 - Right to Build Twin Span

         The Court dismissed Count 3 for failure to state a claim on the basis that the proposed construction of the NITC/DRIC did not violate DIBC’s right to build the Twin Span because DIBC lacked an exclusive right to the Detroit-Windsor crossing. DIBC argues that the Court erred in dismissing Count 3 because “Count 3 was based solely on Plaintiffs’ statutory right to ‘operate and maintain’ the Ambassador Bridge without any time limit, and was pled as an alternative to any theory of exclusivity.” Mot. for Reconsideration at 12. DIBC contends that “[t]he Court should reconsider its dismissal of Count 3 because the plain text of the DIBC Act unmistakably provides a right to maintain and operate the Ambassador Bridge in perpetuity.” Mot. for Reconsideration at 12.

         Federal Defendants do not dispute that the DIBC Act granted “perpetual consent” to DIBC to “maintain and operate” the Ambassador Bridge and that this right includes expanding or replacing the Ambassador Bridge by building the Twin Span. See Opp’n at 10; see also Mem. Op. at 32-33. The Court never held or found anything to the contrary. It indicated that “Congress granted DIBC the right to ‘construct, maintain, and operate a bridge’ in the vicinity of Detroit, ” Mem. Op. at 21 (quoting DIBC Act §1); see also Id. at 23, 29.[7] However, these undisputed premises do not warrant the legal conclusion advanced by DIBC -- namely, that the proposed construction of the NITC/DRIC violated DIBC’s right to “maintain and operate” the Ambassador Bridge.

         The crux of DIBC’s position is articulated in the Motion for Reconsideration: “Plaintiffs are entitled to discovery to show that the NITC/DRIC is the functional equivalent of the Plaintiffs’ Twin Span, and hence violates Plaintiffs’ right to build their Twin Span.” Mot. for Reconsideration at 16. Specifically, DIBC contends that the Court overlooked several allegations supporting Count 3: (1) Federal Defendants accelerated the approvals for the NITC/DRIC at the expense of DIBC, while delaying the regulatory approvals for the Twin Span; and (2) Federal Defendants “promoted and approved the NITC/DRIC without giving any consideration at all to whether it was necessary given [DIBC’s] expressed desire and constant effort to build the[] Twin Span.” Id. at 14 (citations omitted); see TAC ¶ 19 (alleging that DIBC has “the right build the New Span to the Ambassador Bridge and any government action by defendants that seeks to favor the NITC/DRIC over the New Span to prevent plaintiffs from exercising their right to build the New Span is a breach of plaintiffs’ franchise rights . . . .”).

         These allegations do not support the claim that Federal Defendants have violated DIBC’s right to maintain and operate the Ambassador Bridge. If anything, these allegations merely support a claim that Federal Defendants violated DIBC’s desire to maintain a profitable business. “[T]he planned construction of the NITC/DRIC does not violate [DIBC’s] right to build the New Span even if threatens the business rationale for doing so.” Mem. Op. at 33. DIBC can still maintain and operate the Ambassador Bridge -- particularly since “[t]he economic justification for the New Span is . . . not found in increased traffic levels, but instead in reduced maintenance costs and enhanced efficiency in the transit process through customs.” TAC ¶ 6 (alleging that “the New Span would be a desirable upgrade and modernization to the Ambassador Bridge”). Also, DIBC can still build a Twin Span, even if doing so would not be economically feasible. It follows that the premise that NITC/DRIC is the functional equivalent of the Twin Span and that “so long as the NITC/DRIC was built first, it would be impossible for Plaintiffs to build their Twin Span” shows that Federal Defendants’ actions merely threatened the financial viability of the Twin Span. Mot. for Reconsideration at 14-15 (citing TAC ¶¶ 217- 21, 343). Promoting the NITC/DRIC did not actually prevent DIBC from exercising any of its rights under the DIBC Act of 1921.[8]

         DIBC fails to recognize the inescapable reality that its interpretation of the DIBC Act presupposes a grant of exclusivity that Congress did not provide. Absent a grant of exclusivity, DIBC’s “complaint about unfair increased competition and reduced profit margins” fails to state a claim regarding the alleged violation of statutory rights conferred in the DIBC Act. Mem. Op. at 32. Count 3 will remain dismissed.

         C. Count 6 - APA Challenge to Presidential Permit for the NITC/DRIC

         Count 6 alleged that the decision of the U.S. Department of State (USDS) “to grant a Presidential permit for the NITC/DRIC was contrary to law, arbitrary and capricious, in excess of statutory authority, and otherwise in violation of the standards set forth in 5 U.S.C. § 706(2).” TAC ¶ 341. Count 6 was dismissed for lack of jurisdiction on the basis that issuance of a Presidential Permit for the NITC/DRIC was “not final agency action subject to APA review.” Mem. Op. at 42. Specifically, the Court held that the issuance of the Presidential Permit was an exercise of presidential authority and that “permitting judicial review [in the instant case] would run afoul of the separation of powers principle . . . .” Id. at 46 (internal quotation marks and citation omitted).

         DIBC urges the Court “to reconsider its holding that it had no jurisdiction to review the State Department’s approval of the NITC/DRIC application under Section 4 of the IBA[, 33 U.S.C. § 535(b)].” Mot. for Reconsideration at 21. It adds, “[r]eversing this jurisdictional holding will enable the Court to reach Plaintiffs’ strong claims that the State Department’s approval was both contrary to law and arbitrary and capricious.” Id. DIBC advances four arguments for reconsideration of the dismissal of Count 6: (1) presidential approval and presidential permits for international bridges are the same thing; (2) issuance of the Presidential Permit by USDS was not an exercise of the President’s inherent constitutional authority; (3) the Presidential Permit is reviewable under the APA because USDS exercised power delegated to the President by Congress; and (4) the issuance of the Presidential Permit by USDS, even if an exercise of inherent presidential authority, was final agency action reviewable under the APA. Federal Defendants oppose each of these arguments and ask the Court to deny DIBC’s motion.

         Upon consideration of the parties’ present arguments and further study on the underlying legal issues in Count 6, the Court amends certain findings of its earlier Opinion and expands on its earlier analysis. Its conclusion is the same but for different reasons. Given the complexity of the multiple issues in DIBC’s APA claim, it is important to review carefully the historical evolution of the legal framework governing the construction and maintenance of international bridges.

         1. Historical Background: From the Rivers and Harbors Act of 1899 to the International Bridge Act of 1972

         Congress has long asserted its authority to approve or disapprove bridges over navigable waters, both domestic and international, pursuant to its authority to regulate commerce. See U.S. Const. art. I, § 8, cl. 3; Charles River Bridge, 36 U.S. at 420-22. It formalized its authority in the Rivers and Harbors Act of 1899 (1899 Act) which required, inter alia, congressional authorization for the construction of any bridge across or over navigable waters of the United States. See 33 U.S.C. § 401. Not long thereafter, Congress passed the Bridge Act of 1906 to regulate the construction and maintenance of such bridges, thereby reiterating that persons interested in building a bridge (international or domestic) must have first obtained the consent of Congress. See 33 U.S.C. §§ 491-498. In 1909, the United States ratified the Boundary Waters Treaty, which authorized the construction of new bridges over the boundary waters between the United States and Canada subject to certain criteria, such as government approval through “special agreements” (i.e., “concurrent or reciprocal” legislation by U.S. Congress and the Canadian Parliament). See Boundary Waters Treaty, U.S.-Gr. Brit. (for Can.), Jan. 11, 1909, 36 Stat. 2448.

         In 1946, Congress passed the General Bridge Act of 1946, 33 U.S.C. §§ 525-533, to amend the Bridge Act of 1906 and provide its consent “for the construction, maintenance, and operation of bridges and approaches thereto over the navigable waters of the United States” (i.e., domestic bridges). 33 U.S.C. § 525(a). The statute expressly stated that this consent did not extend to the “construction of any bridge which will connect the United States . . . with any foreign country” (i.e., international bridges). 33 U.S.C. § 531. The goal of the later General Bridge Act of 1946 was “to end piecemeal Congressional supervision of bridge construction [within the United States] by delegation of Congressional authority to an expert administrative agency.” Sisselman, 432 F.2d at 753.

         In the early 1960s, Congressional leaders decided that approval of each international bridge had become too burdensome. As a result, “the Committee on Foreign Relations [began] to explore other means of authorizing the construction of international bridges.” 1972 S. Rep. at 3399. The Committee produced an omnibus bill in “consultation with the executive departments, ” which the U.S. Senate first passed in 1964 and again in 1965 and in 1967, but “was not finally enacted by the House” on any occasion. Id. Since no action was taken on the bill, “[o]n September 15, 1971, the executive branch submitted a new draft of legislation, ” which was enacted and became the International Bridge Act of 1972 (IBA). Id. at 3399-3400.

         While the Executive Branch worked on the new draft and Congress worked on its passage, on August 16, 1968, President Lyndon B. Johnson issued Executive Order 11, 423, titled “Providing for the Performance of Certain Functions Heretofore Performed by the President with Respect to Certain Facilities Constructed and Maintained on the Borders of the United States.” Exec. Order No. 11423, 3 C.F.R. 742 (1966-1970), as amended 33 Fed. Reg. 11741 (August 16, 1968) (E.O. 11423). E.O. 11423 stated that the “proper conduct of the foreign relations of the United States requires that executive permission be obtained for the construction and maintenance at the borders of the United States of facilities connecting the United States with a foreign country” and that, in the past, “such executive permission has from time to time been sought and granted in the form of Presidential permits for the construction, connection, operation, and maintenance . . . of such border crossing facilities as water supply and oil pipelines, aerial tramways and cable cars, submarine cables, and lines for the transmission of electric energy.” Id. Notably absent from this list were international bridges, which pursuant to the Bridge Act of 1906 still required congressional authorization.

         E.O. 11423 designated and empowered the Secretary of State “to receive all applications for permits for the construction, connection, operation, or maintenance” of border crossing facilities -- specifically, (i) “facilities for the exportation or importation of petroleum, petroleum products, coal, [or] minerals” (i.e., pipelines and conveyor belts); (ii) “facilities for the exportation or importation of water or sewage;” (iii) “facilities for the transportation of persons or things, or both” (i.e., monorails, aerial cable cars, and aerial tramways); and (iv) “bridges, to the extent that congressional authorization is not required.” Id., § 1(a) (emphasis added). Congressional delegation of the authorization for the construction of international bridges came four years later with the IBA’s passage.

         Congress passed the International Bridge Act of 1972 (IBA), 33 U.S.C. § 535 etseq., to remove itself from the individual evaluation and approval of international bridges. In the IBA, Congress gave its advance consent to the construction, maintenance, and operation of any international bridge “subject to the approval of the proper authorities of the foreign country concerned [i.e., Mexico or Canada], the provisions of the 1906 Bridge Act, and the provisions of the [IBA].” 1972 S. Rep. at 3400; see also 33 U.S.C. § 535. Two important provisions of the IBA are relevant to the instant case. The first provision authorizes a “State or a subdivision or instrumentality thereof to enter into agreements” to build bridges ...


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