United States District Court, District of Columbia
MEMORANDUM OPINION GRANTING DEFENDANT'S RENEWED
MOTION FOR SUMMARY JUDGMENT; DENYING PLAINTIFF'S
CROSS-MOTION FOR SUMMARY JUDGMENT; DENYING AS MOOT
DEFENDANT'S MOTION TO STRIKE RE DOCUMENT NOS.: 38, 40,
RUDOLPH CONTRERAS, UNITED STATES DISTRICT JUDGE.
April 2013, the United States Coast Guard (“Coast
Guard”) performed a routine inspection aboard a
foreign-flagged shipping vessel named the M/V ANTONIS G.
PAPPADAKIS, which revealed potential criminal violations
stemming from the unlawful disposal of oily bilge waste.
Criminal charges were subsequently filed against the
vessel's owner, its International Safety Management
manager, and its Chief Engineer. While these charges were
pending, the Coast Guard refused to reinstate a clearance
that would allow the ship to return to sea unless a bond in
the amount of $2.5 million dollars was posted and the parties
agreed to certain other nonmonetary conditions. However,
these demands were never met. Ultimately, both the owner and
the International Safety Management manager were acquitted of
the charges and the ship's departure clearance was
finally granted in September 2013.
present action, Plaintiff Angelex Ltd.
(“Angelex”), the owner of the ship, has filed
suit against Defendant the United States of America (the
“Government”) under 33 U.S.C. § 1904(h),
seeking compensation for losses incurred as a result of the
nearly five-month delay of the vessel. In short, Angelex
contends that the Coast Guard's acts and omissions,
including its demand for a $2.5 million bond and other
nonmonetary conditions, resulted in the unreasonable delay of
the vessel, thus entitling Angelex to compensation. Pending
now before the Court are the parties' cross-motions for
summary judgment. See Def.'s Renewed Mot. Summ.
J. (“Def.'s Renewed Mot.”), ECF No. 38;
Pl.'s Cross-Mot. Summ. J. (“Pl.'s
Cross-Mot.”), ECF No. 40. For the reasons stated below,
the Court finds that the Government is entitled to summary
judgment on all claims.
is a foreign corporation registered in Malta and is the owner
of the foreign-flagged vessel known as the M/V ANTONIS G.
PAPPADAKIS (the “Pappadakis” or the
“Vessel”). Def.'s Statement Material Facts
(“Def.'s SMF”) ¶¶ 1, 3, ECF No.
22-2; Pl.'s Resp. SMF at 1. At all times relevant to the
current action, Kassian Maritime Navigation Agency, Ltd.
(“Kassian”), a Greek company, contracted with
Angelex to serve as the International Safety Management
manager (“ISM manager”) aboard the Pappadakis.
Def.'s Resp. SMF ¶ 3. On April 14, 2013, the
Pappadakis was on a long-term time charter to United Bulk
Carriers International when it arrived at the Norfolk
Southern terminal at the Port of Norfolk to load a shipment
of coal. Def.'s SMF ¶ 5; Pl.'s Resp. SMF at 1;
Def.'s Resp. SMF ¶ 4. The next day, officers from
the United States Coast Guard (“Coast Guard”)
conducted a routine Port State Control inspection onboard the
ship. Def.'s SMF ¶ 15; Pl.'s Resp. SMF at 1.
During the inspection, a member of the crew provided Coast
Guard inspectors with a note and photographic evidence of a
so-called “magic pipe, ” which was designed to
bypass certain environmental safety features aboard the ship.
Def.'s SMF ¶¶ 16, 18; Pl.'s Resp. SMF at 1.
Specifically, this temporary modification was intended to
bypass the ship's oily water separator such that oily
bilge waste that accumulated aboard the Vessel would be
pumped directly overboard without first having contaminants
removed. Def.'s SMF ¶¶ 16, 18; Pl.'s Resp.
SMF at 1. Given this information, the Coast Guard decided to
conduct a wider investigation into the Vessel's
compliance with the Act to Prevent Pollution from Ships
(“APPS”). Def.'s SMF ¶ 20; Pl.'s
Resp. SMF at 1.
The Act to Prevent Pollution from Ships
APPS is a federal statute that implements an international
maritime treaty called the International Convention for the
Prevention of Pollution from Ships, commonly known as
“MARPOL.” MARPOL aims “to achieve the
complete elimination of intentional pollution of the marine
environment by oil and other harmful substances and the
minimization of accidental discharge of such
substances.” See Wilmina Shipping AS v. U.S.
Dep't of Homeland Sec. (Wilmina Shipping
II), 934 F.Supp.2d 1, 6 (D.D.C. 2013) (quoting
United States v. Pena, 684 F.3d 1137, 1142 (11th
Cir. 2012)); see also 33 U.S.C. § 1901(a)(4).
In furtherance of that goal, MARPOL requires that a vessel
only discharge oily water at sea if special equipment is used
to contain most of the oil and other contaminants and also
requires that vessels record all oil transfers and discharges
in an oil record book, which must be made available for a
government to inspect. See Wilmina Shipping II, 934
F.Supp.2d at 6-7 (citing United States v. Ionia Mgmt.,
S.A., 555 F.3d 303, 306-07 (2d Cir. 2009)). MARPOL,
however, is not self-executing. Each signatory nation must
implement the treaty by establishing rules that, among other
things, sanction ships that violate MARPOL's provisions.
See id. at 6.
1980, the United States enacted the APPS to implement MARPOL.
The “APPS authorizes the Secretary [of the United
States Department of Homeland Security (‘DHS')] to
administer and enforce MARPOL and to issue regulations to
implement the treaty's requirements.” Id.
at 7 (citing 33 U.S.C. § 1903(a), (c)(1); 33 C.F.R.
§ 151.01 (2014); see also Watervale Marine Co. v.
U.S. Dep't of Homeland Sec., 807 F.3d 325, 327 (D.C.
Cir. 2015); United States v. Sanford Ltd., 880
F.Supp.2d 9, 11-12 (D.D.C. 2012). Under the APPS, “[i]t
is unlawful to act in violation of the MARPOL Protocol . . .
or the regulations issued thereunder.” 33 U.S.C. §
1907(a). One such regulation requires vessels over a certain
tonnage to maintain an oil record book. See 33
C.F.R. § 151.25. This document must contain, among other
things, an accurate record of discharges of bilge water and
oily mixtures. See Id. at § 151.25(d). In
addition, it must be made readily available for inspection at
all reasonable times. See Id. at § 151.25(i).
Anyone who knowingly maintains a false oil record book is
guilty of a felony and may also be subject to civil
liability. See, e.g., Sanford, 880 F.Supp.2d at 11
(individual defendants charged with seven felony counts under
the APPS including maintaining a false oil record book); 33
U.S.C. § 1908(a) (“A person who knowingly violates
the MARPOL Protocol . . . commits a class D felony.”);
33 U.S.C. § 1908(b) (setting forth the amount of fines
that individuals must pay when found civilly liable for
violations of MARPOL). If charged criminally, individuals can
face possible fines up to $250, 000 while organizations can
face fines up to $500, 000 for each violation. See 18
U.S.C. § 3571(b)(3), (c)(3). And any ship that violates
MARPOL, APPS, or the regulations promulgated thereunder is
“liable in rem for any [criminal] fine . . .
or civil penalty” that that might be assessed in those
proceedings. 33 U.S.C. § 1908(d).
the APPS, as well as certain other statutes, the Coast Guard
is authorized to board and inspect vessels that are docked at
U.S. ports to detect potential violations of the APPS,
MARPOL, and other environmental laws. 33 C.F.R. §
151.23(a); see also 14 U.S.C. § 89 (authorizing
Coast Guard officers to board and inspect ships at ports).
Before departing a U.S. port, foreign-flagged ships must
obtain a departure clearance from U.S. Customs and Border
Protection (“CBP”). 46 U.S.C. § 60105(b).
However, under 33 U.S.C. § 1908(e), if there is
“reasonable cause” to suspect that “a ship,
its owner, operator, or person in charge” may be
subject to a fine or civil penalty under the APPS and the
Coast Guard has requested that the departure clearance be
withheld, CBP is obliged to withhold or revoke the clearance.
See 33 U.S.C. § 1908(e); Watervale Marine
Co., 807 F.3d at 330. Furthermore, federal officials are
authorized to grant departure clearances for ships previously
detained only “upon the filing of a bond or other
surety satisfactory to the Secretary.” 33 U.S.C. §
1908(e). The D.C. Circuit has noted that this provision
grants the Coast Guard “wide discretion” in
setting the monetary amount of a bond and has further held
that § 1908 authorizes the Coast Guard to condition the
reinstatement of a departure clearance on other non-financial
conditions as well. See Watervale Marine Co, 807
F.3d at 330.
Withdrawal of the Pappadakis's Departure
expanded investigation of the Pappadakis revealed that the
Vessel's oil record book contained no entries recording
the direct discharge of oily bilge water overboard without
being processed through the oily water separator. Def.'s
SMF ¶ 21; Pl.'s Resp. SMF at 1. Yet, inspectors
discovered that the ship's oily water separator was not
even operable. Def.'s SMF ¶ 22-23; Pl.'s Resp.
SMF at 1. Coast Guard officials continued to inspect the
Pappadakis and interview crewmembers in the days that
followed. Def.'s SMF ¶ 25; Pl.'s Resp. SMF at 1.
April 19, 2013, the Coast Guard completed its onboard
investigation and no further investigation was ever conducted
after that point. Def.'s SMF ¶ 63; Pl.'s Resp.
SMF at 1; Def.'s Resp. SMF ¶ 16. That evening, in
light of its findings, the Coast Guard sent a letter to
Angelex and Kassian informing them that the Coast Guard had
collected evidence “establishing reasonable grounds to
believe” that the Pappadakis had violated MARPOL and
APPS. Def.'s SMF ¶ 64; Pl.'s Resp. SMF at 1.
Accordingly, the Coast Guard requested that CBP withhold the
Pappadakis's departure clearance, but did not provide any
information reasoning or factual predicate supporting its
recommendation. Def.'s SMF ¶ 64; Pl.'s Resp. SMF
at 1; Def.'s Resp. SMF ¶¶ 5, 7. Upon the Coast
Guard's request, and without conducting its own
investigation, CBP withdrew the Pappadakis's departure
clearance. Def.'s Resp. SMF ¶ 5-6. However, the
Coast Guard informed Angelex that it would request the
departure clearance be reinstated “[w]hen adequate
surety” was provided. Def.'s SMF ¶ 64;
Pl.'s Resp. SMF at 1.
thereafter, Angelex and the Coast Guard began discussing the
terms and conditions necessary to reinstate the Vessel's
departure clearance. Def.'s SMF ¶ 65; Pl.'s
Resp. SMF at 1. The Coast Guard sought both the posting of a
monetary bond and the execution of a “Security
Agreement” that imposed various non-financial
conditions. Under the Security Agreement both Angelex and
Kassian would be required to take the following actions:
. pay wages, housing and transportation
costs, along with a per diem for those crew members deemed
material witnesses that remained in the jurisdiction and
facilitate their travel for court appearances;
. maintain the employment of the crew
members that remained in the jurisdiction;
. encourage crew members to cooperate with
investigators and refrain from taking disciplinary or other
adverse actions against crewmembers who cooperate;
. hold the crew members' passports for
safekeeping and notify the government if any crew member
requested the return of his passport;
. arrange for repatriation of crew members
once they left the United States;
. stipulate to the authenticity of documents
and items seized from the vessel;
. assist the Government in effecting service
of process on crew members located outside the United States;
. waive objections to both in
personam jurisdiction over themselves and waive in
rem jurisdiction over the vessel; and
. authorize counsel to accept service of
legal papers and enter an appearance in federal district
See Def.'s SMF ¶ 66; Pl.'s Resp. SMF at
1; Def.'s Mot., Ex. 7, ECF No. 22-8.
parties, however, did attempt to negotiate. According to
Angelex, neither it nor Kassian could afford the bond amount
that the Coast Guard was demanding and Angelex attempted to
persuade the Coast Guard of this. See First Am.
Compl. ¶¶ 41, 50, ECF No. 20; Pl.'s Cross-Mot.,
Exs. 3-4, ECF No. 40-5; see also Pl.'s
Cross-Mot. at 7, ECF No. 40; Pl.'s Reply at 6, ECF No.
48. Additionally, Angelex represented to the Coast Guard that
the Pappadakis was encumbered with a mortgage that exceeded
the value of the Vessel. See Pl.'s Cross-Mot.,
Exs. 3-4. As a result of these factors, the negotiations
between the parties appear to have largely centered on the
bond amount. See Def.'s Supplemental Statement
Material Facts (“Def.'s Supplemental SMF”)
¶¶ 149-157, ECF No. 38-2; Pl.'s Resp. SMF at 1;
Pl.'s Cross-Mot., Exs. 3-4. Initially, the Coast Guard
demanded a bond in the amount of $3 million. Def.'s
Supplemental SMF ¶ 150; Pl.'s Resp. SMF at 1.
Angelex counter-offered with a $174, 000 bond and later
increased its offer to $500, 000 and then $775, 000.
Def.'s Supplemental SMF ¶¶ 150, 152-53;
Pl.'s Resp. SMF at 1. The Coast Guard, on the other hand,
was only ever willing to reduce the bond amount to $2.5
million. Def.'s Supplemental SMF ¶ 154; Pl.'s
Resp. SMF at 1. The Coast Guard insisted that unless Angelex
and Kassian jointly and severally posted a $2.5 million bond,
the Vessel was to remain in the district as security for
potential criminal fines or penalties. Angelex would not
agree and therefore the parties were at an impasse.
Def.'s SMF ¶ 73; Pl.'s Resp. SMF at 1. As a
result, the Coast Guard continued to withhold the ship's
Litigation in the Fourth Circuit
or unable to meet the Coast Guard's demands, and with the
Pappadakis unable to leave port, Angelex filed an emergency
petition in the District Court for the Eastern District of
Virginia seeking the reinstatement of the Pappadakis's
departure clearance. See Angelex Ltd. v. United
States, No. 13-237, 2013 WL 1934490, at *3 (May 8, 2013
E.D. Va.) (“Angelex I”). Senior District
Judge Robert Doumar held a hearing on Angelex's emergency
petition on May 6, 2013. Id. At one point during the
hearing, the court took a recess to allow the parties to
negotiate further. Id. The parties discussed and
ultimately reached an agreement in principle. Id.
Specifically, Angelex agreed that it would accept all of the
non-financial conditions if the Coast Guard would be willing
to accept a bond amount of just $1.5 million. See
First Am. Compl. ¶¶ 56-58, ECF No. 20; Answer First
Am. Compl. ¶ 58, ECF No. 21. But when the court
reconvened, the Government informed the judge that Coast
Guard headquarters had rejected the proposed agreement and
refused to accept anything less than the $2.5 million bond it
had previously offered. Angelex I, 2013 WL 1934490,
the parties failed to reach an agreement, Judge Doumar was
forced to rule on Angelex's emergency petition. After
first finding that the court had subject matter jurisdiction
to hear Angelex's emergency petition under both the
Administrative Procedure Act (“APA”) and the
court's admiralty jurisdiction, Judge Doumar ruled that
the Coast Guard had abused its discretion in demanding a bond
of $2.5 million and imposing other non-monetary conditions.
Id. at *9. The court then entered an order setting a
bond of $1.5 million with several specific non-monetary
conditions. See id. at *10. The Government requested
that the district court temporarily stay its order and
simultaneously filed a notice of appeal requesting a stay
from the U.S. Court of Appeals for the Fourth Circuit.
See Angelex Ltd. v. United States, 723 F.3d 500, 505
(4th Cir. 2013) (“Angelex II”). The
district court denied the motion to stay, but the Fourth
Circuit granted it and implemented an expedited briefing
schedule. See id.
appeal, the Government argued that the matter should be
dismissed because the district court lacked subject-matter
jurisdiction. See Id. But in its briefing, the
Government suggested that the Coast Guard's decisions
were not entirely unreviewable. Pl.'s Opp'n Mot.
Dismiss, Ex. 3 at 4-7, ECF No. 8-3. Indeed, it emphasized
that “Congress . . . authorized an after-the-fact
remedy for obtaining compensation from the government.”
Pl.'s Opp'n Mot. Dismiss, Ex. 3 at 7. Specifically,
it noted that”[u]nder 33 U.S.C. § 1904(h),
‘[a] ship unreasonably detained or delayed by the
Secretary acting under the authority of this Act [sic] is
entitled to compensation for any loss or damage suffered
thereby.'” Pl.'s Opp'n Mot. Dismiss, Ex. 3
at 7. Thus, according to the Government, “Congress 
did not leave vessel owners without recourse against
unreasonable denials of clearance” because it
“authorized an independent damages action, separate
from the enforcement proceedings against the vessel.”
Pl.'s Opp'n Mot. Dismiss, Ex. 3 at 7.
Fourth Circuit agreed that the district court lacked subject
matter jurisdiction and reversed the district court's
decision. See Angelex II, at 502. The Fourth Circuit
held that the Coast Guard's position on the terms for the
Pappadakis's release was unreviewable under the APA
because the APA did not permit review of agency actions that
are committed to agency discretion by law. See Id.
at 506-09. It also agreed with the Government's argument