E-Alert Case Updates

Coast Guard Action Pursuant to 33 U.S.C. § 1908 (e) is Committed to Agency Discretion by Law and Therefore Unreviewable by the Court

Angelex, Ltd. v. United States
No.: 13-1610 (Fourth Circuit Court of Appeals, July 22, 2013)
by Elisabeth R. Connell, Summer Associate
Semmes, Bowen & Semmes (www.semmes.com)

On July 22, 2013, the United States Court of Appeals for the Fourth Circuit reversed the judgment of the District Court for the Eastern District of Virginia and ordered dismissal of Angelex’s petition for lack of subject matter jurisdiction, pursuant to FRCP 12(b)(1). Below, the District Court found that it possessed subject matter jurisdiction to resolve the dispute based on the Administrative Procedure Act (‘APA’) and federal question jurisdiction, 28 U.S.C. § 1331, or, in the alternative, in rem admiralty jurisdiction, 28 U.S.C. § 1333. On appeal, the Fourth Circuit concluded that neither of these provides the court with the power to review the Coast Guard’s actions in this case.

This dispute arose from a routine Port State Control inspection of Angelex’s ship, the Pappadakis, on April 15, 2013, at the Norfolk Southern Terminal in Norfolk, Virginia. While aboard the vessel, an inspector received a note passed from a crewmember, which claimed that the vessel’s oily water separator had been bypassed and oily bilge water had been discharged overboard, in violation of the Act to Prevent Pollution from Ships (‘APPS’). APPS requires ships to maintain an accurate log of their oil spillage, discharge, and disposal. If this log, also known as an Oil Record Book (‘ORB’), is knowingly falsified or inaccurate, such action is a Class D felony. After further inspection, the Coast Guard discovered that the allegations of the note were true, the Pappadakis had likely been discharging oily bilge water overboard, and the ORB was incomplete or falsified. Based on these conclusions, the Coast Guard withheld the Pappadakis’ clearance to depart and demanded Angelex post a $2.5 million bond, pursuant to 33 U.S.C. § 1908 (e).

Angelex and the Coast Guard were unable to reach an agreement regarding the bond that Angelex was required to post before the Pappdakis would receive clearance to depart Norfolk, so Angelex filed an emergency petition with the District Court for the Eastern District of Virginia seeking immediate release of the Pappdakis, or for the court to impose an appropriate bond. The district court found subject matter jurisdiction proper under the APA and federal question jurisdiction, or in rem admiralty jurisdiction, and set forth new bond conditions binding on both parties. On May 9, 2013, the government requested the court temporarily stay the order, but this request was denied the following day. The government appealed, and the Fourth Circuit granted the temporary stay for the pendency of the appeal.

The appellate court first concluded that the Coast Guard’s actions under § 1908 (e) were committed to agency discretion by law, triggering the exception to judicial review under APA § 701 (a)(2). Because the language of § 1908 (e) does not provide any judicially manageable standards by which to review the Coast Guard’s actions, there is no law for a reviewing court to apply. § 1908 (e) grants the Coast Guard broad discretion to deny bond altogether and dictate the terms of any bond it might accept, so this action is unreviewable by the courts.

Angelex argued that the Coast Guard’s actions were beyond its statutory authority and in violation of Angelex’s constitutional due process rights. The Court recognized that it has jurisdiction to review those types of allegations even when an agency decision is committed to its discretion by law, but concluded that Angelex was not really challenging the statutory authority or constitutionality of agency action, but rather the agency decision itself.

The statutory authority granted to the Coast Guard under § 1908 (e) is limitless, so Angelex’s claim that the action exceeded the Coast Guard’s statutory authority was meritless. The Court similarly concluded that Angelex was not seeking vindication of constitutional due process rights, but a review of the agency’s decision to demand specific conditions before allowing departure. Because the Coast Guard’s actions conformed to § 1908 (e), there was no reviewable claim.

Furthermore, in rem admiralty jurisdiction did not make this action reviewable. The court found that the Coast Guard’s withholding of the Pappadakis’ departure was not tantamount to an attachment pursuant to a civil action, such as a maritime lien, because the vessel was not being treated as the offender. The Coast Guard’s action was proper under § 1908 (e) and those regulations specifically state that his authority to take this type of action is not dependent on, limited in scope by, or equivalent to, the laws and procedures applicable to the assertion of an in rem claim against the vessel. Angelex’s argument that the action gave rise to in rem admiralty jurisdiction did not fit the law or the facts.

Although the Court held that the Coast Guard’s action was unreviewable, they noted that Angelex was not left without any remedy for the losses suffered due to their delayed departure from Norfolk. APPS contains a built-in safeguard to governmental abuses, providing for compensation for loss or damage as a result of unreasonable detention by the Coast Guard. Because this decision was committed to agency discretion by law, the imposition of a bond was not equivalent to an attachment such as a maritime lien, and Angelex had an after-the-fact remedy available, the Court had no power to review this decision, and Angelex’s petition was dismissed for lack of subject matter jurisdiction.