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Matson Navigation Co., Inc. v. United States Department of Transportation and Maritime Administration

United States Court of Appeals, District of Columbia Circuit

July 17, 2018

Matson Navigation Company, Inc., Petitioner
v.
United States Department of Transportation and Maritime Administration, Respondents APL Marine Services, Ltd. and APL Maritime, Ltd., Intervenors

          Argued April 12, 2018

          On Petition for Review of Decision and Order of the Maritime Administration

          Mark A. Perry argued the cause for petitioner. With him on the briefs was Rachel S. Brass.

          Casen B. Ross, Attorney, U.S. Department of Justice, argued the cause for respondents. With him on the briefs were Jessie K. Liu, U.S. Attorney, Matthew M. Collette, Attorney, Steven G. Bradbury, General Counsel, U.S. Department of Transportation, Paul M. Geier, Assistant General Counsel for Litigation and Enforcement, Joy Park, Senior Trial Attorney, and Joseph O. Click, Attorney-Advisor.

          Brian T. Burgess argued the cause for intervenors. With him on the brief were William M. Jay, Robert T. Basseches, and Gerard J. Cedrone.

          Before: Rogers, Griffith, and Millett, Circuit Judges.

          OPINION

          Rogers, Circuit Judge.

         Matson Navigation Company, Inc., a competitor of APL Marine Services, Ltd., and APL Maritime, Ltd. (together, "APL"), petitions for review of three orders of the Maritime Administration approving APL's requested replacement vessels in the Maritime Security Fleet. For the following reasons, we dismiss the petition for review for lack of jurisdiction under 28 U.S.C. § 2342.

         I.

         The Maritime Security Fleet, established by the Secretary of Transportation, in consultation with the Secretary of Defense, is to consist of "active, commercially viable, militarily useful, privately owned vessels to meet national defense and other security requirements and maintain a United States presence in international commercial shipping." 46 U.S.C. § 53102(a). The Fleet is a part of the Merchant Marine "necessary for the national defense and the development of the domestic and foreign commerce." Id. § 50101(a). It is "owned and operated as vessels of the United States by citizens of the United States." Id. § 50101(a)(3). Fleet vessels must be covered by a Maritime Security Program Operating Agreement with the owner or operator. Id. § 53103(a). The owner or operator, known as a "contractor," must meet citizenship requirements and, in turn, can receive operating subsidies for its vessels. Id. §§ 53101(2), 53102(b) & (c), 53105(b). As relevant here, "[a] contractor may replace a vessel under an operating agreement with another vessel that is eligible to be included in the Fleet under section 53102(b), if the Secretary, in conjunction with the Secretary of Defense, approves the replacement of the vessel." Id. § 53105(f).

         The Maritime Security Program ("MSP") is administered by the Maritime Administration ("MARAD"). See 46 C.F.R. § 296.1. MARAD regulations provide that:

A Contractor who disagrees with the findings, interpretations or decisions of the Maritime Administration or the Contracting Officer with respect to the administration of this part or any other dispute or complaint concerning MSP Operating Agreements may submit an appeal to the Administrator . . . within 60 days following the date of the document notifying the Contractor of the administrative determination . . . . Such an appeal is a prerequisite to exhausting administrative remedies.

Id. § 296.50(a). The regulations state a "contractor" refers to "the owner or operator of a vessel that enters into an MSP Operating Agreement for the vessel with the Secretary of Transportation (acting through MARAD)." Id. § 296.2.

         APL, after reviewing its "total network of U.S. flag operations," requested MARAD on December 4, 2014, to approve, with regard to APL reinstating its U.S.-Guam shipping service, replacement of two "S-12" vessels, pursuant to 46 U.S.C. § 53105(f). Letter from Eric L. Mensing, Chief Executive Officer of APL, to Paul N. Jaenichen, Sr., MARAD Administrator at 1, 3 (Dec. 4, 2014). The vessels were covered under MSP Operating Agreements but no longer met the eligibility requirements in 46 U.S.C. § 53102(b) on "commercial viability" or requirements in the Operating Agreements on "militarily useful capability." Id. at 1. APL sought their replacement by two smaller "feeder" vessels that met those requirements, and sought MARAD's approval before proceeding with acquisition and U.S. flagging. After receiving approval in principle by MARAD and the U.S. Transportation Command, provided the replacement vessels met all MSP requirements, APL requested, ...


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