952 F. Supp. 2d 252
D.D.C.2013Background
- APT (American Petroleum Tankers Parent, LLC), majority-owned by private equity firms, applied for Title XI loan guarantees to refinance debt on five U.S.-flagged petroleum tankers; applications filed Aug 2010 and amended July 28, 2012.
- The Maritime Administration (MarAd) denied the original application (Aug 1, 2012) and the amended application (Nov 9, 2012), citing that the project was not economically sound, refinancing of vulnerable/older vessels, and consumption of remaining Title XI funds.
- The DOT Credit Council reviewed the application and provided recommendations; MarAd retained an Independent Financial Analyst (Scully Capital) to analyze the proposal.
- APT sued under the Administrative Procedure Act, alleging arbitrary and capricious decisionmaking, improper Credit Council influence, and seeking supplementation of the administrative record and limited discovery to probe agency process and motive.
- The district court previously held MarAd’s denial is reviewable under the APA and that the Secretary of Transportation has no statutory authority to force MarAd to obtain Credit Council approval before deciding Title XI applications.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether omitted agency documents that APT seeks must be included in the administrative record | APT contends various memoranda, progress/weekly reports, communications (with Scully, Military Sealift Command, and MarAd staff), and applicant communications were considered and thus belong in the AR | Defendants say most such documents either do not exist, were not considered by the decisionmaker, or are tangential; only materials actually before the Administrator must be included | Court: Denied supplementation except ordered inclusion of two public DoD speeches expressly relied on in MarAd’s denial letters; other categories not shown to have been considered by the Administrator |
| Validity of MarAd redactions/withholdings under the deliberative-process privilege | APT argues redactions hide pretext, factual material, or post-decisional items and asks for disclosure or in camera review | Defendants invoke deliberative-process privilege for predecisional, deliberative internal analyses and presentations; no privilege log required | Court: Accepted the privilege invocation; redactions upheld because materials are predecisional/deliberative and APT failed to make the strong showing required to overcome the privilege |
| Whether discovery outside the administrative record is warranted | APT seeks limited discovery (depositions, documents from Secretary/Credit Council) to show bad faith, improper motive, or that the AR is too bare for review | Defendants: APA review is confined to the AR; discovery allowed only for strong showing of bad faith or where the record is so bare as to frustrate review | Court: Denied discovery—APT failed to make a strong showing of bad faith or misconduct, and not shown that the record is so bare as to prevent effective review |
| Whether Credit Council improperly controlled MarAd’s decision or acted with impermissible bias against private equity owners | APT points to Credit Council involvement, intra-agency communications, altered recommendations, and comments about private equity ownership as evidence of undue influence or bias | Defendants explain Credit Council’s advisory role, differing institutional perspectives, and that concerns about ownership related to long-term interest and creditworthiness rather than mere ownership type | Court: Found evidence circumstantial and insufficient to prove improper control or bias; rejected as basis for discovery or supplementation |
Key Cases Cited
- Citizens to Preserve Overton Park v. Volpe, 401 U.S. 402 (1971) (review requires the full administrative record)
- Motor & Equipment Mfrs. Ass’n v. EPA, 627 F.2d 1095 (D.C. Cir. 1979) (supplementation of administrative record is the exception)
- San Luis Obispo Mothers for Peace v. Nuclear Regulatory Comm’n, 751 F.2d 1287 (D.C. Cir. 1984) (courts should be wary of supplementing records to avoid second-guessing agencies)
- James Madison Ltd. v. Ludwig, 82 F.3d 1085 (D.C. Cir. 1996) (strong showing of bad faith required to permit extra-record discovery)
- In re Sealed Case, 121 F.3d 729 (D.C. Cir. 1997) (deliberative-process privilege requires material be predecisional and deliberative)
- Hinckley v. United States, 140 F.3d 277 (D.C. Cir. 1998) (disagreement among agency actors does not by itself show improper motive)
- Saratoga Dev. Corp. v. United States, 21 F.3d 445 (D.C. Cir. 1994) (documents not provided to the decisionmaker are not part of that agency’s administrative record)
- Amfac Resorts, L.L.C. v. Dep’t of Interior, 143 F. Supp. 2d 7 (D.D.C. 2001) (complete record includes all materials that might have influenced the agency decision)