ST. LAWRENCE SEAWAY PILOTS ASSOCIATION, INC., et al. v. UNITED STATES COAST GUARD
Civil Action No. 14-cv-392 (TSC)
United States District Court, District of Columbia.
Signed March 27, 2015
85 F. Supp. 3d 197
Tanya S. Chutkan, Judge
F.3d 572, 577 (D.C.Cir.2001) (citing Butz v. Economou, 438 U.S. 478, 515, 98 S.Ct. 2894, 57 L.Ed.2d 895 (1978)), Ms. Soncini enjoys absolute immunity with regard to official duties performed during Family Court proceedings regarding J.R.
“Qualified immunity shields federal and state officials from money damages unless a plaintiff pleads facts showing (1) that the official violated a statutory or constitutional right, and (2) that the right was “clearly established” at the time of the challenged conduct.” Ashcroft v. al-Kidd, 563 U.S. 731, 131 S.Ct. 2074, 2080, 179 L.Ed.2d 1149 (2011) (citing Harlow v. Fitzgerald, 457 U.S. 800, 818, 102 S.Ct. 2727, 73 L.Ed.2d 396 (1982)) (internal quotation marks omitted). “[A]ll but the plainly incompetent or those who knowingly violate the law” may enjoy the protection of qualified immunity. Malley v. Briggs, 475 U.S. 335, 341, 106 S.Ct. 1092, 89 L.Ed.2d 271 (1986). Because qualified immunity is “an immunity from suit rather than a mere defense to liability, . . . it is effectively lost if a case is erroneously permitted to go to trial.” Mitchell v. Forsyth, 472 U.S. 511, 526, 105 S.Ct. 2806, 86 L.Ed.2d 411 (1985) (emphasis in original). Accordingly, courts must “resolv[e] immunity questions at the earliest possible stage in litigation.” Hunter v. Bryant, 502 U.S. 224, 227, 112 S.Ct. 534, 116 L.Ed.2d 589 (1991) (per curiam).
From the Court‘s review of Plaintiff s factual allegations and exhibits, it appears that the CFSA Defendants, particularly the case workers, performed investigatory and advisory functions with respect to J.R.‘s placement, progress and permanency goals. These activities are akin to those performed by police officers in anticipation of a criminal prosecution, and therefore “are subject to qualified, not absolute, immunity.” Gray, 275 F.3d at 1117.
III. CONCLUSION
The Court finds that Plaintiff‘s Complaint fails to state claims upon which relief can be granted. Accordingly, the Complaint and this civil action will be dismissed. An Order is issued separately.
MEMORANDUM OPINION
Tanya S. Chutkan, Judge
Plaintiffs St. Lawrence Seaway Pilots Associations, Inc., Lakes Pilots Association, Inc., and Western Great Lakes Pilots Association, Inc. challenge the Coast Guard‘s final rule setting pilotage rates on the Great Lakes for 2014 (the “2014 Final Rate“). Great Lakes Pilotage Rates-2014 Annual Review and Adjustment, 79 Fed.Reg. 12084 (March 4, 2014). Plaintiffs allege the Coast Guard misapplied the regulatory formula by using incorrect inputs, resulting in unreasonably low rates, and seek review of the 2014 Final Rate under the Administrative Procedure Act (“APA“). The parties have each moved for summary judgment. For the reasons set forth below, the Court GRANTS Plaintiffs’ motion for summary judgment, DENIES Defendant‘s motion for summary judgment, and orders supplemental briefing on the question of a proper remedy.
I. BACKGROUND
The Great Lakes Pilotage Act of 1960 requires foreign and American ships engaged in foreign trade traveling on the Great Lakes1 to hire an American or Canadian pilot to provide navigational services.
Plaintiffs challenge the Coast Guard‘s application of that methodology in the 2014 Final Rate. This dispute centers specifically on step 2.A of the 7-step rulemaking methodology, “Determination of Target Rate of Compensation.” To understand Plaintiffs’ challenge to the Step 2.A calculation for the 2014 Final Rate, one must first understand how the Coast Guard set the rates in 2012 and 2013. Below are timelines for the establishment of the 2012, 2013, and 2014 rates.
i. The 2012 Rate
February 28, 2012: Coast Guard announced the rate for 2012. 2012 Rates for Pilotage on the Great Lakes, 77 Fed.Reg. 11752 (Feb. 28, 2012). In computing the 2012 rate the Coast Guard used the pay rates contained in the union contracts between the American Maritime Officers Union (“AMOU“) and companies engaged in shipping on the Great Lakes. See, e.g., id. at 11760. The contracts provided for payment of a daily wage. The Coast Guard then multiplied the daily wage by either 54.5 days or 49.5 days2 in order to generate “monthly figures that represent actual working days and vacation, holiday, week-end,
ii. The 2013 Proposed Rate
August 1, 2012: Coast Guard published notice of proposed rulemaking to set the 2013 rate. Great Lakes Pilotage Rates-2013 Annual Review and Adjustment, 77 Fed.Reg. 45549 (Aug. 1, 2012) (the 2013 Proposed Rate). To calculate the 2013 Proposed Rate, the Coast Guard used a daily rate (applicable to Agreement A only) which was lower than the daily rate used in 2012. Compare 77 Fed.Reg. at 11761 (2012 daily rate of $287.09) with 77 Fed.Reg. at 45545 (2013 proposed daily rate of $270.61). The Coast Guard also accounted for a pension plan contribution of $0.00, and halved the amount of the medical insurance contribution. 77 Fed. Reg. at 45546. These changes resulted in proposed target compensation rates lower than the 2012 rate: $212,094 in undesignated waters and $293,302 in designated waters. 77 Fed.Reg. at 45545-46.
1. The Coast Guard Received Comments Criticizing its Proposed 2013 Rate
August 14, 2012: Coast Guard received email from AMOU with a chart of the “pension plan and medical plan contributions” for 2012, 2013, 2014, and 2015. (A.R. 103).
September 24, 2012: Coast Guard received letter from the Lake Pilots Association, Inc. stating that the “daily rate” for Agreement A effective August 1, 2013 was $295.94 and set forth the planned increases for 2014 and 2015. (A.R. 107).
September 25, 2012: AMOU sent letter to Coast Guard with Agreement A daily rates in 2013, 2014 and 2015. (A.R. 108).3 See also Great Lakes Pilotage Rates-2013 Annual Review and Adjustment, 78 Fed.Reg. 13521, 13522 (Feb. 28, 2013) (summarizing comments).
2. The Coast Guard Received Aggregated Data which did not Include Season Bonuses
Exact date unknown, after September 25, 2012: Coast Guard “reached out to AMOU to inquire if the contract that [the Coast Guard] had used was superseded.” 78 Fed.Reg. at 13522.
November 2, 2012: AMOU provided the correct daily wage rates as well as the correct medical and pension plan contributions. (A.R. 131) (filed under seal) (the “Nov. 2 Letter“). The letter included an annotation that the information was “strictly confidential” and could not be made public without AMOU‘s consent. Id.
November 15, 2012: AMOU submitted two letters to the Coast Guard providing “the correct daily aggregate rates” for Agreement A effective as of August 1, 2013, August 1, 2014, and August 1, 2015. (A.R. 132-33). One letter included “the daily wage rate, vacation pay, pension plan contributions and medical plan contributions” and the other excluded vacation pay (Id.).
December 17, 2012: AMOU confirmed that a table containing the AD is “acceptable” for publication. (A.R. 135 (filed under seal); 137-141).
As of December 2012, the Coast Guard had one daily aggregated rate which purportedly accounted for all of the benefits provided for in the AMOU contracts. Thus, it could slightly alter the way it calculated the target rate. Instead of multiplying the wage and benefit components into monthly figures, the Coast Guard simply took the daily rate and multiplied it by 270—representing the days in a nine-month shipping season. 78 Fed.Reg. at 13529. A consequence of this change was that holidays, weekends and bonus days were no longer accounted for in the formula. Compare 77 Fed.Reg. at 11761 (computing “monthly figures that represent actual working days and vacation, holiday, weekend, or bonus days” in 2012) with 78 Fed. Reg. at 13522 (“These aggregate rates combine, without separately identifying, the following inputs: Daily wage rate, vacation pay, pension plan contributions, and medical plan contributions” in 2013). The new methodology also changed the way the Coast Guard visually presented some of the steps of its calculation. 78 Fed.Reg. at 13522.
3. The Coast Guard Finalized the 2013 Rate Using Aggregated Data Exclusive of Season Bonuses
February 28, 2013: Coast Guard announced the final rate for 2013. The final rate would have been, on average, 16% lower than the 2012 rates. Id. at 13537. Concluding in its discretion7 that a 16% rate decrease could “jeopardize the ability of the three pilotage associations to provide safe, dependable service,” the Coast Guard exercised its discretion to adjust the rates for an average 1.87% increase over the 2012 Rate. Id. at 13524, 13536. In the announcement of the final 2013 rate the Coast Guard also responded to the comments it received that its proposed rate was wrong, and explained the changes any AMOU submission. (See A.R. 230 (October 7, 2013 comment from Plaintiffs’ counsel on proposed 2014 rate noting that “the Pilotage Office requested that AMO provide it with an ‘aggregated rate‘” in 2012); A.R. 137-38 (December 5, 2012 email from AMOU to Coast Guard attaching “the letters you requested“)).
to the data it was using. See supra Section I.ii.2.
iii. The 2014 Proposed Rate
August 8, 2013: The Coast Guard announced a notice of proposed rulemaking for the 2014 rate. Great Lakes Pilotage Rates-2014 Annual Review and Adjustment, 78 Fed.Reg. 48374 (Aug. 8, 2013). The
iv. Comments to the 2014 Proposed Rate
October 4, 2013: a comment from the AMOU provided revised AD, which included holidays, weekends, and a season bonus in the aggregated daily rate. (A.R. 217-18). The Coast Guard received comments asserting that the Coast Guard “incorrectly interpreted or misapplied AMOU contract data” and disputing the Coast Guard‘s statement that “recent AMOU contracts are marked by ‘downward changes,’ and pointed out that AMOU contracts actually increase wages over a 5-year period.” 79 Fed.Reg. at 12086.
v. The 2014 Final Rate
March 4, 2014: Coast Guard announced the 2014 Final Rate and responded to the comments it received on the proposed 2014 rate. See supra Section I.iv.
The Coast Guard disavowed the statement it had made on AMOU contract trends. It stated: “Our discussion is not a reflection on AMOU contract trends, but rather emphasizes that AMOU contract information, when factored into our Appendix A ratemaking methodology, could lead to a pilotage rate decrease, if not offset by the application of discretion under Step 7.” 79 Fed.Reg. at 12086.
The Coast Guard also disputed the comments’ assertions that it had misapplied the AMOU data. The Coast reiterated the accuracy of the data used to compute the 2014 proposed rule. Id. It explained that it declined to use the data from the November 2, 2012 Letter because the information “was marked ‘proprietary,’ and therefore has not been and cannot be shared by the Coast Guard with the public.” Id. Further, the Coast Guard cited the fact that the AMOU had apparently confirmed the accuracy of the AD in connection with the 2013 rate as justification for continuing to rely on that data. Id. (referencing the AMOU email at A.R. 139).
Finally, the Coast Guard rejected the updated AD because it included a “season bonus’ that the AMOU has not previously cited as part of its contracts, and that we do not recognize for purposes of Great Lakes pilotage compensation.
The final 2014 rate adopted the rate as it was proposed in August 2013, including the proposed discretionary increase.
II. LEGAL STANDARD
On a motion for summary judgment in a suit seeking APA review, the standard under
Pursuant to the APA, the Court must set aside any agency action that is “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.”
III. ANALYSIS
A. Target Compensation Rates Must Approximate AMOU Contract Rates
By the plain terms of the Coast Guard‘s own regulations, target pilot compensation is intended to “approximate[] the average annual compensation for first mates on U.S. Great Lakes vessels.”10
Plaintiffs here challenge as nefarious and conspiratorial most of the Coast Guard‘s decisions concerning pilotage rates in the last three years, but they focus primarily on two of the Coast Guard‘s decisions: use of the AD, and rejection of the Updated AD. The Court assesses whether these choices were reasonably made in furtherance of Step 2.A‘s goal: approximation of AMOU contract wages.
B. The Rejection of the CDD and Use of the AD
Plaintiffs challenge the Coast Guard‘s use of the AD instead of the CDD in 2014. The choice to use the AD instead of the CDD was first made in connection with the 2013 rate, but because the 2013 rate was not and is not challenged here, the Court need not engage in an analysis of whether that decision was reasonable and adequately supported.
In 2014, the Coast Guard could have utilized the CDD, or the Updated AD, or sought an entirely new source for the data, but instead adhered to its decision to use the AD because it was “provided and confirmed” by the AMOU. 79 Fed.Reg. at 12086. It made this decision despite comments from the AMOU and Plaintiffs claiming that the AD was not accurate. See supra Section I.iv.
When an agency‘s information is challenged, the agency is not always required to use new data, but must “provide a full analytical defense” and show that it is “conscious of the limits of” the data. Eagle-Picher Indus., Inc. v. E.P.A., 759 F.2d 905, 922 (D.C.Cir. 1985); Ass‘n of Oil Pipe Lines v. F.E.R.C., 83 F.3d 1424, 1433-35 (D.C.Cir. 1996) (FERC‘s choice of index in setting pipeline rates was not arbitrary and capricious where record demonstrated “reasoned judgment in selecting” the “most suitable” index). Although courts will defer to the agency‘s choice of data when the agency was faced with competing data or models, Pub. Emps. for Envtl. Resp. v. U.S. Dep‘t of the Interior, 832 F.Supp.2d 5, 26 (D.D.C. 2011), the agency‘s choice is arbitrary and capricious when “there is simply no rational relationship between the model and the known behavior of the items to which it is applied.” Greater Yellowstone Coal. v. Kempthorne, 577 F.Supp.2d 183, 198 (D.D.C. 2008) (National Park Service‘s Final Environmental Impact Statement, relating to snowmobiles in Yellowstone, was vacated as arbitrary because it relied on
The “analytical defense” the Coast Guard provided for its continued use of the AD was, effectively, that the AMOU had previously approved of that data. 79 Fed.Reg. at 12086. This justification might have been valid in 2013, when the Coast Guard received an email from the AMOU confirming that a table reflecting the AD was “acceptable” to the AMOU.11 (A.R. 139-141). However the AMOU‘s comment for the 2014 rate made clear the AMOU did not endorse the numbers in the AD. (A.R. 217). The Coast Guard did not address this comment except to note that it would not use what AMOU provided as the correct figure because it included a season bonus. See infra Section III.C. Because the Coast Guard provided no rational justification for its decision to continue using data the source of which affirmatively stated was inaccurate, the Court must find that its actions were arbitrary and capricious.12 See, e.g., Chem. Mfrs. Ass‘n v. E.P.A., 28 F.3d 1259, 1266 (D.C.Cir. 1994) (EPA was arbitrary and capricious in responding to a comment about an emissions standard “in an unsupported and conclusory fashion” which “added nothing to the agency‘s defense of its thesis except perhaps the implication that it was committed to its position regardless of any facts to the contrary“).
C. The Decision to Reject the Updated AD Because it Included a Season Bonus was Arbitrary and Capricious
As a general matter, “an agency‘s interpretation of its own regulation is entitled to deference.” Auer v. Robbins, 519 U.S. 452, 461, 117 S.Ct. 905, 137 L.Ed.2d 79 (1997). Auer deference is due when the agency‘s interpretation is not “plainly erroneous or inconsistent with the regulation.” Id. The Court must ordinarily afford the Coast Guard‘s interpretation of its regulation “controlling weight” unless “an alternative reading is compelled by the regulation‘s plain language.” Akiachak Native Cmty. v. Salazar, 935 F.Supp.2d 195, 208-09 (D.D.C. 2013). However, this deference is due only when the regulation is ambiguous, there is no reason to suspect the interpretation does not reflect the agency‘s “fair and considered judgment,” and the interpretation is “fairly supported” by the regulation.
Drake v. F.A.A., 291 F.3d 59, 68 (D.C.Cir. 2002); Christensen v. Harris Cnty., 529 U.S. 576, 588, 120 S.Ct. 1655, 146 L.Ed.2d 621 (2000) (Auer deference is required “only when the language of the regulation is ambiguous“).
These conditions are not met here. The regulation cited by the Coast Guard to exclude the season bonus from target compensation applies to the “recognition of expenses,” which is an accounting of Plaintiffs’ expenses for Step 1 of the process—not the disputed Step 2.A.
The Coast Guard‘s interpretation of
The typical remedy for an arbitrary and capricious agency action is to vacate the rule. Humane Soc‘y of the United States v. Jewell, 76 F.Supp.3d 69, No. 13-186, 2014 WL 7237702 (D.D.C. Dec. 19, 2014). In deciding whether to provide the typical remedy, the Court is guided by two factors: “the seriousness of the . . . deficiencies of the action” and “the disruptive consequences of vacatur.” Heartland Reg‘l Med. Ctr. v. Sebelius, 566 F.3d 193, 197 (D.C.Cir. 2009) (alteration in original). Plaintiffs argue that the disruptive consequences here—reversion to the 2013 Rate, which is lower than the 2014 Rate—would be more prejudicial than leaving the too-low 2014 Rate in place. (Pl. Mem. 30). Plaintiffs also ask the Court to “make clear” that “pilots will be entitled to recover from shippers the difference between that new rate and the improper rate as of August 1, 2014.” (Pl. Mem. 31). The only case on which Plaintiffs rely in support of the notion that the Court may preemptively adjudicate their right to seek refunds from a third party is not entirely on point, as it provided for a refund by the agency of improperly assessed fees. See Allied-Signal, Inc. v. N.R.C., 988 F.2d 146, 153 (D.C.Cir. 1993). The Court is also mindful that its decision likely impacts the propriety and validity of the 2015 rate. Defendant does not address Plaintiffs’ arguments concerning the proper remedy.
Although the Court could deem the Coast Guard‘s silence to be a concession that the requested relief is proper, Phrasavang v. Deutsche Bank, 656 F.Supp.2d 196, 201 (D.D.C. 2009), the Court is not inclined to deviate from the typical remedy without the benefit of argument from all parties. The parties shall therefore file supplemental briefs addressing the issue of a proper remedy.
IV. CONCLUSION
For the reasons set forth above, the Court concludes the 2014 Final Rate was arbitrary and capricious. Accordingly, Plaintiffs’ motion for summary judgment is GRANTED and Defendant‘s cross-motion for summary judgment is DENIED. Plaintiffs shall file a brief addressing a proper remedy on April 17, 2015. Defendant shall file a response no later than May 8, 2015. Plaintiffs may reply by May 18, 2015. Plaintiffs’ opening brief and Defendant‘s response shall each be limited to 15 pages. Plaintiffs’ reply shall be no more than 8 pages.
A corresponding order will issue separately.
Martin SANCHEZ-ALANIZ, Plaintiff,
v.
FEDERAL BUREAU OF PRISONS, et al., Defendants.
Civil Action No. 13-1812 (EGS)
United States District Court, District of Columbia.
Signed March 28, 2015