Am. Great Lakes Ports Ass'n v. Zukunft

296 F. Supp. 3d 27
CourtCourt of Appeals for the D.C. Circuit
DecidedNovember 3, 2017
Docket16-1019
StatusPublished
Cited by8 cases

This text of 296 F. Supp. 3d 27 (Am. Great Lakes Ports Ass'n v. Zukunft) is published on Counsel Stack Legal Research, covering Court of Appeals for the D.C. Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Am. Great Lakes Ports Ass'n v. Zukunft, 296 F. Supp. 3d 27 (D.C. Cir. 2017).

Opinion

RUDOLPH CONTRERAS, United States District Judge

I. INTRODUCTION

In 2016, the Coast Guard promulgated new rules for calculating the rates that international shippers must pay American maritime pilots on the waters of the Great Lakes. Throughout the notice-and-comment process, Plaintiffs-representatives of the international shipping community-criticized the proposed rules in a variety of ways. After having their comments largely rejected, the shippers sued the Coast Guard in this Court under the Administrative Procedure Act, 5 U.S.C. §§ 500 et seq . All the parties have now moved for summary judgment on Plaintiffs' claims. For the various reasons explained below, the Court grants in part and denies Plaintiffs' motion for summary judgment.

II. BACKGROUND

With limited exceptions, all foreign vessels1 operating in the Great Lakes and some of their connecting waters (collectively "the Great Lakes") must employ a registered Canadian or American maritime pilot to aid in navigation. 46 U.S.C. § 9302(a)(1). In 1960, Congress enacted the Great Lakes Pilotage Act ("GLPA"), which authorized the United States Coast Guard ("Coast Guard") to "form[ ] ... a pool ... of United States authorized pilots to provide for efficient dispatching of vessels and rendering of pilotage services" in *33the waters of the Great Lakes. Id. §§ 9301(2), 9304(a). Thus, pilots on the Great Lakes are organized into private associations certified by the Coast Guard, which operate in three separate geographical districts.2 See Great Lakes Pilotage Rates-2016 Annual Review and Changes to Methodology, 81 Fed. Reg. 11,908, 11,910 (Mar. 7, 2016). The Coast Guard is responsible for setting "standards of competency" for registered American pilots and prescribes "rates and charges for pilotage services, giving consideration to the public interest and the cost of providing the services." 46 U.S.C. § 9303(a), (f). Thus, the Coast Guard determines the base pilotage rates that foreign vessels must pay to hire American maritime pilots to navigate the Great Lakes and reviews and adjusts these rates annually. See id.

In September 2015, the Coast Guard issued a Notice of Proposed Rulemaking ("NPRM") informing the public that the Coast Guard sought to "revis[e] the current methodology by which the Coast Guard sets base rates for U.S. pilotage service" and to set pilotage rates for the 2016 shipping season using that new methodology. Great Lakes Pilotage Rates-2016 Annual Review and Changes to Mehodology, 80 Fed. Reg. 54,484, 54,484 (Sept. 10, 2015). The reasons for the methodology change were twofold. First, the Coast Guard explained that "over many years both pilots and industry have identified certain methodology issues that they believe significantly distort[ed] ratemaking calculations." Id. In particular, "[p]ilot associations believe[d] those distortions result[ed] in low rates that contributed to their difficulty in retaining pilots and attracting applicant pilots." Id. Second, a methodology change was required because certain data that the Coast Guard previously relied upon would no longer be available. See id. Before 2016, the Coast Guard's pilotage rate-setting methodology relied, in part, on union compensation data for merchant marine masters and mates.3 81 Fed. Reg. at 11,908; see also St. Lawrence Seaway Pilots Ass'n, Inc. v. United States Coast Guard , 85 F.Supp.3d 197, 204-05 (D.D.C. 2015). According to the Coast Guard, "only one union's contract data [was] ever [ ] made available to the Coast Guard," but that union "now regards th[e] data as proprietary and [would] no longer disclose it to the Coast Guard." 80 Fed. Reg. at 54,484. Consequently, "the Coast Guard no longer ha[d] access to the detailed breakdown of compensation calculation that [its] [former] methodology [once] relie[d] on." Id. Thus, as a result of the previous complaints from pilots and industry concerning the old methodology combined with the future unavailability of pilot compensation data, the Coast Guard decided to change its methodology.

A. 2016 Rate-Setting Methodology

The final pilotage rate-setting methodology adopted by the Coast Guard was largely the same as the rule that it had proposed in September 2015. See 81 Fed. Reg. at 11,942. The Coast Guard developed this methodology based on a set of recommendations made by the Great Lakes Pilotage Advisory Committee ("GLPAC").

id="p34" href="#p34" data-label="34" data-citation-index="1" class="page-label">*34See id.

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296 F. Supp. 3d 27, Counsel Stack Legal Research, https://law.counselstack.com/opinion/am-great-lakes-ports-assn-v-zukunft-cadc-2017.