Matson Navigation Company, Inc. v. Department of Transportation

Opinion

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

MATSON NAVIGATION COMPANY, INC.,

Plaintiff,

v.

U.S. DEPARTMENT OF TRANSPORTATION, et al., Civil Action No. 18-2751 (RDM)

Defendants,

and

APL MARINE SERVICES, LTD., et al.,

Intervenor-Defendants.

MEMORANDUM OPINION AND ORDER

This matter is before the Court on Plaintiff Matson Navigation Company, Inc.’s

(“Matson”) motion for certification for interlocutory appeal. Dkt. 51. After Matson filed that

motion, the Court directed that the parties address whether the Court should instead consider

whether to enter partial final judgment pursuant to Federal Rule of Civil Procedure 54(b).

Minute Order (Jul. 20, 2020). Having reviewed the parties’ submissions, the Court reaffirms its

prior entry of final judgment in this matter. At the same time, however, the Court recognizes that

the question of finality for purposes of appeal is a distinct question for the Court of Appeals and

that the question is, in the unique circumstances of this case, not free from doubt. Accordingly,

to promote clarity and efficiency, the Court will, in the alternative, enter partial final judgment

pursuant to Federal Rule of Civil Procedure 54(b) with respect to Matson’s challenge to

Defendant Maritime Administration’s (“MARAD”) approval of the APL Guam as a replacement vessel. To the extent the Court of Appeals concludes that the Court’s prior order is not final for

purposes of 28 U.S.C. § 1291, this Court has jurisdiction to enter such an order, see Kersh v.

Gen. Council of Assemblies of God, 804 F.2d 546, 547 n.1 (9th Cir. 1986), abrogated on other

grounds, Hollinger v. Titan Capital Corp., 914 F.2d 1564 (9th Cir. 1990) (en banc), and to the

extent the Court of Appeals concludes that this Court’s prior order is final, the entry of this

alternative judgment can and should be disregarded.

I. BACKGROUND

Matson initiated this suit by filing a two-count complaint. Dkt. 1. Count I alleged that

MARAD’s approval of the APL Guam and the APL Saipan as replacement vessels under the

Maritime Security Program (“MSP”) was arbitrary and capricious in violation of the

Administrative Procedure Act (“APA”). Id. at 23–27. Count II alleged that MARAD’s

payments to Intervenor-Defendants APL Marine Services, Ltd. and APL Maritime, Ltd.’s

(together “APL”) of full MSP subsidies without pro rata reductions was also arbitrary and

capricious in violation of the APA. Id. at 27–28. Matson subsequently moved for summary

judgment, Dkt. 20; MARAD moved for partial dismissal due to lack of jurisdiction and cross-

moved for summary judgment, Dkt. 24; and APL cross-moved for summary judgment, Dkt. 21.

The Court granted in part and denied in part Matson’s motion for summary judgment,

denied MARAD’s and APL’s cross-motions for summary judgment, and granted MARAD’s

motion to dismiss in part for lack of jurisdiction. Dkt. 44. The Court concluded that it lacked

jurisdiction to consider Matson’s challenge to MARAD’s approval of the APL Guam as an MSP

replacement vessel because the Hobbs Act vested exclusive jurisdiction in the Courts of Appeals.

Id. at 13–22. But, at the same time, the Court concluded that it did have jurisdiction over

Matson’s challenge to MARAD’s approval of the APL Saipan as a replacement vessel and held

2 that the agency’s approval order “fail[ed] to satisfy basic APA requirements.” Id. at 29. In light

of that holding, the Court permitted the parties to submit additional evidence and briefing

addressing whether vacatur was appropriate and indicated that it would issue a final order after it

made that determination. Id. at 32–34. Upon receipt of the parties’ additional submissions, Dkt.

42; Dkt. 43; Dkt. 45, the Court concluded that vacatur was appropriate, Dkt. 48, and, on June 30,

2020, entered an order to that effect, Dkt. 49. That Order stated: “This Order constitutes the final

judgment of the Court within the meaning of Federal Rule of Civil Procedure 58(a)” and directed

the Clerk of Court to terminate the case. Id.

On July 17, 2020, Matson filed a Notice of Appeal, Dkt. 50, and, “as a protective

measure,” also filed a motion for certification for interlocutory appeal pursuant to 28 U.S.C.

§ 1292(b),1 Dkt. 51 at 4. The Court subsequently ordered that the parties address “whether the

Court can and should enter partial final judgment pursuant to Rule 54(b) with respect to

Plaintiff's challenge to MARAD's 2015 order approving the APL Guam as a replacement

vessel.” Minute Order (July 20, 2020).

II. ANALYSIS

The Court has already entered final judgment on all claims in this case. See Dkt. 49; Dkt.

54 at 2–3; Dkt. 55 at 1. In many cases, “orders remanding to an agency for further proceedings

are not final.” Watkins Law & Advocacy, PLLC v. U.S. Dep’t of Veterans Affairs, No. 19-5341,

2020 WL 3002126, at *1 (D.C. Cir. Mar. 12, 2020); N.C. Fisheries Ass’n, Inc. v. Gutierrez, 550

F.3d 16, 19 (D.C. Cir. 2008); see Cobell v. Norton, 240 F.3d 1081, 1109 (D.C. Cir. 2001)

(collecting cases in which the court retained jurisdiction after “remand[ing] to the agency . . . to

1 Matson represented that it “conferred with counsel for Defendants and counsel for Intervenors” concerning the motion, and that “each stated they took no position” on it. Dkt. 51 at 4.

3 ensure that its instructions are followed”). In such cases, “[a]bsent entry of a partial final

judgment under Federal Rule of Civil Procedure 54(b), the inclusion of a remand in the district

court’s order ordinarily renders the entire order non-final.” Watkins Law & Advocacy, 2020 WL

3002126, at *1; see also Am. Forest Res. Council v. Ashe, 301 F.R.D. 14, 16 (D.D.C. 2014). At

times, however, a court may both remand to the agency and enter final judgment. See, e.g., Am.

Hosp. Ass’n v. Azar, No. 18-2084, 2019 WL 3037306, at *2 (D.D.C. Jul. 10, 2019) (revising its

earlier retention of jurisdiction during remand to the agency and, instead, entering final judgment

“[t]o afford the parties the opportunity for expedited review by the D.C. Circuit”); Am. Hosp.

Ass’n v. Azar, No. 19-5048, 2020 WL 4378021, at *4 (D.C. Cir. Jul. 31, 2020) (explaining that

the district court “remanded to the agency to come up with a remedy” and “then entered final

judgment, paving the way for this appeal”). “[W]hen a court remands a case based on agency

error without retaining jurisdiction, the case is terminated” and the “outcome on remand . . . can

be challenged” through a new action. SecurityPoint Holdings, Inc. v. TSA, 836 F.3d 32, 38 (D.C.

Cir. 2016); cf. Heartland Reg’l Med. Ctr. v. Leavitt, 415 F.3d 24, 30 (D.C. Cir. 2005) (plaintiff’s

challenge to the agency’s decision after remand “must be made in [the plaintiff’s] separate APA

action challenging [the agency’s] post-remand decisions”).

Here, the Court concluded that MARAD’s order approving the APL Saipan as a

replacement vessel was “seriously deficient in several fatal respects” and that, “[i]n seeking

approval . . . on remand, APL will, at best, start from a blank slate.” Dkt. 48 at 3, 5. It,

accordingly, vacated the decision and remanded the case for further proceedings consistent with

the Court’s decision. The Court did not retain jurisdiction and did not provide the parties with

any directions or timetables regarding any further proceedings. Dkt. 44; Dkt. 48; Dkt. 49; see

also Baystate Med. Ctr. v. Leavitt, 587 F. Supp. 2d 37, 41 (D.D.C. 2008) (collecting cases in

4 which the D.C. Circuit vacated agency action without retaining jurisdiction). The Court thus left

it to MARAD and APL on remand to consider (1) whether the agency could—or should—re-

open the previous administrative proceeding or require APL to file an entirely new application;

(2) whether APL might propose a different replacement vessel or different planned service by the

same vessel; or (3) whether MARAD might turn to an alternative operator. In short, the Court

merely “determine[d] that [the] agency made an error of law” and that its “inquiry [was] at an

end.” Palisades Gen. Hosp. Inc. v. Leavitt, 426 F.3d 400, 403 (D.C. Cir. 2005).

Because the Court vacated the only administrative order properly before it and did not

retain jurisdiction or provide any instructions relating to the remand, and because there was

nothing further to address in the case, the Court entered final judgment. Dkt. 49. To the extent

the Court of Appeals concludes that the Court’s entry of final judgment rendered its decision

final for purposes of 28 U.S.C. § 1291, there is no reason to certify this case for interlocutory

appeal or to enter partial final judgment; the judgement is final and appealable. The Court

acknowledges, however, that “[w]hen appellate jurisdiction is at stake, what matters is the

appellate court’s assessment of finality, not the district court’s,” Amarin Pharm. Ireland Ltd. v.

FDA, 139 F. Supp. 3d 437, 447 (D.D.C. 2015) (quoting Franklin v. Dist. of Columbia, 163 F.3d

625, 630 (D.C. Cir. 1998)), and recognizes that the question whether the Court’s judgment is

final for purposes of appellate jurisdiction is not free from doubt. All agree that, “[a]s a general

rule, orders remanding to an agency for further proceedings are not final.” See Watkins Law &

Advocacy, 2020 WL 3002126, at *1. It is less clear, however, whether that “general rule”

applies here, where the Court has expressly entered final judgment, has vacated the order at

issue, has not retained jurisdiction, has not issued any instructions to MARAD regarding the

remand, and has left it to MARAD to decide whether to continue the prior proceeding, to

5 institute a new proceeding, or to take an alternative approach to filling the vacant MSP slot.

Given that uncertainty, and because there is no just reason why Matson’s separate appeal of this

Court’s jurisdictional ruling should be delayed, the Court will enter, in the alternative, partial

final judgment with respect to Matson’s claims relating to the APL Guam.

Under Federal Rule of Civil Procedure 54(b), “[w]hen an action presents more than one

claim for relief . . ., the court may direct entry of a final judgment as to one or more, but fewer

than all, claims . . . [but] only if the court expressly determines that there is no just reason for

delay.” The requirements of Rule 54(b) are satisfied here.

The Court first concludes that Matson’s challenge to MARAD’s approval of the APL

Guam as a replacement vessel constitutes a distinct claim from its challenge to MARAD’s

approval of the APL Saipan. True, Matson’s complaint did not assert separate counts based on

MARAD’s approval of the APL Guam and the APL Saipan but, rather, alleged in a single count

that both decisions violated the APA. See Dkt. 1. But claim preclusion based on the APL

Saipan would not bar the APL Guam claim from proceeding, and Matson would not have

violated the rule against claim splitting had it brought its APL Guam and APL Saipan claims in

separate actions. Tolson v. United States, 732 F.2d 998, 1002 (D.C. Cir. 1984) (citing Gold Seal

Co. v. Weeks, 209 F.2d 802, 809–10 (D.C. Cir. 1954); Page v. Preisser, 585 F.2d 336, 339 (8th

Cir. 1978)). The two “wrong[s]” alleged based on the approval of the vessels are separate and

give rise to distinct claims. Dorsey v. Jacobson Holman PLLC, 764 F. Supp. 2d 209, 212

(D.D.C. 2011) (quoting Sensormatic Sec. Corp. v. Sensormatic Elecs. Corp., 273 F. App’x 256,

265 (4th Cir. 2008)). The Court therefore concludes that Matson brought separate claims based

on MARAD’s approvals of the APL Guam and the APL Saipan. See Cassell v. Michaux, 240

F.2d 406, 407 (D.C. Cir. 1956) (“[O]ne count of a complaint [can] include[] multiple claims.”).

6 The Court further concludes that there is no just reason for delaying an appeal of its

jurisdictional decision. To start, the APL Guam claim is “separable from the other[] [claim]

remaining to be adjudicated” and “the nature of [the APL Guam claim is] such that no appellate

court [would] have to decide the same issues more than once even if there [were] subsequent

appeals.” Brooks v. Dist. Hosp. Partners, L.P., 606 F.3d 800, 806 (D.C. Cir. 2010) (quoting

Curtiss-Wright Corp. v. Gen. Elec. Co., 446 U.S. 1, 8 (1980)). Here, the Court reached the

merits of Matson’s APL Saipan claim, resolved that claim in Matson’s favor, and remanded the

matter to MARAD. With respect to Matson’s APL Guam claim, in contrast, the Court concluded

that it lacked jurisdiction, bringing the matter to a close absent appellate review. See Am. Forest

Res. Council, 301 F.R.D. at 18 (explaining that its order meant that “unless and until [certain

claims] are appealed, no further action will take place”). The two claims, moreover, are based on

different MARAD decisions concerning different vessels. MARAD approved the APL Guam as

a replacement vessel almost five years ago, Dkt. 44 at 6, and, according to Matson, it has

suffered a competitive disadvantage since that time, id. at 13. And, most importantly, if the

Court declines to enter partial final judgment (and the Court of Appeals concludes that the matter

is otherwise not final for purposes of 28 U.S.C. § 1291), Matson might never have the

opportunity to appeal the Court’s decision; if, for example, APL withdraws its application for

approval of the APL Saipan as a replacement vessel, it is unclear what path Matson could take to

obtain appellate review of the this Court’s jurisdictional holding.

The Court will, accordingly, enter partial final judgment pursuant to Federal Rule of Civil

Procedure 54(b) with respect to Matson’s challenge to MARAD’s approval of the APL Guam as

a replacement vessel.

7 Matson also asks that the Court certify its jurisdictional order for interlocutory appeal

pursuant to 28 U.S.C. § 1292(b). Dkt. 51 at 4–5. That provision explains that

[w]hen a district judge, in making in a civil action an order not otherwise appealable under this section, shall be of the opinion that such order involves a controlling question of law as to which there is substantial ground for difference of opinion and that an immediate appeal from the order may materially advance the ultimate termination of the litigation, he shall so state in writing in such order.

According to Matson, there is considerable room for disagreement on the question of the Court’s

jurisdiction over Matson’s challenge to MARAD’s approval of the APL Guam given the “dearth

of precedent” on the issue. Dkt. 51 at 9 (quoting APCC Servs., Inc. v. Sprint Commc’ns Co., 297

F. Supp. 2d 90, 97 (D.D.C. 2003)). The fact that the D.C. Circuit has not previously addressed a

question does not, however, mean that “there is substantial ground for difference of opinion”

regarding that question. In concluding that it did not have jurisdiction over MARAD’s approval

of the APL Guam, this Court relied on D.C. Circuit, Supreme Court, and consistent out-of-circuit

precedent. Dkt. 44 at 13–22. Matson argues that both the Supreme Court’s decision in National

Association of Manufacturers v. Department of Defense (“NAM”), 138 S.Ct. 617 (2018), and

MARAD’s shifting litigation stance establish that “there is substantial ground for difference of

opinion.” Dkt. 51 at 10–11. But the Court considered NAM in reaching its decision and found

Matson’s arguments based on that case unconvincing. Dkt. 44 at 16–18. Nor does MARAD’s

evolving litigation position show that the question is a close one.

In any event, having entered final judgment and, in the alternative, partial final judgment

in this matter, there is no need for the Court to certify its jurisdictional order for interlocutory

appeal. Matson now has a belt for its suspenders; it does not need a sash to complete the

ensemble.

8 CONCLUSION

For the reasons set forth, it is hereby ORDERED that Matson’s motion for certification

pursuant to 28 U.S.C. § 1292(b) is DENIED. The Court will, however, as an alternative form of

judgment, enter partial final judgment pursuant to Rule 54(b) with respect to Matson’s challenge

to the MARAD’s approval of the APL Guam as a replacement vessel and hereby certifies that

there is no just reason for delaying Matson’s appeal of that claim.

SO ORDERED.

/s/ Randolph D. Moss RANDOLPH D. MOSS United States District Judge

Date: August 19, 2020