Dist No 1 PCD MEBA v. MARA

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued May 17, 2000 Decided June 16, 2000

No. 99-1517

District No. 1, Pacific Coast District,
Marine Engineers' Beneficial Association,
Petitioner

v.

Maritime Administration, et al.,
Respondents

BLNG, Inc., et al.,
Intervenors

On Petition for Review of an Order of the
Federal Maritime Administration

Thomas L. Mills argued the cause for petitioner. With
him on the briefs were Constantine G. Papavizas, William A.
Anderson, II and W. Patrick Morris.

 Bruce G. Forrest, Attorney, U.S. Department of Justice,
argued the cause for respondent. With him on the brief were
David W. Ogden, Acting Assistant Attorney General, Douglas
N. Letter and Robert S. Greenspan, Attorneys, John Patrick
Wiese and John G. Salisbury, Attorneys, U.S. Department of
Transportation. Edward Himmelfarb, Attorney, U.S. De-
partment of Justice, entered an appearance.

Michael Joseph argued the cause for intervenor. With him
on the brief were E. Alex Blanton and Joseph O. Click.

Before: Ginsburg, Sentelle and Garland, Circuit Judges.

Opinion for the court filed by Circuit Judge Ginsburg.

Ginsburg, Circuit Judge: Pursuant to s 9 of the Shipping
Act, 1916, the Maritime Administration (MarAd) conditionally
granted applications to transfer the registry of eight vessels
from the United States to the Republic of the Marshall
Islands. District No. 1, Pacific Coast District, Marine Engi-
neers' Beneficial Association, the collective bargaining repre-
sentative for the licensed officers on the vessels, along with
certain of its members (hereinafter collectively, the Union),
petitioned for review. The Union claims that: (1) the Mar-
Ad's decision was arbitrary and capricious; (2) the MarAd
accepted and relied upon ex parte communications in violation
of both the Administrative Procedure Act, 5 U.S.C. s 551 et
seq., and the Fifth Amendment to the Constitution of the
United States; and (3) s 9 of the Shipping Act is an unconsti-
tutional delegation of legislative authority. Because we lack
jurisdiction over the claims based upon the APA, we dismiss
the petition in part. In all other respects we deny the
petition: MEBA did not properly raise its Fifth Amendment
argument and s 9 of the Shipping Act is not an unconstitu-
tional delegation of authority.

I. Background

Section 9 of the Shipping Act prohibits the owner of a
vessel from transferring its registry out of the United States
without the approval of the Secretary of Transportation. See
46 U.S.C. App. s 808(c)(2). The Secretary has delegated his
authority under that section to the MarAd, 49 C.F.R.

s 1.66(a), which has in turn promulgated regulations imple-
menting the approval requirement. The regulations provide
in pertinent part:

(b) Vessels of 1,000 gross tons or more.

(1) Applications for approval of Transfer to foreign regis-
try and flag ... of Documented Vessels or vessels the
last documentation of which was under the laws of the
United States and which are of 1,000 gross tons or more
will be evaluated in light of--

(i) The type, size[,] speed, general condition, and age
of the vessel;

(ii) The acceptability of the owner, proposed transfer-
ee and the country of registry ...; and

(iii) The need to retain the vessel under U.S. documen-
tation, ownership or control for purposes of national
defense, maintenance of an adequate merchant marine,
foreign policy considerations or the national interest.

46 C.F.R. s 221.15(b).

BLNG applied to the MarAd for permission to transfer the
registry of eight vessels from the United States to the
Republic of the Marshall Islands. Although not required by
statute or regulation to do so, the MarAd published in the
Federal Register notice of the applications and a call for
comments thereon. After the announced period for the sub-
mission of comments had ended, however, the MarAd accept-
ed additional comments from, among others, BLNG and its
attorneys.

In its decision the MarAd canvassed the arguments put
forth in the comments and determined that the following
regulatory criteria were relevant to its decision: (1) the
general condition of the vessels; (2) the acceptability of the
Republic of the Marshall Islands; (3) national defense; (4)
the maintenance of an "adequate merchant marine"; (5)
"foreign policy considerations"; and (6) other aspects of the
"national interest."

 The MarAd applied these criteria as follows: (1) The
vessels, which are used to ship liquified natural gas, are in
good working condition. (2) The agency has previously found
the Republic of the Marshall Islands to be an acceptable
transferee. (3) The Department of Defense, upon the Mar-
Ad's inquiry, determined that the vessels are not necessary
for national defense; in any event, the transfer was condi-
tioned so that the vessels could be returned to the United
States if needed in an emergency. (4) Maintenance of an
adequate merchant marine does not require retaining the
vessels. The Department of Energy confirmed there are no
current projects planned that would require the vessels and,
although some jobs might be lost to United States seamen
because of the transfer, BLNG has agreed for at least five
years to maintain crews composed significantly of United
States seamen on six of the eight vessels. (5) The Depart-
ment of State informed the MarAd that no foreign policy
consideration required retaining the vessels in United States
registry. (6) The national interest did not otherwise require
retaining the vessels, primarily because the Republic of the
Marshall Islands adequately regulates safety aboard vessels
and the crew will continue to be composed mainly of United
States seamen.

II. Analysis

As indicated above, the Union raises three objections to the
MarAd's order: (1) It is arbitrary and capricious and there-
fore invalid under the APA; (2) the MarAd's acceptance of
and reliance upon ex parte comments violated both the APA
and the Fifth Amendment; and (3) s 9 is an unconstitutional
delegation of lawmaking authority. Before reaching the mer-
its of those arguments, we address whether the Union has
standing to raise them.

BLNG contends that the Union lacks standing under Arti-
cle III of the Constitution because it has demonstrated
neither a legally significant injury nor that the MarAd's order
is the cause of any injury the Union may have suffered.
BLNG also maintains that the Union lacks prudential stand-

ing to sue under s 9 of the Shipping Act because the interests
the Union is seeking to protect are not "arguably within the
zone of interests to be protected or regulated by" s 9.
Reytblatt v. NRC, 105 F.3d 715, 721 (D.C. Cir. 1997).

BLNG does not dispute that, as a result of the MarAd's
order, some of the Union's members among the crews will
lose their jobs and the Union will be displaced as the exclu-
sive bargaining representative. That is surely enough to give
the Union standing for the purposes of Article III. In
addition, the Union's claimed interest in "maintaining and
promoting jobs in the U.S. merchant marine to service this
nation's economic and national defense needs" is arguably
within the zone of interests protected by s 9. The preamble
to the Shipping Act states as its purposes in creating the
MarAd's predecessor "encouraging, developing, and creating
a naval auxiliary and naval reserve and a merchant marine,"
39 Stat. 728 (1916), and the MarAd reasonably concluded in
its order that a meaningful merchant marine is one with "a
trained and efficient citizen personnel." See also Meacham
Corp. v. United States, 207 F.2d 535, 542-43 (4th Cir. 1953)
(tracing legislative history of and amendments to Shipping
Act). Indeed, the MarAd's organic statute provides that "the
United States shall have a merchant marine ... operated
under the United States flag by citizens of the United States
insofar as may be practicable." 46 U.S.C. App. s 1101. We
therefore conclude that the Union clearly has demonstrated
both the injury in fact and the causation necessary to give it
constitutional standing and that its interests are arguably
within the zone of interests protected by s 9.

A. Claims based upon the APA

The Union first contends that MarAd's order is invalid
under the APA because it is arbitrary and capricious. See 5
U.S.C. s 706(2)(A). The MarAd responds that decisions re-
garding transfers of registry are "committed to agency dis-
cretion by law," 5 U.S.C. s 701(a)(2), and therefore outside
the range of judicial review authorized in the APA. If the
MarAd is correct, then this court lacks jurisdiction over the
Union's claims based upon the APA. See, e.g., ICC v. Broth-

erhood of Locomotive Engineers, 482 U.S. 270, 282, 287
(1987).

The MarAd concedes that its regulations provide specific
criteria to govern its decisions regarding transfers of registry,
but contends that, as in National Federation of Federal
Employees v. United States, 905 F.2d 400 (D.C. Cir. 1990)
(NFFE), the subject matter of the agency's decision does not
admit of judicially manageable standards. We agree. In
NFFE, we were asked to review an APA challenge to the
closure of certain military bases. The Secretary of Defense
had created a Commission on Base Realignment and Closure
and directed it to "identify which bases should be closed or
realigned." Id. at 402. The Secretary listed nine criteria
upon the basis of which the Commission was to make its
recommendations, see id., but the Commission itself decided
that, of the nine, the "military value of a base should be the
preeminent factor." Id. at 405-06. After the Commission
had submitted its recommendations to the Secretary, the
Congress passed the Base Closure Act directing the Secre-
tary to implement them. See id. at 403.

The court held that the Secretary's decisions regarding
base closures and realignments were "committed to agency
discretion by law" and hence not subject to review under the
APA. See id. at 405. Although the Base Closure Act incor-
porated the nine specific criteria that had informed the
Secretary's closure and realignment decisions, the court held
that his decisions were not reviewable because the "subject
matter of those criteria is not 'judicially manageable.' " Id. at
405; see Heckler v. Cheney, 470 U.S. 821, 830 (1985). Review
of the Secretary's decisions would require "second guessing
the Secretary's assessment of the nation's military force
structure and the military value of the bases within that
structure," and courts are "ill-equipped to conduct reviews of
the nation's military policy." Id. at 405-06.

Even a cursory examination of the order under review in
this case reveals that the primary factors driving the MarAd's
decision are national defense, the adequacy of the merchant
marine, foreign policy, and the national interest. Indeed, the

MarAd specifically consulted the Departments of State, De-
fense, and Energy to aid in its decision, and the overwhelm-
ing majority of the analysis in the agency's decision relates to
these factors. Were we to decide whether the MarAd's order
is reasonable, we would necessarily be "second guessing" not
only the Executive's determinations regarding the military
value of the eight vessels but also its judgments on questions
of foreign policy and national interest. These are not sub-
jects fit for judicial involvement. See, e.g., People's Mojahe-
din Org. v. Dep't of State, 182 F.3d 17, 23 (D.C. Cir. 1999).

The Union attempts to distinguish NFFE on the ground
that the concededly "preeminent factor" in the decision under
review in that case was the military value of the bases,
whereas in this case consideration of the national defense was
"but one factor [the MarAd] was required to consider per its
own regulations." As we have noted, however, considerations
of national security, foreign policy, and national interest were
clearly at the center of the MarAd's decision; the Union does
not even suggest that the other criteria listed in the regula-
tions were given similar weight in this case.

The Union also argues that the MarAd's decision must be
subject to review for conformity with the APA because the
Hobbs Act specifically provides that the courts of appeal
have:

jurisdiction ... to determine the validity of--

(3) all rules, regulations, or final orders of--

(A) the Secretary of Transportation issued pursuant to
section 2, 9, 37, or 41 of the Shipping Act, 1916 ...

28 U.S.C. s 2342(3)(A). That the courts have statutory juris-
diction over an act of the Executive in some contexts does not
automatically imply, however, that the courts always have
jurisdiction to review that act for conformity with the APA.
In ICC v. Brotherhood of Locomotive Engineers, the Supreme
Court held, despite the grant of jurisdiction in the Hobbs Act
over "final orders" issued by the ICC, that the agency's order
denying reconsideration of a prior order was not subject to
review under the APA because the latter decision was "com-

mitted to agency discretion by law." See 482 U.S. at 282.
Having held that the MarAd's decision is likewise committed
to agency discretion by law, it follows that the grant of
jurisdiction in the Hobbs Act to review final orders issued
under s 9 is similarly qualified.

In sum, the MarAd's decision regarding the transfer of
registry in this case is committed to its discretion by law.
We therefore lack jurisdiction over the Union's claims based
upon the APA. See Locomotive Engineers, 482 U.S. at 282,
287. We also note, but we do not decide, that in a case where
considerations of national defense, foreign policy, and the
national interest do not play a significant role, if such there
be, we may well have jurisdiction to review the MarAd's
decision regarding a transfer of registry.

B. Ex Parte Communications

The Union next contends that the MarAd's acceptance of
and reliance upon ex parte communications denied it "funda-
mental fairness" in violation of both the APA and the Fifth
Amendment. To the extent the Union's procedural complaint
rests upon the APA, again, we lack jurisdiction to review it.

Although the APA prohibits ex parte contacts in an adjudi-
cation or rulemaking "required by statute to be made on the
record after opportunity for an agency hearing," 5 U.S.C.
s 553(c), see 5 U.S.C. ss 554(a), 557(d), there is no such
requirement applicable to the MarAd's review of an applica-
tion under s 9. In the absence of such a statutory command,
of course, "[a]gencies are free to grant additional procedural
rights in the exercise of their discretion, but reviewing courts
are generally not free to impose them if the agencies have not
chosen to grant them." Vermont Yankee Nuclear Power
Corp. v. NRDC, 435 U.S. 519, 524 (1978). Here the agency
has not granted anyone the right to be free of ex parte
communications. In the absence of any statutory or self-
imposed limitation, we have no jurisdiction to review under
the APA an agency's procedural decision regarding how best
to make a substantive decision committed by law to the
agency's discretion.

 The Union attempts to circumvent this analysis by arguing
that once the MarAd requested comments from interested
parties, it relinquished its discretion to "accept and rely upon
ex parte communications without giving the public an oppor-
tunity to respond to them." The authorities the Union cites
as support for that claim, however, do not stand for that
broad proposition. In each case either the governing statute
or a regulation or both required the agency to afford interest-
ed parties an opportunity to submit comments. See Indepen-
dent U.S. Tanker Owners Comm. v. Lewis, 690 F.2d 908, 923
(D.C. Cir. 1982) (regulation requiring "opportunity for com-
ment by interested parties"); United States Lines, Inc. v.
FMC, 584 F.2d 519, 539 (D.C. Cir. 1978) ("Under the Ship-
ping Act notice and a hearing are required prior to Commis-
sion approval of any agreement subject to Section 15");
National Wildlife Fed'n v. Marsh, 568 F. Supp. 985, 992-93
(D.D.C. 1983) (statute requiring "notice and opportunity for
public hearings" and regulation requiring opportunity for
"meaningful comments"). As we have already noted, no
statute or regulation requires the MarAd to afford interested
parties the opportunity to submit comments on an application
for a transfer of registry under s 9 and, in the absence of
such a requirement, whether the MarAd permits comments
and how it deals with those comments are procedural deci-
sions that, like the underlying substantive decision, are mat-
ters within the agency's discretion. See Vermont Yankee, 435
U.S. at 524.

To the extent the Union's objection to ex parte communica-
tions rests upon the Fifth Amendment, its argument is not
properly before the court. In its opening brief the Union
conclusorily asserted that the MarAd accepted ex parte com-
munications in violation of the Fifth Amendment. The other
parties understandably did not dignify this naked assertion
with a response; nor shall we. See Carducci v. Regan, 714
F.2d 171, 177 (D.C. Cir. 1983) ("We ... decline to entertain
appellant's asserted but unanalyzed constitutional claim"); see
also United States v. Watson, 171 F.3d 695, 699 n.2 (D.C. Cir.
1999) (same). Even if the Union had developed the argument
in its reply brief beyond the vanishingly terse afterthought it

did present, out of fairness to the parties we still would not
review the Union's argument. Cf. Sitka Sound Seafoods, Inc.
v. NLRB, 206 F.3d 1175, 1181 (D.C. Cir. 2000) ("In order to
prevent this sort of sandbagging of appellees and respon-
dents, we have generally held that issues not raised until the
reply brief are waived").

C. Delegation of Legislative Authority

The Union's final contention is that s 9 of the Shipping Act
is an unconstitutional delegation of legislative authority to the
Executive. Relying primarily upon our recent decision in
American Trucking Ass'ns v. EPA, 175 F.3d 1027, modified,
195 F.3d 4 (1999), cert. granted sub nom. Browner v. Ameri-
can Trucking Ass'ns, No. 99-1257, 2000 U.S. LEXIS 3577
(May 22, 2000), and No. 99-1426, 2000 U.S. LEXIS 3629
(May 30, 2000), the Union argues that neither the statute nor
the MarAd's regulations provide an "intelligible principle" to
guide the agency's decisionmaking under s 9. For its part,
the MarAd contends there is an intelligible principle but, even
were there not, the constraints upon the ability of the Con-
gress to delegate its lawmaking authority do not apply in this
case. Because we agree with the latter point, we do not
address the former.

In United States v. Curtiss-Wright Corporation, 299 U.S.
304 (1936), the Supreme Court held that the bar against
excessive delegation of the Congress's lawmaking authority
did not apply to a Joint Resolution authorizing the President
to declare unlawful the sale of arms to certain countries if he
determined such a ban would encourage peace between them.
See 299 U.S. at 312. The Court offered two general ratio-
nales. First, it reasoned that the "investment of the federal
government with the powers of external sovereignty did not
depend upon the affirmative grants of the Constitution," id.
at 318, and, in the realm of "external affairs," "the President
alone has the power to speak or listen as a representative of
the nation." Id. at 319. The Court noted especially the need
for the President to have wide discretion in order to avoid
embarrassing our relations with foreign nations. See id. at
320. Second, the Court traced the long historical practice

supporting the delegation of broad discretion to the Executive
in external affairs. See id. 322-326. The legislation noted by
the Court includes: (1) an act permitting the President to
"lay the embargo upon all ships and vessels in the ports of
the United States, including those of foreign nations," when-
ever he determined the public safety so required, id. at 322;
(2) an act authorizing the President, "whenever an armed
vessel entering the harbors or waters within the jurisdiction
of the United States and required to depart therefrom should
fail to do so," to "forbid ... all intercourse with such vessel
... and the officers and crew thereof" and to "prohibit all
supplies and aid from being furnished them," id. 323-24; and
(3) numerous acts permitting the President to suspend the
duties laid upon foreign vessels if he determined that duties
laid upon ships of the United States were removed. See id.
at 324-25 n.2. On the basis of these two lines of reasoning,
the Court held that the "uniform, long-continued and undis-
puted legislative practice just disclosed rests upon an admissi-
ble view of the Constitution which, even if the practice found
far less support in principle then we think it does, we should
not feel at liberty at this late day to disturb." Id. at 329.

The transfer of a vessel's registry from the United States
to a foreign nation involves considerations and concerns simi-
lar to those operative in Curtiss-Wright. Little imagination
is required to envision situations in which a request to
transfer the registry of a vessel might involve delicate foreign
policy and national defense concerns. Indeed, in the course
of granting the application in this case, the MarAd consulted
with the Departments of State, Defense, and Energy in an
effort to gauge just those types of concerns. Furthermore,
as the Court noted in Curtiss-Wright, there is a long tradi-
tion of permitting the Executive broad discretion in the area
of international shipping; the Union has offered no reason to
treat s 9 differently. Instead, the Union simply asserts that
"[s]ection 9 does not involve delicate negotiations with other
governments or any manner of interaction with other coun-
tries." In fact, however, the Union itself opposed the applica-
tion below on the ground that the transfer would adversely
affect the balance of trade with Japan and that the Republic

of the Marshall Islands would not adequately regulate the
safety of the vessels. In sum, because "the whole aim of
[s 9] is to affect a situation entirely external to the United
States," it is not "open to ... challenge [as] an unlawful
delegation of legislative power to the Executive." Curtiss-
Wright, 299 U.S. at 315.

III. Conclusion

For the foregoing reasons, the petition for review is

Dismissed in part and denied in part.