United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued April 10, 2007 Decided May 15, 2007
No. 05-5382
RICHARD J. MENKES,
APPELLANT
v.
DEPARTMENT OF HOMELAND SECURITY, ET AL.,
APPELLEES
Appeal from the United States District Court
for the District of Columbia
(No. 04cv01456)
Jonathan G. Axelrod argued the cause for appellant. On the
briefs were Edward M. Gleason, Jr. and Richard W. Gibson.
Megan L. Rose, Assistant U.S. Attorney, argued the cause
for appellees. With her on the brief were Jeffrey A. Taylor, U.S.
Attorney, and R. Craig Lawrence, Assistant U.S. Attorney.
Michael J. Ryan, Assistant U.S. Attorney, entered an
appearance.
Before: SENTELLE and BROWN, Circuit Judges, and
SILBERMAN, Senior Circuit Judge.
2
Opinion for the Court filed by Senior Circuit Judge
SILBERMAN.
SILBERMAN, Senior Circuit Judge: Richard J. Menkes, a
ship pilot who sued the Coast Guard, appeals from the district
court’s decision holding that the court lacked jurisdiction over
his APA claim and that his constitutional claims failed to state
a cause of action. We reverse and direct a remand to the agency.
I
Appellant is a licensed pilot registered by the Coast Guard
under the Great Lakes Pilotage Act of 1960. 46 U.S.C. §§ 9301
et seq. This case has its origin in a dispute between Menkes and
the St. Lawrence Seaway Pilots’ Association, a private business
organization composed of ship pilots who provide pilotage
service on the waters of the Great Lakes.
The Great Lakes Pilotage Act generally requires that U.S.
or Canadian registered pilots navigate certain types of vessels
through designated waters of the Great Lakes. Pursuant to the
Act, the President of the United States has designated three areas
in the Great Lakes where navigation by a registered pilot is
required: District One, District Two, and District Three. To
facilitate efficient pilotage in these designated areas, the Act
permits the Coast Guard to establish “pilotage pools,” which are
to be formed by “voluntary” associations of U.S. registered
3
pilots.1 The Coast Guard authorized the Association to form
such a pool in District One.
Menkes was a member of the Association and its pilotage
pool until he quit the Association in December 2000 due to
unexplained professional differences and mounting personal
animosity between Menkes and other members of the
Association. Previously, Menkes had written to Frank J. Flyntz,
the Coast Guard’s Director of Great Lakes Pilotage, to inform
him that he (Menkes) intended to quit the Association, but that
he wanted to continue service as a registered pilot in District
One and that he “maintain[ed] [his] right to be dispatched.”2
1
The relevant section reads in full:
(a) The Secretary may authorize the formation of a pool by a
voluntary association of United States registered pilots to provide
for efficient dispatching of vessels and rendering of pilotage
services.
(b) For pilotage pools, the Secretary may—
(1) limit the number of the pools; (2) prescribe regulations for
their operation and administration; (3) prescribe a uniform system
of accounts; (4) perform audits and inspections; and (5) require
coordination on a reciprocal basis with similar pool arrangements
authorized by the appropriate agency of Canada.
46 U.S.C. § 9304.
2
In September 1998, over two years before leaving the Association,
Menkes applied to form a second pilotage pool in District One—i.e.,
in addition to the Association—consisting solely of himself.
Menkes’s application was denied in June 2000. Flyntz’s letter
informed Menkes that the controlling statute and regulations required
that pilotage pools have more than one member. In addition, Flyntz
noted the forty-year history of the Great Lakes Pilotage Act, in which
4
Flyntz responded, telling Menkes that his resignation from the
Association “has no effect on your status as a Registered Pilot,”
and “[t]herefore you will be placed on the St. Lawrence River
tour-de-role [i.e., pilotage assignment system] at the beginning
of the [2001 navigation] season.” Flyntz also noted that he
expected Menkes would continue to use the Association’s
infrastructure and equipment, and that in accordance with Coast
Guard regulations, see 46 C.F.R. § 401.340(a)-(c), Menkes
would execute a written authorization allowing the Association
to bill Menkes for services and require his compliance with the
Association’s rules and procedures.
In March of the following year, Flyntz wrote to the
Association President, Roger Paulus, in response to Paulus’s
letter concerning Menkes’s status for the 2001 navigation
season. Flyntz stated that “Captain Menkes will continue to
serve as a pilot on the St. Lawrence River tour-de-role,” and that
he would “be available for dispatch whether or not he belongs
to a pilotage pool.” He pointed out that “[a] pilotage pool is a
voluntary association of registered pilots,” (citing 46 U.S.C. §
9304 (emphasis in original)), and that “[t]here is no mandatory
requirement in statute or regulation that requires Great Lakes
registered pilots to belong to a pool in order to provide pilotage
service.” Flyntz further noted that Menkes’s “resignation from
the Association does not . . . provide any basis for the Coast
Guard to deny him the opportunity to continue to earn his
livelihood as a U.S. registered pilot,” (emphasis added) and that
Menkes had “a vested property right in his certificate of
registration” (emphasis added) that the Coast Guard could not
revoke merely because Menkes “does not belong to a pilotage
pool.” Flyntz went on to say: “Furthermore, . . . there is a
the Coast Guard had authorized only one pool for each of the three
pilotage districts. According to Flyntz, Menkes had failed to show
that a second pilotage pool was necessary in District One.
5
serious need for qualified pilots in District 1 and . . . the
Association has not physically provided adequate pilotage
service in accordance with 46 C.F.R. § 401.720(b).”3 That
section of the Coast Guard regulations permits the Director of
Great Lakes Pilotage to order a registered pilot to provide
pilotage service whenever an association cannot provide service
due to “physical or economic inability.” Then, invoking his
authority under Coast Guard regulations, including § 401.720,
Flyntz announced his decision to dispatch Menkes as “an
independent pilot” in District One. The Association appealed
Director Flyntz’s decision to J.P. High, the Coast Guard’s
Director of Waterways Management, who denied the appeal.
Thereafter, Paul M. Wasserman became Acting Director
(and subsequently Director) of Great Lakes Pilotage, and he
apparently had a somewhat different view. On December 29,
2003, Wasserman, responding to another Association enquiry
concerning Menkes’s status as an independent pilot in District
One, wrote to both Paulus and Menkes. Wasserman rejected the
Association’s argument that a “change in circumstances”
warranted a reversal of Flyntz’s 2001 decision to place Menkes
on the tour-de-role, noting that the Association was still not
providing adequate pilotage service. Wasserman affirmed
Flyntz’s determination from 2001 and renewed that
determination for the 2003 navigation season. But he wrote that
3
Section 401.720(b) reads in full:
(b) When pilotage service is not provided by the association
authorized under [the Act] because of a physical or economic
inability to do so, or when the Certificate of Authorization is
under suspension or revocation under § 401.335, the Director
may order any U.S. registered pilot to provide pilotage service.
46 C.F.R. § 401.720(b).
6
at the “end of the season, . . . my determination, and Captain
Menkes’ appointment as an independent pilot, will naturally
expire.” This statement is the first indication from the Coast
Guard that Menkes’s status as an independent pilot was on a
season-to-season basis. Wasserman added that he would
continue to evaluate the Association’s pilotage service in order
to determine whether independent pilots were needed for the
2004 navigation season.
Then, in January 2004, Wasserman responded to appellant’s
further letters, stating:
Your letters imply that your status as an independent pilot
in District One is a permanent circumstance. . . . [Y]ou were
appointed as an independent pilot on March 7, 2001,
because [Director Flyntz] found that the Association was
not able to provide adequate pilotage service at that
time. . . . Your status as an independent pilot has been
predicated on a determination by my office that an
extraordinary circumstance exists, which I have not made
for any future navigation seasons. Therefore, it would be
inappropriate for you to consider your status as an
independent pilot in District One to be a permanent
circumstance.
The Coast Guard, at that point, appears to have set forth two
modifications to its policy. Wasserman wrote (1) that Menkes’s
appointment expired on an annual basis and (2) that any new
appointment would depend on the Director’s determination, not
just that the Association has a “physical or economic inability”
to provide service, but also that “extraordinary circumstances”
exist necessitating the appointment of an independent pilot,
which seems to be a stricter standard.
7
Menkes appealed Wasserman’s decision to Assistant
Commandant T. H. Gilmour. Gilmour denied the appeal,
essentially reiterating Wasserman’s position. Gilmour noted,
however—rather suggestively—that “Captain Menkes is free to
apply to the SLSPA for membership in that association. He is
also free to apply to other pilotage associations within the Great
Lakes since he will have a valid license and a valid certificate of
registration as a U.S. registered pilot on the Great Lakes.” The
letter concluded by noting that the denial of Menkes’s appeal
“constitutes final agency action.”
Menkes filed suit in federal district court in August 2004
seeking, inter alia, reinstatement of his status as an independent
pilot and an order prohibiting defendants from requiring Menkes
“to become a member of the Association as a condition of
working.” Menkes’s complaint lists three claims—that the
Coast Guard’s action (1) violated his associational rights under
the First Amendment; (2) violated his Fifth Amendment right to
due process; and (3) was in violation of the APA. The district
court granted defendants’ motion to dismiss. See Menkes v.
Dep’t of Homeland Sec., 402 F. Supp. 2d 204, 210 (D.D.C.
2005).
The court addressed each of Menkes’s three claims in turn,
beginning with the APA challenge. Although recognizing that
there is a strong presumption of reviewability under the APA,
the court explained that APA review is not available if agency
action is “committed to agency discretion by law.” See 5 U.S.C.
§ 701(a)(2). A matter is committed to agency discretion when
there is a lack of judicially manageable standards to guide
meaningful review. Steenholdt v. F.A.A., 314 F.3d 633, 638
(D.C. Cir. 2003). The court reasoned that the regulations, by
specifically giving the Director sole authority to make
determinations about the need for non-association pilots, failed
to provide a judicially manageable standard by which to review
8
such a decision. Thus, whether additional pilots were
required—or, alternatively, whether the Association was
providing adequate pilotage service—were questions within the
unreviewable discretion of the agency.
The district court also disposed of Menkes’s constitutional
claims. With respect to Menkes’s First Amendment association
claim, the court concluded that “defendants do not require the
plaintiff to join the [Association] as a condition to employment,”
402 F. Supp. 2d at 209-10, noting that the Coast Guard had
allowed Menkes to serve as a pilot from 2001 to 2003 without
joining the Association. Because the only “prerequisite” to
Menkes’s employment was a determination by the Director that
the Association was not providing sufficient service, the court
decided that Menkes had failed to state a valid First Amendment
claim.
Turning to Menkes’s Fifth Amendment due process claim,
the court observed that a constitutionally protected property
interest in continued employment only arises when a plaintiff
can demonstrate a legitimate claim of entitlement to the benefit
in question, rather than a mere unilateral expectation, abstract
need, or desire to have the benefit. Id. at 210 (citing Bd. of
Regents v. Roth, 408 U.S. 564, 576 (1972)). Here Menkes had
no legitimate claim of entitlement because “the pertinent
statutes themselves do not expressly create an entitlement to the
authorization of working as an independent pilot in a district
with an approved pilotage pool.” Id. (emphasis added). The
court noted that the Great Lakes Pilotage Act and the Coast
Guard’s interpretation of the Act “caution against any reliance
upon working as an independent pilot by reiterating that the
Director must first determine that ‘extraordinary circumstances’
exist rendering independent pilots necessary.” Id. Thus,
according to the court, the Act does not secure any benefit for
9
Menkes and does not support any claim of entitlement to
continued status as an independent pilot.
II
Appellant’s APA argument—that the Coast Guard’s actions
are arbitrary and capricious and contrary to law—is based first
on the claim that the Coast Guard, without explanation, changed
its position by announcing that his appointment was on an
annual basis only. Wasserman’s position is, according to
appellant, in tension with Flyntz’s earlier statement that Menkes
had “a vested property right in his certificate of registration” and
that resignation from the Association did not “provide any basis
for the Coast Guard to deny [Menkes] the opportunity to earn
his livelihood as a U.S. registered pilot.” Appellant further
claims that the Coast Guard is rather obviously, if implicitly,
attempting to compel him to rejoin the Association in order to
gain work. That, too, is an unexplained change in position and,
according to appellant, is in conflict with the statute which
explicitly describes pools as “voluntary” associations.
Relying on his contention that the Coast Guard is seeking
to compel him to rejoin the Association, appellant contends that
the agency’s behavior not only violates the governing statute,
but it also violates his First Amendment right not to be forced to
join an expressive association as a condition of employment
with the government. (Although appellant asserts that the
Association takes part in various lobbying activities, he does not
indicate that he objects to any particular position of the
Association.) Finally, appellant argues that the Coast Guard has
violated his Fifth Amendment right to due process because the
agency has deprived him of a property interest—the right to
engage in piloting pursuant to his acknowledged property
10
interest in his registration—without any hearing, or, indeed,
without anything but a conclusory explanation.4
In response, the government raises a number of threshold
jurisdictional arguments. Frankly, we do not think them worth
a tinker’s damn. First, it is claimed that since appellant only
challenged the Coast Guard’s determination of his status for the
2004 season, which has long since concluded, there is no longer
a case or controversy for us to decide; the case is thus moot
because Menkes never requested assignment for subsequent
navigation seasons. That argument improperly assumes that the
Coast Guard is correct on a disputed issue—whether appellant’s
appointment had to be renewed annually. In any event,
appellant claims that the Coast Guard’s 2004 letter, reasonably
interpreted, indicated that he would not receive assignments in
future seasons unless he rejoined the Association. Therefore,
under his theory, further requests for work in 2005 and 2006
would have been futile.
Secondly, the government challenges our jurisdiction on the
ground that the 2003-2004 letters from Wasserman and Gilmour
were not “final agency action,” see 5 U.S.C. § 704; rather, the
letters simply informed Menkes of the pre-existing fact that his
appointment would expire at the end of the 2003 navigation
season. This argument would be unworthy of the
government—the letters reflected a changed position and quite
clearly constituted a final informal adjudication—even if
4
In addition, appellant raises a substantive due process claim. We
consider this argument insubstantial. The Coast Guard’s actions, even
if mistaken, do not amount to a “conscience shocking” abuse of
executive power that violates the substantive component of the Due
Process Clause. See County of Sacramento v. Lewis, 523 U.S. 833,
846-47 (1998).
11
Gilmore had not explicitly said, “[t]his denial of your appeal
constitutes final agency action.”
Finally, we turn to the argument that persuaded the district
court—that the Coast Guard’s action is unreviewable because,
under section 701(a)(2) of the APA, the Director’s decisions in
the case are “committed to agency discretion by law.” As we
noted, the district court thought it had no manageable standards
to allow it to review the Director’s decision not to order an
independent pilot to provide service pursuant to section
401.720(b) of the Coast Guard regulations. In other words, the
court apparently considered the Association’s “physical or
economic” ability to provide adequate pilotage service an
unbounded policy question. We disagree.
In the first place, appellant raises an anterior legal claim.
He argues that if the Coast Guard regulations are read to give a
preference to members of the Association, rather than treating
non-members who comply with the pool’s working rules equally
with members, see 46 C.F.R. § 401.340, the regulations would
then conflict with the controlling statute, which only allows for
pool formation by “voluntary” associations. It can hardly be
suggested that this legal question is not susceptible to judicial
review.
Moreover, even if the Coast Guard is entitled to prefer the
Association over non-member pilots when there is limited
demand, a court could still review the Director’s determination
with respect to the adequacy of the service provided by the
pool—i.e., whether the pool has the physical and economic
ability to provide sufficient service. Center for Auto Safety v.
Dole, 846 F.2d 1532, 1534 (D.C. Cir. 1988) (per curiam) (noting
that agency regulations may provide “law to apply”). We have
often held that standards similar to that set forth in section
401.720(b) are reviewable. See, e.g., Dickson v. Sec’y of
12
Defense, 68 F.3d 1396, 1401-03 (D.C. Cir. 1995) (reviewing
decision of military review board where board “may excuse
failure to file” if in the “interest of justice”); Marshall County
Health Care Auth. v. Shalala, 988 F.2d 1221, 1223-25 (D.C. Cir.
1993) (allowing review of agency decision to provide exceptions
“as the Secretary deems appropriate” because statutory scheme
provided sufficient standards to guide review). To be sure, the
Director might be entitled to a good deal of deference in
determining whether the pool was physically or economically
able to provide adequate service, but that does not mean the
Director could make such decisions unreasonably. For example,
it would be presumably arbitrary and capricious for the Coast
Guard to ignore an obvious unfilled demand for pilotage service,
or to change its standards for determining what level of service
is adequate without explanation. Also dubious would be a
refusal to appoint a pilot for reasons not mentioned in the
regulations, such as an effort to force the pilot to join the
Association.
III
It is not appropriate for us to decide appellant’s statutory
argument—that giving a preference to the Association conflicts
with the controlling statute’s use of “voluntary association”—at
this time. We cannot pass comfortably on that question because
we do not have a forthright agency interpretation of the statute.
Paradoxically, the government argues that we should give
deference to its interpretation under Chevron U.S.A., Inc. v.
Natural Resources Defense Council, Inc., 467 U.S. 837 (1984).
But putting aside the question raised by United States v. Mead
Corp., 533 U.S. 218 (2001)—whether an interpretation
advanced only in an informal adjudication is entitled to
deference—in this case we do not have an explicit agency
interpretation of either the statute or the regulation to evaluate.
To be sure, section 401.720(b) could be read to imply a
13
preference for the Association. The Wasserman and Gilmour
letters could also be read to suggest as much.5 But an
implication is not an agency interpretation, and we are
disinclined to tease out, from the welter of correspondence in
this case, an interpretation the agency itself has failed to offer.
The statutory question is potentially a difficult one. The Coast
Guard must come to grips with the meaning of the statute, and,
particularly, the meaning of the term “voluntary association.”
An agency interpretation is not only necessary to meet
appellant’s administrative law challenge, it is also essential, as
we will explain, to meet his constitutional claims.
Even assuming that the Act can be interpreted to allow the
Coast Guard to give a preference to pool members so long as the
Association has the physical and economic ability to meet
demand, the record is silent on whether that was so when
appellant was denied an appointment in 2004. Of course, this
was an informal adjudication, and it is common for the record to
be spare in such cases. See, e.g., Camp v. Pitts, 411 U.S. 138,
139-41 (1973). But here we have no indication that in 2004 the
situation had changed from earlier years when the pool could not
provide adequate service. Moreover, Director Wasserman’s use
of “extraordinary circumstances,” as we have noted, seems to be
an unexplained, stricter threshold for the appointment of non-
member pilots than the regulation’s text contemplates. Thus, if
the pool could not meet demand, and the Coast Guard was
simply seeking to compel Menkes to join the Association, that
decision might be thought in contravention of the Coast Guard’s
own regulations. In any event, the Coast Guard has offered no
5
In addition, the large price of Association membership, $60,000,
might suggest that members expect at least a preference in assignment;
on the other hand, the membership stake could reflect only an equity
interest in boats and equipment. The record does not tell us which is
the case.
14
explanation regarding the changed conditions from the 2003 to
2004 navigation season, and on remand it will be obliged to do
so.6
The district judge dismissed appellant’s constitutional
contentions for failure to state a claim. We think that was at
least premature. Menkes’s First Amendment claim depends on
the assumption that the Coast Guard was attempting to force him
to join the Association as a condition of employment. As we
understand his position, even granting a preference to pool
members would constitute such compulsion. Although he never
indicates what expressive conduct by the Association he finds
objectionable, he does argue that forcing him to join the
Association is a First Amendment violation. For this point, he
relies primarily on Abood v. Detroit Board of Education, 431
U.S. 209, 234-35 (1977). Abood stands for the proposition that
the government may not compel an employee to subsidize the
political (i.e., non-representational) speech of his or her labor
union—although, under previous Supreme Court case law,
compulsory union membership is permitted as a condition of
employment. Appellant seeks to extend the Abood principle to
his situation by arguing that the government cannot force him to
join an expressive, private organization as a condition of
employment with the government. Before grappling with this
First Amendment issue, however, we would like to see how the
Coast Guard responds to our remand order on appellant’s APA
claim. Conceivably, this question will be mooted.7
6
If the Coast Guard’s view of adequacy of supply changed in 2004, an
explanation would have to include specific comparisons.
7
Appellant’s prayer for relief asks, inter alia, that he be “ma[d]e
whole” for his lost employment opportunities, but it is unclear on what
basis he seeks such a remedy.
15
Finally, appellant’s Fifth Amendment due process claim
raises quite troublesome issues. It rests on the proposition that
Menkes had a property interest in his Coast Guard registration,
and also in his appointment as an independent pilot. The district
court, as we observed, rejected that notion out of hand, asserting
that the Act did not confer such an interest. But the Supreme
Court has recognized that a property interest in employment can
be created through informal understandings between an
institution and its employee. Perry v. Sinderman, 408 U.S. 593,
600-03 (1972). By analogy, it might be thought that appellant’s
registration as a pilot carried an entitlement to certain
appointments. After all, Director Flyntz’s March 2001 letter
explicitly referred to Menkes’s “property right in his registration
certificate” and suggested that right gave him “an opportunity to
continue to earn his livelihood.” And Flyntz never suggested
that Menkes’s appointment was year-to-year.8
Whether appellant had an entitlement to a pro rata share of
all pilotage assignments—or even such assignments as the pool
could not adequately meet—would depend on the nature of the
understandings reached between the Coast Guard and the pilots.
And if it were shown that appellant had a property interest in
such assignments as the pilotage pool could not meet, then he
would be entitled, under the Fifth Amendment, to a further
hearing to determine whether conditions constituting adequate
pilotage service actually existed. Again, this issue might well
be moot after remand, but we should note that if appellant
succeeded in establishing a constitutionally protected interest in
property, he would have an opportunity to challenge factual
8
Wasserman may have been attempting to unilaterally convert a
Sinderman case to a Roth case—i.e., from one in which there is an
understanding of permanent employment status to one in which the
employee has only a year-to-year expectancy.
16
determinations not normally present in deferential APA review
of informal adjudications.
IV
For the foregoing reasons, the judgment of the district court
is reversed and the decision of the Coast Guard is vacated. We
remand this matter to the district court with instructions to
remand the APA claim to the Coast Guard for further
proceedings consistent with this opinion. The district court
should retain jurisdiction over appellant’s constitutional claims,
but hold them in abeyance pending the Coast Guard’s response
to the remand.