United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued September 9, 2015 Decided December 15, 2015
No. 14-5203
WATERVALE MARINE CO., LTD., AS OWNER OF THE M/V
AGIOS EMILIANOS, ET AL.,
APPELLANTS
MERCATOR LINES (SINGAPORE) PTE, LTD., AS OWNER OF THE
M/V GAURAV PREM, ET AL.,
APPELLEES
v.
UNITED STATES DEPARTMENT OF HOMELAND SECURITY AND
UNITED STATES COAST GUARD,
APPELLEES
Appeal from the United States District Court
for the District of Columbia
(No. 1:12-cv-00105)
Barry M. Hartman argued the cause for appellants. With
him on the briefs was Michael G. Chalos.
Anne Murphy, Attorney, U.S. Department of Justice, argued
the cause for appellees. With her on the brief were Benjamin C.
Mizer, Acting Assistant Attorney General, Ronald C. Machen
Jr., U.S. Attorney at the time the brief was filed, and Matthew
M. Collette, Attorney.
2
Before: GRIFFITH and SRINIVASAN, Circuit Judges, and
SILBERMAN, Senior Circuit Judge.
Opinion for the Court filed by Senior Circuit Judge
SILBERMAN.
Opinion concurring in part and concurring in the judgment
filed by Circuit Judge GRIFFITH.
SILBERMAN, Senior Circuit Judge: This case presents the
question whether the Secretary of the Department of Homeland
Security – acting through the Coast Guard – may impose certain
conditions (nonfinancial in nature) upon the release of ships
suspected of violating the Act to Prevent Pollution from Ships.
Ship owners appeal from the district court’s holding that the
case is nonjusticiable. We disagree as to justiciability, but
affirm on other grounds.
I.
The Act is a federal statute passed to implement various
environmental obligations that the United States assumed when
it entered into the International Convention for the Prevention of
Pollution from Ships. See 33 U.S.C. § 1901(a)(4). The goal of
the treaty and its implementing legislation is to eliminate the
intentional pollution of the oceans by “oil and other harmful
substances,” as well as minimize “accidental discharge of such
substances.” See Wilmina Shipping AS v. U.S. Dep’t of
Homeland Sec., 934 F.Supp.2d 1, 6 (D.D.C. 2013) (citations
omitted).
The Secretary of the Department of Homeland Security is
authorized “to administer and enforce” the Convention and to
3
“prescribe any necessary or desired regulations to carry out” its
requirements. 33 U.S.C. § 1903(a), (c)(1).1 It is “unlawful to act
in violation of the” Convention “or the regulations issued
thereunder.” 33 U.S.C. § 1907(a). Knowingly violating the law
may give rise to both criminal and civil liability.
General authority to grant departure clearance to foreign-
flagged ships is in Customs. See 46 U.S.C. § 60105(b). But a
specific provision of the Act deals with the enforcement of the
Convention:
If any ship subject to the [Convention]…is liable for a
fine or civil penalty under this section, or if reasonable
cause exists to believe that the ship, its owner,
operator, or person in charge may be subject to a fine
or civil penalty under this section, the Secretary of the
Treasury [now DHS], upon request of the Secretary [of
DHS], shall refuse or revoke the clearance required by
section 60105 of Title 46. Clearance may be granted
upon the filing of a bond or other surety satisfactory to
the Secretary [of DHS].
33 U.S.C. § 1908(e). Both references to the Secretary now refer
to the Secretary of Homeland Security who supervises both
Customs and the Coast Guard, but in accordance with
regulations, Customs maintains authority to clear a vessel unless
the Coast Guard requests otherwise, and it is the Coast Guard
that has authority to accept a bond.
1
The authority to grant clearance, originally vested in the Secretary of
the Treasury, was subsequently transferred to the Secretary of
Homeland Security, and then further delegated to Customs. See 68
Fed. Reg. 28323 (May 23, 2003).
4
Appellants own and operate two foreign-flagged vessels:
the M/V AGIOS EMILIANOS and the M/V STELLAR WIND.
Each periodically docks at U.S. ports, in the course of its
oceangoing business, to load or offload cargo. In the spring of
2011, the Coast Guard began receiving whistleblower
complaints asserting violations of the Act. Specifically, it was
claimed that the appellants’ vessels had falsified the oil record
books required of all vessels when traveling over international
waters and docking at U.S. ports. Upon initial investigation
stemming from the complaints, the Coast Guard determined that
it had reasonable cause to believe that the vessels’ operators had
committed violations of the Act. Therefore the Coast Guard
ordered Customs to withhold departure clearance.2 The vessels
were held for investigation for differing lengths of time, ranging
from a couple of days to over a month.
As the district court noted, the vessels were eventually
released, but not until appellants had both posted a bond and
executed a “Security Agreement.” These agreements were
required by the Coast Guard as a condition of release of the
vessels. They were designed to allow the government to later
prosecute its case if merited. As such, these agreements include
several terms above and beyond the posting of a typical financial
bond. They called for the vessel owners and operators to pay
wages, housing, and transportation costs to crew members who
remain in the jurisdiction, as well as facilitate their travel to
court appearances, to encourage crew members to cooperate
with the government’s investigation, to help the government
serve subpoenas on foreign crew members located outside of the
United States, to waive objections to both in personam and in
rem jurisdiction, and to enter an appearance in federal district
court. After their release, the vessel owners initiated an
2
The AGIOS EMILIANOS and STELLAR WIND were held at
ports in Louisiana.
5
administrative appeal with the Coast Guard to challenge the
validity of the Security Agreements.
Meanwhile, the Coast Guard proceeded with its criminal
prosecutions. Ultimately, the management associated with the
AGIOS EMILIANOS and STELLAR WIND pled guilty, and
admitted to intentionally bypassing mandatory anti-pollution
equipment on board and discharging oil waste directly into the
waterways. Some among the crew on both ships had rerouted
oily water around required water-oil separators and sludge
incinerators, discharging it directly into the ocean. Those
discharges were then hidden from the mandatory oil records
book, and false entries that the environmental protection
equipment was being used were made.
Appellants, having failed in all administrative appeals,
challenge the nonfinancial Security Agreements that the Coast
Guard demanded before granting departure clearance as beyond
the Coast Guard’s statutory authority. The district court ruled for
the government, stating that the matter of conditional departure
clearance was committed to the Coast Guard’s discretion by law.
The court did observe that the final sentence of § 1908(e),
describing a “bond or other surety,” might well be limited to
purely financial terms. But the court was of the view that the
language stating that “clearance may be granted upon the filing
of a bond or other surety satisfactory to the Secretary” gave the
Department (the Coast Guard) unreviewable discretion, and
therefore the court had no standards by which to judge the claim.
6
II.
Appellants challenge the district court’s holding on several
grounds. Of course, they insist that the case is reviewable; that
there are judicially acceptable standards to apply. Then,
proceeding to the merits, appellants assert that only Customs –
not the Coast Guard – has authority to withhold a ship’s
clearance. And although the Coast Guard can require a bond (or
other surety), it may not demand any nonfinancial conditions as
part of the bond.3
The government reiterates its position before the district
court; that we lack jurisdiction because the Coast Guard has
unreviewable discretion to accept or reject a bond, and thereby
prevent a ship’s departure. Moreover before us, for the first
time, appellants’ standing is challenged and it is further claimed
that the cases are moot. Turning to the surety, the government
contends that the Coast Guard can insist on the nonfinancial
conditions it imposed because such conditions are within the
meaning of the terms “bond or other surety.” Indeed, it is
argued that such conditions are commonly included in bonds.
(The government’s brief boldly so asserts, but no examples nor
dictionary definitions are cited, which is a novel approach to
brief writing.)
3
Appellants claim that the Coast Guard could have used several other
techniques to accomplish what it sought by way of the Security
Agreements. See 18 U.S.C. § 3144 (authority to secure testimony of
material witnesses); Fed. R. Crim. P. 15 (authority to take depositions
of witnesses); 14 U.S.C. § 89(a) (warrantless search, seizure, and
arrest authority); Fed. R. Crim. P. 6 (grand jury powers); 28 U.S.C.
§ 1821; 28 C.F.R. Part 21 (authorizing and implementing procedures
to pay transportation, lodging and other expenses to secure witness
testimony). But, they claim, such measures are not permissible under
§ 1908(e).
7
The government explains why the Coast Guard insisted on
the nonfinancial conditions in these cases. It asserts – and
appellants agree – that the financial terms of a bond referred to
in the Act cover the ultimate liability of a ship owner, which can
be determined only after a legal proceeding, either civil or
criminal. In other words, nothing prevents the ship, after
posting the bond, from sailing away. And if the government
lacks sufficient evidence to present in court without the ship and
its crew, the ship owner’s liability disappears.
***
We have little doubt as to our jurisdiction. Appellants
clearly have standing, and the case is not moot, even if the ships
have sailed. The government contends that the agreements have
no ongoing legal effect. Apparently this is because the plea
agreements were reached by some appellants in the interim
between the filing of the original complaint and this appeal. But
the government overlooks that two of the appellants never pled
to, nor were they, as yet, charged with a crime. It also ignores
the fact that Security Agreements with two of the parties have
no expiration date at all, and even for those Security Agreements
with a duration provision, language releasing the parties has not
been clearly triggered. Finally, the government disregards the
point that even the criminal pleas that were reached do not
foreclose the government’s ability to seek further civil penalties,
as allowed under the Act.
Nor do we agree with the government and the district court
that the Coast Guard’s discretion is unreviewable. Although the
Coast Guard may have wide discretion as to the amount of the
bond it requires (we doubt that even that is totally unreviewable)
there is no reason to believe that the legal question presented –
whether the Coast Guard can impose nonfinancial conditions –
is not suitable for judicial review.
8
On the other hand, appellants’ lengthy discussion of the
respective roles of the Coast Guard and Customs seems rather
academic. After all, both entities are in the same Department
under the common supervision of the Secretary of Homeland
Security. In any event, it is clearly the Coast Guard under the
Secretary’s regulations that has the authority granted by the
Secretary to “request” that Customs “refuse” clearance.4
Which brings us to the main issue in the case; whether the
Coast Guard may require the nonfinancial conditions.
Appellants point to the legislative history indicating that
Congress intended a bond or other surety to cover only financial
liability for penalties imposed in civil or criminal proceedings.
See H.R. No. 96-1224, reprinted in 1980 U.S.C.C.A.N. 4849.
The government does not contest the House Report on which
appellant relies, instead focusing on the phrase “satisfactory to
the Secretary” as giving the Coast Guard broader authority. We
find it unnecessary to decide the scope of the term “bond or
other surety” because the first sentence of section 1908(e) gives
the Coast Guard the requisite authority. It states that “[i]f any
ship subject to the [Convention]…is liable for a fine or civil
penalty...or if reasonable cause exists to believe that the
ship...may be subject to a fine or civil penalty [Customs]...upon
request of the Secretary [the Coast Guard]...shall
refuse...clearance,” and as such it clearly provides authority in
the Coast Guard to simply hold the ship in port until legal
proceedings are completed.5
4
See 19 C.F.R. §§ 4.60a, 4.66a, 4.66c(a).
5
Our concurring colleague suggests that we are bypassing the text and
resorting to our own reasoning. We concede we are reasoning, but we
are focusing on the meaning and necessary implication of the first
sentence of section 1908(e), which of course is textual analysis. The
concurrence does not directly dispute that in the absence of the second
9
The nonfinancial conditions can, therefore, be thought of as
simply the quid pro quo for allowing ships to depart. It is not
necessary to consider whether those conditions are legitimately
a part of “a bond or other surety” because they could be required
independently of a bond. Although the Act authorizes the
Secretary (Coast Guard) to request clearance of a ship if a bond
is satisfactory, the Coast Guard is not required to accept a bond.
(Here we agree with the district court that the words “may” and
“satisfactory” are significant.) Indeed, as we understand the
government, a financial bond, given its limited use, is ordinarily
not satisfactory, so the Coast Guard need not accept bonds
without accompanying nonfinancial conditions.
We note that another statutory section provides a ship
owner with a cause of action for the government’s unreasonable
delay in granting departure clearance.6 We need not consider
whether the reasonableness of nonfinancial conditions is also
subject to challenge because in the cases before us appellants
have not asserted that the nonfinancial conditions are
unreasonable.
Accordingly, we must assume that holding the ships and
crew until a civil or criminal proceeding was completed was
reasonable. And since the Coast Guard can hold the ship for
sentence of 1908(e), the first sentence would give the Coast Guard the
requisite authority for the Security Agreements.
Nor do we understand why our own interpretation gives the Coast
Guard any more authority than does our colleague’s interpretation.
After all, the concurrence contends that a “bond or other surety” can
include any nonfinancial condition – lasting presumably indefinitely
– so long as it is secured by a pot of money and labeled a bond.
6
See 33 U.S.C. § 1904(h).
10
such a purpose, it seems to follow that the Coast Guard can
agree to notify Customs to release the ship only upon condition
that a civil or criminal proceeding would not be jeopardized.
***
For the above reasons, we affirm the district court’s
judgment.
So ordered.
GRIFFITH, Circuit Judge, concurring in part and
concurring in the judgment:
The majority is correct that section 1908(e) authorizes the
Coast Guard to accept a quid in return for the quo of releasing
the ship. That quid is a “bond or other surety.” 33 U.S.C.
§ 1908(e). Rather than find that the Security Agreements in
this case qualify as a “bond or other surety,” however, the
majority bypasses the text of the statute and resorts to its own
reasoning: the greater power granted by the statute to hold the
ship must surely include the lesser power to condition its
release. And as a matter of logic, that seems right. However,
nothing in the text expressly authorizes such a broad, free-
floating quid pro quo authority. Unlike the majority, I would
not decide whether such authority exists by implication.
Instead, I would affirm the judgment of the district court on
the narrower ground provided by the text of the statute: a
“bond or other surety”—the quid provided by Congress—
includes the Security Agreements in this case.
As the majority recognizes, Congress has given the Coast
Guard wide discretion in setting the conditions of a bond or
other surety. My point is only that such discretion comes from
an explicit statutory grant allowing the Coast Guard to accept
a “bond or other surety.” Apart from that authority, nothing in
the express language of the statute permits a quid pro quo
exchange and ignoring the phrase “bond or other surety”
renders that provision superfluous.
Once a ship’s clearance has been refused or revoked, the
statute authorizes the granting of clearance “upon the filing of
a bond or other surety satisfactory to the Secretary.” 33
U.S.C. § 1908(e). Because the phrase “bond or other surety”
is not qualified or defined, the phrase must be given its
“ordinary meaning,” Taniguchi v. Kan Pac. Saipan, Ltd., 132
S. Ct. 1997, 2002 (2012), which includes both financial and
2
non-financial conditions. A bond, for example, is simply a
“written promise to pay money or do some act if certain
circumstances occur or a certain time elapses.” BLACK’S LAW
DICTIONARY (10th ed. 2014) (emphasis added); see also
MERRIAM-WEBSTER UNABRIDGED DICTIONARY (online ed.
2015) (defining “bond” as “a usually formal written
agreement by which a person undertakes to perform a certain
act (such as to appear in court or fulfill the obligations of a
contract) or abstain from performing an act (such as
committing a crime) with the condition that failure to perform
or abstain will obligate the person . . . to pay a sum of money”
(emphasis added)). A surety is similarly broad: a “formal
assurance,” especially “a pledge, bond, guarantee, or security
given for the fulfillment of an undertaking.” BLACK’S LAW
DICTIONARY (10th ed. 2014); see also MERRIAM-WEBSTER
UNABRIDGED DICTIONARY (online ed. 2015) (defining
“surety” as “a pledge or other formal engagement given for
the fulfillment of an undertaking”).
These definitions demonstrate that both bonds and
sureties are general contractual devices used to assure
performance of some act. The text of the statute nowhere
limits these ordinary meanings to financial conditions alone.
The cardinal rule of statutory construction—that the
legislature says in a statute what it means and means what it
says—cautions against overlooking the text and relying
instead on what a court might think is an unstated principle
that informs the provision. See Conn. Nat’l Bank v. Germain,
503 U.S. 249, 253-54 (1992). Reading the statute for what it
says, the Security Agreements comfortably fit within the
authorization to demand a “bond or other surety” in exchange
for the release of the ship. Each Agreement requires the ship
owner to post a “Surety Bond” to “ensure performance of
3
th[e] Agreement” and the payment of any fines or penalties.
To perform the Agreement, the ship owner must waive
objections to jurisdiction and assist in the investigation, for
example by paying for lodging and meals for the crew to
remain in the United States. The United States may keep the
bond amount not only if it secures a judgment against the
owner, but also if the owner “fail[s] to waive objections to
jurisdiction as required by this Agreement.” And it may keep
a certain portion of the bond amount if the ship owner
materially breaches the Agreement’s other conditions. Thus,
as with any bond or surety, the Agreements bind the ship
owners “to perform [ ] certain act[s]”—waive objections to
jurisdiction and assist in the investigation—“with the
condition that failure to perform . . . will obligate the [ship
owners] . . . to pay a sum of money.” MERRIAM-WEBSTER
UNABRIDGED DICTIONARY (online ed. 2015) (defining
“bond”).
The appellants challenge this reading of the statute,
arguing that a phrase in the legislative history shows the Coast
Guard lacks the power to impose non-financial conditions for
the release of a ship:
To assure payment of any fine or civil penalties that
might be incurred upon completion of criminal
proceedings or civil penalty actions, the Secretary of the
Treasury is required to refuse or revoke clearance to any
ship upon request of the Secretary of Transportation.
However, clearance may be granted upon the filing of a
bond or other satisfactory surety.
H.R. Rep. No. 96-1224, at 17 (1980), reprinted in 1980
U.S.C.C.A.N. 4849, 4864 (emphasis added). According to the
appellants, “[t]o assure payment of any fine or civil penalties”
4
means that the bond or surety must be limited to covering the
payment of a fine. Leaving to one side the debate about the
value of legislative history in statutory interpretation, see
Samantar v. Yousuf, 560 U.S. 305, 326-27 (2010) (Scalia, J.,
concurring in the judgment), we have consistently held that
where the statutory text is clear, “[t]he plain meaning of
legislation should be conclusive” unless it “compels an odd
result.” Engine Mfrs. Ass’n v. EPA, 88 F.3d 1075, 1088 (D.C.
Cir. 1996) (internal quotation marks omitted); Nat’l Pub.
Radio, Inc. v. FCC, 254 F.3d 226, 231 (D.C. Cir. 2001). Here,
nothing odd results from imposing conditions that assist the
United States in its prosecution of violations of the Act to
Prevent Pollution from Ships. We would be stepping beyond
the bounds of the judicial role were we to disregard the text of
the statute based on a phrase in a House Report.
In any event, the appellants make too much of this
phrase. The language from the House Report upon which the
appellants rely does not limit a bond or other surety to
financial conditions. Instead, it offers that one purpose of
section 1908(e) is to make sure that fines are paid. But any
likelihood of obtaining a fine vanishes if the United States
cannot secure the conditions included in the Security
Agreements here. For instance, if ship owners do not waive
objections to jurisdiction, the United States may lack
jurisdiction to prosecute them after granting clearance. No
prosecution means no fine, in which case the United States
must return the bond amount to the ship owners. Recognizing
this problem, the appellants conceded at oral argument that a
“bond or other surety” could, at a minimum, contain an
obligation to waive objections to jurisdiction. Appellants then
suggested a new line between non-financial conditions that
are jurisdictional and those that are not. But that line, like the
5
distinction the appellants urge between financial and other
conditions, has no basis in the text of the statute.
For these reasons, I would affirm the judgment of the
district court on the ground that the Security Agreements are
the type of “bond or other surety” that the statute’s plain text
authorizes the Coast Guard to accept in exchange for the
release of the ship.