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Walk Softly Stranger ... Grappling with Governance over the Northwestern Hawaiian Islands

Walk softly.

Walk softly, stranger.

The land on which you stand is Holy ground ...

a place of unspoiled beauty, colored by the hand of God.

And you who stand upon this land will someday too

remember sun-washed sands and quiet days, and

moments crystallized in time.

Walk softly, stranger, 

for you stand on Holy ground.

[A testimonial to the beauty of Northwestern Hawaiian Islands left by a Coast Guardsman on East Island, French Frigate Shoals, as published in  Yamase, State-Federal Jurisdictional Conflict over the Internal Waters and Submerged Lands of the Northwestern Hawaiian Islands, 4 U. Haw. L. Rev. 139 (1982).

The federal government is considering the expansion of the existing Papahanaumakuakea Marine National Monument from its existing boundaries seaward to the boundaries of the Exclusive Economic Zone.

Civil Beat has run several articles on this proposal (here,here,here and earlier this week here).

The federal government has struggled for over a hundred years with the management and protection of the resources of these islands.  The Yamase article above is the most concise analysis, albeit dated now, of a cross-jurisdictional argument between the federal government and the State of Hawaii regarding who can enforce what on these islands.  The Burns and Nixon administrations came close to an agreement.  

Broadly speaking, there are different statutory mechanisms to create governance regions in the ocean.  Marine Sanctuaries can be created under the National Marine Sanctuaries Act, 16 U.S.C. 1431 et seq.; the State of Hawaii can, subject to federal navigational servitude, act within its waters to create marine protected areas, like Hanauma Bay.  Finally, like President T. Roosevelt,President George W. Bush, the Antiquities Act gives the President the power to designate marine monuments.

The governance impact of the creation of a sanctuary, a state preserve or a monument all depend on the authority imbued in the creating authority and it is important to note that each statute gives the approving authority powers, i.e. express powers and rule-making powers.  

President Theodore Roosevelt himself added to the mix when he signed Executive Order 1019 which for decades formed the demarcation of jurisdiction between the Department of the Interior and Department of Commerce. [Mariner's Note to Executive Order Signers - if you say the 100 fathom curve or say 12 nautical miles from land, it makes it easier to enforce].

[Image courtesy of: U.S. Department of the Interior - From Yearbook of the United States Department of Agriculture, 1911, Google Books scan, on page 156., Public Domain, https://commons.wikimedia.org/w/index.php?curid=10630075]

As to the Walk Softly poem, that appears to originate from Coast Guardsman Harry Emmett Finch who was stationed at a Coast Guard LORAN station on French Frigate Shoals.

Stay tuned.

Why We Love the West Coast - Fish, Antitrust and the Federal Arbitration Act

“When you collect marine animals there are certain flat worms so delicate that they are almost impossible to catch whole for they will break and tatter under the touch. You must let them ooze and crawl of their own will onto a knife blade and lift them gently into your bottle of sea water. And perhaps that might be the way to write this book-to open the page and let the stories crawl in by themselves.” - John Steinbeck, Cannery Row.

We can't say that any decision of a federal appeals court has the same lure as a Steinbeck novel, but we couldn't stop thinking of Cannery Row when we read this one.  The Ninth Circuit just issued an opinion in a case where several fishermen sought to enjoin the merger of two seafood processors citing federal antitrust laws.  The Court affirmed the trial court's preliminary injunction against the sale.  The opinion is Boardman v. Pacific Seafood Group, et al. and the decision can be found here.  Oh, and the Federal Arbitration Act is thrown in, too.

Several years ago, fisherman brought an lawsuit seeking to stop a merger of two fish industry processors - the buyers of fish from the fishing vessels.  That lawsuit ended in settlement that contractually addressed the fishermen's concerns about the anti-competitive aspects of the merger.  The settlement included a provision that the acquiring company, Pacific Seafood, would provide 60 days notice before attempting to acquire the target company, Ocean Gold.

In 2015, the acquiring company, Pacific Seafood, gave notice that it intended to acquire Ocean Gold's stock.  The fishermen argued that such a merger would increase Pacific Seafood's "market power in seafood input markets" significantly giving rise to a claim of decreased competition in the West Coast market.  The trial court found that the merger would lessen competition and enjoined the stock sale until the lawsuit could be tried.  The Ninth Circuit affirmed this decision.

Separate from the antitrust issues, the Court analyzed the arbitrability of the dispute since the settlement agreement in the first case had an arbitration provision.  The settlement agreement in the earlier litigation included the following provision:

The February 9, 2006 Agreement between Pacific Seafood Group and Ocean Gold Seafoods, will not be renewed in 2016. In the event that the [sic] Pacific Seafood and Ocean Gold intend to enter into any new agreement that requires Pacific Seafood Group to act as the exclusive marketer of any seafood product produced by Ocean Gold Seafoods, Pacific Seafood and Ocean Gold shall first give 60 days’ notice to class counsel and the Oregon Department of Justice and an opportunity to object to the agreement. In the event of an objection to the new contractual arrangement, Judge Hogan shall determine whether the proposed new agreement is pro-competitive and if so, it may be approved.

The Court found that the current dispute was not covered by this agreement making the current claims not arbitrable.  There is a separate issue as to whether federal judges or magistrate judges can be arbitrators with the majority indicating that use of federal judges as arbitrators may not be authorized under federal law.  N.7.

The dissent would have compelled this matter to be arbitrated in the first instance.

It isn't Steinbeck, but we usually do not have insights into the economics of the commercial fishing industry, so we will be watching this one.

Edmund Fitzgerald: Investigating Marine Casualties

Today marks the 40th anniversary of the sinking of the M/V Edmund Fitzgerald on Lake Superior in 1975.  It sank in rough weather, taking with it the lives of 29 officers and crew. Commemorative events are outlined here.  

With this anniversary and with the sinking of the M/V El Faro last month, it seemed timely to outline the marine casualty investigation roles of the U.S. Coast Guard and the National Transportation Safety Board.  The agencies have overlapping authorities to investigate marine casualties and they have entered a Memorandum of Understanding regarding their independent roles in a marine casualty.  

Typically, the U.S. Coast Guard investigates all marine casualties but some investigations trigger NTSB involvement.  Under 49 U.S.C. 1131, the NTSB has authority to investigate:

a major marine casualty (except a casualty involving only public vessels) occurring on or under the navigable waters, internal waters, or the territorial sea of the United States as described in Presidential Proclamation No. 5928 of December 27, 1988, or involving a vessel of the United States (as defined in section 2101 (46)  [1] of title 46), under regulations prescribed jointly by the Board and the head of the department in which the Coast Guard is operating.

"Major marine casualties" are defined by regulation (49 C.F.R. 850.5) and the current regulation states:

(e) Major marine casualty means a casualty involving a vessel, other than a public vessel, that results in—(1) The loss of six or more lives;(2) The loss of a mechanically propelled vessel of 100 or more gross tons;(3) Property damage initially estimated as $500,000 or more; or(4) Serious threat, as determined by the Commandant and concurred in by the Chairman, to life, property, or the environment by hazardous materials.

The NTSB has appellate review over decisions of the U.S. Coast Guard with regard to merchant marine licensing which can lead to unusual court decisions like, Collins v. National Transportation Safety Board.  Collins is Admiral Thomas Collins, then Commandant of the U.S. Coast Guard.

In Collins, the D.C. Circuit Court of Appeals reviewed an administrative appeal from a proceeding before a Coast Guard Administrative Law Judge.  The ALJ below found that a licensed mariner committed misconduct leading to a collision in Miami Harbor.  The ALJ suspended the mariner's license for five months.  The mariner appealed to the Commandant of the U.S. Coast Guard who affirmed the decision.  The mariner then appealed to the NTSB under 49 U.S.C. 1133 which reversed the Commandant's decision.  The Coast Guard appealed to the D.C. Circuit Court of Appeals.

As is common with judicial review of administrative decisions, the court wanted to provide the executive branch with "deference" on matters that the agencies were better suited to judge (like mariner misconduct).  This case was unusual because the court had to decide which agency was entitled to deference:  the U.S. Coast Guard or the NTSB.

The court held that the U.S. Coast Guard's interpretation of the regulations at issue were entitled to deference both by the court and the NTSB.

Back to the Edmund Fitzgerald, the National Transportation Safety Board report published its findings in a report and the abstract of the report stated:

About 1915 EST on November 10, 1975, the Great Lakes bulk cargo vessel SS EDMUND FITZGERALD, fully loaded with a cargo of taconite pellets, sank in eastern Lake Superior in position 46 59.91 N, 85 06.61 W, approximately 17 miles from the entrance to Whitefish Bay, MI. The ship was en route from Superior, WI, to Detroit, MI, and had been proceeding at a reduced 3 speed in a severe storm. All the vessel’s 29 officers and crewmembers are missing and presumed dead. No distress call was heard by vessels or shore stations. The Safety Board considered many factors during the investigation including stability, hull strength, operating practices, adequacy of weathertight closures, hatch cover strength, possible grounding, vessel design, loading practices, and weather forecasting. The National Transportation Safety Board determines that the probable cause of this accident was the sudden massive flooding of the cargo hold due to the collapse of one or more hatch covers. Before the hatch covers collapsed, flooding into the ballast tanks and tunnel through topside damage and flooding into the cargo hold through nonweathertight hatch covers caused a reduction of freeboard and a list. The hydrostatic and hydrodynamic forces imposed on the hatch covers by heavy boarding seas at this reduced freeboard and with the list caused the hatch covers to collapse. Contributing to the accident was the lack of transverse watertight bulkheads in the cargo hold and the reduction of freeboard authorized by the 1969, 1971, and 1973 amendments to the Great Lakes Load Line Regulations.

The tale was memorialized in a song by Gordon Lightfoot which, in full disclosure, has been hummed or sang on every ship I have ever sailed on.  As the song reminds us, the sea is, and always has been, an ever present danger to sailors worldwide. 

Territorial Status Case Headed for Supreme Court

October 1st and the Supreme Court just granted hearing in several cases.  Of note, to this humble island attorney, is the case of Puerto Rico v. Valle. Those pesky Insular Cases....(my posts here and here).

This case arises from a criminal prosecution in Puerto Rico.  A criminal defendant was convicted of federal crimes in federal court, but then subsequently tried and convicted of violations of Puerto Rico law.  He challenged the second conviction on Double Jeopardy grounds.  The Double Jeopardy clause of the U.S. Constitution provides:  Nor shall any person be subject for the same offence to be twice put in jeopardy of life or limb.  Amend. V.  This provision does not protect criminal offenders who are charged for the same conduct by different sovereigns.  Consider a bank robber:  bank robbery is a federal crime (18 U.S.C. 2113) and armed robbery is a state crime.  Because a State and the Federal Government are separate sovereigns, no double jeopardy violation.

So, from a Constitutional perspective, is Puerto Rico the same sovereign as the federal government OR, as the Question Presented asks:  Whether the Commonwealth of Puerto Rico and the Federal Government are separate sovereigns for purposes of the Double Jeopardy Clause of the United States Constitution.

Puerto Rico says: No.  It has a Congressionally approved organic act and constitution which gave the people's sovereign power to the Puerto Rico government, which in turn, passed the criminal code.

Mr. Valle says:  Yes.  Under the Constitution, there are only two sovereigns:  states and the federal government and Puerto Rico is not a state.

SCOTUSBLOG has the cert briefs here.  When the merits briefs are available, we will post them here.

This blogger's answer?  Stay tuned.

Ninth Circuit - Jones Act is Constitutional

The Ninth Circuit struck down a challenge to the constitutionality of the Jones Act or Merchant Marine Act of 1920.  The case was Novak v. United States and the opinion can be found here.

The litigated component of the Jones Act (rest easy merchant mariners, you didn't lose your worker compensation causes of action) was the requirement that any ship carrying cargo between two points in the United States - say Long Beach and Honolulu - be "built in the United States."  

Per the Court:

Plaintiffs’ theory is that, by excluding foreign competition, the cabotage provisions have created “an essentially monopolistic Hawaiian ocean shipping market” that has resulted in “high prices” and “a de facto duopoly” of two established firms in the Hawaii-mainland shipping market. Plaintiffs contend that all Hawaii residents and businesses, including themselves, have been harmed not only by the increased shipping costs, but also by the resultant inflated cost of doing business in Hawaii because higher shipping costs lead to higher prices for imported goods. Plaintiffs assert that interstate trade between Hawaii and the rest of the United States has been significantly stifled to such an extent that the effect of the Jones Act’s restrictions amounts to “an unlawful restraint of trade and interstate commerce, thereby violating the Commerce Clause of the United States Constitution.” Plaintiffs filed this action against the United States, asserting a single cause of action under the Commerce Clause.

The basic issue on appeal is the Standing doctrine which requires you to be the right plaintiff with an injury caused by some conduct and that injury can be redressed by a favorable decision.

The Ninth Circuit rejected this challenge to the Jones Act because the harm alleged by plaintiffs - increased prices for goods purchased in Hawaii - was not caused by the Jones Act itself, but was rather based on the prices set by the shipping companies carrying the cargo.  As such, absent showing that BUT FOR the Jones Act, the prices would have assuredly been less, the Plaintiffs did not have standing to bring the challenge.

Classically, amendment of a complaint could cure a standing problem, so the Ninth Circuit analyzed whether amendment could cure the problem.  Under the federal rules, amendment of complaints should be allowed, unless it would be futile.  Or, if the amended complaint would fail for any reason, the court won't allow you to amend it.

In this case, the Ninth Circuit found the Jones Act to be a valid exercise of Congress' commerce clause powers.

9th Circuit - California Shark Fin Law Not Preempted by Fed Fisheries Law

The Ninth Circuit rejected a challenge to California's Shark Fin Law, Cal. Fish & Game Code § 2021(b) which makes it "unlawful for any person to possess, sell, offer for sale, trade, or distribute a shark fin" in the state.  The case is Chinatown Neighborhood Ass'n v. Harris and the opinion can be found here.

Shark finning is a practice of harvesting shark fins to make shark fin soup.  The rest of the living shark is discarded.

The practice was prohibited by Congress in 2000.  California outlawed possession of fins without the shark carcass in 1995, then in 2011 criminalized the possession of detached shark fins in the California Shark Fin Law.

Several trade associations filed a federal challenge to the Shark Fin Law asserting that California's law was preempted by federal fisheries law.

The Ninth Circuit found that the federal fisheries law, the Magnuson-Stevens Fishery Conservation and Management Act, 16 U.S.C.§§ 1801-1884 did not preempt California's Shark Fin Law.  The Court similarly rejected a dormant commerce clause challenge to the law.

Fisheries laws are a complex web of federal and state laws and regulations.  For sure, the States have the power to regulate fisheries within their waters, typically seaward of the 3 nautical mile line from the baseline.  Similarly, States can regulate fish LANDED in their ports.  

Federal law can and does preempt state law under the Supremacy Clause of the Constitution.  Federal fisheries laws does not preempt California's Shark Fin Law.  So says the Ninth Circuit.

 

DC Showdown Over Fisheries Law Amendments

Ah, the bloggers's dream:  juxtaposing DC Showdown with Fisheries Law in the title of your post.

On a more serious note, domestic fisheries are a $5B component of our national economy with certainly more impact locally in those ports where fish are landed.

The governing statute which sets out federal regulation of fisheries is the Magnuson-Stevens Fisheries Conservation and Management Act, codified at 16 U.S.C. 1801 et seq.

Congressman Young (AK) introduced a bill updating the Magnuson-Stevens Act in ways that trouble the White House.  The bill, H.R. 1335, contains some interesting provisions: 1) exempting fishery management actions from the National Environmental Policy Act and replacing it with a different type of study; 2) changing the types of fish counted towards the sustainable stock figures (red snapper killed during oil drill platform removal are not counted, nor fish seized from foreign fishers violating U.S. EEZ); and 3) extending State jurisdiction over recreational red snapper fishery in the Gulf Coast.

The White House says that President Obama will veto the bill if it gets passed by the Congress. Per Congressman Young's website, the House is set to vote on the bill today.

Stay tuned.

Fifth Circuit: No Punitive Damages for Unseaworthiness Claims

The Fifth Circuit, sitting en banc, held that punitive damages were NOT available for unseaworthiness claims.  The case is Haleigh Janee McBride v. Estis Well Serv. and the original opinion can be found here.  In a lengthy opinion, with multiple concurring/dissenting opinions, the panel found that the Supreme Court's decision in Atlantic Sounding Co, Inc. v. Townsend did not overrule the Court's prior precedent in Miles v. Apex Marine Corp.

We took this case en banc to decide whether the seaman plaintiffs in this case, both the injured seamen and the personal representative of the deceased seaman, can recover punitive damages under either the Jones Act or the general maritime law. We affirm the district court and conclude that this case is controlled by the Supreme Court’s decision in Miles v. Apex Marine Corp., which holds that the Jones Act limits a seaman’s recovery to pecuniary losses where liability is predicated on the Jones Act or unseaworthiness. Because punitive damages are non-pecuniary losses, punitive damages may not be recovered in this case.

Stay tuned to this one.  The opinion notes no circuit splits, but we suspect that will not last for long.

Federal Safety Board Recommends New Regulations for Parasailing

Off we go, into the wild blue yonder?

Parasailing: A neat experience for a vacationer or an industry in need of regulation?

[Photo courtesy of wikiepedia commons].

The National Transportation Safety Board issued a report entitled Parasailing Safety today.  The NTSB issued this report in response to several accidents on parasailing vessels.

Per the Executive Summary:

This special investigation report examines parasailing accidents in the United States and its territories, and identifies several areas where the risk associated with parasailing may be mitigated. Each year, an estimated 3 to 5 million people in the United States participate in parasailing; however, no federal regulations or guidelines establish specific training or certification for parasailing operators. There is no requirement for inspection of the parasailing equipment, and no requirement to suspend operations during inclement or unsuitable weather conditions. As this report will describe, passengers seeking to enjoy the thrill, adventure, and panoramic views of parasailing risk becoming accident victims. Due to the nature of parasailing, accidents usually result in either serious injury or death. 

This investigation report strives to reduce the number of injuries and fatalities associated with parasailing through recommendations that will improve safety for parasailing passengers and operators. The report also examines operations, equipment, and the various dynamic forces that affect parasailing.

As a result of this investigation, the National Transportation Safety Board makes new safety recommendations to the United States Coast Guard, the Federal Aviation Administration, and the National Association of State Boating Law Administrators.

The NTSB made several recommendations to the regulating agencies.  They are:

To the United States Coast Guard:

1. Implement a specialized license endorsement that all holders of a valid Coast Guard merchant mariner credential would be required to obtain before conducting parasailing operations. (M-14-11)
2. Incorporate by reference ASTM International’s parasailing standards to govern all parasailing operations. (M-14-12)

To the Federal Aviation Administration:

3. In accordance with 14 United States Code 141 and 49 United States Code 106(m), request assistance from the Coast Guard to enforce existing Federal Aviation Administration regulations applicable to parasailing operations. (A-14-064)

4. Review all existing regulations and special provisions that are intended to separate parasailing and aircraft operations, and take appropriate action to ensure that these directives are in harmony and consistently applied nationwide to reduce the risk of midair collisions. (A-14-065) 

5. Work with the Coast Guard to resolve conflicts between (a) the existing Federal Aviation Administration special provision that gives aircraft right-of-way over parasailing vessels, and (b) the existing international and inland navigation rules that imply that parasailing vessels are restricted in their ability to maneuver and, therefore, should have the right-of-way. (A-14-066)

To the National Association of State Boating Law Administrators:

6. Draft a model act that may be used by your membership as a framework for state legislation to reduce the risk associated with parasailing. (M-14-13).

One interesting finding of the NTSB.  Knots, including the ubiquitous bowline, make a line (rope) weaker.  Bowline is way easier to tie than the sheepshank, as Richard Dreyfuss well knows:

 

Second Circuit - U.S. Courts Can Enforce Judgments Involving Maritime Claims, Not Just Maritime Courts

In a classic admiralty, multi-country, CivPro wonky fashion, the Second Circuit Court of Appeals just issued a decision analyzing the basic jurisdiction of the federal courts to enforce foreign judgments arising from admiralty cases.

The case is D'amico Dry Limited v. Priemera Maritime (Hellas) Ltd., et al. and the opinion can be found here.

By way of jurisdictional background, the federal courts have jurisdiction to hear admiralty cases pursuant to 28 U.S.C. 1333 which provides:

The district courts shall have original jurisdiction, exclusive of the courts of the States, of:

(1) Any civil case of admiralty or maritime jurisdiction, saving to suitors in all cases all other remedies to which they are otherwise entitled.

(2) Any prize brought into the United States and all proceedings for the condemnation of property taken as prize.

A vessel operator sought to hedge its risks when its vessels were unutilized by selling its routes as an option or futures contract.  It sold such a contract to a shipper and the shipper defaulted on the obligation to pay.

Vessel operator brought a claim in England and its claim was heard in commercial court, not admiralty court.  Because these futures contracts do not involve the actual shipment of goods, English courts do not consider the contracts to be maritime in nature.  The operator sought to enforce the judgment in the United States and the districtu court dismissed its claim because the claim was not maritime in nature.

The Second Circuit found the claim to be maritime in nature and reversed the trial court's decision.  

The Court found that whether a claim was maritime in nature was the appropriate inquiry for jurisdiction and not which court issued the judgment/award.  In the modern international shipping world, foreign judgments are becoming commonplace and this is an important decision to help practitioners discern jurisdiction for enforcement of those judgments/awards.