Opinion
03 CV 4273 (ADS) (MLO).
August 23, 2006
EVANS, OSBORNE AND KREIZMAN, LLC, Attorneys for the Plaintiff, Ocean, New Jersey, By: Joel N. Kreizman, Esq., of Counsel.
HILL RIVKINS HAYDEN LLP, Attorneys for the Defendant Block Island Pilots, New York, New York, By: Kipp Charles Leland, Esq., of Counsel.
ELIOT SPITZER ATTORNEY GENERAL OF THE STATE OF NEW YORK, Attorney for the Defendants Richard Hobbie, III, Robert Pouch, and Board of the Commissioners of Pilots of the State of New York, New York, New York, By: Joel Graber, Assistant Attorney General, Special Litigation Counsel.
MEMORANDUM OF DECISION AND ORDER
This case arises out of claims by New England Shipping Company, Inc. (the "plaintiff") that Block Island Pilots unlawfully collected a $1,874.19 pilotage fee from them. The plaintiff New England Shipping Company describes itself as "a full-service steamship agency serving all ports in the Northeast," that provides services regarding the management of their clients' vessels and cargo while in port. See www.newenglandshipping.com. According to the complaint, New England Shipping also acts as an agent for ship owners in arranging for ship pilotage. Complaint ("Compl.") at 2. Block Island Pilots collected the pilotage fee under the alleged authority of New York Navigation Law and a certain public notice issued by the Board of Commissioners of Pilots of the State of New York (the "Board"). This notice requires foreign vessels and American vessels engaged in foreign trade transiting the New York waters of Block Island Sound to be piloted by a New York licensed pilot. The individual defendants, Richard Hobbie, III ("Hobbie"), and Robert Pouch ("Pouch"), are the President and Executive Director of the Board, respectively. Collectively, the Board, Hobbie, and Pouch are referred to as the "State Defendants."
The plaintiff, Block Island Pilots, and the State defendants have each made a separate motion for summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure (" Fed.R.Civ.P."). As a preliminary matter, the Court notes that on February 8, 2006, the plaintiff submitted a letter in response to the Supplemental Declaration of Robert Pouch. As correctly pointed out by counsel for the State defendants, this document is in the nature of an unauthorized "sur-reply." Accordingly, the February 8, 2006 letter from the plaintiff has not been considered by the Court in the determination of these motions.
I. BACKGROUND
Unless otherwise noted, the material facts underlying this controversy, set forth below, are not in dispute.
A. The Parties
The plaintiff is a Connecticut corporation with its principal place of business in New Haven, Connecticut. Among other services, the plaintiff acts as an agent in arranging ship pilotage for vessels entering ports in the northeastern United States.
Block Island Pilots is a Rhode Island corporation with its principal place of business in Newport, Rhode Island. The business of Block Island Pilots is to act as an agent for ship pilots licensed by the State of New York to navigate foreign vessels and domestic vessels under registry (i.e., engaged in foreign trade) through the New York waters of Block Island Sound. A "pilot" is an individual licensed to navigate a vessel through specific bodies of water. All pilots licensed by the State of New York to navigate vessels through the waters of Block Island Sound are associated with Block Island Pilots. Declaration of Captain Kenneth Warner ("Warner Decl.") ¶ 5.
The Board is an administrative body constituted pursuant to section 87 of the New York Navigation Law. The Board licenses, regulates, and supervises maritime pilots responsible for navigating vessels operating in New York State waters, international waters under piloting jurisdiction of the State of New York, and waters of concurrent State jurisdiction.
B. The Statutory and Regulatory Background
The history of state pilotage regulation generally, and the pilotage provisions of the New York Navigation Law have previously been discussed by this Court, the Second Circuit, and other courts. See, e.g., Interport Pilots Agency, Inc. v. Sammis, 774 F. Supp. 734 (E.D.N.Y. 1991), aff'd, 14 F.3d 133 (2d Cir. 1994); Interoceanica Corp. v. Sound Pilots, Inc., No. 95 CIV. 0950 (RPP), 1996 WL 337279 (S.D.N.Y. June 19, 1996), rev'd, 107 F.3d 86 (2d Cir. 1997); Ball v. Ineroceanica Corp., 867 F. Supp. 226 (S.D.N.Y. 1994), aff'd, 71 F.3d 73 (2d Cir. 1995); see also Warner v. Dunlap, 532 F.2d 767 (1st Cir. 1976) (resolving dispute regarding Rhode Island regulation of pilotage in Block Island Sound).
In sum, Congress is authorized to regulate pilotage, but has delegated that authority to the states. See 46 U.S.C. § 8501(a) ("Except as otherwise provided . . . pilots in the bays, rivers, harbors, and ports of the United States shall be regulated only in conformity with the laws of the States."); Interport, 14 F.3d at 136. The only exception to the rule giving the States plenary jurisdiction to regulate pilotage in their territorial waters is found in the Boundary Waters Act, 46 U.S.C. § 8501(b). The Boundary Waters Act provides that neighboring states share the power to regulate pilotage in waters that form a territorial boundary between them. See Interport, 14 F.3d at 136.
In 1971, under the authority of 46 U.S.C. § 8501(a), the State of New York enacted legislation requiring that vessels transiting Long Island Sound and Block Island Sound be piloted by a New York licensed pilot or a pilot licensed "under the laws of any other state having concurrent jurisdiction" over those waters. See 1971 N.Y. Laws, ch. 942, § 1, codified at N.Y. Nav. Law § 89-b. The statute further provided that vessels that failed or refused to use a New York pilot when required to do so by section 89-b would be liable for a pilotage fee as if a New York pilot had been employed. Id.; Interport, 14 F.3d at 137.
In its current form, section 89-b(1) provides the following:
Every foreign vessel and every American vessel under register transiting the New York state waters of Long Island Sound or Block Island Sound east of Execution Rocks or Sands Point . . . shall take a Long Island-Block Island Sound pilot licensed under the authority of this article. . . . Every foreign vessel and every American vessel under register transiting the New York state waters of Long Island Sound or Block Island Sound east of a line running southeasterly from the mouth of the Byram River at the New York-Connecticut boundary to Oak Neck Point on Long Island shall take a pilot licensed under the authority of this article or the laws of any other state having concurrent jurisdiction over these waters. Whenever the services of such a pilot are refused, the master, owners or consignees shall pay pilotage as if one had been employed.
C. The 1999 Memorandum Agreement
In 1999, the Board and the Commissioner of Transportation of the State of Connecticut entered into a Memorandum of Agreement (the "Agreement") regarding the creation of a "joint rotation system" for the assignment of pilots within the waters of the Long Island Sound and Block Island Sound. Declaration of Robert H. Pouch, dated December 2, 2005 ("Pouch. Decl.") Ex. K. Under the joint rotation system Block Island Pilots, as "system administrator," would assign pilots to foreign vessels and American vessels under register from either New York or Connecticut, in turn. The Agreement was also endorsed by the Connecticut Pilot Commission. In relevant part, the Agreement states the following:
1. The Board of Commissioners of Pilots of the State of New York and Commissioner of the Connecticut Department of Transportation hereby agree to the establishment of a joint rotation system for the assignment of pilots to pilot vessels in the navigable waters of Long Island Sound-Block Island Sound, including all boundary waters and the waters of both States of Long Island Sound and Block Island Sound and all ports and the terminals thereon. . . .
. . .
6. Pilot licences issued by the [Commissioner of Transportation for the State of Connecticut] will be endorsed to allow qualified pilots on the Connecticut side of the rotation under this Agreement to pilot vessels within [Block Island Sound]. . . .
7. Each State will recognize the endorsements of the other State with respect to the Waters within their respective jurisdiction.
Pouch. Decl. Ex. K. Although the Agreement was executed on December 23, 1999 and January 27, 2000 by representatives of the Commissioner of Transportation of the State of Connecticut and the Board, respectively, the Agreement was not implemented immediately. It is not readily apparent from the evidence in the record when the Agreement became effective.
According to the Board's "One Hundred Fifty-First Annual Report to the Governor and Legislature 2004," published on July 30, 2005, "the Agreement was finalized and implemented in New York during the first half of 2005." Pouch Decl. Ex. I, at 13. The Court found no other evidence regarding when the State of New York or the Board took any steps to implement the Agreement.
With regard to Connecticut, the record indicates that on April 29, 2003, the Connecticut Department of Transportation obtained the consent of the Governor of Connecticut to implement the Agreement through the adoption of "emergency regulations." Pouch Decl. Ex. R. "Emergency regulations" are those adopted by a Connecticut agency without providing the notice otherwise required under Connecticut law, and are permissible under certain circumstances. Pouch Decl. Ex. R. The emergency regulations implementing the Agreement were codified at section 15-15a-17 of the Regulations of Connecticut State Agencies, effective September 10, 2003. Conn. Agencies Regs. § 15-15a-17 ("Pilot rotation system").
The plaintiff contends that the Agreement was not implemented until January, 2004, but provides no evidence to support this claim. See Plaintiff's Response to the State Defendants' Rule 56.1 Statement ¶ 12.
D. The 2003 Public Notice
On April 8, 2003, the Board, purporting to act pursuant to its authority under sections 87 and 89-b(1) of the New York Navigation Law, issued a public notice to "all New York State Long Island Sound-Block Island Sound Licensed Pilots and Maritime Users of the State Pilotage System and Vessels Transiting the New York Waters and Designated Approaches" (the "2003 Public Notice"). Although the Agreement had been executed years earlier, by all accounts it still had not been implemented at the time the public notice was issued in April, 2003. The Board issued the 2003 Public Notice citing concerns with the amount of time required for the implementation of the Agreement on the part of the State of Connecticut. The 2003 Public Notice states, in relevant part, the following:
PLEASE BE ADVISED THAT NEW YORK STATE REQUIRES: A New York State licensed pilot is required for all foreign flagged vessels and all U.S. flagged vessels operating under registry while entering, transiting or departing the New York waters of Block Island Sound, including the navigable access and approach waters designated by the Board of Commissioners of Pilots as pilot stations for the purpose of pilot embarkation and disembarkation at pilot stations Point Judith and Montauk, . . .;
. . . .
PENALTIES FOR UNLAWFUL PILOTAGE INCLUDE:
a. The full New York State pilotage fee applicable to the vessel in violation, including applicable surcharge(s).
b. A misdemeanor violation consisting of a fine not exceeding one hundred dollars for each violation or by imprisonment not exceeding sixty days for any pilot, owner, operator, and/or agent in violation.
c. Authority: New York State Navigation Law, Section 89-b and New York Code of Rules and Regulations
THE NEW YORK STATE LAW WILL BE STRICTLY ENFORCED FOR PURPOSES OF NAVIGATIONAL SAFETY, ENVIRONMENTAL PROTECTION AND HOMELAND SECURITY. PLEASE BE GUIDED ACCORDINGLY.
Pouch Decl. Ex. A.
Also on April 8, 2003, in conjunction with the issuance of the 2003 Public Notice, the Board issued an additional notice entitled "Requirements for Licensure, Limited New York State Pilot License Applicable To: The New York Waters of Block Island Sound, and The New York Waters of Western Long Island Sound" ("Requirements for Licensure"). Pouch Decl. Ex. L. The Requirements for Licensure provided for the issuance of a "Limited New York State pilot license" to any pilot licensed by the State of Connecticut who filed an application with the Board and satisfied certain criteria. Id. According to the defendant Pouch, all but two Connecticut-licensed pilots applied for and received a limited New York license for Block Island Sound on or before June 17, 2003. Supplemental Declaration of Robert H. Pouch ("Pouch Supp. Decl.") ¶¶ 4, 6-7. It is not clear how many Connecticut-licensed pilots existed about the time that the temporary New York pilot licenses were issued. Apparently, there were approximately twenty Connecticut-licensed pilots in or about November 2001, and no new Connecticut pilot licenses have issued since that time. See Carmen v. Dep't of Transp., No. CV020512243S, 2003 WL 21499236, at *1 (Conn.Super.Ct. June 11, 2003) (upholding the constitutionality of Regulation of Connecticut State Agencies § 15-15a-15, which imposed a moratorium on the issuance of new Connecticut pilot licenses); Pouch Decl. Ex. I at 13.
E. The M/V Clipper Regal
The claims in this case arise out of two voyages of the vessel M/V Clipper Regal (the "Ship"). The Ship is a foreign vessel registered under the flag of the Bahamas. Warner Decl. ¶ 4. The plaintiff alleges, and the defendants do not dispute, that the plaintiff "acted as an agent" for the Ship. The parties do not explain what it means to have "acted as an agent" for the Ship. Thus, the Court makes the reasonable assumption that in this case the plaintiff acted as the Ship's agent by arranging for a pilot, Captain Thomas Walker, to be available to navigate the Ship to port in Connecticut and back out to sea.
On July 28, 2003, Captain Walker piloted the Ship from the Atlantic Ocean, through the New York waters of Block Island Sound, into Long Island Sound, and came to port in the City of New Haven, Connecticut. On July 29, 2003, Captain Walker piloted the Ship from New Haven back out to sea, again transiting through the New York waters of Block Island Sound. Captain Walker is a pilot licensed by the State of Connecticut, but not licensed by the State of New York. No New York licensed pilot was aboard the Ship at any point during its journey through waters under the jurisdiction of New York. It is undisputed that the port in the City of New Haven lies within that portion of the Long Island Sound that forms a territorial boundary between New York and Connecticut. It is also undisputed that Connecticut has no border or boundary that touches the waters of Block Island Sound.
On or about July 29, 2003, Block Island Pilots became aware that the Ship was piloted through Block Island Sound without a New York licensed pilot. Claiming to proceed under the authority set forth in section 89-b of the New York Navigation law and the 2003 Public Notice, Block Island Pilots sent the plaintiff an invoice for a pilotage fee in the amount of $1,874.19. This amount represents the fee that would have been charged to the Ship had it employed a New York licensed pilot.
On or about July 31, 2003, the plaintiff paid the pilotage fee to Block Island Pilots, asserting that the payment was being made under protest out of fear that the Ship would be arrested in Philadelphia, where it had by then come to port.
On August 28, 2003, the plaintiff commenced this action. The plaintiff seeks declaratory and injunctive relief, and the return of the $1,874.19 in pilotage fee. Specifically, the plaintiff asks the Court for a judgment declaring that (1) the 2003 Public Notice violates the Boundary Waters Act; (2) the 2003 Public Notice violates the rulings of this Court made in the case of Interport Pilots Agency, Inc. v. Sammis, 774 F. Supp. 734 (E.D.N.Y. 1991), aff'd, 14 F.3d 133 (2d Cir. 1994), and therefore, the Board is precluded from requiring vessels transiting between the Atlantic Ocean and Connecticut ports to employ a New York licensed pilot for any part of that passage; and (3) a requirement that vessel owners and agents employ a New York licensed pilot for any part of the transit between the Atlantic Ocean and a Connecticut port violates the Commerce Clause of the United States Constitution, U.S. Const. art 1, § 8, cl. 3. Finally, the plaintiff requests that the Court enjoin the defendants from "seeking to enforce" the 2003 Public Notice.
II. DISCUSSION
Although not raised by the parties, the Court must, as an initial matter, determine whether jurisdiction in this Court is proper. The plaintiff seeks relief under the Declaratory Judgment Act, 28 U.S.C. § 2201. This Act does not itself provide a basis for jurisdiction. See 28 U.S.C. § 2201(a) ("In a case of actual controversy within its jurisdiction . . . any court of the United States . . . may declare the rights and other legal relations of any interested party.") (emphasis added); Conn. Yankee Atomic Power Co. v. Town of Haddam Planning and Zoning Comm'n, 2001 WL 1167816 *1 (2d Cir. Oct. 1, 2001). Thus, for jurisdiction to lie, the matter to be determined must satisfy the case or controversy requirement for federal jurisdiction pronounced in Article III, Section 2 of the United States Constitution. Id. (citing Niagara Mohawk Power Corp. v. Tonawanda Band of Seneca Indians, 94 F.3d 747, 752 (2d Cir. 1996)).
A declaratory judgment action presents an actual controversy if "the facts alleged, under all the circumstances, show that there is a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment." Duane Reade, Inc. v. St. Paul Fire and Marine Ins. Co., 411 F.3d 384, 388 (2d Cir. 2005);In re Prudential Lines Inc., 158 F.3d 65, 70 (2d Cir. 1998) (quoting Maryland Cas. Co. v. Pac. Coal Oil Co., 312 U.S. 270, 273, 61 S. Ct. 510, 512, 85 L. Ed. 826 (1941)). A plaintiff seeking declaratory relief cannot rely solely on past injury to satisfy this requirement, but must show a likelihood that the challenged conduct will occur again in the future. McCormick v. School Dist. of Mamaroneck, 370 F.3d 275, 284 (2d Cir. 2004);Deshawn E. by Charlotte E. v. Safir, 156 F.3d 340, 344 (2d Cir. 1998).
A declaratory judgment action regarding "the rights and duties of a party whose challenged activities have ceased may be dismissed on grounds of mootness." Ford v. Reynolds, 326 F. Supp. 2d 392, 405 (E.D.N.Y. 2004) (citing Cardinal Chem. Co. v. Morton Int'l, Inc., 508 U.S. 83, 95-96, 113 S. Ct. 1967, 124 L. Ed. 2d 1 (1993)). "A case becomes moot when a court is no longer able to grant effective relief because the dispute has been resolved through other means, or because the passage of time has made the claim stale, and it is unlikely that the precise conditions of the case will recur." Cook v. Colgate Univ., 992 F.2d 17, 19 (2d Cir. 1993);see also County of Los Angeles v. Davis, 440 U.S. 625, 631, 99 S. Ct. 1379, 59 L. Ed. 2d 642 (1979) (citations omitted).
In this case, the plaintiff was invoiced for a pilotage fee because a ship for which it acted as an agent violated the New York Navigation Law and the 2003 Public Notice. By commencing this action, the plaintiff was seeking to establish that the collection of that fee was unlawful, and that shippers have an affirmative right under the Boundary Waters Act, 46 U.S.C. 8501(b), Interport v. Sammis, 774 F. Supp. 734 (E.D.N.Y. 1991), and the Commerce Clause, to transit the New York waters of Block Island Sound to Connecticut ports with the services of a Connecticut licensed pilot without having to pay an additional pilotage fee to the State of New York.
However, it appears to the Court that this controversy may no longer be "live" in a jurisdictional sense because, apparently, shippers have had the right to transit the New York waters of Block Island Sound to Connecticut ports with the service of a Connecticut pilot, without being required to pay an additional New York pilotage fee, after the implementation of the 2003 Memorandum of Agreement and the creation of the joint-pilotage system in those waters. Although it is not clear precisely when the Agreement became fully implemented by both States, both New York and Connecticut appear to currently be operating under its terms. If this is true, the Court is concerned that the case has become moot; that subject matter jurisdiction no longer exists; and, in that event, this action should be dismissed. In this regard, additional factual information is required from the parties.
Accordingly, all of the motions for summary judgment before the Court are denied without prejudice. The parties are directed to submit additional briefs to the Court, in compliance with the Court's individual motion practices and the local rules for this district, according to the briefing schedule set forth below. The parties shall confirm the date on which the 1999 Memorandum of Agreement became fully implemented, i.e., the date on which New York and Connecticut began operating the joint rotation system for the waters of Block Island Sound, and whether the Agreement is still in effect; ascertain the effect of the implementation of the Agreement on subject matter jurisdiction in this case; and discuss whether this matter has become moot or whether it may proceed under the Declaratory Judgment Act.
In accordance with Local Rule 6.1(b) and Fed.R.Civ.P. 6, the briefing schedule is set as follows: (1) on or before September 25, 2006, each party may submit an initial brief discussing the matters set forth above; (2) on or before October 16, 2006, each party may submit a responsive brief; (3) on or before October 23, 2006, each party may submit a reply brief. If it is determined that this case was not rendered moot by the implementation of the Agreement and that subject matter jurisdiction continues to exist, the parties may renew their motions for summary judgment. In the event that the parties eventually renew their motions for summary judgment, they shall indicate their intent do so in a short letter to the Court, in which case the Court will re-consider the briefs filed on the instant applications. The parties will not be required to submit additional briefs.
III. CONCLUSION
Based on the foregoing, it is hereby
ORDERED, that the motions for summary judgment are denied, without prejudice, and with leave to renew after the Court makes a determination regarding whether this dispute in this case has become moot; and it is further
ORDERED, that on or before September 25, 2006, the parties are each directed to submit a brief discussing the issues of the Declaratory Judgment Act, mootness, subject matter jurisdiction, and the implementation of the 1999 Memorandum of Agreement, and stating their respective positions on these issues; and it is further
ORDERED, that on or before October 16, 2006, each party may submit a responsive brief. On or before October 23, 2006, each party may submit a reply.
SO ORDERED.