Amicus Curiae Brief — Federal Maritime Comm'n v. South Carolina Ports Authority

4) sep 0 7. 2uul

No. 01-46

IN THE

Supreme Court of the United States

FEDERAL MARITIME COMMISSION,

Petitioner,

Vv.

SOUTH CAROLINA STATE PORTS AUTHORITY,

Respondent.

On PETITION FOR A Writ OF CERTIORARI TO THE

UnirepD STATES COURT OF APPEALS FOR THE FouRTH CIRCUIT

MOTION FOR LEAVE TO FILE BRIEF AMICI CURIAE AND

BRIEF FOR UNITED STATES MARITIME ALLIANCE

LIMITED AND CARRIERS CONTAINER COUNCIL, INC.

-AS AMICI CURIAE IN SUPPORT OF PETITIONER

C. Peter LamMBos*

DonaTo CARUSO

LamMBos & JUNGE

29 Broadway - 9" Floor

New York, New York 10006

(212) 943-2470

Attorneys for Amici Curiae

United States Maritime Alliance

Limited and Carriers Container

* Counsel of Record Council, Inc.

_

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COUNSEL PRESS

(800) 274-3321 + (800) 359-6859

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MOTION FOR LEAVE TO FILE

BRIEF AMICI CURIAE

Introduction

In 1994, Respondent South Carolina State Ports Authority

(“SCSPA”) petitioned the Federal Maritime Commission

(“FMC”), the petitioner herein, for approval of certain

amendments SCSPA proposed to include in its FMC-filed

terminal tariff, which prescribes the terms and conditions

SCSPA imposes on customers and contractors utilizing its

marine terminal facilities in the Port of Charleston. See Petition

of South Carolina State Ports Auth. For Declaratory Order,

Docket No. 94-24, Final Decision (FMC Aug. 12, 1997),

available at http://www.fmc.gov/dockets/94-24.ord. SCSPA’s

proposed tariff amendments included guidelines for the

licensing by SCSPA of stevedores and marine terminal operators

allowed to use SCSPA’s facilities and for reserving to SCSPA

itself certain terminal functions at the facility, thus denying

competitors access to its publicly-owned facilities to perform

these functions. Carriers Container Council, Inc., (“CCC”),

which now seeks leave to file the attached amici curiae brief,

was permitted by the FMC to intervene in opposition to

SCSPA’s tariff amendments to protect CCC’s carrier-members’

right to use the services. of stevedores and marine terminal

operators of their own choosing. CCC also protested the tariff

amendment requiring applicants for stevedore licenses to

promote commerce through Charleston because it would

unjustly discriminate against multi-port stevedores in violation

of federal shipping law.

Just last year CCC and United States Maritime Alliance

Limited (“USMX°”), the two movants for permission to file the

attached brief as amici curiae, contemplated the filing of a

complaint with the FMC against SCSPA for imposing

restrictions at its facility that prohibited CCC’s and USMX’s

carrier-members from utilizing a gate at SCSPA’s Charleston

terminal that was operated by a marine terminal company that

competed with SCSPA. SCSPA staffs its gate with state

employees; the competing terminal operator uses longshore

workers represented by the International Longshoremen’s

Association, AFL-CIO (“ILA”). SCSPA’s restriction prevented

CCC’s and USMX’s carrier-members from complying with the

obligation in their collective bargaining agreement with the ILA

that requires them to use longshore workers represented by the

ILA.

USMX and CCC hereby move, pursuant to Sup. Cr. R.

37.2(b), for leave to file the attached brief amici curiae to join

petitioner in seeking this Court’s review of a decision that

threatens to deprive USMX and CCC of avenues of relief they

have resorted to in the past to vindicate their members’ federal

shipping law rights against state port authorities. Petitioner

-Federal Maritime Commission has consented to the filing of

this amici curiae brief. Its written consent has been lodged with

the Clerk of the Court. Respondent SCSPA has refused to

consent.

Movants: Their Identities, Purposes, and Functions

USMX and CCC are non-profit membership associations

which are the principal management, multiemployer collective

bargaining representatives for employers of longshore workers

on the Atlantic and Gulf Coasts of the United States. USMX is

an association of ocean carriers, port associations, marine

terminal operators, and stevedoring companies. USMX’s

members handle virtually all of the general cargo shipped

through United States ports on the East and Gulf Coasts. CCC

is an association of the major United States and foreign ocean

Carriers serving United States ports in connection with the

transportation of goods by sea in international trade and

commerce. CCC’s 25 carrier-members during the past calendar

year transported to and from United States Atlantic and Gulf

ports more than 50 million tons of containerized cargo in the

foreign trades of the Untied States. This cargo volume amounts

to approximately three-fourths of all containerized cargo loaded

and unloaded at United States Atlantic and Gulf ports.

The principal mission of USMX and CCC is to represent

their members in collective bargaining with the ILA — the labor

organization that represents dockworkers employed on the

Atlantic and Gulf Coasts. USMX is the lead negotiator in Master

Contract negotiations with the ILA covering ports from Maine

to Texas; CCC is primarily responsible for Master Contract

administration. This Master Contract establishes the terms and

conditions of employment for tens of thousands of American

longshore workers on the Nation’s Eastern and Southern shores.

USMxX and CCC also represent their members’ interests

in regulatory matters that affect their business and labor

practices. The carrier members of these associations are

the customers of Respondent SCSPA and other state port

authorities operating marine terminals in United States ports.

The stevedoring- and marine-terminal-members of USMX are

the competitors and contractors of these state authorities. In the

past, federal shipping law has provided CCC, USMX, and their

members with the means to challenge actions taken by

these state port authorities that interfered with the commercial

interests of the members of CCC and USMX or impeded the

administration of their collective bargaining agreements with

the ILA. See supra pp. 1-2.

Movants’ Interest In This Case

The extension by the court of appeals in this case of the

doctrine of state sovereign immunity to proceedings before

federal administrative agencies is a crucial issue of constitutional

law that affects the interests of CCC, USMX, and their members.

If the decision of the court of appeals in this case is allowed to

stand, the members of USMX, CCC, and other bargaining and

trade associations in the maritime industry will be deprived of

the rights provided by Congress to obtain recourse for shipping

law violations committed by state commercial instrumentalities

operating marine terminals that are essential for the conduct of

the members’ transportation businesses. These shipping law

violations may not only affect the members’ commercial

interests but also may have a significant impact upon their

collective bargaining interests. Indeed, over the years the FMC

has decided shipping law cases that have had a direct and

immediate impact on collective bargaining in the maritime and

longshore industries. See, e.g., Volkswagenwerk AG v. FMC,

390 U.S. 261 (1968); New York Shipping Ass'n v. FMC, 854

F.2d 1338 (D.C. Cir. 1988), cert. denied, 488 US. 1041 (1989);

Boston Shipping Ass'n v. FMC, 706 F.2d 1231 (1st Cir. 1983).

USMX’s and CCC’s brief amici curiae will present the

views of customers, competitors, and contractors of state-

operated marine terminals and provide the perspective of private

enterprise in a case that centers upon an intergovernmental

controversy. Because of the singular importance of the

constitutional issue presented, the vital and compelling interests

of CCC, USMX, and their members in the resolution of that

issue, and the particular perspective they provide, CCC and

USMxX request leave to file the attached brief as amici curiae

in this case.

Respectfully submitted,

C. Peter LamBos*

Donato Caruso

LamBos & JUNGE

29 Broadway - 9” Floor

New York, New York 10006

(212) 943-2470

Attorneys for Amici Curiae

United States Maritime Alliance

Council, Inc.

* Counsel of Record

i

TABLE OF CONTENTS

Page

Table of Cited Authorities ..................... ii

IIE: Seah de aie ied gt tee |

Interest of the Amici Curiae ................... 2

Summary of Argument ....................... 3

GE h-dkb bb UR bdebdedurebiceeenscaueees +

Review On Writ Of Certiorari Is Warranted

Because This Case Involves A Novel

Constitutional Question Of National

Importance That Has A Direct And

Substantial Impact On The Federal

Regulatory Regime .................... +

A. Constitutional Question Of First

DE Sc cvivdchbssneeecedseuce 5

B. Nationwide Effect Of Decision Below

Upon Federal Regulatory System ..... 6

C. Decision Below Contravenes The

Constitutional Plan ................ 10

EY cuuWald wuubsobsctuveccetéeesdcecscc 13

TABLE OF CITED AUTHORITIES

United States Constitution:

art. 1, § 10, C1. 2 ......e eee eee errr eee eeeees

art. 1, § 10, cl. 3 2... 2. cece cece e eee e reese

U.S. Const. amend. XI... 2... eee cece ee eeees

Cases:

Alden v Maine, 527 U.S. 706 (1999) ......--+++:

Bethlehem Steel Corp. v. Indiana Port Comm'n,

21 F.M.C. 629 (1979) ... 2... 2 eee eee eee eeee

Blatchford v. Native Village of Noatak, 501 U.S. 775

tC .) )

California v. United States, 320 U.S. 577 (1944) ....

Ceres Marine Terminal, Inc. v. Maryland Port

Admin., 27 Shipping Reg. Rep. (P&F) 1251 (FMC

1997), remanded, 1998 U.S. App. LEXIS 25733

(4th Cir. 1998) ..... 66. cece eee cece eee eees

Page

12

Cited Authorities

Clark v. Barnard, 108 U.S. 436 (1883) ..........

College Sav. Bank v. Florida Prepaid Postsecondary

Educ. Expense Bd., 527 U.S. 666 (1999) ......

Connecticut Dep't of Environmental Protection v.

OSHA, 138 F. Supp. 2d 285 (D. Conn. 2001) ...

Elthaj-Chehade v. University of Texas, 1999 OCAH

LEXIS 3 (Jan. 28, 1999) é .

Florida v. United States, 133 F. Su 2d

’ ; : 1280

(N.D. Fla. 2001) =

.

eeeeeeeeeeeseeeeeeeeeeeeees

Hans v. Louisiana, 134 U.S. 1 (1890) ...........

Harrington & Co. v. Georgia Ports Auth.,

23 Shipping Reg. Rep. (P&F) 753 (1.D.), adopted,

23 Shipping Reg. Rep. (P&F) 1276 (FMC 1986)

“eee © @ © @e@

ee ®e @ @e eee

ee ee ee eeeee

ofr eeeeeee

Hensel v. Office of Chief Administrative Hearing

Officer, 38 F.3d 505 (10th Cir. 1994) .........

James J. Flanagan Shipping Corp. v. Lake Charles

Harbor & Terminal Dist., 27 Shipping Reg. Rep.

(P&F) 1123 (FMC 1997)

Kimel v. Florida Bd. of Regents, 528 U.S. 62 (2000)

7n

7n

iv

Cited Authorities

—

Kupferberg v. University of Oklahoma Health

Sciences Center, 1994 OCAHO LEXIS 99

(Nov. 21, 1994) 20... cc cece eee eee eee eens

McCulloch v. Maryland, 17 U.S. (4 Wheat.) 316

GBGIED occcccovccccccescesescsessesesCeues

Ohio Environmental Protection Agency v. United

States Dept. of Labor, 121 F. Supp. 2d 1155

(S.D. Ohio 2000) .. 0... cece eee eee ees

Palmetto Shipping & Stevedoring Co. v. Georgia

Ports Auth., 24 Shipping Reg. Rep. (P&F)

50 (I.D.), adopted, 24 Shipping Reg. Rep. (P&F)

761 (FMC 1988) ....... 06. c ce eee eee eee eeee

Pate Stevedore Co. of Mobile v. Alabama State

Docks Dep't, 24 Shipping Reg. Rep. (P&F) 657

(1.D.), adopted, 24 Shipping Reg. Rep. (P&F)

1221 (FMC 1989) ........ cc cece eee eee eee

Principality of Monaco v. Mississippi, 292 U.S. 313

CIGD oc ccccccdocccccncsccccecscccececece

Rhode Island v. United States, 115 F. Supp. 2d 269

(D. R.1. 2000) 2... ccc cece rece ccvccsccvcees

Ryan Walsh, Inc. v. Port of Houston Auth., No. 97-

16, Approval of Settlement (FMC ALJ Apr. 30,

1998), available at http://www. fmc.gov/dockets/

PP GGABEB occ cccccccsccccccccccsvccess

Page

10

7n

7n

10n

Vv

Cited Authorities

Seminole Tribe of Florida v. Florida, 517 U.S. 44

PN dithin dh aittnawerwaneat akaindiidcaer

South Carolina State Ports Auth. v. Georgia Ports

toons 22 Shipping Reg. Rep. (P&F) 1-111 (FMC

Southeastern Mar. Co. v. Georgia Ports Auth., 23

Shipping Reg. Rep. (P&F) 530 (I.D.), adopted,

23 Shipping Reg. Rep. (P&F) 941 (FMC 1986)

Stevens Shipping & Terminal Co. v. South Carolina

ee Ports Auth., 23 Shipping Reg. Rep. (P&F)

67 (1.D.), adopted, 23 Shipping Reg. Rep. (P&F)

SE SE VEceudueeaberesscedécesces

United States Lines v. Maryland Port Admin.,

23 F.M.C. 441 (1980)

United States v. Locke, 529 U.S. 89 (2000) ......

United States v. Texas, 143 U.S. 621 (1892) .....

Wong-Opasi v. Tennessee, 2000 OCAHO LEXIS 2

ENE Sed dbiubsceccocudccescccccse

Page

4,5

7n

7n

vi

Cited Authorities

Statutes:

8 U.S.C.A. § 1324a (West 1999 & Supp 2001) ...

15 U.S.C.A. § 2622 (West 1998) ............0..

33 U.S.C.A. § 1367 (West 1986) ............05.

42 U.S.C.A. § 300j - 9(i) (West Supp. 2000) .....

42 U.S.C.A. § 5851 (West 1995) ...........005.

42 U.S.C.A. § 6971 (West 1995) ............0..

42 U.S.C.A. § 7622 (West 1995) ............05.

42 U.S.C.A. § 9610 (West 1995) ...............

Rules:

4 rr pe eer e

Page

|

BRIEF FOR UNITED STATES MARITIME ALLIANCE

LIMITED AND CARRIERS CONTAINER COUNCIL, INC.

AS AMICI CURIAE IN SUPPORT OF PETITIONER

INTRODUCTION'

The United States Court of Appeals for the Fourth Circuit

has ruled that State sovereign immunity trumps Congress’s

power to authorize private litigants to obtain redress against

State commercial instrumentalities before federal

administrative agencies for the instrumentalities’ violation

of federal law. This decision involves a novel question of

constitutional law never before addressed by this Court. The

Fourth Circuit’s resolution of this issue, if left undisturbed,

will upset longstanding congressional regimes not only in

the maritime industry but also in other sectors of the national

economy that have historically subjected state commercial

activities to the same federal regulation applicable to private

enterprises.

The court of appeals in this case has unleashed the

doctrine of State sovereign immunity from its Article III

moorings and allowed it to wander into Article I waters,

where it threatens to deprive private enterprises of

recourse before federal administrative agencies to remedy

violations of federal law committed by state commercial

instrumentalities. Review of this case will enable the Court

to cabin the scope of State sovereign immunity to promote a

federalism that binds the States to the supremacy of federal

regulation of objects committed by the Constitution to

exclusive federal sovereignty.

1. In accordance with Sup. Cr. R. 37.6, this is to confirm that

no part of this brief was authored by counsel for any party and that

only the amici curiae contributed monetarily to the preparation and

submission of this brief.

2

INTEREST OF THE AMICI CURIAE

United States Maritime Alliance Limited (“USMX”’)

and Carriers Container Council, Inc. (“CCC”) are non-

profit membership associations which are the principal

management, multiemployer collective bargaining

representatives for employers of longshore workers on the

Atlantic and Gulf Coasts of the United States.

USMxX is an association of ocean carriers, port

associations, marine terminal operators, and stevedoring

companies. USMX’s members handle virtually all of the

general cargo shipped through United States ports on the

East and Gulf Coasts. CCC is an association of the major

United States and foreign ocean carriers serving United States

ports in connection with the transportation of goods by sea

in international trade and commerce. CCC’s 25 members

during the past calendar year transported to and from United

States Atlantic and Gulf ports more than 50 million tons of

containerized cargo in the foreign trades of the Untied States.

This cargo volume amounts to approximately three-fourths

of all containerized cargo loaded and unloaded at United

States Atlantic and Gulf ports.

The principal mission of USMX and CCC is to represent

their members in collective bargaining with the International

Longshoremen’s Association, AFL-CIO (“ILA”) — the labor

organization that represents dockworkers employed on the

Atlantic and Gulf Coasts. USMX is the lead negotiator in

Master Contract negotiations with the ILA covering ports

from Maine to Texas; CCC is primarily responsible for

Master Contract administration. This Master Contract

establishes the terms and conditions of employment for tens

of thousands of American longshore workers on the Nation’s

Eastern and Southern shores.

3

| USMX and CCC also represent their members’ interests

in regulatory matters. The carrier members of these

associations are the customers of Respondent South Carolina

State Ports Authority (“SCSPA”) and other state port

authorities operating marine terminals in United States ports.

The stevedoring- and marine-terminal-members of USMX

are the competitors and contractors of these state authorities.

In the past, federal shipping law has provided CCC, USMX,

and their members with the means to challenge actions taken

by these state port authorities that interfered with the

commercial interests of the members of CCC and USMX or

impeded the administration of their collective bargaining

agreements with the ILA. Should the decision of the court

of appeals in this case be permitted to stand, the members of

USMX and CCC would be deprived of these remedies that

Congress has provided. The amici joining in this brief,

therefore, have a vital and compelling interest in convincing

this Court to entertain review of this case to define the

appropriate parameters of State sovereign immunity.

SUMMARY OF ARGUMENT

Review by writ of certiorari is warranted because the

rule of decision of the court of appeals involves a question

of constitutional law neyer before addressed by this Court.

The decision of the court of appeals, if left undisturbed,

places in jeopardy the continuing vitality of private

complaint proceedings before administrative agencies to

redress violations of federal law by state commercial

instrumentalities. The principal of constitutional law adopted

by the court of appeals is already hindering the enforcement

not only of federal shipping laws but also of the

whistleblower provisions of federal environmental statutes

and the employment discrimination prohibitions of federal

immigration statutes.

4 -

Issuance of a writ of certiorari will enable this Court to

limit the reach of the doctrine of State sovereign immunity

by holding that state instrumentalities engaged in commercial

activities, like maritime commerce, that fall within the

objects committed by the plan of the Constitution to the

exclusive sovereignty of the Federal Government are subject

to regulation under applicable federal law by duly constituted

federal regulatory agencies which may require those state

commercial entities to defend complaints filed by private

persons in administrative proceedings before the agencies.

This refinement of the doctrine of State sovereign immunity

will promote a federalism that binds the States to the

sovereignty they granted to the Federal Government when

they ratified the Constitution.

ARGUMENT

Review On Writ Of Certiorari Is Warranted

Because This Case Involves A Novel Constitutional

Question Of National Importance That Has A

Direct And Substantial Impact On The Federal

Regulatory Regime

At the close of the Twentieth Century this Court issued

a series of decisions that fortified the protections afforded

to the States by the Eleventh Amendment and the doctrine

of sovereign immunity.” In Seminole Tribe of Florida v.

Florida, 517 U.S. 44, 72 (1996), the Court ruled that the

principle of state sovereign immunity embodied in the

2. The Eleventh Amendment provides as follows:

The Judicial power of the United States shall not be

construed to extend to any suit in law or equity,

commenced or prosecuted against one of the United

States by Citizens of another State, or by Citizens or

Subjects of any Foreign State.

U.S. Const. amend. XI.

5

Eleventh Amendment prevents congressional authorization

in federal enactments of suits by private parties in the federal

courts against unconsenting States. Seminole Tribe awakened

the echoes of Hans v. Louisiana, 134 U.S. 1, 15 (1890), which

had observed that each State is a sovereign in the federal

system and that federal jurisdiction over suits against

unconsenting States “was not contemplated by the

Constitution when establishing the judicial power of the

United States.”

In Alden v Maine, 527 U.S. 706 (1999), this Court held

that the sovereign immunity of the States extends to private

suits to enforce federal statutory rights in state courts. In the

view of the Alden Court, the sovereign immunity of the States

derives not from the literal language of the Eleventh

Amendment, which “confirmed rather than established

sovereign immunity as a constitutional principle,” but from

ae of the original Constitution itself. 527 U.S. at

While a State may waive its sovereign immunity by

consenting to suit, see Clark v. Barnard, 108 U.S. 436, 447-

48 (1883), this Court in College Sav. Bank v. Florida Prepaid

Postsecondary Educ. Expense Bd., 527 U.S. 666, 679-87

(1999), held that a State’s proprietary activities in a

traditionally for-profit enterprise does not constitute a

constructive waiver of its sovereign immunity from an Article

III lawsuit.

A. Constitutional Question Of First Impression

The decisions of this Court have confined the doctrine

of sovereign immunity to assertions of judicial power against

the States. See Kimel v. Florida Bd. of Regents, 528 U.S. 62,

98 (2000) (Stevens, J. dissenting) (“Seminole Tribe . . . leaves

open a State’s liability upon enforcement of federal law by

federal agencies.”). The court of appeals in this case went

6

where this Court had never gone before. The court below

ruled that States were immune from the exercise of federal

Executive Power by an administrative agency established

by Congress through the exercise of its Article | powers.

It held that a State’s sovereign immunity protects it from

being brought before a federal administrative agency by a

private party (Pet. App. 2a).’ In the view of the court of

appeals, the doctrine of sovereign immunity deprives

Congress of the authority to permit private parties to hale

unconsenting States into any adversarial proceeding,

including those within the adjudicative apparatus of federal

agencies and commissions (Pet. App. 12a, 25a).

B. Nationwide Effect Of Decision Below Upon Federal

Regulatory System

The importance of the constitutional question presented

in this case is self-evident. Apart from the fact that the issue

is one of first impression never before addressed by the

Supreme Court, its resolution by the court of appeals places

in jeopardy the continued vitality of enforcement

mechanisms that form the backbone of the federal regulatory

system. Many federal enactments contain administrative

procedures that enable private litigants to commence

complaint proceedings before federal agencies to obtain

redress for violations of the substantive provisions of these

federal statutes. Private litigants are the agencies’ eyes and

ears. These private parties bring to the agencies’ attention

possible infringements of federal law that would otherwise

go undetected if enforcement were to depend solely upon

the limited resources of the agencies themselves. Indeed, in

its decision in this case, Petitioner Federal Maritime

Commission (“FMC”) explained that its “jurisdiction over

complaint cases brought against ports is one of the agency's

primary means of regulating ports.” (Pet. App. 33a).

3. The abbreviation “Pet. App.” refers to the separately bound

appendix that accompanied the petition for certiorari filed i this case.

7

| Private complaint proceedings against States involved

in activities subject to federal regulation have been a staple

of administrative law. This is particularly true before

Petitioner FMC. Almost a half century ago this Court held

that state instrumentalities by virtue of their operation of

marine terminal facilities are “persons” subject to regulation

under federal shipping statutes. See California v. United

States, 320 U.S. 577, 585-86 (1944). Indeed, over the years

Respondent SCSPA and its counterparts in other ports have

been brought before the FMC in complaint proceedings

commenced by private parties to redress alleged shipping

law violations by these state instrumentalities.* At no time

prior to this case was there ever any question raised that this

type of administrative proceeding was an impermissible

infringement of the instrumentalities’ sovereign immunity.

4. See Ryan Walsh, Inc. v. Port of Houston Auth., No. 97-16,

Approval of Settlement (FMC ALJ Apr. 30, 1998), available at http:/

/www fc. gov/dockets/97-16ABC.htm; Ceres Marine Terminal, Inc.

v. Maryland Port Admin., 27 Shipping Reg. Rep. (P&F) 1251 (FMC

1997), remanded, 1998 U.S. App. LEXIS 25733 (4th Cir. 1998);

James J. Flanagan Shipping Corp. v. Lake Charles Harbor &

Terminal Dist., 27 Shipping Reg. Rep. (P&F) 1123 (FMC 1997);

Pate Stevedore Co. of Mobile v. Alabama State Docks Dep't, 24

Shipping Reg. Rep. (P&F) 657 (1.D.), adopted, 24 Shipping Reg.

Rep. (P&F) 1221 (FMC 1989); Palmetto Shipping & Stevedoring

Co. v. Georgia Ports Auth., 24 Shipping Reg. Rep. (P&F) 50 (1.D.),

adopted, 24 Shipping Reg. Rep. (P&F) 761 (FMC 1988); Harrington

& Co. v. Georgia Ports Auth., 23 Shipping Reg. Rep. (P&F) 753

(1.D.), adopted , 23 Shipping Reg. Rep. (P&F) 1276 (FMC 1986):

Southeastern Mar. Co. v. Georgia Ports Auth., 23 Shipping Reg.

Rep. (P&F) 530 (1.D.), adopted, 23 Shipping Reg. Rep. (P&F) 941

(FMC 1986); Stevens Shipping & Terminal Co. v. South Carolina

State Ports Auth. , 23 Shipping Reg. Rep. (P&F) 267 (1.D.), adopted,

rd bay omen Rep. (P&F) 684 (FMC 1985); South Carolina

0 uth. v. Georgia Ports Auth., 22 Shipping Reg.

(P&F) 1111 (FMC 1984); United States Praag dew pn

Admin., 23 F.M.C. 441 (1980); Bethlehem Steel Corp. v. Indiana

Port Comm'n, 21 F.M.C. 629 (1979).

It has always been a fact of life in the shipping industry

that state port authorities engaged in the business of marine

terminal operations subject to the shipping laws of the United

States must defend complaint proceedings brought against

them before the FMC. Indeed, for the first 37 years of

SCSPA’s existence, from its formation in 1962 until 1999,

there was never any doubt voiced by SCSPA as to this

regulatory obligation. In 1999, however, the SCSPA

amended the terminal tariff it files with the FMC governing

the terms and conditions SCSPA sets for use of the marine

terminals it operates in South Carolina to include an express

choice of forum clause. The amendmc _§ provides that every

person utilizing SCSPA’s marine terminals consents to the

jurisdiction of the South Carolina state courts in any actions

against the SCSPA arising from the terminal services the

Authority furnishes except for “actions brought pursuant to

Acts of the Congress of the United States that expressly

designate the jurisdiction in which such actions should be

brought and from which the Authority would not have

sovereign or eleventh amendment immunity.” SCSPA’s

Terminal Tariff No. FMC-T No. 8, Rule 34-021 (effective

Jan. 6, 1999), available at http://www.port-of-charleston.

com. While the tariff amendment contains an implicit

recognition that SCSPA is answerable in those tribunals

designated by Congress, which in the case of state-operated

marine terminals, like SCSPA, undoubtedly means the

Federal Maritime Commission, the amendment for the first

time in SCSPA’s history invokes the concept of sovereign

or eleventh amendment immunity as a possible impediment

to the exercise of jurisdiction by that congressionally

designated tribunal.

The intrusion of the doctrine of sovereign immunity into

the federal regulatory regime is hindering the enforcement

of other federal statutes besides the shipping acts.

The enforcement of “whistleblower” provisions enacted by

9

Congress in federal environmental statutes has been affected.’

Within the last year and a half, four federal district courts, —

including one that relied heavily on the decision of the court of

appeals in this case, invoked the sovereign immunity doctrine

to bar federal administrative proceedings commenced by

whistleblowers seeking recourse for retaliatory or discriminatory

actions taken against them by their state employers.° Administrative

proceedings before the Executive Office For Immigration

Review by employees seeking recourse under the Immigration

Reform and Control Act, 8 U.S.C.A. § 1324a (West 1999 &

Supp 2001), for citizenship-based employment discrimination

by State instrumentalities have been outlawed by the United

States Court of Appeals for the Tenth Circuit in a decision in

which the court of appeals simply assumed without discussion

that the administrative proceeding qualified as a lawsuit

for sovereign immunity purposes. See Hensel v. Office of Chief

Administrative Hearing Officer, 38 F.3d 505 (10th Cir. 1994).

The Tenth Circuit’s ruling has shut the door of the Executive

Office For Immigration Review to victims of citizenship-

based employment discrimination by state employers.’

5. 15 U.S.C.A. § 2622 (West 1998) (Toxic Substance Control

Act); 33 U.S.C.A. § 1367 (West 1986) (Water Pollution Prevention &

Control Act); 42 U.S.C.A. § 300j - 9(i) (West Supp. 2000) (Safe

Drinking Water Act); 42 U.S.C.A. § 5851 (West 1995) (Energy

Reorganization Act); 42 U.S.C.A. § 6971 (West 1995) (Solid Waste

Disposal Act); 42 U.S.C.A. § 7622 (West 1995) (Clean Air Act);

42 U.S.C.A. § 9610 (West 1995) (Comprehensive Environmental

Response Compensation & Liability Act).

6. Connecticut Dep't of Environmental Protection v. OSHA, 138

F. Supp. 2d 285 (D. Conn. 2001); Florida v. United States, 133 F.

Supp. 2d 1280 (N.D. Fla. 2001); Ohio Environmental Protection Agency

v. United States Dept. of Labor, 121 F. Supp. 2d 1155 (S.D. Ohio 2000);

Rhode Island v. United States, 115 F. Supp. 2d 269 (D. R.1. 2000).

7. See Wong-Opasi v. Tennessee, 2000 OCAHO LEXIS 2 (Jan.

11, 2000); Elhaj-Chehade v. University of Texas, 1999 OCAHO LEXIS

3 (Jan. 28, 1999); Kupferberg v. University of Oklahoma Health

Sciences Center, 1994 OCAHO LEXIS 99 (Nov. 21, 1994).

10

The decision of the court of appeals in this case has

nationwide ramifications that threaten the traditional

enforcement mechanisms of federal regulation. Extending

the reach of State sovereign immunity to administrative

proceedings permits state entities to violate federal law with

impunity. Whistleblowers and other employees will be

vulnerable to discharge and employment discrimination for

which they have no relief. This lack of personal recourse

hardly encourages the reporting by state employees of

violations of federal environmental law. By the same token

the members of the amici curiae submitting this brief will

be virtually powerless to vindicate their shipping law rights

against state port authorities, which act not as governmental

regulators but as private entrepreneurs. The suggestion that

the federal agencies themselves can effectively compel

States’ compliance with federal law* suffers from a naively

optimistic appraisal of the capabilities and resources of

federal regulatory bodies. See Alden v. Maine, 527 U.S. 706,

810 (1999) (Souter, J., dissenting).

C. Decision Below Contravenes The Constitutional Plan

What is needed is this Court’s refinement of the doctrine

of State sovereign immunity to assure a faithful adherence

to the constitutional plan as it has been understood over the

past century in the establishment and development of the

regime of federal regulation. “In America, the powers of

sovereignty are divided between the government of the

Union, and those of the States. They are each sovereign, with

respect to the objects committed to it, and neither sovereign

with respect to the objects committed to the other.”

McCulloch v. Maryland, 17 U.S. (4 Wheat.) 316, 410 (1819).

8. The doctrine of state sovereign immunity does not shield

the States from suits brought by the Federal Government. Alden v.

Maine, 527 U.S. 706, 755-56 (1994); Principality of Monaco v.

Mississippi, 292 U.S. 313, 329 (1934); United States v. Texas, 143

U.S. 621, 644-45 (1892).

11

To subject state instrumentalities engaged in commercial

activities that fall within the objects committed by the-

Constitution to the Federal Government to regulation under

applicable federal law by duly constituted federal regulatory

agencies does no violence to the inherent nature of state

sovereignty. What it does do is confirm and give effect to

the longstanding understanding of all those private and

governmental commercial enterprises operating within the

realm of federal regulation that State sovereign immunity

has never sanctioned special treatment for state commercial

instrumentalities. The mark of effective regulation is

evenhandedness. State commercial entities and private

market participants expect a level playing field where they

are subjected to the same regulatory obligations, including

the need to respond to complaints before federal regulators

for alleged violations of federal law.

When a State engages in ordinary commercial

ventures, it acts like a private person, outside the

area of its “core” responsibilities, and in a way

unlikely to prove essential to the fulfillment of a

basic governmental obligation. A Congress that

decides to regulate those state commercial

activities rather than to exempt the State likely

believes that an exemption, by treating the State

differently from identically situated private

persons, would threaten the objectives of a federal

regulatory program aimed primarily at private

conduct.

College Sav. Bank v. Florida Prepaid Postsecondary Educ.

Expense Bd., 527 U.S. 666, 694-95 (1999) (Breyer, J.

dissenting) (citations omitted).

Regulation of maritime commerce was one of the objects

committed exclusively to the Federal Government.

See U.S. Const. art. I, § 8, cl. 3, 10; art. I, § 9, cl. 5, 6; art. I,

12

§ 10, cl. 2, 3. The need to repose regulatory power over

maritime commerce exclusively in the Federal Government

to thwart the Balkanizing effects of the States’ parochial

intervention was one of the reasons for the adoption of the

Constitution. See United States v. Locke, 529 U.S. 89, 99

(2000). The plan of the convention, therefore, called for the

States to surrender to the Federal Government sovereignty

over the regulation of maritime commerce.

The constitutional grant of sovereignty to the Federal

Government over maritime commerce was not conditional.

The power to regulate includes the adoption of not only

substantive law but also appropriate remedies and procedures

essential to the fulfillment of the regulatory objectives

embodied in the substantive provisions. By engaging in the

profit-making operation of marine terminals in their ports,

the States implicitly surrender their sovereignty and submit

to the regulatory sovereignty over maritime commerce they

granted exclusively to the Federal Government in the

constitutional compact. See Blatchford v. Native Village of

Noatak, 501 U.S. 775, 781-82 (1991).

Inherent in this submission to the sovereignty of the

Federal Government is the acceptance of the regulatory rules

both substantive and procedural enacted by the Federal

Sovereign. That the regulatory regime includes having to

defend complaint proceedings brought by private persons

does not constitute coercive and disrespectful overriding of

the sovereign immunity of the States. The state commercial

instrumentality in this case voluntarily chose to engage in

an enterprise which it well knew fell within the regulatory

sovereignty of the Federal Government. To submit to the

regulatory jurisdiction of the Federal Maritime Commission,

the agency entrusted by Congress with the enforcement of

federal shipping laws, is perfectly consistent with the

constitutional plan, which South Carolina and all the other

States have ratified.

13

CONCLUSION

The novel extension by the court of appeals in this case of

the State sovereign immunity doctrine to administrative

proceedings before federal agencies imposes a constitutionally

unwarranted burden upon the federal regulatory system.

The ramifications nationwide on the enforcement of federal

shipping laws and other regulatory statutes support the need

for review by this Court. A writ of certiorari will enable the

Court to review a substantial constitutional question that it has

not yet addressed and establish an appropriate definition of State

sovereign immunity that will promote a federalism that binds

the States to the sovereignty they granted to the Federal

Government to regulate maritime commerce. The petition of

the Federal Maritime Commission should be granted, and a writ

of certiorari issued to review the judgment entered in this case

by the United States Court of Appeals for the Fourth Circuit.

Respectfully submitted,

C. Peter LAMBos*

Donato Caruso

LamBos & JUNGE

29 Broadway - 9” Floor

New York, New York 10006

(212) 943-2470

Attorneys for Amici Curiae

United States Maritime Alliance

Limited and Carriers Container

Council, Inc.

* Counsel of Record