Opposition Brief — Norfolk Dredging Co. v. United States, 125 S. Ct. 1825 (2005) (No. 04-809)

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No. 04-809

Jn the Supreme Court of the United States

NORFOLK DREDGING Co., INC., PETITIONER

UNITED STATES OF AMERICA, ET AL.

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE FEDERAL CIRCUIT

BRIEF FOR THE UNITED STATES IN OPPOSITION

PAUL D. CLEMENT

Acting Solicitor General

Counsel of Record

STUART E. SCHIFFER

Acting Assistant Attorney

General

DAVID M. COHEN

DEBORAH A. BYNUM

DOMENIQUE KIRCHNER

Attorneys

Department of Justice

Washington, D.C. 20530-0001

(202) 514-2217

QUESTION PRESENTED

Whether the court of appeals correctly held that

under Section 5501(a)(2)(A)(iii) of the Oceans Act of

1992, Pub. L. 102-587, 106 Stat. 5084 (46 U.S.C. App. 292

note), non-hopper dredges chartered by the Stuyvesant

Dredging Company (or by an entity in which it has an

ownership interest) may be used in United States waters

in certain circumstances other than to supplement or

temporarily replace work performed by hopper dredges.

(I)

TABLE OF CONTENTS

Page

i IIIS ES OPE P NOE TOE ae ONSET 1

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MR. heer ced ca dd oe oss ohh aa o ake aaa 2

PE in Triskbeked oethtes eudeekdseeksésneded aus ds 6

a aD ais Sara al oe ee ee ee ewe ae 11

TABLE OF AUTHORITIES

Cases:

Barnhart v. Sigmon Coal Co., 534 U.S. 438

EE Mod adice ieee Adee dasa kre Wee e he eka OOK ews 8

Columbian Rope Co. y. West, 142 F.3d 1313 (D.C.

chs lciceubus Jbdah bb be hack dso odsucsieeccue 6

Davis v. Michigan Dep't of Treasury, 489 U.S.

DT aviesdeuudasudekdsenesensdabadeadtwadece 8

INS v. Cardoza-Fonseca, 480 U.S. 421 (1987) ...... 8

Iselin v. United States, 270 U.S. 245 (1926) ........ s

Laime v. United States Tr., 540 U.S. 526

PD isthneeeeeauabad oats tts aenedadnes ate 7, 8,9

Marine Carriers Corp. v. Fowler, 429 F.2d 702

(2d Cir. 1970), cert. denied, 400 U.S. 1020 (1971) ... 10

Public Utils. Comm’n v. FERC, 236 F.3d 708

EE WU tou besnsdnkibeeseddavsehes esos 6

Regan v. Wald, 468 U.S. 222 (1984) ................ 8

Russello v. United States, 464 U.S. 16 (1983) ....... 8

United States v. Republic Steel Corp., 362 U.S.

SE ts cdbndseuseuk ches bas os dkodecceanesassas 7

Foreign Dredge Act of 1906, ch. 2566 § 1, 34 Stat.

ME) AeNGdGk adds dR S4ERKNE Udo thine eke cedeeasiacbedoe 2

Statutes and regulation—Continued: Page

Oceans Act of 1992, Pub. L. No. 102-587, Tit. V, 106

Stat. 5039:

Re OE BES os bc acadudeeosuseusbakanns 8

§ 5501(aX(1), 106 Stat. 5084 2... 2... ccc ccc eee 2,5

§ 5501(a)(2):

PEE 4 Gadskddedséewsenadawamnan kan 2,9

PEED cbvicnadbaaxeanakeeaeasanna 3

§ 5501(a)(2)(A) , 106 Stat. 5084 ............ 2.00. 7

§ 5501(a)(2)(A)(i), 106 Stat. 5084 ............ 4,6,7

~ $5501(a)(2)(A)(ii), 106 Stat. 5084 ....... 4, 5, 6,7, 8

§ 5501(a)(2)(A)(iii), 106 Stat. 5084 ......... 4, 5, 6,

7, 8,9, 10

Reorganization Plan No. 3 of 1946, 60 Stat. 1097 ...... 3

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Be ee ID Sné ck dee ssuedascacceckandenn 3

eR ED nda ndcdwssbdendddeatascasanasens 2

DURE Sedecinsdankdecdsnuenastadnnss 4,5

19 C.F.R.:

ED un cis ee Gada baweeiawas 3

SEE Sieccuwsehsbinckdnndboneswebeanees 3

A PE 6606 c4de ANN aR ERS DEREK SOROS 3

Miscellaneous:

H.R. 1464, 102d Cong., Ist Sess. (1991) ........... 8,9

H.R. Rep. No. 260, 102 Cong., Ist Sess. (1991) ..... 8,9

aL TF

Jn the Supreme Court of the Anited States

No. 04-809

NORFOLK DREDGING Co., INC., PETITIONER

UNITED STATES OF AMERICA, ET AL.

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE FEDERAL CIRCUIT

BRIEF FOR THE UNITED STATES IN OPPOSITION

OPINIONS BELOW

The decision of the court of appeals (Pet. App. la-

lla) is reported at 375 F.3d 1106. The initial decision of

the Court of Federal Claims is reported at 58 Fed. Cl.

167, and its corrected opinion upon reconsideration (Pet.

App. 12a-50a, is reported at 58 Fed. Cl. 741.

JURISDICTION

The judgment of the court of appeals was entered on

July 7, 2004. A petition for rehearing was denied on

August 13, 2004 (Pet. App. 51a). On November 2, 2004,

the Chief Justice extended the time within which to file

a petition for a writ of certiorari to and including De-

cember 11, 2004, and the petition was filed on December

10, 2004. The jurisdiction of this Court is invoked under

28 U.S.C. 1254(1).

(1)

STATEMENT

1. Before 1992, a foreign-built dredge engaging in

dredging operations in the United States was subject to

forfeiture unless it was documented as a vessel of the

United States. Foreign Dredge Act of 1906, ch. 2566,

§ 1, 34 Stat. 204. That prohibition was amended by

Section 5501(a)(1) of the Oceans Act of 1992, Pub. L. No.

102-587, Tit. V, 106 Stat. 5084, which provides that a

chartered vessel generally may engage in dredging

operations in the navigable waters of the United States

only if, inter alia, United States citizens own at least

75% of the charterer. 46 U.S.C. App. 292(a)(2), 802.

Congress provided in Section 5501(a)(2), however, that

the prohibition against foreign ownership does not apply

to:

(A)\(i) the vessei STUYVESANT, official number

648540;

(ii) any other hopper dredging vessel documented

under chapter 121 of title 46, United States Code

before the effective date of this Act and chartered to

Stuyvesant Dredging Company or to an entity in

which it has an ownership interest; however, this

exception expires on December 3, 2022, or when the

vessel STUYVESANT ceases to be documented

under chapter 121, whichever first occurs; and

(iii) any other nonhopper dredging vessel docu-

mented under chapter 121 and chartered to

Stuyvesant Dredging Company or to an entity in

which it has an ownership interest as is necessary (a)

to fulfill dredging obligations under a specific con-

tract, including any extension periods; or (b) as

i i eee

temporary replacement capacity for a vessel which

has become disabled but only for so long as the

disability shall last and until the vessel is in a posi-

tion to fully resume dredging operations; however,

this exception expires on December 8, 2022 or when

the vessel STUYVESANT ceases to be documented

under chapter 121, whichever first occurs.

Pub. L. No. 102-587, 106 Stat. 5084-5085 (46 U.S.C. App.

292 note).

The Bureau of Customs and Border Protection

(Customs) is charged with regulating limitations on the

use of foreign vessels in United States waters, Reorgani-

zation Plan No. 3 of 1946, €9 Stat. 1097. Customs issues

letter rulings to interested parties regarding the scope

of the exceptions in Section 5501(a)(2). 19 C.F.R.

177.1(d)(1), 177.9.

2. On August 8, 2003, the United States Army Corps

of Engineers (the Corps) solicited bids for a fixed-price

contract to conduct dredging operations in Morehead

City Harbor, Beaufort Harbor, and Brandt Island,

North Carolina. Pet. App. 2a, 12a. The Federal Acqui-

sition Regulation (FAR), which was incorporated in the

Corps’ solicitation, requires that a contractor must

“(ble otherwise qualified and eligibie to receive an

award under applicable laws and regulations.” 48

C.F.R. 9.104-1.

The Corps awarded the contract to the lowest bidder,

respondent Bean Stuyvesant L.L.C. (Bean). “Bean is

50% owned by Bean Dredging L.L.C., a U.S. company,

and 50% owned by Stuyvesant Dredging Co. (‘SDC’),

which is in turn wholly owned by a Dutch corporation.”

Pet. App. 2a. Bean planned to perform the contract by

chartering the vessel, the Meridian, a U.S.-built, “non-

hopper dredge” owned by a U.S. company, Bean Merid-

ian L.L.C. Non-hopper dredges “are unable to store

the dredged material on board; the dredged material

must be piped to a separate vessel or location,” whereas

“(hjopper dredges are self-propelled vessels that pump

dredged material from the channel floor and store the

material in containers called hoppers aboard the vessel.”

Ibid. The Meridian possesses a certificate of documen-

tation issued by the U.S. Coast Guard, and is docu-

mented under chapter 121 of 46 United States Code.

3. Petitioner, which submitted the second lowest bid

for the contract, filed this action in the Court of Federal

Claims seeking to enjoin the award of the contract to

Bean. Petitioner alleged that Bean could not legally

charter the Meridian, because Bean is 50% owned by

SDC, a foreign corporation, and the vessel could not

meet the statutory exceptions for non-hopper dredges

delineated in Section 5501(a)(2)(A)(iii). The govern-

ment and Bean relied on three letter rulings issued by

Customs that had concluded that United States docu-

mented non-hopper dredges that are fulfilling dredging

obligations under a specific contract fall within the plain

terms of clause (A)(iii). Pet. App. 17a-19a, 21a-23a.

The Court of Federal Claims enjoined the Corps

from proceeding with the performance of the contract

with Bean. Pet. App. 12a-50a. The court interpreted

clause (A)(iii) as allowing Stuyvesant Dredging Co., or

an entity in which it has an interest, to utilize any non-

hopper dredging vessel only if its use is “as a temporary

replacement for a hopper or non-hopper” or is “supple-

mental to the dredging activities involving hoppers” that

were otherwise qualified under clauses (A)(i) or (ii), z.e.,

the Stuyvesant or hoppers documented as of 1992, the

date that the Oceans Act was passed. /d. at 35a.

4. The court of appeals reversed and held that Bean

met the criteria set forth in clause (A)(iii). Pet. App. la-

lla.. The court of appeals concluded that the trial court

“erroneously add[ed] conditions not present in the

statutory language.” Jd. at 9a. The court of appeals

explained:

Neither the plain language of exception (A)(iii) nor

the structure of the three exceptions pertaining to

SDC provides any basis for the [trial] court’s conclu-

sion that non-hopper dredges could only be used in a

supplemental or replacement capacity to fulfill

contracts expressly calling for the services of the

vessel STUYVESANT or other hopper vessels

documented as of 1992.

Ibid. The court of appeals also found it “telling that

exception (A)(ii) specifically requires chartered hopper

dredges to be- ‘documented under 46 U.S.C. ch. 121

before the effective date of this Act,’” which was in 1992,

while “[e]xception (A)(iii) lacks a similar clause.” Pet.

App. 9a (citing § 5501(a)(2)(A)(ii), 106 Stat. 5084).

The court of appeals also rejected petitioner’s

contention that its interpretation would “cause the

exception to swallow the rule.” Pet. App. 10a. The court

explained that clause (A)(iii) requires that “(t]he non-

hopper must be chartered ‘to fulfill dredging obligations

under a specific contract’ or in a ‘temporary replacement

capacity’ for a disabled vessel, and the charter must

occur before the exception expires.” J/bid. (quoting

§ 5501(a)(2)(A)(iii), 106 Stat. 5084). Because there was

no dispute that the Meridian met those criteria, the

court of appeals reversed the trial court’s injunction and

remanded with instructions to enter summary judgment

in favor of the Corps and Bean. /d. at 11a.

ARGUMENT

1. The petition for certiorari should be denied

because the case is moot. On August 13, 2004, the court

of appeals issued its mandate in conjunction with its

denial of a petition for rehearing. On August 16, 2004,

the trial court issued a final judgment in favor of Bean

and the United States. On August 17, 2004, petitioner

moved for a recall of the court of appeals’ mandate,

which was denied on August 23, 2004. Petitioner did not

seek a stay from this Court, and on August 26, 2004, the

disputed contract again was awarded to Bean.

We are informed by the Corps that on January 31,

2005, the Meridian completed its work under the

con.ract. All the remaining dredging work to be com-

pleted under the contract is work being performed by a

subcontractor that is utilizing another dredge, which is

not the subject of this litigation. Because the Meridian

has fully performed its work, petitioner’s suit, which

sought solely injunctive relief (Compl. 4-5), is now moot.

See, e.g., Columbian Rope Co. v. West, 142 F.3d 1313,

1317 (D.C. Cir. 1998); Public Utils. Comm’n v. FERC,

236 F.3d 708, 714 (D.C. Cir. 2001).

2. In any event, the court of appeals’ decision is

correct and does not warrant further review by this

Court. Petitioner argues that clause (A)(iii) is a “grand-

father” clause that permits SDC (or an entity in which

it has an ownership interest) to charter non-hopper

dredges only when those vessels supplement certain

pre-existing hopper dredges or the vessel Stuyvesant

that would be exempt under clauses (A)i*) and (ii). Pet.

5-24. The court of appeals correctly rejected that extra-

textual reading of clause (A)(iii), and the court’s holding

comports with the construction of the statute by Cus-

toms.

a. Absent an absurd result, the plain language of a

statute governs, and courts accordingly may not add

provisions that do not appear in the text of the statute.

E.g., Lamie v. United States Tr., 540 U.S. 526, 533-539

(2004). Those principles are controlling in this case.

Section 5501(a)(2)(A) sets forth three independent ex-

ceptions with respect to SDC: clause (A)(i) pertains to

the vessel Stuyvesant; clause (A)(ii) pertains to hopper

dredges chartered to SDC before 1992; and clause

(A)(iii) pertains to non-hopper dredges used under a

specific contract or as a temporary replacement to a

disabled vessel. Nothing in the text of clause (A)(iii)

requires non-hopper dredges to be supplemental to a

qualifying hopper dredge. As the court of appeals held,

had Congress intended to impose such a restriction upon

SDC’s chartering of non-hoppers, it easily could have

written one into the statute. Pet. App. 9a.!

There also is no reason to believe that Congress

meant to tie clause (A)(iii) to the use of hoppers, but

simply failed to include such language in that provision.

Congress was aware of the different types of dredges,

and addressed hopper dredges separately in clause

(A)(ii). In contrast, Congress did not include any

language regarding hoppers in clause (A)(iii). Congress

also limited the use of hoppers to those documented

' Petitioner faults the court of appeals for not citing “a single

authority” for the proposition that self-contained clauses separated by

a semi-colon are independent. Pet. 20. Petitioner cites no contrary

authority, however, and the proposition is unremarkable. E. g., United

States v. Republic Steel Corp., 362 U.S. 482, 486 (1960) (finding reach

of statute “plain” when separate clauses were separated by a semi-

colon).

before 1992 in clause (A)(ii), but placed no similar

restrictions on non-hoppers in clause (A)(iii). Since

Congress included particular language regarding

hoppers in subparagraph (A)(ii) and omitted it from

(A)(iii), it is “presumed that Congress acts intentionally

and purposely in the disparate inclusion or exclusion.”

INS v. Cardoza-Fonseca, 480 U.S. 421, 482 (1987)

(quoting Russello v. United States, 464 U.S. 16, 23

(1983)).

Because the statutory language is clear on its face,

petitioner errs in relying on the principle that grandfa-

ther clauses should be strictly construed. Pet. 22-23.

What petitioner seeks is “not * * * a construction of

the statute, but in effect, an enlargement of it by the

court, so that what was omitted, presumably by inadver-

tence, may be included within its scope.” Lamie, 540

U.S. at 538 (quoting /selin v. United States, 270 U.S.

245, 251 (1926)). Similarly, the plain language of clause

(A)(iii) is fatal to petitioner’s claim that the legislative

history of Section 5501 suggests that the exception

protects only those fleets of vessels that existed at the

time of the statute’s enactment. Pet. 22-25; see Davis v.

Michigan Dep’t of Treasury, 489 U.S. 8038, 809 n.3

(1989). Indeed, much of the history cited by petitioner

is floor statements or isolated statements by legislators,

which are poor indicators of congressional intent.

Barnhart v. Sigmon Coal Co., 534 U.S. 488, 457 (2002);

Regan v. Wald, 468 U.S. 222, 237 (1984).

Furthermore, the legislative history cited by peti-

tioner originally arose in the context of an un-enacted

House bill, H.R. 1464, 102d Cong., Ist Sess. (1991), that

would have limited the exception to only “the vessel

STUYVESANT” and would not have allowed SDC to

charter or operate any other hopper vessels or non-

hopper vessels. H.R. Rep. No. 260, 102d Cong., 1st Sess.

13 (1991). Later legislative comments regarding pro-

tection of existing dredging operations and grand-

fathering of existing fleets parroted the earlier legisla-

tive comments that had been used to describe the re-

jected bill. Congress repudiated the approach in those

comments when it declined to enact H.R. 1464 and

instead enacted the broader statutory language con-

tained in Section 5501(a)(2).” 3

Nor is there any basis for arguing that the plain

language of the statute produces an absurd result. Cf.

Lamie, 540 U.S. at 586. Petitioner erroneously argues

that reading clause (A)(iii) as written would allow “one

clause [to] swallow the remainder of a lengthy and

complex statutory provision.” Pet. 21. As the court of

appeals explained (Pet. App. 10a), clause (A)(iii) contains

specific limits, and those limits produce an entirely

rational result. Clause (A)(iii) permits SDC to charter

non-hopper dredges only as necessary “to fulfill dredg-

ing obligations under a specific contract” or in a “tem-

porary replacement capacity,” and the charter must

occur before the statutory exception expires in 2022, at

the latest. Although petitioner specuiates that a plain

reading of the statutory text could permit “SDC and

related entities * * * to dominate the U.S. dredging

market,” Pet. 13, that implausible hypothetical does not

rise to the level of an absurdity.

* The trial court acknowledged that the legislative history re-

ferencing existing fleets or operations was nearly identical to the

comments in H.R. Rep. No. 260 with respect to the rejected H.R. 1464.

See Pet. App. 45a (“T]he statement that the ‘amendment also includes

a grandfather clause to protect existing dredging operations’ cor-

responds most directly to the earlier version of the exception,” H.R.

1464, which protected only the Stuyvesant).

b. The court of appeals’ reading of clause (A)(iii)

does not conflict with the decision of any other court of

appeals. Petitioner nonetheless argues that this Court’s

review is warranted because “no circuit split ever can

develop on the meaning of the provision” given “the

vagaries of Federal Circuit’s jurisdiction.” Pet. 15-16.

Petitioner is mistaken. The Federal Circuit does not

have exclusive jurisdiction to review judicial decisions

interpreting the scope of clause (A)(iii). Rather, Con-

gress in the first instance vested Customs with the

responsibility to construe clause (A)(iii) and, indeed,

Customs already has construed clause (A)(iii) consistent

with its plain meaning and the decision below. Pet. App.

18a, 24a-25a. Customs’ interpretation of the statute is

subject to review under the Administrative Procedure

Act in district courts and the circuit courts of appeals.

See, e.g., Marine Carriers Corp. v. Fowler, 429 F.2d 702

(2d Cir. 1970), cert. denied, 400 U.S. 1020 (1971).

Accordingly, if petitioner were correct that the issue is

one of recurring and substantial importance, the matter

would be likely to arise in other courts of appeals upon

review of Customs’ letter rulings sought by aggrieved

parties similarly situated to petitioner.

CONCLUSION

The petition for a writ of certiorari should be denied.

Respecuully submitted.