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

A)

No. 04-809

Jn the Supreme Court of the Gnited States

NORFOLK DREDGING COMPANY, INC.,

Petitioner,

v.

UNITED STATES OF AMERICA AND BEAN STUYVESANT,

L.L.C.,

Respondents.

On Petition for a Writ of Certiorari to

the United States Court of Appeals

for the Federal Circuit

REPLY BRIEF FOR PETITIONER

MICHAEL H. PAYNE CHARLES A. ROTHFELD |

Starfield & Payne, P.C Counsel of Record

220 Commerce Dr., Ste. 250 EILEEN PENNER

Ft. Washington, PA 19034 Mayer, Brown, Rowe &

(215) 542-7070 Maw LLP

1909 K Street, NW

Washington, DC 20006

(202) 263-3000

SANFORD I. WEISBURST ~

Mayer, Brown, Rowe &

Maw LLP

1675 Broadway

New York, NY 10019

(212) 506-2500

Counsel for Petitioner

TABLE OF CONTENTS ?

Page

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Bag FE ae athikintiteecheie ces l

1. The Controversy Remains Live...............cccccccceeee l

i 2. If The Case Is Moot, The Court Should

a Grant The Petition, Vacate The Judgment,

E And Remand With Instructions To Dis-

4 ei ei ee yo 4

q B. The Issues Presented Here Warrant

. PRUE TIP SI Ss acest cannntsticicsninssohnarascenddnccoinnninanies 5

4 1. Respondents Barely Address The Petition’s

a Showing That The Federal Circuit’s Deci-

4 sion Is One Of Enormous Practical Impor-

a I Crs crubtind nee 5

Ee 2. Respondents Are Wrong In Contending

4 That The Federal Circuit’s Interpretation Of

a The Oceans Act Is Correct. .........:.cscscccssscssssenseeees 7

4 77 SARE A Se Poo nen cea a OT 9

(1)

1

TABLE OF AUTHORITIES

Page(s)

CASES:

Ameron, Inc. v. U.S. Army Corps of Engrs,

TOT FBG Bie Ga dees 3

Arizonans for Official English v. Arizona,

Sad OS Te, ED CRED cadanicccusdinshindscpshapuapataieansdatanaedeadinsns 4

Christopher Village, Ltd. P’ship v. Retsinas,

BOO F 3G SEO CG Ca, Fister cassccsnrcsncadcstasisocacats 3

Columbian Rope Co. v. West,

142 FS T5152 COR Ga a rervick saccrsessisscatonacess 4

Fauconniere Mfg. Corp. v. Sec’y of Defense,

PE FG S50 CR Cie SO kiceeatbaanunis 4

Gull Airborne Instruments, Inc. v. Weinberger,

G4 F .20-E50 CA. CAR, Te kisetniscisaiceinsstenissvnckons 2

James Luterbach Constr., Inc. v. Adamkus,

FS FBS Fe CP, We aicttinsieiciaastnidessnnannins 3

Joint School Dist. No. 241 v. Harris,

SiS WIS. TEAR iii ditbtindicatamiadicsataas 4

Kinnett Dairies, Inc. v. J.C. Farrow,

SEND FD TOO CB Gy FI i isi acccscecscnnsndicasnccicancnen 4

Koons Buick Pontiac GMC, Inc. v. Nigh,

ED Dh 0k, A Ga since osecdaiesia tiioearsnanenions 8

Lehman v. MacFarlane, 529 U.S. 1106 (2000) .............0.000.. 4

Murphy v. Hunt, 55 U.S. 478 (1982) (per curiam) ............... 3

iia |

ill

TABLE OF AUTHORITIES

(continued)

Page(s)

NTA Graphics, Inc. v. NLRB, 511 U.S. 1124 (1994)............ 4

PGBA, LLC v. United States, 389 F.3d 1219

SN Mac ANU pusicnsecccnsnenencniinetnsnpsiasninnansinacnsasescorssned 6

Powell v. McCormack, 395 U.S. 486 (1969) ...........cccceeseeees 2

Sale v. Haitian Ctrs. Council, Inc.,

SG WEE ID cnschasronsensvontasnsesesanstvnssnssonsnctoiecene 4

Seif v. Chester Residents Concerned For Quality Living,

I I, OID i rndcnsdcceseretnsntnnntnsatiinnccsnsenenecenss 4

Super Tire Eng’g Co. v. McCorkle,

Ps Ee PID cisniticsnstccinivedinieseiosansnnnatncianianaaanti 3

Teel v. Khurana, 525 U.S. 979 (1998) ............-.ssssssscssssseeeeees 4

United States v. Munsingwear, Inc.,

BN ile Se I direc snnsnstasnsdnnsneanksdennubsamumnsieneiins 4,5

United States v. Republic Steel Corp.,

BE Oh, Ge CD ecsccsssctnonsvcncensnanbieccisincinsesnsnensaass 7

United States v. Weatherhead, 528 U.S. 1042 (1999).......... 4

Weinstein v. Bradford, 423 U.S. 147 (1975).....ccccsccceseeesenees 3

STATUTES:

BE is 0 RA ein tiensiaciicascntcaneisnncsnnsscsinesoninesscesnetsuntannconsesn 6

BE BR 6 TBI sorsesecccestiesnsessscsesensssiessssainonensscssoesseqnesenesonaen 6

PERU BIE. © BABA veccccccccscsssnassescscsssiesssnnsvascersesevensaccssassancesovaie 2

iv

TABLE OF AUTHORITIES

(continued)

Page(s)

MISCELLANEOUS:

CBO Letter Report (Oct. 21, 2003) (available at

http://www.iwr.usace.army.mil/ndc/dredge/

ici cintcnpsieesnbecsannntsdsntdepandbnneghiasisonndccaminunacs 6

CHARLES ALAN WRIGHT, ARTHUR R. MILLER &

EDWARD H. COOPER, 13A FEDERAL PRACTICE &

PROCEDURE (2d ed. 1984 & 2004 Supp.)............... 4-5

REPLY BRIEF FOR PETITIONER

The briefs in opposition are most notable for what they

fail to say. Respondents make no serious attempt to deny the

enormous importance of this case to the vitality of a crucial

domestic industry — a point that is graphically demonstrated

by the broad amicus support for the petition from organized

labor and the United States maritime industry. Respondents

also do not really deny that the Federal Circuit’s approach

allows all foreign entities that are associated with SDC to

expand their operations in the United States without limit;

that the holding below gives those foreign companies huge

competitive advantages over domestic firms; or that those

foreign businesses could come to dominate the United States

dredging market. And respondents do not even try to explain

why Congress, in closing a loophole in the cabotage laws,

would countenance such a result.

The United States does contend that the case is moot. If

the Government were correct in that assertion, the proper out-

come would be for the Court to grant the petition, vacate the

judgment, and remand the case with instructions that it be

dismissed as moot. But the United States is wrong: the dis-

pute here remains live. Because ths issue presented is an im-

portant and recurring one, and because the approach to

statutory construction embraced by the court below is in clear

tension with this Court’s teaching, further review is war-

ranted.

A. The Case Is Not Moot.

1. The Controversy Remains Live.

The United States, but not its co-respondent Bean Stuy-

vesant, asserts that the case is moot because the Meridian

completed its work under the contract on January 31, 2005.

U.S. Opp. 6. That argument is wrong.

2 '

Contrary to the United States’ description (U.S. Opp. 6),

Norfolk’s complaint did not seek “solely” to enjoin the Gov-

ernment from awarding one specific contract to Bean Stuyve-

sant. Rather, Norfolk additionally sought “[a] declaratory

judgment that Bean Stuyvesant is a foreign corporation that

is subject to the proscnptions contained in 46 App. U.S.C. §

292 and, as such, it is prohibited from conducting dredging

operations in United States waters and it is not qualified or

eligible to receive an award of contracts on Federal dredging

solicitations.”” Compl. § 5.

“Where several forms of relief are requested and one of

those requests subsequently becomes moot, the Court has

still considered the remaining requests.” Powell v. McCor-

mack, 395 U:S. 486, 496 n.8 (1969). In particular, “[a] court

may grant declaratory relief even though it chooses not to

issue an injunction * * *.” Jd. at 499. Petitioner’s request for

declaratory relief remains vital in at least two respects.

First, a declaratory judgment in Norfolk’s favor would

undoubtedly affect future bid contests. Declaratory judgment

is appropriate where “the challenged governmental activity

* * * is not contingent, has not evaporated or disappeared,

and, by its continuing and brooding presence, casts what may

well be a substantial adverse effect on the interests of the pe-

titioning parties.” Super Tire Eng'’g Co. v. McCorkle, 416

U.S. 115, 122-23 (1974) (mooting of injunction request did

not moot case, where plaintiff had also sought declaratory

judgment). Here, it is a virtual certainty that Norfolk will

compete against Bean Stuyvesant or other SDC affiliates in

future bid solicitations; whether those entities are eligible to )

receive such contracts obviously will affect the bidding and

the award. |

Second, a declaratory judgment in Norfolk’s favor could

“be used as a predicate to further relief” (ibid.) in the form of

damages for Norfolk’s costs in preparing its bid for this con-

tract. Gull Airborne Instruments, Inc. v. Weinberger, 694

PE

3

F.2d 838, 846 n.10 (D.C. Cir. 1982) (“[E]ven if the claim for

injunctive relief is extinguished by mootness, Gull may retain

a viable claim for damages to the extent of its bid preparation

costs.”); 28 U.S.C. § 1491(b)(2) (similar). See generally

Christopher Village, Ltd. P’ship v. Retsinas, 190 F.3d 310,

315 (Sth Cir. 1999) (holding that declaratory judgment could

be used “‘as a predicate for a damages action against [the gov-

ernment] in the Court of Federal Claims”) (quoting Powell,

395 U.S. at 499). But see James Luterbach Constr., Inc. v.

Adamkus, 781 F.2d 599, 603 (7th Cir. 1986) (damages must

have been sought in complaint in present action to save case

from mootness).

Moreover, even if this case otherwise would be moot, it

cries out for application of the “capable of repetition but

evading review” exception, which applies where “(1) the

challenged action was in its duration too short to be fully liti-

gated prior to its cessation or expiration, and (2) there was a

reasonable expectation that the same complaining party

would be subjected to the same action again.” Murphy v.

Hunt, 455 U.S. 478, 482 (1982) (per curiam) (quoting

Weinstein v. Bradford, 423 U.S. 147, 149 (1975)) (internal

quotation marks omitted). Here, according to the Govern-

ment’s own account (U.S. Opp. 6), the Meridian completed

its work on the contract in just over five months—hardly

enough time for Norfolk to procure a grant of certiorari and a

decision on the merits from this Court, especially where the

United States sought and obtained two extensions of time to

file its brief in opposition. Other contracts almost invariably

will be completed within a similar time-frame: non-hopper

dredges typically complete their contractual duties within a

short period of time. And, as explained above, Norfolk and

Bean Stuyvesant undoubtedly will be rival bidders on future

dredging contracts. Several circuit courts have found the

“capable of repetition” exception to mootness applicable in

very similar circumstances. See, e.g., Ameron, Inc. v. U.S.

Army Corps of Eng’rs, 787 F.2d 875, 881 (3d Cir. 1986);

4

Kinnett Dairies, Inc. v. J.C. Farrow, 580 F.2d 1260, 1266

(Sth Cir. 1978).

2. If the Case Is Moot, The Court Should Grant

The Petition, Vacate The Judgment, And

Remand With Instructions To Dismiss.

If the Court disagrees and concludes that the case is

moot, however, the United States still is wrong in contending

that certiorari should be denied. Rather, when a case becomes

moot during the pendency of a petition for certiorari, the

Court’s “established practice * * * is to reverse or vacate the

judgment below and remand with a direction to dismiss.”

United States v. Munsingwear, Inc., 340 U.S. 36, 39 (1950).

See also Arizonans for Official English v. Arizona, 520 U.S.

43, 71 (1997). “Vacatur ‘clears the path for future relitiga-

tion’ by eliminating a judgment the loser was stopped from

opposing on direct review.” bid. (quoting Munsingwear, 340

U.S. at 40). This principle has been applied by several courts

in the specific context of a dispute over a government con-

tract award tlat becomes moot by virtue of performance of

the contract by the winning bidder. See, e.g., Columbian

Rope Co. v. West, 142 F.3d 1313, 1318 (D.C. Cir. 1998)

(cited at U.S. Opp. 6); Fauconniere Mfg. Corp. v. Sec’y of

Defense, 794 F.2d 350, 352 (8th Cir. 1986).

When a case becomes moot while a petition for a wnit of

certiorari is pending, this Court routinely issues a summary

order granting the petition, vacating the judgment below, and

remanding with directions to dismiss. See, e.g., Lehman v.

MacFarlane, 529 U.S. 1106 (2000); United States v.

Weatherhead, 528 U.S. 1042 (1999); Teel v. Khurana, 525

U.S. 979 (1998); Joint School Dist. No. 241 v. Harris, 515

U.S. 1154 (1995); NTA Graphics, Inc. v. NLRB, 511 US.

1124 (1994) (granting Government’s motion for such relief);

Sale v. Haitian Ctrs. Council, Inc., 509 U.S. 918 (1993); Seif

v. Chester Residents Concerned For Quality Living, 524 U.S.

974 (1998). See generally CHARLES ALAN WRIGHT, ARTHUR

5

R. MILLER & EDWARD H. CoOopPER, 13A FEDERAL PRACTICE

& PROCEDURE § 3533.10, at 434-35 & n.31 (2d ed. 1984 &

2004 Supp.) (collecting additional cases reflecting “this

[Court’s] practice [of] summarily granting certiorari, vacat-

ing, and remanding to dismiss—often with a citation to the

Munsingwear decision”; observing that “[t]here is no need

for change” in this practice). Following that course is espe-

cially appropriate in this case, where the issue is important,

the decision below is doubtful, and that decision—if unre-

viewable on mootness grounds but left unvacated—will gov-

ern future bid protests, whether by Norfolk or other domestic

dredging contractors.

B. The Issues Presented Here Warrant Review By

This Court.

1. Respondents Barely Address The Petition’s

Showing That The Federal Circuit’s Decision Is

One Of Enormous Practical Importance.

The petition described in detail the significant impact that

the Federal Circuit’s decision will have on the domestic

dredging industry. That decision allows SDC (or any foreign

entity in which SDC has even a minimal ownership interest,

such as Bean Stuyvesant) to expand its U.S. dredging busi-

ness Virtually without limit.’ And it confers numerous advan-

tages upon SDC that pave the way for its domination of the

U.S. dredging market: SDC, unlike U.S. dredging operators,

(1) may adjust to changing market conditions by re-

documenting its vessels under a foreign flag, and then bring-

ing the vessels back under U.S. flag at a later date; (2) may

' Although the United States asserts that Clause (A)(iii) contains

“specific limits” (U.S. Br. 9), on examination the provision re-

quires only that the charter of a non-hopper dredge be necessary

“to fulfill dredging obligations under a specific contract” — which

describes every relevant charter, because a// dredging is performed

under a “specific coritract.”

6

engage in transfer pricing or transfer profits overseas; (3) en-

joys access to foreign capital; and (4) may operate in certain

foreign countries such as Iran. Pet. 12-16. Amici elaborate

on these points. See Br. of Amici Curiae Dredging Contrac-

tors Of America, et al. 14-17.

The United States does not deny that these competitive

advantages will accrue to SDC and its affiliated entities, to

the detriment of the domestic dredging industry. Instead, it

simply asserts without explanation or support that the pros-

pect of SDC’s domination of the domestic dredging market is

“implausible.” U.S. Opp. 9. As for respondent Bean Stuyve-

sant, it offers only a conclusory denial of the petition’s show-

ing. Bean Stuyvesant Opp. 4-5. But the competitive effects

sketched in the petition are inarguable; in fact, the petition

cited a Congressional Budget Office report indicating that

Bean Stuyvesant’s market share of contracts let by the U.S.

Army Corps of Engineers rocketed from zero prior to fiscal

year 1999 to 17% in fiscal year 2001-02. Pet. 15 (citing

CBO Letter Report (Oct. 21, 2003) (available at

http://www.iwr.usace.army.mil/ndc/dredge/dredge.htm)). Re-

spondents make no response to this point.

The United States also contends that the dramatic impact

of the Federal Circuit’s decision does not warrant this

Court’s review because there is no conflict in the circuits.

U.S. Opp. 10. But the Government does not dispute our

claim (Pet. 15) that the Federal Circuit is the on/y court of

appeals with jurisdiction to review appeals from bid protest

determinations.” The United States instead suggests that

> See PGBA, LLC v. United States, 389 F.3d 1219, 1227 (Fed. Cir.

2004) (describing legislation that gave Court of Federal Claims

exclusive jurisdiction over bid protests as of January 1, 2001);

28 U.S.C. §§ 1295(a)(3) (granting Federal Circuit exclusive appel-

late jurisdiction to review final decisions of the Court of Federal

Claims) and 1292(c) (granting Federal Circuit exclusive appellate

7

Norfolk and other domestic dredging concerns could some-

how foment a circuit split by seeking Administrative Proce-

dure Act review in various circuits of the Customs Service’s

private-letter rulings interpreting the Oceans Act. U.S. Opp.

10. This suggestion, however, is remarkable, and wholly in-

feasible in practice: the United States would have domestic

dredging companies engage in the futile exercise of request-

ing unfavorable private letter rulings from the Customs Ser-

vice, for the sole purpose of forum-.hopping the judicial

review of those rulings. The reality is that bid protests are the

form that these disputes inevitably will take in the future, and

the Federal Circuit is the only court of appeals with jurisdic-

tion to review those protests. Accordingly, the importance of

the issue, rather than the presence or absence of intercircuit

conflict, should guide this Court’s decision whether to grant

the petition.

2. Respondents Are Wrong In Contending That

The Federal Circuit’s Interpretation Of The

Oceans Act Is Correct.

In defending the decision below, the United States and

Bean Stuyvesant rely in large part upon their contention that

the language of the Oceans Act is plain and supports the Fed-

eral Circuit’s reading. U.S. Opp. 7; Bean Stuyvesant Opp. 6.

But the Federal Circuit’s holding rested crucially upon the

assumption that, where clauses of a statutory provision are

“self-contained” and “semi-colon delimited,” the clauses are

“independent of each other.” Pet. App. 7a. This proposition

jurisdiction to review interlocutory orders where final decision

would be within Federal Circuit’s exclusive appellate jurisdiction).

3 The Government contends that this principle is unremarkable.

U.S. Opp. 7 n.1. But the lone case it cites demonstrates that semi-

colons are not to be treated as steel traps. See United States v. Re-

public Steel Corp., 362 U.S. 482 (1960). There, this Court, when

faced with the task of interpreting the word “obstruction” in the

first part of a statute, looked to the second part of the statute (sepa-

8

is in tension, to say the least, with this Court’s view that

“statutory language must be read in its proper context and not

viewed in isolation.” Koons Buick Pontiac GMC, Inc. v.

Nigh, 125 S. Ct. 460, 467 (2004). See also Pet. 19-20 & n.10

(citing similar decisions by this Court and lower courts).

Adopting the Federal Circuit’s mistaken approach, the United

States and Bean Stuyvesant make no attempt to read the pro-

visions in context or explain why Congress tied them all to

the hopper dredge Stuyvesant. See Pet. 21. Nor do they pro-

vide a persuasive basis to distinguish the canon that, where

ambiguity remains as to the meaning of a grandfather clause,

the clause must be strictly construed. Pet. 22. Finally, nei-

ther the United States nor Bean Stuyvesant make any attempt

to reconcile their isolated reading of subparagraph (A)(iii)

with the clear statutory purpose of the Oceans Act, which

they do not deny was to close loopholes in existing cabotage

laws.

The United States does argue that some of the same

statements appear in the legislative history of both the

Oceans Act and an earlier version of the legislation that

would have limited the grandfather exception to only “the

vessel STUYVESANT.” U.S. Opp. 8-9. But the logical in-

ference to draw from the repetition of these statements in

connection with the statutory language actually enacted is

that they continued to inform Congress’s understanding of

the legislation’s scope. As the Court of Federal Claims ex-

plained:

[T]he amendment as finally enacted * * * first was

presented to the House of Representatives. After

reading the language in question, Representative

Tauzin stated: “This amendment would close loop-

rated from the first part by a semi-colon). /d. at 486. That is pre-

cisely the “holistic” interpretive method reaffirmed in Koons Buick

Pontiac and applied by the Court of Federal Claims, but not the

Federal Circuit, in this case.

9

holes in the Federal law. It has been written in co-

operation with the U.S. dredging operators and

grandfathers existing foreign-owned fleets.”

Pet. App. 45a (quoting 138 Cong. Rec. 15647) (emphasis

added).* Thus, the legislative history points toward the same

narrow reading of subparagraph (A)(iii) as do the interpretive

canons discussed above, and further demonstrates that the

Federal Circuit erred.

CONCLUSION

The petition for a writ of certiorari should be granted and

the case set for plenary review. If, however, the Court con-

cludes that the case is moot, the Court should grant the peti-

tion, vacate the judgment, and remand with instructions to

dismiss the case as moot.

Respectfully submitted.

MICHAEL H. PAYNE CHARLES A. ROTHFELD

Starfield & Payne, P.C Counsel of Record

220 Commerce Dr., Ste. 250 EILEEN PENNER

Ft. Washington, PA 19034 Mayer, Brown, Rowe &

(215) 542-7070 Maw LLP

1909 K Street, NW

Washington, DC 20006

(202) 263-3000

SANFORD I. WEISBURST

Mayer, Brown, Rowe &

Maw LLP

1675 Broadway

New York, NY 10019

(212) 506-2500

MARCH 2005

* The Government omits this part of the Court of Federal Claims’

opinion from its quotation of the opinion at U.S. Opp. 9 n.2.