[00:00:01] Speaker 05: Case number 17-5269, Angel Edds, a limited appellate versus United States of America. [00:00:52] Speaker 01: may please the court your honor's George Chalice on behalf of Appellant Angel X. This is a case that comes to this court as one of first impression and it is a challenge to the reasonableness of the Coast Guard's actions in detaining a vessel in the port of Norfolk. [00:01:09] Speaker 01: back in April of 2013. [00:01:13] Speaker 01: Almost five years to the day, the vessel was released following a failed prosecution of the vessel's ship's owner, the appellant here, Angel X, and the ship's contractual manager, a company called Cassian Maritime Navigation Agency. [00:01:29] Speaker 01: Now in that matter, the dispute arose because the government detained the vessel [00:01:33] Speaker 01: in exchange for a variety of demands on the owner and the operator of the ship, which included a financial bond as well as non-financial terms. [00:01:45] Speaker 01: The question of whether the Coast Guard could make those demands is not before the court. [00:01:49] Speaker 01: That was here in a case called Watervale. [00:01:52] Speaker 01: And at the time, this circuit, as well as the Fourth Circuit said, the Coast Guard has the authority to do these demands. [00:02:00] Speaker 01: But what Watervale left open, as the Fourth Circuit left open, is the question of is the action reasonable? [00:02:08] Speaker 01: Because both courts recognized that 1904H provides an after-the-fact remedy. [00:02:12] Speaker 01: to an aggrieved owner, such as the appellant in this case. [00:02:16] Speaker 01: Now we submit that the district court got it wrong because the district court said that it did not need to address the reasonableness of the terms. [00:02:25] Speaker 01: The district court got it wrong because it said that the max fine of the owner and the operator is, as a matter of law, reasonable. [00:02:33] Speaker 01: But the district court missed the ball, and I'd say missed the boat in this case, because the only asset, what we're talking about, [00:02:41] Speaker 01: is the ship. [00:02:43] Speaker 01: And the only ownership interest in the ship belongs to Angel X. Can we go back a moment? [00:02:50] Speaker 04: In assessing the reasonableness of what the Coast Guard insisted upon, don't we have to look at what the record shows us as to what the boat [00:03:04] Speaker 04: owners presented to the Coast Guard. [00:03:07] Speaker 04: I agree Your Honor. [00:03:09] Speaker 04: And what do we have in the record supporting the claim of an indebtedness which engulfed the value of the ship itself? [00:03:22] Speaker 01: The Coast Guard at the time when this matter was pending before the Eastern District of Virginia before Judge Dumar, the Coast Guard asked for and were provided financials of the ship owner, Angel X. The question is, are any of those in the record of this case? [00:03:38] Speaker 01: Sure, absolutely not. [00:03:40] Speaker 01: Absolutely. [00:03:41] Speaker 01: In fact, part of our gripe with the District Court's decision is- Where in the record? [00:03:44] Speaker 05: Where are they? [00:03:47] Speaker 01: It's from the district court case. [00:03:49] Speaker 01: It's from the administrative record. [00:03:51] Speaker 01: It's from all those things, which... Can you point us to the Joint Appendix? [00:03:54] Speaker 02: Is there a Joint Appendix site or you weren't able to find him? [00:03:57] Speaker 01: I don't believe it was included in the Joint Appendix, but it was certainly evidence and is evidence before the court in the district court. [00:04:04] Speaker 05: The district court didn't think so. [00:04:07] Speaker 01: Yeah, that's what one of the errors the district court made. [00:04:10] Speaker 01: The district court also said that as far as it was concerned, the question of reason... What exactly was provided when you say the financials? [00:04:18] Speaker 01: I don't remember the details. [00:04:21] Speaker 01: I know for sure it was unaudited financial statements, balance sheets, profit and loss. [00:04:26] Speaker 05: There were some emails describing what the financial statements would say. [00:04:31] Speaker 01: No, the emails, Your Honor, were a description of the vessel's mortgage indebtedness. [00:04:37] Speaker 01: There is a mortgage that was recorded in the Coast Guard. [00:04:42] Speaker 05: Would you agree that if these financial statements are not in the record, [00:04:46] Speaker 05: That's fatal to your argument here. [00:04:49] Speaker 01: I don't agree, Your Honor, because we would have presented testimonial evidence at trial for the owner of the ship and representatives of the owner of the ship who would have come in and testified. [00:04:58] Speaker 01: Now, the government can't take advantage of the fact that it didn't call any witnesses for deposition. [00:05:04] Speaker 01: We identified at least eight witnesses. [00:05:06] Speaker 01: We identified documents and subjects that they would have testified about. [00:05:10] Speaker 03: I mean, the Coast Guard identified... You had a duty to come forward with evidence of factual disputes at the summary judgment stage, did you not? [00:05:19] Speaker 01: Yes, we do, of course we do. [00:05:20] Speaker 03: And so the admissible evidence that you came forward with was what? [00:05:26] Speaker 01: The administrative record that was before the court in the Eastern District of Virginia and the Fourth Circuit and all of which would have been... That's awfully big and vague. [00:05:35] Speaker 03: Is there anything more specific? [00:05:38] Speaker 01: On the topic of financials or inability, there certainly would have been evidence as to the company's financial position. [00:05:47] Speaker 01: There would have been the charter party, which would explain what the vessel's earning capacity was. [00:05:52] Speaker 01: There was the mortgage indebtedness, which is a matter of public record. [00:05:56] Speaker 01: It can be found through the vessel's flag state registry and there would have been testimonial evidence from representatives of the ship owner who would have come in and explained very clearly that this ship was upside down and by not being able to trade it was almost a near near death for the company. [00:06:19] Speaker 05: You say in your brief that the district court erred because there are several disputed issues of material fact. [00:06:33] Speaker 05: But as I look at those, all the ones that you list are about process. [00:06:38] Speaker 05: who actually made the decision, what they actually considered, what they were thinking. [00:06:46] Speaker 05: But why is that relevant? [00:06:50] Speaker 05: The question is whether the agency's action was reasonable. [00:06:54] Speaker 05: And I don't see anything in the statute that imposes any process requirements. [00:07:00] Speaker 05: It's just objective reasonableness. [00:07:03] Speaker 05: So why are any of those even relevant? [00:07:06] Speaker 01: Right, so the statute talks to an unreasonable delay. [00:07:12] Speaker 01: And so I agree that the statute and the regs don't provide a process which the Coast Guard must follow. [00:07:18] Speaker 01: In fact, I would agree with the government that the statute generally defers to the Coast Guard on what process that they would use. [00:07:27] Speaker 01: But where I disagree with the government in this regard is [00:07:30] Speaker 01: that 1904H, after the fact remedy, is the safeguard or backstop, if you will, that the processes, or however you would say it in the plural, that are employed must be reasonable. [00:07:45] Speaker 05: Wait, wait, I lost you there. [00:07:47] Speaker 05: I was with you up until your last sentence. [00:07:51] Speaker 05: I thought at the beginning that you and I were in agreement. [00:07:54] Speaker 05: the statute doesn't impose any process. [00:07:59] Speaker 01: Specific or express process. [00:08:01] Speaker 01: Correct, right. [00:08:02] Speaker 05: So now how do you get to getting process back in? [00:08:05] Speaker 01: So 1904H provides a standard for which the decision-making process must follow. [00:08:13] Speaker 01: And that that standard is one of reasonableness. [00:08:16] Speaker 01: And it would be unreasonable, and that's the way the statute's written in terms of unreasonable, [00:08:21] Speaker 01: It would be unreasonable not to look at the totality of the circumstances, and we point out specific incidents where the government or Coast Guard, in this case, put their head in the sand and did not do things that would have been reasonable, such as they asked for financials, they did no analysis. [00:08:39] Speaker 01: They imposed the maximum fine as their calculation, but they did it [00:08:44] Speaker 01: for both the vessel owner, Angel X, and the non-party who has no ownership or equity interest in the vessel. [00:08:52] Speaker 01: So that's unreasonable because there's no in rem right or quasi in rem right against the vessel for any fine or penalty that might be imposed against the operator or an individual or anybody else. [00:09:04] Speaker 01: It's the property of Angel X and only Angel X. [00:09:07] Speaker 03: At what point in time are we supposed to measure the reasonableness of the government's actions in delaying the ship? [00:09:18] Speaker 03: under 1904H use sort of 20-20 hindsight, or do we look back at the time they made the decisions to impose the bond that they did and say, given the information they had, the information they didn't have, was it reasonable? [00:09:34] Speaker 03: Which time frame do we use? [00:09:36] Speaker 01: In this case, I think it's a distinction. [00:09:37] Speaker 03: In this case, under the statute, under 1904H, in all cases, what time frame do we use? [00:09:42] Speaker 01: Yeah, so I think that it has to be a contemporaneous snapshot and follow the evolution of the case. [00:09:49] Speaker 01: In this matter, I think that the question of whether it's 2020 hindsight or doing that process that we just spoke about is a distinction without a difference. [00:09:58] Speaker 01: The Coast Guard did not. [00:09:59] Speaker 03: Do you agree that we look, when you say contemporaneous, you mean at the time they actually made the decision, the decision to impose the bond and the amount of the bond? [00:10:07] Speaker 01: Right, but Your Honor, our complaint goes beyond that. [00:10:10] Speaker 01: It's not a snapshot of when they took the decision. [00:10:13] Speaker 01: It's the failure to continue to reassess the decision throughout the nearly six months that the vessel sat. [00:10:19] Speaker 03: Has the government allowed, at this sort of pre-prosecution stage, to disbelieve evidence that's submitted by the ship owner? [00:10:28] Speaker 03: I think they are, but there's no dispute that the only company that has an ownership or equitable interest in the Antonis G. Papadakis vessel was Angel X. Yes, but could they disagree about, put it in a hypothetical case, not this one, could they disagree with ship owners assertions of innocence or lack of knowledge or lack of affiliation with someone else's bad activities? [00:10:55] Speaker 01: In another case, could they disagree? [00:10:57] Speaker 01: if differing minds could reasonably agree to disagree, yeah. [00:11:00] Speaker 01: But again, the standard's reasonable. [00:11:02] Speaker 01: Your Honor, I know my time is up, but I'd like to point the panel to Joint Appendix at page 390. [00:11:07] Speaker 01: And what's important about that is, that's the captain of the port, Captain John Little's testimony. [00:11:14] Speaker 01: And he, by DOJ designation and by admission of other Coast Guard, more senior Coast Guard representatives, said that Captain Little, [00:11:23] Speaker 01: was the individual with the authority to decide what's satisfactory and unsatisfactory, what's reasonable and what's unreasonable. [00:11:31] Speaker 01: And Little himself testified, and you find it in Joint Appendix 390, that the bond conditions that Judge Dumas imposed, the $1.5 million bond, which is the equivalent of the maximum fine against the ship owner, [00:11:43] Speaker 01: was reasonable. [00:11:45] Speaker 01: He says it was not unsatisfactory to him. [00:11:48] Speaker 01: So if he is the individual tasked with the authority to decide what's reasonable and what's unreasonable, what's satisfactory and what's unsatisfactory, and he says that $1.5 million on the financial terms was a reasonable, satisfactory figure, plus other things, which we haven't spoken about in this argument, isn't it unreasonable to demand something more than that? [00:12:11] Speaker 01: When the man with the authority [00:12:12] Speaker 05: His decision was reversed by the Fourth Circuit. [00:12:20] Speaker 01: It wasn't reversed. [00:12:22] Speaker 01: It was basically vacated on the finding, that he didn't have subject-matter jurisdiction. [00:12:30] Speaker 05: Yeah, so if he had no subject-matter jurisdiction, he had no authority to make any determination with respect to the reasonableness of this. [00:12:39] Speaker 01: That may be right. [00:12:40] Speaker 01: He was without jurisdiction. [00:12:41] Speaker 01: That may be right, but it doesn't mean he was wrong. [00:12:44] Speaker 05: Let me ask you a slightly unrelated question with respect to the non-monetary provisions. [00:12:51] Speaker 05: Am I right? [00:12:52] Speaker 05: Do I read this record correctly that at the time Judge Dumon made his decision, your client didn't object to any of the non-monetary? [00:13:02] Speaker 01: Angel X agreed. [00:13:04] Speaker 01: The owner of the ship agreed. [00:13:06] Speaker 05: Well, that's the only party before us here, right? [00:13:08] Speaker 01: That's correct. [00:13:09] Speaker 05: Okay, so then how under this statute can you challenge it? [00:13:15] Speaker 05: Because obviously the actions of the agency didn't cause [00:13:19] Speaker 05: And he lost you. [00:13:21] Speaker 01: No, it did, Your Honor, and I'll explain why. [00:13:23] Speaker 01: Because you're talking about one pile of money, and the money can be paid to you, it can be paid in part to Judge Williams, it can be paid in part to Judge Malay. [00:13:32] Speaker 01: But I can't give it all to you and still give a little bit to the other judges, right? [00:13:36] Speaker 01: So in this circumstance, when you lump it all together, it was too much. [00:13:41] Speaker 05: With the reduced bond, which had to be secured dollar for dollar, the company was able to... Didn't the district court find that your client stated that even without the non-monetary conditions, they could not supply the bond? [00:13:57] Speaker 01: That's right. [00:13:58] Speaker 01: That's 100% correct. [00:13:59] Speaker 05: But the point is... Doesn't that resolve that point then? [00:14:02] Speaker 01: It does not. [00:14:02] Speaker 05: It doesn't really make any difference, right? [00:14:04] Speaker 05: Because your client is on record saying, [00:14:08] Speaker 05: even without the non-monetary conditions, it could not have satisfied demand. [00:14:14] Speaker 01: No, that misses the point completely, and I'll explain why if I may. [00:14:18] Speaker 01: Sure. [00:14:19] Speaker 01: Willing to agree to something when the gun is against your head is very different than making it reasonable. [00:14:25] Speaker 01: The test isn't whether you can beg, borrow, and steal, and make this deal to get your ship back in service. [00:14:31] Speaker 01: What it says here is that they, our client, was working very hard to meet the government's demands because it was facing almost a short extinction if they didn't. [00:14:41] Speaker 01: They went out and the record would show, if we had more of an opportunity to develop the factual record, that they secured lending to put up the bond and they secured funding to cover the expenses which largely would have come from the ship's continual trade. [00:14:57] Speaker 01: It would have been basically a little bit behind, but as they would have earned monies and fees from the ship trading, they would have been able to cover the housing, the hotels, the costs, and so forth. [00:15:07] Speaker 01: But without getting the ship into service, without getting a bond that was reachable, without being able to earn [00:15:14] Speaker 01: future income, the whole deal fell apart. [00:15:17] Speaker 01: So it's incorrect to look at them as two separate and distinct obligations that if it was good enough under this circumstance, it would be good enough under that circumstance. [00:15:25] Speaker 01: That goes one step too far and misstates what the fact, the contemporaneous facts were at the time. [00:15:39] Speaker 01: Thank you. [00:15:40] Speaker 05: Thank you. [00:15:41] Speaker 05: We'll hear from the government. [00:15:46] Speaker 00: May it please the court and Murphy for the United States. [00:15:50] Speaker 00: Your Honor, I'd like, if I might, to just describe the statutory scheme a little bit, and that will explain why Cassian. [00:15:56] Speaker 00: It was also reasonable for the government to demand a bond that would include money that represents Cassian's potential liability. [00:16:05] Speaker 00: Under section 1908e, [00:16:07] Speaker 00: the government has to refuse or revoke the vessel's clearance if there's a reasonable cause to believe that the pollution laws were violated. [00:16:16] Speaker 00: And this Court in Watervale recognized that under the statutes, the government can simply hold the ship until the criminal proceedings are completed. [00:16:25] Speaker 00: That's reasonable and I don't believe that it's disputed. [00:16:29] Speaker 00: It's also undisputed that here it was reasonable for the government to initially withhold the clearance. [00:16:34] Speaker 00: So as the district court recognized here, when you get to the part where the secretary may grant clearance, it doesn't, she doesn't have, he or she doesn't have to, but may grant clearance, the government's entitled to a set of conditions that put the government in a no worse position than it would be in if it had kept the vessel. [00:16:56] Speaker 04: Do you accept the idea that that's subject to review for reasonableness? [00:17:01] Speaker 00: We do accept that in this separate subsequent action, it is subject to review for reasonableness, yes, Your Honor. [00:17:11] Speaker 00: So as the district court recognized, any condition that makes the agreement an effective substitute for the presence of the vessel is going to be reasonable. [00:17:22] Speaker 00: And here, Cassian's liability is cleared just from the statute. [00:17:27] Speaker 00: Under subsection A, it makes it a criminal penalty for a person to violate Marpol. [00:17:35] Speaker 00: Subsection E, you can withhold clearance if the vessel's owner, operator, or person in charge is liable. [00:17:43] Speaker 00: And then the liability in rem precision makes the ship liable for any fine imposed without regard to whether it's against the owner, the operator, or anyone else. [00:17:54] Speaker 03: So how do we review the satisfactory to the secretary decision under 1908 later, under 1904 age? [00:18:05] Speaker 03: How are we supposed to determine whether in any given case the decision either not to grant a bond at all or to grant a bond that was too large for them to meet is unreasonable? [00:18:20] Speaker 03: How would that ever be reviewed? [00:18:22] Speaker 00: I think you just have to look at the statutory scheme. [00:18:25] Speaker 00: You have to look at the Secretary's interest in prosecuting the vessel. [00:18:30] Speaker 00: And to the extent that it's within the Secretary's discretion, that the Coast Guard acted within its discretion, I think that's going to be reasonable. [00:18:39] Speaker 03: What would be an example of an unreasonable? [00:18:42] Speaker 03: What would be outside the discretion? [00:18:43] Speaker 03: Since you say they don't have to give a bond at all. [00:18:45] Speaker 00: Well, let's say that in this case, the owner and the operator had said, OK, you caught us. [00:18:51] Speaker 00: We were polluting. [00:18:52] Speaker 00: We are willing to put out the full amount of all of the criminal penalties and agree to the non-financial conditions. [00:19:00] Speaker 00: And the secretary said, I've changed my mind. [00:19:03] Speaker 00: I don't think I'm going to let you go. [00:19:05] Speaker 04: You veer into a point that struck me about the district court opinion. [00:19:11] Speaker 04: And that was the idea that the maximum chargeable fines were, if so facto, reasonable. [00:19:19] Speaker 04: But we know that Congress often sets penalties way in excess of what it expects. [00:19:26] Speaker 04: judges or other authorities to levy. [00:19:30] Speaker 04: And so it seems to me a stretch to think that any fine specified in the statute automatically represents the floor for reasonableness. [00:19:44] Speaker 00: We're on a couple of points on that. [00:19:46] Speaker 00: First of all, the bond and the penalty and the maximum fine also involve charging discretion by the Coast Guard. [00:19:55] Speaker 04: So, for example, here, the Papadakis... Yes, but suppose it's plain, the Coast Guard looking at all the facts then available to it. [00:20:06] Speaker 04: can see that this is a case that is not going to produce the maximum fine. [00:20:13] Speaker 04: Right? [00:20:13] Speaker 00: But Your Honor, at the time that the decision's being made... I'm talking about at the time. [00:20:18] Speaker 00: Right. [00:20:19] Speaker 00: At the time, nobody knows how the criminal trial is going to progress. [00:20:23] Speaker 00: I mean, at the time the initial decision was made, there was only one violation charged, and events kind of moved. [00:20:30] Speaker 04: And I think what the... You're going beyond the district judge. [00:20:32] Speaker 04: You're suggesting that [00:20:34] Speaker 04: All kinds of additional charges might develop, presumably, with all kinds of new maximums. [00:20:41] Speaker 00: But what's relevant, Your Honor, is at the time that the discussions over the bond demand are going on, I think the district court was absolutely right. [00:20:50] Speaker 00: At that time, nobody knows what the conviction is going to look like, or even if there's going to be a conviction. [00:20:57] Speaker 00: Because remember, the point is to leave a substitute for the presence of the vessel. [00:21:02] Speaker 00: The government needn't be any worse off than it would be if it had the ship. [00:21:07] Speaker 03: Was there any duty to revisit that judgment as facts develop? [00:21:12] Speaker 03: Imagine you set the bond and then as you investigate it turns out the ship was hijacked and it was the pirates who were dumping all the gunk into the sea. [00:21:24] Speaker 03: Do we still just look back, as you said, at the time of the initial decision? [00:21:27] Speaker 00: No, Your Honor. [00:21:28] Speaker 03: Well, how often do we revisit? [00:21:30] Speaker 03: I mean, how do we assess the reasonableness of this whole thing? [00:21:32] Speaker 00: Well, eventually, there's either going to be a security agreement or we're going to keep the vessel. [00:21:38] Speaker 00: So here, it's a little bit difficult to assess because there was never actually final office. [00:21:45] Speaker 00: The negotiations were still ongoing. [00:21:47] Speaker 00: when Angel X's council went to court and started litigation in the Fourth Circuit. [00:21:52] Speaker 00: And then after the Fourth Circuit made its decision, there was another effort by the government to reach out to Angel X, and that's at JA 418, to see if we could have another negotiation. [00:22:04] Speaker 00: So at any point, there's going to be some doubt perhaps about if there's no Syria agreement is reached about quite what the offers were. [00:22:14] Speaker 00: So I think all you can do at this point is since the vessel didn't leave and the question is was it reasonable for the Coast Guard to keep it is to look at that set of circumstances in this case. [00:22:27] Speaker 03: So your test of reasonableness is as long as it leaves the government in the same position it would be if the ship were there. [00:22:32] Speaker 00: Correct. [00:22:33] Speaker 03: Which then has no adjustment for overcharging [00:22:39] Speaker 03: penalties that are way higher than anybody really thinks they're ever going to seek, let alone recover. [00:22:45] Speaker 03: As long as they charge it up high, they're good. [00:22:48] Speaker 00: But that's not clear that, I mean, it's not clear that that's what happened. [00:22:51] Speaker 03: I'm asking about your legal tests for unreasonableness and that keep them in the same position as if the boat were there, sort of is going to insulate you from everything. [00:23:03] Speaker 00: What the district court said was you need something objective that you can tell right at the beginning because don't forget these are normally taking place really over hours and days because the ship wants to go on its way and the government wants to protect its interest in prosecuting the crimes. [00:23:18] Speaker 00: So I'd also like to add this is the only case that we're aware of in which there was an inability to reach an agreement. [00:23:25] Speaker 03: I'm just trying to understand what the test for unreasonable delay is when the unreasonableness is trying to measure whether something was reasonably satisfactory to the secretary at some prior time. [00:23:38] Speaker 03: And as you said, I get that upfront, in the first immediate moments, [00:23:44] Speaker 03: It might be hard, but you agreed that you don't just stop and then over that you have to reevaluate the reasonableness of the bond over time as the investigation develops. [00:23:54] Speaker 03: So what is the test? [00:23:55] Speaker 00: But I think that just the facts of what's going to happen here is [00:24:01] Speaker 00: Either there will be a security agreement or there won't. [00:24:04] Speaker 00: So say, for example, we held the vessel and facts came to light that showed that, you know, Angel X was not going to be a viable defendant, but Cassian would. [00:24:15] Speaker 00: Then, you know, the reasonableness of asking for, you know, a bond to secure financial penalties against Cassian would go away. [00:24:22] Speaker 00: or angelics, whichever. [00:24:24] Speaker 00: So then you'd need to negotiate on the basis of the lower amount. [00:24:28] Speaker 03: But how are courts supposed to do this after the fact? [00:24:30] Speaker 03: Because what will happen is they'll say, hey, we gave you evidence that we were innocent. [00:24:34] Speaker 03: And the government will go, well, we didn't know. [00:24:36] Speaker 03: We were still investigating. [00:24:38] Speaker 03: And nothing's going to be certain enough to keep the government in the same position it would be as if the ship were there until things are actually proved at trial, are they? [00:24:46] Speaker 00: Well, I mean, here we [00:24:50] Speaker 00: I think that's why the district court said [00:24:53] Speaker 00: We know the government can keep the ship, so it's reasonable for the government not to put itself in a worse position. [00:25:00] Speaker 03: But we don't know the government can reasonably keep the ship, do we? [00:25:03] Speaker 00: Yes, we do. [00:25:04] Speaker 00: I think we know that just from the statute, because the statute says that the government has to revoke the clearance. [00:25:11] Speaker 00: That's not even optional for the secretary. [00:25:14] Speaker 00: We know that the government may give the departure clearance, and we know from Waterville that there's very broad discretion over that. [00:25:21] Speaker 03: And the other thing to note is that we know that after the fact, we can evaluate the reasonableness of that decision not to give a bond. [00:25:29] Speaker 03: Are you saying, it sounds like your argument that we don't, that you can always keep the ship. [00:25:33] Speaker 03: We can always keep the ship. [00:25:37] Speaker 03: By nature, I mean that any bond will always be reasonable because it'll be better than keeping the ship. [00:25:46] Speaker 00: It doesn't mean that any bond will be reasonable, but the district court was correct that any bond up to the amount of the maximum penalties is going to be reasonable. [00:25:54] Speaker 00: And the reason we know we can keep the ship, Your Honor, is because under Section 1908D, it provides for liability in rem for the fine imposed. [00:26:04] Speaker 00: And by the time the fine's imposed, there's been a criminal trial, and the statute presupposes that the vessel is still there. [00:26:11] Speaker 00: So I think the district court is just correct. [00:26:13] Speaker 00: that we can keep the vessel. [00:26:16] Speaker 00: The statute requires us to at least keep the ship for an amount of time. [00:26:21] Speaker 00: And if we can't come to terms, then it is reasonable for the government to protect its entire interests. [00:26:26] Speaker 03: I'm just trying to understand how Congress could have had a statutory provision for unreasonable delay or detention, unreasonable detention, if, under your theory, detention is inherently allowed and reasonable. [00:26:38] Speaker 00: Well, I assume that there's no issue about the detention in this case, but I'm assuming that a ship could come in and say, you should never have detained me because there was no Marpol violation. [00:26:51] Speaker 00: That's not an issue in this case. [00:26:54] Speaker 00: And the reason that the statute is in here, I can't actually answer that question. [00:26:57] Speaker 00: It's a requirement of Marpol. [00:27:00] Speaker 00: I believe it's Article 7. [00:27:01] Speaker 00: that one of the things that the country's legislation has to have is a remedy for unreasonable detention or delay. [00:27:10] Speaker 05: You said in response to a question that this was the only case where the parties weren't able to reach an agreement about the bomb. [00:27:19] Speaker 05: Correct. [00:27:20] Speaker 05: Is that in the record? [00:27:23] Speaker 05: Is that information in the record? [00:27:24] Speaker 05: I mean, how many such cases are there and besides, what difference does that make in this case? [00:27:31] Speaker 00: I don't think it's in the record, but it seems like I would have to ask the Coast Guard exactly. [00:27:42] Speaker 05: Do you know how many times ships are prevented from departing and bonds negotiated? [00:27:49] Speaker 00: I know it's a significant number. [00:27:52] Speaker 00: And the closest thing I have is the testimony of Commander Grant, which is around page J416, where he had negotiated seven with them. [00:28:04] Speaker 00: And we did put a footnote in our brief trying to address this issue of how many cases there are. [00:28:10] Speaker 05: And suppose you're right that this is the only one and that there are many. [00:28:13] Speaker 05: Does that make any difference in how we dispose of this case? [00:28:18] Speaker 00: I think it should comfort, Your Honor, that generally it is a reasonable process, that generally the government acts reasonably, vessels are willing to put up the money. [00:28:32] Speaker 00: They don't say things like, oh, I'm not giving you any information from the operator because you can't reach its assets. [00:28:39] Speaker 05: All right. [00:28:40] Speaker 05: OK. [00:28:40] Speaker 00: Thank you. [00:28:42] Speaker 05: Thank you, Your Honor. [00:28:44] Speaker 05: Thank you. [00:28:45] Speaker 05: Did counsel have any time left? [00:28:49] Speaker 05: You can take a minute. [00:28:50] Speaker 01: Your honor, the bond demand in the other terms beyond the financial terms don't put the government or the Coast Guard in the same position as if the ship sat there. [00:28:59] Speaker 01: If the ship sat there, the ship only answers for the fine against its owner, Angel X. It doesn't create personal jurisdiction of a foreign manager or an operator. [00:29:09] Speaker 01: The Second Circuit case law, which we cited in the Katelyn case with the vessel called the Angel N, that makes clear that that doesn't create [00:29:17] Speaker 01: There is no jurisdiction over a foreign ship manager or operator. [00:29:21] Speaker 01: There was no continuing investigation. [00:29:23] Speaker 01: Not one single Coast Guard or DOJ employee went to the vessel after about the 19th of April, so the ship sat another five months plus. [00:29:31] Speaker 05: And why is that relevant? [00:29:33] Speaker 01: Because the government's contention is that the vessel sitting there and the bond, financial and non-financial terms, put the government in the same position as if the vessel sat there. [00:29:47] Speaker 01: What I'm arguing is it doesn't at all. [00:29:49] Speaker 01: It puts the government in a better position. [00:29:51] Speaker 01: By sitting there, the vessel doesn't require records custodians that come from foreign offices. [00:29:58] Speaker 01: It doesn't require either the owner or the manager to pay for it. [00:30:02] Speaker 01: Again, Your Honor, this court, this circuit court, wrote in the border valve that if the government asserts in the appellant's agree that the financial terms of a bond referred to in the act cover the ultimate liability of a ship owner, [00:30:16] Speaker 01: Here, the government's asking for the ultimate liability of a ship owner and somebody else. [00:30:20] Speaker 01: You don't need to do a very complicated mathematical analysis or forensic accounting. [00:30:25] Speaker 03: What about if in a different case, the government's theory was that [00:30:29] Speaker 03: The ship owner hired the operator, put the operator up to this. [00:30:34] Speaker 03: This is all part of their conspiracy together. [00:30:37] Speaker 03: And again, in a different case, they're both convicted. [00:30:40] Speaker 03: Can the government then, at the end of the criminal trial, seize the ship? [00:30:47] Speaker 01: Not the ship. [00:30:48] Speaker 01: The government can certainly seize, assuming there's an unpaid fine by the operator, there are other means available to the government to seize assets in the traditional way. [00:30:59] Speaker 03: They can't use the ship as an asset. [00:31:00] Speaker 01: No, Your Honor. [00:31:02] Speaker 01: I'd like to leave the Court, if I may, with just a few rhetorical questions that frame the issue. [00:31:06] Speaker 05: You need to finish up. [00:31:07] Speaker 05: You had one minute, so you don't have time for a few rhetorical suggestions. [00:31:12] Speaker 01: Okay. [00:31:16] Speaker 01: How is it reasonable to hold the ship and say that it's necessary for the prosecution if no one goes to the ship? [00:31:23] Speaker 01: All the witnesses are off. [00:31:24] Speaker 01: How is it reasonable to hold the ship as security for a fine when there's no equity in the vessel because of the mortgage, which by black letter US maritime law, trumps any claim the government may have? [00:31:37] Speaker 01: All right. [00:31:38] Speaker 01: Thank you very much. [00:31:39] Speaker 01: The case is submitted.