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Phase number 21 dash 1137 at out navigation company, Inc.

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petitioner versus United States Department of Transportation and Maritime Administration.

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Mr. Townsend for the petitioner.

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Mr. Ross for the respondents.

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Mr. Burgess for the intervener.

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Morning, Mr. Townsend will hear from you.

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Good morning, and may it please the court, Lucas Townsend for petitioner appellant, Matson Navigation Company.

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You can raise the podium if you like.

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I'm sorry.

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You can raise the podium if you like.

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There's a button to your right.

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And we can hear you better if the microphones are closer to your mouth.

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Thank you, Your Honor.

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Lucas Townsend from Matson Navigation Company.

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And I have reserved three minutes

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Since 2015, the Maritime Administration has been awarding a windfall to APL in the form of unlawful subsidies to operate vessels in the Pacific domestic shipping trade.

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Madsen is a domestic carrier whose U.S.

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built vessels must compete with APL subsidized vessels.

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Batson has repeatedly challenged Marad's orders for violating statutory prohibitions designed to prevent this grossly unfair state of play.

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But jurisdictional issues have clouded these challenges.

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The jurisdictional issues are briefed in the briefs.

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And with the court's permission, I would like to address Marad's issues today.

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I'd like you to address the jurisdictional issues.

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Yes.

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Your position now is that the Hobbs Act does infer exclusive jurisdiction to this court.

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Is that your position now?

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Our position is that the best reading, and let me just say at the outset, I think there are reasonable arguments on either side of this issue.

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The best reading of this court's 2018 decision, the National Association of Manufacturers, and the text of the statute is that the original jurisdiction lies in the district court.

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That's the best way to read all of these.

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I will acknowledge that the government has a reasonable position on this point.

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At the end of the day, my client simply wants a judicial review.

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We're not trying to bum the depths of the jurisdictional statutes here, because we've been trying to get that merits review for some time.

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But we want to offer what we believe is the best reading of the President's.

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And so I'm happy to address jurisdiction more at length, but we do, we would be delighted if the court determines that it has original jurisdiction for the Hobbs Act.

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That was your position back in 2018.

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In 2018, exactly.

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You were in this court, you were under a petition filed pursuant to the Hobbs Act.

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We were told otherwise at that time.

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We have taken that into account.

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We've pressed our arguments in the district court and the district court has disagreed with us, so here we are again.

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Let me ask you about a jurisdictional question that is not really brief, which is whether Matson is a party aggrieved within the meaning of the Hobbs Act.

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Why would Matson be a party aggrieved?

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Well, Matson has classic competitor standing.

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Well, you have standing, but that's different from whether you're a party aggrieved under the Hobbs Act.

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We have very specific standards for that.

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Usually someone has to be a party to the proceedings below.

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And in this case, there was no way really for Matson to be a party.

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I mean, Matson filed comments and, you know, papers with Merad, but it was not...

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In any sense, a formal party to the proceedings, we have been petitioning to be a party in these proceedings, because we believe we have a very strong interest in the outcome of these proceedings, but the agency has not allowed us to intervene as a party.

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So we have a very informal process in which we were allowed to submit a comment.

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And it was a comment that was really shooting in the dark because we didn't have the document that we were commenting on and it changed substantially after the agency.

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But I wonder if it's even possible in the context of the informal proceedings here for someone to be a party aggrieved within the meaning of the Hobson.

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Well, I think the alternative... Because that's a jurisdictional... I mean, that is part of our jurisdiction.

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So if Matson is not a party aggrieved, then we lack jurisdiction.

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Well, certainly some court has jurisdiction here, some court.

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I mean, there is a strong presumption in favor of judicial review of agents of the action.

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So then maybe the district court does.

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Well, that was the position that we presented below.

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That is what we think is the best reading of the precedents.

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But again, if this court would like to exercise original jurisdiction here today, we would be fine with that outcome.

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And simply trying to get judicial review.

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I would like to address the merits today with the court's indulgence.

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The 2022 approval order.

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were the Dakar, rests on a fiction.

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It rests on a fiction that there was a vessel under an operating agreement in 2022 called the Agate.

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There was no such vessel.

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That vessel had been withdrawn from the fleet.

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It had been decommissioned and it had been scrapped years early, almost six years early.

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In 2022, there was no vessel under an operating agreement and that cannot-

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I don't just lay my cards on the table.

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I don't really find that argument persuasive.

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I don't know what basis there is in the text for it.

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If my car breaks down and I don't get around for another year until buying another car, I'm still replacing my old car, even if I sent my old car to the junkyard and it burned in the scrap.

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I just don't understand how your argument drives with the common sense of the fact.

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Well, I would suggest that Marad has itself taken a very similar position with respect to the Saipan.

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JA 197, note one, Marad filed a declaration in which they say the Saipan is not a vessel under an operating agreement when it is ejected from the fleet, and the Saipan was removed from the fleet.

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Afur Shiari, when a vessel is withdrawn from the fleet,

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And it is scrapped.

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It is no longer a vessel.

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Afour-Hiari, it is not a vessel under an operating agreement.

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Those circumstances are quite different.

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I mean, the Saipan was no longer a vessel by operation of law.

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Isn't that an important distinction?

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We think that it's exactly the same position with respect to the agate.

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The agate was not, under law, under the operating agreement, and by reading the statute, it was no longer a vessel under an operating agreement.

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That is really the same.

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Now there was a factual component to it that wasn't present in the case of the Saipan, but that's all the more reason, all the more reason why it was not a vessel under an operating.

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And I, so Mirad seems to take the position that under an operating agreement just means the vessel that's mentioned in the operating agreement.

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That's the agate.

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Why isn't that correct?

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The operating agreement that they point to is a 2015 operating agreement.

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Sure.

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The agate was in existence in 2015.

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It was in the fleet.

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There is no basis for saying that.

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But that's not their basis for saying it's under an agreement.

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They're saying it's the one that's named in the agreement.

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They're, they're deeming that to be the operating

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It's not the one that's in 2022.

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Well, there we submit there was no vessel under an operating agreement.

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There had been a vessel in the meantime, the side pan.

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So you're not really addressing the argument, which is under an agreement is just the one that's in the agreement.

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Why is that not correct?

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Well, it has to, there has to be a, it has to be, first of all, there has to be a vessel and it has to, has to be subject to legal force under an agreement.

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That contract 2015 had no legal force on the agate in 2022.

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The agate did not exist any longer.

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That contract, the agency is just deeming that to be the contract in 2022, ignoring the fact that there was another vessel.

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I'll just try one more time, because each time I ask you this, you go to a different interpretation.

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I'm just saying what's wrong with Mayrat's interpretation.

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and why is it not reasonable they're saying under an operating agreement there's no verb in that they're just saying it's the vessel that's named in the agreement what's wrong with that interpretation without going to your interpretation what's wrong with their interpretation it's fiction and it allows for fictions under that view it could say the rms rms titanic

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And that would still be the basis for a replacement.

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And there is no way that Congress did not want that.

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Congress spoke in 2018 in response to Marad's actions in this litigation, prohibited domestic trade for vessels in the fleet that are receiving these subsidies.

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And that was a very strong statement by Congress.

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There is no indication that Congress wanted the agency to employ fictions of this sort to bring new vessels.

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But the statute does contemplate periods when the vessels are not operating.

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And they don't get kicked out of the program.

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We're talking about ships.

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Ships are not constantly operating.

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And they have to be repaired.

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They can get sunk if they're called to duty and put into the line of fire.

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And what you're proposing is a very cumbersome process that is very technical.

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They have to be continuously operating in order to be replaced.

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That doesn't seem to grapple with the practical considerations of what a ship is and the fact that they're not constantly operating.

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Not at all, Your Honor, because as Your Honor mentioned, the statute and the regulations provide for gaps in instances where there is a gap.

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This is not a gap.

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There is no vessel under an operating agreement in 2022.

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But if they're not even built yet.

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I'm sorry?

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ships that are not even built yet can be under an operating agreement.

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Correct because they're specified and there is provision in the statute that specifies what happens in those circumstances.

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But here this must be read in the context of Congress's statement in 2018 that vessels receiving these subsidies can't operate in domestic commerce.

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That has to frame the inquiry here and this type of a fiction where vessels are withdrawn either kicked out or withdrawn from the fleet and there is no vessel in an operating agreement

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That would be a new vessel, a new vessel subject to the 2018 prohibition that Congress placed in the statute in response to this litigation.

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That was Congress speaking in 2018.

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There are additional reasons why both of these vessels are not properly authorized in addition to the replacement vessel.

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And it's because they were authorized to engage in domestic trade.

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The statute says that they are either exclusively in foreign trade, they must be exclusively in foreign trade, or in mixed foreign and domestic trade pursuant to a registry endorsement under 46 USD 12,0001.

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And 12,0001 is not the least bit ambiguous.

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It specifies five territories.

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But there's a Coast Guard regulation that interprets

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that regular endorsements to allow trade with the Northern Mariana Islands.

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And what's interesting to me, Council, is that your client relies upon the same type of endorsement and the same Coast Guard regulations to trade in the Mariana Islands.

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So why can your client rely on it, but APL can't?

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Well, the agency didn't rely on the Coast Guard regulation.

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The Coast Guard regulation is not cited in any

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in either of the orders under review.

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So this is not something that the court even needs to deal with.

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If this is somehow significant, then the agency can address it in orders under review in the first instance.

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Otherwise, it's barred by Chenner.

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But on its face, it fails.

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The Coast Guard does not administer the Maritime Security Program.

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They are not interpreting the Maritime Security Act.

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Whatever vessel the Coast Guard might allow to dock at the port of Saipan is not our concern in this case.

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We're concerned with what vessels are allowed into the Maritime.

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But if the endorsement lets them go to the Northern Mariana Islands, why are not they in compliance with the statute?

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operating under an endorsement that lets them go to the Northern Mariana Islands.

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They first must be eligible to enter into the fleet and receive subsidies.

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Well, eligibility just says foreign commerce.

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You're relying on the statute 105.

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That's about the operating.

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Well, the agency itself interprets foreign commerce to mean exclusively foreign commerce or mixed foreign to domestic pursuant to a regular

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I'm familiar with that regulation, but is the regulation allowed to contradict the statute that defines foreign commerce?

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Well, I would.

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So first of all, I would say it doesn't contradict the statute because foreign commerce is just not modified statute.

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And so the agency reasonably interpreted it for purposes of the Maritime Security Act.

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to mean exclusive exclusively foreign or mixed foreign and domestic.

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And that goes back.

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That's interesting, too, because now you're relying on the agency saying they're reasonable when it suits you.

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They're not reasonable.

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And it it doesn't.

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Well, I think it cuts the same way it cuts against the other side's position as well.

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They want to rely on a post foreign regulation that says nothing about the northern area.

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islands and plainly contradicts the coast guard regulation you don't agree that the coast guard regulation permits an endorsement to cover the northern mariana islands correct the coast guard regulation well first of all the coast guard regulation doesn't even mention but it can't contradict 12 triple one

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And doesn't your client rely on the same Coast Guard regulation in order to trade in the north or service the Northern Mariana Islands?

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I mean, it's not it doesn't say explicitly Northern Mariana Islands.

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It talks about coast wise trade.

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My client is not in the maritime security.

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And so I understand that.

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But these endorsements are not just for the maritime security.

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Well, the Coast Guard is, I mean, the Coast Guard has no authority to interpret the Maritime, administer the Maritime Security Act.

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And that is the eligibility for entry into this fleet.

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That is the issue.

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That is the issue that MARAD has exclusive jurisdiction over.

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And they have not relied on the Coast Guard regulation.

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And they have not explained.

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Will you answer Judge Pan's question about your client's activities vis-a-vis Northern Mariana Islands and the Coast Guard?

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as essentially your client is on the coast guard's endorsement to do that?

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Yes or no?

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I'm not certain whether he answered that question or the Northern Maritime Office.

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I can address it in the funnel if that's the case.

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But again, I hasten to point out that my client is not in the maritime security program.

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It's not subject to the 2018 prohibition or domestic carry US vessels and we are under the Jones Act.

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So we are not subject to this to this program and the administration.

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The Coast Guard regulation simply does not apply in this context.

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It doesn't apply, and it can change the plain text of 46 USC 12-111.

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Isn't there a different Coast Guard regulation, though, that your client needs to rely on in order to trade in the Northern Mariana Islands, because there's sort of a gap about how trade happens with the Northern Mariana Islands?

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A different regulation.

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I'm not sure.

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I mean, a different provision of what is this?

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My understanding is that in order to trade in the Northern Mariana Islands, everybody, whether you're in this program or not, needs this endorsement under 12-triple-one.

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This 12-triple-one endorsement is not specific to the maritime security program.

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Your client is a very active, the most dominant apparently, carrier to the Mariana Islands.

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Your client

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is using one of these endorsements under 120001, which has been interpreted by the Coast Guard to allow trade to the Northern Mariana Islands, regardless of the statutory list, which doesn't include it.

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And so it was interesting to me that your client would

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sort of question the applicability of this provision, this regulation that your client relies upon to do this trade.

[00:16:38] Speaker 06:
But we're questioning the entry of vessels into the maritime security program.

[00:16:44] Speaker 02:
Oh, I understand that.

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But the reason they're allowed to be in the maritime security program as replacement vessels

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is because they have this endorsement under 12 triple zero, I'm sorry, 12 triple one.

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And that endorsement has been interpreted by the Coast Guard to allow APL to go to the Mariana Islands.

[00:17:05] Speaker 02:
And since your client also does the same thing, it surprises me that you would question the applicability of the Coast Guard regulation to interpret 12 triple zero one.

[00:17:14] Speaker 02:
Well, the agency again, 12 triple one, I'm sorry.

[00:17:18] Speaker 06:
Two separate issues.

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The replacement vessel issue is different from the registry.

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issue so if so first they are not replacement but it's the replacement vessels that are allowed to trade in the Mariana Islands because if you're a new vessel you're not allowed to do that at all assuming that they are replacement vessels which we dispute yes right we'd have to have a registry endorsement it would also have to be a

[00:17:38] Speaker 06:
it would have to have some exception to the coast wide trade trade provision.

[00:17:42] Speaker 06:
But again, this, this is about the receipt of subsidies under the maritime security program.

[00:17:48] Speaker 02:
But why should 12 triple one apply differently to APL than it does to your because APL because Marad is administering a different statute.

[00:17:56] Speaker 06:
It's administering.

[00:17:57] Speaker 02:
I'm just talking about 12 triple one, which is administered by the coast guard.

[00:18:01] Speaker 02:
Why should it be administered differently to your client versus APL?

[00:18:04] Speaker 06:
Well, I think these are issues that the agency could address, had it address the applicability of the Coast Guard regulation.

[00:18:10] Speaker 06:
It did not do that.

[00:18:10] Speaker 06:
It did not address the Coast Guard regulation in the orders under review.

[00:18:14] Speaker 02:
If this is an issue, the agency... The statute just says that it has to have a registry endorsement under 12-111.

[00:18:19] Speaker 02:
These ships have that.

[00:18:23] Speaker 02:
And to the extent you go further, you're the ones who are saying, oh, but

[00:18:27] Speaker 02:
what 12 triple one allows or what that registered registry endorsement allows should not include the Mariana Islands, then we have to go to the Coast Guard regulation.

[00:18:36] Speaker 06:
Well, no, the Congress's judgment was that the statute 12 triple one does not apply to the Northern.

[00:18:42] Speaker 06:
There's no way of doing that.

[00:18:44] Speaker 02:
You are pushing the Coast Guard.

[00:18:45] Speaker 06:
I'm sorry.

[00:18:46] Speaker 02:
Then you are questioning the Coast Guard regulation that says you can go to the Mariana Islands.

[00:18:50] Speaker 06:
If the Coast Guard regulation applied here, we don't think it applies at all.

[00:18:53] Speaker 06:
The agency didn't rely on it.

[00:18:54] Speaker 06:
If it applied here, it can't change the meaning of the statute.

[00:18:56] Speaker 06:
The statute is unambiguous.

[00:18:58] Speaker 06:
It mentions five territories, none of them, the Northern Mariana Islands.

[00:19:02] Speaker 02:
But that means your client can't go to the Northern Mariana Islands either, because they're operating under a registry endorsement under 12-triple-1, the words of which doesn't include the Northern Mariana Islands.

[00:19:13] Speaker 02:
This is why this argument is very interesting to me, because it doesn't seem to be in your client's interest to question the registry endorsements under 12-triple-1 going to the Mariana Islands.

[00:19:23] Speaker 02:
Your client needs that to go to the Mariana Islands.

[00:19:27] Speaker 06:
I'm not at all sure, and I can address your honor's question.

[00:19:31] Speaker 06:
to look at it, but I am not at all sure that the 12-triple-one registry endorsement is the basis for my client to visit.

[00:19:37] Speaker 06:
I think it is, counsel.

[00:19:39] Speaker 06:
But if, in this context, the maritime security program is administered by MARAD to receive, to allow vessels to receive subsidies in this program, it is a different context in which Congress has spoken very clearly about the limits of domestic trade for vessels that are receiving these subsidies.

[00:19:56] Speaker 06:
That frames the issue quite differently from a Jones Act carrier

[00:20:00] Speaker 06:
uh, providing trade to the northern Maryland.

[00:20:03] Speaker 06:
Quite a different situation.

[00:20:05] Speaker 06:
Um, I'm, I see him over my time.

[00:20:09] Speaker 04:
Why do we need to reach this issue with respect to a vessel that not going to trade, um, domestically that's was understanding or, um, erudite

[00:20:22] Speaker 06:
I believe it's the Dakar.

[00:20:25] Speaker 06:
There's an argument that the Dakar does not currently trade with the Northern American Islands, but it has been authorized to trade with the Northern American Islands.

[00:20:33] Speaker 06:
And that's the problem.

[00:20:34] Speaker 06:
There would be no further agency action needed for the Dakar to start calling Saipan.

[00:20:40] Speaker 06:
and the admission of the vessel into the fleet, currently receiving subsidies, that is unlawful if the vessel is authorized to trade with the Northern Mariana Islands.

[00:20:52] Speaker 06:
And that would be contrary to 12-triple-1.

[00:20:54] Speaker 06:
It would be contrary to Section 502B of the covenant established in the Northern Mariana Islands.

[00:21:01] Speaker 06:
These are activities of a contractor of the United States.

[00:21:06] Speaker 04:
Why shouldn't we take the position that if and when

[00:21:10] Speaker 06:
happens you have a right challenge in but it's not right now well there's no agency action that's required before that happens it's the admission into the into the the agency action has occurred it's the admission into the fleet and the receipt of the subsidies with the authority to provide trade to the northern that's the that is the action here

[00:21:31] Speaker 06:
per challenge.

[00:21:32] Speaker 06:
No further agency action has to happen.

[00:21:34] Speaker 06:
And APL takes the position.

[00:21:36] Speaker 06:
They don't need any further agency approval if they begin serving, begin calling the Saipan court.

[00:21:42] Speaker 06:
So it is right now.

[00:21:44] Speaker 06:
The issue is right.

[00:21:45] Speaker 06:
And the agency has simply authorized something they have no right to authorize.

[00:21:48] Speaker 06:
The statute prohibits it.

[00:21:50] Speaker 06:
Again, I come back to Congress's.

[00:21:52] Speaker 01:
Yes, sir.

[00:21:54] Speaker 01:
Why did Matson agree that the challenge to the Guam was moot?

[00:21:58] Speaker 01:
Because if Matson believes that the Herodote was unlawful because the Guam was unlawfully approved, then why not maintain that the suit against the Guam approval was still alive?

[00:22:13] Speaker 01:
I mean, because that seems to be the core of the dispute.

[00:22:17] Speaker 06:
I think ultimately the Herodote is unlawfully in the fleet for the same reason that the quam was.

[00:22:23] Speaker 06:
And I think that the prior challenge, the replacement vessel challenge, is something the court doesn't need to decide in order to find that the Herodote is unlawfully in the fleet.

[00:22:34] Speaker 06:
But in I think it was 2018 or

[00:22:39] Speaker 01:
But I mean, is the challenge to the Herodote separate, really, from the underlying challenge to whether the Guam was lawfully?

[00:22:45] Speaker 06:
It is, in one respect.

[00:22:48] Speaker 01:
In what is the legal way in which it is distinct?

[00:22:51] Speaker 06:
Well, there are two arguments.

[00:22:52] Speaker 06:
One is that it is not a replacement vessel of the Guam, because the Guam was not lawfully

[00:22:58] Speaker 06:
Uh, that is that your question goes to that, to that issue.

[00:23:02] Speaker 06:
The separate question is that even if it were a replacement vessel, it is not, uh, it isn't, it has been authorized to trade unlawfully in domestic trade, uh, with the Northern Mariana Islands.

[00:23:13] Speaker 06:
And that is the registry endorsement, uh, issue 12 triple one and the covenant, uh, 12, uh, 502 B, the covenant establishment.

[00:23:23] Speaker 06:
Island separate separate issue.

[00:23:26] Speaker 01:
So so I know you didn't seem to really want to talk about jurisdiction, but if we were to conclude that there were no jurisdiction here, then there's no grounds on which we would reach any of the merits is there.

[00:23:38] Speaker 06:
If this court does not have original jurisdiction, then it would simply address our appeals from the district court's rulings that it had no original jurisdiction.

[00:23:47] Speaker 06:
And so we would presumably then go back down to the district court.

[00:23:51] Speaker 06:
We would love to avoid that trip.

[00:23:54] Speaker 06:
We've been fighting these orders for a long time.

[00:23:57] Speaker 01:
I understand.

[00:23:59] Speaker 01:
There's nothing left of the merits for us to think about.

[00:24:03] Speaker 06:
It would not be correct.

[00:24:05] Speaker 06:
It would not be the merits.

[00:24:10] Speaker 06:
If there are no more questions, I'll serve.

[00:24:13] Speaker 04:
All right, we'll give you some time on rebuttal.

[00:24:18] Speaker 04:
I believe we hear from Ross.

[00:24:37] Speaker 07:
Thank you, your honor.

[00:24:38] Speaker 03:
May it please the court, Jason Ross for the United States.

[00:24:41] Speaker 03:
The district court correctly determined that this court has exclusive jurisdiction to review the Marriott orders challenged here, because those orders explicitly relied on section 50501, which is one of the statutes listed in the Hobbs Act, the channel exclusive jurisdiction to this court.

[00:24:58] Speaker 01:
Can I first ask you, why is Matson a party aggrieved here, which is another jurisdictional requirement for us to have?

[00:25:07] Speaker 01:
original jurisdiction in the House Act case.

[00:25:09] Speaker 03:
So the government doesn't dispute that Matson has an Article III injury, and I think... Party aggrieved is not only about Article III injury.

[00:25:18] Speaker 01:
The aggrieved part is, but you also have to be a party.

[00:25:21] Speaker 03:
I agree, Your Honor.

[00:25:21] Speaker 03:
I think actually the real answer is maybe a practical one, which is if, say, Merritt had denied one of APL's applications in this case, I think we would all agree that APL would be a party aggrieved under 2344.

[00:25:35] Speaker 03:
And it would be quite odd if Matson would have to follow a different rule under this court's jurisdictional holding rather than APL itself.

[00:25:44] Speaker 03:
Because I think that if APL were to challenge an agency decision, it would come to this court.

[00:25:49] Speaker 03:
But if a third party who has an Article 3 injury based on the agency's decision,

[00:25:54] Speaker 03:
is challenging the same underlying order, it would be quite odd that that order would have to be challenged in the district court.

[00:26:01] Speaker 01:
Maybe.

[00:26:02] Speaker 01:
I mean, you know, in a case like this where the proceedings are so informal,

[00:26:06] Speaker 01:
And Mattson files a series of comments, many of which are not really responded to by Merad.

[00:26:12] Speaker 01:
Maybe it is appropriate when someone is not a party to the agency proceedings that they have to go to district court first.

[00:26:20] Speaker 03:
I think I have a legal response as well as a factual one with respect to the problem you've posed.

[00:26:27] Speaker 03:
The legal answer, I think, is that this court has repeatedly reiterated that

[00:26:30] Speaker 03:
consistent jurisdictional rules should apply to different kinds of parties.

[00:26:34] Speaker 03:
In the media access project case, for example, it's made clear that when there is a jurisdictional hook to a particular agency challenge, then the whole suit is looped up into the Court of Appeals to exclusively review the case.

[00:26:47] Speaker 03:
The second is that Mara did actually substantively engage with all of

[00:26:52] Speaker 01:
So here, Matson asked, can we file?

[00:26:59] Speaker 01:
Matson said, sure, we're happy to take your comments.

[00:27:03] Speaker 01:
And so they did.

[00:27:03] Speaker 01:
What if Matson had said, no, this is an informal proceeding.

[00:27:06] Speaker 01:
We don't hear from third parties.

[00:27:08] Speaker 01:
There's no way to file comments in this type of proceeding.

[00:27:12] Speaker 01:
Then would Matson be a party of grief?

[00:27:15] Speaker 03:
I think so.

[00:27:15] Speaker 03:
And I will say for the court's edification, that is what happened in the 2018 challenge.

[00:27:21] Speaker 01:
So basically, the mayor- They didn't think that, you know, the court didn't address party agreed in that case.

[00:27:26] Speaker 03:
Right.

[00:27:26] Speaker 01:
But so would Hobbs Act jurisdiction, I mean, it's hard to see if they file no comments and have no participation below under our case law.

[00:27:35] Speaker 01:
It's hard to imagine how they could be a party agreed.

[00:27:39] Speaker 03:
I think I will just return to my answer before that it would

[00:27:45] Speaker 03:
participants in the program and another for... Well, then that reads out party, right?

[00:27:49] Speaker 01:
Because if, say, Mera, if, say, if Matson didn't participate below, they would really in no sense be a party.

[00:27:57] Speaker 01:
And that would read party out of the Hobbs Act.

[00:27:59] Speaker 01:
And we have a long line of case law saying party is important.

[00:28:02] Speaker 01:
It's not just a person aggrieved, you know, as an APA.

[00:28:05] Speaker 01:
You have to be a party in some sense.

[00:28:09] Speaker 03:
I guess so that would read party narrowly to suggest only parties before the agency itself.

[00:28:14] Speaker 01:
I think that's what our case law says, that you have to have participated in some way.

[00:28:19] Speaker 03:
But that's also true in this case, right?

[00:28:20] Speaker 03:
That Matson filed extensive exhibits with the agencies.

[00:28:25] Speaker 01:
I guess I'm concerned about what the rule would be in a situation where agency proceedings are informal and the ability of someone to participate as a party is sort of at the grace of the agency.

[00:28:38] Speaker 01:
So if Matson's not allowed to file comments, then they're not a party aggrieved.

[00:28:43] Speaker 01:
And if they're allowed to file comments, just sort of based on whatever Mayrad decides in that particular informal case, then they become a party agreed.

[00:28:51] Speaker 01:
And it seems strange that our Hobbs Act jurisdiction would turn on such a distinction.

[00:28:57] Speaker 01:
There are almost no cases addressing a circumstance like this, where the underlying agency proceedings are informal.

[00:29:06] Speaker 03:
You're right, Your Honor.

[00:29:08] Speaker 03:
But I think that's why a party aggrieved here should be read to include Matson, who did participate for the agency.

[00:29:13] Speaker 03:
Why?

[00:29:14] Speaker 03:
Because they are aggrieved by the agency's decision.

[00:29:17] Speaker 03:
As I said.

[00:29:17] Speaker 01:
Well, they're aggrieved, but my question is not about whether they're aggrieved.

[00:29:20] Speaker 01:
I think competitor standing here is reasonable.

[00:29:26] Speaker 01:
But are they a party?

[00:29:28] Speaker 01:
Maybe they can challenge us in district court, right?

[00:29:31] Speaker 01:
But they don't get to be a party aggrieved under the hot

[00:29:35] Speaker 03:
I don't know what to say further, Your Honor, except that it seems natural to apply the same rule to participants in the program and to people who challenge.

[00:29:44] Speaker 01:
It's not what our case law says, though, right?

[00:29:46] Speaker 01:
I mean, we have a series of cases, including a number of recent cases, and that's not the standard for what a party of grief is under cases like.

[00:29:54] Speaker 01:
you know, um, Ohio nuclear regulatory, which is a recent case and another 2018 case.

[00:29:59] Speaker 03:
I mean, I apologize, your honor.

[00:30:01] Speaker 03:
I'm just not familiar with those decisions.

[00:30:03] Speaker 03:
As you acknowledged previously, this question was not briefed.

[00:30:06] Speaker 03:
Um, I will just reiterate though, that for purposes of a review of agency decision-making, the process is very similar in district court as it would be before this court.

[00:30:16] Speaker 03:
That is the administrative record is presented to the court for the court's review.

[00:30:20] Speaker 03:
There aren't questions of credibility or, um,

[00:30:22] Speaker 03:
witness determinations and the like.

[00:30:24] Speaker 03:
So to the extent that there is some concern with procedural irregularities and that sort of thing, that is something this court is perfectly suited to do.

[00:30:32] Speaker 03:
And I will just again say that before, if you'd like me to turn to the merits, I'm happy to engage further on the jurisdictional question.

[00:30:39] Speaker 03:
But as my colleague mentioned, I think all of the parties here are eager to address the substantive dispute before the court.

[00:30:46] Speaker 03:
That said,

[00:30:48] Speaker 03:
it would make sense to apply the same definitional rule of a party aggrieved to all participants before an agency, even in an informal adjudication, and that the same rule would apply to someone who is petitioning the agency for a particular decision, as well as a third party who is contesting or possibly supporting that agency decision-making.

[00:31:10] Speaker 03:
So I apologize, I don't have anything further because this question wasn't briefed.

[00:31:15] Speaker 03:
But with that, I can turn to first the replacement question under 53105F.

[00:31:20] Speaker 03:
I think the most natural textual understanding of that particular provision is that there was a vessel subject to legal obligations at the time that the Dakar replaced the Ag

[00:31:33] Speaker 03:
And it might be useful if the court, um, is interested to, to zoom out a little bit and understand why we are in the current dilemma that we're in.

[00:31:42] Speaker 03:
And that's because in June, 2020, the district court vacated the Saipan decision and roughly a month later, Marad re-approved the Saipan to participate in the program.

[00:31:52] Speaker 03:
Uh, Matson again filed the suit and subsequently, um, APL applied to replace the Saipan with the Dakar.

[00:31:59] Speaker 03:
And that was in June, 2021.

[00:32:01] Speaker 03:
So at that time,

[00:32:03] Speaker 03:
The side was participating in the program and had applied to replace the side with the car 2 months later.

[00:32:10] Speaker 03:
Mara determined that in fact, the side was not eligible to participate in the program.

[00:32:15] Speaker 03:
It had become too old essentially.

[00:32:17] Speaker 03:
There are reasons I can get into that, but it's probably not worth.

[00:32:20] Speaker 03:
That much more confusion then 2 months later.

[00:32:22] Speaker 03:
In October 2021.

[00:32:25] Speaker 03:
Mara determined that the Saipan couldn't participate in the program and snapped back APL's then pending application for the Dakar to the Agata.

[00:32:36] Speaker 03:
At that time, APL was subject to legal obligations under the relevant operating agreement, and Mara had simply determined that the vessel subject to those obligations was the Agata.

[00:32:46] Speaker 03:
Now, the agency additionally waived APL's ostensible noncompliance with the operating agreement's terms because the APL itself did not fail to comply with those requirements on its own.

[00:33:00] Speaker 03:
It was because of this protracted litigation, in fact, that there was some dispute caused over which vessel was actually participating and implying its trade in the Pacific Ocean.

[00:33:09] Speaker 03:
So, the agency reasonably determined that it would waive the heel to toe provision in the operating agreement, so that APL could replace the ACTA with the DECAR.

[00:33:24] Speaker 03:
If there are no other questions on the replacement vessel, I can also turn to the question of the Northern Mariana Islands.

[00:33:31] Speaker 04:
We'll just point the court to... So your argument is really more a factual one as opposed to statutory or interpretation.

[00:33:42] Speaker 03:
There is a statutory interpretation argument as well, Your Honor, and that is because I believe for the reasons Judge Pan identified, the upshot of Matson's case is that a vessel must constantly be in operation while participating in the maritime security program.

[00:33:56] Speaker 03:
And that kind of belies common sense.

[00:33:58] Speaker 03:
And Congress recognized as much.

[00:33:59] Speaker 03:
53106D3 provides for gaps in service.

[00:34:06] Speaker 03:
53104C1 provides for breach of an operating agreement.

[00:34:10] Speaker 03:
Indeed, 53102B2 specifically provides that a vessel that is yet to be constructed can be admitted to the program.

[00:34:18] Speaker 03:
All of this goes to say that there are circumstances in which a vessel is not actively plying its trade that the agency could determine that it could participate in the program.

[00:34:27] Speaker 01:
any limitation to that?

[00:34:28] Speaker 01:
I mean, your front on the other side says, what about the Titanic, if the Titanic was under an operating agreement?

[00:34:33] Speaker 01:
I mean, is there any type of temporal or other limitation?

[00:34:37] Speaker 03:
So 53104C3 provides that the agency shall terminate an agreement in which an operator is not complying with the terms.

[00:34:45] Speaker 03:
And in those circumstances, a vessel operator has an opportunity to cure the breach.

[00:34:50] Speaker 03:
But the agency is directed, Congress directed the agency to terminate agreements that are not being, whose terms are not being satisfied.

[00:34:57] Speaker 03:
And the agency here reasonably determined that APL was endeavoring to comply with the operational requirements.

[00:35:04] Speaker 03:
And as I mentioned previously, essentially was at all relevant times here, at least the times when... So that's within the discretion of the agency to decide.

[00:35:14] Speaker 03:
I think that's part of it.

[00:35:14] Speaker 03:
Yes, Your Honor.

[00:35:16] Speaker 03:
The textual argument as well, if you look at the phrase vessel under an operating agreement, denotes legal obligations that attach to the vessel itself.

[00:35:24] Speaker 03:
It's not a question of what is a vessel, because that sort of singular focus on the vessel itself is instead a question answered by 53102, which is a vessel's eligibility to participate in the program.

[00:35:38] Speaker 03:
I apologize it's a little bit of word salad with all of the statutory provisions, but that's why the relevant phrase is vessel under an operating agreement rather than simply what is a vessel.

[00:35:50] Speaker 03:
And that question is one that is what is a vessel was one that the agency answered very long ago with respect to the agitas entry into the program.

[00:35:59] Speaker 01:
Can I just ask you another jurisdictional question, the one that is briefed, but what is the reasoning for us to have jurisdiction under 50501?

[00:36:11] Speaker 01:
I mean, if you look at the Mattson 1 case, the 2018 Mattson case and the NAM case,

[00:36:21] Speaker 01:
It seems hard to see how this is, you know, pursuant to a definitional phrase, which is 50501.

[00:36:31] Speaker 03:
I think this court in Matsen 1 suggested that there's a distinction between implicitly relying on a statutory provision and explicitly relying on that, such a provision.

[00:36:42] Speaker 03:
I realize that's sometimes difficult to discern, but as a factual matter here, that's not a hard question.

[00:36:49] Speaker 03:
There are a number of pages, it's JA 157 and JA 479 to 480, in which the agency

[00:36:56] Speaker 03:
carefully analyzes whether the vessels are, would satisfy the requirements of 50501.

[00:37:02] Speaker 03:
And that's an important predicate for participation in the maritime security program.

[00:37:07] Speaker 03:
Part of the point of the program is to have vessels dissipate in times of war or national emergency.

[00:37:14] Speaker 03:
And so there's actually a really important consideration that the vessels be U.S.

[00:37:18] Speaker 03:
citizens as Congress has defined them.

[00:37:19] Speaker 01:
Act is very specific in terms of listing under which provisions you get original Court of Appeals jurisdiction, similar to in the Clean Water Act case in NAMM.

[00:37:32] Speaker 01:
And so one of the provisions that's not listed in the Hobbs Act is the replacement vessel provision.

[00:37:38] Speaker 01:
I mean, if Congress had wanted there to be exclusive direct appeal to the courts of appeal, then

[00:37:45] Speaker 01:
It could have easily listed that, but it didn't list that provision.

[00:37:48] Speaker 01:
It lists many other provisions in the same space.

[00:37:53] Speaker 01:
So does this mean that any determination by the Department of Transportation that implicates the definition of a U.S.

[00:38:00] Speaker 01:
citizen under 50501 gives us exclusive jurisdiction?

[00:38:05] Speaker 01:
Yes, I think so your honor and indeed not a very expansive reading then of the exclusive jurisdiction provision in a way that is really in tension with the name.

[00:38:14] Speaker 03:
Yes, I don't think so and in fact it's worth looking to the first sentence of 2342 for a which says which affords this court exclusive jurisdiction to review a final rules regulations or excuse me rules regulations and final orders.

[00:38:29] Speaker 03:
I mean, it's that final orders language that's particularly important and which the district court here, which is that 50501 doesn't actually give the agency authority to issue any orders.

[00:38:40] Speaker 03:
And everyone agrees here that the decisions were issued under the authority of 53105.

[00:38:46] Speaker 01:
So it's quite possible that rules, regulations, or orders, not all of those things apply to all of the provisions under which we might have original jurisdiction, right?

[00:38:56] Speaker 01:
So I don't know what an order means pursuant to a definition, right?

[00:39:00] Speaker 01:
Like how does a definitional, how is an order pursuant to a definitional thing?

[00:39:05] Speaker 01:
It might only be for rules and regulations.

[00:39:07] Speaker 01:
And there may similarly be other provisions that are listed and I haven't like studied all the provisions in the Hobbs Act.

[00:39:14] Speaker 01:
But some of those provisions may not be susceptible to rules or regulations, but only orders, right?

[00:39:19] Speaker 01:
So all three words don't have to apply to every single vision.

[00:39:22] Speaker 03:
So two responses, your honor.

[00:39:24] Speaker 03:
First, as a textual matter, the Hobbs Act.

[00:39:26] Speaker 03:
in listing out many provisions some of the subsections only say final orders others say only say rules and regulations so i think the fact that congress included final orders when referring to the maritime security provisions that that actually is quite significant and so then i think your the real question is how do we um construe pursuant to its rules regulations or

[00:39:50] Speaker 01:
orders.

[00:39:52] Speaker 01:
So it doesn't have to be, again, I don't know, I mean, I don't read all of those things have to apply to all of the provisions that are listed as a grounds for exclusive jurisdiction.

[00:40:04] Speaker 03:
If not, then the court would not be giving full effect to each of those terms.

[00:40:08] Speaker 03:
And so

[00:40:09] Speaker 03:
I think that everyone that each of the terms should be ready to apply to each of the different statutory provisions listed in each of the Hobbs Act subsections that I'm guessing that some of those provisions don't aren't really susceptible to rules or regulations in the same way that the definitional provision is not susceptible to an order.

[00:40:28] Speaker 03:
I guess I don't know.

[00:40:29] Speaker 03:
As a matter of fact, I will say that.

[00:40:35] Speaker 03:
of maritime security program orders.

[00:40:37] Speaker 01:
And so would that be a very expansive reading then of our original jurisdiction?

[00:40:43] Speaker 03:
I don't think so, Your Honor.

[00:40:44] Speaker 03:
And to the extent the court is concerned, I think we can all agree there aren't a whole lot of cases involving the maritime security program.

[00:40:52] Speaker 03:
And so it's not as if that there's Pandora's boxes being opened here.

[00:40:56] Speaker 03:
Certainly to the contrary, this is a relatively niche area

[00:41:00] Speaker 03:
that it would not span the court's jurisdiction, but rather simply give effect to Congress's terms.

[00:41:06] Speaker 03:
And I guess I will just point out that this court has also reiterated that in a jurisdictional channeling statute, to the extent that there is ambiguity, you know, in AFL-CIO-VNLRB, it's suggested that that ambiguity is construed in favor of conferring this court with jurisdiction.

[00:41:21] Speaker 01:
Those cases arise where there is a statute that has a very broad original

[00:41:26] Speaker 01:
jurisdiction grant.

[00:41:27] Speaker 01:
It's not a statute like the one, like the Hobbs Act, where there are specific provisions granting original jurisdiction, like in the Clean Water Act.

[00:41:35] Speaker 01:
So I don't think those general cases saying that we interpret the ambiguity to favor appellate jurisdiction, original appellate jurisdiction applies in a context like the Hobbs Act.

[00:41:49] Speaker 02:
Didn't the Third Circuit in Kenoko versus Skinner hold that pursuant to under the Hobbs Act

[00:41:56] Speaker 02:
means acting or done in consequence or in prosecution of anything.

[00:42:00] Speaker 02:
Hence, agreeable, confirmable, following, or recording.

[00:42:03] Speaker 03:
Yes, that's right, Your Honor.

[00:42:04] Speaker 03:
I will say that the government does not rely on Kanoka Skinner because that case involved a challenge to a regulation, and in fact, a Coast Guard regulation that hits you here.

[00:42:13] Speaker 01:
And I'm not sure that much of the reasoning of Kenoko survives the NAM case because Kenoko relies very heavily on policy arguments and functional arguments about the way this works, which I think are very much undercut by the Supreme Court's decision in NAM.

[00:42:30] Speaker 03:
That may be the case.

[00:42:31] Speaker 03:
I will also point to the government's brief in the 2018, or excuse me, in the

[00:42:36] Speaker 03:
2020 Matson case, which I believe Judge Wilkins was on the panel for that case, which was dismissed as moot.

[00:42:42] Speaker 03:
There, we cite a number of decisions from the Second and Seventh Circuits, which explain and give a little bit more meat on the bones to what is pursuant to, usually articulating what is the necessary predicate for the agency's decision or what is a key legal premise upon which the agency has to rely in order to issue the decision.

[00:43:03] Speaker 03:
And in those cases only support our theory here that invoking section 50501 or making a determination that a here a vessel meets the citizenship requirements.

[00:43:16] Speaker 03:
Is in line with the statutory provision itself and would give this court jurisdiction.

[00:43:21] Speaker 01:
So just sort of considering the very importance of having clear jurisdictional rules, whatever the rule is, so we don't have this type of litigation where people have to go to both courts because they're not sure, what should be the rule in a case like this?

[00:43:35] Speaker 01:
I mean, does the agency is mentioning 50501 sufficient?

[00:43:39] Speaker 01:
So if they mention that, does that give us Hobbs Act jurisdiction?

[00:43:44] Speaker 01:
Does it have to be something more than that, where they're really

[00:43:47] Speaker 01:
lying on 50501?

[00:43:48] Speaker 01:
I mean, what's the, what's the law?

[00:43:52] Speaker 03:
I think clarifying this court's holding in Madison one is certainly sufficient.

[00:43:56] Speaker 03:
That is the agency's reliance on or that the statute statutory provision is a predicate for the agency's decision, then it would fall within the jurisdictional channeling provision.

[00:44:07] Speaker 03:
There could be some sort of exception for, you know, to prevent agency gamesmanship such that, you know,

[00:44:14] Speaker 03:
Citing a provision that is certainly not an issue would not give the court jurisdiction, you know I understand that concern and the government is sensitive to accusations that agencies will play games with You know choosing the Court of Appeals versus the district court that of course there's a question whether the agencies actually have any interest in doing that but The point being that there could be an out as it were or how is someone supposed?

[00:44:40] Speaker 01:
How is a party supposed to know whether citizenship determination was appropriate?

[00:44:45] Speaker 01:
if that's your line.

[00:44:46] Speaker 03:
So that's for eligibility decisions under 53102.

[00:44:50] Speaker 03:
That's usually a question.

[00:44:52] Speaker 03:
53102C specifically requires that vessels meet the... So since that's required, there had to be.

[00:44:59] Speaker 01:
And so then you wouldn't have to necessarily mention 50501.

[00:45:01] Speaker 04:
Yeah, that's why I don't think that mentioning it is a good test or even really very relevant.

[00:45:11] Speaker 04:
I mean, it's relevant to the extent that if it's mentioned, then that some evidence is reliable.

[00:45:20] Speaker 04:
Who cares if it's mentioned, whether or not it's mentioned, if it's clear that finding under that statutory provision is predicated?

[00:45:31] Speaker 03:
I agree, Your Honor.

[00:45:32] Speaker 03:
I suppose that in an effort to ensure that there are clear jurisdictional rules and the agencies are on notice, that element of legal formalism might be helpful in this regard.

[00:45:43] Speaker 03:
Because if agencies are required to specifically invoke particular statutory provisions in order to have a jurisdictional channeling statute apply, then that's something that at least they also understand.

[00:45:59] Speaker 02:
So I think relied upon is the better test, but Mattson one seemed to suggest that it has to be explicitly relied upon.

[00:46:06] Speaker 02:
It also has to be mentioned.

[00:46:08] Speaker 03:
Right.

[00:46:09] Speaker 03:
And so the explicit reliance or the citation as well as I think actual reliance.

[00:46:14] Speaker 03:
Yeah, I think the court also used the language rest its analysis on.

[00:46:19] Speaker 03:
And so that also from a substantive as well as formal perspective, I think would be the belt and suspenders approach.

[00:46:30] Speaker 03:
I do want to just briefly address the Northern Mariana Islands just so that the court, or the court's pleasure, at the court's pleasure.

[00:46:38] Speaker 03:
So I will just note that put note two of Mattson's reply brief on page 23, they expressly disavow challenging the Coast Guard regulation.

[00:46:46] Speaker 03:
I'll also point the court to 46 USC 2103-2104.

[00:46:52] Speaker 03:
authority, regulatory authority to oversee regulatory, excuse me, to oversee registry endorsements.

[00:46:59] Speaker 03:
So just for the court's awareness, MARAD does not enforce 12111.

[00:47:05] Speaker 03:
It merely ensures that vessels comply with that statutory provision.

[00:47:09] Speaker 03:
The Coast Guard and Customs enforce that provision.

[00:47:12] Speaker 03:
And that's why the government suggested, citing the Collins case, that in these kinds of circumstances in which agencies have

[00:47:19] Speaker 03:
overlapping regulatory ambits, and there are statutory provisions with cross-cutting implications that you defer to the agency's expertise-laden, excuse me, expertise-laden decision-making to understand how all of these statutes fit together.

[00:47:34] Speaker 03:
The one key piece that I think Matson avoided mentioning in the opening part of the argument is 46 USC 55-101, which generally exempts from the Coast Wise laws the Northern Mariana Islands.

[00:47:47] Speaker 03:
It's that gap between

[00:47:49] Speaker 03:
55101 and 12111 that the Coast Guard regulation attempts to fill.

[00:47:55] Speaker 03:
And so the Northern Mariana Islands, as an American territorial possession, trade with those islands, that is, these domestic trade.

[00:48:02] Speaker 03:
But 55101 also generally exempts those islands from the coast-wise laws.

[00:48:08] Speaker 03:
So the Coast Guard naturally tried to fill that gap by saying that trade with any domestic point in which a coast-wise endorsement is not required would be permitted by a registry endorsement under 12111.

[00:48:22] Speaker 02:
So I have a question about your regulation 46 CFR 296.2, which defines foreign commerce to include more than what the statute defines commerce to include.

[00:48:36] Speaker 02:
296.2 includes it.

[00:48:39] Speaker 02:
Mixed foreign and domestic trade allowed under registry endorsement.

[00:48:47] Speaker 02:
It pulls that language into this definition.

[00:48:52] Speaker 02:
And then this definition is used under a regulation about eligibility.

[00:48:59] Speaker 03:
And that's... 53102, right?

[00:49:04] Speaker 02:
I think it's 296.11.

[00:49:07] Speaker 02:
A vessel is eligible if it's operated in foreign commerce.

[00:49:13] Speaker 02:
So the problem is the statute defines foreign commerce differently.

[00:49:18] Speaker 02:
It doesn't include that mixed trade business.

[00:49:21] Speaker 02:
And so I'm just wondering if your regulation is contrary to the statute and therefore invalid.

[00:49:29] Speaker 03:
To the extent the regulation is inconsistent with the statute, the statute certainly governance runner.

[00:49:33] Speaker 03:
I don't think Madison's challenge the substance of the regulation itself either.

[00:49:37] Speaker 03:
But I don't think I also don't think that their challenge turns on the validity of that regulation.

[00:49:42] Speaker 02:
Because even under no, they are relying on that regulation to make.

[00:49:47] Speaker 02:
what under the statute is an operating agreement issue into an eligibility issue.

[00:49:53] Speaker 02:
So they're trying to rely on it, but it seems like this regulation, to the extent that it conflicts with the statutory definition of foreign commerce, cannot possibly be valid.

[00:50:03] Speaker 03:
I think that's right, Your Honor.

[00:50:04] Speaker 03:
So this would go to the government's argument that 53102 requires the vessels be subject to an operating agreement and that operating agreement provide that the vessels participate in foreign commerce.

[00:50:16] Speaker 03:
And then there's a separate question, I think under 53105, whether vessels in complying with their operating agreements terms can participate in foreign commerce or mixed foreign commerce and domestic trade.

[00:50:29] Speaker 03:
So I think that the government's primary argument with respect to this Northern Mariana Islands point is that at the time the vessels applied for the program, they satisfied the terms of 53-102 because each of those vessels operating agreements specifically provided they participate in foreign trade.

[00:50:46] Speaker 03:
You know, the agency might... Right.

[00:50:48] Speaker 02:
So you would want to...

[00:50:50] Speaker 02:
Disregard these 2 regulations that report to also talk about eligibility.

[00:50:56] Speaker 02:
You're just relying on the statute about eligibility, but you have 2 regulations that speak to eligibility that support.

[00:51:02] Speaker 03:
I think then the question goes to whether 53105 is a relevant consideration under for making the initial eligibility decision.

[00:51:11] Speaker 03:
And so then.

[00:51:12] Speaker 02:
That's a different argument from these regulations though.

[00:51:16] Speaker 02:
They're relying on these regulations to say this is eligibility, because 105 talks about what you have to have in an operating agreement.

[00:51:24] Speaker 02:
I get that, but they're saying you have these two regulations that import the 105 language into eligibility, so there's not a clean break between eligibility and

[00:51:35] Speaker 02:
you know, the operating agreement itself.

[00:51:37] Speaker 03:
I agree with that, Your Honor.

[00:51:38] Speaker 03:
And so to the extent that you disagree with the government's 53-102 argument, I think then it becomes a question of do the vessels or is the vessels trade in the Northern Mariana Islands consistent with 53-105?

[00:51:52] Speaker 03:
Right.

[00:51:52] Speaker 03:
Okay.

[00:51:54] Speaker 02:
Thank you.

[00:51:57] Speaker 03:
Absent additional questions, we urge the court to affirm the district court's decisions in 2252-12 and 2252-24 and to deny the petitions for review in cases 21-1137 and 22-1150.

[00:52:08] Speaker 03:
Thank you.

[00:52:09] Speaker 03:
Thank you.

[00:52:09] Speaker 04:
All right, we will hear from Council Court Intervener, Mr. Burgess.

[00:52:23] Speaker 05:
Thank you, your honor, Brian Burgess for the APL interveners.

[00:52:26] Speaker 05:
Given my limited time, I would like to jump to the mayor's, if that's okay, but to just maybe to follow up on one factual point raised by Judge Rao's questions.

[00:52:34] Speaker 05:
With respect to the hairdo, Hanson did not participate in a degree in that proceeding.

[00:52:40] Speaker 05:
So government counsel's arguments about its participation as a party are necessarily limited.

[00:52:46] Speaker 05:
So to the extent Ronner thinks that they are not a party of greed, that all the other acts.

[00:52:52] Speaker 05:
And we have taken the position, we're actually the only party that has taken a consistent position on jurisdiction throughout these proceedings that the actions should lie in the district court rather than the court of appeals.

[00:53:02] Speaker 01:
But not on the grounds of party agreed.

[00:53:05] Speaker 01:
I'm sorry?

[00:53:05] Speaker 01:
Not on the grounds of party agreed.

[00:53:07] Speaker 05:
Right.

[00:53:08] Speaker 05:
That hasn't been agreed.

[00:53:09] Speaker 05:
Do you believe that Matt?

[00:53:11] Speaker 05:
No, we don't disagree with the position.

[00:53:13] Speaker 05:
The position suggested by your questions on the issue.

[00:53:17] Speaker 05:
Turning to the merits into Madsen's lead argument, which takes the remarkable position that an operator loses the ability to replace a vessel when it becomes inoperable, such as through a casualty or an accident.

[00:53:30] Speaker 05:
In other words, that you lose the ability to replace a vessel when it's most obviously necessary.

[00:53:36] Speaker 05:
As Judge Wilkins and Judge Pan's questions I think alluded to, there's no basis in the statute for that restriction.

[00:53:42] Speaker 05:
The statute does not, it refers to a vessel under an agreement,

[00:53:45] Speaker 05:
We and the government understand to be the vessel that was identified under the agreement and is bound by its obligations.

[00:53:51] Speaker 05:
There's no implicit requirement that it be currently operating or otherwise seaworthy and it's contrary to the structure of the statute.

[00:54:00] Speaker 05:
impose such a requirement.

[00:54:02] Speaker 05:
I do want to address Matt's argument suggesting that, and I don't know how they justify drawing a line between a casualty or an accident and the facts of this case, but they seem to suggest, well, this is different because the vessel has been inoperable for six years.

[00:54:16] Speaker 05:
But that's just a consequence, as the government counsel indicated, of the way the litigation unfolded.

[00:54:21] Speaker 05:
And function of a vacatur of our approval is that it restores the status quo ante.

[00:54:26] Speaker 05:
that's well established in the case law to position Matson itself is taken at other spots in this litigation, is that reverts things back to 2016 when you had the original replacement, the agate is the vessel under that agreement at that time.

[00:54:41] Speaker 05:
And to Judge Rao's question before, is there any limiting principle to this?

[00:54:46] Speaker 05:
Could there be a gap forever?

[00:54:48] Speaker 05:
We agree with the position of the government that as long as there is an operating agreement in place and a vessel identified by it, you have a right to replace that vessel.

[00:54:57] Speaker 05:
But there are restrictions on your ability to proceed under an operating agreement if you're not going to be operating.

[00:55:02] Speaker 01:
What about Mr Townsend's argument that allowing this type of replacement is inconsistent with the 2018 statute that Congress enacted?

[00:55:13] Speaker 01:
I mean Mr Townsend takes sort of a broader, purposivist type of view of that statute, that it's sort of designed to limit

[00:55:21] Speaker 01:
what what Matt's in views as a kind of rent seeking.

[00:55:24] Speaker 05:
Sure I mean a few responses to that.

[00:55:26] Speaker 05:
One council indicated that that was passed in response to this litigation.

[00:55:30] Speaker 05:
I have no idea what his basis for that is.

[00:55:32] Speaker 05:
There's nothing in the legislative history that suggests that in any event in 2018 precedes this controversy about replacement.

[00:55:39] Speaker 05:
There was a controversy at the time about what the proper scope of service would be authorized.

[00:55:43] Speaker 05:
I don't see how that statute can be read to address this issue, particularly because it did not, anyway, amend or affect the operative provision about replacement rights.

[00:55:53] Speaker 05:
It placed service restrictions on new entrants to the program.

[00:55:57] Speaker 05:
but did not in any way change when you can get a replacement vessel.

[00:56:00] Speaker 05:
So I think it would be an odd reading of that provision to modify the pre-existing 53105F provision that is what actually governs here and determines when you could have a replacement.

[00:56:12] Speaker 05:
The reason they're making this argument, of course, is because they care about trying to get the service restrictions under the 2018 NDA, but the argument wouldn't be limited to that.

[00:56:19] Speaker 05:
It would apply across the MSP and really have a disabling effect of participants' ability to replace vessels under the program.

[00:56:30] Speaker 05:
If there are any other questions about replacement, I'm happy to address it.

[00:56:33] Speaker 05:
Otherwise, I'll turn to the question of service for the Northern Marion Islands.

[00:56:38] Speaker 05:
And a few points on that.

[00:56:39] Speaker 05:
One, I do think it's very important that Judge Pan's questions pick up on this, but there's only one registry.

[00:56:44] Speaker 05:
There's not a registry endorsement that applies to MSP vessels and other vessels, which is what Madison is trying to argue.

[00:56:52] Speaker 05:
They're trying to have it halfway that the registry endorsement would allow less service with respect to the MSP vessels, but there's just no basis in the statute.

[00:57:00] Speaker 05:
that type of understanding.

[00:57:02] Speaker 05:
The statute 53105A refers to domestic trade allowed under a registry issued under the statute.

[00:57:10] Speaker 05:
So there's no basis to provide a different rule for MSP vessels than other vessels.

[00:57:15] Speaker 05:
If they actually wanted to attack it, they would have to attack the Coast Guard regulation.

[00:57:19] Speaker 05:
they have consistently declined to do that throughout this litigation.

[00:57:23] Speaker 05:
I think Judge Pan's questions include to why, understood that that is how this operates and that is how people including Madison in this industry do operate.

[00:57:33] Speaker 05:
As to Madison's argument that the court can't even consider this because the agency didn't address it, that's just not correct.

[00:57:39] Speaker 05:
If you look at pages 280 through 283 of the Joint Appendix,

[00:57:43] Speaker 05:
The agency, and this is the opinion from the chief counsel address this exact issue about scope service allowed under registry endorsement.

[00:57:51] Speaker 05:
I understand that's an argument to be well, that doesn't count because it was from a different approval order, but it's involving the same question about approval of a placement under the agate.

[00:58:02] Speaker 05:
It's the same controversy, same parties.

[00:58:05] Speaker 05:
It was remanded by Judge Moss specifically to address this open question, and it was done so in a thorough or authoritative opinion by the chief counsel.

[00:58:13] Speaker 05:
So the notion that Chenery prevents the court from upholding the agency and that rationale, I don't think is supported, and it would be a very strange rule to require the agency to repeat its analysis about factors that things are not relevant in every approval order.

[00:58:28] Speaker 05:
Um, another, I think important point to mention from that, that same chief counsel, uh, memorandum because it addresses the questions we're asking Judge Pan.

[00:58:37] Speaker 05:
about the regulation, which goes to the question of, you know, is it eligibility or is it operational service?

[00:58:44] Speaker 05:
The Chief Counsel, this is at 279 through 280 of the memorandum, addressed the regulation and essentially said that, you know, in this context, where it's going beyond what the statutory definition is, we apply the statutory definition, there's no indication that the agency intended to restrict

[00:59:03] Speaker 05:
what the or expand what the requirements are for eligibility under the MSP and if you look at the regulations as a whole

[00:59:11] Speaker 05:
For example, the definition of an eligible vessel under 296.2 refers specifically to 53102 rather than 53105A.

[00:59:21] Speaker 05:
So there is some confusion with the regulations.

[00:59:23] Speaker 05:
The agency acknowledged that.

[00:59:24] Speaker 05:
Judge Boss, I think, called the regulations confounding because when you apply that statutory, I'm sorry, the regulatory definition for foreign commerce, you try to plug it in across the regulation.

[00:59:34] Speaker 05:
It just doesn't work.

[00:59:35] Speaker 05:
try to do it, you'll see it just results in redundancy and gibberish.

[00:59:39] Speaker 05:
So the agency, you know, I think in a genuinely ambiguous regulation would be held to our deference that that isn't controlling.

[00:59:47] Speaker 05:
But in any event, as the government council indicated, even if the court were inclined to think that 53105

[00:59:55] Speaker 05:
A, we're somehow relevant to an eligibility determination, a service that is engaged in entirely lawful.

[01:00:02] Speaker 05:
Judge Wilkins' question about the Dakar, although again, we think service to Saipan is perfectly lawful under a registry endorsement, we see no basis to possibly reach that issue here with respect to the Dakar.

[01:00:16] Speaker 05:
The agency was clear in its decision that it understood that the Dakar was not going to be calling that court.

[01:00:21] Speaker 01:
And the argument that- But nothing in the approval prevented.

[01:00:25] Speaker 05:
You know, that's true, but that's just because the approval isn't directed toward it.

[01:00:29] Speaker 05:
I mean, the MSP statute is not structured to provide pre-approval to every quarter, you might call it.

[01:00:35] Speaker 05:
It's just determining whether this vessel is eligible.

[01:00:37] Speaker 01:
The agency action is the same.

[01:00:39] Speaker 01:
Nothing will change.

[01:00:41] Speaker 01:
APL calls on SIPAN with respect to the underlying agency action.

[01:00:45] Speaker 05:
That's right.

[01:00:46] Speaker 05:
And I think it just goes to show that the question of operating conditions are separate from the determination of whether a vessel is eligible.

[01:00:52] Speaker 05:
But to the question of whether there could be an additional action to challenge, I mean, the relevant action I would think would be the payments under the MSP program.

[01:01:00] Speaker 05:
To the extent we're engaged in service that Matson believes or that the agency were to determine is contrary to an operating agreement, that would be a relevant opportunity

[01:01:10] Speaker 05:
So how would that work?

[01:01:11] Speaker 04:
So let's suppose, you know, hypothetical, for the sake of argument, that there's a challenge based on your client not operating consistent with the operating agreement.

[01:01:30] Speaker 04:
You're saying that there would be some vehicle or third party to challenge the payments.

[01:01:37] Speaker 05:
Certainly we'll have defenses and I wouldn't, I'm not going to give any of those away, but I do think that would be the relevant agency action.

[01:01:44] Speaker 05:
Challenge the payment as being inconsistent with the statute and the contract.

[01:01:50] Speaker 05:
What would that mechanism be?

[01:01:54] Speaker 05:
I think it would be an APA challenge just as they're trying to change.

[01:02:01] Speaker 05:
Sending payments.

[01:02:03] Speaker 05:
It's in itself arbitrary.

[01:02:06] Speaker 05:
Again, we think the services particular is perfectly awful.

[01:02:11] Speaker 05:
So, imagine we might have other defenses raised to such an action.

[01:02:14] Speaker 05:
Yeah, I think that is the problem.

[01:02:16] Speaker 05:
I think that would be the proper vehicle to challenge if you're concerned with operating rather than.

[01:02:22] Speaker 01:
Do you think this court is precluded from reaching the question that the car because of the agency's understanding that it won't go to Saipan or that just as a prudential matter?

[01:02:33] Speaker 05:
Well, I think it's presented and right.

[01:02:35] Speaker 05:
I think it's not precluded in this of pining about whether it thinks the services proper or not.

[01:02:41] Speaker 05:
But I don't think it can't be something that was necessary to the agency's decision.

[01:02:46] Speaker 05:
Challenge the agency said this, you know, you're satisfying the conditions for eligibility as you engage in foreign commerce.

[01:02:55] Speaker 05:
That's the suggestion that it implicitly authorized additional trade.

[01:03:00] Speaker 05:
But whatever the court thinks of that doesn't determine whether the approval was proper.

[01:03:04] Speaker 05:
So it just seems kind of strenuous.

[01:03:06] Speaker 05:
Challenge this.

[01:03:12] Speaker 05:
Has no further questions.

[01:03:14] Speaker 05:
We just the merits weird you to uphold.

[01:03:17] Speaker 04:
All right, thank you.

[01:03:18] Speaker 04:
Mr. Townsend, I think that you were out of time, but we'll give you three minutes.

[01:03:24] Speaker 06:
Thank you, your three points.

[01:03:30] Speaker 06:
First, to reiterate, this is not a case about a gap.

[01:03:34] Speaker 06:
There are provisions in the statute that deal with gaps, marine casualties, time spent in dry dock.

[01:03:40] Speaker 06:
That's not this case.

[01:03:41] Speaker 06:
If that had happened, the agency would have addressed those provisions.

[01:03:45] Speaker 06:
That would be the basis for the reasoning here.

[01:03:46] Speaker 06:
This is a case about a no vessel, no vessel under an operating system.

[01:03:51] Speaker 06:
That's quite different on the situation of a gap.

[01:03:54] Speaker 06:
Second, the division between eligibility requirements for the fleet and operation is really very quite looser.

[01:04:01] Speaker 06:
To be sure, our eligibility provisions, 53102B, but then 53103 says that a condition for inclusion in the fleet is to have an operating agreement, and then 53105 specifies what that operating agreement must say.

[01:04:19] Speaker 06:
And the agency itself considers trade links, it considers commercial viability when it makes the eligibility determination.

[01:04:27] Speaker 06:
You can see that at JA 139 and JA 452, where the agency actually considers where these vessels will go as part of the eligibility determination.

[01:04:36] Speaker 06:
So,

[01:04:36] Speaker 06:
The illusion, the argument that anything that has to do with contract compliance is something that can just be addressed later, it is incorrect.

[01:04:46] Speaker 06:
It isn't found in the statute.

[01:04:47] Speaker 06:
The agency itself recognizes that through its regulations, which 296.11 and 296.2 bring these considerations into the eligibility stage.

[01:04:58] Speaker 06:
A third point, with respect to the Coast Guard regulation, again, it was not addressed.

[01:05:04] Speaker 06:
To whatever extent the arguments present interesting issues, the agency did not address them below.

[01:05:10] Speaker 06:
The pages that council cites are from the SIPAN memo.

[01:05:14] Speaker 06:
The memos were the re-approval of the SIPAN.

[01:05:16] Speaker 06:
The agency later withdrew or vacated the re-approval of the SIPAN.

[01:05:21] Speaker 06:
We don't know what the agency's position is with respect to 296.1, with respect to 63.17, the Coast Guard regulation.

[01:05:30] Speaker 06:
For years, the agency took no position, pointedly took no position, expressly said, we have no position on the Coast Guard regulation.

[01:05:38] Speaker 06:
And when they did address it in the re-approval order, the order was vacated.

[01:05:42] Speaker 06:
And then the orders under review here, the Herodote 2021 Herodote order and the 2022 Saipan order, don't address it at all.

[01:05:49] Speaker 06:
It is not something that the agency addressed in this case, in these orders, and it would be barred by Channery.

[01:05:56] Speaker 02:
Can you address whether your client as a party aggrieved with respect to the Herodote?

[01:06:02] Speaker 02:
Because you didn't participate in the proceedings before the agency with respect to the Herodote.

[01:06:06] Speaker 06:
Well, we don't think that the participation that we were allowed with respect to the Dakar is really any meaning meaningfully different.

[01:06:12] Speaker 06:
It was not a complete participation.

[01:06:14] Speaker 06:
We were not allowed in as a party status.

[01:06:17] Speaker 06:
So we don't see that as a basis for distinguishing between the two orders.

[01:06:20] Speaker 06:
But we are a party agree.

[01:06:22] Speaker 06:
We are.

[01:06:22] Speaker 06:
I'm sorry.

[01:06:23] Speaker 02:
Did you attempt to participate with the Herodote and you were.

[01:06:26] Speaker 06:
Yes, we've consistently asked to intervene as a party in these proceedings and all of the proceedings and the agency has always said no, no intervention.

[01:06:35] Speaker 02:
But they did consider your comments with respect to the Dakar.

[01:06:39] Speaker 06:
With respect to the Dakar, we were allowed to file a comment on an application that we were not allowed to see, an application to replace the Saipan with the Dakar.

[01:06:49] Speaker 06:
And then later, after the comments were submitted, the agency treated the application as actually an application to replace the Agate.

[01:06:56] Speaker 06:
with the Dakar so it wasn't even the application that we were commenting on which again we were not allowed to see but we would I would say that we're a person did you submit something on the Herodote that they didn't they rejected it or how did you try to participate with the Herodote we requested permission to intervene as a party with respect to the Herodote and they said no and they said no but you requested permission to intervene on the Dakar they said no but they accepted your comments

[01:07:21] Speaker 06:
Yes, the courts strongly suggested that the agency allow us some some ability to speak in the agency proceeding.

[01:07:30] Speaker 06:
And so the agency is a matter of administrative grace allowed the parties a limited period to comment on the application for the car.

[01:07:38] Speaker 06:
And that was in.

[01:07:39] Speaker 06:
2016.

[01:07:41] Speaker 01:
But I would say... How can our Hobbs Act jurisdiction turn on distinction?

[01:07:46] Speaker 01:
I mean, because under the Hereto, how can you be seen as a party to the proceedings where there were no comments even?

[01:07:53] Speaker 06:
I would say that the distinction doesn't actually work as between the two orders, but I would say that we're a party.

[01:07:59] Speaker 01:
And I think if that's right, then you go to district court.

[01:08:01] Speaker 06:
I think we're a party aggrieved to the same extent we would be a party aggrieved under the APA, person aggrieved under the APA.

[01:08:08] Speaker 01:
I mean, have you read our party aggrieved cases?

[01:08:10] Speaker 01:
I mean, you know, they very much emphasize that party aggrieved is different from person aggrieved.

[01:08:17] Speaker 01:
You have to be a party to the proceedings.

[01:08:18] Speaker 01:
And we have a Simmons case from 1982 that then Judge Scalia wrote, all the way up to a case that was just decided this past fall, Ohio Nuclear Regulatory Commission, something like that.

[01:08:31] Speaker 01:
I mean, so this is a very consistent line of cases.

[01:08:35] Speaker 01:
For 40 years, we say you have to be a party to the proceedings.

[01:08:38] Speaker 06:
I can just say that we're trying to make the best of what came before this, including the 2018 decision, where this was not an issue in that case.

[01:08:48] Speaker 06:
And it was generally accepted that we did.

[01:08:49] Speaker 01:
The fact that a court doesn't address a threshold jurisdictional issue doesn't make any binding jurisdictional holding on future points.

[01:08:57] Speaker 06:
Point taken, Your Honor.

[01:08:58] Speaker 06:
And again, this is just our best reading

[01:09:01] Speaker 01:
I think actually the circumstance here makes it pretty obvious why the better rule is an informal agency proceedings.

[01:09:08] Speaker 01:
You can't be a party aggrieved.

[01:09:11] Speaker 06:
It is our position that the district court had original jurisdiction.

[01:09:14] Speaker 06:
We are just simply trying to get review because these orders have been obscured from review for quite some time.

[01:09:23] Speaker 06:
And I simply, I just want to leave with the 20, again, the 2018 NDA spoke very clearly about what's permitted here.

[01:09:30] Speaker 06:
and what is not permitted.

[01:09:31] Speaker 06:
Domestic trade for subsidized vessels is not permitted.

[01:09:34] Speaker 06:
And that is the rule that goes back to the 19th century.

[01:09:37] Speaker 06:
This 2015 order was a sea change in this area, allowing these types of subsidies for vessels in domestic trade.

[01:09:44] Speaker 06:
And so if the court exercises original jurisdiction, we would ask the court to set aside the orders under review.

[01:09:51] Speaker 04:
Thank you.

[01:09:52] Speaker 04:
I take the case under advisement.