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Furie Operating Alaska, LLC v. U.S. Department of Homeland Security

United States District Court, D. Alaska

July 1, 2014

FURIE OPERATING ALASKA, LLC, Plaintiff,
v.
U.S. DEPARTMENT OF HOMELAND SECURITY; SECRETARY OF HOMELAND SECURITY JEH JOHNSON, in his official capacity; U.S. CUSTOMS AND BORDER PROTECTION; and ACTING COMMISSIONER DAVID
v.
AGUILAR, in his official capacity, Defendants.

ORDER AND OPINION [Re: Motion at docket 75]

JOHN W. SEDWICK, District Judge.

I. MOTION PRESENTED

At docket 75, plaintiff Furie Operating Alaska, LLC ("Furie") moves pursuant to 28 U.S.C. ยง 1292(b) to certify an interlocutory appeal from this court's order at docket 71 ("the Order") denying Furie's motion to dismiss. Furie's supporting memorandum is at docket 76. Defendants' opposition is at docket 80. Furie's reply is at docket 84. Oral argument was not requested and would not assist the court.

II. BACKGROUND

Furie filed this lawsuit to challenge action by U.S. Customs and Border Protection ("CBP") which determined that Furie should pay a $15 million penalty for transporting merchandise from Texas to Alaska via Vancouver, British Columbia using a foreign vessel for a segment of the trip in violation of the Jones Act requirement that such transportation be accomplished using American vessels.[1] The "merchandise" was the Spartan, a jack-up drilling rig which is itself a vessel. Furie's complaint pled six claims for relief: (1) The penalty imposed was unlawful, because the Spartan was not being transported as merchandise, (2) the Secretary failed to exercise independent judgment when she denied a wavier requested by Furie which was arbitrary, capricious and an abuse of discretion, (3) the Secretary's refusal to grant a waiver when her predecessor had done so was an unexplained action which was arbitrary, capricious, and an abuse of discretion, (4) the Secretary's refusal to mitigate the $15 million penalty was also an arbitrary and capricious action which manifests an abuse of discretion, (5) the $15 million penalty violates the Excessive Fines Clause of the Eighth Amendment, and (6) the Secretary's treatment of Furie amounted to a denial of due process under the Fifth Amendment.[2] In addition to Furie's claims, the lawsuit includes a counterclaim by Defendants alleging that "Furie's transportation of the Spartan Rig from Texas to Alaska, in part by a non-coastwise qualified vessel, violated the Jones Act"[3] which entitles the United States to recover a $15 million penalty from Furie ("the Counterclaim").

The parties are familiar with the many other aspects of their dispute not summarized above. Readers who are not will find a much fuller recitation of the background facts in the Order.[4]

III. DISCUSSION

Generally speaking a party may not appeal any decision by a district court which is not evidenced by a final judgment.[5] In the course of litigation, trial courts may render decisions on issues of law which do not result in a final judgment. Sometimes those decisions are erroneous and on rare occasions an appellate court's correction of the error without awaiting a final judgment will substantially advance society's interest in the prompt resolution of disputes. Recognizing that such circumstances arise from time to time, Congress enacted a statue authorizing interlocutory appeals in limited situations:

When a district judge [issues an order] not otherwise appealable... shall be of the opinion that such order involves a controlling question of law as to which there is substantial ground for difference of opinion and that an immediate appeal may materially advance the ultimate termination of the litigation, he shall so state.... The Court of Appeals... may thereupon, in its discretion, permit an appeal to be taken....[6]

Furie argues that the Order should be certified for interlocutory review. Certification depends on whether the court finds that (1) the Order addressed a controlling question of law, (2) there is a substantial ground for difference of opinion as to that question, and (3) an immediate appeal would materially advance termination of this lawsuit.

With respect to the controlling question of law, Furie contends that this court incorrectly answered the following interrelated questions:

1. Whether CBP's interpretation of the term "merchandise" under the Jones Act as including vessels transported in the normal course of their maritime operations versus those transported in connection with their sale is permissible and entitled to Chevron deference or is reasonable and entitled to deference under Skidmore.
2. Whether CBP's interpretation of the Jones Act is applicable to the movement of vessels via dry-towing and the Coastwise Towing Statute as applicable to the movement of vessels via wet-towing is sufficiently persuasive to warrant deference under either Chevron or Skidmore.

Respecting the first question, the Order held that CBP's interpretation of the term "merchandise" as being applicable to the Spartan while it was being hauled on the deck of another vessel was entitled to Chevron deference, and that if it were not, the interpretation was entitled to Skidmore deference. Furie correctly maintains that deference to CBP's interpretation led the court to conclude that the Spartan was properly considered "merchandise" for purposes of the Jones Act. The second question is bound together with the first by Furie's argument that the Towing Statute governs the movement of vessels regardless of whether they are towed in the water (wet-towed), or moved as cargo aboard another vessel (dry-towed), and so a dry-towed vessel cannot be subject to treatment as merchandise ...


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