DC Appeals Court dismisses Matson’s petition to investigate APL

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Guam – An appellate court in our nation’s capital is bowing out of a fight between two private Guam shippers and remanding the case to a lower court.

Matson Navigation’s fight to stop APL from doing subsidized business with the U.S. Maritime Security Program is on hold now that a federal appeals court has dismissed Matson’s petition for review.

Matson Navigation says American President Lines lacks the legal requirements to serve in the United States Maritime Security Program under which APL is now operating. Matson also claims that that APL’s federally subsidized contract is “distorting the market.”

In the United States Court of Appeals for the District of Columbia Circuit, Matson challenged three orders and an appeal decision by the U.S. Department of Transportation’s Maritime Administration, also known as MarAd.

MarAd’s orders had approved two of APL’s requested replacement vessels in the Maritime Security fleet, and APL’s program-compliant operations of those vessels. MarAd upheld those decisions on Matson’s appeal. The Maritime Security Program pays subsidies to private American flag shippers doing a mix of American and foreign commerce in exchange for their readiness to support the nation’s defense, as needed, by the U.S. Merchant Marine fleet.

Matson says neither of APL’s approved vessels meet the statutory requirements for replacement vessels and that APL’s subsidized operations are “distorting the market and creating an unlevel playing field” in service to Guam.

In June 2017 Matson filed an appeal with the capital city court after MarAd rejected Matson’s appeal in April of that year. But the federal appeals court says it has no jursidiction in the Matson case for several reasons: (1) because Matson waited too long to file against marad’s appeal decision, (2) because Matson does not have an operating agreement with MSP as required by law, and (3) because of a technicality loopholing the appeals court out of addressing certain vessel citizenship requirements.

The appellate court cites the Administrative Orders Review Act, also known as the Hobbs Act, in its reason for remanding the case to district court. It states that while the Hobbs Act provides that courts of appeals shall have exclusive jurisdiction in determining the validity of the rules, regulations, and orders of the U.S. Transportation Secretary, petitions for review under the Hobbs Act must be filed within 60 days of the entry of the agency’s order.

Citing case law, the court also asserts that “the time limit is jurisdictional in nature and may not be enlarged or altered by the courts.”

The capital’s federal appeals court states that in the three challenged orders, MarAd made and upheld final determinations of APL’s contractual obligations for two replacement vessels.

The appellate court states:

“Unless the three orders were issued pursuant to a statute listed in the Hobbs Act vesting exclusive jurisdiction in the courts of appeals, and the petition for their review is timely, this court lacks jurisdiction to address Matson’s petition for review. If the court lacks exclusive jurisdiction because an order was not issued pursuant to a statute listed in the Hobbs Act, then Matson is subject to the ‘default rule’ and must ‘go first to district court rather than to a court of appeals.'”