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Angelex Ltd. v. United States

United States Court of Appeals, Fourth Circuit

July 22, 2013

ANGELEX LTD., as owner of the M/V Antonis G. Pappadakis, and the M/V Antonis G. Pappadakis in rem, Petitioner-Appellee,

Argued: June 25, 2013

Appeal from the United States District Court for the Eastern District of Virginia, at Norfolk. Robert G. Doumar, Senior District Judge. (2:13-cv-00237-RGD)


Douglas Neal Letter, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for Appellants.

George Michael Chalos, CHALOS & CO, P.C., Oyster Bay, New York, for Appellee.


Neil H. MacBride, United States Attorney, Alexandria, Virginia, Stuart F. Delery, Acting Assistant Attorney General, Matthew M. Collette, Anne Murphy, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for Appellants.

Before KING, FLOYD, and THACKER, Circuit Judges.

THACKER, Circuit Judge:

The United States of America, the United States Coast Guard, and the United States Customs and Border Protection Agency (collectively, "Respondents" or the "government") appeal the district court's order, which, upon an emergency petition filed in the Eastern District of Virginia, (1) altered the terms of a bond the Coast Guard had fixed for the release of a detained ship that was under investigation; and (2) restricted the types of penalties the government could seek for the ship's potential violations of certain ocean pollution prevention statutes. As explained below, this matter was not subject to review in the district court because the Coast Guard's actions were committed to agency discretion by law. As a result, the district court lacked jurisdiction to consider the petition and we, therefore, reverse and remand for dismissal under Federal Rule of Civil Procedure 12(b)(1).



We begin with the international and domestic legal landscape underlying this matter. The United States is a signatory to MARPOL, which is a multi-national treaty aimed at "achiev[ing] the complete elimination of international pollution of the marine environment by oil and other harmful substances and the minimization of accidental discharge of such substances[.]"[1] Protocol of 1978 Relating to the International Convention for the Prevention of Pollution from Ships, Feb. 17, 1978, 1340 U.N.T.S. 61, 128. MARPOL requires member States to prohibit violations of the treaty through domestic laws, and to provide penalties "adequate in severity to discourage violations of [MARPOL]." Id. at 186.

In fulfilling its obligations pursuant to MARPOL, Congress enacted the Act to Prevent Pollution from Ships ("APPS"). See 33 U.S.C. §§ 1901-15. According to APPS, "the Secretary shall administer and enforce" MARPOL, as well as statutes and regulations designed to preserve the marine environment. Id. § 1903(a). The term "Secretary" is defined as "the Secretary of the department in which the Coast Guard is operating." Id. § 1901(a)(11). At all times relevant to this appeal, the Coast Guard operated under the Department of Homeland Security ("DHS").

The regulations attendant to APPS require, in relevant part, that certain oil-carrying ships must "maintain" an Oil Record Book ("ORB"), and

[e]ntries shall be made in the [ORB] . . . whenever any of the following machinery space operations take place on any ship to which this section applies -- (1) Ballasting or cleaning of fuel oil tanks; (2) Discharge of ballast containing an oily mixture or cleaning water from fuel oil tanks; (3) Disposal of oil residue; and (4) Discharge overboard or disposal otherwise of bilge water that has accumulated in machinery spaces.

33 C.F.R. § 151.25(a), (d); see also United States v. Ionia Mgmt. S.A., 555 F.3d 303, 309 (2d Cir. 2009) (holding that "the APPS's requirement that subject ships 'maintain' an ORB, 33 C.F.R. § 151.25, mandates that these ships ensure that their ORBs are accurate (or at least not knowingly inaccurate) upon entering the ports or navigable waters of the United States"); United States v. Jho, 534 F.3d 398, 403 (5th Cir. 2008) ("[W]e read the requirement that an oil record book be 'maintained' as imposing a duty upon a foreign-flagged vessel to ensure that its oil record book is accurate (or at least not knowingly inaccurate) upon entering the ports of navigable waters of the United States."). A person who knowingly violates APPS or its attendant regulations commits a Class D felony. See 33 U.S.C. § 1908(a).


There are two Petitioners in this appeal: the Antonis G. Pappadakis ("Pappadakis" or "the vessel"), an ocean-going bulk cargo carrier, which was built in 1995 and registered in Malta; and Angelex Ltd. ("Angelex"), a company that purchased the vessel on March 9, 2007. The vessel is Angelex's sole income-earning asset. Angelex contracted with a third party, Kassian Maritime Navigation Agency, Ltd. ("Kassian"), a Greek company, to serve as the vessel's operator. Kassian also operates several other cargo ships and is not a petitioner in this appeal.[2]

The events giving rise to this action began on April 14, 2013. On that day, the Pappadakis arrived at the Norfolk Southern Terminal in Norfolk, Virginia, and loaded a cargo of coal for delivery to a customer in Brazil. The next day, on April 15, 2013, Coast Guard inspectors conducted a routine Port State Control inspection of the Pappadakis. While Coast Guard personnel were aboard the vessel, a crewmember passed a note to one of the inspectors, which stated that the vessel's oily water separator had been bypassed and oily bilge water had been discharged overboard. The letter also alleged that this discharge was not reported in the ORB. Upon further inspection, the Coast Guard discovered that the Pappadakis's oily water separator was inoperable, the vessel had likely been discharging bilge water overboard, and the ORB was incomplete or falsified, in contravention of MARPOL and APPS.

The Coast Guard referred its findings to the Department of Justice for possible prosecution. It also informed Angelex that the Pappadakis's clearance to depart Norfolk had been withheld, and negotiations for a security agreement between the Coast Guard and counsel for Angelex began.[3]

After a few days, the negotiations stalled with the Coast Guard requiring the posting of a $2.5 million bond, a number of non-monetary obligations intended to ensure the availability and cooperation of the crewmembers and officials, and consent to the United States's continued jurisdiction over the matter. Unable to further negotiate with the Coast Guard, and claiming to be losing money by the day, Angelex and the Pappadakis (in rem) then filed an emergency petition on April 25, 2013, in the Eastern ...

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