28 F. 3d 142 - Government of Guam v. American President Lines

Appellant shippers, including the Government of Guam,1 sought reparations from appellee carriers2 in a proceeding before the Federal Maritime Commission for allegedly unlawful rates under the Shipping Act, 1916, and the Intercoastal Shipping Act, 1933.3 Appellants thereafter filed a virtually identical claim in the United States District Court for the District of Columbia. The district court dismissed the complaint for lack of subject-matter jurisdiction. Appellants now contend that the district court erred by not inferring an implied private civil action under the Shipping Acts, and by not allowing appellants an opportunity to amend the complaint. For substantially the reasons set forth in the thoughtful opinion of the district court, Government of Guam v. American President Lines, Ltd., 809 F.Supp. 150 (D.D.C.1993) (Guam I ), we affirm the dismissal of the complaint. Further, we hold that appellants have waived the right to raise the amendment claim of error on appeal because they did not file a motion to amend, or seek leave to amend, the complaint in the district court, and they have presented no special circumstances to excuse their failure to do so.

The context in which this appeal arises is set forth in the District Court's opinion from which we quote:

On December 7, 1989, the Government of Guam filed a complaint with the Commission. That complaint is virtually identical to the complaint in the instant case. Each complaint includes four counts. Counts I and II allege that both defendants charge Guam shippers unjust, unreasonable, and discriminatory rates in violation of sections 16 First, 17, and 18(a) of the Shipping Act, 46 U.S.C.App. Secs. 815 First, 816, & 817(a), and section 2 of the Intercoastal Shipping Act, 46 U.S.C.App. Sec. 844. Counts III and IV allege that defendant Sea-Land operates as a water common carrier without having a required tariff on file with the Commission,* and also that Sea-Land improperly charges varying rates for similarly situated shippers, in violation of sections 16 First and 17 of the Shipping Act, 46 U.S.C.App. Secs. 815 First & 816, and section 2 of the Intercoastal Shipping Act, 46 U.S.C.App. Sec. 844.

On March 9, 1990, an administrative law judge granted Guam leave to amend the Commission complaint to add four shippers as plaintiffs. Three of those shippers are among the plaintiffs in the present case. In the same ruling, the ALJ dismissed that portion of the complaint seeking reparations on behalf of all similarly situated Guam shippers under a parens patriae theory. In so ruling, the ALJ relied on Commission decisions holding that reparations may be awarded only to those who have actually paid unreasonable rates unless there has been a valid assignment from one with a legal right to reparations. The Commission proceeding is presently ongoing.

Plaintiffs' complaint was filed in this Court on March 10, 1992. Plaintiffs' asserted purpose in bringing this action in court is to "toll" the two-year statute of limitations for the numerous Guam shippers that have allegedly been injured by defendants' shipping rates. They have thus moved for certification of a class consisting of shippers and persons who have dispatched or received shipments into or out of Guam via the defendant carriers. At the same time, plaintiffs have moved for a stay of proceedings in this case pending the Commission's determination in the parallel administrative proceeding. Plaintiffs thus concede that the Commission has the task of resolving the merits of the dispute; they call on this Court essentially to preserve, and ultimately to administer, the claims of the class.

Guam I, supra, 809 F.Supp. at 151-52. We write to emphasize two points.

Implying a private cause of action where the statute provides a remedy. Appellants concede that the Shipping Acts do not expressly provide for a private federal cause of action by a shipper to challenge a carrier's rates, but they contend that the district court erred in declining to infer, upon applying the factors in Cort v. Ash, 422 U.S. 66, 95 S.Ct. 2080, 45 L.Ed.2d 26 (1975), a protective cause of action on behalf of the Guam shippers as a class. Appellants maintain that Congress intended such a private cause of action because an analogous proceeding is impermissible before the Federal Maritime Commission and the only available way for the Guam shippers to obtain recovery is by a class action in district court.

Where a statute provides an express remedy, Cort v. Ash is, strictly speaking, inapplicable. In that case, the Supreme Court stated that "[i]n determining whether a private remedy is implicit in a statute not expressly providing one, several factors are relevant."4 422 U.S. at 78, 95 S.Ct. at 2088. There, the Court faced the issue of whether a stockholder's derivative suit for damages against corporate directors could be implied under a criminal statute prohibiting corporations from making contributions in connection with Presidential elections. Id. at 68, 95 S.Ct. at 2083-84. The Court held that "implication of such a federal cause of action is not suggested by the legislative context of [the criminal provision] or required to accomplish Congress' purposes in enacting the [Federal Election Campaign Act]." Id. at 68-69, 95 S.Ct. at 2084. Thus, because the Shipping Acts provide appellants with an express reparations remedy before the Federal Maritime Commission, see 46 U.S.C. app. Secs. 821(a), 845a, the district court concluded that the Cort analysis did not appear to be directly applicable to appellants' claim that appellee carriers had violated the provisions of the Shipping Acts requiring "just and reasonable rates." Guam I, supra, 809 F.Supp. at 153.

Yet, as our opinion in Danielsen v. Burnside-Ott Aviation Training Ctr., Inc., 941 F.2d 1220, 1227-28 (D.C.Cir.1991), recognizes, the Cort v. Ash factors are relevant in determining whether the express remedy provided in a statute was intended by Congress to be the exclusive remedy. The Danielsen court noted with approval the Ninth Circuit's application of the Cort test in determining whether a private civil right of action could be inferred under the Service Contract Act, 41 U.S.C. Sec. 351, which itself provided an administrative remedy. Id. (citing Miscellaneous Serv. Workers, Local # 427 v. Philco-Ford Corp., 661 F.2d 776, 780-81 (9th Cir.1981)). This court agreed that implication of a private right would undercut the specific administrative remedy prescribed by Congress in that statute. Id. at 1228.

More precisely, the Supreme Court has made clear that when Congress has provided an express remedy, not all of the Cort factors have the same weight because the central analysis is directed at discovering legislative intent by means of "the language of the statute, the statutory structure, or some other source." Karahalios v. National Fed'n of Fed. Employees, Local 1263, 489 U.S. 527, 532-33, 109 S.Ct. 1282, 1286-87, 103 L.Ed.2d 539 (1989) (quoting Thompson v. Thompson, 484 U.S. 174, 179, 108 S.Ct. 513, 516, 98 L.Ed.2d 512 (1988) (in turn quoting Northwest Airlines, Inc. v. Transport Workers, 451 U.S. 77, 94, 101 S.Ct. 1571, 1582, 67 L.Ed.2d 750 (1981))); Transamerica Mortgage Advisors, Inc. v. Lewis, 444 U.S. 11, 23-24, 100 S.Ct. 242, 248-49, 62 L.Ed.2d 146 (1979) (citing Touche Ross & Co. v. Redington, 442 U.S. 560, 575-76, 99 S.Ct. 2479, 2488-89, 61 L.Ed.2d 82 (1979)). Where Congress has provided an express remedy, the Court has explained, "[t]he presumption that a remedy was deliberately omitted from a statute is strongest when Congress has enacted a comprehensive legislative scheme including an integrated system of procedures for enforcement." Massachusetts Mut. Life Ins. Co. v. Russell, 473 U.S. 134, 147, 105 S.Ct. 3085, 3092-93, 87 L.Ed.2d 96 (1985) (quoting Northwest Airlines, Inc. v. Transport Workers, supra, 451 U.S. at 97, 101 S.Ct. at 1584). While this presumption may be overcome without evidence that Members of Congress actually had in mind the creation of a private cause of action, see Thompson v. Thompson, supra, 484 U.S. at 179, 108 S.Ct. at 516, and California v. Sierra Club, 451 U.S. 287, 293, 101 S.Ct. 1775, 1778-79, 68 L.Ed.2d 101 (1981), rebutting the presumption is not easily accomplished given the "elemental canon" of statutory construction that "where a statute expressly provides a remedy, courts must be especially reluctant to provide additional remedies." Karahalios v. National Fed'n of Fed. Employees, supra, 489 U.S. at 533, 109 S.Ct. at 1286 (citing Transamerica Mortgage Advisors, Inc. v. Lewis, supra, 444 U.S. at 19, 100 S.Ct. at 246-47). " '[I]n the absence of strong indicia of contrary congressional intent, [the Court is] compelled to conclude that Congress provided precisely the remedies it considered appropriate.' " Id. (quoting Middlesex County Sewerage Auth. v. Sea Clammers, 453 U.S. 1, 15, 101 S.Ct. 2615, 2623, 69 L.Ed.2d 435 (1981)).

Accordingly, in the instant case, the district court concluded, upon examining the statutory scheme in the Shipping Acts and the different language in the Interstate Commerce Act, that in the absence of evidence of congressional intent to imply a cause of action, the conclusion was compelled, under California v. Sierra Club, supra, 451 U.S. at 293, 101 S.Ct. at 1778-79, that no implied right of action should be inferred. Guam I, supra, 809 F.Supp. at 153-54. In addition, the district court noted that under the Cort factors, see supra note 4, the first and third factors did not lend weight to appellants' argument and that appellants had not offered any supporting legislative history. Id. at 153 n. 4.

We find no error in the district court's analysis. First, the Shipping Acts include a specific reparations remedy. See 46 U.S.C. app. Secs. 821(a), 845a. Second, the statutes provide for enforcement proceedings in the district court. See 46 U.S.C. app. Secs. 828 & 829; Massachusetts Mut. Life Ins. Co. v. Russell, supra, 473 U.S. at 147, 105 S.Ct. at 3092-93. Third, although modeled after the Interstate Commerce Act, the Shipping Acts do not include a provision, which is in the Interstate Commerce Act, providing for a district court cause of action as an alternative to the administrative proceeding. See 49 U.S.C. Sec. 11705(c)(1); United States Navigation Co. v. Cunard S.S. Co., 284 U.S. 474, 481, 52 S.Ct. 247, 249, 76 L.Ed. 408 (1932). Under the analysis in Karahalios v. National Fed'n of Fed. Employees, supra, 489 U.S. at 532-33, 109 S.Ct. at 1286-87, these provisions together reinforce the conclusion that an implied right cannot be inferred because Congress provided for rate regulation in an administrative agency and specified the circumstances in which it intended for there to be a federal cause of action.5 See T.I.M.E. Inc. v. United States, 359 U.S. 464, 469, 79 S.Ct. 904, 908, 3 L.Ed.2d 952 (1959) ("reasonable rates" provision creates criterion for administrative determination of lawful rate rather than a justiciable legal right) (citing Montana-Dakota Utils. Co. v. Northwestern Pub. Serv. Co., 341 U.S. 246, 251, 71 S.Ct. 692, 695, 95 L.Ed. 912 (1951)). A contrary conclusion would undermine the statutory scheme. Paraphrasing a statement by the Supreme Court in analogous circumstances, "[o]nly through the action of [the Federal Maritime Commission] could there be secured the uniformity of ruling upon which appropriate protection from unreasonable exactions and unjust discriminations must depend." United States Navigation Co. v. Cunard S.S. Co., supra, 284 U.S. at 483, 52 S.Ct. at 250 (referring to the Interstate Commerce Act and quoting Board of R.R. Comm'rs v. Great N. Ry. Co., 281 U.S. 412, 421-22, 50 S.Ct. 391, 393-94, 74 L.Ed. 936 (1930)).6

Application of the Cort factors leaves appellants in no better position. Even assuming that they meet the first and third Cort factors--if appellants are within the class for whose benefit the Shipping Acts were enacted and if inferring a private cause of action is consistent with the underlying purposes of the legislative scheme--appellants point to no legislative history or other source to suggest that Congress intended to imply an additional remedy to the express administrative remedy it provided (the second Cort factor) in the Shipping Acts. Appellants have the burden to show some evidence of congressional intent to create a remedy in addition to that expressly provided, Suter v. Artist M., --- U.S. ----, 112 S.Ct. 1360, 1370, 118 L.Ed.2d 1 (1992), and it is not enough simply to argue that there is nothing in the legislative history that could reasonably be construed to deny creation of an implied private federal district court action for Shipping Act violations. See Touche Ross & Co. v. Redington, supra, 442 U.S. at 571, 99 S.Ct. at 2486-87 ("implying a private right of action on the basis of congressional silence is a hazardous enterprise, at best"). Moreover, appellees point with some persuasive force to the legislative history of the Shipping Act as indicating an implicit rejection by Congress of a judicial damages remedy for shippers.7 Consequently, the district court could properly conclude that application of the Cort factors is unlikely to warrant the inference of a private right of action under the Shipping Acts. Guam I, supra, 809 F.Supp. at 153 n. 4.

Appellants' contention that their position does not involve an attempt to "usurp" the authority of the Federal Maritime Commission is beside the point. Appellants consider the administrative remedy inadequate because of (1) the costs to individual shippers in an administrative proceeding attacking an entire tariff structure, as distinct from a proceeding seeking reparations for overcharges on a particular cargo shipment, (2) the two-year statute of limitations in the face of a proceeding that has been going on for more than three years, and (3) the unavailability of class action or parens patriae administrative procedures. Whether procedural inadequacies exist in the administrative proceeding can be addressed on appeal from a final order of the Federal Maritime Commission, as appellants acknowledge. Further, as appellants' colloquy with the district court regarding the possibility of a class action before the Commission makes clear, their contention that the remedies under the Shipping Acts are unavailable to the Guam shippers is still to be demonstrated.8 Indeed, were there evidence that the administrative proceedings could not adapt to what appellants characterize as a proceeding that is unique in scope, such considerations would not overcome the absence of evidence that Congress intended to imply the existence of a private protective cause of action in anticipation of a favorable administrative ruling on behalf of a class. See Saltzman v. Farm Credit Servs. of Mid-America, ACA, 950 F.2d 466, 469 (7th Cir.1991) (citing California v. Sierra Club, supra, 451 U.S. at 297, 101 S.Ct. at 1781); cf. Centel Cable Television Co. of Fla. v. Admiral's Cove Assocs., Ltd., 835 F.2d 1359, 1362-63 (11th Cir.1988).

Many of the cases relied on by appellants for inferring a cause of action were decided before Cort v. Ash, supra, (1975), and Karahalios v. National Fed'n of Fed. Employees, supra, (1989), where the Supreme Court made clear its shift in emphasis from its prior standard to evidence of congressional intent to imply a private cause of action.9 Other cases are readily distinguishable.10 Contrary to appellants' contention, nothing suggests that the parties' failure in Karahalios v. National Fed'n of Fed. Employees, supra, to pursue their administrative remedies prior to bringing suit in court was a relevant consideration in the Supreme Court's decision not to infer a private cause of action; rather, the Court's conclusion was based on the lack of evidence of congressional intent. 489 U.S. at 532-33, 536, 109 S.Ct. at 1286-87, 1288-89. Furthermore, we agree with the district court, Guam I, supra, 809 F.Supp. at 154, and appellees, thatD.L. Piazza Co. v. West Coast Line, Inc., 210 F.2d 947 (2d Cir.), cert. denied, 348 U.S. 839, 75 S.Ct. 42, 99 L.Ed. 661 (1954) (Piazza ), is most clearly on point. In that case, after losing before the Federal Maritime Board, the Piazza company sued in federal district court for the same amount of reparations sought in the administrative proceeding. Piazza, supra, 210 F.2d at 948. The Second Circuit, noting that the Supreme Court had held that exclusive primary jurisdiction over recovery of reparations under the Shipping Act is in the Federal Maritime Board, held that the company's only remedy was that in the statute, namely review of the Board's decision by the court of appeals. Id. Appellants' argument that Piazza is no longer good law is unpersuasive.11 Their reliance on Interconex, Inc. v. Federal Maritime Comm'n, 572 F.2d 27 (2d Cir.1978), is misplaced because the Piazza issue was not before the court.12

Accordingly, we affirm the district court's dismissal of appellants' complaint for lack of subject-matter jurisdiction.

Amending a complaint. Appellants also contend that the district court erred in dismissing the complaint without affording them an opportunity to amend. With such an opportunity, they maintain that they could have added new legal theories under the Interstate Commerce Act, see 49 U.S.C. Sec. 10701(a), and in admiralty, pursuant to 28 U.S.C. Sec. 1333.

The complaint purported to state a cause of action under the Shipping Acts, exclusively. However, in their opposition to the motion to dismiss, appellants stated that if the Federal Maritime Commission were to agree with one of the carriers that it was subject to the jurisdiction of the Interstate Commerce Commission, then appellants would amend their complaint to add a claim under the Interstate Commerce Act and a claim in admiralty.13 Likewise, during argument on the motion to dismiss, appellants' counsel indicated that their interest in pursuing other legal theories rested on a future ruling by the Federal Maritime Commission and the court of appeals.14

"The normal procedure for requesting an amendment to the complaint in federal court is to file a FED.R.CIV.P. 15 motion to amend together with the proposed amendment or new pleading."15 Bank of Waunakee v. Rochester Cheese Sales, Inc., 906 F.2d 1185, 1192 (7th Cir.1990); 3 JAMES W. MOORE & RICHARD D. FREER, MOORE'S FEDERAL PRACTICE p 15.12, at 15-115 to 15-116 (2d ed. 1994). Because appellants had not previously amended their complaint and a motion to dismiss is not ordinarily considered a "responsive pleading" under Rule 15(a), appellants were free to amend the complaint as a matter of right prior to the district court's ruling on the motion to dismiss. See Confederate Memorial Ass'n, Inc. v. Hines, 995 F.2d 295, 299 (D.C.Cir.1993).

Appellants' counsel did not file a motion to amend the complaint, nor did they submit an amended complaint to the district court. The district court's remarks during argument, expressing doubts about appellants' theory of an implied cause of action under the Shipping Acts, put appellants on notice of the need to amend the complaint if they wanted new theories to be considered by the district court.16 Yet, appellants' counsel did not advise the district court of their readiness to amend the complaint, even in the face of appellees' counsel's reference during argument to the fact that appellants had not amended either their administrative complaint or their district court complaint to state a claim under the Interstate Commerce Act. Under these circumstances, we conclude that neither appellants' opposition to the motion to dismiss, nor their counsel's reference to the assertion of new legal theories contingent on future administrative action, was sufficient to constitute a motion under Rule 15(a) to amend the complaint. See Glenn v. First Nat'l Bank in Grand Junction, 868 F.2d 368, 370 (10th Cir.1989); cf. Kowal v. MCI Communications Corp., 16 F.3d 1271, 1280 (D.C.Cir.1994) (citing FED.R.CIV.P. 7(b) and quoting Confederate Memorial Ass'n, Inc. v. Hines, supra, 995 F.2d at 299).

Appellants also did not seek leave to amend their complaint after the district court granted appellees' motion to dismiss; instead appellants filed a notice of appeal. See Confederate Memorial Ass'n, Inc. v. Hines, supra, 995 F.2d at 299; see also Glenn v. First Nat'l Bank in Grand Junction, supra, 868 F.2d at 371; National Petrochemical Co. of Iran v. M/T Stolt Sheaf, 930 F.2d 240, 245 (2d Cir.1991). Appellants offer no explanation for not seeking leave to amend. See Twohy v. First Nat'l Bank of Chicago, 758 F.2d 1185, 1196 (7th Cir.1985); cf. Bank of Waunakee v. Rochester Cheese Sales, Inc., supra, 906 F.2d at 1192. However, their failure to seek leave to amend is consistent with their counsel's representations to the district court that appellants' interest in amending the complaint was tied to future administrative action.

Appellants, further, have not suggested why an exception to the general rules favoring the finality of judgments and the expeditious resolution of litigation should be made in their case.17 While our approach need not be inflexible,18 appellants offer no reason for not following the normal course for amending a complaint, and we are confronted with a record showing that their interest in amending the complaint rested on a future contingency that has yet to occur. Accordingly, we hold that appellants have waived the right to raise the amendment claim of error on appeal, see The Dartmouth Review v. Dartmouth College, supra note 18, 889 F.2d at 22-23; see also Kowal v. MCI Communications Corp., supra, 16 F.3d at 1280 (citing Confederate Memorial Ass'n, Inc. v. Hines, supra, 995 F.2d at 299), and they have failed to show that they are entitled to a remand by this court to permit them to seek leave to amend. See Royal Business Group, Inc. v. Realist, Inc., supra note 18, 933 F.2d at 1066; 3 MOORE, supra, at 15-109 to 15-110; 6 WRIGHT, supra note 17, at 698.

Affirmed.