Plaintiff Reply to Defendants Memorandum to Dismiss Preliminary Injunction

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					                           UNITED STATES DISTRICT COURT
                           FOR THE DISTRICT OF COLUMBIA


_________________________________________
                                          )
FEDERAL MARITIME COMMISSION,              )
                   Plaintiff              )
vs.                                       ) Civil Action No. 1:08-cv-1895-RJL
                                          )
CITY OF LOS ANGELES, CALIFORNIA, et al. )
                        Defendants        )
_________________________________________ )


              PLAINTIFF’S REPLY TO DEFENDANTS’ OPPOSITION TO
                   MOTION TO DISMISS AND FOR VACATUR


       The Port Defendants have opposed Plaintiff Federal Maritime Commission’s motion to

dismiss this proceeding without prejudice and for vacatur of the Courts’ April 15, 2009 Order

and Memorandum Opinion denying Plaintiff’s motion for a preliminary injunction. The Ports

propose that the proceeding be dismissed with prejudice upon the assertion that any other

resolution would be inequitable and prejudicial to their interests. The Commission submits that

there is no basis for a dismissal with prejudice where, as here, the circumstances giving rise to

the commencement of this proceeding have changed dramatically through actions wholly

unattributable to actions by the Commission.

       As the Ports point out, pursuant to Rule 41(a)(2) of the Federal Rules of Civil Procedure,

the Court may order dismissal “on terms as the court considers proper.” Contrary to the Ports

contentions, however, they will suffer no inequitable or prejudicial effects from grant of the

requested motion to dismiss without prejudice.
MOTION TO DISMISS WITHOUT PREJUDICE

       Motions to dismiss under Rule 41(a)(2) are “generally granted in the federal courts unless

the defendant would suffer prejudice other than the prospect of a second lawsuit or some tactical

disadvantage.” Hisler v. Gallaudet University, 344 F.Supp.2d 29, 36 (D.D.C. 2004), citing,

Conafay v. Wyeth Labs, 793 F.2d 350, 353 (D.C.Cir.1986) and 9 Charles Alan Wright & Arthur

R. Miller, Federal Practice and Procedure § 2364 (2d ed.). Applying Rule 41(a)(2), a court must

consider whether the plaintiff seeks the motion for voluntary dismissal in good faith, whether the

dismissal would subject the defendant to legal prejudice based, for example, on: the defendant's

trial preparation efforts, excessive delay or lack of diligence by the plaintiff in prosecuting the

complaint, whether the plaintiff has provided insufficient explanation for the motion, and the

filing of motions for summary judgment by the defendant. In re Vitamins Antitrust Litigation,

198 F.R.D. 296, 304 (D.D.C.2000).

       No argument can be made that the Commission acted in bad faith in filing its motion to

dismiss, or lacked diligence in prosecuting its complaint before the Court.         Similarly, the

Commission has pursued its case with deliberate speed, having filed its motion for preliminary

injunction on November 16, 2008 (two weeks after the complaint was filed). The Commission’s

motion for preliminary injunction included the declarations (initial and reply declarations) of Dr.

Pearson setting out the basis of the Commission’s determination to commence this proceeding

and the declaration of Robert Blair setting out a chronology related to the Ports development of

their Clean Truck Program and their concession agreements, which declarations attached

voluminous relevant documents.

       Each Port then filed separate motions to dismiss on December 22, 2008, in lieu of

answers, and the Commission responded in opposition. The Commission filed an amended

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complaint on February 11, 2009. The Ports filed an additional round of motions to dismiss on

February 26, 2009 that did not vary significantly from those filed in December 2008. The Ports

each included in their February 26 motion paper an alternative motion for summary judgment,

challenging among other things the Commission’s jurisdiction over the Ports as relates to truck

drayage with respect to the Ports.

       In their response in opposition to the Commission’s motion to dismiss without prejudice,

the Ports insinuate that the Commission’s filing of an amended complaint after their first round

of motions to dismiss was a tactic to delay and subject them to undue effort and cost. The Ports

fail to point out that the Commission amended its complaint as of right as neither Port had (and

still have not) filed an answer. The Ports chose not to file an answer, just as they chose the

timing for filing their alternative motions for summary judgment. They should not now be heard

to complain.

       Responsive to contentions made by the Ports in their December 2008 motions to dismiss,

the Commission amended its complaint to incorporate the substance of the declarations of Dr.

Pearson and Mr. Blair (and documents attached to them) that were submitted with respect to the

preliminary injunction. While the Ports now complain about the amendment, the amended

complaint simply attached Commission testimony and materials, most of which the Ports

received some three months earlier, on November 16, 2008. Arguments that the amended

complaint required Herculean efforts to file second rounds of original argument in February

2009 are simply disingenuous, as the Ports could equally have addressed those declarations and

materials in their December 2008 motions to dismiss.

       The Ports assert that they have been subject to “profligate demands” and incurred

substantial time and expense in filing their original and second round motions to dismiss. Ports’

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Opposition, at 10. It should be noted that the Ports and the Commission jointly filed a motion on

February 2, 2009, to hold discovery in abeyance pending the Court’s decisions on the

Commission’s preliminary injunction motion and the Ports’ motions to dismiss. That joint

motion was granted by the court on February 3, 2009. This proceeding thus has not progressed

in an untoward or burdensome manner and remains still in the early stages of litigation.

       The mere fact that the defendant may have incurred substantial expense prior to dismissal

does not amount to legal prejudice. In re Vitamins Antitrust Litigation, 198 F.R.D. at 304.

Because the “pendency of [] dispositive motion[s] alone [are] not grounds for denying the

plaintiff's dismissal motion,” Gallaudet University, 344 F.Supp.2d at 39, grant of the

Commission’s motion for dismissal without prejudice will not work any inequity upon the Ports.

       The Commission filed its motion to dismiss at this time for the reasons fully set out in its

motion, and cannot be discounted by the Ports’ attempt to paint the motion as an effort to avoid

the effects of the Court’s denial of a preliminary injunction. The actions of the Ninth Circuit and

the U.S. District Court for the Central District of California enjoined the employee driver

mandate as violative of the constitutional law doctrine of preemption; which driver mandate is

the central element that the Commission sought to have enjoined in this proceeding. The Ports

hold out that they will win on the merits of the ATA complaint proceeding in California. Those

proceedings, however, yielded the 9th Circuit’s unequivocal reversal of the lower District Court

denial of a preliminary injunction motion filed by ATA, indicating that the Ports will not be able

to overcome the preemption doctrine in the merits phase before the District Court. Nonetheless,

the existence of the preliminary injunction now in place, alone, provides a sufficient basis for

dismissal without prejudice, as it blocks the key reason for the complaint initiating this



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proceeding.    The instant motion to dismiss thus is occasioned by events beyond the

Commission’s control.

       Moreover, the actions taken by the Port of Long Beach to eliminate all differences

between its Clean Truck Fee exemptions and those of the Port of Los Angeles means that, with

the sole exception of POLA’s truck purchase incentives, the impact of those differences in the

Ports’ Clean Truck Programs that are the subject of this proceeding have now been equalized. If

new, disparate exemptions were to be put in place in the future by one or the other port, the facts

surrounding such actions will be assessed on their own merit. At that time and under the fact set

then prevailing, the question of whether an exemption arose out of agreement conduct between

the Ports would have to be separately assessed.        As indicated, it appears unlikely to the

Commission that economic conditions at the Ports will give rise to an incentive to restore

exemptions that provide an advantage to its competition next door.

       The Ports also would have the Court believe that the President’s recent elevation of

incumbent Commissioner Joseph E. Brennan to be acting Chairman is the reason that the

Commission filed its motion to dismiss without prejudice. The Ports once again miss the mark

in so attempting to cast doubt on the merits of the Commission’s motion. The decision for filing

this motion to dismiss and for vacatur was a unanimous vote of all sitting Commissioners at that

time; moreover, that vote occurred before the President took action to designate Commissioner

Brennan as the Commission’s acting Chairman. Inasmuch as the votes of two Commissioners

who agreed to the commencement of this proceeding were required to authorize the filing of the

instant motion, the Ports have offered only base speculation to this court in seeking to discount

the stated justification for the Commission’s determination herein. In sum, the motion to dismiss



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was filed for the reasons stated in the motion and not because of a change of policy resulting

from a change in leadership at the Commission. 1


MOTION FOR VACATUR

        The Commission’s motion for vacatur is founded upon events and decisions in which the

Commission played no part, but which circumstances have negated the issues that led the

Commission to file its complaint. The Ports, however, assert that the preliminary injunction in

California is not moot because it could be dissolved if the Ports win on the merits

notwithstanding the strong ruling by the 9th Circuit that the employee driver mandate is

preempted as a constitutional law matter. Ports’ Opposition at p. 3. As might be expected, the

Ports take a very optimistic view of their chances of overcoming the constitutional infirmities of

their position in the ATA complaint proceeding. The Ports’ position appears to indicate that they

would have this proceeding stayed until the merits phase of the ATA proceeding is final, at

which time the preliminary injunction would be made permanent, or not. The Commission

submits that the status of the ATA proceeding is sufficiently clear to support its separate motion

for vacatur.

        The Court’s April 28, 2009 order and memorandum opinion should be vacated to reserve

questions related to future section 6(g) complaint proceedings to cases that proceed to a final

determination.      Otherwise, others will naturally tend to cite the April 28 memorandum as

precedent, though it remains primarily interlocutory in nature. The Commission learned last

week that this concern as to possible citation as precedent has already been realized. A joint

1
        Moreover, as the departure of Commissioner Harold Creel Jr. has left the Commission with only two
Commissioners, it will be appreciated that any future substantive decisions to be taken with respect to this
proceeding will require unanimity. If the Court were inclined to grant the motion with prejudice, the Commission
would have to determine whether such result requires that the proceeding be continued. See, Elbaor v. Tripath
Imaging, Inc., 279 F3d 314, 320 (5th Cir. 2002) (where plaintiff requests dismissal without prejudice, the court may
not dismiss with prejudice without offering plaintiff the opportunity to withdraw its motion).
                                                         6
venture of small- and medium-sized licensed motor carriers filed, on June 3, 2009, an application

with the Surface Transportation Board an application to engage in “pooling of certain traffic,

services, equipment, and operations” that will enable member LMCs to meet the requirements of

the Clean Air Action Plan of the Ports of Los Angeles and Long Beach. See STB Docket No.

MC-F-21034, Clean Truck Coalition LLC, appended as Attachment A, at p. 1-3.

        The Clean Truck Coalition quotes certain conclusions made by this Court in its April 28,

2009 Memorandum Opinion as if the matters before the Court had been finally decided, stating

that:

        The Court rejected [the Commission’s] position finding that access to the [Clean
        Truck] Program resulted in an “unconcentrated market”. . . Overall, the Court
        found that the Program did not “harm competition in the drayage market” as
        between LMC and non-LMC carriers and, moreover, as between the population of
        LMC drayage companies.

CTC Application, Id. at n. 7. Based upon the Court’s findings with respect to the

preliminary injunction, the CTC concludes that “the proposed pooling agreement will

have a negligible, if any, effect on the competitive alternatives” provided by non-

members. CTC Application, at p. 13.

        The CTC application demonstrates that the Court’s interlocutory order and memorandum

may be used, and misconstrued, without regard to the fact that this proceeding will not have

proceeded to the merits. Vacatur of the Courts’ memorandum opinion is not against the public

interest, contrary to the Ports’ assertions (Ports’ Opposition, at p. 8). Although rendered for the

first time in a section 6(g) proceeding, the Court’s ruling denying the motion for preliminary

injunction found the judicial foundation for injunction to be unexceptional, opining that the

preliminary injunction sought by the Commission required application of the traditional

equitable standards for injunctions under Winter v. Natural Res. Defense Council, Inc., -- U.S. --,

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129 S. Ct. 365, 374 (2008) and Washington Metro. Area Transit Comm’n v. Holiday Tours, Inc.,

559 F.2d 841, 843 (D.C. Cir. 1977).      April 28 Memorandum Opinion, at 10-15. The Court’s

April 28 Memorandum thus applies injunctive standards that are well documented by prior

decisions of the Supreme Court and the Circuit Courts of Appeal. Vacatur would ensure that

resolution of questions related to section 6(g) complaint proceedings ultimately would be

reserved to cases that proceed to a final determination.

       For the foregoing reasons, Plaintiff requests that its motion for dismissal without

prejudice and for vacatur of the Court’s April 28, 2009 Order and Memorandum Opinion be

granted.



                                                     Respectfully submitted,

                                                     Benjamin K. Trogdon /s/

                                                     Peter J. King, General Counsel
                                                     Benjamin K. Trogdon (D.C. Bar #362679)
                                                     Office of the General Counsel
                                                     Federal Maritime Commission
                                                     800 North Capitol Street, NW
                                                     Washington, D.C. 20573
                                                     Tel: (202) 523-5740
                                                     PKing@fmc.gov
July 13, 2009                                        BTrogdon@fmc.gov




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