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Dia Nav. Co., Ltd. v. Pomeroy

filed: September 13, 1994.


On Appeal From the United States District Court For the District of New Jersey. (D.C. Civil Action No. 93-cv-01366).

Before: Hutchinson, Roth and Rosenn, Circuit Judges.

Author: Roth


ROTH, Circuit Judge :

In this case, we are asked to examine the Immigration and Naturalization Service's ("INS") policy of placing upon common carriers the burden of detaining stowaways who have applied for asylum in the United States. In brief, we conclude that the provisions of the Immigration and Naturalization Act ("INA") lack the requisite clarity which would justify the policy as it presently has been established. In light of the statutory ambiguity and of the characteristics of the INS policy, we believe that the policy constitutes a legislative rule which could only have been promulgated pursuant to the notice and comment provisions of the Administrative Procedure Act ("APA"). For this reason, we conclude that the District Court improperly dismissed the appellant's complaint under Fed.R.Civ.P. 12(b)(6). We further find that the district court improperly denied appellant's motion for summary judgment insofar as it sought a judgment declaring that the INS policy on detention of stowaways who have applied for asylum is invalid for failure to comply with the notice and comment procedures of the APA. We do find, however, that the district court properly dismissed appellant's other claims, including its claim for reimbursement of the expenses it incurred in detaining the stowaways involved in this case.*fn1 We will, therefore, reverse in part and affirm in part the order of the district court and we will remand this case to the district court to enter judgment in favor of appellant consistent with this opinion.


Appellant Dia Navigation Company, Ltd., ("Dia") is a Cyprus corporation which owns the M/V European Senator ("Senator"), an ocean carrier which transports commercial cargo between the United States and Europe. On February 13, 1993, four Romanian stowaways were found aboard the Senator while it was en route from Le Havre, France, to the Port of Newark, New Jersey. The stowaways were presented to and interviewed by an INS inspection officer upon arrival in Newark on February 21, 1992. None of the four Romanians had proper identification for entry into the United States. The INS officer verified that they were in fact stowaways, which meant that they were subject to deportation without an exclusion hearing. However, each of the stowaways requested political asylum.

Under existing INS policy, the carrier on which a stowaway arrives must pay the expenses of detaining him for as long as it takes the INS to process his asylum claim. Accordingly, the INS officer presented the ship's master with a Form I-259 "Notice to Detain, Deport, Remove or Present Aliens." The form provided that "pursuant to the provisions of the Immigration and Nationality Act, and the Regulations issued by the Attorney General thereunder," App. at 25, the aliens were to be detained on board the ship. A notation on the form read: "CARRIER IS RESPONSIBLE FOR THE DETENTION[,] TRANSPORTATION AND WELFARE OF THE ALIEN UNTIL OTHERWISE INSTRUCTED BY USINS." Id. The form was presumably accompanied by some indication by the officer that Dia could detain the stowaways off the ship pending the processing of their asylum claims.

Dia complied with INS's orders, housing the stowaways in two rooms at the Staten Island Holiday Inn and hiring armed guards to maintain one guard per stowaway around the clock.*fn2 During the detention, one of the detainees began a hunger strike and threatened to commit suicide. To prevent this, the guards placed him in a separate room and put him in leg irons. Faced with this situation, Dia requested that INS assume custody of this detainee; INS refused to do so.

Furthermore, because INS would not convene a hearing on the asylum claims until it had received completed asylum applications, Dia had to hire a Romanian interpreter to help with preparation of the forms and to assist at the asylum hearings. Ultimately two of the stowaways' asylum requests were granted; the other stowaways were flown back to Romania at Dia's expense.*fn3 In the end, the Romanians were detained for a total of 54 days. Dia claims to have incurred $127,580 in detention-related expenses.

At this point we pause to note that the processing of asylum applications often takes a considerable amount of time. Indeed, the proceedings in this case appear to have been relatively speedy. Dia cites a General Accounting Office report which indicates that in the period from 1986 to 1989 the average amount of time required to process an asylum application ranged from 5.8 months in San Francisco to 31.2 months in Chicago. General Accounting Office, Report to Congress: Immigration Management 49 (1991). Moreover, our attention has been directed to no set standards, in the form of regulations or otherwise, concerning the conditions under which such aliens are detained. Instead, INS apparently claims the discretion to order whatever measures and impose whatever conditions of detention it deems appropriate. In a hearing before the district court, counsel for INS claimed that INS could require carriers to detain stowaways for any period of time, without limitation. App. at 131-34, 136-38. In response to this assertion, the district court Judge inquired: "You can have [an INS officer] who has a bad day and says, I want two guards on this guy 24 hours a day, I want him put in the Plaza, I want him given gourmet meals, and you're telling me that the vessel owner can't say a thing about that, right?" Counsel for the INS simply responded, "Yes." App. at 165.

On March 30, 1993, Dia filed suit under 28 U.S.C. § 2201 seeking 1) a declaratory judgment that the INS policy requiring an ocean carrier to both detain stowaways who have applied for political asylum and be responsible for those stowaways' attendant detention costs and expenses was unlawful and void and 2) an injunction to prohibit the INS from enforcing or attempting to enforce the policy. Dia contended that the INS violated the INA, including the User Fee provisions, the APA, and the INS's own regulations. Dia further claimed a right under the APA and the Tucker Act to reimbursement of the expenses it had incurred in detaining the aliens as well as for its related expenses.

Defendants filed their answer to the complaint on May 14, 1993. On May 28, 1993, the government filed a motion to dismiss under Fed.R.Civ.P. 12(b)(6), and Dia filed a motion for summary judgment. On August 11, 1993, the district court granted the government's motion, construing it as a motion for summary judgment, and dismissed the complaint. This appeal followed.

Dia advances a number of arguments on appeal. It contends first that the INA by its terms requires the INS to bear the costs of detaining stowaways who apply for asylum and that this court need not defer to the INS's interpretation of the statute. Dia next asserts that the INS policy violates the INS's own regulations and that the INS's action in this case was arbitrary and capricious. Dia's final attack on the INS policy, and the one with which we agree, is that the policy should have been promulgated pursuant to notice and comment rulemaking. Dia also argues that the district court improperly dismissed its claims for monetary relief.


The district court had jurisdiction over this case pursuant to 5 U.S.C. § 702, 8 U.S.C. § 1329, and 28 U.S.C. § 1331. We have jurisdiction over Dia's timely appeal of the final decision of the district court pursuant to 28 U.S.C. § 1291. Our decision not to consider Dia's claim for injunctive relief, see supra note 1, does not render this appeal moot. We must consider the relevant statutory provisions and their interpretation by INS in addressing Dia's claims for monetary relief. See 13A Charles A. Wright et al., Federal Practice and Procedure § 3533.8 at 378 (1984). Moreover, to the extent that the claims for damages may not support the depth of our analysis, we believe that this case is among those "capable of repetition, yet evading review." In such cases a finding of mootness is avoided by a determination that the complaining party may reasonably expect to be subject to the challenged activity in the future and that the challenged activity is by its nature so short in duration that its validity could not be fully adjudicated prior to its cessation or termination. See Reich v. Local 30, Int'l Brotherhood of Teamsters, 6 F.3d 978, 984 (3d Cir. 1993). See also United States v. Simone, 14 F.3d 833, 836-37 (3d Cir. 1994); Clark v. Brewer, 776 F.2d 226, 229 (8th Cir. 1985); Finberg v. Sullivan, 634 F.2d 50, 55 (3d Cir. 1980) (in banc). Both factors are present here. The international nature of Dia's business makes it quite possible that it will be confronted with the problem of stowaways in the future. And the amount of time required to process asylum applications, while lengthy, is typically less than would be necessary to adjudicate the validity of the INS policy. Cf. ITT Rayonier v. United States, 651 F.2d 343, 346 (5th Cir. Unit B July 1981) ("We would be most reluctant to permit a federal agency to so arrange its timetables that the scope of its authority would continue to elude judicial scrutiny.").

Because this case concerns the district court's grant of summary judgment, we have plenary review. E.g., Erie Telecommunications, Inc. v. City of Erie, 853 F.2d 1084, 1093 (3d Cir. 1988).


Under the INA, all aliens arriving in the United States are subject to examination and inspection by an INS inspector whose duty it is to determine whether they are permitted to enter the country. See 8 U.S.C. §§ 1224-25; 8 C.F.R. § 235.3. If an alien does not appear to be someone clearly entitled to enter--that is, if the INS inspector suspects that the alien is an "excludable" alien--he is subject to an exclusion hearing to determine whether he is eligible to remain. "Excludable" aliens are defined in 8 U.S.C. § 1182(a). Stowaways are expressly included in the category of "excludable" aliens. 8 U.S.C. § 1182(a)(6)(D).

In addition to being excludable aliens, stowaways are generally viewed as a disfavored category. E.g., Yiu Sing Chun v. Sava, 708 F.2d 869, 875 n.21 (2d Cir. 1983). One consequence of this is that, in contrast to other excludable aliens, stowaways are automatically subject to deportation and have no right to a hearing to determine their status. The INA provides:

The provisions of section 1225 of this title for detention of aliens for examination before special inquiry officers and the right of appeal provided for in section 1226 of this title shall not apply to aliens who arrive as stowaways and no such alien shall be permitted to land in the United States, except temporarily for medical treatment, or pursuant to such regulations as the Attorney General may prescribe for the ultimate departure or removal or deportation of such alien from the United States.

8 U.S.C. § 1323(d). Under this provision stowaways who do not seek political asylum are subject to immediate deportation, and under 8 U.S.C. § 1227(a)(1) the carriers on whose vessel or plane they arrived are responsible for returning them to the place from whence they came, as well as for the costs of any detention for the period between the issuance of the deportation/exclusion order and the actual departure of the stowaways.

This case presents us with the question of whether and to what extent INS may place on carriers the additional burden of detaining and maintaining asylum-seeking stowaways during the period in which their asylum applications are pending. The statutory scheme by its express terms only contemplates placing on carriers the cost of detaining stowaways who are subject to immediate deportation. Asylum seekers cannot, however, be deported pending a decision on their asylum application; were it otherwise the asylum procedures adopted in the Refugee Act of 1980 would be rendered largely meaningless. See 8 U.S.C. §§ 1105a & 1253(h); Amanullah v. Nelson, 811 F.2d 1, 5 n.2 (1st Cir. 1987) ("Congress plainly anticipated that persons seeking asylum would be detained pending consideration of their applications."); Garcia v. Smith, 674 F.2d 838, 840 n.1 (11th Cir. 1982) (relying on congressional intent to extend applicability of § 1105a to stowaways). A fortiori an asylum-seeking stowaway is not subject to "immediate deportation" while the asylum application is under consideration. Yet the INS has taken the position that it has the authority to parole stowaways who have applied for asylum into the custody of carriers, 8 C.F.R. § 253.1(f)(3), and that carriers may be held liable for the costs of detention and related services during this period. See Legal Opinion of INS Acting General Counsel (January 11, 1991). Moreover, as noted above, INS apparently reserves the right to impose whatever conditions on detention it deems appropriate. Of these three rules, only the first, 8 C.F.R. § 253.1(f)(3), was adopted pursuant to the notice and comment provisions of the APA.

Prior to 1986, INS made carriers responsible for the detention of all excludable aliens, arriving on their planes or vessels, as well as for related costs. See 8 C.F.R. §§ 233.1, 235.3 (1986). In imposing this requirement, INS relied on the provisions of 8 U.S.C. § 1223. That section provided in part:

Whenever a temporary removal of aliens is made under this section, the vessels or aircraft or transportation lines which brought them, and the masters, commanding officers, owners, agents, and consignees of the vessel, aircraft, or transportation line upon which they arrived shall pay all expenses of such removal to a designated place for examination and inspection or other place of detention and all expenses arising during subsequent detention, pending a decision on the aliens' eligibility to enter the United States and until they are either allowed to land or returned to the care of the transportation line or to the vessel or aircraft which brought them.

8 U.S.C. § 1223 (repealed Oct. 18, 1986, 100 Stat. 1783-56).

Congress began to express concern about this state of affairs as early as 1985. In that year the House Appropriations Committee noted its apprehension

about the policy of the Immigration and Naturalization Service which requires scheduled passenger airlines to assume custody and financial responsibility for aliens who arrive by plane in the United States without proper documentation. The Committee understands that in the absence of Government detention facilities, air carriers must detain such aliens in custody and in all cases pay for their food and shelter. The Committee believes this policy raises significant questions about the equity and legal propriety of requiring private entities to assume the financial burdens of maintaining and, at times, exercising physical custody over excluded aliens for extended periods of time. ...

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