09 April 2013

Matty Moroun's company sues U.S. leaders, Canada to stop competing span

Story originally appeared on Freep.

WASHINGTON -- The owner of the Ambassador Bridge has filed a lawsuit against a number of federal officials -- the U.S. secretaries of state, transportation and homeland security among them -- and the Canadian government as the company tries to block the building of a rival Detroit River bridge, and force approval for its own second span to Windsor.

The new complaint, now quietly winding its way through federal court in Washington, D.C., was filed in February but was dated Nov. 9, just three days after last year's referendum in which Michigan voters rejected a constitutional amendment that would have required a statewide and local vote before the state spent any money on a new international bridge or tunnel to Canada.

In the lawsuit, the Detroit International Bridge Co., the family business controlled by Manuel (Matty) Moroun that owns the 84-year-old Ambassador Bridge, claims a "perpetual and exclusive franchise right" to operate the crossing free of competition from another span. It says the proposed New International Trade Crossing would "destroy" the value of its franchise, and argues that the process by which the State Department would approve a deal between Michigan and Canada to build the rival bridge is unconstitutional.

"No one's ever argued it. It's never really come up," said Hamish Hume, a lawyer at Boies, Schiller & Flexner in Washington, which represents the bridge company. His argument: A 1972 act giving the State Department authority to approve international bridges is unconstitutional because Congress never spelled out, as Hume says it needed to, what principle to use in making its decisions.

A decision on the presidential permit needed to move forward on the NITC bridge could be announced at any time by Secretary of State John Kerry, but the bridge company already is seeking an injunction against such a permit. It will be weeks, however, before all the various agencies named in the complaint -- which was added to a lawsuit involving the Coast Guard filed three years ago -- respond to the court.

Most of those involved declined to talk at length about the lawsuit, though Gary Doer, Canada's ambassador to the U.S., said he is "confident of both the merits and the legality of the (NITC) bridge."

Ken Silfven, spokesman for Gov. Rick Snyder, said the complaint "is nothing that we didn't anticipate."

"We expected these delay tactics based on their track record," he said. "After all is said and done, though, the bridge will be built."

The bridge company is looking for a judgment that its franchise rights are "exclusive of all contiguous and injurious competition in the form of any other bridge between Detroit and Windsor" and to stop other agencies, including those coming under Transportation Secretary Ray LaHood and Homeland Security Secretary Janet Napolitano, from putting up obstacles or otherwise delaying approvals for a second Ambassador Bridge span.

As of last week, State Department personnel said officials were still working on the NITC application, noting some 15,000 comments had been received on it. The lawsuit, they said, had no bearing on the timing of a decision.

Government lawyers declined to talk about the complaint, but made clear in court filings their position that the process for issuing a presidential permit -- a responsibility granted to the executive branch by Congress in 1972 -- meets constitutional muster. In filings, they called the bridge company's arguments "futile."

Hume said if the State Department were to issue a permit to the NITC, the bridge company would look to a judge to block it under the points raised in the complaint.

"It's pretty obvious they (the bridge company) are throwing whatever they can at the wall and hope something sticks," said Andrew Finn, an expert on Canada and border policy at the Woodrow Wilson International Center for Scholars in Washington.

But Finn didn't completely reject what he called "the closer question" of a lawsuit against the State Department should it approve a presidential permit for the new rival bridge. Besides the constitutional question, the argument would be that while Congress gave the president authority to approve international crossings in 1972, the creation of the Ambassador Bridge predates that, with legislation passed by both Congress and the Canadian parliament in 1921.

The bridge company also has taken the position that those acts were tantamount to a treaty and created a franchise that can't be destroyed without superseding acts by both legislatures, despite the fact that dozens of presidential permits have been issued over the years.

"I think what they're saying is, we're special and this is the one place you can't do it," Finn said. He didn't find the argument convincing, but said it's always possible a judge could disagree.

Certainly, the case has settled into a more esoteric part of the law. Few experts could be found with experience in litigating such a question regarding an international crossing and Hume acknowledged there have been few bridge permits granted in cases like this for agreements between a state and a foreign power, which he argues are prohibited.

In the 1980s, the owner of a bridge in Presidio, Texas, failed in his attempt to get the Supreme Court to block a neighboring bridge from being built, though some of the claims raised were different than those here.

The Canadian government has offered to pay Michigan's $550-million share of the $2.1-billion overall cost of the NITC bridge, but the complaint said there is no economic justification for the new bridge.

The bridge company argues in the complaint that 75% of its truck traffic and 40% of its passenger traffic could be diverted to the new bridge, reflecting "a long-standing desire on the part of the Canadian government to eliminate private ownership of the Detroit-Windsor bridge crossing."

Also in February, state Rep. Fred Durhal, D-Detroit, filed a lawsuit in Ingham County against Snyder, claiming the governor can't enter into an agreement with Canada without legislative approval.

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