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Bay Ferries, Ltd. v. Board of Commissioners for Port of Portland

Superior Court of Maine, Cumberland

June 1, 2018

BAY FERRIES, LTD., Plaintiff


          Lance E. Walker, Justice

         Before the Court is Plaintiff Bay Ferries' Rule 80B appeal of Defendant Board of Commissioners for the Port of Portland's ("Board") November 28, 2017 approval of increased pilotage fees charged by Defendant Portland Pilots ("Pilots"), Oral argument was heard on this matter on May 7, 2017. For the following reasons, Plaintiffs appeal is granted.

         I. Background

         Bay Ferries operates a roundtrip ferry service between Yarmouth, Nova Scotia and Portland, Maine aboard a vessel named HSV Alalcai, commonly referred to as "The CAT." The CAT operates seasonally five days a week. State law requires The CAT to take a licensed pilot each time it enters and departs from Portland Harbor. P. & S.L. 1981, ch. 98, § 5.2. Defendant Pilots are the only pilots operating in Portland Harbor. For its pilotage services, Bay Ferries must pay to Pilots a minimum pilotage fee, which is set by the Board. The Board is "a public body corporate and politic and is charged with responsibility for the regulation of navigation and commerce within Portland Harbor...." P. & S.L. 1981, ch. 98, § 2. Pilotage fees are the product of f the pilotage rate multiplied by the number of pilot units (a unit of measurement based on the size and dimensions of the vessel being piloted). In 2016, the the Board set the pilotage rate at $7.09 per pilot unit, with each vessel subject to compulsory pilotage under the Portland Harbor Law required to pay for a minimum of 100 pilot units each time it took a pilot. (R. Tab 57 at 5.)

         During the spring of 2017, at the request of the Pilots, the Board purported to raise the minimum pilotage fee from $709 to $1200. Bay Ferries appealed the Board's decision on procedural grounds, citing lack of notice and the Board's failure to follow proper ratemaking procedures. That appeal was consolidated with this proceeding, and decision on the validity of the spring 2017 rate increase is currently pending.

         Presumably in response to Bay Ferries' objections to the initial ratemaking procedures, the Board instituted another ratemaking proceeding in the fall of 2017. On September 25, the Board announced it would hold a public hearing on October 12 during which it "may vote to propose a change in the authorized pilotage fee...." (R. Tab 3 at 0001.) On October 12, the Board, maintaining it was acting on its own initiative, proposed to set a minimum pilotage fee of $1200. Over the course of the next month leading up to the Board's final vote, tire Board investigated pilotage rates at other New England ports. The Pilots provided to die Board evidence of the Pilots' operating expenses, but insisted that information about the Pilots' income was irrelevant to the proceedings, despite Bay Ferries' persistent assertion that evaluation of the Pilots' income was necessary to the determination of a just and reasonable rate. After taking evidence and hearing from Bay Ferries and Pilots on November 2 and November 16, the Board voted to set the new pilotage rate at $7.18 per pilot unit with a minimum of 150 pilot units, resulting in a minimum pilotage fee of $1077. The Board thereafter entered formal written findings and conclusions on November 28, 2017. Bay Ferries filed this appeal on December 20, 2017.

         II. Standard of Review

         The decision of a fact-finding and decision-making body in an 80B appeal is reviewed for errors of law, abuse of discretion, or findings not supported by substantial evidence. Aydelott v. City of Portland, 2010 ME 25, ¶ 10, 990 A.2d 1024. The party seeking to overturn the decision bears the burden of persuasion, Id. The court will "accord due consideration to the [agency's] interpretation and application of technical statutes and regulations and will overturn the [agency's] action only if the statute or regulation plainly compels a contrary result." Dyer v. Superintendent of Ins., 2013 ME 61, ¶ 11, 69 A.3d 416 (quoting Anthem Health Plans of Me., Inc. v. Superintendent of Ins., 2012 ME 21, ¶ 13, 40 A.3d 380). In reviewing factual findings, the court will "determine whether the [agency] made findings not supported by substantial evidence in the record [and] will examine the entire record to determine whether the agency could fairly and reasonably find the facts as it did, even if the record contains other inconsistent or contrary evidence." Id. (quotation marks and citations omitted).

         III. Discussion

         The Board's power to establish pilotage fees is derived from statute, which provides: "The commission may fix and establish by rule the compensation for the services of the pilots as may, from time to time, be deemed just and reasonable." P. & S.L. 1981, ch. 98, § 5.2. In opposing the new minimum fee, Bay Ferries' primary argument is that the Board could not have determined what constitutes a just and reasonable rate without reference to the Pilots' revenues, which the Pilots have refused to disclose. Bay Ferries expands on this argument by highlighting several fact findings made by the Board that expressly or impliedly find a decrease in revenues, a proposition which Bay Ferries argues has no support in tire record. These findings include:

• [T]he number of vessels entering Portland Harbor has decreased substantially over the last 18 years, resulting in a reduction in the demand for pilotage services and in revenues earned by pilots;
• The reduction in vessels has made it more difficult for pilots to sustain their business and to provide reliable and safe pilotage services;
• Portland Pilots foresees significant financial challenges for pilots continuing to provide services in Portland Harbor given the reduced traffic if rates are not increased to a level that is comparable to other ports.

(R. Tab 57 at 6.) The Court agrees that the record does not contain substantial evidence supporting a loss of revenue to the Pilots warranting a 50% rate increase, and further finds that evidence of declining maritime traffic in Portland Harbor over the last 18 years and of rates charged by other ...

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