Federal Regulation of Pilots and Delegation to Private Pilot Associations
In the coastal states of the U.S., pilots are mostly, but not entirely, regulated by the states. But in the international waters of the St. Lawrence River and Great Lakes, federal law controls.
International shipping only reached the Great Lakes in 1959. That is when the U.S. and Canadian governments finished a system of locks that allowed larger ships engaged in international trade to journey up and down the St. Lawrence River and between the Great Lakes. Congress passed the Great Lakes Pilotage Act in 1960 to regulate how international shipping uses pilots, and the training and registration of the pilots themselves. 1
The Canadian government passed similar legislation, and the two countries jointly provide pilots to foreign vessels as they use the waters of the Great Lakes and St. Lawrence.
The pilots are highly regulated. The Coast Guard sets the rates that ships must pay for pilots to be on board, and even dictates how many pilots are licensed in various parts of the Great Lakes. 2
To provide for pilot training, Congress allowed for the creation of “voluntary associations” to provide for “pilotage pools.” 3
How pilots become trained and licensed (technically called “registration”) is spelled out in detailed regulations. 4
The act Congress passed, and the regulations the Coast Guard adopted, make these associations appear to be strictly monitored.
Yet, when it comes to actually implementing these regulations, the Coast Guard is out to sea. Instead, pilot associations for each district are left to operate as monopolies that have complete control over who can go to work. 5
To analogize to the practice of medicine, it would be as if there is, by law, only one medical office in town, everyone in town must use that office, and the partners in the practice can veto any doctor who wants to work with them. That would be profoundly unconstitutional. And the same is true of how the Coast Guard favors the St. Lawrence Seaway Pilots’ Association.
Matthew Hight, Experienced Sailor and Captain
Captain Hight was born and raised in Maine and now makes his home in Florida. While still a teenager, he took a voyage on a merchant ship and instantly fell in love with the sea. After graduating from Maine Maritime Academy, he served for years on the High Seas, eventually attaining a master credential and then captaining ships for eight years.
But years at sea take their toll on even the hardiest mariner. He returned stateside and spent a few years as a consultant before applying to work as a pilot in upstate New York. He has a large family and hopes to provide for them with a pilot’s salary once he vindicates his right to work.
The Association Concocts Reasons to Block Captain Hight
Captain Hight began training to work as a pilot in the summer of 2015. He immediately made approximately dozens of trips up and down the St. Lawrence Seaway and across Lake Ontario. By May 2016, the association recommended to the Coast Guard that he be given a “temporary registration,” which allowed him to man ships on Lake Ontario without another pilot present and earn a full pilot’s salary. He continued working this way through the rest of 2016 and all of 2017, making approximately 200 trips on the lake.
Under the system the association and Coast Guard have set up, the only way to become a pilot on the St. Lawrence and Lake Ontario is to train under the association and then “buy into” it as a member. 6
The association is a for-profit business, and a buy-in costs close to $200,000. One reason it costs so much is that the association owns an expensive lake house, inflating its assets. 7
Nevertheless, Captain Hight was ready to do this in order to pursue his calling, and the association was ready to accept him. It listed him on a “buy-in ballot” in January 2018, and was ready to have him join later that spring. All that was left was for him to take an exam administered by the Coast Guard, get his formal registration as a pilot, and then “buy in” and be accepted as a member of the association.
But then things started to go wrong. Captain Hight had been questioning some business practices of the association, especially regarding the powers of the association president. He stated his concern to some of his colleagues that the president did not provide the association’s members, including the treasurer, access to the association’s financial records. Captain Hight thought this practice was ethically questionable and financially irresponsible. Remember, Captain Hight was expected to contribute to the association’s finances in a significant way.
Suddenly everything changed. In early March 2018, the president of the association sent a letter to the Coast Guard advising it that it should not renew his temporary registration and that he should not be given a full license.
The negative recommendation was based on two minor incidents. One was that he swore like a sailor. On one occasion, Captain Hight was attempting to guide the ship requiring careful direction to the helmsman. At the same time, the commander of the ship was speaking loudly in the background. This made it difficult for Captain Hight to hear the crew’s replies to his helm commands and created a potentially dangerous situation for the ship, the crew, and anyone in the vicinity. Accordingly, Captain Hight raised his voice and asked for quiet, using a four-letter word. The commander complied and the bridge went silent. After the ship docked and the crew disembarked, the commander aggressively informed Captain Hight that he took offense to Captain Hight’s raising his voice. During the subsequent exchange, Captain Hight again used a couple expletives while explaining his need for quiet to safely navigate the ship.
The second involved an incident that Captain Hight was neither responsible for nor aware of. A tugboat was damaged by a channel buoy after it had assisted a vessel piloted by Captain Hight. At the time, the only indication Captain Hight had of the tugboat’s troubles was when, after Captain Hight’s vessel cleared the channel, he overheard the driver on the radio stating that he was having “trouble” and “experiencing propeller vibration.” Captain Hight did not know the tug had actually been damaged at the time and had no reason to believe this was a reportable incident.
After the association retaliated against him, Captain Hight appealed to the Coast Guard, but to no avail. His pleas were met with no action, and eventually he received an administrative denial. He appealed to the Coast Guard’s Commandant, and that too was denied. His only recourse is a lawsuit to protect his constitutional rights.
Captain Hight’s Legal Claims
What the Coast Guard did to Captain Hight is so unconstitutional, and unlawful under the Coast Guard’s own regulations, that his case makes a number of claims. First, the Coast Guard has unconstitutionally delegated governmental power to the association, a self-interested private monopoly. Second, the requirement that he join the association in order to go to work violates the First Amendment. Third, his treatment by the Coast Guard in his appeal violated his due process rights. Finally, the Coast Guard is violating its own rules, and federal laws, in denying him a license and a chance to go to work.
The Government Can’t Let Private, Self-Interested Parties Use the Powers of Government
First, when government acts, it is supposed to act in the public interest, not to favor one group over another. And to protect against the failure to act in the public interest, we have restraints on government such as the Constitution, procedural safeguards, democratic elections, and Congressional oversight.
What might happen if the government turned its responsibilities over to a private party who lacked those protections and had a self-interested agenda at odds with the public interest? It’s pretty obvious it wouldn’t be good. That is exactly what the Coast Guard has done with piloting on the Great Lakes.
The Coast Guard told Captain Hight he cannot get a license unless the association gives him a positive recommendation. Period. Captain Hight argued to the Coast Guard that the recommendation was negative because of unethical retaliation by the association’s president. No matter. Under the Coast Guard’s view of the law, whatever the reason, if the association does not recommend him he cannot get a license.
Not only is this absurd, it’s a clear example of the delegation of lawmaking power to a private party, something long understood to violate the Constitution. 8
Freedom to (Not) Associate
Given his experience during training, Captain Hight has no desire to join the association. But the Coast Guard takes the position that he must get its permission before he can get a license, and even if he passes the Coast Guard exam, he has to join the association in order to go to work. That is because the Coast Guard allows the association to control the list of pilots that can pilot ships—called the “tour de role.” The association removed Captain Hight from the tour de role after denying him a recommendation, and every indication is that it will not return him to the tour de role even after he gets his license.
This violates the First Amendment, which protects Americans from being forced to join a private association in order to pursue their calling. The Supreme Court has ruled that workers cannot be forced to join or pay money to a private association that speaks on their behalf without their consent. The same principle applies for Captain Hight. He shouldn’t have to join an association that lobbies the Coast Guard if he disagrees with their policies and considers them ethically suspect.
A bedrock rule of our constitutional order is that if the government takes something away from you, you have a right to certain procedures and an ability to know the facts it is using against you. That apparently doesn’t apply to pilots and the Coast Guard. In having his appeal denied, the Coast Guard said what Captain Hight contended didn’t match up with what the association told Coast Guard officials. But those officials didn’t give him a chance to examine those statements or cross-examine any witnesses. That’s a violation of the Fifth Amendment’s guarantee of due process of law.
The Coast Guard’s Own Regulations
On top of all these constitutional violations, the Coast Guard doesn’t even enforce its own regulations correctly. In fact, the director of the office that regulates pilots on the Great Lakes even admitted that how it issues the licenses Captain Hight was working under “doesn’t really align with the regulations.”
IJ and Captain Hight are now asking the federal courts to force the Coast Guard to simply enforce those regulations, and not defer to its stretched interpretation of them. The courts cannot side with the Coast Guard’s interpretation of its own rules just because it’s the government.
Impacts Beyond this Case
This case raises a number of issues that could reverberate outside of the pilots on the Great Lakes. For example, many occupations are tightly regulated, with mandates to join private associations, such as the lawyers in many states who have to join bar associations to hold their licenses. Also, other associations similar to the St. Lawrence Seaway Pilots’ Association are often given lawmaking authority. An example is the Financial Industry Regulatory Authority (FINRA), that governs many of the rules for brokers. Thus, Captain Hight’s fight against the delegation of governmental power to private interests could make some much-needed waves.
The Litigation Team
The case is being litigated by IJ Senior Attorney Anthony Sanders and IJ Constitutional Law Fellow Ben Rump.
The Institute for Justice
The Institute for Justice is the national law firm for liberty. Since 1991, IJ has litigated in the courts of law and in the court of public opinion to defend free speech, property rights, economic liberty, and parental choice in education. Many of these cases challenge schemes that protect entrenched interests and deprive Americans of their right to earn a living. For instance, IJ is representing would-be cosmetologists in Pennsylvania denied the right to work because of old criminal convictions, a family-owned liquor store stopped from getting its license by a Tennessee association, and online entrepreneurs forced out of South Carolina by politically connected optometrists.