July 12, 2007
Jones Act proponents sue Coast Guard
Long-simmering concerns about some recent Coast Guard Jones Act eligibility decisions have reached court.
A suit was filed earlier this week in the U.S. District Court for the Eastern District of Virginia against the U.S. Department of Homeland Security. the U.S. Coast Guard and the National Vessel Documentation.
The plaintiffs are the Shipbuilders Council of America, Crowley Maritime Corporation and Overseas Shipholding Group.
The filing says the case is "an action for review of the issuance of a certificate of documentation with a coastwise endorsement by the National Vessel Documentation Center ("NVDC"), a unit of the United States Coast Guard ("Coast Guard"), authorizing the Motor Tanker SEABULK TRADER ("MIT SEABULK TRADER) to engage in U.S. domestic trades even though it has had double sides added in a foreign shipyard to make it a doublehulled vessel. Since the beginning of this Nation, our domestic shipping trades (or "coastwise" trades) have been reserved to vessels built in the United States in order to provide a supply of suitable vessels and trained mariners to promote the commercial interests of the country, and to serve as a military auxiliary in time of war or national emergency. Consistent with this rule, a vessel that has obtained coastwise trading privileges and is later rebuilt must be rebuilt entirely in the United States in order to retain coastwise trading privileges."
The filing notes that OPA 90 phases out the use of single-hulled vessels to carry oil in U.S. waters and says that "some companies, including two of the plaintiffs in this action, are renewing their fleets in compliance with U.S. law by building or rebuilding double-hulled vessels in U.S. shipyards" and "are investing billions of dollars in construction orders for environmentally advanced vessels, ...that are helping to revitalize America's commercial shipbuilding industry."
The filing says "other companies, however, are skirting the law by constructing double hulls on existing vessels in foreign shipyards. They obtained preliminary determinations in confidential proceedings before the NVDC stating that such work would not disqualify the vessels from U.S. coastwise privileges. On May 9, 2007, NVDC issued a certificate of documentation with a coastwise endorsement to Seabulk Energy Transport Inc. covering the M/T SEABULK TRADER. The M/T SEABULK TRADER had just departed a shipyard in the People's Republic of China, where extensive work was done to its hull to convert (or retrofit) the vessel from a single-hulled to a double-hulled configuration. NVDC's issuance of the certificate of documentation with a coastwise endorsement permits the M/T SEABULK TRADER to operate in U.S. domestic trades.
The filing says that the Coast Guard's decision to issue the coastwise endorsement and thereby approve the rebuilt vessel for continued use in the coastwise trades causes substantial harm to companies that will be forced to compete with the M/T SEABULK TRADER while having incurred the much higher costs of complying with the law. It will have far reaching consequences to the entire U.S. flag fleet and the U.S. shipbuilding industry as it is applied in other cases. Because the decision is arbitrary, capricious, an abuse of discretion, contrary to law, and issued without observance of procedures required by law, Plaintiffs seek in this action an order declaring it to be invalid, vacating it, and enjoining the Coast Guard from acting in further reliance on it.
Tim Colton of Maritime Business Strategies has posted the entire filing on www.coltoncompany.com.