Trade Groups Sue CBP Over Jones Act Ruling Inaction

The Offshore Marine Service Association (OMSA) and the Shipbuilders Council of America (SCA) recently filed a lawsuit against CBP over the agency's treatment of vessels that transport and use oil and gas equipment under the Jones Act. The suit, filed Nov. 9 with the U.S. District Court for the District of Columbia, follows a CBP reversal on plans to revoke or modify several Jones Act rulings involving the transportation of pipeline material from a U.S. point to other points within U.S. waters or those on the U.S. Outer Continental Shelf that are coastwise points (see 1701200018). "CBP’s unlawful interpretations of the Jones Act have stifled investment by U.S. shipping companies and diverted business away from Jones Act qualified vessels, the shipyards that build them, and the mariners and other personnel responsible for their operation," the trade groups said.

The lawsuit is part of a lengthy history involving the agency and numerous rulings involving the Jones Act. CBP proposed to revoke and modify the rulings in January (see 1701200018), acknowledging "that it had created wholesale exceptions to the Jones Act that were not found in the statute," OMSA and SCA said. "Objections to CBP’s proposed action were lodged by those that stood to gain the most from maintaining the status quo, namely, the foreign owners and charterers of vessels who were benefiting from CBP’s unlawful opinions," the groups said. CBP changed course after the proposal elicited thousands of comments.

Despite CBP's efforts to make changes to the rulings and the "sustained acknowledgment that its letter rulings flout the Jones Act, those letter rulings continue to preclude enforcement of the Jones Act to the
detriment of the U.S. domestic maritime industry," the groups said. "CBP’s unlawful interpretations of the Jones Act have stifled investment by U.S. shipping companies and diverted business away from Jones Act qualified vessels, the shipyards that build them, and the mariners and other personnel responsible for their operation," the trade groups said. The court should "declare invalid several CBP letter ruling interpretations of the Jones Act that the agency has acknowledged violate the statute, but which the agency is unwilling to revoke or modify," the groups said.

The groups allege that CBP violated the Administrative Procedures Act by not revoking or modifying the rulings as proposed. That decision and two others were "arbitrary" and "capricious" in violation of the APA's legal standards, said the OMSA and SCA. "As a matter of policy, we do not comment on pending litigation," a CBP spokesman said. "However, lack of comment should not be construed as agreement or stipulation with any of the allegations."

Email ITTNews@warren-news.com for a copy of the lawsuit.