Alaska District Court Permits Amicus Brief in Be Filed in Case Over Jones Act Penalties

The U.S. District Court for the District of Alaska permitted an amicus brief to be filed in a case brought by two shipping companies contesting hefty Jones Act penalties over their shipments of fish from Alaska to the East Coast of the U.S. The brief from logistics company Lineage Logistics Holdings was permitted despite opposition from the Department of Justice, which argued that the brief does not raise any new issues (Kloosterboer International Forwarding LLC v. United States, D. Alaska #3:21-00198).

The two companies that filed the lawsuit, Kloosterboer International Forwarding and Alaska Reef Management, face penalties in excess of $25 million. CBP said that the two companies' seafood shipments from Alaska to the eastern U.S. via the Bayside, New Brunswick, Canada port violate the Jones Act -- the law that says shipping between U.S. ports must be conducted by U.S.-flagged, -made and -owned ships. KIF and ARM used a Canadian-flagged ship.

The two companies argue, however, that their shipments qualify for an exception to the Jones Act, given to shipments that are transported in part using Canadian rail lines, among other conditions. KIF and ARM sought to qualify for the exception by putting the shipments on a train in Canada, sending them to a destination 100 feet away, then bringing the train right back. From there, shipments finished their journey to Maine (see 2109170048).

Lineage Logistics sought permission to file its amicus brief in December 2021 (see 2112270047). In the brief, the company argued that building a rail line in Canada to take advantage of this Jones Act exception is "ordinarily permissible" under the law. Lineage Logistics said that the Supreme Court said that liability cannot be imposed just because an individual or entity set up a transaction to avoid liability. Even if KIF and ARM set up a Canadian rail line to avoid Jones Act penalties, they cannot be then held liable under the Jones Act, the amicus brief said.

DOJ opposed the brief's addition to the case, arguing that it did not raise any new issues, but instead provides additional perspectives on arguments already advanced (see 2201050055). Lineage Logistics' brief just distracts from the real focus of the case, which is whether this Canadian railway could ever meet the requirements of this Jones Act exception, the U.S. said. In the end, Judge Sharon Gleason permitted the amicus to be filed in the case, stating that good cause had been shown to enter the brief.