Seattle Maritime Law Blog : Seattle Maritime Lawyers & Attorneys : Mikkelborg Broz Law Firm : Collision and Salvage, Fisheries, Jones Act : Seattle, Washington

By Lafcadio Darling

Recently, U.S. Senator John McCain introduced the "Open America’s Water Act" which will repeal the portion of the Jones Act requiring American coastwise trade to be performed by U.S. flagged vessels owned by Americans.  In the news release on the Senator's website, McCain argued that this U.S. flag requirement  is harmful to the U.S. economy and that repealing the Act will have a net economic benefit.  The Senator also stated that this rule is hampering foreign vessels from assisting with the cleanup of the BP DEEPWATER HORIZON oil leak.

Assuming that Senator McCain is correct about the overall economic benefits of repealing the U.S.-flag requirement, it is unclear whether opening American ports to foreign flagged vessels would be harmful to the U.S. maritime industry, which is already hurting from current economic conditions.  Moreover, opening U.S. ports and coastwise trade to more foreign vessels may cause new environmental, safety and security problems along American coasts, since those vessels would not have to follow the rigorous and consistent regulatory framework that applies to American vessels.

As to Senator McCain's stated concerns about prevention of foreign vessels from assisting with the BP Gulf oil leak, those concerns appears to be misplaced or exaggerated.  According to Maritime Executive Magazine, the Gulf National Incident Command reports that numerous foreign vessels are currently assisting with the Gulf cleanup and that there have been "no incidents" of foreign vessels being barred from assisting in the cleanup operation.  In fact, the massive Taiwanese skimming vessel A WHALE has, to much fanfare, arrived in the Gulf and  started skimming operations.

Since the U.S.-flag rule of the Jones Act may appear on its face to help U.S. business, Senator McCain's point about the Act actually hurting the economy is interesting and worthy of debate.  However, his suggested repeal of the Jones Act does not appear to be based on the right considerations and seems to lack an adequate factual basis.

A longer article on this bill can be found on our website.

The text of the proposed Open America's Waters Act can be found on the Senator's website.

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By Mark Fahrenkrug and Lafcadio Darling

On June 2, 2010, U.S. District Judge Martin Feldman ruled that the Federal government had acted in an arbitrary and capricious manner when deciding to impose a deep water drilling moratorium in the Gulf of Mexico, and concluding it therefore could not stand.  This ruling was the result of a legal challenge to the moratorium mounted by several parties who work in the oil extraction industry in the Gulf. 

In his ruling, Judge Feldman took particular note of disagreement by some members of the panel advising the “National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling,” as to the scientific support for the hazards posed by deep drilling.  Based on this finding, the Judge enjoined the moratorium; not surprisingly, the government plans an emergency appeal, which will no doubt ask the 5th Circuit Court of Appeals to enter an injunction until a full appeal can be entertained.

In a statement issued on the same day, U.S. Secretary of the Interior Ken Salazar defended the moratorium, vowing to issue a further moratorium order that addresses the District Court's concerns.

This case not only involves one of the largest environmental and economic disasters in United States history, but also implicates other issues such as separation of powers and the proper role of regulators of activity on public land after permits have been issued but in the face of changing circumstances.

Stay tuned, as this story is bound to quickly develop in interesting ways.

The text of the District Court's ruling can be found here.
 

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As was previously discussed on our firm website, Transocean--the owner of the oil rig DEEPWATER HORIZON--made waves by filing an action in U.S. federal court seeking to limit its liability for the catastrophic oil spill in the Gulf of Mexico to $26.7 million.

Recently, the U.S. Department of Justice decisively condemned this attempt to limit liability as "unconscionable."  Comparing Transocean to the owners of the infamous ocean liner RMS TITANIC, who also tried to use the Limitation of Liability Act, a letter from the Attorney General's office strongly criticized Transocean's move and sought confirmation from Transocean that it was not trying to limit its liability under the Oil Pollution Act of 1990.

Transocean responded quickly by "clarifying" that it never intended to limit its liability under the OPA through this filing and seemed to hastily retreat from the apparently broad sweep of its original limitation filing.

It seems that Transocean is trying to cover its bases legally, while avoiding too much heat from the authorities or from the general public.  Regardless of whether the limitation action succeeds, this will be a difficult tight-rope for Transocean to walk.

A longer discussion of these recent developments can be found on our website.

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