Note from the Editor

William R. Bennett III, Editor

My commute into New York City is by fast ferry, which allows me the pleasure of watching all sorts of vessels arrive and depart New York Harbor: cruise ships, container vessels, tankers, bulkers, tugs, research vessels, and, of course, the occasional yacht. Watching a large cruise ship or container vessel passing underneath the Verrazano-Narrows Bridge is a spectacular sight. And, of course, seeing any type of vessel pass near the Statute of Liberty is nostalgic. A picture is a must; one cannot have too many of those types of photos, in my opinion. My fellow passengers give me a sideways glance every time I get up to head out on deck to take a photo of a vessel passing by us. I take pictures because I love the maritime industry, but I was recently reminded how difficult life is working at sea.

This past Labor Day weekend, while enjoying time at the beach, a friend asked whether the crew aboard a tanker that had been anchored off Sandy Hook, NJ, for a few days were able to get off to visit New York City. I replied, “Generally, no.” The group I was with were shocked. After explaining why crew were not permitted off the vessel, I then explained that the average unlicensed crew member’s tour can be from 4 to 10 months long, with no weekends or holidays; possibly no choice of who to room with; no choice of what to eat for breakfast, lunch or dinner; often unable to speak with a loved one at home for several days or weeks. Add to that the potential for inhospitable weather while at sea. We all agreed that put into perspective the debate about whether one should be in the office two or three days a week.

In closing, please consider supporting an organization that cares for seaman and their mental health.

Finally—A Path Forward for Implementation of the Vessel Incidental Discharge Act

Jeanne M. Grasso and Dana S. Merkel

Background

In December 2018, the Vessel Incidental Discharge Act (“VIDA”) was signed into law and intended to replace the Environmental Protection Agency’s (“EPA”) 2013 Vessel General Permit (which has been in place for nearly ten years) to bring uniformity, consistency, and certainty to the regulation of incidental discharges from U.S. and foreign-flag vessels. VIDA amended the Clean Water Act and will substantially alter how EPA and the United States Coast Guard (“USCG”) regulate vessel discharges. VIDA required EPA to finalize uniform performance standards for each type of incidental discharge by December 2020, a deadline that the EPA has missed by nearly three years, and requires the USCG to implement EPA’s final standards within two years thereafter.

In October 2020, EPA published a proposed rule titled Vessel Incidental Discharge National Standards of Performance to implement VIDA, but the proposal languished with the change from the Trump Administration to the Biden Administration. In January 2023, more than two years later, EPA announced its plans to issue a Supplemental Notice of Proposed Rulemaking in the Fall of 2023. EPA indicated that the Supplemental Notice was intended to clarify its proposed rule, share ballast water data compiled by the USCG, and propose additional regulatory options.

Continue reading “Finally—A Path Forward for Implementation of the Vessel Incidental Discharge Act”

Recent Developments Affecting U.S. Maritime Arbitration

Thomas H. Belknap, Jr.

This article highlights some recent legal developments relevant to maritime arbitration although, as will be seen below, not all of the developments specifically involve maritime cases. This fact serves as a good reminder that maritime arbitration in the United States is but a subset of a broad and well-developed body of law relating generally to international and commercial arbitration.

Recent Supreme Court Jurisprudence

Although the United States Supreme Court has not recently decided a case specifically addressing maritime arbitration, it has been active in the past few years in deciding cases that are directly relevant to arbitrating maritime claims. For instance, in Coinbase, Inc. v. Bielski, 143 S. Ct. 1915 (2023), the Supreme Court held that a district court must stay its proceedings while an interlocutory appeal on the issue of arbitrability is pending. Notably, an interlocutory appeal on this issue is generally only available where the district court has denied a petition to compel arbitration, and not when such a motion has been granted.

ZF Automotive US, Inc., 142 S. Ct. 2078 (2022): The Court held that a party may not use 28 U.S.C. § 1782 to obtain discovery in aid of foreign arbitration because a foreign arbitral panel is not a “foreign tribunal” within the meaning of the statute. This resolved a circuit split in which some circuits had found that such discovery was available, and others found not. Notably, discovery in aid of foreign proceedings is still often available in support of foreign court proceedings and can be a powerful discovery tool.

Badgerow v. Walters, 142 S. Ct. 1310 (2022): The Supreme Court held that in applications to compel arbitration under § 4 of the Federal Arbitration Act (“FAA”), a federal court must “look through” the complaint to the subject matter of the action to decide whether it has subject matter jurisdiction. Thus, for instance, if the dispute involves a maritime contract, that fact will give the federal court subject matter jurisdiction to decide the petition. On the other hand, where a party seeks to challenge or confirm an arbitration award under § 9 or 10 of the FAA, the court may not consider the subject matter of the underlying dispute but may only analyze whether subject matter jurisdiction exists over the enforcement action—i.e., of a contractually agreed arbitral award. As a result, absent diversity jurisdiction, federal courts will rarely have subject matter jurisdiction to enforce arbitral awards under the FAA, even where the underlying dispute arose under a maritime contract. That said, where the dispute concerns an award governed by the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (aka the New York Convention), federal subject matter jurisdiction will still exist on the basis that the Convention is a “treaty obligation” of the United States.

Morgan v. Sundance, Inc., 142 S. Ct. 1708 (2022): The Court held that a district court need not find “prejudice” as a condition to finding that a party has waived its right to stay litigation or compel arbitration under the Federal Arbitration Act; waiver of an arbitration clause should be construed just as any other contract provision.This is in keeping with the general principle that while arbitration is to be favored, contract terms relating to arbitration should not be given special treatment or be construed differently from other contractual terms.

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Navigating the Complex Waters of Cross-Border Maritime Mergers & Acquisitions

Nathan S. Brill

Significant assets, intricate ownership structures, multinational operations, overlapping regulatory schemes, disparate time zones, and differing transaction customs are just a few of the macro challenges that make mergers and acquisitions in ocean shipping and related industries some of the most intricate and exciting transactions in the global economy.

Like any successful voyage, buyers, sellers, and financiers entering and exiting investments must plan ahead, account for the regulatory forecast, and plot a course to closing that achieves the desired business goals on a satisfactory timeline and budget. The following is an overview of some unique regulatory considerations and deal points that may be novel, particularly to those transaction participants based primarily outside of the United States and making their first investment with a United States nexus.

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Maritime Transportation: Whose Responsibility Is It When Produce Arrives in Damaged Condition?

Keith B. Letourneau

What do avocados, bananas and citrus fruit all have in common in Texas? A large percentage reach our shores by ship. But you know how bananas and avocados ripen on the kitchen counter. How are they kept fresh from grove to store, and whose responsibility is it when the produce arrives in damaged condition, or the buyer fails to pay for these commodities?

Container ships with dedicated refrigerated containers (reefer ships) regularly transport perishable fruit from Central and South America to U.S. ports on the Gulf, East and West Coasts. The U.S. Carriage of Goods by Sea Act (“COGSA”) governs the transportation of cargo by ocean common carriage between the United States and foreign ports. Common carriage means that the ocean carrier makes its cargo space available to the public, as opposed to private carriage, which dedicates its cargo space to one or a select few shippers.

COGSA creates a burden-shifting scheme to assess liability when cargo arrives in damaged condition. The shipper (that is, the party whose cargo is transported) can present a prima facie case of liability by proving that it delivered the cargo in sound condition at the load port, the cargo arrived in damaged condition at the discharge port and the shipper suffered monetary damage as a result. The burden then shifts to the carrier to prove that it exercised due diligence and one of COGSA’s 17 exceptions to liability apply, for example: perils, dangers and accidents of the sea; inherent vice of the cargo; latent defects of the cargo not discoverable by due diligence; or an act, neglect of the master, mariner or servants of the carrier in the navigation or management of the vessel. If the carrier satisfies that hurdle, the shipper must then prove that the carrier’s negligence caused the damage. Note that carriers generally disclaim any liability for damage to cargo carried above deck (because of exposure to the elements) and so shippers should be aware as to whether the bill of lading includes any such disclaimer and where their cargoes will be stowed aboard the vessel.

Continue reading “Maritime Transportation: Whose Responsibility Is It When Produce Arrives in Damaged Condition?”

Can Foreign Corporate Defendants Be “Found” by Registering and Appointing an Agent Post Mallory?

Lauren B. Wilgus and Noe S. Hamra

Post Mallory v. Norfolk Southern Railway Co., are foreign corporate defendants “found within the district” for purposes of Rule B by registering to do business in New York and appointing an agent for service of process?

Introduction

For years, federal courts in the Second Circuit consistently held that registration with the New York Department of State to conduct business in New York, and designation of an agent within the district upon whom process may be served, constituted being “found within the district” for purposes of Rule B of the Supplemental Rules for Admiralty or Maritime Claims and Asset Forfeiture Actions of the Federal Rules of Civil Procedure (the “Admiralty Rules”). This precedent was clearly established in STX Panocean (UK) Co. v. Glory Wealth Shipping Pte Ltd., 560 F.3d 127, 133 (2d Cir. 2009), where the Second Circuit unequivocally held that “a company registered with the Department of State is ‘found’ [within the district] for purposes of Rule B….”

However, subsequent developments in the law of personal jurisdiction combined with the absence of clear legislative statements in the New York registration statutes[1] have cast doubt on the continuing viability of STX Panocean’s holding, and the extent to which a court can exercise general jurisdiction over foreign corporate defendants, especially under New York law.

Continue reading “Can Foreign Corporate Defendants Be “Found” by Registering and Appointing an Agent Post Mallory?”

Evolution of Offshore Wind and the Coastwise Laws

Jonathan K. Waldron, Dana S. Merkel, and Vanessa C. DiDomenico


Over the past year, a number of new interpretations related to the application of the coastwise laws to the developing offshore wind industry in the United States have clarified how construction and operation of offshore wind farms will proceed. The U.S. coastwise laws, which impose restrictions on the transportation of merchandise and passengers, as well as towing and dredging operations, are interpreted and enforced by U.S. Customs and Border Protection (“CBP”).

There was much uncertainty in the offshore wind industry for many years with respect to how the coastwise laws should apply to offshore wind farm construction and operation. Following the 2021 National Defense Authorization Act, which clarified that the coastwise laws apply to offshore wind on the U.S. outer continental shelf (“OCS”) as they do for oil and gas, CBP began issuing rulings applying the laws to the offshore wind industry—and industry is requesting more and more CBP rulings to clarify how the contemplated offshore wind work can be performed in compliance with the law. Although some issues are still pending, this article provides an update on some of the most recent and noteworthy interpretations.

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Blank Rome Named “Law Firm of the Year” in Admiralty & Maritime Law in U.S. News – Best Lawyers® 2023 “Best Law Firms”

Our firm was named “Law Firm of the Year” in Admiralty & Maritime Law in the 2023 “Best Law Firms” survey by U.S. News & World Report – Best Lawyers®. Only one law firm per legal practice area received the “Best Law Firm” recognition.

Our Maritime practice group was also ranked Tier 1 nationally and ranked Tier 1 regionally in Houston, New York City, and Washington, D.C., in Admiralty & Maritime Law.

To view Blank Rome’s full rankings, please click here.

Perspectives: Intentional about Inclusion (2022–2023)

Welcome to the 2022–2023 edition of Perspectives, Blank Rome’s diversity, equity, and inclusion (“DEI”) magazine.

In this edition, you will find:

  • Interviews with our Diversity & Inclusion Committee co-chairs and new laterals;
  • A profile of our Chief Operating Officer Shonette Gaston;
  • Recaps of our inaugural DEI Summit and our sixth annual Women’s Leadership Summit;
  • Updates on our recruitment, mentorship and sponsorship, and client partnership programs;
  • Accolades and events from the past year; and more!

We would be delighted to hear from you. If you have any comments or suggestions, or if you would like to partner with our firm on future DEI initiatives and programs, please contact Director of Diversity & Inclusion Krystal Studavent Ramsey.

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Read Perspectives

To read the 2022–2023 edition of Blank Rome’s Perspectives, please click here.


© 2023 Blank Rome LLP. All rights reserved. Please contact Blank Rome for permission to reprint. Notice: The purpose of this update is to identify select developments that may be of interest to readers. The information contained herein is abridged and summarized from various sources, the accuracy and completeness of which cannot be assured. This update should not be construed as legal advice or opinion, and is not a substitute for the advice of counsel.

The BR Privacy & Security Download: October 2023

October 2023

Welcome to this month’s issue of The BR Privacy & Security Download, the digital newsletter of Blank Rome’s Privacy, Security & Data Protection practice. We invite you to share this resource with your colleagues and visit Blank Rome’s Privacy, Security & Data Protection webpage for more information about our team.

Read the newsletter here.

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