Category: Maritime Updates

Perspectives

Welcome to the March 2019 edition of Perspectives, Blank Rome’s diversity and inclusion newsletter that keeps you informed on our latest diversity news and provides insight on current diversity issues in the legal industry and beyond.

Featured in this edition:

    • Insightful and in-depth conversation with Judge James T. Giles
    • Update on participation in Mansfield Rule 2.0
    • Initiatives aimed at advancing women in law and promoting LGBTQ+ equality
    • Highlights from heritage history months celebrations
    • Overview of recent diversity and inclusion headlines, accolades, and events

To learn more about Blank Rome’s diversity and inclusion initiatives, please visit blankrome.com/diversity-inclusion.

Download Perspectives here.

Recent Maritime Elevations, Appointments, and Additions

New Maritime Elevations and Appointments

Lauren B. Wilgus Elevated to Blank Rome Of Counsel

Blank Rome is pleased to announce that Lauren B. Wilgus was elevated from associate to of counsel in the Firm’s Maritime and International Trade practice group, effective January 1, 2019. Lauren has more than 17 years of experience in the shipping industry and concentrates her practice in the areas of international and maritime litigation and alternate dispute resolution. She is also a member of the Firm’s Maritime Emergency Response Team, and has been an active member in numerous maritime industry organizations throughout her career.

To learn more, please read Blank Rome Announces 2019 Promotions: 14 Partners, 4 Of Counsel.

Richard V. Singleton Appointed Co-Chair of IBA’s Maritime and Transport Law Committee

Blank Rome Partner Richard V. Singleton has been appointed to serve a two-year term as co-chair of the International Bar Association’s (“IBA”) Maritime and Transport Law Committee, one of the oldest and most established committees of the IBA.

To learn more on Richard’s appointment, please click here.

Joan M. Bondareff Reappointed to Virginia Offshore Wind Development Authority

Blank Rome Of Counsel Joan M. Bondareff has been reappointed to a new four-year term on the Virginia Offshore Wind Development Authority where she has served as chair since November 2016.

To learn more, please read Virginia Offshore Wind Development Authority Elects New Officers (press release, January 4, 2019).

New Energy Attorneys Bolster Maritime Practice

Blank Rome Welcomes Experienced Energy Group to Firm’s Washington, D.C., Office

Blank Rome welcomed Partners Mark R. Haskell and Brett A. Snyder and Of Counsel George D. Billinson to the Firm’s Energy group in the Washington, D.C., office, on January 16. Together, they bring notable experience advising clients on a wide breadth of energy industry-related matters involving regulation, compliance, enforcement, transactions, and litigation.

In addition, their collective practice has significant maritime law synergies, with many of their projects involving the exports of liquified natural gas, natural gas liquids, and other commodities by ship. In joining Blank Rome and collaborating with the Firm’s leading maritime practice and attorneys, they are now able to offer their clients service from wellhead to shipping contract.

To learn more, please read Blank Rome Continues Ongoing Lateral Expansion with the Addition of Energy Group in Washington, D.C. (press release, January 16, 2019).

Surviving the VIDA Loca

Jeanne M. Grasso

On December 4, 2018, the Frank LoBiondo Coast Guard Authorization Act of 2018 (the “Act”) was signed into law. Title IX of the Act is the Vessel Incidental Discharge Act of 2018 (“VIDA”). VIDA establishes a new framework for the regulation of discharges incidental to the normal operation of vessels, adding a new Section 312(p) to the Clean Water Act, Uniform National Standards for Discharges Incidental to Normal Operation of Vessels. VIDA is the culmination of years of discussion and debate within Congress and the maritime industry to bring consistency and certainty to the regulation of discharges from U.S. and foreign-flag vessels. How and whether this consistency and certainty will occur will be seen in the next several years.

Background

VIDA was born primarily out of a lawsuit relating to the U.S. Environmental Protection Agency’s (“EPA”) exemption of vessels from the Clean Water Act’s National Pollutant Discharge Elimination System (“NPDES”) permitting program. By its terms, the NPDES permitting program, which regulates discharges of pollutants from point sources into the navigable waters of the United States (generally within three miles from shore), applies to discharges incidental to the normal operations of a vessel because a vessel is a point source when in navigable waters. Continue reading “Surviving the VIDA Loca”

MARPOL Compliance Alert: D.C. Court of Appeals Shuts the Door on APPS Relief

Gregory F. Linsin and Dana S. Merkel

Achieving sustained compliance with the requirements of Annex I of the International Convention for the Prevention of Pollution from Ships (“MARPOL”) has been a challenge for the commercial maritime industry. In far too many situations, the detection of noncompliant activity by the U.S. Coast Guard has resulted in criminal prosecutions with devastating consequences for the vessel operator, owner, and crew, and the risks for the maritime industry are only increasing as the deadlines for Annex V compliance loom. This article explains a proven system for commercial vessel owners to minimize or even eliminate these substantial enforcement risks.

APPS Violations and Angelex

The Act to Prevent Pollution from Ships (“APPS”), which implements MARPOL in the United States, authorizes the Coast Guard to detain any vessel if there is reasonable cause to believe the “ship, its owner, operator, or person in charge” may be liable for APPS violations. There have been many legal challenges over the years to the U.S. Coast Guard’s enforcement authority, including its jurisdiction over the vessels, bond amounts demanded, and non-monetary bond requirements, but all have failed. In December 2018, in the case of Angelex Ltd. v. United States, the D.C. Court of Appeals rejected the last untested avenue for potential relief for a vessel owner under APPS. Continue reading “MARPOL Compliance Alert: D.C. Court of Appeals Shuts the Door on APPS Relief”

Noteworthy Maritime Publications

Navigating Maritime Arbitration: The Experts Speak

Blank Rome Partner John D. Kimball co-authored Navigating Maritime Arbitration: The Experts Speak (February 2019, Juris Legal Information, Arbitration Law), which brings together a collection of essays concerning virtually all aspects of maritime arbitration in the United States, with a strong focus on New York due to the volume of arbitrations the state holds.

The book features chapters written by a wide range of experienced arbitrators and attorneys who are widely recognized as being among the leading experts in maritime arbitration. In addition to John’s chapter, “Arbitrators’ Dilemma: Stick Your Head in The Sand?,” Blank Rome Partner Thomas H. Belknap, Jr., authored chapter 11, “Enforcing and Challenging Arbitral Awards.”

To learn more, please visit arbitrationlaw.com/books/navigating-maritime-arbitration-experts-speak.

United States, Ports & Terminals 2019

Blank Rome Partner Matthew J. Thomas authored the “United States” chapter in Ports & Terminals 2019, a Getting the Deal Through publication by Law Business Research Ltd (2018).

To learn more, please visit blankrome.com/publications/united-states.

Court-to-Court Communication and Letters of Request in Cross-Border Litigation and Asset Tracing

Rick Antonoff and Evan Jason Zucker

An increasingly global economy and the ease with which money and other property is transferred across national borders has led to more cross-border litigation and a call for greater cooperation and communication between foreign courts. But the ability for courts to communicate across borders has its limits. Recently, in In re Zetta Jet USA, Inc.,1 a chapter 7 trustee asked a U.S. bankruptcy court to authorize sending a letter from the U.S. court to an Australian court, under 28 U.S.C. § 1781, asking the Australian court to continue an injunction against moving a vessel located in Australia pending the resolution of an avoidance action in the United States against the vessel’s purported owner. The U.S. court refused to issue such a letter after concluding that a letter from a U.S. court requesting the Australian court to continue an injunction would be an unwarranted interference by the U.S. court in the Australian proceeding, and would offend principles of international comity by suggesting how the Australian court should rule on the injunction as well as preempting the Australian court’s consideration of whether to vacate the injunction.2

Background

Zetta Jet USA, Inc. (“Zetta US”) and Zetta Jet PTE (“Zetta Singapore,” and together with Zetta US, collectively, the “Zetta Entities”) operated an international luxury travel business that fell into financial distress largely due to allegedly fraudulent activity of its principal, Geoffrey Owen Cassidy. On September 15, 2017, Zetta US and Zetta Singapore each filed a voluntary petition for relief under chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Central District of California (the “U.S. Bankruptcy Court”). The cases were subsequently converted to chapter 7 cases and Jonathan King (the “Trustee”) was appointed the chapter 7 trustee. Continue reading “Court-to-Court Communication and Letters of Request in Cross-Border Litigation and Asset Tracing”

Risk Management Tools for Maritime Companies

COMPLIANCE AUDIT PROGRAM

Blank Rome Maritime has developed a flexible, fixed-fee Compliance Audit Program to help maritime companies mitigate the escalating

risks in the maritime regulatory environment. The program provides concrete, practical guidance tailored to your operations to strengthen your regulatory compliance systems and minimize the risk of your company becoming an enforcement statistic. To learn how the Compliance Audit Program can help your company, please visit blankrome.com/complianceauditprogram.

MARITIME CYBERSECURITY REVIEW PROGRAM

Blank Rome provides a comprehensive solution for protecting your company’s property and reputation from the unprecedented cybersecurity challenges present in today’s global digital economy. Our multidisciplinary team of leading cybersecurity and data privacy professionals advises clients on the potential consequences of cybersecurity threats and how to implement comprehensive measures for mitigating cyber risks, prepare customized strategy and action plans, and provide ongoing support and maintenance to promote cybersecurity and cyber risk management awareness. Blank Rome’s maritime cyber risk management team has the capability to address cybersecurity issues associated with both land-based systems and systems onboard ships, including the implementation of the Guidelines on Cyber Security Onboard Ships and the IMO Guidelines on Maritime Cyber Risk Management in Safety Management Systems. To learn how Blank Rome’s Maritime Cyber Risk Management Program can help your company, please visit blankrome.com/cybersecurity or contact Kate B. Belmont (kbelmont@blankrome.com, 212.885.5075).

TRADE SANCTIONS AND EXPORT COMPLIANCE REVIEW PROGRAM

Blank Rome’s Trade Sanctions and Export Compliance Review Program ensures that companies in the maritime, transportation, offshore, and commodities fields do not fall afoul of U.S. trade law requirements. U.S. requirements for trading with Iran, Cuba, Russia, Syria, and other hotspots change rapidly, and U.S. limits on banking and financial services, and restrictions on exports of U.S. goods, software, and technology, impact our shipping and energy clients daily. Our team will review and update our clients’ internal policies and procedures for complying with these rules on a fixed-fee basis. When needed, our trade team brings extensive experience in compliance audits and planning, investigations and enforcement matters, and government relations, tailored to provide practical and businesslike solutions for shipping, trading, and energy clients worldwide. To learn how the Trade Sanctions and Export Compliance Review Program can help your company, please visit blankrome.com/services/cross-border-international/international-trade or contact Matthew J. Thomas (mthomas@blankrome.com, 202.772.5971).

The Supreme Court Adopts a Middle of the Road Approach When Deciding a Manufacturer’s Duty to Warn in the Context of Maritime Tort Asbestosis Cases

John D. Kimball and Noe S. Hamra

 

On March 19, 2019, the U.S. Supreme Court in Air & Liquid Systems Corp. v. Devries held that, under maritime law, a product manufacturer has a duty to warn of asbestos or other hazardous parts when its own product, although not containing such hazardous parts, requires its later incorporation, and the manufacturer knows or has reason to know that the integrated part is likely to be dangerous for its intended use. The Supreme Court’s decision settles a longstanding conflict between federal and state courts regarding the applicable rule in maritime tort cases. Manufacturers of such products must take this ruling into account when evaluating product warnings.

Background

For years, federal and state courts have struggled to find consensus on the applicable rule regarding a manufacturer’s duty to warn of the danger of its products when those products later had dangerous parts added to them. Prior to Devries, courts generally applied one of three approaches.

The first approach, viewed as plaintiff-friendly, relied on mere foreseeability. Under this approach, if it was foreseeable that the manufacturer’s product would be used with another product or part, even if the manufacturer’s product did not require use or incorporation of that other product or part, then the manufacturer could face liability for failure to warn.

The second approach, viewed as defendant-friendly, relieves manufacturers of any liability if they do not make, sell, or distribute the dangerous part or incorporate the dangerous part into the product, even if the product requires incorporation of the part and the manufacturer knows that the integrated product is likely to be dangerous for its intended use (this is also known as the “bare-metal defense”).

Please click here for the full client alert. 

New Developments in MARPOL Annex VI Compliance and Implementation

Jeanne M. Grasso, Jonathan K. Waldron, and Dana S. Merkel

 

The International Maritime Organization (“IMO”), in preparing for the global 0.5 percent fuel oil sulfur limit, recently adopted an amendment to MARPOL Annex VI to support consistent implementation and enforcement of the new requirement. At the same time, the IMO rejected a proposal for an “experience building phase” during the first months of implementation. This put to rest any rumors of a delay in implementation. Meanwhile, the U.S. Coast Guard published procedures by which owners may seek authorization to operate engines that do not meet MARPOL Annex VI NOx Tier III requirements for qualified vessels.

New Developments

The IMO adopted an amendment to support consistent implementation of the forthcoming 0.5 percent limit on sulfur in ships fuel oil on October 26, 2018, during the recent session of its Marine Environment Protection Committee (“MEPC 73”). This amendment, effective on March 1, 2020, prohibits the carriage of non-compliant fuel oil for use on the vessel unless the vessel is outfitted with an exhaust gas cleaning system, often referred to as a scrubber. The amendment does not alter the January 1, 2020 implementation date for the 0.5 percent sulfur limit.

Also related to MARPOL Annex VI, the U.S. Coast Guard published an enforcement Work Instruction formally addressing how the U.S. Coast Guard will enforce the Annex VI nitrogen oxides (“NOx”) Tier III standards within the North American and U.S. Caribbean Sea Emission Control Areas (“ECAs”). See Exercise of Enforcement Discretion with Regard to MARPOL Annex VI Regulation 13.5.1.2; CVC-WI-014(1) (October 17, 2018). Because engines meeting the NOx Tier III standards were largely unavailable after the Tier III standards took effect in 2016, the U.S. Coast Guard is allowing impacted vessels to instead be certified as meeting U.S. Environmental Protection Agency (“EPA”) Clean Air Act Tier 3 requirements pursuant to 40 C.F.R. Part 1042. Once individually recognized by the U.S. Coast Guard, such engines may be used indefinitely, even after NOx Tier III compliant engines become available.

Please click here for the full client alert. 

EPA’s 2013 Vessel General Permit to Be Continued into 2019

Jeanne M. Grasso, Jonathan K. Waldron, and Emma C. Jones

 

The U.S. Environmental Protection Agency (“EPA”) recently published an update on its website notifying the industry that it would administratively continue the 2013 Vessel General Permit (“VGP”) until a new permit is issued sometime in 2019.

New Development

EPA’s 2013 VGP, which regulates incidental discharges from vessels, is set to expire on December 18, 2018. On October 10, 2018, EPA issued a statement on its website that the current 2013 VGP will not be reissued prior to the expiration date, but will be administratively continued and remain in effect until the new VGP is issued. EPA identifies its target timeframe for publishing a draft VGP, for public comment, as spring 2019. This will likely include a comment period of at least 30 days. This will be followed by a few months of EPA review before a new final VGP is published, likely during the summer. The link to the website can be found at epa.gov/npdes/vessels-vgp.

Practically, this means that vessels currently covered under the 2013 VGP will automatically be covered by the administrative continuance without further action, and new vessels with keels laid prior to December 18, 2018, must file a Notice of Intent (“NOI”) prior to December 18, 2018, to be covered by the 2013 VGP, otherwise they will not be covered until the 2018 VGP is finalized. If new vessels do not file an NOI before December 18, 2018, they will not be able to discharge in the United States, which basically prohibits them from operating in the United States.

Please click here for the full client alert.