Earlier this year, Blank Rome was recognized in the 2024 Best Lawyers in America survey, which ranked 200 firm attorneys in the annual categories of “Lawyers of the Year,” “Ones to Watch,” and “Best Lawyers” in 50 practice groups across 12 regions.
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The BR Derivatives Report
Our new BR Derivatives Report blog, authored by Blank Rome’s seasoned Finance and Investment Management attorneys, sheds light on the ever-shifting regulatory landscape and developments affecting the negotiation of transactions in this dynamic sector of the financial markets. Our goal is to make the derivatives market accessible and understandable, and to provide valuable updates and observations that inform business and regulatory decisions. You can receive new content as it publishes by subscribing. Read More »
The BR Privacy & Security Download
We invite you to read our May 2024 edition of The BR Privacy & Security Download, the monthly digital newsletter of Blank Rome’s Privacy, Security & Data Protection practice, which covers current trends and updates in the areas of state, local, and federal laws and regulations, U.S. litigation and enforcement, and international laws and regulations, as well as the group’s recent events and webinars, media activity, and news. Read More »
The BR State + Local Tax Spotlight
Welcome to the April 2024 edition of The BR State + Local Tax Spotlight, our monthly newsletter from Blank Rome’s State + Local Tax team that highlights important State + Local Tax developments across numerous jurisdictions and provides updates on significant legislative developments and judicial decisions that could impact business operations. Read More »
SWERT is an interdisciplinary group of Blank Rome attorneys and government relations professionals with decades of experience helping companies and individuals recover from severe weather events, including hurricanes, wildfires, mudslides, snowstorms, earthquakes, and tornadoes. We are ready to assist those in the path of storms and other severe weather events.
Learn more at blankrome.com/SWERT.
Jeanne M. Grasso, Dana S. Merkel, and Holli B. Packer ●
The U.S. Coast Guard (“USCG”) published a Request for Information (“Request”) on June 7 in the Federal Register (89 Fed. Reg. 48515) seeking information on the monitoring, recordkeeping, and reporting procedures under the U.S. Environmental Protection Agency’s (“EPA”) Vessel General Permit (“VGP”) and the USCG’s ballast water management requirements. With the USCG’s inquiry focused on the resources devoted per vessel to compliance requirements, the USCG plans to use the information provided to “evaluate new and updated solutions that inform data-driven policymaking, reduce the reporting and record-keeping burden on industry, and confirm environmental compliance.” While not stated explicitly, the Request is clearly a precursor to the USCG’s development of a proposed rule pursuant to the Vessel Incidental Discharge Act (“VIDA”). Comments are due by July 22, 2024.
Interested parties are encouraged to review the Request carefully and provide their insights, either individually or through trade associations, prior to the July 22, 2024, deadline as this Request is a critical precursor to implementation of VIDA.
2013 Vessel General Permit. The VGP was issued under the Clean Water Act’s (“CWA”) National Pollutant Discharge Elimination System program and provides permit coverage nationwide for discharges incidental to the normal operation of commercial vessels more than 79 feet in length. EPA issued the first version of the VGP in 2008 and then another, more stringent, version in 2013. The VGP set effluent limits and mandated Best Management Practices to control certain types of incidental discharges. It also required vessels to conduct routine and annual inspections and imposed numerous recordkeeping obligations, as well as monitoring and reporting requirements.
USCG Ballast Water Management. The USCG published a final rule addressing ballast water management, which became effective in June 2012. These regulations, codified in 33 C.F.R. Part 151, mandate ballast water management requirements, including type-approved ballast water management systems. They further outline required Best Management Practices and monitoring, recordkeeping, and reporting requirements.
Vessel Incidental Discharge Act. In December 2018, VIDA was signed into law and intended to replace the VGP to bring uniformity, consistency, and certainty to the regulation of incidental discharges from U.S. and foreign-flag vessels. VIDA amended the CWA and will substantially alter how EPA and the 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 more than three years, and requires the USCG to implement EPA’s final standards within two years thereafter.
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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.
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”
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.
Continue reading “Recent Developments Affecting U.S. Maritime Arbitration”
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.
Continue reading “Navigating the Complex Waters of Cross-Border Maritime Mergers & Acquisitions”
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?”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?”