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August 25, 2008

Court upholds Jones Act eligibility of tankers

In a decision filed today the U.S. District Court of the Eastern District of Pennsylvania has upheld the United States Coast Guard interpretation of the Jones Act as it relates to the shipbuilding methods employed by Aker Philadelphia Shipyard and General Dynamics NASSCO.

The case had been brought by the Metal Trades Department of the AFL-CIO, naming Admiral Thad W. Allen, United States Coast Guard, Thomas L. Willis and the National Vessel Documentation Center as defendants.

At issue was the use of foreign-manufactured components and assemblies in the series of Jones Act products tankers under production at the two shipyards.

In her opinion, Judge Gene E.K. Pratter, noted that

"Only vessels built in the United States are eligible to operate in United States coastwise trade. The present action involves the interpretation of federal law aimed at protecting the American shipbuilding trade. The ultimate issue presented here is whether the Coast Guard erred in ruling that using equipment modules manufactured abroad, but attached to vessels in shipyards in the United States, does not disqualify those vessels from being considered American-built under the Jones Act. Although at first blush this dispute may appear to demand diving into the specialized world of naval architecture, ultimately the rigorous grammar lessons of an English teacher provide the ballast for the Court's decision."

That decision, given 39 pages later in her opinion, was

"The Coast Guard's interpretation of the regulation at issue is reasonable in terms of the text, history and purpose of the Jones Act. Accordingly, the Court finds that the interpretation at issue is not plainly erroneous or inconsistent and, thus, must be upheld."

You can download the whole 40 pages of the opinion HERE.

Aker Philadelphia Shipyard President and CEO, Jim Miller said today: "We wish to reiterate that Aker Philadelphia Shipyard is extremely proud to be building ships in full compliance with the legal requirements for vessels to be operated in the Jones Act trade. We are satisfied with the court's decision and by working closely with our skilled union work force will continue to deliver on our promise to build quality ships for the U.S. market."


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