Bryant’s Maritime Blog – 16 June 2009

Headlines: Supreme Court strikes down Valdez tax on tankers; Assessment of interest and costs in Exxon Valdez case; Proposed MOVEMENT Act may violate WTO; Bill introduced re seabed mineral extraction; Bill introduced re Arctic hydrographic services; Bill introduced re marine shipping in the Arctic; UN Security Council resolution re North Korea; and NAVFOR ATALANTA counter-piracy operation extended for one year.

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Supreme Court strikes down Valdez tax on tankers

The US Supreme Court reversed the decision of the Alaska Supreme Court which had upheld a personal property tax imposed by the City of Valdez against tankers calling in the port. Justice Breyer announced the judgment of the Court and delivered the opinion of the Court with respect to Parts I, II-A, and II-B-1, in which Justices Scalia, Kennedy, Ginsburg, and Alito joined, and an opinion with respect to Part II-B-2, in which Justices Scalia, Kennedy, and Ginsburg joined. Chief Justice Roberts filed an opinion concurring in part and concurring in the judgment, in which Justice Thomas joined. Justice Alito filed an opinion concurring in part and concurring in the judgment. Justice Stevens filed a dissenting opinion, in which Justice Souter joined. The bottom line is that the Court found the Valdez property tax, as assessed, to violate the Tonnage Clause of the US Constitution because it was basically a charge for the privilege of entering or trading in or lying in a port. Polar Tankers, Inc. v. City of Valdez, Alaska, No. 08-310 (June 15, 2009). Note: It is hoped that this decision will put an end to local jurisdictions treating commercial vessels as moving revenue cows, to be milked as frequently as possible. It is just as likely, though, that those jurisdictions will see the decision as a challenge, and strive for more inventive assessment formulas.

Assessment of interest and costs in the Exxon Valdez case

The US Court of Appeals for the Ninth Circuit ruled that the assessment of post-judgment interest against Exxon Mobil runs from the date of the original 1996 punitive damages judgment, not from the 2008 date of the court’s judgment for the plaintiffs following the Supreme Court’s decision on the maximum level of punitive damages. Over a vigorous dissent, the court also ruled that each party in the litigation should bear its own costs. The dissent contended that Exxon Mobil succeeded in getting the punitive damages award reduced by 90% and should be considered the prevailing party, thus entitled to recover its costs. Baker v. Exxon Mobil Corp., No. 04-35182 (9th Cir., June 15, 2009). It is ironic and perhaps highly appropriate that the Supreme Court decision on the City of Valdez tax on tankers and the Ninth Circuit decision on some final phases of the Exxon Valdez litigation should be issued on the same day.

Proposed MOVEMENT Act may violate WTO

Representative Richardson (D-CA) introduced the MOVEMENT Act of 2009 (H.R. 2355) to establish a National Goods Movement Improvement Fund to provide funding for infrastructure projects that will improve the movement of goods, mitigate environmental damage caused by the movement of goods, and enhance the security of transported goods to establish a National Goods Movement Improvement Fund to provide funding for infrastructure projects that will improve the movement of goods, mitigate environmental damage caused by the movement of goods, and enhance the security of transported goods. (5/12/09). Note: When I originally posted this bill, I did not read it carefully and, thus, expressed no particular objection or comment. Closer analysis of the proposed source of the National Goods Movement Improvement Fund causes me to now stake out a position. The legislation would basically hijack and fundamentally alter the Harbor Maintenance Trust Fund (HMTF). It provides that 71.43% of the HMTF would be appropriated to the new NGMIF. It further provides that the Harbor Maintenance Tax (HMT) assessment rate would rise from 0.125% of the value of the cargo to 0.4375% of the value of the cargo, but would be imposed only on imported cargo (although cargo that originated in either Canada or Mexico would be exempt). The HMT would also be imposed on cargoes landed in Canada or Mexico and brought into the United States by truck or rail. The European Union (among others) has been dissatisfied for years with the HMT, contending that it violated first the General Agreement on Trade and Tariffs (GATT) and now the World Trade Organization (WTO) provisions regarding non-discrimination. The foreign governments have held back from filing a formal objection, acknowledging that most (but not all) of the HMT funds went into actual harbor maintenance projects and that the cost was equitably shared by both foreign and domestic shippers. This legislation, if enacted into law, would eliminate any rationale for foreign governments to exercise continued forbearance. Standby for heavy weather.

Bill introduced re seabed mineral extraction

Delegate Faleomavaega (D-AS) introduced a bill (H.R. 2834) to direct the Administrator of the National Oceanic and Atmospheric Administration to conduct a technological capability assessment, survey, and economic feasibility study regarding recovery of minerals, other than oil and natural gas, from the shallow and deep seabed of the United States. (6/11/09).

Bill introduced re hydrographic services in the Arctic

Representative Young (R-AK) introduced a bill (H.R. 2864) to amend the Hydrographic Services Improvement Act of 1998 to authorize funds to acquire hydrographic data and provide hydrographic services specific to the Arctic for safe navigation, delineating the United States extended continental shelf, and the monitoring and description of coastal changes. (6/13/09).

Bill introduced re marine shipping in the Arctic

Representative Young (R-AK) introduced the Arctic Marine Shipping Assessment Implementation Act of 2009 (H.R. 2865) to ensure safe, secure, and reliable marine shipping in the Arctic including the availability of aids to navigation, vessel escorts, spill response capability, and maritime search and rescue in the Arctic, and for other purposes. (6/13/09).

UNSC – resolution providing for inspection of North Korean ships and cargoes

The United Nations Security Council adopted Resolution 1874 (2009) imposing further sanctions against the Democratic People’s Republic of Korea (North Korea)in response to that nation’s recent nuclear weapons tests and continued work on ballistic missiles. Among other things, the resolution calls upon all States to inspect all cargo to and from North Korea in their territory if there is information that provides reasonable grounds to believe the cargo contains prohibited items. The resolution also calls upon all States to inspect vessels, with the consent of the flag State, on the high seas if there is information that provides reasonable grounds to believe the cargo contains prohibited items. The resolution directs Member States to prohibit the provision by their nationals or from their territory of bunkering services to North Korean vessels if there is information that provides reasonable grounds to believe the vessels are carrying prohibited items. (6/12/09).

EU – NAVFOR ATALANTA operation extended for one year

The European Union (EU) issued a press release stating that the Council of the European Union agreed that Operation EU NAVFOR-ATALANTA should be extended for one year from its current end date of 13 December 2009. The Council noted that the operation has demonstrated its ability to act effectively against piracy, that piracy off the coast of Somalia was likely to remain a serious threat beyond the previously planned termination date, and that early agreement on extending the operation would facilitate the necessary force generation. Thirteen warships and three maritime patrol surveillance aircraft are currently taking part in the operation. (6/15/09).

USCG – analysis of GAO report on ALJ program

The US Coast Guard issued a news release summarizing and analyzing the recent report of the Government Accountability Office (GAO) on the Coast Guard’s Administrative Law Judge (ALJ) program. (6/15/09).

USCG – Merchant Mariner Medical Advisory Committee established

The US Coast Guard issued a news release stating that the agency recently established the Merchant Mariner Medical Advisory Committee (MMMAC), which will provide advice to the agency on matters relating to the medical evaluation process and evaluation criteria for medical certification of US merchant mariners. Persons interested in serving on the MMMAC should contact the Coast Guard. (6/15/09).

UK – tug capsizes and sinks at Peterhead

The UK Maritime and Coastguard Agency (MCA) issued a press notice stating that a tug capsized and sank at Peterhead. The crew of three has been rescued. (6/14/09).

If you have questions regarding the above items, please contact the editor:

Dennis L. Bryant

Bryant’s Maritime Consulting

4845 SW 91^st Way
Gainesville, FL 32608-8135

USA

1-352-692-5493
dennis.l.bryant@gmail.com

http://brymar-consulting.com

© Dennis L. Bryant – June 2009

Redistribution permitted with attribution