American Seafoods, allies await ruling from US judge on Jones Act fines

Published on
September 20, 2021

American Seafoods and others recently fined for Jones Act violations for using the so-called Bayside Program to bring Alaska-sourced seafood to the U.S. East Coast are awaiting a ruling from U.S. District Court Judge for the District of Alaska Sharon L. Gleason in their lawsuit against the U.S. government.

On Friday, 17 September, Gleason heard arguments from those involved in the Bayside Program, who have been collectively fined nearly USD 500 million (EUR 426 million) for their use of a 100-foot, dead-end railway in New Brunswick, Canada. They are seeking a temporary restraining order and preliminary injunction against U.S. Customs and Border Protection, which began issuing fines after determining the railway did not meet the terms of a waiver to the Jones Act which it had previously granted.

As of Monday, 20 September, Gleason had yet to rule in the case. She heard nearly one hour of oral arguments put forth by both parties, including from American Seafoods subsidiary Alaska Reefer Management (ARM) and Kloosterboer International Forwarding (KIF), which is owned by cold storage firm Lineage Logistics, as well as from a CBP attorney.

“I will take it under advisement. I understand time is of the essence and so I hope to get off [a ruling] in the near-term,” she said at the termination of the hearing. “Very well-briefed by both sides, interesting issues.”

In a press release issued after the hearing, ARM President Per Brautaset said it is his company’s belief the Bayside Program "is in full compliance with a long-recognized statutory exception to the Jones Act, referred to as the ‘third proviso,’ and CBP’s own long-established, publicly disclosed rulings and guidance concerning the route.”

“A ruling in our favor will allow us to immediately resume trucking fish from the cold storage facility in Bayside without the threat of further Customs fines,“ Brautaset said. “This will help to resolve immediate shortages of frozen seafood that are already impacting food processors and their employees who deliver products for consumers and fast-food chains as well as school lunch and food bank programs in the Eastern United States.”

KIF Logistics and Operations Director Jennifer Adamski said her side was hopeful for a positive ruling from Gleason.

“We were forced to halt shipping a month ago, causing 26 million pounds of frozen seafood – over 100 million servings of American fish – to remain in cold storage in Bayside, unable to reach American consumers during a time of supply chain strain on our food system,” Adamski said. “Our hope is that Judge Gleason will grant the temporary restraining order so that we and our partners along the chain can continue to supply consumers and customers, while saving jobs in our industry.”

American Seafoods President Inge Andreassen has urged Gleason to grant an injunction that would halt the issuance of more fines and not require the payment of fines already issued.

Photo courtesy of Kloosterboer International Forwarding

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