Be Kind and Stay Home – Now That’s An Order!

As the world is battling the coronavirus outbreak, the legal community has been forced to adapt in their own unique ways. State courts in New York are closed for all but emergency filings, while other federal and state courts around the country have postponed jury trials, in-person hearings, and shifted to telephonic or video appearances. Everyone is operating with limited staff and skeleton crews. Many federal judges have issued standing orders detailing their own unique policies and procedures.  Including Magistrate Judge Edison of the Southern District of Texas, who reminded attorneys appearing by video conference that while there was no requirement to wear formal courtroom attire during the video conference, “You are, however, required to wear clothes.”

Recently, in a case involving alleged counterfeit unicorn drawings and knock-off elves, Judge Seeger of the Northern District of Illinois issued a remarkable order reprimanding a plaintiff who filed multiple emergency motions.  The plaintiff argued that defendants were infringing on its trademarks and sought multiple emergency temporary restraining orders. Denying plaintiff’s motions for emergency relief and hearings, the Court noted “[i]f there’s ever a time when emergency motions should be limited to genuine emergencies, now’s the time.” Judge Seeger stated “[t]he world is facing a real emergency. Plaintiff is not” and quipped “one wonders if the fake fantasy products are experiencing brisk sales at the moment.”

Other courts have taken a proactive approach in encouraging amicable resolution of procedural matters and settlement without requiring judicial intervention. In an order issued to all civil cases assigned to Judge Totenberg of the Northern District of Georgia, the Court gave the following directive: “Be kind to one another in this most stressful of times. Remember to maintain your perspective about legal disputes, given the larger life challenges now besetting our communities and world. Good luck to one and all.”

We join Judge Totenberg in wishing good luck and good health to all.

Judge Seeger’s Order can be viewed here. Judge Totenberg’s Order can be viewed here.

In A Time of Crisis – Could a Jones Act Waiver be on the Way?

On Wednesday March 18, 2020, crude prices fell to their lowest levels in 18 years. As companies and industries around the world are bracing for an unknown global economic slowdown brought on by COVID-19, domestic oil companies and others are already looking towards policy shifts from the U.S. federal government to help adapt to this new global reality. Even before the swath of shelter-in-place orders, prohibitions on gatherings of more than 10 people, and tightening of international borders rolled out over the past week; U.S. based shale drillers were already worried about the inability to compete on production costs as Saudi Arabia and Russia flood the market with crude. Bahri, Saudi Arabia’s tanker company has been heavily chartering vessels, and has provisionally hired 25-30 VLCCs (with delivery over the coming weeks) to supply tens of millions of barrels of crude oil to the open market. In an effort to combat the price plunge and the unknown short-term and long-term economic realities caused by a world-wide pandemic, last Friday President Trump announced a plan to purchase enough crude oil to fill the U.S.’s Strategic Petroleum Reserve “right up to the top.” 

 The American Exploration and Production Council (“AXPC”) has already requested a temporary waiver of the Jones Act, calling for the measure on Friday March 13, 2020. The Merchant Marine Act of 1920 (the “Jones Act”) restricts domestic coastwise trade by requiring all goods transported between U.S. ports to be carried on U.S.-flagged vessels. Operating under a U.S. flag is generally more expensive as it requires the vessel to be partially constructed in the United States, as well as to be owned and crewed by United States citizens. There is precedent for the law to be modified or its restrictions waived in times of national crisis. For example, in 2017, President Trump waived the act temporarily for Puerto Rico, allowing much needed humanitarian relief to reach the island after Hurricane Maria. Though critics later questioned the overall effectiveness of the measure.

The complete repeal of the Jones Act has historically had some vocal supporters, specifically the late Senator John McCain, who described it as an “antiquated law” that hinders free trade and raises prices for American consumers. While the Jones Act has its detractors, it also has supporters, including the U.S. maritime industry and shipbuilding interests.  In response to AXPC’s request, the American Maritime Partnership rebuked the request as unfounded and unnecessary stating: “[a]t a time of American crisis and uncertainty, a waiver to the Jones Act would only open our borders and markets to foreign shipping with foreign crews that pose an added threat to the safety and security of our nation’s health.”  On Thursday March 19, 2020, two Houston terminals (Barbours Cut and Bayport Container) were closed indefinitely after a worker tested positive for COVID-19.

Given the rapidly evolving landscape, Congress and/or the President may look to repeal or alter parts of the Jones Act to remain globally competitive and stimulate the U.S. economy. As AXPC warned: “[o]ur industry requires constant capital investment and, at these artificially low prices, our industry cannot work.” As of this writing, modifications and/or waivers to the Jones Act have not been officially recommended by the White House or Congress as a response to the COVID-19 outbreak (or the drop in crude prices). However, President Trump, Vice President Pence, and Secretary of the Treasury Steven Mnuchin have made clear that all options for economic stimulus are being considered.  A relaxation of the Jones Act could be one of those measures on the horizon.

For U.S. trade and transportation questions, contact us at info@chaloslaw.com.

Do the right thing!!!

As we are all getting bombarded with messages about the Coronavirus pandemic and how closely everyone is monitoring developments, our primary concern is the health and well-being of our friends, colleagues and competitors.  We implore each of you to do your part to help stop the spread of the virus.

Please:

  • stay in and work from home (you can do it… modern technology is terrific);
  • practice frequent hand washing with soap and warm water for at least 20 seconds;
  • avoid touching your eyes, nose, or mouth;
  • cover your nose and mouth when coughing or sneezing with a tissue;
  • avoid close contact with anyone with cold or flu-like symptoms;
  • quarantine anyone who is sick;
  • practice social distancing;
  • do not attend events with more than 10 people; and
  • clean and disinfect frequently touched surfaces.

Guidance from the CDC can be viewed at https://www.cdc.gov/coronavirus/2019-ncov/prepare/index.html.

We wish everyone good health and look forward to getting on the other side of this issue soonest.

Stay safe!

Chalos & Co Article Featured in The Arrest News

An article authored by George M. Chalos, Esq. is featured in the 27th Issue of “The Arrest News,” published by shiparrested.com.  The article, titled “IMO 2020 Enactment & Enforcement in the United States,” discusses the importance of having compliant fuel oil onboard (0.5% sulfur content or less) and maintaining accurate records for port state control inspections.  It is expected that the U.S. Coast Guard and Department of Justice will aggressively pursue the failure to comply with the new Sulfur limits and all shipowners and operators should have good policies and procedures for IMO 2020 compliance in place.

For more information on the implementation of IMO 2020,  please do not hesitate to contact us with any questions at info@chaloslaw.com.

To read a copy of the article click here.

Chalos & Co Article Featured in Marine Money International

Chalos & Co, P.C. is pleased to share that an article by George M. Chalos, Esq. is featured in the October/November 2019 issue of Marine Money International.  The article, titled “IMO 2020: Enactment & Enforcement in the United States,” discusses the importance of having compliant fuel oil onboard (0.5% sulfur content or less and maintain accurate records for port state control inspections.  It is expected that the U.S. Coast Guard and Department of Justice will aggressively pursue the failure to comply with the new Sulfur limits coming in force on January 1, 2020.

For more information on the implementation of IMO 2020 requirements,  please do not hesitate to contact us with any questions at info@chaloslaw.com.

To read a copy of the article click here.

Use of A Stand-Up Paddleboard on Navigable Waters is Not a Traditional Maritime Activity

On December 4, 2019, the United States Court of Appeals for the Ninth Circuit issued an opinion affirming the United States District Court for the Central District of California’s dismissal of an action for lack of subject matter jurisdiction.

Petitioners Skip Abed and Blue Water Boating, Inc. (“Petitioners”) are in the business of renting watersport equipment to the public.  On February 18, 2018, Petitioners filed a complaint for exoneration from or limitation of liability and declaratory relief against the survivors of Davies Kabogoza who drowned in the Santa Harbor while using a stand-up paddleboard (“SUP”) rented from the Petitioners.   Petitioners sought to invoke the court’s admiralty tort jurisdiction and argued that the District Court had subject matter jurisdiction over the action because the activity of using a SUP is more similar to a kayak than to a surfboard.  The district court applied the traditional maritime nexus test which requires that a plaintiff invoking admiralty jurisdiction must show: (1) the tort occurs on navigable waters; (2) the tort has the potential to disrupt maritime commerce; and (3) the general character of the activity has a substantial relationship to traditional maritime activity.  The District Court did not find Petitioners’ argument persuasive and dismissed the action for lack of subject matter jurisdiction.

Petitioners appealed the judgment to the Ninth Circuit. The Ninth Circuit also applied the traditional maritime nexus test and held that the general character of the activity, the rental of a SUP, lacked “maritime flavor” and a close relationship to traditional maritime activity under prong three of the traditional maritime nexus test.  Accordingly, the Ninth Circuit affirmed the District Court’s dismissal of the action.

To read the full opinion, please click here.

For more information about the Ninth Circuit decision, please do not hesitate to contact us at info@chaloslaw.com.

George M. Chalos Presents at Gallagher Marine Systems 2019 Symposiums in Athens and London

George M. Chalos of Chalos & Co, P.C. attended and presented at the Gallagher Marine Systems (GMS) 2019 Symposiums in Athens, Greece and London, England. Mr. Chalos presented on the enactment and enforcement of IMO 2020 in the United States. 

To learn more about GMS, please visit their website at https://www.gallaghermarine.com/.

For more information on the implementation of IMO 2020, please do not hesitate to contact us with any questions at  info@chaloslaw.com.

Eleventh Circuit Fails to Hold Government Accountable for Federal Tort Claims Act

In 2012, Evergreen Marine, Ltd. (“Evergreen”), purchased a yacht in reliance on the U.S. Coast Guard’s representation that the vessel was unencumbered by a mortgage or other lien. However, there was, in fact, a mortgage (of nearly $700,000) on the vessel held by M&T Bank, who later seized the vessel to foreclose on its mortgage.  The Coast Guard admitted that despite its prior representations to the contrary, a mortgage had been recorded in 2003, but the paper record had not been electronically recorded when the agency moved to a digital index. After settling with the mortgage holder, Evergreen sued the United States under the Federal Tort Claims Act (“FTCA”) arguing that the U.S. Coast Guard’s National Vessel Documentation Center (“NVDC”) breached federal statutory duties: (1) to maintain an accurate index of mortgages and (2) to deny the foreign transfer of a U.S. documented vessel encumbered by a mortgage.

The District Court dismissed the lawsuit citing lack of subject-matter jurisdiction and concluding that the United States enjoyed sovereign immunity from Evergreen’s claims pursuant to the FTCA’s misrepresentation exception. The FTCA’s misrepresentation exception under 28 U.S.C. § 2680(h) bars any claim “[a]rising out of . . . misrepresentation, deceit, or interference with contract rights.” This includes claims arising out of both intentional and negligent misrepresentation. On appeal, the Eleventh Circuit Court of Appeals found that the misrepresentation exception applied because “the essence of the claim[s] involves the government’s failure to use due care in obtaining and communicating information.”

To read the 11th Circuit’s opinion, please click here.

For more information about the Court’s decision, please do not hesitate to contact us at info@chaloslaw.com.

Chalos & Co Proudly Supports Thomas Miller (Americas) ‘Play for Pink’ Breast Cancer Fundraiser

Congratulations to Thomas Miller (Americas) & the UK P&I team on raising $250,000 at its 2019 annual charity golf outing, Play for Pink, in support of the Breast Cancer Research Foundation.  Chalos & Co is a proud contributor and supporter of the great work done by the Breast Cancer Research Foundation to advance the prevention and cure for breast cancer.

For more information and to contribute to the Breach Cancer Research Foundation please visit their website at https://www.bcrf.org/

To read a copy of the Tradewinds Article click here.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Chalos & Co, P.C. attended the VII International Conference “Practical Aspects of Maritime Shipping – Experience 2019” in Saint Petersburg, Russia

Viktoriya Ukhova and Melissa Russo of Chalos & Co, P.C. participated in the VII International Conference “Practical Aspects of Maritime Shipping – Experience 2019” in Saint Petersburg, Russia hosted by Remedy Law Firm on September 27, 2019. Melissa Russo of the Chalos & Co, New York office presented on the current landscape of United States sanctions.  The panel of the speakers was varied and included international attorneys and maritime specialists with expertise in various hot topics in the maritime industry.