A recent ruling by the U.S. Fifth Circuit Court of Appeals has dealt a setback to Great Lakes Dredge & Dock Company (Great Lakes), affirming the dismissal of its legal challenge against a U.S. Customs and Border Protection (CBP) letter. The ruling concerned the transportation of scour protection rock for offshore wind projects.
Great Lakes had sought a determination from CBP regarding whether the Jones Act prohibited foreign-flagged vessels from transporting scour protection rock from U.S. points to the Outer Continental Shelf (OCS). Initially, CBP ruled in 2021 that such transportation constituted coastwise trade, requiring the use of Jones Act-compliant vessels. However, in a later revision, CBP concluded that foreign vessels could perform the first transport of scour protection rock to an untouched OCS seabed, as it did not yet qualify as a "coastwise point."
Great Lakes challenged CBP’s modified ruling, arguing it created an unfair advantage for foreign vessels. However, the American Petroleum Institute (API) intervened, asserting that Great Lakes lacked legal standing to challenge CBP’s determination. A district court agreed, dismissing the case, and now the Fifth Circuit has upheld that decision.
In its ruling, the appellate court emphasized that Great Lakes failed to demonstrate an imminent and direct economic harm from CBP’s decision, particularly since the Vineyard Wind project—referenced in the ruling—had already been completed without Great Lakes’ involvement.
The court document also noted Great Lakes’ claims about future market impact were speculative, suggesting there was no clear evidence that upcoming offshore wind projects would be affected in the same manner.
Great Lakes, which in 2021 had invested in a Jones Act-compliant rock installation vessel, Arcadia, recently sued shipbuilder Hanwha Philly Shipyard over delays and disagreements on the vessel’s construction.
This ruling highlights ongoing regulatory uncertainties surrounding the Jones Act’s application to offshore wind projects. While U.S. maritime operators have largely sought to leverage the Jones Act to maximize the use of American vessels in offshore wind development, CBP’s interpretation has allowed for foreign-flagged vessel participation in certain aspects of early-stage installations.
