Opinion ID: 291350
Heading Depth: 1
Heading Rank: 3

Heading: Eligibility of the OBSERVER for the Coastwise Trade

Text: 20 Because our conclusion differs from Judge Tenney's on the WAPELLO'S eligibility for the coastwise trade, we must reach the issue of whether on the issue of its eligibility for coastwise trade the OBSERVER is to be considered a new ship, a rebuilt TRUSTCO, or a rebuilt SANTA HELENA. 5 One of these three options — that the OBSERVER is an entirely new ship — we may eliminate from consideration at the outset. In all administrative determinations regarding the OBSERVER'S right to participate in various aspects of the shipping trade, the United States Maritime Administration and the Bureau of Customs consistently referred to the OBSERVER as a rebuilt ship. Moreover, to characterize the OBSERVER as a new vessel built in the United States for American owners which is consequently eligible for the coastwise trade, would enable shipowners to avoid our ruling that vessels with the WAPELLO'S history should be excluded from the coastwise trade. If the OBSERVER were to be considered a new ship, a shipowner could easily purchase two ships ineligible for coastwise trade (like the WAPELLO), and attach the stern of each to the forebody of the other in American shipyards, making both progeny eligible for the coastwise trade. The effect of this process — two ships eligible for coastwise trade where before there were none — would be in direct conflict with the statutory purpose to protect the business of shippers already engaged in the coastwide trade. Although the joining process would have occasioned some work for American shipyards, the end result is not likely to bring about a marked improvement or modernization of the United States Merchant Marine. 21 There remain two avenues we may travel. First, the OBSERVER may be characterized as a rebuilt SANTA HELENA. In such event, we have already set forth our reasons for its exclusion. The genealogy of the OBSERVER requires this conclusion. We have stated that the joining of the stern of one vessel to the forebody of anther constitutes reconstruction of one of the contributing parents rather than the creation of a new vessel. The SANTA HELENA is itself either a rebuilt WAPELLO or a rebuilt. ESSO CHITTAGONG. Since both of these vessels were sold to foreign owners after being built in the United States, they, and their offspring the SANTA HELENA, would be excluded from the coastwise trade under the first proviso to section 27. Were the OBSERVER to be considered a rebuilt SANTA HELENA, it would also be subject to the taint of the SANTA HELENA'S parentage. Furthermore, the second proviso to section 27, a provision relating specifically to rebuilt ships which was enacted in 1956 and amended in 1960, offers an alternative ground for the exclusion of the SANTA HELENA. 6 Act of July 14, 1956, Pub.L.No.84-714, 70 Stat. 544; Act of July 5, 1960, Pub.L. No.86-583, 74 Stat. 321. Under its terms, no vessel    which has acquired the lawful right to engage in the coastwise trade, by virtue of being built in    the United States, and which has later been rebuilt, shall have the right thereafter to engage in the coastwise trade, unless the entire rebuilding    is effected within the United States. Since the two parents of the SANTA HELENA, the WAPELLO and the ESSO CHITTAGONG, had both acquired the lawful right to engage in the coastwise trade by being built in the United States, and since the rebuilding which spawned the SANTA HELENA was effected in Japan, this exclusionary clause of section 27 requires barring the SANTA HELENA and its progeny from coastwise trade. 22 Maritime transplants seem to present problems gratefully absent in the human variety. In the former we have considerable difficulty in distinguishing the donor from the donee. In the latter both are clearly identified. In any event, if the OBSERVER were to be considered a rebuilt TRUSTCO instead of a rebuilt SANTA HELENA, we are of the view that it would be eligible for coastwise trade. The TRUSTCO was American built and, throughout its existence, American owned. Accordingly, it never ran afoul of the first proviso to section 27. And, the rebuilding which produced the OBSERVER was in full accord with the structures of the second proviso, since it was carried out in an American shipyard. Furthermore, as required by the second proviso, the construction of any major components of the hull or superstructure of the vessel, including the forebody which was originally the forebody of the WAPELLO, was also effected within the United States. 7 23 Accordingly, the crucial factor in determining the OBSERVER'S eligibility for the coastwise trade is whether it should be characterized as a rebuilt TRUSTCO or a rebuilt SANTA HELENA. Nothing in the rather sparse record before us would lead us to conclude that this question is not a material issue of fact which requires trial. Without the benefit of expert testimony, we cannot judge the weight to be given to the fact urged upon us, that the SANTA HELENA'S forebody comprises three-quarters of the OBSERVER'S length but that the TRUSTCO'S stern is by far the more valuable part of the OBSERVER. Moreover, the Bureau of Customs seems to have made inconsistent determinations as to the appropriate category into which the OBSERVER falls. The OBSERVER'S temporary Certificate of Registry strongly suggests that the OBSERVER is to be considered a rebuilt TRUSTCO, reciting that the OBSERVER is a rebuilt ship originally constructed in 1943, the year of the TRUSTCO'S construction. The Bureau of Customs, however, issued not only a temporary Certificate of Registry but also a new registration number. The TRUSTCO was registered as a United States vessel and, under 19 C.F.R. § 3.28, subd. C, a rebuilt vessel retains its registry number. The issuance of a new registration number therefore suggests that the OBSERVER was viewed as a rebuilt SANTA HELENA, a vessel which was not registered American and, consequently, could not have carried a registration number through the rebuilding process. Given the apparent inconsistency in these agency determinations, we are of the view that a trial could shed some light on the reasons for and meaning of the actions of the Bureau of Customs. 24 For all the reasons stated we reverse and remand for a trial.