Opinion ID: 362881
Heading Depth: 1
Heading Rank: 2

Heading: the statutes and issues

Text: 11 The Merchant Marine Act of 1920, § 27 (the Jones Act) provides: 12 . . . No merchandise shall be transported by water, or by land and water, on penalty of Forfeiture thereof, between points in the United States, including Districts, Territories, and Possessions thereof embraced within the coastwise laws, either directly or via a foreign port, or for any part of the transportation, in any other vessel than a vessel built in and documented under the laws of the United States and owned by persons who are citizens of the United States . . . . 24 13 With regard to the Virgin Islands, however, the above language is qualified by § 21: 14 . . . (T)he coastwise laws of the United States shall not extend to the Virgin Islands of the United States until the President of the United States shall, by proclamation, declare that such coastwise laws shall extend to the Virgin Islands and fix a date for the going into effect of same. 25 (No party contends such proclamation has ever issued.) 15 While the parties have argued extensively on the overall purpose of the Merchant Marine Act of 1920, the numerous decisions dealing with the continuity of flow in foreign and interstate commerce 26 , and the impact of the Magnuson Amendment to the Ports and Waterways Safety Act of 1972, 27 we view the problem as one of straightforward statutory construction. 16 On the facts of this case, the key words of the Jones Act are its flat prohibition: No merchandise shall be transported . . . Between points in the United States . . . (in foreign vessels) . . . The central issue, therefore, is whether the merchandise (crude oil) transported from Valdez to St. Croix by Hess is so similar to the merchandise (refined oil products) subsequently shipped from St. Croix to the continental United States that the processing at St. Croix fails to interrupt an essentially single voyage of the oil from Valdez, Alaska, to the East Coast. If the oil and its by-products are deemed to constitute a single element of merchandise, then the same merchandise travels between Valdez and an East Coast port I. e., between two points in the United States and is subject throughout that voyage to the prohibitions of the Jones Act. If, on the other hand, the processing at St. Croix effects such a substantial metamorphosis of the oil that an essentially different merchandise is transported on the second leg of the trip than on the first, the single voyage from Valdez to the East Coast is severed at St. Croix. Because the Virgin Islands are expressly excluded from U.S. coastwise laws, 28 neither of these two sub-voyages would be between two points in the United States, including . . . possessions thereof embraced within the coastwise laws, 29 and no vessel carrying merchandise on the two voyages would fall within the proscriptions of the Jones Act. 17 Further, we must consider the argument of appellant Seafarers Union that the Trans-Alaska Pipeline Authorization (TAPS) Act 30 and the Magnuson Amendment 31 bar the transportation of Alaskan oil in foreign vessels. 18 We turn first to the issues related to the identity of merchandise argument under §§ 21 and 27 of the Merchant Marine Act of 1920, and then consider separately the impact of the TAPS Act. 19