Jones Act Industry Lawyer Addresses Full Repeal Strawman

by Michael Hansen, Hawaii Shippers Council, May 1, 2015

The Journal of Maritime Law & Commerce published an interesting paper, “Myth and Conjecture? The ‘cost’ of the Jones Act,” written by four members of the K&L Gates law firm lead by Mark Ruge, Partner and co-chair of the firm’s Public Policy and Law Practice.  The G&L Gates law firm is a K Street practice and one of the ten largest law firms in the U.S.

A veteran of more than a decade as a staffer on Capitol Hill, Mr. Ruge serves as counsel to the American Maritime Partnership, the largest coalition in the history of the U.S. maritime industry, and represents numerous other transportation clients on federal policy issues.  The American Maritime Partnership (AMP) is the primary Jones Act industry trade association whose raison d'être is to mount a very active defense of the nation’s cabotage laws.

The primary thrust of the paper is to outline the problems of operating a foreign flag ship exclusively in the domestic coastwise trades of the United States if the Jones Act and related laws were to be repealed.  Mr. Ruge and his co-authors have correctly identified the problems of operating a foreign flag ship in these circumstances, which makes such an operation largely infeasible.

Ensuring that any relaxation of the Jones Act would not change the current application of the rest of the federal and state regulatory environment to both domestic and foreign ships operating in domestic trades is an important position for the Jones Act industry and they refer to it as the “level playing field,” as another line of cabotage defense.

Mr. Ruge and his co-authors did not discuss moderate Jones Act reforms such as U.S. Senator John S McCain’s legislative proposals of 2010 and 2015 eliminating the domestic ship build requirement.  Nor did they contemplate in their paper the current use of foreign flag ships in the noncontiguous trades with American Samoa and the U.S. Virgin Islands, and the protocols for employing foreign flag ships in domestic transportation under emergency Jones Act waivers.  Those items would have provided more nuance, but of course, the counsel to the Jones Act industry wants to put forward the most extreme case of a full nationwide repeal of the Jones Act to act as a strawman and argue against any changes to the coastwise laws.

Given the very strong case Mr. Ruger and his co-authors make that operating a foreign flag ship exclusively in domestic trade in the absence of the Jones Act would be infeasible, leads one to wonder why his clients at the American Maritime Partnership are so frightened by Jones Act reform?

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Attachment: Myth and Conjecture? The “Cost” of the Jones Act

Journal of Maritime Law & Commerce, Vol. 46, No. 1, January, 2015

Mark Ruge, Partner and Co-Chair, Public Policy and Law Practice, K&L Gates (Washington, DC), J.D. Georgetown University Law Center.

Darrell Conner, Government Affairs Counselor and Co-Chair, Public Policy and Law Practice, K&L Gates (Washington, DC), B.A. James Madison University.

Nickolas Milonas, Associate, K&L Gates (Washington, DC), J.D. American University Washington College of Law.

Sarah Beason, Associate, K&L Gates (Washington, DC), J.D. William and Mary School  of Law.