The Fifth Circuit Scopes Jones Act Competitive Protections

Great Lakes Dredge & Dock Company, L.L.C. v. Magnus, 128 F.4th 678 (5th Cir. 2025)

By Fraser K. Mitchell, Managing Editor of Loyola Maritime Law Journal

Early in 2020, Great Lakes Dredge & Dock Company (“Great Lakes”) requested a letter ruling from the U.S. Customs and Board Protection Agency (“CBP”), about an offshore wind farm project off of Martha’s Vinyard located on the Outer Continental Shelf (“OCS”) that involved laying scour protection rock.[1] The request from Great Lakes sought to clarify whether the Jones Act under 46 U.S.C. §§ 55101-23, would prevent foreign-flagged vessels from participating in operations that transported scour protection rock from the U.S. to the OSC seabed like the Martha’s Vineyard project.[2]

In January 2021, CBP responded to the request with a letter explaining that the Jones Act would apply to the Martha’s Vineyard project as CBP determined that the transportation of scour rock from the U.S. to the OCS constituted the transportation of merchandise between a coastwise point.[3] Accordingly, a Jones Act-qualified vessel would be required to undertake the operations.[4] However, soon after its January 2021 initial letter ruling, CBP sent out an amended ruling explaining that the initial delivery of sour rock did not require a Jones Act-qualified vessel because when the initial drop-off was being made there exists no coastwise point when dropping off the rock at the OCS seabed.[5] This letter ruling qualified this amendment by stating that once the initial layer was set down, a coastwise point would exist, so subsequent rock transportation would require a Jones Act-qualified vessel.[6] Great Lakes ultimately sued CBP agency officials in July 2022.[7]

Great Lakes, arguing to the district court in the Southern District of Texas, claimed that the amended letter ruling was in violation of the Administrative Procedure Act and that the amended letter ruling would subject its under-construction vessel to “unlawful competition” under the Jones Act and Outer Continental Shelf Lands Act.[8] The American Petroleum Institute (“API”) intervened unopposed, and the three parties—Great Lakes, CBP, and API—all moved for summary judgment.[9]

API challenged Great Lakes standing on the grounds that Great Lakes had no actual or imminent injury. To further their argument, API showed that the Martha’s Vineyard project had been completed and no similar projects were being competed for.[10] API further argued that there was an issue of redressability because nothing in the record indicated that the alleged competition posed to Great Lakes would come from the U.S. as opposed to foreign sources.[11] The Texas district court agreed with API and dismissed Great Lakes’ complaint for lack of standing which prompted a timely appeal from Great Lakes.[12]

The Fifth Circuit, on de novo review, analyzed (1) whether Great Lakes had competitor standing and (2) CBP’s standing.[13] First, the appellate court held that Great Lakes’ argument for standing was incorrect because there was no appropriate showing of an actual or imminent injury properly qualifying as an injury-in-fact.[14] The appellate panel rejected Great Lakes’ argument that an issuance of regulatory compliance that could potentially cause an increase in competition was all that was needed to show injury-in-fact.[15] The panel held that a showing of actual increase in competition was required for competitor standing to exist.[16] The court relied on the same facts previously asserted by API: (1) the Martha’s Vineyard project had already concluded; (2)  there was no evidence in the record that supports the contention that future projects will be impacted; and (3) because Great Lakes only supplies rock from the U.S., the prospective competition pointed to would not overlap because none of the other entities source their rock from the U.S.[17]

Separately, the Fifth Circuit also rejected CBP’s narrower interpretation of Great Lakes’ potential standing.[18] First, the argument of CBP regarding the amended letter applying to “transactions involving operations identical to those in the ruling letter” was first brought on appeal and so cannot be advanced.[19] The appellate court went further and elaborated that the projects mentioned in API’s arguments could not specify the details of the transactions.[20] The record lacked evidence that would indicate whether the allegedly competitive projects would be sourced by U.S. or foreign points; thus neither CBP, nor Great Lakes, could demonstrate that the projects of API were, in fact, competitive to that of Great Lakes.[21]

Accordingly, the Fifth Circuit affirmed the judgment of the Southern District Court of Texas.[22]

———

[1] Great Lakes Dredge & Dock Company, L.L.C. v. Magnus, 128 F.4th 678, 680 (5th Cir. 2025).

[2] Id.

[3] Id.

[4] Id.

[5] Id.

[6] Magnus, 128 F.4th at 680-81.

[7] Id. at 681.

[8] Id. at 681.

[9] Id. at 681

[10] Id. at 681.

[11] Magnus, 128 F.4th at 681.

[12] Id. at 681.

[13] Id. at 681-82.

[14] See id. at 682-83.

[15] Magnus, 128 F.4th at 682.

[16] Id.

[17] See id. at 682-83.

[18] Id. at 684.

[19] Id. at 683.

[20] Magnus, 128 F.4th at 683-84.

[21] Id.

[22] Id. at 684.