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SCHOENLANK v. KURZ-MORAN SHIPPING AGENCY

March 23, 1994

R.J. SCHOENLANK, Plaintiff,
v.
KURZ-MORAN SHIPPING AGENCY and M/T CHERRY VALLEY, her engines, boilers, tackle, etc., in rem, Defendants.


HAIGHT, JR.


The opinion of the court was delivered by: CHARLES S. HAIGHT, JR.

HAIGHT, District Judge:

 This maritime case involving the liability of the agent of an American-flag vessel for state pilotage fees is before the Court on stipulated facts and the parties' cross-motions for summary judgment.

 Background

 On September 28, 1992 the CHERRY VALLEY completed discharge of a bulk oil cargo at a terminal at Bayway, New Jersey. Her itinerary called for her to proceed in ballast to Sewells Point Anchorage, Virginia, presumably to load her next cargo (the stipulated facts are silent on the point). *fn1" It was on that ballast leg that plaintiff offered his pilotage services to the CHERRY VALLEY and was rebuffed. The vessel arrived at Sewells Point Anchorage on October 1, 1992 and discharged her ballast. *fn2" On the CHERRY VALLEY's passage from New York to Norfolk, she did not stop at any foreign ports, did not carry any foreign cargo, did not have any domestic cargo for delivery to a foreign port, and was not transporting any merchandise or passengers for hire.

 In 1972 Margate and the Maritime Subsidy Board of the United States Department of Commerce entered into a contract for payment by the Board of a construction differential subsidy to help aid Margate build three American-flag oil tankers. The CHERRY VALLEY was one. At the same time Margate and the Board entered into a contract providing for payment by the Government to Margate of an operating differential subsidy on these three vessels. These subsidy contracts were authorized by the Merchant Marine Act of 1936, 46 U.S.C. app. §§ 1101-1294 (West Ann. Pocket Pt. 1993).

 Discussion

 Pilotage is an ancient maritime calling. Its need arises from the inability of the master of a vessel to be familiar with hazards to navigation in all waters and ports of call. Hence the services of the local pilot, celebrated by Mark Twain in his accounts of pilotage on the Mississippi.

 The Federal Government and the several States touching upon or containing navigable waters have an Interest in regulating pilotage to advance marine safety. State pilotage laws also produce revenue. The Federal pilotage statutes are presently codified at 46 U.S.C. §§ 8502-8503 (West Special Pamphlet 1993). They specify the manner in which the States may regulate pilots and the manner in which they may not. The Supreme Court summarized the boundaries of authority in Ray v. Atlantic Richfield Co., 435 U.S. 151, 159-60, 55 L. Ed. 2d 179, 98 S. Ct. 988 (1978): the Federal pilotage statutes "give the Federal Government exclusive authority to regulate pilots on enrolled vessels and . . . preclude a State from imposing its own pilotage requirements upon them." But "just as it is clear that States may not regulate the pilots of enrolled vessels, it is equally clear that they are free to impose pilotage requirements on registered vessels entering and leaving their ports." The pilotage statutes constitute an exercise in federalism of many years' standing.

 To comprehend the legislative boundaries in respect of pilotage, one must also speak the language of vessel documentation under Federal statutes. A useful summary appears in Douglas v. Seacoast Products, Inc., 431 U.S. 265, 272-73, 52 L. Ed. 2d 304, 97 S. Ct. 1740 (1977): "Ships engaged in trade with foreign lands are 'registered' . . . . Vessels engaged in domestic or coastwise trade or used for fishing are 'enrolled' . . ."

 The statutory scheme, codified in the Vessel Documentation Act of 1980, 46 U.S.C. app. §§ 12101-23 (West Special Pamphlet 1993), is administered by the United States Coast Guard. The Coast Guard issues each American-flag vessel a certificate of documentation. The certificate may be "endorsed" for one or more of five categories of use: registry (for foreign trade), coastwise (for domestic trade), Great Lakes, fishery, and recreational. A certificate endorsement is, in practical effect, a license permitting the vessel to engage in the designated activity. Since a vessel may obtain one or more endorsements, she may on one voyage be sailing "on register" and on another "coastwise."

 The Federal pilotage statute recites that except as otherwise provided by its terms, pilots "shall be regulated only in conformity with the laws of the States." 46 U.S.C. app. § 8501(a). But a State may not require "a coastwide *fn3" vessel" propelled by machinery and subject to Federal inspection "to take a pilot licensed or authorized by the laws of the State . . ." § 8501(b). A "coastwise seagoing vessel" is required to be under the control of a federally licensed pilot (that is, not a pilot appointed under State authority) if the vessel is "not sailing on register," is underway, and not on the high seas. § 8502(b). That is the statutory division of authority over pilotage summarized by the Supreme Court in Ray.

 The State of New Jersey exercised its allotted power by providing that "all masters of foreign vessels and vessels from a foreign port, and all vessels sailing under register . . . shall take a licensed pilot." N.J. Stat. Ann. § 12:8-35. It was pursuant to this statute that plaintiff at bar offered his services to ...


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