96 F.4th 283
2d Cir.2024Background
- Viking, a Swiss company, sought to enter the U.S. Mississippi River cruise market by chartering a vessel constructed and owned by River 1, LLC, an American company.
- River 1 was responsible for managing maritime operations, while Viking managed onboard entertainment.
- The United States Maritime Administration (MARAD) determined this arrangement was a permissible "time charter" under 46 C.F.R. § 221.13, not an impermissible "bareboat" (demise) charter.
- American Cruise Lines (ACL), a competitor, challenged MARAD's decision, arguing the arrangement illegally transferred control of a U.S. vessel to a foreign entity and failed to meet amended notice and comment requirements under the 2021 NDAA.
- The case was reviewed under the narrow, deferential standard of the Administrative Procedure Act.
- The court affirmed MARAD's decision, finding ACL had standing but upholding MARAD's interpretation and process as reasonable and procedurally sufficient.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Was the charter a "bareboat" (impermissible) or "time charter" (permissible)? | The agreement was actually a bareboat charter, transferring control to Viking in violation of law. | The agreement was a time charter: River 1 retains control (crew, maintenance, etc.). | Agreement is a permissible time charter; no impermissible transfer. |
| Did MARAD apply blackletter maritime law and analogous regulations correctly? | MARAD misapplied law and regulations; foreign control exists under regulatory factors. | MARAD correctly interpreted law and reasonably applied analogous regulatory factors. | MARAD’s analysis reasonable and properly applied relevant law/regulations. |
| Did MARAD follow the 2021 NDAA’s notice and comment requirements? | MARAD’s public summary was too vague to allow meaningful comment. | MARAD posted a detailed summary and allowed public comment under NDAA. | MARAD’s process satisfied NDAA procedural requirements. |
| Does American Cruise Lines have standing to bring the challenge? | Suffered competitive injury that would be redressable if MARAD’s decision was vacated. | Injury speculative; no guarantee of enforcement action if decision vacated. | ACL has standing due to potential redress of competitive injury. |
Key Cases Cited
- Nissho–Iwai Co. v. M/T Stolt Lion, 617 F.2d 907 (2d Cir. 1980) (defines time charter characteristics under maritime law)
- Blanco v. United States, 775 F.2d 53 (2d Cir. 1985) (distinguishes bareboat or demise charters from time charters)
- Fitzgerald v. A.L. Burbank & Co., 451 F.2d 670 (2d Cir. 1971) (reiterates legal standard of exclusive possession for a demise charter)
- Hansen v. E.I. DuPont de Nemours & Co., 33 F.2d 94 (2d Cir. 1929) ("crew on board" as strong presumption against demise charter)