Rulings, remedies and court proceedings for customs and trade professionals

Alaska Shipping Companies Move for Injunction Against Shipping Penalties for Seafood

Two Alaskan shipping companies, Kloosterboer International Forwarding and Alaska Reefer Management, filed for a preliminary injunction and a temporary restraining order against CBP penalties for seafood shipments in the U.S. District Court for the District of Alaska. CBP recently continued to issue the penalty notices for companies shipping Alaskan seafood from Alaska to the eastern U.S. via the Bayside, New Brunswick, Canada, port, alleging Jones Act violations. The two companies challenged these penalties in the district court, declaring that they have essentially shut down this critical shipping route that had been previously cleared by CBP as complying with the Jones Act.

In the preliminary injunction motion, KIF and ARM said that continued enforcement of these penalties -- which have totaled nearly $25 million for KIF alone -- will lead to irreparable harm to their business and to the "entire frozen fish supply chain to the eastern United States." The plaintiffs also argue that they are likely to succeed on at least one of their claims since the penalties were issued without any prior notice or chance to comment, in clear violation of the plaintiffs' Fifth Amendment Due Process clause rights.

CBP declined to comment on the case. "Nonetheless, lack of comment should not be construed as agreement or stipulation with any of the allegations," an agency spokesperson said.

"We are reeling from crippling penalties, Customs has not been forthcoming to share specifics, and Customs' long-standing guidance tells us we are operating in compliance," Per Brautaset, president of ARM, said in a statement in a news release. "We just didn't have a choice but to try and save our business and our partners' businesses, and all the jobs in Alaska and other communities that will be lost."

Jennifer Adamski, director of logistics and operations at KIF, added: "We are grateful for the support of many members of the U.S. seafood supply chain and their legislators who are concerned by this apparent shift in interpretation without warning. We were forced to halt shipping almost two weeks ago, which has created food supply disruptions and economic hardship to our industry, our customers, and our workers -- who risk losing their jobs in Alaska and elsewhere."