Great Lakes Dredge & Dock Loses Appeal in Offshore Wind Farm Contracts Dispute

Great Lakes Dredge & Dock recently faced a setback in its efforts to reverse a Customs and Border Protection ruling that could impact its ability to secure contracts for offshore wind farm projects. The U.S. 5th Circuit Court of Appeals rejected GLDD’s appeal, stating that the harm to the company’s business interests was speculative and had not yet materialized.

In January 2021, CBP issued a ruling prohibiting foreign-flagged vessels from dumping U.S. rock onto the U.S. continental shelf, citing the origin and destination of the rock as U.S. points. However, following a request from the American Petroleum Institute, CBP reversed its decision two months later, allowing foreign vessels to deposit the first layer of scour protection rock at new U.S. windfarm sites. The subsequent layers would still need to be placed by Jones Act vessels.

The Jones Act, which protects U.S. coastwise shipping interests, aims to exclude foreign operators who may have cost advantages due to lower capital, labor, and compliance costs. By defining the limits of these protections, CBP plays a crucial role in upholding the Jones Act and ensuring a level playing field for U.S. maritime companies.

GLDD had heavily invested in a new Jones Act-compliant rock placement vessel, anticipating a steady stream of contracts for offshore wind installations. As the sole bidder with a qualified vessel, GLDD secured multiple contracts by 2023. However, the company raised concerns that CBP’s ruling could hinder its ability to compete for future projects by allowing foreign competitors to enter the market.

The American Petroleum Institute, intervening in the case, argued that GLDD lacked standing to sue as it had not yet lost a bid to a foreign operator. The district court agreed, dismissing GLDD’s suit for lack of standing. Despite GLDD’s appeal, the 5th Circuit upheld the dismissal, citing insufficient evidence of potential harm from foreign competition.

While GLDD’s concerns about future competition are valid, the court emphasized that the company had not demonstrated concrete injury-in-fact from CBP’s ruling. With the offshore wind industry poised for growth, the implications of foreign competition remain uncertain, making it challenging to assess the impact on U.S. companies like GLDD.

Overall, the legal battle highlights the complex interplay between U.S. maritime regulations, foreign competition, and the evolving offshore wind sector. As companies like GLDD navigate these challenges, the need for clarity and consistency in regulatory decisions becomes increasingly crucial for the industry’s future.