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HQ 115580

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March 20, 2002

VES-10-02-RR:IT:EC 115580 GEV

CATEGORY: CARRIER

Glen T. Oxton, Esq.
Healy & Baillie, LLP
29 Broadway
New York, NY 10006-3293

RE: Dredging; Pipelaying; Vessel; 46 U.S.C. App. § 292

Dear Mr. Oxton:

This is in response to your letter dated January 24, 2002, on behalf of your client, Iroquois Gas Transmission System (“Iroquois”), requesting reconsideration of Customs ruling letter 115538, dated December 21, 2001, regarding the applicability of 46 U.S.C. App. § 292 to their pipe-laying project. Our ruling on the issues for which you seek reconsideration is set forth below.

FACTS:

As represented in your initial ruling request dated November 29, 2001, which enclosed supporting documentation (Exhibits 1-15) regarding this matter, the Iroquois Gas Pipeline Project (the “Project”) involves laying a 24-inch gas pipeline from Northport, Long Island, westward in Long Island Sound and within the East River to Hunts Point in the Bronx, New York. The pipeline will be buried about 3 feet under the surface of the Sound and 5 feet under river bottoms.

It is proposed that a foreign-flag lay barge be used to lay the pipe. All other vessels involved in the Project will be qualified for U.S. coastwise trade.

The lay barge is a large work barge equipped with heavy cranes and powerful winches. When in operation, the lay barge is propelled and controlled using an array of 8-12 anchors ranging in size from 5-20
tons. In order to lay pipe, the lay barge winches itself forward against its anchors for about 2,000 feet. Then its anchors are moved by tugs and the process is repeated.

The deck of the lay barge is equipped with pipe-welding stations enabling several sections of pipe to be welded together. The barge also has an examination station where x-rays or other similar methods are used to check the integrity of the welding. After the pipe is welded and checked, it is laid off the specially constructed stern of the lay barge into the water and onto the floor of the Sound or river, as the barge winches itself forward.

The lay barge is essentially a self-contained floating factory. It has accommodations for over 200 persons and also has recreational facilities on board. When laying the pipe for the Project, it will remain continuously at the pipelaying site and conduct operations 24 hours a day. A more complete description of the lay barge and the other vessels to be used in the project is contained in Exhibit 2.

The primary means of burying the pipe will be a plow pulled by the lay barge; however, as described below, different considerations for excavation and covering the pipe affect three sections of the route. In order to place the pipe below the seabed in the mud bottom sections of the route, the lay barge will pull a plow on the bottom in front of the place where the pipe lands on the bottom or it will pull the plow in a separate operation after the pipe is laid on the bottom. The plow will leave bottom material piled on both sides of the pipe. A description of the plowing procedure is set forth in Exhibit 3 and a detailed description of the plow is provided in Exhibit 4.

The First Ten Miles

The bottom of the Sound in the first ten miles from Northport typically is composed of sand in which use of a plow may not be feasible because the sand might not hold a steep angle trench. Where these conditions are encountered, clamshell buckets will be used from smaller coastwise-qualified vessels. There may be short sections along the entire route where the bottom is too hard for a plow. A clamshell bucket also will be used in these areas.

For 70% of the first two sections of the route, i.e., the Long Island Sound sections, natural forces will be relied upon to cover the pipe. The remaining 30% of these sections require greater protection which will be provided by placing rock over the pipeline.

The Next 20 Miles

The second section of the route covers slightly more than 20 miles in Long Island Sound. The bottom here typically consists of mud in which use of a plow is proposed. The method of covering the pipeline is stated above.

The Final 5 Miles

The final section of the route consists of about 5 miles in the East River. Most of the bottom in this section is mud suitable for use of a plow. The method of coverage in this section is subject to approval of State and Federal authorities due to the concern that the bottom material may contain pollutants. It is anticipated that the applicant will be required to reverse plow or backfill the bottom material moved by the original plowing back over the pipe, then cap the covered pipeline with concrete mats or slabs. In areas where additional protection is required, a layer of rock will be placed over the mats or slabs.

Pipe and all other materials and supplies, as well as provisions and personnel, will be transported to the lay barge by material barges, service vessels and crew boats, all of which will be coastwise-qualified. The lay barge will not transport any materials of construction and will have no transportation function beyond its own mobilization to and from the site.

Iroquois is considering chartering a lay barge from J. Ray McDermott, Inc., Stolt Offshore Inc., or Global Industries. Descriptions of each of the vessels owned by these companies, registered respectively under the flags of Panama, France and Mexico, are set forth in Exhibits 5, 6 and 7.

In your request for reconsideration dated January 24, 2002, you state that your client has had further conversations with the potential contractors for the Project, as a result of which it has learned that the proposed process was not completely described in your initial ruling request of November 29, 2001. You omitted to state that the coastwise-qualified tugs that are used to move the barge’s anchors are also used to assist and pull the barge (together with the barge’s winches against its anchors) when the plow is being used from the lay barge. You further provide that without the tugs the lay barge could not by itself move from anchorage to anchorage along the pipeline route to construct the facility.

Accordingly, you request that you be permitted to amend the fourth paragraph on page 2 and the second paragraph on page 3 of your letter of November 29, 2001, to reflect the use of coastwise-qualified tugs as described above. These paragraphs are so amended for our consideration.

In addition, your request for reconsideration reiterates your position, as stated in your letter of November 29, 2001, that the barge should be considered a work platform rather than a vessel thereby rendering inapplicable the prohibition against non-coastwise-qualified vessels engaging in dredging in the navigable waters of the United States set forth in 46 U.S.C. App. § 292. Your most recent letter cites as support for your position Stewart v. Dutra Construction Company, Inc., 230 F.3d 461 (1st Cir. 2000) which was not cited in your initial ruling request. It is this case upon which we are urged to reverse our holding as to this issue.

Finally, your request for reconsideration also reiterates your position that the proposed operation does not constitute dredging within the meaning of 46 U.S.C. App. § 292. In this regard you urge us to consider overruling a precedential Customs ruling addressing this issue which was published as Customs Service Decision (C.S.D.) 79-331. In support of this position you cite the following Customs ruling letters: 114487, dated October 19, 1998; 113927, dated May 9, 1997; and 113223, dated September 29, 1994. You also cite regulations of the Department of Transportation (49 CFR §§ 192.246-295.248) and the case of Gar-Con Development, Inc. v. State of Florida, 468 So.2d 413 (1985).

At your behest, a meeting was held at Customs Headquarters on February 21, 2002, to provide you and your client an opportunity to orally present your position in this matter.

ISSUES:

Whether the lay barge in question is a “vessel” within the meaning of 46 U.S.C. App. § 292.

Whether the use of a plow from the lay barge or another vessel for the purpose of creating a trench into which a pipeline is laid and re-covered constitutes “dredging” within the meaning of 46 U.S.C. App. § 292.

LAW AND ANALYSIS:

Title 46, United States Code Appendix, § 292 (46 U.S.C. App. § 292, the coastwise dredging statute), provides that with one exception not herein applicable, vessels may dredge in the navigable waters of the United States only if they meet the requirements of 46 U.S.C. App. § 883 (i.e., built in and documented under the laws of the United States and owned by persons who are citizens of the United States (i.e., a coastwise-qualified vessel)).

Points embraced within the coastwise laws include all points within the territorial waters of the United States, including points within a harbor. The territorial waters of the United States consist of the territorial sea, defined as the belt, three nautical miles wide, seaward of the territorial sea baseline, and to points located in internal waters, landward of the territorial sea baseline, in cases where the baseline and coastline differ.

At the outset it should be noted that the amendatory language proffered in your letter of January 24, 2002, regarding the use of coastwise-qualified tugs in the Project merely confirms that which we understood to be the facts from the information provided in your initial request, i.e., that all vessels other than the barge used in the Project will be coastwise-qualified. Notwithstanding our consideration of these amended paragraphs, the provisions of the coastwise towing statute (46 U.S.C. App. § 316(a)) and those of the coastwise dredging statute (46 U.S.C. App. § 292) are mutually exclusive. Compliance with the former as to the tugs to be used in the Project is of no consequence with respect to Customs administration of the latter regarding the use of the barge at issue.

As for the first issue for our consideration, in Customs ruling 115538 we noted that it is your contention that the lay barge in question is not a “vessel” for purposes of 46 U.S.C. App. § 292, but merely a “work platform” and therefore beyond the purview of this statute. In this regard you noted that the term “vessel” is one of the few terms included in the general federal statutory definitions applicable to all federal laws:

The word “vessel” includes every description of watercraft or other artificial contrivance used, or capable of being used, as a means of transportation on water. 1 U.S.C. § 3

We also noted that 46 U.S.C. § 2101(45) incorporates this definition in the general provisions of the shipping laws. Furthermore, we also discerned that in 19 U.S.C. § 1401(a), a similar definition is found in the Customs laws:

The word “vessel” includes every description of water craft or other contrivance used, or capable of being used, as a means of transportation in water, but does not include aircraft.

In our prior ruling we discussed the judicial analysis courts have adopted concerning the above definition with respect to a particular craft. We stated that the courts have determined that “[a]s a general principle, where the vessel status of an unconventional craft is unsettled, it is necessary to focus upon the ‘purpose for which the craft is constructed and the business in which it is engaged.’” Gremillion v. Gulf Coast Catering Co., 904 F.2d 290, 293 (5th Cir. 1990), citing Blanchard v. Engine & Gas Compressor Servs., Inc., 575 F.2d 1140, 1142 (5th Cir. 1978), and The Robert W. Parsons, 191 U.S. 17, 30, 24 S.Ct. 8, 12, 48, 48 L.Ed. 73 (1903) In order to be deemed a “vessel” for general maritime jurisdiction, a craft must be “designed for navigation and commerce and retain such status even while moored, dry-docked, or otherwise immobilized and secured to land.” Cook v. Belden Concrete Products, Inc., 472 F.2d 999, 1001 (5th Cir. 1973), citing Cope v. Vallette Dry Dock, 119 U.S. 625, 7 S.Ct. 336, 30 L.Ed. 501 (1887). In determining vessel status, the court in Gremillion stated: “The caselaw is heavily skewed in favor of conferring such status upon craft whose primary mission is the transportation of cargo, equipment, or passengers over navigable waters.” Gremillion at p. 293. The court further provided that, “The greater the structure’s resemblance to conventional seafaring craft, the greater the odds of securing vessel status.” Id. However, as noted in Estate of Wenzel v. Seward Marine Services, Inc., 709 F.2d 1326, 1328 (9th Cir. 1983), the fact that a particular craft “was constructed for a purpose other than the transportation of persons or things from one place to another does not mean that as a matter of law, it is not a vessel in navigation.”

As to whether a particular craft resembles a traditional vessel as discussed above, the courts have looked to whether it maintains or possesses the following attributes of traditional vessels: (1) navigational aids; (2) lifeboats and other life-saving equipment; (3) a raked bow; (4) bilge pumps; (5) crew quarters; and (6) registration with the Coast Guard as a vessel. Gremillion, at 293, citing Bernard v.

Binnings Construction Co., Inc., 741 F.2d 824, 832, n.25 (5th Cir. 1984). The degree to which a particular craft possess these features is indicative as to its legally-recognized status as a vessel. Id.

With respect to the three foreign-flag barges proposed to be used in the Project, our initial ruling stated that a review of the documentation submitted (specifically, Exhibits 2, 5, 6, and 7) indicates the following. The general description of the craft is that of a “vessel” which has “sleeping quarters, messing, medical and other facilities necessary to support continuous work offshore.” (Exhibit 2) The three specific crafts under consideration are as follows: (1) a Panamanian-flagged “vessel” which possesses navigational/communication equipment (fax/phone, radio, radar), a sick bay, galley, laundry, movie room, conference room, life-saving equipment (rafts, jackets, buoys, foam system), and 116,000 USG of potable water (Exhibit 5); (2) a “registered French Merchant Ship” with “airconditioned living quarters and mess facilities for 233 men (excluding hospital capacity to 2 men), a fresh water output of 80 tons per day, navigational and positioning equipment (radar, gyrocompass, repeater compass, echo sounder, navigator), radio communication equipment, and lifesaving appliances (rafts, life ring buoys, etc.) (Exhibit 6); and (3) a Mexican-flagged barge with sleeping quarters for 259 people (Exhibit 7).

Upon reviewing the above-referenced characteristics of the three crafts under consideration, we stated that it is our position that each of them possess features sufficiently indicative of a vessel which far exceed those of a “work platform designed to receive, weld and lay pipe.”

The next issue considered in our initial ruling on this matter was that of transportation/navigation whereby you contended that any transportation function performed by a lay barge in this case is purely incidental to its primary purpose of serving as a platform for the assembly and laying of pipe. In this regard we noted that a barge that is built with mobility over navigable waters (such as any of the three under consideration) as one of its features still maintains its status as a vessel notwithstanding the fact that it may be moored at a site for several months. Brunet v. Boh Brothers Construction Co., 715 F.2d 196 (5th Cir. 1983) More specifically, we noted that a pipelaying barge, even one which remained afloat and moored in a repair yard, has been held to be a “vessel in navigation”. McDermott, Incorporated v. Boudreaux, 679 F.2d 452 (5th Cir. 1982)

The crafts deemed not to be vessels in the cases you cited in your original ruling request are distinguishable from those described in Exhibits 2, 5, 6, and 7 in that they did not possess the same judicially-recognized characteristics. (See Cook, supra, concerning a craft not designed for the purpose of navigation but rather for use primarily as a stationary floating construction platform; Leonard v. Exxon Corp., 581 F.2d 522 (5th Cir. 1978), concerning three barges lashed together to create a workplace to assemble pipe while “more or less permanently” connected to shore; Watkins v. Pentzien, Inc., 660 F.2d 604 (5th Cir. 1981), concerning two barges secured end-to-end and to the bed of a river that were used to weld and lay pipe in a marsh close to the bank of the river; Gremillion, supra, addressing a barge without radar or navigational apparatus, not registered with the Coast Guard and used exclusively as a stationary housing facility in shallow coastal and inland waters; Bernard, concerning a work punt without a deck or crew quarters used as a small platform from which to break cement and guide sheet pilings; and Pavone v. Mississippi Riverboat Amusement Corp., (The BILOXI BELLE), 52 F.3d 560 (5th Cir. 1995) concerning an indefinitely moored, shore-side, floating casino.)

Accordingly, in view of the above-cited authority, Customs ruling letter 115538 held that the lay barge in question is a “vessel” within the meaning of 46 U.S.C. App. § 292.

In urging us to reverse our decision on this issue and adopt your position that the subject barge is a work platform and not a vessel, you submit that the case of Stewart v. Dutra Construction Company, Inc. 230 F.3d 461 (1st Cir. 2000) should govern this issue. As discussed below, it is our opinion that this case is not controlling in this matter.

In Stewart, the court addressed the issue of whether the SUPER SCOOP, a large floating platform operating as a dredge in the excavation of a tunnel in Boston Harbor, was a vessel not for purposes of the dredging statute (46 U.S.C. App. § 292), but rather for purposes of recovery for personal injury to or death of seamen under 46 U.S.C. App. § 688 You note that the SUPER SCOOP’s characteristics were very similar to those of the three proposed barges. It is a large floating platform without propulsion but had navigational lights, ballast tanks, crew dining facilities, and navigational equipment. Tugboats were normally used to achieve slow movement of the barge with crew members using anchors and chains to achieve positional movement. You also note that, “The

SUPER SCOOP was used to dig a trench for a tunnel in Boston harbor in a project similar in nature to the Iroquois pipeline project, with the exception that in Boston the spoils were removed by scows.”

You further state, “Whereas in the proposed project there will be no transportation of spoils.” In holding that the SUPER SCOOP was not a vessel for purposes of 46 U.S.C. App. § 688, the court, while acknowledging that the activity in which it was engaging was in fact dredging, determined that for purposes of recovery under that statute, dredging was not transportation or navigation but “primarily a form of construction.” Id. at pp. 464, 468

We find your reliance on the court’s decision in Stewart misplaced for numerous reasons. First, as noted above, that case involved an entirely different statute from the statute at issue in the case at hand. The assumption that the courts would reach the same conclusion as to vessel status for all federal laws in cases where a water craft is involved falls of its own weight. This is no more evident than in the facts of the Stewart case. Unlike the three foreign-flag barges under consideration for use in the Project, the SUPER SCOOP was not only required to be registered with the U.S. Coast Guard (USCG) and comply with safety regulations issued by that agency and the Department of Transportation, it was issued a load-line certificate by the American Bureau of Shipping. Id. at p. 464. These are federal requirements imposed upon vessels, not work platforms.

It is also noteworthy that the court in Stewart acknowledged that the activity of the SUPER SCOOP in Boston Harbor constituted dredging. Id. at pp. 463-464. Your position that the definition of “vessel” is to be interpreted the same for all federal laws therefore presents a dichotomy. Since the SUPER SCOOP in Stewart was deemed not to be a “vessel” for purposes of 46 U.S.C. App. § 688, under your proposed position it would also not be considered a vessel for purposes of 46 U.S.C. App. § 292. Also under your rationale, if the SUPER SCOOP was foreign-flagged, it could therefore engage in dredging in the navigable waters of the United States, including Boston Harbor, without violating the dredging statute, since it is not a vessel as the court in Stewart determined. Such an interpretation, however, clearly runs contra to the Congressional intent of the coastwise laws, which include 46 U.S.C. App. § 292, to protect the U.S. maritime industry. (see 42 O.A.G. 189, August 7, 1963)

Your reliance upon Stewart is also misplaced for other reasons. Unlike in the dredging statute, the word “vessel” does not even appear in 46 U.S.C. App. § 688. In this regard it is paramount that the court in Stewart noted that:

Although [46 U.S.C. App. § 688] itself does not use the word “vessel,” the Court has placed a gloss on the statute. This gloss clarifies that a prospective plaintiff’s status as a seaman (and, therefore, his eligibility to sue under the [46 U.S.C. App. § 688]) depends, in the first instance, on his connection to a “vessel in navigation.” McDermott Int’l, Inc. V. Willander, 498 U.S. 337, 354, 111 S.Ct. 807, 112 L.Ed.2d 866 (1991). But the Justices have spoken rather elliptically as to the nature of that connection, e.g., Chandris, 515 U.S. at 368-71, 111 S.Ct. 807, and they have left the lower courts to fret, largely unguided, over what is or is not a vessel in navigation. That question is of utmost importance here, as Dutra acknowledges the appellant’s status as a member of the SUPER SCOOP’s crew. The pivotal issue, then, is whether the SUPER SCOOP, at the time of the accident, was a vessel in navigation as that term is used in the jurisprudence of [46 U.S.C. App. § 688]. (Id. at 466, Emphasis added)

It is readily apparent that the court in Stewart recognized that it was interpreting the term “vessel” specifically for purposes of 46 U.S.C. App. § 688, not for all federal statutes. Furthermore, we note that courts have disagreed with your statement on p. 6 of your letter of January 24, 2002, regarding the SUPER SCOOP, that “a barge built and used to excavate the harbor bottom is not engaged in trans-portation, navigation or commerce.” Not only does the court in Stewart acknowledge that the SUPER SCOOP was a dredge, it is judicially recognized that a dredge is a vessel engaged in commerce. Saylor v. Taylor, 77 F. 476, 477 (4th Cir. 1896)

As noted above, the court in Stewart recognized that the lower courts have been “largely unguided, over what is or is not a vessel in navigation” for purposes of 46 U.S.C. App. § 688. This is evident from the holdings of various other Jones Act cases which, like Stewart, emanated from the First Circuit. Specifically, we note the decision in Gahagan Const. Corporation v. Armao, 165 F.2d 301, 305 (1st Cir. 1948), cert. denied, 333 U.S. 876, 68 S.Ct. 905, 92 L.Ed. 1152. The dredge in that case, like the foreign-flag barges under consideration,
had the following characteristics: (1) no motive power of its own and had to be moved by tugs; (2) once positioned by tugs it moved itself forward for short distances by using spuds which held the dredge in place during dredging operations as pivots in connection with lines attached to anchors; (3) the crew ate and slept on board; and (4) navigation lights. The court held that this dredge was a “vessel” for purposes of 46 U.S.C. App. § 688 in accordance with the definition of “vessel” set forth in 1 U.S.C. § 3, supra.

The First Circuit has also recognized the vessel status under 46 U.S.C. App. § 688 of “special purpose floating structures whose function requires exposure to the hazards of the sea usually at some distance from the shore, such as barges, dredges, drilling platforms and floating derricks.” Powers v. Bethlehem Steel Corporation, 477 F.2d 643, 647-648 (1st Cir. 1973), citing Gahagan, supra, and Stafford v. Perini Corporation, 475 F.2d 507 (1st Cir. 1973) (a construction barge anchored two miles offshore was a vessel for purposes of the Jones Act). More importantly, the court in Powers stated that, “These navigable craft, like conventional vessels, retain their status even when berthed for long periods or even when resting upon or attached to the bottom.” Id. at p. 648 Further in this regard, it is noteworthy that the Supreme Court has not considered a dredge to be other than a vessel for purposes of recovery under 46 U.S.C. App. § 688 even though at the time of the injury to the individual the dredge was anchored to shore. Senko v. La Crosse Dredging Corporation, 352 U.S. 374, 77 S.Ct. 415, 1 L.Ed.2d 724 (1957) The Court noted that “this dredge, like most dredges, was not frequently in transit.” Id. at p. 417

Finally, the Supreme Court has recognized that the term “vessel” is susceptible of different interpretations where the administration of differing federal laws is at issue. In this regard we note the Court’s decision that a dredge and accompanying scows used in the construction of a pier at the Boston navy yard were “vessels” for purposes of federal labor law. Ellis v. United States, 206 U.S. 246 (1907) (See also Norton v. Warner Co., 321 U.S. 565, 64 S.Ct. 747, 88 L.Ed. 430 (1994) where the Court held that a barge without motive power, that never went to sea or moved more than 30 miles from Philadelphia, was a “vessel” for purposes of the Longshoremen’s and Harbor Workers’ Act, 33 U.S.C.A. § 901, et seq.)

Accordingly, we find no controlling authority to support your contention that the foreign-flag lay barges proposed to be used in the Project are “vessels” as that term is used for purposes of admin-istering 46 U.S.C. App. § 292. Moreover, our prior decision to the contrary is consistent with the protectionist intent of that statute. Therefore, our determination as to this issue remains unchanged.

In regard to the second issue for which you seek reconsideration, you contend that the proposed activity does not constitute “dredging” for purposes of 46 U.S.C. App. § 292. This activity, which will take place during the last 25 miles of the Project, involves a lay barge pulling a plow on the seabed in front of the place where the pipe lands on the bottom or it will pull the plow in a separate operation after the pipe is laid on the bottom. The plow will leave bottom material piled on both sides of the pipe. According to your submission, the plow is moved along with the barge at the rate of pipelaying and is designed to cut a ditch approximately 8 feet deep and 6-8 feet wide in front of the pipeline.

In our response to your initial ruling request, we noted that with respect to whether a particular activity constitutes “dredging” for purposes of 46 U.S.C. App. § 292, Customs has long-held that this term means “the use of a vessel equipped with excavating machinery in digging up or otherwise removing submarine material.” (Emphasis added; Customs ruling letters 103692, dated December 28, 1978 (published as Customs Service Decision (C.S.D.) 79-331); 109108, dated November 13, 1987; and 109910, dated January 26, 1989 (published as C.S.D. 89-64); see also Gar-Con Development v. State, 468 So.2d 413 (1985)) Using this definition of “dredging”, Customs has ruled that the use of a foreign-built vessel to tow an underwater sea plow to create a furrow or trench into which pipe is to be laid during the course of a pipelaying operation constitutes “dredging” within the meaning of 46 U.S.C. App. § 292 and is therefore prohibited. (See C.S.D. 79-331, followed in Customs ruling letter 114487, dated October 21, 1998) We therefore held in Customs ruling letter 115538 that in view of the fact that the activity proposed to be accomplished by the lay barge in the Project is the same as that addressed in C.S.D. 79-331 (i.e., the towing of an underwater sea plow to create a furrow or trench into which pipe is to be laid during the course of a pipelaying operation), we are governed by the holding of that decision. We further stated that the remainder of the administrative decisions cited in your initial request for our consideration (i.e., C.S.D.s 88-7, 89-64, 89-40, and Customs ruling
letter 113223, dated September 29, 1994), address operations that are distinguishable from that under consideration in this case. Consequently, we concluded that these decisions are not controlling in this matter.

In your request for reconsideration of this second issue you state that in Customs ruling letter 115538 we merely stated that Customs is governed by the holding in C.S.D. 79-331 without considering whether it should be overruled. In having been given the opportunity to further expound upon our position, our rationale for declining to change this precedential ruling is set forth below.

Prior to addressing the arguments raised in your letter, at the outset we find it instructive to once again review Stewart, supra, cited at length in support of your position that the subject barge is not a vessel, but omitted with respect to the issue of whether the proposed activity in this case constitutes “dredging” for purposes of 46 U.S.C. App. § 292. We once again draw your attention to the following statement on p. 5 of your letter of January 24, 2002:

The SUPER SCOOP was used to dig a trench for a harbor tunnel in Boston in a project similar in nature to the Iroquois pipeline project, with the exception that in Boston spoils were removed by scows. Whereas, in the proposed project there will be no transportation of spoils.
(Emphasis added)

It is noteworthy that the court in Stewart considered the SUPER SCOOP to be engaged in “dredging”. Id. at pp. 462-464. However, you urge us to reach the opposite conclusion in this case notwith-standing your admission that the barges in question to be used in the Project will be engaging in a “similar” activity. The position you urge us to adopt is irreconcilable with your admission as to the similarity of the activities in question and the court’s confirmation that such activities constitute dredging.

Turning now to the Customs rulings you cite in support of your position, you state that Customs has consistently held that non-coastwise-qualified vessels may engage in pipelaying. (C.S.D. 79-321; Customs ruling letter 114487, dated October 19, 1998) You further provide that current federal regulations by various federal agencies including the Department of Transportation require that pipelines be buried, the depth of burial being dependent on the depth
of water. (49 CFR §§ 195.246 – 295.248) You therefore conclude that the use of a plow or other device to create a trench is clearly an integral part of the pipelaying process which Customs has agreed may be accomplished by a non-coastwise-qualified vessel.

Notwithstanding the fact that pipelaying and dredging, or for that matter, towing as discussed earlier in this ruling, may be accomplished during the course of a single operation such as the Project, to suggest that such divergent activities be collectively accorded identical treatment under the respective coastwise laws governing each is to ignore the disparate provisions of each of the following relevant statutes: 46 U.S.C. App. § 883 (merchandise transportation); 46 U.S.C. App. § 292 (dredging); and 46 U.S.C. § 316(a) (towing). Just because a foreign-flag vessel is permitted to lay pipe, as held in C.S.D. 79-321 and Customs ruling letter 114487, does not in and of itself exempt it from compliance with other applicable coastwise laws. Likewise, the fact that the tugs to be used are coastwise-qualified is of no consequence to the activities of the barge in question. Customs therefore declines to accord blanket treatment for vessels in a single operation that involves the laying of pipe, the creation of a trench in which it will be buried, and any accompanying towing/positioning activities, with respect to the administration of the aforementioned statutes.

You also state that the creation of a trench for the purpose of pipelaying does not come within the definition of dredging adopted by Customs and referenced in C.S.D. 79-331. You suggest that the phrase “digging up or otherwise removing,” set forth in the aforementioned definition requires removal of bottom material. You further suggest that the structure of the phrase shows that “digging up” means that something must be removed and digging with some movement of bottom material for the purpose of pipelaying does not involve any “removal” or transportation of spoil. In this regard you note that the case cited in Customs ruling letter 115538 and in other Customs rulings, Gar-Con Development v. State, 468 So.2d 413 (Fla. App. 1 Dist. 1985), holds that:

The common plain and ordinary meaning of the word “dredging” is the removal of soil from the bottom of waters by suction or scooping or other means. 468 So.2d at 414-415 (Emphasis added)

It is your position that the Gar-Con court did not adopt or approve the definition of dredging contained in the Florida regulations discussed therein – “the excavation, by any means, in the waters of the state.” You further contend that by applying the plain meaning of the word, the court held that not all submarine excavation constitutes dredging; and removal of bottom material is required. On this basis, you state that the court held that pile driving was not dredging. You therefore assert that the same rationale applies to pipelaying.

With respect to your arguments regarding the definition of “dredging” adopted by Customs for purposes of 46 U.S.C. App. § 292 as it pertains to the case currently under consideration, we offer the following.

As noted above, Customs has long-held the position, as set forth in numerous rulings including C.S.D. 79-331, that “dredging generally means the use of a vessel with excavating machinery in digging up or otherwise removing submarine material.” This position is bolstered by the court’s discussion in Gar-Con where, in addition to the sentence you cite, the court also included the following three sentences preceding it:

Dredging is defined as “excavation” by any means The word “excavate” is derived from a latin word meaning to hollow out. Its common, plain and ordinary meaning is to make a cavity or hole in, to dig out, hollow out, to remove soil by digging, scooping out or other means. Id. at 414-415.

This all-inclusive interpretation adopted by Customs, which does not limit the meaning of the word “dredging” to “removal” of material from the bottom by its breaking the surface of the water, is consistent with the protectionist intent of Congress in enacting this statute. It is our position not only that the “removal” of submarine material would take place during the course of the Project, but also that dredging includes “digging out”, an activity that indisputably would take place during the course of the Project which proposes that the subject barge create a trench 3-5 feet deep on the bottom of the Sound or river (or 8 feet deep and 6-8 feet wide as described in Exhibit 3).

Further in support of your position that we adopt a narrower interpretation of “dredging”, you cite to the following Customs ruling letters wherein the activity involved was held not be “dredging” for purposes of 46 U.S.C. App. § 292: 113927, dated May 9, 1997 (the
use of a grapnel from a vessel that may have penetrated the seabed up to .3 meters in order to raise up and remove out-of-service cable and debris from the ocean bottom); and 113223, dated September 29, 1994 (the use of an underwater trencher from a vessel which created an opening approximately 12” wide and 1 meter deep in which subsea cable was to be laid) Such incidental manipulation of the ocean bottom is clearly distinguishable from the circumstances of the Project where, as stated above, it is proposed to intentionally create a trench 3-5 feet below the bottom of the Sound or river (or 8 feet deep and 6-8 feet wide as provided in Exhibit 3).

Accordingly, we decline to overrule our holding in C.S.D. 79-331. To do so, as you suggest, in the absence of compelling legal authority, runs contra to the interests of Congress in protecting U.S. maritime interests, specifically in this case, the domestic dredging industry.

HOLDINGS:

The lay barge in question is a “vessel” within the meaning of 46 U.S.C. App. § 292.

The use of a plow from the lay barge or another vessel for the purpose of creating a trench into which a pipeline is laid and re-covered constitutes “dredging” within the meaning of 46 U.S.C. App. § 292.

Customs ruling letter 115538 is affirmed.

Sincerely,

Sandra L. Bell

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