From there, the fish is loaded onto trucks that are temporarily loaded onto flat rail cars along 100 feet of track before they drive into Maine. The seafood eventually reaches fast food restaurants and other outlets in several states.
The East Coast supply chain uses foreign-flagged vessels to deliver the seafood. But the companies claim they comply with the Jones Act because of a provision allowing an exemption, in part because the frozen seafood makes the brief trip from Canada by rail before it reaches Maine, the complaint says.
However, penalty notices have apparently been issued because the Canadian rail route is used, even though the agency has supported the route in its published interpretative rulings, the complaint says.
The suing companies say the notices threaten that long-established supply chain and jobs in Alaska and the Lower 48, according to the complaint.
“CBP’s penalty notices effectively have shut down a critical shipping route that — for over 20 years — has been approved by CBP as complying with the Jones Act, and which is essential to the delivery of frozen seafood to consumers, fast food chains, and school lunch and food bank programs throughout the United States,” the complaint asserts.
Customs and Border Protection “does not comment on matters under litigation,” the agency said in an emailed statement.
“Nonetheless, lack of comment should not be construed as agreement or stipulation with any of the allegations,” the statement said.
The penalties for Kloosterboer alone total $25 million, the complaint says. Numerous other companies in the plaintiffs’ supply chain have also received notices totaling more than $325 million, the complaint says.
“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,” said Per Brautaset, president of Alaska Reefer Management, in a prepared statement on Sept. 2. “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.”