Friday, June 2, 2023 | Back issues
Courthouse News Service Courthouse News Service

‘The Ship Has Sailed,’|Court Tells Cargo Co.

(CN) - Ruling that "the ship has ... literally sailed," the 9th Circuit dismissed as moot the claims of a U.S.-based cargo company that was out-bid by a foreign rival for delivering vegetable oil to India under the government's Food for Peace program.

America Cargo Transport sued the Department of State Agency for International Development (USAID) and the Department of Transportation Maritime Administration after it lost a bid to ship 5,660 metric tons of vegetable oil from Texas to India through the Food for Peace program.

Federal law requires that 75 percent of all such shipments be transported by "U.S.-flag vessels," or U.S.-based shipping companies.

American Cargo offered to deliver the full vegetable oil shipment for $520 per metric ton, while rival Maersk Sea-Land bid $125 per metric ton for a portion of the shipment.

USAID went with Maersk Sea-Land for part of the shipment and hired foreign cargo companies to deliver the rest of the cargo.

American Cargo argued that Maersk Sea-Land was not actually a U.S.-flag vessel, and that USAID was required to run its decision by the Department of Transportation Maritime Administration, but failed to do so.

The government conceded that USAID should have obtained the maritime agency's approval, but said it would not make the same mistake again, leading a federal judge to dismiss American Cargo's lawsuit as moot.

A three-judge panel for the 9th Circuit agreed that the case is moot for two reasons: first, the government acknowledged the mistake and adjusted bidding and shipping practices accordingly; and second, the vegetable oil has already been shipped.

"Because the shipment at issue has already been completed -- the ship has in this case literally sailed -- [American Cargo's] claim for injunctive relief is moot," Judge M. Margaret McKeown wrote for the Seattle-based panel.

The 9th Circuit also affirmed the Washington judge's denial of American Cargo's bid for damages and attorney's fees.

Read the Top 8

Sign up for the Top 8, a roundup of the day's top stories delivered directly to your inbox Monday through Friday.