Details still unknown, but feds approved Jones Act settlement

The federal government has approved a settlement between the U.S. Department of Homeland Security and Furie Operating Alaska LLC over a Jones Act violation and fine.

The Acting Assistant Attorney General for the Civil Division of the U.S. Department of Justice approved the settlement on Feb. 3, according to a Feb. 7 court filing. The filing announcing the final approval of the settlement did not include any details of its contents.

The announcement appears to bring an end to the five-year legal fight between Furie and the federal government, as well as months of delays within the Justice Department.

The two sides announced the settlement last summer but have withheld details while the Justice Department reviewed it. This final review took much longer than expected, which proved to be the result of lost paperwork, according to a lead attorney on the case.

“The delay in obtaining final approval, it seems, can be explained by the fact that the approval packet seems to have been lost,” U.S. Attorney Karen L. Loeffler told a judge from the U. S. District Court for the District of Alaska in a status report in late January.

Loeffler explained that she had been under the impression that settlement was sent through the ranks of the Department of Justice for final approval in November 2016.

“However, no one who is still around can find where the matter was approved,” Loeffler explained in a Jan. 31 filing. “Both the Assistant Attorney General and the Associate Attorney General have left the Department. The individuals with whom the undersigned had been communicating with all thought the case had proceeded and been approved, but no one can find record of the approval or of the matter having been forward for approval. Normally, such matters are assigned a tracking number, but there is no record of the case being assigned a tracking number. The only record are my emails transmitting the request for settlement approval. This might have been caught earlier, but I, too, had assumed that the matter had been forwarded but was delayed because of the holidays.”

Furie and the U.S. Department of Homeland Security announced a “tentative” settlement in August 2016 to their long-running legal dispute over a Jones Act violation, but have withheld details of the deal while the Justice Department has been reviewing its terms.

In late September 2016, Loeffler told the court that she expected final approval within 45 days. But she subsequently requested extensions in late November and mid-January.

After the most recent request for more time, the court asked Loeffler to provide a status update with an affidavit from an appropriate Justice Department official explaining the delay and providing a timeline for final approval. The attempt to secure that information revealed the state of the paperwork and launched an expedited review of the settlement.

U.S. Customs and Border Protection assessed a $15 million fine against Furie predecessor Escopeta Oil Co. in October 2011, after the company brought the Spartan 151 jack-up rig to Alaska to explore the offshore Kitchen Lights unit. The federal agency accused the company of violating the Jones Act, which requires any vessel moving between domestic ports to be built, flagged, crewed and mostly owned by Americans.

The following summer, Furie sued the U.S. Department of Homeland Security, calling the fine “unwarranted and unprecedented.” The two sides entered mediation late last year.

- ERIC LIDJI