HomeCircuit Court Admiralty Cases2001 (May-August)

The following are links to selected Circuit Court opinions concerning admiralty and maritime law issued during the period May through August, 2001.

Federal Marine Terminals v. Worcester Peat Co.
First Circuit Court of Appeals
August 27, 2001

Charter Parties/Demurrage: since courts have been reluctant to impose demurrage liability on a party that is neither a signatory, successor nor possessor of a document that expressly or by incorporation refers to demurrage, the loading stevedore who was not in privity will not be liable for demurrage that the shipper was required to pay the vessel due to the delays in loading the cargo of peat moss; Carriage of Goods: the loading stevedore is further not liable for the loss of any peat moss since the shipper failed to provide any reliable evidence of how much peat moss was lost during loading and failed to establish that the amount lost was beyond what was anticipated for this type of cargo.

Pearce v. United States
Sixth Circuit Court of Appeals
August 23, 2001 

Suits in Admiralty Act: while the Corps of Engineers had a duty to warn boaters of the dangers around an operating dam, it satisfied that duty by posting nine clearly-visible warning signs and including a warning on the navigational chart that highlighted the taildeck area of the dam as a "Danger Zone";further, although it had installed a warning horn near the dam that was not working at the time of the accident where two boaters drowned, it did not violate the Good Samaritan Doctrine because, first,the Corps had previously determined that warning signs provided ample warning and, second, the system was not active because of high water damage.

Myers v. American Triumph F/V
Ninth Circuit Court of Appeals
August 13, 2001

Coast Guard Regulation: plaintiff's admiralty action against the American Triumph F/V for conversion of the ferae nature fish that the Vessel had captured from 1989 through 1998 was properly dismissed since the Vessel had a Coast Guard Certificate of Documentation and Fishery Endorsement that was conclusive evidence of its qualification to be employed in the fishing trade.

OPE International v. Chet Morrison Contractors
Fifth Circuit Court of Appeals
August 9, 2001 (Revised)

Arbitration: the Federal Arbitration Act preempts section 9:2779 of the Louisiana Revised Statutes that would have precluded the parties from enforcing the agreement to arbitrate, thus the district court properly compelled the parties to submit to arbitration.

Yang Ming v. Okamoto Freighters
Ninth Circuit Court of Appeals
August 7, 2001

Carriage of Goods/Indemnity: the ocean carrier was entitled to indemnity under the bill of lading from the NVOCC/shipper pursuant to the NVOCC/shipper's breach of the warranty of the description of the cargo; the containers were said to have contained cigarettes and cigars, but instead contained worthless used tires, which resulted in the ocean carrier suffering demurrage, shifting, terminal handling, transhipment and customs charges after the containers were rejected by the consignee and abandoned by the NVOCC/shipper; the NVOCC/shipper was in turn entitled to indemnity from the initial shipper of the goods under the separate bill of lading that the NVOCC/shipper had issued to the initial shipper which also contained a warranty of cargo description. 

Temporary Employment v. Trinity Marine Group
Fifth Circuit Court of Appeals
August 7, 2001

Longshore & Harbor Workers' Act: the Benefits Review Board lacked jurisdiction to resolve the contractual indemnity issue between the employment agency and the employer, thus the final order of the Benefits Review Board holding the employment agency liable in indemnity for compensation owed the longshore employee was vacated.

Hyundai Mipo Dockyard Co. v. AEP/Borden Industries
Second Circuit Court of Appeals
August 3, 2001

Procedure (Personal Jurisdiction): since the district court made no factual findings concerning whether Hyundai Mipo Dockyard ("HMD") had sufficient minimum jurisdictional contacts apart from the fact that it had a local office and a White Pages listing in the district, the case would be remanded for an evidentiary hearing on whether the court had personal jurisdiction to have issued the injunction restraining HMD from proceeding with its declaratory judgment action in Korea.

Underwriters at Lloyd's v. Labarca
First Circuit Court of Appeals
August 2, 2001

Marine Insurance: since the vessel was unseaworthy at the time she sank (because hoses that supplied sea water to air conditioning units were left unsealed after repair work) and this unseaworthy condition was the cause of the sinking, the underwriters were relieved of any obligation under the hull insurance policy.

United States v. Great Lakes Dredge & Dock Co.
Eleventh Circuit Court of Appeals
July 30, 2001

Government Regulation: the United States Government may claim for damages under the National Marine Sanctuaries Act ("NMSA") of 1972, 16 U.S.C. § 1431-1445, for property damage to the Florida Keys Marine Sanctuary caused by a grounded tugboat and dredge pipe.

Eott Energy v. Winethur Swiss Insurance
Ninth Circuit Court of Appeals
July 20, 2001

Foreign Sovereign Immunity: since the defendant insurance company is not directly owned by Ireland, but rather held through an intermediate holding company owned by Ireland, it is not itself an "instrumentality of a foreign state" under the Foreign Sovereign Immunity Act ("FSIA"); even though the insurance company is not directly owned by ireland, it is still possible for it to be an "organ" of a foreign state as defined by § 1603(b)(2) of the FSIA; since the record is unclear, the case will be remanded to the district court to determine whether the company acted as an "organ" of a foreign state by engaging in "a public activity on behalf of the foreign government."

Lite-On v. Burlington Aire Express
Ninth Circuit Court of Appeals
July 10, 2001

Carriage of Goods: the consignor of goods named in a bill of lading has standing to sue the carrier for misdelivery of goods and breach of contract regardless of evidence that the consignee, and not the consignor, entered into the shipment contract with the carrier; thus the district court's granting of summary judgment on behalf of the consignor's assignee against the carrier for delivery of the goods without presentation of an endorsed copy of the bills of lading, and where the consignee had not paid for the goods, was affirmed. 

Newport News Shipbuilding v. Riley
Fourth Circuit Court of Appeals
June 29, 2001 (Revised)

Longshore & Harbor Worker's Act: claimant made out a prima facie case of disability, and Newport News did not rebut this case by showing that there was suitable alternative employment available either within or without the company; Newport News instead contended simply that claimant was terminated for poor performance, which did not enable Newport News to carry its burden of showing the availability of suitable alternative employment.

Verdine v. Ensco Offshore
Fifth Circuit Court of Appeals
June 22, 2001

Indemnity: since the agreement for repairs to a fixed platform rig off the coast of Louisiana pertained to specific oil wells and related to the exploration, development, production, or transportation of oil, gas, or water, the Louisiana Oilfield Anti-Indemnity Act applied; thus the indemnity and maritime choice of law provisions in the agreement were invalidated under the Act.

Weaver v. Hollywood Casino-Aurora
Seventh Circuit Court of Appeals
June 21, 2001

Admiralty Jurisdiction/Jones Act: a party seeking to invoke federal admiralty jurisdiction over a personal injury claim pursuant to 28 U.S.C.1333(1) and pursuant to the the Jones Act must satisfy conditions of location on navigable waters and of connection with maritime activity; since the record indicated that the portion of the river where the casino boat was located may not have been navigable in fact, the case was remanded so that the district court could determine whether subject matter jurisdiction existed.

Garcia v. Amfels, Inc.
Fifth Circuit Court of Appeals
June 19, 2001

Longshore & Harbor Workers' Act/Procedure: since the law in the Fifth Circuit was clear that the LHWCA does not create federal subject matter jurisdiction when raised as a defense, the district court did not abuse its discretion when it awarded plaintiffs their attorneys fees and costs resulting from defendant's wrongful removal of plaintiffs' state court case brought under state law to the district court.

Snowden v. Director, OWCP
District of Columbia Circuit Court of Appeals
June 19, 2001

Longshore & Harbor Workers' Act: notwithstanding the general grant of jurisdiction to the Benefits Review Board contained in 33 U.S.C. 921(b)(3), actions concerning orders declaring default in the payment of installments due under the Act are to be brought in the district court and, only subsequent thereto, by appeal to the appropriate court of appeals; thus the Benefits Review Board erred by asserting jurisdiction and overturning a supplementary compensation order of the Office of Workers' Compensation Programs.

Fireman's Fund Insurance v. Tropical Shipping
Eleventh Circuit Court of Appeals
June 19, 2001

Carriage of Goods by Sea Act ("COGSA"): to invoke COGSA's package limitation, the carrier must satisfy two preconditions: first, the carrier must give the shipper adequate notice of the $500  limitation by including a "clause paramount" in the bill of lading that expressly adopts the provisions of COGSA; and second, the carrier must give the shipper a fair opportunity to avoid COGSA section 4(5)'s limitation by declaring excess value; since the bill of lading provided sufficient notice of the limitation of liability and provided an opportunity to declare excess value, COGSA's package limitation applied to the shipment; the district court correctly defined a mobile television stage as the relevant COGSA package and applied the $500 package limitation to a claim for its total destruction since the bill of lading legibly and clearly described the stage as "one unit" or "package" and the shipper did not declare the value of the stage on the bill of lading;  Marine Insurance: Florida law applies in resolving the inusurers "other insurance" dispute; when two insurance policies contain "other insurance" clauses, the clauses are deemed mutually repugnant and both insurers share the loss on a pro rata basis in accordance with their policy limits.

Herman Family Revocable Trust v. The Vessel Teddy Bear
Ninth Circuit Court of Appeals
June 13, 2001

Admiralty Jurisdiction: since there was no admiralty jurisdiction over this dispute concerning the aborted contract to sell a yacht, the court lacked subject matter jurisdiction and had no power to adjudicate either the in rem admiralty claims or the supplemental state law claims.

Demette v. Falcon Drilling Co.
Fifth Circuit Court of Appeals
June 12, 2001

Outer Continental Shelf Lands Act ("OCSLA"): the OCSLA applies to an injury suffered on the Fal-Rig #85 since it was jacked-up over the OCS at the time of Demette's injury and it was therefore a device "temporarily attached to the seabed" for the purpose of drilling for oil under section 1333(a)(1) of the Act; further, since the contract for oil drilling services and the injury that invoked it were maritime in nature, maritime law applies of its own force and Louisiana state law does not apply under section 1333(a)(2) of the Act; Longshore & Harbor Workers' Act/Indemnity: since section 1333(b) of the OCSLA extends the LHWCA to non-seamen employed on the OCS, Demette is entitled to LHWCA benefits "by virtue" of the OCSLA; in such a case, the LHWCA provides that reciprocal indemnity provisions between the employer and the vessel owner are enforceable, although section 905(b) of the LHWCA ordinarily bars the enforcement of indemnity agreements between employers and vessel owners; thus, since Demette's employer and the vessel owner each promised to indemnify the other, the indemnification is reciprocal and therefore valid and enforceable.

Commercial Union Insurance v. Sea Harvest Seafood Co.
Tenth Circuit Court of Appeals
June 11, 2001

Marine Insurance/Admiralty Jurisdiction: a claim under an open marine cargo insurance policy covering a shipment of frozen shrimp from Bangkok, Thailand to Philadelphia via California and Chicago was within the court's admiralty jurisdiction although the loss did occur during the Chicago to Philadelphia overland portion of the shipment; the cargo owner's claim of loss under the policy was properly denied by the district court under admiralty law since the loss resulted from a failure to attach a generator to the refrigerated container, which was not a loss due to "derangement or breakdown of the refrigerating machinery," as the term is used in marine insurance policies.

Espinal v. Royal Caribbean Cruises
Eleventh Circuit Court of Appeals
June 8, 2001

Maintenance & Cure: the district court erred in relying on the general maritime law, rather than the terms of the applicable Collective Bargaining Agreement ("CBA"), in calculating the amount of unearned sick wages due plaintiff seaman.

ConAgra Inc. v. Indian River Towing Co.
Eighth Circuit Court of Appeals
June 8, 2001

Damages: proving loss-of-use damages in an admiralty case involves two elements: first, a vessel owner must prove that profits have actually been, or may be reasonably supposed to have been, lost; and second, the amount of lost profits must be proven with reasonable certainty; the owner of a fleet of barges in this case met this burden by showing that there was a ready market for its barges and that it had no spare barges available to substitute for the damaged barges; Damages (Prejudgment Interest): prejudgment interest was properly awarded for the loss-of-use claim since it is awarded in admiralty suits to ensure full compensation for the injured party and should be granted unless there are exceptional or peculiar circumstances.

Louis Dreyfus v. Blystad Shipping & Trading Inc.
Second Circuit Court of Appeals
June 7, 2001

Arbitration/Charter Parties: the charter's New York arbitration clause, which provided that any "dispute arising from the making, performance or termination of this Charter Party" be arbitrated, was a broad arbitration clause; thus, by implicating the rights of Owner and the duties of Charterer under the charter party, Owner's claims under collateral letters of indemnity given by Charterer in return for discharging cargo without presentation of the bills of lading were within the scope of the broad arbitration clause and were subject to New York arbitration.

Tisbury Towing v. Tug Venus
First Circuit Court of Appeals
June 5, 2001

Collisions/Casualties: the trial court was not clearly erroneous in finding that the barge Owner had not met its burden of proving when the grounding incident in question occurred and therefore could not prove that the tug VENUS had ever grounded while towing its barge ALGOL 500.

De Chalus v. P & O Containers
Eleventh Circuit Court of Appeals
May 24, 2001

Carriage of Goods by Sea Act ("COGSA"): the correct package for purposes of COGSA's $500 per package limitation was not the container, or the 2,270 "cartons" of perfume on pallets as described on the bill of lading, but the 42 individual pallets, which were described as "packages" on the face of the bill of lading.

Newport News Shipbuilding v. Stallings
Fourth Circuit Court of Appeals
May 23, 2001

Longshore & Harbor Workers' Act: a small compensation award, based on an actual loss of earning capacity, does not as a matter of law preclude an employer from seeking relief under § 8(f), which limits an employer's compensation liability to two years of benefits when a preexisting disability substantially aggravates a work-related injury.

In re Hellenic, Inc.
Fifth Circuit Court of Appeals
May 21, 2001

Limitation of Liability Act: once the claimant establishes negligence or unseaworthiness caused the loss, the owner of the vessel must prove that the  negligence was not within the owner's privity or knowledge to limit its liability; the construction superintendent whose negligence caused the loss, although he may have possessed significant power over the management of an individual job, could not make "basic business decisions" for the corporation and did not possess managing authority over "the field of operations" in which the negligence occurred, thus his negligence was not within the privity or knowledge of the corporate owner.

Reserve Mooring v. American Commercial Barge Line
Fifth Circuit Court of Appeals
May 16, 2001

Maritime Torts/Damages: physical injury to a proprietary interest is a prerequisite to recovery of economic damages in cases of an unintentional maritime tort, thus because plaintiff's mooring facility suffered no physical injury when a wreck blocked its use, its claim for purely economic damages must be denied.

BP North America v. Solar ST
Fifth Circuit Court of Appeals
May 14, 2001

Carriage of Goods/Damages: BP's futures trading in the diesel oil market after it discovered its diesel oil cargo was damaged is inapposite to a "market value" damages calculation, thus the district court should simply have calculated BP's damages as the difference between the market value of sound oil on the date of discharge and an estimated market valuation of the contaminated oil on the date of discharge.

Simeonoff v. M/V Saga
Ninth Circuit Court of Appeals
May 8, 2001

Jones Act/Comparative Negligence: a seaman may not be held contributorily negligent for carrying out orders that result in injury, even if the seaman recognizes possible danger and does not delay to consider a safer alternative; further, a seaman who responds to a superior's urgent call for help cannot be found contributorily negligent, thus the plaintiff, who knew of the dangers when he responded to the call of assistance from the engineer in fixing a pot launcher, was not contributorily negligent when the pot launcher gave way, fell and crushed his foot; Damages: the court's economic damage award was sufficiently detailed and supported by the evidence and the court's non-economic damage award of $18,900 for pain and suffering was not inadequate, was supported by the evidence and did not shock the conscience; Damages (Prejudgment Interest): in personal injury cases under admiralty jurisdiction, prejudgment interest must be granted unless peculiar circumstances justify its denial; thus the matter of prejudgment interest would be remanded to the district court to articulate its reasons for denying that interest. 

Project Hope v. Neptune Orient Lines
Second Circuit Court of Appeals
May 4, 2001

Carriage of Goods: the district court properly found that the land carrier of a shipment from Winchester, Virginia to Egypt via the port of Norfolk, Virginia was jointly and severally liable for cargo damage pursuant to the Carmack Amendment, 49 U.S.C. § 14706; Damages: damages under the Carmack Amendment should generally be based on the fair market value, but they need not be if circumstances suggest a more appropriate alternative, which in this case was properly the replacement cost of the damaged goods.

Submersible Systems v. Perforadora Central
Fifth Circuit Court of Appeals
May 4, 2001

Procedure (Personal Jurisdiction): claims falling within the admiralty jurisdiction of the federal courts are claims "arising under federal law" for the purposes of Rule 4(k)(2) of the Federal Rules of Civil Procedure, which provides that "serving a summons or filing a waiver of service is also effective, with respect to claims arising under federal law, to establish personal jurisdiction over the person of any defendant who is not subject to the courts of general jurisdiction of any state"; Rule 4(k)(2) requires a court to consider a defendant's contacts with the United States as a whole, which in this case did not confer personal jurisdiction since the defendant's contacts with the United States were not "continuous and systematic"; Maritime Attachment: the district court was correct in denying  plaintiff's application for a Rule B attachment since plaintiff failed to file an affidavit concerning the presence of the defendant within the district as required by Rule B.

Corrada Betances v. Sea-Land Service
First Circuit Court of Appeals
May 3, 2001

Labor Law: the district court entered summary judgment dismissing plaintiff's wrongful discharge claim based on the following undisputed facts: At the end of his shift on April 21, 1997, Plaintiff left Sea-Land's premises with a fellow supervisor. The pair visited various watering holes, imbibing as they went. Five hours later, they returned to Sea-Land's premises for a car, but did not simply drive away, but, rather, entered the marine department office (where others were still toiling) and engaged in raucous behavior. On April 22, Plaintiff was suspended for two weeks. On November 11, 1997, Plaintiff called the office to say that he would be late for work. When he arrived, he was wearing the same clothes that he had been wearing the day before and a fellow supervisor smelled a strong odor of alcohol on his breath. Various co-workers noticed slurred speech, bloodshot eyes, slumped posture, and other indicia of inebriation. The marine manager spent a few minutes with Plaintiff, obviously disliked what he saw, told Plaintiff that he was in no shape to work, and ordered him to leave the premises. The next day, Sea-Land terminated Plaintiff's employment. Noting that "there is little point in attempting to reinvent a well-fashioned wheel", the First Circuit "declined the invitation" to reverse the district court's summary dismissal of Plaintiff's wrongful discharge claim.

La Reunion Francaise v. Barnes
Ninth Circuit Court of Appeals
May 3, 2001

Marine Insurance/Admiralty Jurisdiction: a federal court has admiralty jurisdiction over a marine insurance policy that, besides covering damage to a boat while on the water, requires the policyholder to store his boat on land for half the year, insures against theft while on land, and limits navigation of the boat to inland waters of California.

Brusco Tug & Barge v. NLRB
District of Columbia Court of Appeals
May 1, 2001

Labor Law: the National Labor Relations Board rejected owner's argument that mates on its tugboats are supervisors within the meaning of the National Labor Relations Act, and found that owner, by interfering with its mates' right to organize, had committed an unfair labor practice; but, because the Board failed adequately to explain its decision, the Circuit Court denied enforcement and remanded for further proceedings.

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