Recent developments in admiralty law in the United States Supreme Court, the Fifth Circuit, and the Eleventh Circuit.

• Author: Black, Norman W.

TABLE OF CONTENTS

1. FEDERALISM IN MARITIME LAW

   A Yamaha Motor Corp. v. Calhoun

   2. American Dredging Co. v. Lambert

   3. Baris v. Sulpicio Lines, Inc.

   4. Wagner v. McDermott, Inc.

2. COMPARATIVE FAULT

   1. Exxon Co., U.S.A. v. Sofec, Inc

3. PRACTICE AND PROCEDURE

   1. Henderson v. United States

   2. Underwriters at Interest on Cover Note

      JHB92M10582079 v. Nautronix, Ltd.

   3. Acacia Vera Navigation Co. v. Kezia, Ltd.

4. MAINTENANCE, CURE, AND WAGES

   1. Flores v. Carnival Cruise Lines

5. RECOVERY IN NEGLIGENCE FOR PURE ECONOMIC LOSS

   1. Corpus Christi Oil & Gas Co. v. Zapata Gulf Marine

6. ACTIONS AGAINST THE GOVERNMENT

   1. Marine Coatings v. United State

   2. Baldassaro v. United States

   3. Miller v. United States

   4. Martin v. Miller

7. CARGO

   1. Banana Services, Inc. v. M/V Tasman Star

   2. Plastique Tags, Inc. v. Asia Trans Line, Inc.

8. MARINE INSURANCE

   1. Hilton Oil Transport v. Jonas

   2. Morewitz v. West of England Ship Owners Mutual

   Protection & Indemnity Ass'n

9. LIMITATION OF LIABILITY

   1. In re Tom-Mac, Inc.

   2. Odeco Oil & Gas Co. v. Bonnette

10. MARITIME LIENS AND MORTGAGES

    1. Silver Star Enterprises, Inc. v. Saramacca M/V

    2. Dietrich V. Key Bank, N.A.

    3. Bradford Marine, Inc. v. M/V Sea Falcon

1. FEDERALISM IN MARITIME LAW

   1. Yamaha Motor Corp. v. Calhoun(1)

      This case involved a wrongful death suit arising out of a collision between a jet ski, driven by twelve-year-old Natalie Calhoun, and an anchored vessel in territorial waters.(2) Her parents sued the manufacturer of the jet ski in federal court in Philadelphia, asserting both admiralty and diversity jurisdiction.(3) They sought damages under state law for inter alia loss of society, decedent's lost future earnings, and punitive damages.(4)

      The district court held federal maritime law controlled the case, not state law.(5) Maritime law permitted recovery for loss of society but not future earnings and punitive damages.(6) Acknowledging that the content of the maritime law was not clear on the matters presented, the district court certified to the Third Circuit the question of "whether, pursuant to ... a maritime cause of action, plaintiffs may seek to recover (1) damages for the loss of the society of their deceased minor child, (2) damages for the loss of their child's future earnings, and (3) punitive damages."(7)

      The Third Circuit did not answer the certified question; instead, it held maritime law had not worked out clear answers to the issues involved and the case should be governed by state law.(8) The Third Circuit remanded the case to Judge Pollak to decide, inter alia, whether the application of the law of Pennsylvania or Puerto Rico was appropriate.(9)

      A unanimous Supreme Court affirmed.(10) Justice Ginsburg's opinion proceeded as follows:

      1) This is indeed a case of admiralty and maritime jurisdiction. "`With admiralty jurisdiction,' we have often said, `comes the application of substantive admiralty law.'"(11)

      2) But " [t]he exercise of admiralty jurisdiction `does not result in automatic displacement of state law.'"(12) Before Moragne, which created a federal maritime wrongful death action, admiralty courts had regularly applied state wrongful death and survival statutes. The question is, should they still?(13)

      3) The question should be narrowed as much as possible.

      As we recently acknowledged, "[i]t would be idle

      to pretend that the line separating permissible from

      impermissible state regulation is readily discernible

      in our admiralty jurisprudence." We attempt no

      grand synthesis or reconciliation of our precedent

      today, but confine our inquiry to the modest

      question whether it was Moragne's design to

      terminate recourse to state remedies when

      nonseafarers meet death in territorial waters.(14)

      4) When the question is thus narrowed--limiting the focus to pleasure boating, to territorial waters, and to death remedies as opposed to liability issues--the answer is that state law should control. Moragne did not say anything to the contrary, and "[f]ederal maritime law has long accommodated the States' interest in regulating maritime affairs within their territorial waters."(15)

      Yamaha needs to be considered alongside American Dredging,(16) which held that state courts in maritime cases are free to follow their own notions on forum non conveniens regardless of the federal practice.(17) American Dredging indicated pretty clearly that, on procedural issues, the state courts are generally free of federal restraints.(18) Yamaha and American Dredging together demonstrate that there is greater scope for state-law applicability in maritime cases than most maritime lawyers had believed possible.

      But Justice Ginsburg worked hard to keep Yamaha narrow. Among the questions she indicated the Court was not touching were: (1) the rights of "seafarers" vis-a-vis seamen and longshore workers;(19) (2) whether the Moragne wrongful death remedy extends to "nonseafarers like Natalie";(20) (3) whether Moragne provides a survival action;(21) (4) what law to apply to events on the high seas beyond territorial waters;(22) and (5) "the source--federal or state--of the standards governing liability, as distinguished from the rule on remedies [in the case at hand]. We thus reserve for another day reconciliation of the maritime personal injury decisions that rejected state substantive liability standards, and the maritime wrongful death cases in which state law has held sway."(23)

      The Supreme Court has often said that federal admiralty courts have the constitutional authority and duty to fashion new rules of substantive maritime law as circumstances dictate.(24) There has long been a rumble of criticism of the Court for not taking that responsibility seriously enough.(25) Yamaha will certainly fuel that criticism.

   2. American Dredging Co. v. Lambert(26)

      A motorboat collided with a dredge pipeline, supported by floating pontoons, that was trailing behind the dredge American near the Port of Miami.(27) Three of the four people on the motorboat were killed.(28)

      In one of the first appellate applications of Yamaha v. Calhoun, the Eleventh Circuit held that the personal representatives of the deceased boaters could recover non-pecuniary damages under Florida law because the boaters had been non-seamen killed in territorial waters.(29)

   3. Baris v. Sulpicio Lines, Inc.(30)

      In December 1987, a Philippine ferry collided with a Philippine tanker, killing 5,000 people.(31) Plaintiffs, family members of the victims, sued in Louisiana state court in 1988, but withheld service of process for five years, meanwhile filing an action in Texas state court.(32) The defendants succeeded in removing the Texas case to federal court, which dismissed the action for forum non conveniens.(33) The dismissal order contemplated the Philippines as the only proper place for trial.(34)

      The plaintiffs failed to timely appeal the dismissal, and eventually began taking steps to activate the state court suit in Louisiana,(35) where procedural law drastically restricts the availability of forum non conveniens dismissals.(36) When the defendants saw the plaintiffs going forward in Louisiana, not the Philippines, they returned to the federal court and sought an anti-suit injunction.(37) The Fifth Circuit held the Anti-Injunction Statute(38) precludes the injunction.(39) Rehearing en banc was granted on March 14, 1996.(40)

      The Anti-Injunction Statute states: "[a] court of the United States may not grant an injunction to stay proceedings in a State court except as expressly authorized by Act of Congress, or where necessary in aid of its jurisdiction, or to protect or effectuate its judgments."(41) The only arguable basis for the injunction would have been the "protect or effectuate its judgments" provision--called the relitigation exception.(42) But the panel held because dismissals for forum non conveniens are not on the merits, the federal court had no "judgment" to "protect or effectuate" in the relevant sense.(43)

      The grant of rehearing en bane indicates the interplay of the federal forum non conveniens doctrine and the Anti-Injunction Statute is of great importance. In a "special concurrence,"(44) all three members of the Fifth Circuit panel scolded the plaintiffs' lawyers for having kept the Louisiana suit "secret" and said that had the federal court known of the Louisiana suit "it may have ruled differently."(45) The quoted language may suggest that had the Texas court known about the Louisiana suit, it could have written its forum non conveniens dismissal judgment in Such a way as to enable it later to enjoin perceived "end runs" by invoking the relitigation exception to the Anti-Injunction Statute.

   4. Wagner v. McDermott, Inc.(46)

      An injured offshore welder sued McDermott, which filed a third party claim against its subcontractor, asserting a contractual right to indemnity.(47) After the welder settled his action, McDermott pursued its contractual indemnity claim.(48) The trial court held the Louisiana Oilfield Indemnity Act,(49) precluded McDermott from asserting an indemnity right.(50)

      The Fifth Circuit affirmed, holding that state law, not maritime law, applied because the contract was non-maritime in nature.(51) If the contract were maritime, it would be subject to general maritime law principles which hold such indemnity provisions enforceable.(52) Additionally, if the injuries had occurred under circumstances making McDermott a "vessel" as defined in the Longshore and Harbor Workers' Compensation Act (LHWCA),(53) then [sections] 905(c) of that Act would validate the indemnity agreement.(54) But neither prerequisite to enforceability is present; the contract was not a maritime one and McDermott does not fall within the broad concept of "vessel" under the LHWCA.(55)

      State law and maritime law compete with great frequency in connection with these offshore indemnity agreements.(56) This is a typical case. It shows how difficult it is to distinguish between maritime and non-maritime contracts while also illustrating a...