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

• Author: Smith, Jerry E.
• Position: U.S. 5th and 11th Circuit Courts of Appeal

1. INTRODUCTION

   The Supreme Court decided two maritime cases during the 1997-1998 term. In the case of California v. Deep Sea Research, Inc.,(1) the Court clarified, and slightly narrowed, the states' Eleventh Amendment immunity from suits in rem,(2) sixteen years after Treasure Salvors(3) announced that immunity.(4) The Supreme Court's decision in Dooley v. Korean Air Lines Co.,(5) a Death on the High Seas Act (DOHSA)(6) case, is more generally applicable. In Dooley, the Court standardized the law of maritime death cases, holding that there can be no action under general law for something that is disallowed under DOHSA.(7) The opinion serves as an interesting example of how the courts deal with multiple statutes, any of which could provide a vehicle for recovery.

2. CHANGING NATURE OF MARITIME CASES

   With the Supreme Court maintaining its traditional low profile, the responsibility for resolving the apparently unending flow of undecided maritime issues remains with the circuits, and the Fifth and Eleventh Circuits bear a disproportionate share of that responsibility,(8) The docket of the Fifth Circuit reflects, in part, the changing nature of maritime commerce and the way America uses the sea. Most significantly, the maritime docket seems to change from year to year with the economy, and especially the price of oil. The docket also changes as plaintiffs' lawyers, who have a choice of where to file, and defendants' lawyers, who can choose whether to remove cases to federal court, evaluate the friendliness (or perceived lack of same) of the Fifth Circuit to their clients' interests.

   Recent disputes include whether offshore workers should be considered "seamen" under the Jones Act(9) and whether they should be covered under the Longshore Act.(10) Another issue is whether it makes sense for substantive standards of liability and damages to depend on such distinctions as whether an oilrig is floating or fixed to the sea bottom.(11)

   Another example of how the circuits have had to cope with and recognize the legal problems attendant to the oil industry is the Margate Shipping(12) case. In that marine salvage case, an oil tanker rescued a cargo barge.(13) One of the factors used to determine the salvage award is the risk of peril to the salvor.(14) Our court recognized that the tanker crew faced not only the loss of the oil tanker and its cargo, but also potentially faced catastrophic environmental liability from an oil spill.(15)

   Finally, courts have been forced to deal with the changing nature of maritime commerce, from loose cargo to containerization. This past year, in the Anglia(16) case, the Eleventh Circuit confronted the question of whether a contract for services in a container port could confer admiralty jurisdiction.(17) Specifically the court decided whether certain services provided in container ports could be considered "maritime in nature."(18) The answer was a qualified no.(19) Most of the cargo-handling activities, such as containerizing and breaking bulk, had no particular relationship to maritime shipping; rather, they could have been performed hundreds of miles inland.(20)

   There are two points behind these examples. One is that while the Fifth and Eleventh Circuits are, and always have been, maritime-intensive, the nature of the maritime caseload continues to change. The other point is perhaps more important: The changing nature of how we do business forces us to constantly redefine and reapply the ancient concepts of maritime law.

3. MARITIME JURISPRUDENCE

   Of course, not all novel issues of law stem from new ways of doing business. For example, the Fifth Circuit recently issued a pair of decisions that deal with the "delivery" standard under the Carriage of Goods by Sea Act (COGSA).(21) The U.N./F.A.O. World Food Programme(22) and Servicios-Expoarma(23) cases involved straightforward carriage contracts and uncontainerized cargo.(24) These cases presented factual situations no different from what one might have found fifty or a hundred years ago. For the first time, however, the court formulated a rule to determine precisely when "delivery," as defined by the statute, had occurred.

   Admiralty, of course, is one of the foremost areas in which federal judges engage in substantive rulemaking and, some might say, policymaking. General maritime causes of action require the courts to act like a state supreme court, vested with the power and duty to craft common law rules of civil liability. But even within the framework of what is nominally statutory interpretation, we must devise substantive rules and standards. For example, while the Jones Act covers only the crewmen of "vessels,"(25) it fails to define what a "vessel" is.(26) Does the term include a barge or a riverboat casino that never moves from its dock, or a floating oilrig?(27)

   The Fifth Circuit decides maritime cases in the context of its recent opinion in Servicios-Expoarma, C.A.,(28) a COGSA case. Although many attorneys' maritime practices are mostly, or even exclusively, in the area of personal injury rather than COGSA, the Servicios case highlights how the court balances and utilizes traditional maritime common law, the plain words of the statutes, and analogies to other areas of the law to reach a conclusion on an issue of first impression.

   This case raised at least two issues of first impression. The first, and more significant, is when "delivery," as used in COGSA, occurs for purposes of triggering the one-year period allowed for filing suit for damage to goods.(29) The second issue is the question of which side, the consignee/plaintiff or the carrier/defendant, bears the burden of showing the extent of damage to each package for purposes of the $500 per package limit set forth in the statute.(30)

   The facts of the case are simple. The carrier unloaded the cargo, which was transferred into a customs warehouse before the consignee had access to it.(31) The goods remained in the customs warehouse for ten days.(32) When the consignee took actual possession, the extensive damage to the goods was discovered.(33)

   The consignee and shipper did not file suit promptly.(34) The statute states that the carrier is not liable "unless suit is brought within one year after delivery of the goods."(35) Suit was filed more than a year after the carrier placed the goods in the warehouse, but less than a year after the consignee received the goods and had an opportunity to inspect them for damage.(36)

   Naturally, the key question became what the statute means by the word "delivery."(37) Surprisingly, no federal court of appeals had yet decided when delivery occurs under this statutory section.

   The court began by looking to other areas of maritime law. Most limitations periods begin running when the cause of action accrues.(38) For example, under the Jones Act, suit must be commenced "within three years from the day the cause of action accrued."(39)

   Fortunately for the maritime personal injury plaintiffs' lawyers, the court did not alter the well-established "discovery rule," which provides that a cause of action should not accrue until the plaintiff has actual or constructive knowledge of its existence.(40) Instead, the court observed that the COGSA limitations period makes no reference to when the cause of action accrues, but instead pegs the running of limitations to an extrinsic event: when the goods were delivered(41) Actual receipt by the consignee is irrelevant.(42) This is solely a matter of statutory interpretation.

   The Servicios-Expoarma case is indicative of the growing trend by the Fifth Circuit and the Supreme Court to take statutes at face value. There is, therefore, a noticeable tendency away from trying to enact policy or trying to interpret the intent of Congress if it had squarely confronted the disparity between the Jones Act accrual standard(43) and the COGSA extrinsic event standard.(44) The Fifth Circuit decided this issue despite the fact that, in some cases, the result is to deny a reasonable opportunity to inspect.

   In interpreting the meaning of the word delivery, The court also looked to what it perceived as the common understanding of the words delivery(45) and receipt.(46) It concluded that delivery is an act of the carrier, while receipt is an act of, quite naturally, the recipient.

   The opinion then addressed the...