In 2004, the supply vessel M/V ISLA AZTECA (owned by Maritimas Mexicanas, S.A. de C.V., also known as "MarMex") allided with a stationary drilling unit, the MODU/TOTONACA (owned by Perforaciones Exploracion y Produccion, also known as "Protexa"). All parties are Mexican. The incident took place about 45 miles off the coast of Mexico, and thus within Mexico's exclusive economic zone (EEZ). Under the U. N. Convention on the Law of the Sea (UNCLOS), Mexico has certain "sovereign rights" within the EEZ. See UNCLOS Article 56 [December 10, 1982, 1833 U.N.T.S. 397.]
Marmex filed a "limitation action" in Mexico pursuant to the Convention on Limitation of Liability for Maritime Claims (1976 Convention) [November 19, 1976, 1456 U.N.T.S. 221] as codified in the Mexican Law of Navigation. In maritime law, a limitation action limits a vessel owner's liability to some measure of the value of the vessel. The owner usually posts a bond in that amount. The U.S. is not a party to the 1976 Convention, but instead has its own Limitation of Liability Act, 46 U.S. § 30501 (2006). Protexa has not filed a claim in the Mexican limitation proceeding.
Protexa and its insurance underwriters, however, did file a lawsuit against MarMex in a Texas federal court. MarMex moved to dismiss based on lack of subject matter jurisdiction because (1) the allision took place in Mexico's EEZ, (2) forum non conveniens, and (3) international comity. The court denied MarMex's motion, and bifurcated the trial between liability and damages.
The district court found MarMex liable for the allision. MarMex now appeals several of the district court's rulings in favor of Protexa.
The U.S. Court of Appeals for the Fifth Circuit, in a per curiam opinion, affirms and remands to permit the trial on damages to proceed.
The Court explains why it rejects MarMex's jurisdictional argument. "[T]he weight of authority, including the precedent of the Supreme Court, supports the view that there are no clear territorial limits to federal maritime tort jurisdiction. See, e.g., Panama R. Co. v. Napier Shipping Co., 166 U.S. 280, 285 (1897) ('[T]he law is entirely well settled . . . that torts originating within the waters of a foreign power may be the subject of a suit in a...