Justia Admiralty & Maritime Law Opinion Summaries

Nearly a million barrels of crude oil owned by a U.S. company were seized from a vessel in Venezuelan waters by Venezuelan authorities under threat of force. The oil was insured under a marine cargo reinsurance policy that covered losses arising from war-related risks, including “insurrection.” The insured company claimed that the political turmoil in Venezuela, including the contested presidency and violent suppression of opposition, constituted an insurrection as defined by the policy. The reinsurers denied coverage, arguing that the events did not meet the policy’s definition of insurrection, leading to litigation.The United States District Court for the Southern District of New York reviewed cross-motions for summary judgment. The court found the term “insurrection” in the policy to be ambiguous and, applying New York law and the doctrine of contra proferentem, construed the ambiguity in favor of the insured. The court held that the Maduro regime’s actions constituted an insurrection within the meaning of the policy. The case proceeded to trial on causation and damages, where the jury found in favor of the insured on most issues, awarding over $54 million in damages plus interest.On appeal, the United States Court of Appeals for the Second Circuit considered challenges to the district court’s summary judgment ruling, judicial notice orders, and jury instructions on causation. The Second Circuit held that the district court did not err or abuse its discretion in any of the challenged rulings. It affirmed that the policy’s “arising from” language required only but-for causation, not proximate causation. The court affirmed the district court’s judgment in all respects, upholding the award to the insured. View "CITGO Petroleum Corp. v. Ascot Underwriting Ltd." on Justia Law

In April 2006, an oil tanker owned or operated by Ernst Jacob GmbH & Co. KG and insured by Shipowners Insurance & Guaranty Company, Ltd. ran aground off the coast of Puerto Rico. Although no oil was spilled, the response efforts to free the vessel and prevent a potential spill caused significant damage to coral reefs. The United States, acting through NOAA and in coordination with Puerto Rico’s Department of Natural and Environmental Resources, undertook restoration and assessment of the damaged natural resources. After unsuccessful attempts to secure payment from the responsible parties and their insurers, NOAA sought compensation from the Oil Spill Liability Trust Fund, which paid out restoration and assessment costs. Subsequently, the United States filed suit against the vessel’s owner and insurer to recover both compensated and uncompensated damages for injury to natural resources under the Oil Pollution Act of 1990 (OPA).The United States District Court for the District of Puerto Rico bifurcated the case into liability and damages phases. Without allowing discovery, the District Court granted partial summary judgment to the United States on liability, finding that the Coast Guard’s Federal On-Scene Coordinator (FOSC) had determined the grounding posed a “substantial threat of a discharge of oil,” and that this determination was not arbitrary or capricious. The court applied a deferential standard of review to the FOSC’s decision and did not address whether the damaged natural resources were “managed or controlled” by the United States, as required by OPA.On appeal, the United States Court of Appeals for the First Circuit held that it had jurisdiction under 28 U.S.C. § 1292(a)(3) due to the presence of admiralty claims. The court vacated and reversed the District Court’s grant of summary judgment, holding that liability under OPA requires proof by a preponderance of the evidence, not merely deference to the FOSC’s determination, and remanded for further proceedings, including resolution of whether the United States “manages or controls” the natural resources at issue. View "US v. Ernst Jacob GmbH & Co. KG" on Justia Law

Two men were apprehended by the United States Coast Guard in international waters south of Puerto Rico after being observed jettisoning bales of cocaine from a vessel that lacked any indication of nationality. The Coast Guard recovered approximately 306 kilograms of cocaine and eventually transported the men, including the appellant, to St. Thomas in the U.S. Virgin Islands. The government asserted that the men were never brought to Puerto Rico, though the appellant disputed this. A grand jury in the District of the Virgin Islands indicted the appellant on multiple drug trafficking charges under the Maritime Drug Law Enforcement Act (MDLEA), as well as related offenses.The appellant moved to dismiss the indictment for improper venue, arguing that the MDLEA’s “any district” venue provision was unconstitutional and that venue was proper in Puerto Rico, where he claimed he was first brought. He also sought a pretrial evidentiary hearing on venue and the issuance of subpoenas for Coast Guard witnesses. The United States District Court of the Virgin Islands denied these motions, holding that the MDLEA’s venue provision was constitutional and that the Virgin Islands was a proper venue. The court also found that mere passage through Puerto Rico’s territorial waters did not constitute being “first brought” there under 18 U.S.C. § 3238, and denied the request for an evidentiary hearing, finding no colorable factual dispute that would affect the outcome.On appeal, the United States Court of Appeals for the Third Circuit reviewed the District Court’s decisions. The Third Circuit held that the MDLEA’s “any district” venue provision is constitutional, both facially and as applied, for offenses committed on the high seas. The court also found that the District Court did not abuse its discretion in denying a pretrial evidentiary hearing on venue. Accordingly, the Third Circuit affirmed the District Court’s orders. View "USA v. Cuevas-Almonte" on Justia Law

The case concerns a rule issued by the Federal Maritime Commission in 2024 to address concerns about demurrage and detention charges in maritime shipping. These charges are imposed by ocean carriers and marine terminal operators on shippers, truckers, and other entities for delays in the movement or return of shipping containers. The rule sought to clarify which parties could be billed for these charges, limiting invoices to those in a contractual relationship with the billing party—typically shippers or consignees. However, the rule categorically excluded motor carriers from being billed, even when they had a direct contract with the ocean carrier.Prior to review by the United States Court of Appeals for the District of Columbia Circuit, the Federal Maritime Commission promulgated the rule and responded to public comments. Initially, the Commission suggested that motor carriers in contractual privity could be billed, but later issued a correction stating that motor carriers could not be billed under any circumstances, regardless of contractual relationship. The World Shipping Council, representing ocean carriers, petitioned for review, arguing that the rule was arbitrary and capricious, among other challenges.The United States Court of Appeals for the District of Columbia Circuit found that the Commission’s rule was arbitrary and capricious under the Administrative Procedure Act. The court held that the Commission failed to reasonably explain its exclusion of motor carriers from the set of billable parties, despite its stated rationale of limiting billing to those in contractual privity. The court granted the petition for review, severed and set aside the portion of the rule (46 C.F.R. § 541.4) that confined billing to shippers or consignees, and left the remainder of the rule intact. View "World Shipping Council v. FMC" on Justia Law

After Hurricane Laura damaged an offshore platform owned by Genesis Energy, Genesis contracted with Danos, LLC to perform repairs. To support the project, Genesis also chartered a vessel from a third party to house and transport the repair crew and equipment. During the course of repairs, a Danos employee was injured while being transferred from the platform to the vessel and subsequently sued Danos, Genesis, and the vessel owner. Genesis filed a crossclaim against Danos, seeking defense and indemnification under a 2008 Master Services Agreement, arguing that the contract required Danos to indemnify Genesis for such claims.The United States District Court for the Southern District of Texas reviewed cross-motions for summary judgment from Genesis and Danos. The district court determined that the contract between Genesis and Danos was not a “maritime contract” under the Outer Continental Shelf Lands Act (OCSLA) and relevant Fifth Circuit precedent, specifically In re Larry Doiron, Inc. As a result, Louisiana law applied, which rendered the indemnification provision unenforceable. The district court granted summary judgment in favor of Danos, denied Genesis’s motion, and dismissed Genesis’s crossclaim with prejudice. The court’s order was designated as a final judgment under Federal Rule of Civil Procedure 54(b), and Genesis appealed.The United States Court of Appeals for the Fifth Circuit reviewed the district court’s grant of summary judgment de novo. The Fifth Circuit held that the contract was not a maritime contract because the parties did not expect the vessel to play a substantial role in the completion of the repair work; its functions were limited to transportation, housing, and ancillary support, which are insufficient under the applicable legal standard. The Fifth Circuit affirmed the district court’s judgment, holding that Louisiana law applied and the indemnification provision was unenforceable. View "Genesis Energy v. Danos" on Justia Law

A maintenance worker was employed by a yacht club and, as part of his expanded duties, assisted with the club’s fleet of boats, including tasks that required boarding vessels in navigable waters. While returning a club-owned boat to the water after maintenance, the worker slipped and fell on the boat’s deck, sustaining injuries. He initially filed a claim under California’s workers’ compensation law and later brought suit in superior court, alleging general maritime negligence and unseaworthiness against the yacht club.The Superior Court of Los Angeles County sustained the club’s demurrer without leave to amend, holding that admiralty jurisdiction did not apply because the injury occurred on a noncommercial boat docked at a private yacht club. On appeal, the California Court of Appeal affirmed, but on different grounds, concluding that the California Workers’ Compensation Act provided the worker’s exclusive remedy. The California Supreme Court reversed, holding that neither the Longshore and Harbor Workers’ Compensation Act nor California’s workers’ compensation law barred the worker’s general maritime claims, and remanded the case to the Court of Appeal to address federal jurisdiction and the viability of the tort claims.The Court of Appeal of the State of California, Second Appellate District, Division Eight, held that admiralty jurisdiction applies to the worker’s claims because the incident occurred on navigable waters and involved activities substantially related to traditional maritime activity. The court further held that the worker, not covered by the Longshore Act, may assert claims for both unseaworthiness and negligence against his vessel-owning employer. The judgment was reversed and the case remanded for further proceedings consistent with these holdings. View "Ranger v. Alamitos Bay Yacht Club" on Justia Law

Fieldwood Energy LLC, an oil and gas company, contracted with Island Operating Company, Inc. (IOC) through a Master Services Contract (MSC) to provide workers for oil and gas production services on offshore platforms in the Gulf of Mexico. The MSC defined the work as “Lease Operators,” and a subsequent work order requested “A Operators” to perform tasks such as compliance testing and equipment checks on the platforms. The contract required Fieldwood to provide marine transportation for workers and equipment, which it did by hiring Offshore Oil Services, Inc. (OOSI) to transport IOC employees, including Tyrone Felix, to the platforms. Felix was injured while disembarking from OOSI’s vessel, the M/V Anna M, and subsequently made a claim against OOSI.OOSI filed a complaint for exoneration or limitation of liability in the United States District Court for the Eastern District of Louisiana. OOSI also sought indemnification from IOC under the MSC’s indemnity provision. IOC moved for summary judgment, arguing that Louisiana law, specifically the Louisiana Oilfield Anti-Indemnity Act (LOAIA), rendered the indemnity provision unenforceable. The district court agreed, finding that the MSC was not a maritime contract because vessels were not expected to play a substantial role in the contract’s performance, and thus Louisiana law applied. The court granted summary judgment for IOC on indemnity and insurance coverage, and later on defense costs after OOSI settled with Felix.On appeal, the United States Court of Appeals for the Fifth Circuit reviewed the district court’s summary judgment de novo. The Fifth Circuit held that the MSC was not a maritime contract because neither its terms nor the parties’ expectations contemplated that vessels would play a substantial role in the contract’s completion. As a result, Louisiana law applied, and the LOAIA barred enforcement of the indemnity provision. The Fifth Circuit affirmed the district court’s summary judgment in favor of IOC. View "Offshore Oil Services, Inc. v. Island Operating Co." on Justia Law

A tugboat owned by a private company collided with a bridge in Maryland, causing significant property damage. The tugboat owner, seeking to limit its financial liability for the accident, initiated a proceeding under the federal Exoneration and Limitation of Liability Act. This law allows vessel owners to cap their liability at the value of the vessel and its cargo, which in this case was much less than the total damage to the bridge. The State of Maryland, as the party suffering the loss, filed a claim in the limitation proceeding, seeking full compensation for the damage and contesting the applicability of the liability cap.The United States District Court for the Eastern District of Virginia found that the limitation action was not a suit against Maryland and did not seek damages from the state, but rather aimed to determine the tug owner’s liability and distribute the available fund among claimants. The district court denied Maryland’s motion to dismiss, which was based on the argument that sovereign immunity protected it from having its recovery limited by federal law. Maryland appealed this decision before the case proceeded further.The United States Court of Appeals for the Fourth Circuit reviewed the district court’s denial of Maryland’s motion to dismiss. The Fourth Circuit held that sovereign immunity does not shield a state from the operation of the Limitation Act when the state voluntarily files a claim in such a proceeding. The court reasoned that the limitation action did not subject Maryland to coercive judicial process, as Maryland chose to participate as a claimant. The court affirmed the district court’s decision, allowing the limitation action to proceed and holding that Maryland’s sovereign immunity was not implicated under these circumstances. View "Jackson Creek Marine, LLC v. Maryland" on Justia Law

Ed Seganti, the owner of a 2018 Cobia motorboat, was involved in a boating collision near Goose Creek in Nassau County on May 29, 2022. Nancy Skolnik, a passenger on another boat, was injured in the accident. On September 22, 2022, Skolnik’s attorney sent Seganti a letter notifying him of her intent to pursue a personal injury claim arising from the collision. Nearly a year later, Skolnik filed suit in New York State Supreme Court against Seganti and the other boat’s operator. On November 1, 2023, Seganti filed a petition in the U.S. District Court for the Eastern District of New York seeking to limit his liability under the Limitation of Liability Act.The U.S. District Court for the Eastern District of New York determined that Seganti’s petition was untimely because it was filed more than six months after he received written notice of Skolnik’s claim. The court held that this untimeliness deprived it of subject matter jurisdiction and dismissed the action on that basis.The United States Court of Appeals for the Second Circuit reviewed the district court’s decision. The Second Circuit held that the six-month time limit in 46 U.S.C. § 30529(a) is a non-jurisdictional claim-processing rule, not a restriction on subject matter jurisdiction. However, because Seganti’s petition was untimely, the appellate court concluded that the petition failed to state a claim upon which relief could be granted. The Second Circuit modified the district court’s judgment to reflect dismissal under Federal Rule of Civil Procedure 12(b)(6) with prejudice, and affirmed the judgment as modified. The main holding is that the six-month deadline in § 30529(a) is not jurisdictional, but failure to comply with it requires dismissal for failure to state a claim. View "In the Matter of the Complaint of Ed Seganti" on Justia Law

A coastal town in Maine, known for its small population and proximity to a national park, experienced a significant increase in cruise ship tourism, with large vessels bringing thousands of passengers daily. In response to concerns about congestion, public safety, and the impact on local amenities, residents approved an ordinance capping the number of cruise ship passengers who could disembark in the town to 1,000 per day. The ordinance imposed fines for violations and was intended to address issues primarily at the waterfront and, to a lesser extent, in the downtown area.Several local businesses, a business association, and a pilots’ association challenged the ordinance in the United States District Court for the District of Maine. They argued that the ordinance was preempted by federal and state law, violated the Commerce Clause (including its dormant aspect), and infringed on due process rights. After a bench trial, the District Court largely ruled in favor of the town and an intervening resident, rejecting most claims but finding that the ordinance was preempted by federal regulations only to the extent it restricted crew members’ shore access. The court declined to enjoin the ordinance, noting the town’s intent to address this issue through further rulemaking.On appeal, the United States Court of Appeals for the First Circuit affirmed the District Court’s rejection of the state law preemption, federal preemption (except for the now-moot crew access issue), and due process claims. The First Circuit also affirmed the dismissal of discrimination-based Dormant Commerce Clause claims, finding no similarly situated in-state and out-of-state competitors. However, the court vacated and remanded the District Court’s dismissal of the Pike balancing Dormant Commerce Clause claim, instructing further analysis of whether the ordinance’s burdens on interstate commerce are clearly excessive in relation to its local benefits. The court dismissed as moot the appeals related to the crew access issue. View "Ass'n to Preserve and Protect Local Livelihoods v. Town of Bar Harbor" on Justia Law