Justia Admiralty & Maritime Law Opinion Summaries

In 2008, Intervenors-Appellees Caterpillar Financial Services Asia Pte Ltd (“Caterpillar”) and Eksportfinans ASA (“Eksportfinans”) provided a loan to Marfield Limited Incorporated (“Marfield”) for the construction of an offshore construction vessel. To secure payment of this loan, Marfield executed and delivered a First Preferred Naval Mortgage to Eksportfinans and a Second Preferred Naval Mortgage to Caterpillar on December 19, 2008. As further security for outstanding sums owed to Caterpillar, Marfield executed a Third Preferred Naval Mortgage on April 17, 2014, encumbering the vessel. The vessel was flagged in Panama, so all three of those mortgages were submitted to the Panama government.In 2012, Caterpillar and Intervenor-Appellee the Norwegian Government (“Norway”) provided a loan to Shanara Maritime International S.A. (“Shanara”) for the construction of another offshore construction vessel. Once both vessels were complete, there were chartered until early 2014, when the Mexican government seized them. On February 28, 2014, Marfield and Shanara terminated their bareboat charters of the vessels, and the vessels remained in the Mexican government’s custody. Shanara and Marfield could not generate revenue on the vessels and began to fall behind on their loan payments to IntervenorsAppellees Caterpillar, Norway, KFW, and Eksportfinans (collectively, the “Lenders”). Shortly after that, the Mexican government separately seized the vessels in connection with the bankruptcy.Subsequently, the district court entered findings, including that (1) Marfield and Shanara are in default under the loan agreements; and (2) the Lenders’ preferred ship mortgages related to said default outrank Plaintiff's state-created liens arising from PLaintiff's attachment of the vessells under Texas state law. The Fifth Circuit affirmed, finding no clear error. View "Corporativo Grupo v. Marfield Ltd" on Justia Law

Two years after an unfortunate single-boat accident, one of the boat’s two occupants died as a result of his injuries. The boat in which he was a passenger had struck a warning sign that was totally submerged at the time of the allision between the boat and sign. His estate and survivors sued the companies responsible for the sign in question. The district court granted summary judgment to the Defendants on the ground that the incident occurred on water governed by Louisiana law rather than federal. The parties agreed that if Louisiana law governs, the claims are barred. At issue in this appeal is whether or not the allision occurred in “navigable” waters such that federal law governs   The Fifth Circuit affirmed. The court explained that navigational servitude relates to actualities – “the waters below the ordinary high-water mark,” “the line of the shore,” and so forth, id. – rather than potentialities. Should the Corps permanently flood the Refuge, the water there would likely be navigable. But as the parties agree that the Corps has not, in fact, permanently flooded the refuge, the water may not be said to be navigable under this theory. Further, the unvegetated channel establishes the ordinary high-water mark of the Bayou; water outside of that channel is not navigable. Moreover, Plaintiffs here failed to present even slight evidence concerning a commercial purpose for the channel in question. Accordingly, the court found that the water in which the allision occurred was not navigable and summary judgment was proper. View "Newbold v. Kinder Morgan SNG Operator" on Justia Law

A yacht owned by Raiders ran aground. Raiders had insured the vessel with GLI, which denied coverage stating the yacht’s fire-extinguishing equipment had not been timely recertified or inspected notwithstanding that the vessel’s damage was not caused by fire. GLI sought a declaratory judgment that Raiders’ alleged failure to recertify or inspect its fire-suppression equipment rendered the policy void from its inception. Raiders responded with five counterclaims, including three extra-contractual counterclaims arising under Pennsylvania law for breach of fiduciary duty, insurance bad faith, and breach of Pennsylvania’s Unfair Trade Practices and Consumer Protection Law.Concluding the policy’s choice-of-law provision mandated the application of New York law and precluded Raiders’ Pennsylvania law-based counterclaims, the district court dismissed those claims. The court rejected Raiders’ argument that applying New York law would contravene Pennsylvania public policy, thereby making the choice-of-law provision unenforceable under Supreme Court precedent (Bremen (1972)), which held that under federal admiralty law a forum-selection provision is unenforceable “if enforcement would contravene a strong public policy of the forum in which suit is brought.” The Third Circuit vacated. Bremen’s framework extends to the choice-of-law provision at issue; the district court needed to consider whether Pennsylvania has a strong public policy that would be thwarted by applying New York law. View "Great Lakes Insurance SE v. Raiders Retreat Realty Co LLC" on Justia Law

Nippon Yusen Kabushiki Kaisha (“NYK”), incorporated and headquartered in Japan, is a major global logistics company that transports cargo by air and sea. On June 17, 2017, the ACX Crystal, a 730-foot container ship chartered by NYK, collided with the destroyer USS Fitzgerald in Japanese territorial waters. Personal representatives of the seven sailors killed sued NYK in federal court, asserting wrongful death and survival claims under the Death on the High Seas Act.  In both cases, the plaintiffs alleged that NYK, a foreign corporation, is amenable to federal court jurisdiction under Fed. R. Civ. P. 4(k)(2) based on its “substantial, systematic and continuous contacts with the United States as a whole. The district court granted NYK’s motion to dismiss for lack of personal jurisdiction under Fed. R. Civ. P. 12(b)(2).   The Fifth Circuit affirmed, rejecting Plaintiffs’ invitation to craft an atextual, novel, and unprecedented Fifth Amendment personal jurisdiction standard. The court explained that under the Supreme Court’s reigning test for personal jurisdiction, the district court did not err in absolving NYK from appearing in federal court. The court wrote that general jurisdiction over NYK does not comport with its Fifth Amendment due process rights. NYK is incorporated and headquartered in Japan. As a result, exercising general jurisdiction over NYK would require that its contacts with the United States “be so substantial and of such a nature to render [it] at home” in the United States. Here, NYK’s contacts with the United States comprise only a minor portion of its worldwide contacts. View "Douglass v. Nippon Yusen Kabushiki" on Justia Law

Plaintiff and his wife were passengers on a cruise aboard a ship operated by Defendant. A verbal altercation between Plaintiff and another passenger ensued and while the security officer turned to speak to Plaintiff, the other passenger punched Plaintiff in the face.   Plaintiff alleged that Defendant was negligent because it failed to (a) reasonably and properly train security personnel; (b) have adequate security measures, including adequate security presence and surveillance cameras; (c) warn him of the danger of being physically assaulted while onboard the vessel; (d) promulgate and enforce policies and procedures designed to prevent passengers from physically assaulting other passengers; and (e) exercise reasonable care under the circumstances. The district court granted summary judgment in favor of Defendant, ruling that there was no evidence suggesting that Defendant had actual or constructive notice of the risk of harm.   The Eleventh Circuit affirmed the grant of summary judgment to Defendant and denied Plaintiff’s motion for sanctions. The court held that Plaintiff has not presented sufficient evidence to create an issue of fact as to whether Defendant had actual notice that any passengers would attack him. The court reasoned that in the context of passenger-on-passenger violence, a cruise line has a duty to warn and/or protect when it or its employees reasonably apprehend the danger such that the attack was foreseeable. However, while the presence of a security officer during disembarkation connotes some awareness of the importance of order, a verbal dispute does not provide actual notice that a physical assault is to follow. View "Reinier Fuentes v. Classica Cruise Operator Ltd, Inc." on Justia Law

N&W filed a maritime limitation action in federal district court after Plaintiff was injured on a ship owned by N&W Marine Towing. The district court initially stayed Plaintiff from prosecuting claims against N&W in other forums, however, the court lifted its stay after Plaintiff made certain stipulations.The Fifth Circuit reasoned that under the Limitation of Liability Act, shipowners “may bring a civil action in a district court of the United States for limitation of liability.” The Limitation Act allows shipowners to limit their liability for an array of incidents, as long as the incident giving rise to liability occurred without the p knowledge of the owner.Here, after N&W filed its limitation action, three parties filed claims: Wooley, Turn Services, and RCC. However, RCC and N&W settled, and Turn Services assigned its claims to Plaintiff, leaving him as the only remaining claimant. The court found that Plaintiff’s stipulation both recognized the district court’s exclusive jurisdiction over the limitation proceeding and stated that Plaintiff would not seek to enforce a damage award greater than the value of the ship and its freight until the district court had adjudicated the limitation proceeding. Thus, the court found that the district court did not abuse its discretion by lifting the stay and allowing Plaintiff to pursue remedies in other forums. Further, the court found that N&W’s arguments regarding removal are not relevant to the issue of whether the district court abused its discretion by lifting the stay. View "Wooley v. N&W Marine Towing" on Justia Law

Nadella Corporation bought a ship, the MV Falcon Carrier, for scrap from Falcon Carrier Shipping Limited. Unbeknownst to Nadella, the ship was encumbered by a $368,000 debt. To recover that debt, the debt holder “arrested” Nadella’s new ship. Nadella then tried to recover that debt from the ship’s seller Falcon Carrier Shipping. Newbrook Shipping—the owner of those two ships arrested by Nadella—sued Nadella in South Africa and was considering another lawsuit in Nevis. Newbrook applied in Maryland federal court for an ex parte order under Sec. 1782 authorizing discovery from Nadella’s purported parent company, Global Marketing Systems. The district court rejected discovery for the speculative “proceeding” in Nevis but then granted the full application.On appeal, Global Marketing argues that the district court substantively erred in granting the entire application and approving service of process. The court stated that Sec. 1782 identifies four mandatory conditions that must be satisfied before an application can be granted. Here, the last condition, that the evidence sought must be “for use” in a foreign proceeding, is not fully satisfied.The court held that Section 1782 gives litigants access to federal courts to obtain discovery for use in international litigation. But that access is not unlimited. The district court erred by granting the full application when it held the speculative proceeding in Nevis did not provide a basis for Sec. 1782 discovery. The court remanded for the district court to consider Global Marketing’s arguments. View "In re: Application of Newbrook" on Justia Law

The Fifth Circuit affirmed the district court's refusal to vacate a second default judgment against the Elephant Group. The court concluded that the district court had jurisdiction over the Elephant Group, and that the Elephant Group failed to present a meritorious defense, as opposed to mere legal conclusions.In this case, Tango Marine, a Grecian corporation, filed suit in district court against the Elephant Group, two Nigerian businesses, seeking maritime attachment and garnishment pursuant to Federal Rule of Civil Procedure Supplemental Rule B. Tango Marine subsequently sought entry of default, which the clerk entered. When no motion for default judgment appeared before the district court, the district court ordered Tango Marine to file its motion for default judgment or explain its failure. Tango Marine then filed its motion for default judgment and the Elephant Group participated in the suit by filing a motion for extension of time and to have the default set aside. With the initial default set aside, the Elephant Group filed a motion to dismiss under Federal Rule of Civil Procedure 12(b). In response, Tango Marine filed an amended complaint and a response opposing the motion to dismiss. The Elephant Group responded only to this response to the motion to dismiss and never filed an answer to the amended complaint. Tango Marine ultimately asked the clerk for a second entry of default due to the Elephant Group's failure to answer the amended complaint, which the clerk granted. View "Tango Marine, S.A. v. Elephant Group, Ltd." on Justia Law

On January 19, 2019, Bonvillian's vessel allided with a crew boat docked on the Mississippi River. On the crew boat, Pellegrin sustained personal injuries. On August 23, 2019, Pellegrin sued Bonvillian in Louisiana state court. On December 16, 2019, Bonvillian filed a verified limitation complaint. The Limitation of Liability Act of 1851 allows vessel owners to limit their vessel’s tort liability to the value of the vessel plus pending freight, 46 U.S.C. 30501–30512, requiring vessel owners to “bring a civil action in a district court of the United States . . . within 6 months after a claimant gives the owner written notice of a claim.”The district court dismissed, citing the Fifth Circuit “Eckstein” rule that “a party alleging a limitation petition was not timely filed challenges the district court’s subject matter jurisdiction over that petition.” The district court concluded that the Fifth Circuit’s Eckstein rule remained controlling (despite Bonvillian’s contention that the Supreme Court implicitly overruled Eckstein in 2015), and that it lacked subject matter jurisdiction. The Fifth Circuit reversed, overturning the Eckstein rule based on intervening Supreme Court decisions. The 46 U.S.C. 30511(a) time limitation is a mere claim-processing rule which has no bearing on a district court’s subject matter jurisdiction. View "Bonvillian Marine Service, Inc. v. Pellegrin" on Justia Law

In July 2015, R.N. went boating on Lake Coeur d’Alene with his friends, C.N. and B.L. All three boys were sixteen years old at the time. The boat was owned by C.N.’s father. C.N., B.L., and R.N. obtained about 12 beers from an unknown source and consumed them while boating. Later, the boys stopped at Shooters, a restaurant and bar near the south end of the lake. Respondent Tracy Lynn allegedly provided C.N., B.L., and R.N. with an alcoholic drink known as a “Shooter sinker” (also known as a “derailer”). The boys left the restaurant and drank the derailer on the lake. At some point during the trip, R.N. jumped or fell off the boat into the water and drowned. Appellant-plaintiffs Brandi Jones (R.N.'s mother), and Dasha Drahos (R.N.'s sister) filed a complaint against Lynn, alleging she recklessly and tortiously caused R.N.’s death by providing him with alcohol before he drowned in Lake Coeur d’Alene. Lynn moved for summary judgment, asking the district court to dismiss the case because the Plaintiffs failed to comply with the notice requirements under Idaho’s Dram Shop Act. The district court agreed and granted Lynn’s motion for summary judgment after concluding there was no uniform body of federal maritime dram shop law that would preempt Idaho’s Dram Shop Act. Thus, the Plaintiffs had to comply with the Dram Shop Act’s notice requirements. The Plaintiffs appealed to the Idaho Supreme Court. Finding that the district court correctly applied with the Idaho Dram Shop Act after concluding the Act did not conflict with any uniform federal common law, and that the district court did not err in finding Appellants' claims were barred because they did not comply with the Dram Shop Act, the Supreme Court affirmed the grant of summary judgment. View "Jones v. Lynn" on Justia Law