Justia Admiralty & Maritime Law Opinion Summaries

The Supreme Court of the United States reviewed two cases involving challenges to a rule promulgated by the National Marine Fisheries Service under the Magnuson-Stevens Act. The rule required certain fishing vessels to carry observers onboard to collect data necessary for fishery conservation and management, with the cost of these observers to be borne by the vessel owners. The petitioners, various fishing businesses, argued that the Act did not authorize the Fisheries Service to impose these costs on them.In the lower courts, the District Court for the District of Columbia Circuit and the First Circuit Court of Appeals both upheld the rule. They applied the Chevron framework, a two-step process used to interpret statutes administered by federal agencies. Under this framework, if a statute is ambiguous, courts defer to the agency's interpretation as long as it is reasonable. Both courts found that the Magnuson-Stevens Act was ambiguous on the issue of observer costs and deferred to the Fisheries Service's interpretation.The Supreme Court, however, overruled the Chevron doctrine, holding that it was inconsistent with the Administrative Procedure Act (APA). The APA requires courts to exercise their independent judgment in deciding whether an agency has acted within its statutory authority. Courts may not defer to an agency interpretation of the law simply because a statute is ambiguous. The Court vacated the judgments of the lower courts and remanded the cases for further proceedings consistent with this opinion. The Court emphasized that while courts may seek guidance from the interpretations of those responsible for implementing particular statutes, they must not defer to these interpretations. Instead, they must independently interpret the statute and ensure that the agency has acted within its statutory authority. View "Loper Bright Enterprises v. Raimondo" on Justia Law

In a maritime insurance dispute between Great Lakes Insurance, a German company, and Raiders Retreat Realty, a Pennsylvania company, the Supreme Court of the United States ruled that choice-of-law provisions in maritime contracts are presumptively enforceable under federal maritime law, with certain narrow exceptions not applicable in this case.The dispute originated when Raiders Retreat Realty's boat ran aground, and Great Lakes Insurance denied coverage, alleging that Raiders breached the insurance contract by failing to maintain the boat’s fire-suppression system. The insurance contract contained a choice-of-law provision that selected New York law to govern future disputes. Raiders argued that Pennsylvania law, not New York law, should apply. The District Court ruled in favor of Great Lakes, finding that the choice-of-law provision was presumptively valid and enforceable under federal maritime law. The Third Circuit Court of Appeals vacated this decision, holding that choice-of-law provisions must yield to the strong public policy of the state where the suit is brought.The Supreme Court reversed the Third Circuit's decision, emphasizing the importance of uniformity and predictability in maritime law. The Court concluded that choice-of-law provisions allow maritime actors to avoid later disputes and the ensuing litigation and costs, thus promoting maritime commerce. Therefore, such provisions are presumptively enforceable under federal maritime law. The Court further clarified that exceptions to this rule exist but are narrow, and none of them applied in this case. View "Great Lakes Insurance SE v. Raiders Retreat Realty Co." on Justia Law

CARCO sub-chartered an oil tanker from tanker operator Star, which had chartered it from Frescati. During the tanker’s journey, an abandoned ship anchor punctured the tanker’s hull, causing 264,000 gallons of heavy crude oil to spill into the Delaware River. The 1990 Oil Pollution Act, 33 U.S.C. 2702(a), required Frescati, the vessel’s owner, to cover the cleanup costs. Frescati’s liability was limited to $45 million. The federal Oil Spill Liability Trust Fund reimbursed Frescati for an additional $88 million in cleanup costs.Frescati and the government sued, claiming that CARCO had breached a clause in the subcharter agreement that obligated CARCO to select a berth that would allow the vessel to come and go “always safely afloat,” and that obligation amounted to a warranty regarding the safety of the selected berth. Finding that Frescati was an implied third-party beneficiary of the safe-berth clause, the Third Circuit held that the clause embodied an express warranty of safety.The Supreme Court affirmed. The safe-berth clause's unqualified plain language establishes an absolute warranty of safety. That the clause does not expressly invoke the term “warranty” does not alter the charterer’s duty, which is not subject to qualifications or conditions. Under contract law, an obligor is strictly liable for a breach of contract, regardless of fault or diligence. While parties are free to contract for limitations on liability, these parties did not. A limitation on the charterer’s liability for losses due to “perils of the seas,” does not apply nor does a clause requiring Star to obtain oil-pollution insurance relieve CARCO of liability. View "CITGO Asphalt Refining Co. v. Frescati Shipping Co." on Justia Law

Batterton was working on a Dutra vessel when a hatch blew open and injured his hand. Batterton sued Dutra, asserting various claims, including unseaworthiness, and seeking general and punitive damages. The Ninth Circuit affirmed the denial of Dutra’s motion to dismiss the claim for punitive damages: The Supreme Court reversed. A plaintiff may not recover punitive damages on a claim of unseaworthiness. Precedent establishes that the Court “should look primarily to . . . legislative enactments for policy guidance” when exercising its inherent common-law authority over maritime and admiralty cases. Overwhelming historical evidence suggests that punitive damages are not available for unseaworthiness claims. The Merchant Marine Act of 1920 (Jones Act) codified the rights of injured mariners by incorporating the rights provided to railway workers under the Federal Employers’ Liability Act (FELA); FELA damages were strictly compensatory. The Court noted that unseaworthiness in its current strict-liability form is the Court’s own invention, coming after enactment of the Jones Act. A claim of unseaworthiness is a duplicate and substitute for a Jones Act claim. It would exceed the objectives of pursuing policies found in congressional enactments and promoting uniformity between maritime statutory law and maritime common law to introduce novel remedies contradictory to those provided by Congress in similar areas. Allowing punitive damages on unseaworthiness claims would also create bizarre disparities in the law and would place American shippers at a significant competitive disadvantage and discourage foreign-owned vessels from employing American seamen. View "Dutra Group v. Batterton" on Justia Law

Manufacturers produced equipment for three Navy ships. The equipment required asbestos insulation or asbestos parts to function as intended, but the manufacturers did not always incorporate the asbestos into their products, so the Navy later added the asbestos. Two Navy veterans, exposed to asbestos on the ships, developed cancer. They sued the manufacturers. The manufacturers argued that they should not be liable for harms caused by later-added third-party parts.The Supreme Court affirmed the Third Circuit in rejecting summary judgment for the manufacturers. The Court adopted a rule between the “foreseeability” approach and the “bare-metal defense,” that is "especially appropriate in the context of maritime law, which has always recognized a ‘special solicitude for the welfare’ of sailors." Requiring a warning in these circumstances will not impose a significant burden on manufacturers, who already have a duty to warn of the dangers of their own products. A manufacturer must provide a warning only when it knows or has reason to know that the integrated product is likely to be dangerous for its intended uses and has no reason to believe that the product’s users will realize that danger. The rule applies only if the manufacturer directs that the part be incorporated; the manufacturer makes the product with a part that the manufacturer knows will require replacement with a similar part; or a product would be useless without the part. View "Air & Liquid Systems Corp. v. DeVries" on Justia Law