Justia U.S. 3rd Circuit Court of Appeals Opinion Summaries

Articles Posted in Admiralty & Maritime Law
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This case involves a lawsuit against the United States for allegations of negligence in a search-and-rescue mission by the U.S. Coast Guard. The plaintiffs, the estate of Aaron Greenberg (who drowned in a boating accident), Adrian Avena (who survived the accident), and AA Commercial, LLC, claimed that the Coast Guard was negligent in its response to the distress signal from their capsized vessel. They argued that the Coast Guard broadcasted incorrect information about the vessel in distress and did not deploy the closest helicopter for the rescue mission.The United States Court of Appeals for the Third Circuit affirmed the lower court's dismissal of the case, stating that the United States was immune from such a suit. According to the court, the plaintiffs failed to show how the Coast Guard's alleged negligence "increased the risk of physical harm" to Greenberg. The court noted that under the "Good Samaritan" doctrine, the Coast Guard would only be liable if its actions increased the risk of harm or if harm was suffered because of the plaintiffs' reliance on the Coast Guard. In this case, the court found that even if the Coast Guard had done nothing, the outcome would have been the same, thus the Coast Guard did not increase the risk of harm to Greenberg.Furthermore, the court denied the plaintiffs' motion for leave to amend their complaint, stating it would be futile as they had not identified any set of facts that could demonstrate how the Coast Guard's actions increased the risk of physical harm to Greenberg. View "Avena v. Avena" on Justia Law

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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

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Vastardis, a citizen of Greece and Chief Engineer onboard the Liberian-registered petroleum tanker, Evridiki, was convicted of offenses related to maritime pollution: failing to maintain an accurate Oil Record Book for several weeks, 33 U.S.C. 1908(a); falsifying high-seas Oil Record Book entries, Sarbanes-Oxley Act, 18 U.S.C. 1519; obstructing justice in the Coast Guard’s investigation of the Evridiki, 18 U.S.C. 1505; and making false statements, 18 U.S.C. 1001. The district court imposed a $7,500 fine, a $400 special assessment, and three years’ probation. Vastardis was barred from entering or applying for visas to enter the U.S.The Third Circuit affirmed the convictions but vacated the portion of the sentence that precludes Vastardis from entering the U.S. while under court supervision. The deception at issue involved falsely documenting bilge water discharges that occurred when the Evridiki was on the high seas and were only discovered when the Evridiki was docked in the Delaware Bay port. Vastardis cannot be convicted in a U.S. court for crimes occurring in international waters, but the convictions here were based on the presence of inaccurate records in U.S. waters, so the district court had subject matter jurisdiction even though the actual entries may have been made beyond U.S. jurisdiction while on the high seas. View "United States v. Vastardis" on Justia Law

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The Reefer arrived at the Port of Wilmington, Delaware for what its owner, Nederland, expected to be a short stay. Upon inspection, the Coast Guard suspected that the vessel had discharged dirty bilge water directly overboard and misrepresented in its record book that the ship’s oil water separator had been used to clean the bilge water prior to discharge. Nederland, wanting to get the ship back to sea as rapidly as possible, entered into an agreement with the government for the release of the Reefer in exchange for a surety bond to cover potential fines. Although Nederland delivered the bond and met other requirements, the vessel was detained in Wilmington for at least two additional weeks.Nederland sued. The Delaware district court dismissed the complaint, holding that Nederland’s claims had to be brought in the U.S. Court of Federal Claims because the breach of contract claim did not invoke admiralty jurisdiction a claim under the Act to Prevent Pollution from Ships (APPS) failed because of sovereign immunity. The Third Circuit reversed. The agreement is maritime in nature and invokes the district court’s admiralty jurisdiction. The primary objective of the agreement was to secure the vessel's departure clearance so that it could continue its maritime trade. APPS explicitly waives the government’s sovereign immunity. View "Nederland Shipping Corp. v. United States" on Justia Law

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Wilson was a marine construction worker on the New Jersey Route 3 bridge replacement project, which spans the Lower Passaic River from Clifton to Rutherford, at a location where the navigation channel was authorized to be 150 feet wide and 10 feet deep. Wilson drove steel piles for a cofferdam, a watertight structure that allows construction below the waterline, and was routinely exposed to extremely loud working conditions. He was diagnosed with a permanent hearing impairment resulting from those conditions. Wilson sought compensation benefits under the Longshore and Harbor Workers’ Compensation Act, 33 U.S.C. 901–50. An ALJ and the Benefits Review Board dismissed Wilson’s claim, finding that he was not covered under the LHWCA because he was not injured on navigable waters of the United States.The Third Circuit reversed. The waters where Wilson was injured were navigable, looking to whether a waterway “by itself or by uniting with other waterways, forms a continuous [commercial] highway,” and whether commercial vessels could navigate within the noted physical constraints. There were no impediments blocking the navigation channel between its confluence with the Newark Bay and the Route 3 bridge. At all points in between, the channel exceeded four feet in depth and 72 feet in width. View "Wilson v. Creamer-Sanzari Joint Venture" on Justia Law

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The Inganamorts docked their 65-foot fishing vessel behind their part-time Boca Raton, Florida residence. In 2011, while they were at their New Jersey home, the ship sank enough to sustain serious damage. They reported the loss to their insurer, Chartis, with whom they had an all-risk policy. Chartis sent a claims specialist, who reported three inches of standing water in the starboard forward cabin bilge and multiple potential sources of water ingress, including a hole in the hull the size of a screw. He found that the electrical breakers were severely rust-stained and blackened from an electrical failure; subsequent testing revealed obvious water intrusion. The final review confirmed the initial findings and identified that the battery charger was not working; without a source of power, the ship’s bilge pumps had ceased functioning.Chartis sought a declaratory judgment that it was not liable for the damage and claimed that the Inganamorts were liable for misrepresentation. The Inganmorts neither filed a statement of facts nor opposed Chartis’s statement of undisputed facts. The district court treated Chartis’s statement of facts as undisputed and granted Chartic summary judgment, finding that the Inganamorts “ha[d] no evidence to demonstrate a fortuitous loss[.]” The Third Circuit affirmed. An insured bears the burden of proving fortuity; the Inganamorts did not meet that burden. View "Chartis Property Casualty Co. v. Inganamort" on Justia Law

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LWI sued for cargo damage sustained during a trip to Camden, New Jersey, on the Ocean Quartz (Vessel). Liability for the damage is governed by the carrier’s bill of lading, which contains a forum selection clause requiring suit to be brought in South Korea. LWI instead sought to bring an in rem suit against the Vessel in the District of New Jersey, arguing that the foreign forum selection clause violates the Carriage of Goods by Sea Act (COGSA), 46 U.S.C. 30701, because South Korea does not allow in rem suits. The Third Circuit affirmed the dismissal of the suit. While foreign forum selection clauses were originally disfavored under COGSA, the Supreme Court later adopted a policy that better reflected the need to respect the competence of foreign forums to resolve disputes. The court rejected an argument that that COGSA designates in rem suits as substantive rights, which are violated by the forum selection clause. LWI’s own willful limitation of alternatives, not the forum selection clause, has eliminated its ability to recover. View "Liberty Woods International Inc. v. Motor Vessel Ocean Quartz" on Justia Law

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In 2004, after traveling from Venezuela to Paulsboro, New Jersey, Frescati’s single-hulled oil tanker, Athos, came within 900 feet of its intended berth and struck an abandoned anchor in the Delaware River, causing 264,000 gallons of crude oil to spill. The shipment was intended for CARCO. Frescati paid $143 million for the cleanup and was reimbursed $88 million by the government, under the Oil Pollution Act (OPA), 33 U.S.C. 2701. The Third Circuit held that Frescati was a third-party beneficiary of CARCO’s warranty that CARCO’s berth would be safe if the ship had a draft of 37 feet or less and that CARCO had an unspecified tort duty of care. On remand, the district court held that CARCO was liable to Frescati and the government as Frescati’s subrogee, for breach of contract because the Athos had a draft of 36′7″ and exercised good seamanship; CARCO had a duty to use sonar to locate unknown obstructions in the berth approach and to remove obstructions or warn invited ships. CARCO argued that the conduct of the Coast Guard, NOAA, and the Army Corps of Engineers misled CARCO into believing that the government was maintaining the anchorage. The court awarded Frescati $55,497,375.958 for breach of contract and negligence, plus prejudgment interest. The government, after the court’s 50% reduction, was awarded $43,994,578.66 on its subrogated breach of contract claim. The Third Circuit affirmed in favor of Frescati on the breach of contract claim but vacated as to negligence. The court affirmed the government’s judgment with respect to its subrogated breach of contract claim but, because CARCO’s equitable recoupment defense failed, remanded for recalculation of damages and prejudgment interest. View "Frescati Shipping Co., Ltd. v. Citgo Asphalt Refining Co." on Justia Law

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In 2004, after traveling from Venezuela to Paulsboro, New Jersey, Frescati’s single-hulled oil tanker, Athos, came within 900 feet of its intended berth and struck an abandoned anchor in the Delaware River, causing 264,000 gallons of crude oil to spill. The shipment was intended for CARCO. Frescati paid $143 million for the cleanup and was reimbursed $88 million by the government, under the Oil Pollution Act (OPA), 33 U.S.C. 2701. The Third Circuit held that Frescati was a third-party beneficiary of CARCO’s warranty that CARCO’s berth would be safe if the ship had a draft of 37 feet or less and that CARCO had an unspecified tort duty of care. On remand, the district court held that CARCO was liable to Frescati and the government as Frescati’s subrogee, for breach of contract because the Athos had a draft of 36′7″ and exercised good seamanship; CARCO had a duty to use sonar to locate unknown obstructions in the berth approach and to remove obstructions or warn invited ships. CARCO argued that the conduct of the Coast Guard, NOAA, and the Army Corps of Engineers misled CARCO into believing that the government was maintaining the anchorage. The court awarded Frescati $55,497,375.958 for breach of contract and negligence, plus prejudgment interest. The government, after the court’s 50% reduction, was awarded $43,994,578.66 on its subrogated breach of contract claim. The Third Circuit affirmed in favor of Frescati on the breach of contract claim but vacated as to negligence. The court affirmed the government’s judgment with respect to its subrogated breach of contract claim but, because CARCO’s equitable recoupment defense failed, remanded for recalculation of damages and prejudgment interest. View "Frescati Shipping Co., Ltd. v. Citgo Asphalt Refining Co." on Justia Law

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Joyce, a member of the Seafarers Union, agreed to serve as a bosun aboard the MAERSK OHIO for three months in 2012. The Union and Maersk had a collective bargaining agreement (CBA) that was incorporated by reference into the Agreement. Joyce fell ill onboard, was declared unfit for duty, and repatriated to the U.S. The CBA provided that, if a seafarer was medically discharged before the conclusion of his contract, he was entitled to unearned wages for the remaining contract period. Overtime was not included in the definition of unearned wages. Joyce received only base pay for the time left on his contract after his discharge. Joyce alleged that the CBA provisions governing unearned wages violated general maritime law. The district court granted Maersk summary judgment, distinguishing the Third Circuit’s 1990 “Barnes” holding that the specifics of what is covered by a seafarer’s right to “maintenance” (traditionally, food and lodging expenses) could be modified by a court, even if those specifics were established in a CBA. The Third Circuit affirmed, overruling the Barnes decision and joining other circuits, holding that a union contract freely entered by a seafarer that includes rates of maintenance, cure, and unearned wages will not be reviewed piecemeal by courts unless there is evidence of unfairness in the collective bargaining process. View "Joyce v. Maersk Line Ltd" on Justia Law