Articles Posted in Admiralty & Maritime 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

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Rubi, a U.S. citizen, is the Director of 7R Holdings LLC, which has its principal place of business in Puerto Rico. Holdings holds 7R Charters, which owned M/Y Olga, a yacht registered in the British Virgin Islands (BVI). Calot captains Olga. Using email and the telephone, Calot, while in Puerto Rico, hired Trotter, while in Florida, to work as a chef on Olga. Trotter boarded Olga in St. Thomas, U.S. Virgin Islands. Days later, Olga traveled to Scrub Island, BVI, and let down its anchor. Trotter allegedly sustained an injury while descending stairs to the dock, was treated for her alleged injuries at a BVI hospital, and returned to Florida. Trotter sued Rubi, Holdings, and Olga in the District Court of the Virgin Islands under the Jones Act, 46 U.S.C. 30104, and general maritime laws. The court dismissed, citing forum non conveniens. The Third Circuit affirmed, applying the general presumption that the possibility of a change in substantive law should ordinarily not be given substantial weight in the forum non-conveniens inquiry, because the remedy provided by the alternative forum is not clearly inadequate and because the Jones Act does not contain a special venue provision. The court did not abuse its discretion in exercising its forum non-conveniens power after reasonably balancing the relevant private and public interest factors. View "Trotter v. 7R Holdings LLC" on Justia Law

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The widows of deceased husbands who served in the U.S. Navy alleged that their husbands contracted cancer caused by exposure to asbestos-containing insulation and components that were added onto ship’s engines, pumps, boilers, blowers, generators, switchboards, steam traps, and other devices. The manufacturer-defendants each made their products “bare metal.” If they manufactured an engine, they shipped it without any asbestos-containing insulation materials that would later be added. Following a remand, the district court applied the bright-line rule version of the bare-metal defense and clarified that summary judgment had been entered in favor of the manufacturers on both the strict liability and negligence claims. The court reasoned that the rule approach was best because maritime law favors uniformity. The Third Circuit vacated, stating that it surveyed “bedrock principles of maritime law” and concluded that they permit a manufacturer of even a bare-metal product to be held liable for asbestos-related injuries when circumstances indicate the injury was a reasonably foreseeable result of the manufacturer’s actions, at least in the context of a negligence claim. The court affirmed summary judgment on the product liability claims. View "In re: Asbestos Products Liability Litigation" on Justia Law

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Christopher Columbus owns and operates the passenger vessel “Ben Franklin Yacht,” which provides cruise services on the Delaware River from Philadelphia. Bocchino was a patron on a Ben Franklin cruise on May 3, 2013, when, in a “drunken brawl,” he was apparently “assaulted on the vessel and/or in the parking lot near the dock” by “unknown patrons of the cruise and/or agents, servant[s], workmen and/or employees’” of Christopher Columbus. Bocchino filed a state court suit, alleging negligence. Christopher Columbus then filed its Complaint for Exoneration From or Limitation of Liability in federal court. The district determined that the test for maritime jurisdiction had not been met and dismissed the limitation action for lack of subject-matter jurisdiction. The Third Circuit vacated. The federal courts have the power to hear “all Cases of admiralty and maritime Jurisdiction,” U.S. Const. art. III, sect. 2, cl. 1; 28 U.S.C. 1333(1). The location aspect of the jurisdictional test is satisfied because the alleged tort occurred on the Delaware River and carrying passengers for hire on a vessel on navigable waters is substantially related to traditional maritime activity. Such an incident has the potential to disrupt maritime commerce. View "Christopher Columbus LLC v. Bocchino" on Justia Law

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Plaintiffs used ocean common carriers to transport vehicles between foreign countries and the United States. Direct purchaser plaintiffs made arrangements with and received vehicles directly from the carriers, while indirect purchaser plaintiffs obtained the benefit of the carrier services by ultimately receiving vehicles transported from abroad. In 2012, law enforcement raided the offices of Defendants, ocean common carriers, in connection with antitrust investigations. Several Defendants pleaded pleaded guilty to antitrust violations based on price-fixing, allocating customers, and rigging bids for vehicle carrier services. Plaintiffs filed suit, alleging that Defendants entered into agreements to fix prices and reduce capacity in violation of federal antitrust laws and state laws. The Third Circuit affirmed dismissal of the case. Defendants allegedly engaged in acts prohibited by the Shipping Act of 1984, 46 U.S.C. 40101, which both precludes private plaintiffs from seeking relief under the federal antitrust laws for such conduct and preempts the state law claims under circumstances like those at issue. The Act responds to “the need to foster a regulatory environment in which U.S.-flag liner operators are not placed at a competitive disadvantage vis-a-vis their foreign-flag competitors.” The Federal Maritime Commission has regulatory authority displacing private suits. View "In re: Vehicle Carrier Services Antitrust Litigations" on Justia Law

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Hargus and others rented F&I's 26-foot ship, One Love, to travel throughout the U.S. Virgin Islands. F&I had hired Coleman as a captain. At Cruz Bay, Coleman anchored close to the shore. Most of the passengers disembarked. Later, members of the group, standing on the beach approximately 25 feet away from the boat, threw beer cans at Hargus while he was standing on the One Love’s deck. Coleman threw an empty insulated plastic coffee cup that hit Hargus on the side of his head. Hargus did not lose consciousness, nor complain of any injury. One Love resumed its journey. Days later, Hargus, having experienced pain and vision impairments, was diagnosed with a concussion and a mild contusion. Hargus had previously suffered 10-12 head injuries. The doctor allowed Hargus to return to work that day without restrictions. Hargus did not seek further medical treatment until a year later, when he was examined for headaches, memory loss, mood swings, and neck pain. Hargus filed suit, claiming a maritime lien against the One Love, negligence, and negligent entrustment. The district court awarded $50,000, concluding that it had admiralty jurisdiction, that Coleman was negligent and that the One Love was liable in rem. The Third Circuit vacated, holding that the act giving rise to Hargus’ claim was insufficient to invoke maritime jurisdiction because it was not of the type that could potentially disrupt maritime commerce. The district court lacked subject matter jurisdiction. View "Hargus v. Ferocious & Impetuous, LLC" on Justia Law

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The Waterfront Commission of New York Harbor is a bi-state corporate and political entity created by interstate compact in 1953, after years of criminal activity and corrupt hiring practices on the waterfront N.J.S. 32:23-1; N.Y. Unconsol. Laws 9801. In 2013 the Commission opened its Longshoremen’s Register to accept applications for 225 new positions, requiring shipping companies and other employers to certify that prospective employees had been referred for employment compliant with federal and state nondiscrimination policies. Rejecting a challenge, the district court held that the Commission had acted within its authority and had not unlawfully interfered with collective bargaining rights. Such rights were not completely protected under the language of the Compact. The Third Circuit affirmed, noting that opponents had ample notice and opportunity to be heard with respect to the nondiscrimination amendment. Compact Section 5p-(5)(b) clearly provides for inclusion of registrants under “such terms and conditions as the [C]ommission may prescribe.” View "NY Shipping Ass'n, Inc. v. Waterfront Comm'n of NY Harbor" on Justia Law