THE LIMITATION OF SHIPOWNER'S LIABILITY ACT AS AN INDEPENDENT BASIS FOR FEDERAL JURISDICTION?
TABLE OF CONTENTS I. Introduction 206 II. Limitation of Liability of Shipowners--to Stimulate Investment in U.S. Shipping 211 III. The Ebb and Flow of Admiralty Jurisdiction 218 A. The Locality Test for Admiralty Tort Jurisdiction 218 B. The Admiralty Extension Act and Abandonment of the Pure Locality Test 224 IV. Limitation for Vessels on Non-Navigable State Waters? 226 V. Shipowners Limitation of Liability Act as an Independent Basis of Federal Jurisdiction 230 VI. Conclusion 236
Having posed the titular question to several very experienced maritime attorneys, it was not surprising to have most respond with a resounding "NO." Some though, were more reflective and withheld an opinion. A few even ventured an affirmative response. The answer to the inquiry is not all that obvious and remains in a state of limbo as there is precedent from the United States Supreme Court that the Shipowner's Limitation of Liability Act (1) provides an independent basis for federal jurisdiction even if the underlying tort is not within admiralty jurisdiction. If the Act is an independent basis for federal jurisdiction, the next question is . obviously whether it is federal question jurisdiction or admiralty jurisdiction.
The issue was most recently raised in the landmark admiralty jurisdiction decision of the United States Supreme Court in Sisson v. Ruby. (2) The complainant's vessel was docked at a marina on Lake Michigan (3) and caught fire resulting not only in the vessel's destruction but also substantial damage to the marina and other vessels. (4) The owner, Sisson, sought injunctive and declaratory relief invoking the court's admiralty jurisdiction and also sought limitation of liability under the Shipowner's Limitation of Liability Act. (5) The district court dismissed for want of admiralty jurisdiction. (6) On a Motion For Re-Consideration, Sisson maintained that the Limitation Act provided an independent statutory basis for admiralty jurisdiction. (7) Ultimately, the trial court denied the Motion for Re-Consideration and held that the Limitation Act did not serve as an independent basis of federal admiralty jurisdiction. (8) On appeal, the Seventh Circuit affirmed the trial court's ruling that admiralty jurisdiction was lacking; (9) it also affirmed the trial court's decision that the Limitation Act did not provide an independent basis of federal admiralty jurisdiction. (10)
The Supreme Court granted writs on two issues: first, to review whether the incident sufficiently invoked federal admiralty jurisdiction. (11) The second issue was whether the Limitation of Liability Act alone supported federal jurisdiction. (12) The Supreme Court reversed the appellate court on the first question and held that the incident was within federal admiralty jurisdiction. (13) This made the second issue moot. (14)
Due to the Supreme Court's refusal to rule on this issue in Sisson v. Ruby, current precedent rests with a 1911 decision of the Court in Richardson v. Harmon (15) which has been cited as support for the proposition that the Limitation Act is an independent basis for federal jurisdiction. (16) In that case, the vessel struck an abutment to a railroad bridge on the Maumee River which empties into Lake Erie. (17) After the owner of the bridge filed suit in state court to recover damages from the vessel, the owners of the offending vessel filed to limit liability of the vessel in federal court asserting they had no privity or knowledge and were thus entitled to the benefits of the Limitation Act. (18) The trial judge sustained the bridge owner's objection to admiralty jurisdiction of the federal court on the basis that the incident was not a maritime tort cognizable in admiralty and that "the limited liability act of Congress did not extend to any such right of action." (19) The Supreme Court restated this precedent in Just v. Chambers. (20)
While several U.S. appellate courts have addressed the issue since Sisson v. Ruby, these have all reached the conclusion that the Limitation Act is not an independent basis of admiralty or federal question jurisdiction. However, the answer remains in limbo as no Court of Appeals can overrule a Supreme Court decision, and the Supreme Court has clearly expressed an interest in revisiting the issue by granting writs in Sisson v. Ruby. The Courts of Appeals which have confronted the issue only briefly address the precedent of Richardson v. Harmon or merely mention the potential constitutional conundrums raised which could not have been foreseen by the Supreme Court in the first decade of the Twentieth Century when the case was decided. (21) Another Court of Appeals has only stated that Richardson is an anomaly. (22) Others sidestep the question on the basis that the Admiralty Extension Act (23) implicitly overrules Richardson by extending admiralty jurisdiction to torts on land when caused by vessels on navigable waters.
One district court in Massachusetts held steadfast to the holding of Richardson that the Limitation Act is an independent basis for a federal court to exercise admiralty jurisdiction. In In re: Bernstein, (24) Chief Judge Young stated that until the U.S. Supreme Court overrules its precedent he is bound to apply it. He criticized the contemporary decisions for failing to address Richardson directly, save one (25) which merely stated that Richardson was a "historically flawed decision" (26) and further stated that "the doctrine of stare decisis ought not be so lightly discarded." (27) Thus, he was bound by the decision but acknowledged that "the manifest history of the Act demonstrates its inapplicability to the circumstances of this case...." (28) A commentator in the Michigan Law Review also has expressed support for the proposition that the Limitation Act is an independent basis of admiralty jurisdiction. (29) Taken to its logical conclusion, then, where the Limitation Act exists as an independent basis of federal jurisdiction (either federal question or admiralty), then one is confronted with the absurd proposition that the owner of rowboats used in a lake in Central Park in New York could seek limitation of liability in a federal court. Certainly, neither Congress nor the courts intend such a result.
Nonetheless, the question remains whether the precedent of Richardson v. Harmon continues to be valid law or not. Are there situations in which a federal court can exercise admiralty jurisdiction in a limitation proceeding even though the underlying claim would not otherwise be within admiralty jurisdiction? If not, does the Limitation Act, nonetheless, provide an independent basis for federal question jurisdiction? If federal question jurisdiction exists, then is the right of the vessel owner to seek limitation a "cause of action?" Are there situations in which issues of federalism may be infringed were the Court to hold that the Act does provide an independent basis of either admiralty or federal question jurisdiction? If the Act is the basis for federal question jurisdiction, does this raise other constitutional issues such as right to trial by jury?
The first section of this paper--Part I--will discuss the Limitation of Liability Act including a brief review of the historical roots of the right of the vessel owner to limit liability and the purpose for the legislation. In addition, Part I will discuss the jurisprudence prior to Richardson v. Harmon. Then, the decision of the Supreme Court in Richardson v. Harmon will be reviewed and this section will offer
a suggestion as to why the court decided as it did.
Part II will address the development of admiralty jurisdiction pursuant to Article III, Section 2 of the United States Constitution and as interpreted by the United States Supreme Court.
Part III will briefly examine: the development and rise of man-made reservoirs used for agricultural and recreational purposes; the limitation of admiralty jurisdiction to torts occurring on those lakes; and the tension between state versus federal jurisdiction over torts on such man-made lakes if the limitation act supports independent federal admiralty or federal question jurisdiction. This section will also address the conflict between the Seventh Amendment right of trial by jury if the Limitation Act does provide an independent basis for admiralty jurisdiction.
The next section--Part IV--will discuss the question whether the act creates federal question jurisdiction and whether the right of the vessel owner to seek limitation of liability under the act is a "cause of action."
Part V will discuss whether the Act satisfies the requirements for federal question jurisdiction.
Finally, in Part VI, a suggestion to resolve the issue will be made.
II. LIMITATION OF LIABILITY OF SHIPOWNERS--TO STIMULATE INVESTMENT IN U.S. SHIPPING
Whether limitation of liability began as far back as the Rhodians, the Romans, the Corpus Iuris Civilis, or to the High Middle Ages of the Twelfth Century, (30) the right of shipowners to limit liability spread throughout Western Europe into the North Sea and Baltic area in the Sixteenth and Seventeenth Centuries as commerce increased, with the exception of the British Isles. (31) The Hanseatic League, the City of Hamburg, Sweden, the Dutch, and the French, over the course of nearly three quarters of a century, adopted laws which limited the liability of shipowners. (32) In 1734, the British Parliament enacted a statute which permitted a vessel owner to limit liability for the acts of the master and crew without the "privity or knowledge" of the owner of the vessel. (33) The avowed purpose was to place English vessel owners on equal footing with other nations--particularly with their Dutch counterparts--increase the merchant marine, and encourage investment in shipping. (34)
The concept to limit the liability of a vessel owner was adopted in the United States first by the State of Massachusetts and then the State of Maine in 1819 and 1821, respectively. (35) These state statutes were observed by federal courts as limitation of liability, which was not considered part of the common law. Limitation was strictly a statutory privilege of the vessel owner and restricted to vessel owners in New England. (36) In 1851, vessel owners infuriated by the Supreme Court's decision in Lexington (37)--which held that a vessel owner may not unilaterally limit its common law liability as a common carrier and owed the duty to use ordinary care in the custody, delivery, and care of good transported on vessels--successfully lobbied Congress to pass legislation limiting the shipowners' liability. (38)
Like its British antecedent, the acknowledged purpose of the 1851 Limitation Act was to give American vessel owners the same advantages which were afforded to their British and Continental counterparts (39) and to encourage investment in shipping to develop a U.S. merchant marine. (40) Relevant to this discussion, the U.S. Supreme Court first addressed whether the Limitation Act provided an independent basis for federal jurisdiction in the matter of Ex Parte Phenix Ins. Co. (41) The S/S OCONTO was on a voyage from Chicago, Illinois to Green Bay, Wisconsin. (42) As the vessel entered the Fox River, a fire broke out at a mill on the land allegedly due to sparks from the vessel as it passed the mill, causing extensive damage to the buildings on land. (43) The vessel owner filed for limitation in federal court under the Limitation Act while suits were also filed in state court by property owners against the vessel owner. The land-based state plaintiffs excepted to the jurisdiction of the federal court on the basis that the damage occurred on land and was not within the court's admiralty jurisdiction. (44) The limitation-petitioner asserted that the federal court had admiralty jurisdiction over the issue based on Section 4283 of the 1851 Act (45)--which provided "that 'the liability of the owner of any vessel for any act, matter, or thing, loss, damage or forfeiture, done, occasioned, or incurred, without the privity or knowledge of such owner or owners, shall in no case exceed the amount or value of the interest of such owner in such vessel, and her freight then pending.'" (46) Because the owners of the land-based property could not invoke admiralty jurisdiction of the federal court and the rules promulgated for limitation only require that the vessel be transferred to a trustee by a court of "competent jurisdiction," (4) ' the Court stated unequivocally that neither the Limitation Act nor the supplemental rules confer jurisdiction on a federal court. (48) At the time the incident occurred, admiralty tort jurisdiction was strictly limited to damages sustained on navigable waters (the locality test) and did not extend to damages consummated on land due to vessel negligence. (49)
The U.S. Supreme Court again addressed whether the Limitation Act provided an independent basis of federal jurisdiction in Butler v. Boston & Savannah S.S. Co. (50) The S/S CITY OF COLUMBUS stranded and sank off Martha's Vineyard resulting in the deaths of most of the passengers, crew and cargo. Wrongful death suits were filed in state court along with suits to recover the lost cargo. The vessel owner then filed a libel (written declaration) to limit liability. The fundamental question was whether the Act limited the liability of the vessel owner only for damage to or loss of cargo, or whether it also allowed limitation for wrongful death and personal injury. The unanimous Court interpreted the Act broadly and held that it applied to all claims arising out of the maritime disaster. In reaching its conclusion, the Court stated that its interpretation of the statute hinged on the word "loss." (51) "[N]othing could be more general or broad than its term.... It is the liability not only for loss of goods, but for any injury by collision, or for any act, matter, loss, damage or forfeiture whatever, done or incurred." (52) The Court acknowledged that while the liability for wrongful death was created by state statute, (53) a state law could not restrict the parameters of federal maritime law and that the stranding, though within state territorial waters, was nonetheless within federal admiralty jurisdiction. (54) The law of limited liability "is necessarily coextensive with that of the general admiralty and maritime jurisdiction and... extends wherever public navigation extends--on the sea and the great inland lakes and the navigable waters connecting therewith." (55) The Court, also commenting on the 1884 Amendment to the Act, (56) noted that this modification was likely intended to clarify its meaning to apply to personal injury claims as well as cargo claims. "But it is unnecessary to decide this point in the present case." (57) It would be almost a quarter century before the Court squarely addressed this change in the Act.
In 1884, Congress amended the Limitation Act (58) to add the following language: "That the individual liability of a ship-owner, shall be limited to the proportion of any or all debts and liabilities that his individual share of the vessel bears to the whole...." (59) The amendment also made it clear, unlike its predecessor, that claimants could join all vessel owners into one action. (60) But, as the amendment included any debts and liabilities, the limitation did not extend to wages of seamen employed by the vessel owner. (61) It would appear that the purpose of the 1884 Amendment was Congressional assent to the interpretation of the act by the Supreme Court in Butler v. Boston & Savannah S.S. Co. (62)
One federal district judge in Maryland, as well as the U.S. Court of Appeals for the Ninth Circuit, interpreted the 1884 Amendment as a clarification of the initial statute. The district court in Chappell v. Bradshaw (63) stated that the 1851 Act allowed ship owners to seek limitation for losses "by reason of fire, collision, [or] embezzlement" (64) while the 1884 Amendment extended the right to seek limitation "for any and all debts and liabilities" (65) of the vessel owner with the exception of seaman's wages. (66) Subsequently, the Ninth Circuit Court of Appeals in The Annie Faxon (61) reasoned that the purpose of the 1884 Amendment was to extend limitation to "to all cases of debt and liability under contract obligations made on account of the ship, with the exception of wages due employes [sic]." (68) Though the courts were addressing the fundamental issue of whether the 1884 Amendment repealed the 1851 Act, these decisions reflect a more reasoned interpretation of the 1884 Amendment. Fifteen more years would pass before the Supreme Court would confront the changed Act.
The Court finally addressed the 1884 amendment directly in Richardson v. Harmon. (69) It gave the language an expansive and strained interpretation in its effort to promote Congressional intent to stimulate investment in shipping; this sentiment pervades the decision. In Richardson, a barge on the Maumee River off Lake Erie allided with a railroad bridge causing extensive damage to both the vessel and bridge. (70) The owner of the bridge filed suit in Ohio state court under the saving to suitors clause. (71) Thereafter, the vessel owner filed a libel and petition in federal court seeking limitation asserting the vessel was without fault and that if it were, it was without the privity and knowledge of the owners. (72)
The bridge owner challenged the jurisdiction of the federal court, asserting that the action was at common law and not within federal admiralty jurisdiction. (73) The federal district judge agreed, as the tort was not maritime in nature. As in Ex parte Phenix Ins. Co., (74) the lower court followed precedent which excluded allisions with land based structures from admiralty jurisdiction. (75) Justice Lurton acknowledged that the amendment of 1884 was not a paragon of clarity (76) and that the dearth of debate shed "little to no light as to the meaning...," (77) He reasoned that adding the language "any or all debts and liabilities" (78) would otherwise be superfluous if the intent of Congress were not to extend limitation to non-maritime torts. (79) The Court distinguished Butler v. Boston & Savannah S.S. Co. on the basis that the event giving rise to that litigation occurred prior to the adoption of the 1884 Amendment. (80) He also distinguished Ex parte Phenix Ins. Co. because the incident occurred prior to the 1884 Amendment and thus was not applicable. (81)
The Court in Richardson added that the decision in Butler v. Boston & Savannah S.S. Co. suggests that the amendment was intended to include claims not otherwise included in the 1851 Act. It then concluded that the 1884 Amendment aimed to add claims not previously included within the old provision whether the claims are maritime or non-maritime. (82) Butler's conclusion--that the 1884 Amendment intended to broaden the scope of claims which were subject to limitation regardless of the jurisdictional basis--seems beyond the Congressional intent; the Court in Butler reasoned that the term "loss" was broad and general (83) and that the purpose of the Act was to encourage shipping. (84) Yet, that Court held that limitation was coextensive with admiralty jurisdiction." (85) The Court in Richardson, nonetheless, took a further leap, rationalizing that the purpose of the Limitation Act would be unfulfilled were it not to apply to torts that were not within admiralty jurisdiction. Importantly, it fails to state what the basis of the federal court's jurisdiction is. Equally as important is that the Court fails to define what a "non-maritime tort" is.
It is one thing for Congress to clarify that the Act was intended to include not only claims for damage to cargo but also claims for personal injury or death, as well as other property, and to exclude from the act seaman's claims for wages. It is another, however, to declare that the amendment applied to all potential liabilities of the vessel owner regardless of whether the underlying claim was maritime in nature or not. This is especially true in light of the fact that neither the 1851 Act nor the 1884 Amendment includes a jurisdictional clause.
Whether it became common after Richardson for vessel owners to seek limitation when the underlying tort was not within admiralty jurisdiction is unknown. There were few attempts to challenge the decision as evidenced by the dearth of citations to the case on the jurisdictional issue. In The No. 6, (86) the owner of a pipeline in the East River damaged by a dredge disputed the court's jurisdiction, when the owner of the dredge filed for limitation, on the basis that the underlying tort was not within admiralty jurisdiction. The Second Circuit cited Richardson as precedent for the court's jurisdiction. (87) The Supreme Court, in dictum in Just v. Chambers, (88) held that an action for wrongful death under the Florida wrongful death statute on a yacht in territorial waters of the state was clearly within maritime jurisdiction; it then reiterated in dictum the rule of Richardson that limitation extends to non-maritime tort claims. (89)
The decision of the Supreme Court in Richardson may also reflect a recognition by the Court that the exclusion of allisions from the ambit of admiralty jurisdiction was illogical and would deprive vessel owners of the right to seek limitation in what likely was becoming a more common occurrence due to the industrial revolution of the late Nineteenth and early Twentieth Centuries and the explosive growth of the United States. The Richardson decision also reflects an expansion of admiralty jurisdiction under Article III, Section 2 of the Constitution, as interpreted by the Supreme Court and by Acts of Congress since the early days of the Republic. Despite the precedent established by the Richardson decision, it seems to have remained dormant until the late Twentieth Century.
III. THE EBB AND FLOW OF ADMIRALTY JURISDICTION
A. The Locality Test for Admiralty Tort Jurisdiction
Delovio v. Boit (90) is the seminal decision defining the extent of the Constitutional grant of Admiralty jurisdiction in contract disputes. Justice Story discarded the severe restrictions and limitations imposed on English courts of admiralty and concluded that a contract for marine insurance fell within the admiralty jurisdictional grant of the Constitution. As long as the contract "relate[s] to the navigation, business, or commerce of the sea," (91) it was within the admiralty jurisdiction of a federal court. Torts, however, continued to be governed by the strict locality rule of the ebb and flow of the tide adopted from England. (92) Even after Justice Story's treatment of maritime contracts in Delovio, he continued to adhere to the restricted ebb and flow of the tide rule in The S. B. Thomas Jefferson, (93) a suit for seaman's wages because the vessel traversed between two inland ports in Kentucky and Missouri. (94) Though the suit was a breach of contract claim, admiralty jurisdiction only extended to employment of seamen whose services are "substantially performed, or to be performed," (95) on the high seas or on those waters within the ebb and flow of the tide. (96) Hence, the dismissal for want of jurisdiction was affirmed.
The Court continued to adhere to this rule, even for contracts, in 1837 in The S.B. Orleans v. Phoebus, (91) an action over a dispute between joint owners of a vessel and a crewmember for wages. The Supreme Court--again with Justice Story writing for an unanimous Court--held that the actions were not within admiralty jurisdiction because the vessel plied the waters between New Orleans and interior ports. (98) The minority owner's petition alleged that the vessel lay within the "ebb and flow of the tide" at the Port of New Orleans and thus fell within admiralty jurisdiction of the federal court. The trial court upheld jurisdiction but was reversed. A vessel may touch on tidal waters but the fundamental question was whether the vessel is engaged in trade on the sea and its tidal waters or interior trade. (99) The vessel was exclusively engaged in interior trade and therefore its actions were not within the court's admiralty jurisdiction. (100) Thus, at the time, even if a vessel lay at a port within the ebb and flow of the tide but primarily engaged in trade on interior waters of the United States and its tributaries, a federal court lacked admiralty jurisdiction.
The Supreme Court granted a writ of review 12 years later in Waring v. Clark (101) and for all practical purposes repudiated the restriction of admiralty jurisdiction for torts to the ebb and flow of the tide in an action brought in admiralty to recover damages as a result of a collision on the Mississippi River 95 miles north of New Orleans. (102) Justice Wayne wrote the opinion giving an exegesis on the admiralty jurisdiction of English courts which, as a result of statutes passed during the reign of Richard II and Henry IV, prohibited admiralty jurisdiction to civil cases arising within the body of the country (infra corpus comitatus). (103) Justice Wayne discarded the yoke and restrictions of English admiralty jurisdiction and espoused a broad interpretation of the Constitutional grant, as the colonial courts took a more extensive view than that of the common law courts of England. (104) One of the concerns in adopting the Constitution was to "to give a power to the [federal government] to relieve [the States] from the difficulties which had arisen from the exercise of admiralty jurisdiction by the States separately." (105) Including the limitations of English law in the Constitution would strip U.S. courts of the constitutional duty to interpret and define what disputes fall within admiralty and maritime jurisdiction (106) and would deprive U.S. courts of the right to decide those cases. (107)
The Court also addressed the right to trial by jury, which was a major concern of the dissent, for there is no jury in a trial in which a federal court exercises solely admiralty jurisdiction. (108) The Seventh amendment guarantees jury trial in suits at common law--which are in a distinct class--even though there may be concurrent admiralty jurisdiction. (109) The present statutory grant of admiralty jurisdiction is substantially similar to the initial act passed by Congress in 1791. (110) Like its predecessor, the present statute includes the "saving to suitors clause." (111) Thus, if there is "concurrent jurisdiction in admiralty and common law, the jurisdiction in the latter is not taken away." (112) Where suit is brought in a common law court, both plaintiff and defendant are afforded the advantage of that court. (113) The admiralty jurisdiction of the U.S. extends to tide waters, as far as the tide flows, though that may be "infra corpus comitatus" which included the locale where this incident occurred. (114) The Supreme Court, despite this expansion of federal jurisdiction, continued to adhere to the "tidewater rule;" but, as Professor Thomas Schoenbaum notes, the Court gave more lip service to the rule than strict adherence to it. (115)
With western expansion and increased commerce on the internal rivers of the United States, and in particular with the growth of maritime commerce on the Great Lakes, (116) Congress enacted the Great Lakes Act (117) which extended admiralty jurisdiction to contract and tort disputes involving vessels of 20 tons and up, engaged in coastwise trade and commerce on lakes and navigable waters connecting those lakes. (118) To overcome any concerns that such an extension of federal admiralty jurisdiction over the inland lakes and navigable rivers would deprive parties of a right to a jury trial, the act extended to either party the right to request trial by jury. (119) Its constitutionality was challenged in the landmark decision, Propeller Genesee Chief v. Fitzhugh. (120)
Due to a collision between the schooner CUBA and the propeller GENESEE CHIEF on Lake Ontario, the schooner CUBA sank. The owner of the GENESEE CHIEF excepted to the federal court's admiralty jurisdiction, asserting that all owners of the vessels were citizens of the state of New York and that the collision occurred solely within the state of New York and not on the high seas, river, or any body of water within the ebb and flow of the tide. (121)
Justice Taney wrote the opinion and addressed the claim that the act was an unconstitutional extension of federal authority under the commerce clause. However, the Court held the act was not regulation of commerce. (122) Rather, it depended on whether the waters covered by the act were "within the admiralty and maritime jurisdiction; as conferred by the Constitution......." (123) Noting the prior decision of the court in The Thomas Jefferson which held that admiralty and maritime jurisdiction was limited to the ebb and flow of the tide, it was nonetheless "an erroneous decision" made at a time "when the commerce on the rivers in the west was in its infancy...." (124) Though the Court in Waring v. Clarke later found sufficient evidence of the effects of the tide 95 miles above the port of New Orleans, (125) "that case showed the unreasonableness of giving a construction to the Constitution which would measure the jurisdiction of the admiralty by the tide." (126) The Act of Congress of 1789 which established the federal courts makes it clear that the navigable character of the water was the defining issue of jurisdiction and not the ebb and flow of the tide. (127) "If the water was navigable it was deemed to be public; and if public, was regarded as within the legitimate scope of the admiralty jurisdiction conferred by the Constitution." (128)
The Great Lakes Act had limited scope, applying only to vessels of 20 tons and up, enrolled and licensed for coastwise trade and engaged in commerce between different states but not in domestic trade. (129) Hence, the admiralty and maritime jurisdiction was extended to include these inland lakes (the Great Lakes) and the navigable tributaries engaged in domestic trade. As a result, under the Constitution, the grant of federal admiralty jurisdiction was not limited to the tidal flow. (130) It further established that the authority of Congress to extend federal admiralty jurisdiction was pursuant to Art. III, Sec. 2 as further evidenced by the next decision of the Court in 1857.
Jackson v. S.B. MAGNOLIA (131) involved a collision of two vessels on the Alabama River located solely within that state. It was argued that as it occurred solely in Alabama, there was no admiralty jurisdiction. (132) In addition, counsel argued that GENESEE CHIEF did not extend jurisdiction to federal courts to waters not included in the 1845 legislation. (133) The Court stated that while the Great Lakes Act did not extend to all domestic trade on navigable waters, the Judiciary Act of 1789 did not restrict admiralty jurisdiction to the ebb and flow of the tide. "If the waters over which the jurisdiction is claimed are [navigable from the sea] the act makes no distinction between them." (134) Federal admiralty jurisdiction thus extends to navigable rivers even if located solely within a state. (135)
The esteemed Justice Story, while serving as a circuit court judge, stated as early as 1813 that the locality of the tort is the test to determine admiralty jurisdiction. (136) The Supreme Court in The Ply mouth (137) adopted the pure locality test for admiralty tort jurisdiction. The tort and damage had to occur on navigable waters. In that case, a suit was brought for damage to cargo on the wharf and other land-based structures caused by a fire upon the vessel, the FALCON, when docked in the Chicago River. Both the trial court and court of appeals dismissed for want of jurisdiction. The Supreme Court affirmed on the basis that the "wrong and injury complained of must have been committed wholly upon the high seas or navigable waters, or, at least, the substance and consummation of the same must have taken place upon those waters to be within the admiralty jurisdiction." (138) Though the negligence occurred solely on the vessel, this was immaterial as the entire damage occurred on land and was thus outside of admiralty jurisdiction. (139)
As admiralty jurisdiction in general was expanded to include any inland navigable waters which were engaged in interstate or international commerce, admiralty tort jurisdiction remained a constant and did not extend to allisions with stationary structures on navigable waters. Hybrid accidents involving both potential vessel and land-based negligence required the Supreme Court to tweak this rule in The Admiral Peoples. (140) In that case, the Court maintained admiralty jurisdiction when the plaintiff fell from a gangway from the vessel to the dock, reasoning that the gangway was part of the vessel and a duty was owed by the vessel. Concurrent vessel and land-based negligence would not defeat admiralty jurisdiction. But, as Professor Schoenbaum observed, this rule did not have a solid policy foundation. (141) Stability and more predictability was not obtained, however, until 1948.
B. The Admiralty Extension Act and Abandonment of the Pure Locality Test
Despite the decision in Richardson--which undoubtedly highlighted the limitations of admiralty tort jurisdiction--and the confusion spawned by the Plymouth-Peoples rule, it was not until 1948 that Congress enacted the Admiralty Extension Act which eliminated the arbitrary distinction of hybrid water and land-based torts or concurrent vessel/land negligence as long as the injury to persons or property were caused by a vessel on navigable waters. (142) The action may be brought either in personam or in rem. (143) However, the extension of admiralty jurisdiction to allisions and land-based damage due to the negligence or fault of a vessel did not completely eliminate some confusion in mixed cases whether a tort was within admiralty jurisdiction or not. (144)
In any event, after the enactment of the Admiralty Extension Act, locality alone was no longer the defining characteristic of admiralty tort jurisdiction. Since The Plymouth and its progeny, advances in transportation, especially after World War II, also brought to light the fact that aircraft accidents may not be within admiralty jurisdiction even though the tort occurred over navigable waters and was consummated on navigable waters. (145) The Supreme Court addressed this in its decision in Executive Jet Aviation, Inc. v. City of Cleveland (146) and recognized that the strict locality rule was inappropriate for certain aviation accidents which effected a sea change in determining admiralty tort jurisdiction.
The aircraft engines ingested seagulls as it departed from an airport in Cleveland and then crashed and sank in Lake Erie, a short distance from the airport. (147) The owner of the aircraft filed suit in federal court asserting admiralty jurisdiction. (148) The trial court dismissed for lack of admiralty jurisdiction which was affirmed by the Sixth Circuit on the basis that the tort occurred on land and not on the lake. (149) Sixth Circuit precedent required two criteria to be met in order to invoke federal admiralty jurisdiction. (150) First, the locality test must be met. Second, there must be a relationship or nexus between the wrong and the maritime service, navigation, or commerce. (151) The unanimous Supreme Court in Executive Jet eschewed the pure locality test, requiring further that the tort bear a significant relationship to maritime activity to invoke federal admiralty jurisdiction. (152)
After its decision in Executive Jet, the Supreme Court added an additional requirement to satisfy admiralty tort jurisdiction in Foremost Ins. Co. v Richardson. (153) Two pleasure craft collided in the Amite River in Louisiana resulting in a wrongful death suit brought in federal district court of the Eastern District of Louisiana which granted the motion to dismiss for lack of admiralty jurisdiction on the basis that a collision between two pleasure craft was not commercial or traditional maritime activity. (154) The U.S. Court of Appeals for the Fifth Circuit reversed. (155) The Supreme Court affirmed the Fifth Circuit on the basis that the term "vessel" is broadly defined in the U.S. Code (156) making no distinction between commercial and recreational craft and the federal rules of the road also apply to all watercraft. (157) Vessels thus need not be engaged in commercial activity to fall within the purview of admiralty jurisdiction of a federal court; it extends to all vessels, including recreational vessels. Finally, the Supreme Court in Sisson v. Ruby (158) added the requirement that the maritime tort must also have to the potential to disrupt maritime commerce. Thus, admiralty jurisdiction is both narrowed and broadened by the new test. It is narrowed in the respect that mere locality alone is no longer the sine qua non whether a tort falls within federal admiralty jurisdiction. It is expanded to the extent that it must involve traditional maritime activity and merely have the potential to disrupt maritime commerce. (159)
IV. LIMITATION FOR VESSELS ON NON-NAVIGABLE STATE WATERS?
The one constant for admiralty jurisdiction is that the waterway must be "navigable waters of the United States" which, since The Genesee Chief, (160) requires that the waterway be engaged in either international or interstate commerce; the standard is more restrictive than the commerce clause. (161) The test for navigability for admiralty jurisdiction was firmly established by the Supreme Court in The Daniel Ball:
Those rivers must be regarded as public navigable rivers in law which are navigable in fact. And they are navigable in fact when they are used, or are susceptible of being used, in their ordinary condition, as highways for commerce, over which trade and travel are or may be conducted in the customary modes of trade and travel on water. And they constitute navigable waters of the United States within the meaning of the acts of Congress, in contradistinction from the navigable waters of the States, when they form in their ordinary condition by themselves, or by uniting with other waters, a continued highway over which commerce is or may be carried on with other States or foreign countries in the customary modes in which such commerce is conducted by water. (162)
Since the Twentieth Century, modern engineering and technology has resulted in the development of extensive dams managed by the U.S. Corps of Engineers. Since 1900, over 90,000 public and private dams have been constructed and exist in the United States. (163) Of those over 25,000 created reservoirs used for recreational purposes. (164) Though inland lakes located solely within a state existed since the founding of the Republic, the Twentieth Century has seen an explosion of public and private projects creating a vast number of man-made lakes for recreational purposes in most states. The Supreme Court in Foremost Insurance Co. v. Richardson and in Sisson v. Ruby held that admiralty jurisdiction extended to recreational vessels involved in torts on "navigable waters of the United States" due to the potential impact even collisions or allisions involving recreational vessels could have on maritime commerce. In In re: Germain, the U.S. Court of Appeals for the Second Circuit held that admiralty jurisdiction could be invoked in an accident when a swimmer was injured while diving from a recreational vessel in Lake Oneida, New York. (165) The Supreme Court has boldly stated that "every tort involving a vessel on navigable waters falls within the scope of admiralty jurisdiction." (166) Though a party may invoke admiralty jurisdiction for accidents involving recreational vessels on "navigable waters of the United States," such an accident must have some potential to affect international or interstate maritime commerce. Recreational boating has expanded exponentially in the latter half of the Twentieth Century and into the Twenty-First Century with over 4,400 reported accidents resulting in over 700 deaths and in excess of $49 million in property damage according to the U.S Coast Guard 2016 Recreational Boating Statistics. (167)
A lake--whether natural or man-made--located solely within the boundaries of a state does not fall within the admiralty jurisdiction granted by the Constitution. This was made clear in The Daniel Ball, and the rule has been applied to many man-made lakes located solely within the confines of a state as evidenced by the following cases.
The U.S. Court of Appeals for the Fourth Circuit, in Alford u. Appalachian Power Company, (168) held that a tort committed on Smith Mountain Lake (located solely within the Commonwealth of Virginia) did not fall within the Constitutional grant of admiralty jurisdiction because the lake in question was created by a dam on the Roanoke River and is located solely in Virginia; it did not form a continuous highway of commerce with other states or foreign nations. (169)
Similarly, in Three Buoys Houseboat Vacations U.S.A. Ltd. v. Morts, (170) the Eighth Circuit held that a tort committed on the Lake of the Ozarks did not fall within federal admiralty jurisdiction. The lake was created by the construction of Bagnell Dam and used for intrastate shipping; this was not sufficient to make it an interstate highway for commercial purposes to sustain federal admiralty jurisdiction. "[I]n order to qualify as a navigable waterway for admiralty purposes we hold that purely intrastate commercial shipping is not enough." (171) In Leblanc v. Cleveland (172) and Chapman v. United States, (173) both the Second and Seventh Circuits affirmed dismissal of torts on bodies of water similar to the Lake of the Ozarks and which bore no significant relationship to traditional maritime activity or maritime commerce. The Eleventh Circuit also held that a federal court could not exercise admiralty jurisdiction over a tort on a canal on which an artificial obstruction prevented vessels from using it to conduct interstate commerce. (174)
Courts, as well as Congress, in the early days of the Republic were reluctant to extend admiralty jurisdiction beyond the ebb and flow of the tide due to the restriction on trial by jury when a court exercised solely admiralty jurisdiction over a matter. (175) The judiciary and Congress were both concerned that expanding admiralty jurisdiction beyond the ebb and flow of the tide would deny litigants of their Seventh Amendment right to trial by jury which was exercised in colonial courts in both tort and contract cases involving vessels in state waters beyond the ebb and flow of the tide. The dissent raised in Waring v. Clark expresses the concern that such an extension of admiralty jurisdiction would deny citizens the right to trial by jury which they could otherwise previously exercise in court. (176) The Great Lakes Act which extended admiralty jurisdiction to "lakes and navigable waters connecting said lakes" (177) in matters of contract or tort involving vessels over 20 tons and engaged in coastwise trade assuaged these concerns affording both plaintiff and defendant the right to request trial by jury. It does not extend to bodies of water located exclusively within a state and which does not support international or interstate commerce. Litigants in those cases--absent diversity jurisdiction or another independent basis of federal jurisdiction--are restricted to state court and to which state law will apply. (178) As such, either party then may request trial by jury as the action is one at common law.
V. SHIPOWNERS LIMITATION OF LIABILITY ACT AS AN INDEPENDENT BASIS OF FEDERAL JURISDICTION
If the Limitation Act serves as an independent basis of federal admiralty jurisdiction, then may a vessel owner seek limitation in federal court for torts committed on non-navigable waters? Several courts have addressed the question whether the Shipowners' Limitation of Liability Act provides an independent basis of federal jurisdiction allowing the vessel owner to remove a case from state to federal court though the claim arose on waters solely within a state. While the overwhelming majority have held that the Act does not support independent federal jurisdiction, the failure of the U.S. Supreme Court to address the issue after having granted writs precisely on the question in Sisson v. Ruby leaves the issue unresolved and the precedent of Richardson v. Harmon still standing. The broad sweep of Richardson cannot be dismissed by the simple explanation that the Admiralty Extension Act undermined the policy basis, for it is clear that the policy basis of that decision was to interpret the Act broadly to extend the benefit of limitation to vessel owners to all torts. Yet, as discussed at the time of that decision, man-made lakes solely within states created for recreational as well as hydroelectric and irrigation purposes either did not exist or were few; and certainly the explosion of recreational boating since World War II on such lakes creates legal issues which were also non-existent in the early Twentieth Century.
It is axiomatic that for a court to exercise admiralty jurisdiction, a body of water must be presently navigable or potentially capable to support either international or interstate waterborne commerce. (179) Though a waterway may be navigable, if an artificial obstruction prevents interstate commerce, then there is no admiralty jurisdiction. (180) No federal purpose is advanced by extending federal admiralty jurisdiction over waters which are not engaged in international or interstate waterborne commercial activity. (181) If a body of water is navigable to invoke admiralty jurisdiction, then substantive maritime law applies. (182)
Thus, if a body of water is located solely within a state and does not support or is not capable of supporting waterborne interstate commerce, then absent admiralty jurisdiction, substantive maritime law is not applicable. State law then governs any torts which occur on them. To extend federal maritime law to torts and contracts involving inland water bodies would certainly advance federal interests beyond the purview of the framers of the Constitution and resurrect the same concerns which motivated the early courts to restrict admiralty jurisdiction to the ebb and flow of the tide.
The term navigability is protean depending on the public purpose of an Act of Congress. It does not have a fixed meaning. (183) Navigability under the Rivers and Harbors Act of 1899, (184) the Federal Water Pollution Control Act (185) or the Commerce Clause of the Constitution (186) is not coextensive with navigability under the Constitutional grant of admiralty jurisdiction. (187) As noted by the Supreme Court, Congress may regulate commerce under the Commerce Clause regardless of whether navigation or water is involved. (188) It is one thing to grant the federal government the authority to regulate commerce or control obstructions on waterways and quite another to invoke admiralty jurisdiction, the purpose of which is to promote shipping and provide a neutral federal forum to apply a uniform set of rules. (189)
Just as any attempt by a state to extend its law to disputes within admiralty jurisdiction is unconstitutional, (190) so would any attempt to extend admiralty jurisdiction and its substantive law to bodies of water which do not pass the navigability test for admiralty jurisdiction. Litigants would be deprived of their Seventh Amendment right to trial by jury which was a major concern of the early courts as state courts had previously exercised jurisdiction over torts and contracts beyond the ebb and flow of the tide affording parties the right to trial by jury.
The original Limitation of Liability Act exempted owners of vessels engaged in river or inland trade. (191) The Act in its present incarnation applies to "seagoing vessels and vessels used on lakes or rivers or in inland navigation...." (192) It was amended in 1886 to allow owners of vessels engaged in inland river trade and commerce to seek limitation of liability. Its constitutionality was challenged in In re Garnett, (193) in which cotton merchants or consignees of the cargo asserted that the extension of the Act to inland navigation was unconstitutional. The vessel, S/S KATIE, was exclusively engaged in coastwise trade on the Savannah River between Augusta, Savannah, and other ports in South Carolina. (194) After it was stranded on a sandbar, a fire broke out in cotton that was onboard resulting in the discharge of the burning cotton bales into the river. (195) The vessel owner sought limitation under the Act which was challenged by the cargo owners on the basis the vessels were not sea going vessels and that the Act could not apply to vessels engaged solely in inland river commerce. Justice Bradley wrote the opinion for a unanimous court, stating first that limitation of liability is part of the maritime code of this country as enacted by Congress, which has the authority under Article III, Sec. 2 of the Constitution and is exclusively a federal prerogative; (196) the same constitutional grant of authority extends equally to the power of Congress to grant the right of limitation to vessels engaged in inland navigation. (197) However, it is important to note that the extension of the Act to owners of vessels engaged in trade on inland rivers and waters is only to those waters which are navigable. (198) Implicit in the application of the Act is the concept of navigability as defined by the Court for admiralty jurisdiction. This is obvious because Congress added the language in 1886 to apply to "seagoing vessels and vessels used on lakes or rivers or in inland navigation...." (199)
There is no jurisdictional grant in the original Limitation of Liability Act nor has one been added in the subsequent amendments. Federal question jurisdiction arises under the Constitution and laws of the United States; but admiralty jurisdiction is a separate and distinct form of jurisdiction and is exclusive of federal question jurisdiction. This is made clear by the Supreme Court in Romero v. International Terminal Operating Co. (200) in which Justice Frankfurter recounts the history and development of admiralty jurisdiction and common law remedies from the birth of the United States. (201) As a court of common law, parties are entitled to a jury; as a court of admiralty, there is no jury. (202)
Thus, to allow a party to apply for limitation under the Act for a tort occurring on a lake, river or other non-navigable body of water located solely and exclusively within a state would expand the constitutional grant of admiralty jurisdiction further than envisioned by the drafters of the Constitution and exceed the necessity of having uniform rules for maritime commerce. Thus, to negate the "navigability" requirement from the Act as suggested by one commentator (203) would likely be an unconstitutional overreaching into state sovereignty. A rough analogy can be drawn with the Death on the High Seas Act (204) which created a maritime cause of action for deaths occurring more than "three nautical miles from the shore of the United States." (205) DOHSA also specifically retains causes of action for death within a state and explicitly excludes the Great Lakes and the internal waters of a state. (206)
Only two appellate courts considered whether the Limitation Act itself serves as a basis for federal question jurisdiction. (207) The Eighth Circuit rejected the argument, maintaining the Limitation Act is akin to a defense. (208) The Ninth Circuit also rebuffed the argument in a more thorough analysis (209) on the basis that the law must create the cause of action, citing American Well Works Co. v. Layne & Bowler Co., (210) and that the federal question must appear on the face of the complaint, relying on Franchise Tax Bd. v. Construction Laborers Vacation Trust. (211) As in American Well Works where the court held that "[a] suit for damages to business caused by a threat to sue under the patent law is not itself a suit under the patent law," (212) a complaint to limit the liability of a vessel is not a suit under federal law nor is it a cause of action created by federal law; rather, it is a defense to and derivative of the underlying tort claims. (213)
The Supreme Court stated in Romero v. International Terminal Operating Company (214) that a suit in admiralty does not raise federal question jurisdiction. It would be quite an anomaly were the limitation statute to confer federal question jurisdiction when admiralty jurisdiction is not federal question jurisdiction. Therefore, this raises yet another potential constitutional challenge, as well as the question of whether those parties who file claims in the limitation proceeding would have a Seventh Amendment right to a jury trial. For example, consider a suit filed in state court against a vessel owner whose vessel was plying the waters of the Lake of the Ozarks as in Three Buoys Houseboat Vacations U.S.A. Ltd. v. Morts. (215) The claim is a common law claim affording both plaintiff and defendant the right to trial by jury. If the limitation statute is a basis for federal jurisdiction--should the defendant timely file in federal court a complaint for limitation (216)--the original state claimant then loses a right to a jury trial. (217) Pursuant to the savings to suitors clause, 28 U.S.C. [section] 1332, a state court may entertain a maritime claim such as a maritime tort or breach of contract claim retaining the right to a jury trial. However, a tort on a lake solely and exclusively within a state does not invoke the admiralty jurisdiction or require the application of maritime law. Allowing a vessel owner, then, to file for exoneration from or limitation of liability, essentially negates the jurisdiction of a state over purely local matters. While the purpose of the limitation act was to stimulate investment in shipping, to apply the Act to recreational vessels on non-navigable waters hardly advances that purpose.
The U.S. Court of Appeals for the Ninth Circuit in Seven Resorts v. Cantlen (218) is the only court to address the issue of whether the Limitation Act falls within federal question jurisdiction. As noted by the court, federal question jurisdiction arises when a federal statute creates a cause of action or if "a substantial question of federal law is a necessary element of the plaintiff's cause of action...." (219)
That the Limitation Act is procedural is inherent in the nature of the proceeding and based on the rules established by the Supreme Court in Norwich Co. v. Wright (220) which have remained virtually unchanged and are now codified in Rule F of the Supplemental Rules for Admiralty or Maritime Claims and Asset Forfeiture Action. (221) It is an affirmative defense rather than a cause of action, and this is inherent in the burden of proof and nature of the proceeding. Though the vessel owner files the complaint and is required to post security, it must be done within six months of written notice of a claim in writing. (222) While neither the Act nor Rule F establish the order of trial, it is illogical that the vessel owner would have to prove exoneration or limitation and lack of privity or knowledge first as this would be tantamount to requiring it to prove a negative. (223) Those filing claims should prove liability first, requiring the court to apply substantive principles of maritime law for liability and then shifting the burden of proof to the shipowner to prove its lack of fault or lack of privity or knowledge. (224)
Admittedly, if the Act provides a basis for federal question jurisdiction, then that alone would be sufficient for a either party to request a trial by jury. Yet, since the limitation act was adopted by Congress, no court presiding over a limitation claim has allowed any party to have a jury. That in and of itself speaks volumes.
In Richardson v. Harmon, (225) the Supreme Court expanded the right of the vessel owner to seek exoneration from or limitation of liability in a case which at the time did not fall within admiralty jurisdiction. The precedent established by this decision remained rather dormant until the Court granted writs on the issue in Sisson u. Ruby. However, as the Court held that the incident in Sisson invoked federal admiralty jurisdiction, it did not address the second issue on which writs were granted. It appears that having granted writs on the issue in Sisson, the Court deemed it appropriate to re-consider its precedent in light of its redefining of admiralty tort jurisdiction since Executive Jet and its progeny. The Act, by definition, applies only to "seagoing vessels and vessels used on lakes or rivers or in inland navigation, including canal boats, barges, and lighters." (226) The inclusion of the word "navigation" in this provision of the Act should logically mean the navigability requirement of admiralty jurisdiction as granted by Article III, Section 2 of the Constitution and which should certainly imply that the jurisdictional basis for which the vessel owner seeks limitation requires the underlying liability to be within federal admiralty jurisdiction. To hold otherwise would allow vessel owners on non-navigable waters--such as artificial bodies of water, rivers and lakes located solely within a state and not engaged in international or interstate commerce--to invoke the admiralty jurisdiction of a federal court and thus deprive states of jurisdiction over purely state concerns and thus divest parties of their constitutional right to a trial by jury. Federal courts have been wary of depriving claimants in maritime torts or contract disputes of their right to trial by jury under the saving to suitors clause (227) even when the vessel owner has timely filed for exoneration from or limitation of liability. (228) Likewise, the courts should be even more cautious if not totally averse to expanding the jurisdiction of a federal court to owners of vessels on non-navigable waters, not only because it fails to fulfill the original purpose of the Act but also as such an extension infringes on state jurisdiction depriving claimants of their right to trial by jury in what otherwise would be common law claims subject to state law and not substantive maritime law. Furthermore, by its express language, the Act applies "to seagoing vessels and vessels used on lakes or rivers or in inland navigation...." (229) By restricting its application to vessels engaged in inland navigation, this logically should be the navigation requirement of admiralty jurisdiction and maritime commerce. To expand it further would resurrect Constitutional conundrums long laid to rest.
The U.S. Supreme Court should again grant writs as soon as the opportunity arises to resolve this question and put it to rest. It considered it important enough in Sisson v. Ruby to grant writs but found it unnecessary to answer the question having resolved that the dispute fell within admiralty jurisdiction.
Arthur A. Crais, Jr. (*)
Arthur A. Crais, Jr., J.D., Tulane University, 1974, Adjunct Professor of Maritime Law, Loyola University of New Orleans, College of Law. The author would like to thank Judson Adams, Tyler Loga, and Ainsley Fagan for their assistance. Judson C. Adams, J.D. 2018, Loyola University New Orleans College of Law; B.A. 2015, University of Alaska, Anchorage. Tyler S. Loga, J.D. 2018, Loyola University New Orleans College of Law; B.A. 2014, Louisiana State University. Ainsley Fagan, J.D. 2018, Loyola University New Orleans College of Law; B.A. 2014, Tulane University.
(1) 46 U.S.C. [section][section] 30501 et seq. (2012).
(2) Sisson v. Ruby, 110 S.Ct. 2892 (1990). It appears that the Supreme Court granted writs on the issue in Jerome B. Grubart v. Great Lakes Dredge & Dock Co., 513 U.S. 527 (1995) as it is addressed in the Reply Brief For The Petitioner Jerome B. Grubart, Inc., 1994 U.S. S. Ct. Briefs LEXIS 331 (1994), and the Brief Of The Maritime Law Association Of The United States, As Amicus Curiae, In Support Of The Respondent, Great Lakes Dredge & Dock Company, 1994 U.S. S. Ct. Briefs LEXIS 553 (1994). Yet, the Seventh Circuit makes no mention of the issue in its opinion. Great Lakes Dredge & Dock Co. v. City of Chicago, 3 F.3d 225 (7th Cir. 1993). It is not listed as an issue in the initial Brief For The Petitioner Jerome B. Grubart, Inc., 1994 U.S. S. Ct. Briefs LEXIS 517 (1994).
(3) Complaint of Sisson, 867 F.2d 341 (7th Cir. 1989).
(6) Id. See also Complaint of Sisson, 663 F. Supp. 858 (N.D. Ill. 1987).
(8) In re: Complaint of Sisson, 668 F. Supp. 1196 (N.D. Ill. 1987).
(9) Sisson, 867 F.2d 341, 348.
(10) Id. at 350-351.
(11) Sisson, 497 U.S. 358, 359 (1990).
(12) Id. at 360. The parties were requested by the Court to brief whether it should reconsider the ruling in Richardson v. Harmon, 222 U.S. 96 (1911).
(13) Sisson, 497 U.S. at 367.
(14) Id. at 359, n.1.
(15) Richardson, 222 U.S. at 96.
(16) "Proceedings by vessel owners to limit their liability as permitted by the Acts of Congress are within the admiralty jurisdiction even if the claims limited against might not be sued upon in admiralty." 1-XIV BENEDICT ON ADMIRALTY [section] 225 (2017), Matthew Bender & Company, Inc., a member of the LexisNexis Group, n. 1 (citing Richardson v. Harmon, 222 U.S. 96 (1911); In re Houseboat Starship II, 2006 A.M.C. 1335 (D. Tenn. 2005)(quoting text); In re Colonial Trust Co., 124 F. Supp. 73, 1955 AMC 1290 (D. Conn. 1954) (quoting 6th edition of text); The Trim Too, 39 F. Supp. 271, 1941 AMC 1147 (D. Mass. 1941)). See In re Bernstein, 81 F. Supp. 2d 176, 2000 AMC 760 (D. Mass. 1999) (criticizing rule but following it as controlling precedent).
(17) Richardson, 222 U.S. at 99-100.
(18) Id. at 100.
(19) Id. at 101.
(20) Just v. Chambers, 321 U.S. 383, 386 (1941); In that case, the Court addressed the issue whether admiralty personal injury claimants could enforce a judgment against the estate of the owner of the vessel. The statement thus is irrelevant to the case and dictum at best.
(21) The list of decisions is noted by Judge Young in In re: Bernstein, 81 F.Supp 2d 176, 181 (D. Mass. 1999): "Seven Resorts, Inc. v. Cantlen, 57 F.3d 771, 773 (9th Cir. 1995); Sea Vessel, Inc. v. Reyes, 23 F.3d 345, 348 n.6 (11th Cir. 1994); David Wright Charter Serv. of N. Carolina, Inc. v. Wright, 925 F.2d 783, 785 (4th Cir. 1991); Three Buoys Houseboat Vacations U.S.A. Ltd. v. Morts, 921 F.2d 775, 779-80 (8th Cir. 1990); Guillory v. Outboard Motor Corp., 956 F.2d 114, 115 (5th Cir. 1992)."
(22) Seven Resorts, Inc. v. Cantlen, 57 F.3d 771, 772 (9th Cir. 1995).
(23) 46 U.S.C. [section] 30101 (2012). The Admiralty Extension Act was passed in 1948 to avoid the confusion over admiralty jurisdiction established in The Plymouth, 70 U.S. 20 (1865) and The Admiral Peoples, 295 U.S. 649 (1935). See also THOMAS J. SCHOENBAUM, ADMIRALTY AND MARITIME LAW, Vol. 1 [section] 3-1, p. 131-32 (5th ed. 2011). The purpose of the act was to extend admiralty jurisdiction to allisions and other land based injuries when proximately covered by a vessel or its crew. Id. at 133. The Act, however, requires to be "on navigable water." 46 U.S.C. [section] 30101.
(24) In re Bernstein, 81 F.Supp. 2d 176 (D. Mass. 1999). The incident occurred on the landlocked Lake Winnisquam in New Hampshire. He found that though the lake was not "navigable waters" of the United States. (Id. at 179), the Limitation Act was an independent basis of the court's jurisdiction. (Id. at 181).
(25) Seven Resorts, 57 F.3d at 773.
(26) In re: Bernstein, 81 F.Supp. 2d at 181.
(29) Amie L. Medley, Note: A Sea of Confusion: The Shipowner's Limitation of Liability Act as an Independent Basis of Admiralty Jurisdiction, 108 MICH. L. REV. 229 (2009).
(30) See James J. Donovan, The Origins and Development of Limitation of Shipowners' Liability,, 53 TUL. L. REV. 999, 1000-1001 (1979). See also Graydon S. Staring, The Roots and False Aspirations of Shipowner's Limitation of Liability, 39 J. MAR. LAW & COM. 315, 322-323 (2008).
(31) Id. at 1002-1003. See also THE REBECCA, 20 F. Cas. 373, 1831 U.S. Dist. LEXIS 5 (D. Me. 1831).
(32) Id. at 1003-1004.
(33) Id. at 1007; See also Graydon S. Staring, The Roots and False Aspirations of Shipowner's Limitation of Liability, 39 J. MAE. LAW & COM. 315, 325 (2008). Graydon S. Staring, The Roots and False Aspirations of Shipowner's Limitation of Liability, 39 J. MAR. LAW & COM. At 325. See also Norwich Co. v. Wright, 80 U.S. 104, 117-118 (1871) in which Justice Bradley traces the development of the British Limitation Act from 1734 to 1813. In this landmark decision, the Supreme Court held that the Limitation Act extended not only to cargo on the vessel but to '"any loss, damage, or injury by collision."' Id. at 120). The Court also took the additional step to define the procedures to be taken for limitation and held that only a federal court had jurisdiction for a limitation proceeding. (Graydon S. Staring, Limitation Practice and Procedure, 53 TUL. L. REV. 1134, 1135 (1979). These rules are codified in Supplemental Rule F of the Federal Rules of Civil Procedure and remain basically unmodified. 28 U.S.C. Supp. Admiralty Rule F.
(34) Graydon S. Staring, Limitation Practice and Procedure, 53 TUL. L. REV. at 1007-1008.
(35) Id. at 1009. See also Norwich, 80 U.S. at 119.
(36) Graydon S. Staring, The Roots and False Aspirations of Shipowner's Limitation of Liability, 39 J. MAR. LAW & COM. at 325-326. These state limitation statutes were relegated to the dustbin of history with the decision of the Supreme Court in THE LOTTAWANNA, 88 U.S. 558 (1874) which required uniformity in maritime law throughout the U.S.
(37) New Jersey Steam Navig. Co. v. Merchants' Bank of Boston, 47 U.S. 344 (1848).
(38) James J. Donovan, The Origins and Development of Limitation of Shipowners' Liability,, 53 TUL. L. REV. at 1012.
(39) Id. at 1013, 1015, 1018-1019.
(40) Graydon S. Staring, The Roots and False Aspirations of Shipowner's Limitation of Liability, 39 J. MAR. LAW & COM. at 327. See also Norwich, 80 U.S. at 121. The Court stated: "The great object of the law was to encourage ship-building and to induce capitalists to invest money in this branch of industry."
(41) Ex parte Phenix Ins. Co., 118 U.S. 610 (1886).
(45) 46 U.S.C. [section] 30505.
(46) Phenix, 118 U.S. at 617.
(48) Id. at 617, 624.
(49) THE PLYMOUTH, 70 U.S. 20, 33 (1866).
(50) Butler v, Boston & S.S.S. Co.,130 U.S. 527 (1889).
(51) Id. at 550. When the statute was printed the word "lost" appeared rather than "loss." The Court stated that this was an apparent misprint.
(53) Three years prior to this decision the Court held in The Harrisburg, 119 U.S. 199 (1886) that there was no cause of action for wrongful death under general maritime law. The Court expressed no opinion on whether a state act could create a cause of action not available under general maritime law or allowed by federal statute.
(54) Butler, 130 U.S. at 558.
(55) Id. at 557.
(56) Act of June 26, 1884, ch. 121, [section] 18, 1884, 48th Congress.
(57) Butler, 130 U.S. at 554.
(58) Act of June 26, 1884, ch. 121, [section] 18, 1884, 48th Congress (emphasis added).
(62) See generally Butler, 130 U.S. 527 (1889).
(63) Chappell v. Bradshaw, 35 F. 923 (D. Md. 1888).
(64) Id. at 924.
(66) Id. at 924-25.
(67) The Annie Faxon, 75 F. 312 (9th Cir. 1896).
(68) Id. at 318-319.
(69) Richardson, 222 U.S. at 96.
(70) Id. at 99-100.
(71) Id. at 100.
(73) Id. at 101.
(74) Phenix, 118 U.S. at 610.
(75) Richardson, 222 U.S. 96, 101. See also, THE PLYMOUTH, 70 U.S. at 34, in which the Court held that the negligent act and damage must occur upon navigable waters.
(76) Id. at 102.
(77) Id. at 103.
(78) Act of June 26, 1884, ch. 121, [section] 18, 1884, 48th Congress.
(79) Richardson, 222 U.S. at 103.
(80) Id. at 104.
(81) Id. at 106-107.
(82) Id. at 106.
(83) Butler, 130 U.S. at 550.
(85) Id. at 557.
(86) THE NO. 6, 241 F. 69 (C.A.2 1917).
(87) Id. at 71.
(88) Just, 321 U.S. at 383.
(89) Id. at 386.
(90) Delovio v. Boit, 7 F.Cas. 418 (C.C.D.Mass. 1815).
(91) Id. at 444.
(92) Id. at 443.
(93) The Thomas Jefferson, 23 U.S. 428 (1825).
(95) Id. at 429.
(96) Id. at 429.
(97) Orleans v. Phoebus, 36 U.S. 175, 183 (1837).
(98) Id. at 183.
(101) Waring v. Clarke, 46 U.S. 441 (1847).
(102) Id. at 451.
(103) Id. at 453.
(104) See Waring, 46 U.S. at 454.
(105) Id. at 457.
(108) Id. at 470. The dissent based its objection to an extension of admiralty jurisdiction on the abolition of the right to trial by jury, the substitution of civil law over common law and federal encroachment on the jurisdiction of state court tribunals. Commerce between states on internal waters was, according to the dissent, out of the reach of federal jurisdiction and constituted federal encroachment on exclusive state jurisdiction. Id. at 498.
(109) Waring, 46 U.S. at 460.
(110) THOMAS J. SCHOENBAUM, ADMIRALTY AND MARITIME LAW, Vol. 1 [section] 3-1, p. 113 (5th ed. 2011).
(111) 28 U.S.C. [section]1333 (2018) "[T]he district courts shall have original jurisdiction, exclusive of the courts of the States, of (1) Any civil case of admiralty or maritime jurisdiction, saving to suitors in all cases all other remedies to which they are otherwise entitled. (2) Any prize brought into the United States and all proceedings for the condemnation of property taken as prize."
(112) Waring, 46 U.S. at 461.
(114) Id. at 464.
(115) THOMAS J. SCHOENBAUM, ADMIRALTY AND MARITIME LAW, Vol. 1 [section] 3-1, p. 112 (5th ed. 2011).
(117) Great Lakes Act, ch. 20, 5 Stat. 726 (1845), (codified as amended at 28 U.S.C. [section]1873 (1948)).
(119) Id. "[T]he trial of all issues of fact shall be by jury if either party demands it."
(120) Propeller Genesee Chief v. Fitzhugh, 53 U.S. 443, 447 (1851).
(121) Id. at 450.
(122) Id. at 452.
(123) Id. at 453.
(124) Id. at 456.
(125) Waring, 46 U.S. at 441.
(126) Propeller, 53 U.S. at 456-457.
(127) Id. at 457. See also The Eagle, 75 U.S. 15, 20-21 (1868) in which the Court further extended federal admiralty jurisdiction and substantive U.S. maritime law to a marine casualty involving a tug and tow on the Canadian side of the Detroit River. Admiralty jurisdiction was challenged on the basis that the collision occurred in Canadian waters and the Great Lakes Act did not extend to foreign waters. The 1789 Judiciary Act 1789 conferred a broad grant of admiralty jurisdiction to the federal court extending into foreign waters. Id. at 21.
(128) Propeller, 53 U.S. at 457.
(129) Id. at 458.
(130) Thomas J. Schoenbaum, ADMIRALTY AND MARITIME LAW, Vol. 1 [section] 3-1, p. 113 5th ed. (2011).
(131) Jackson v. S.B. Magnolia, 61 U.S. 296 (1857).
(132) Id. at 299.
(133) Id. at 300.
(134) Id. at 301.
(135) Id. at 301.
(136) Thomas v. Lane, 23 F. Cas. 957, 960 (C.C.D. Me. 1833). The seaman brought suit for battery and unlawful imprisonment against the master and mate which occurred in Havanna harbor. Though he stated that the court would have jurisdiction for a tort within a foreign port subject to the ebb and flow of the tide, the alleged unlawful imprisonment occurred on shore. In addition, the plaintiff failed to state that the tort occurred either on the high seas or within the ebb and flow of the tide.
(137) The Plymouth, 70 U.S. at 36 (1865).
(138) Id. at 35.
(139) Id. at 37.
(140) The Admiral Peoples, 295 U.S. 649 (1935).
(141) THOMAS J. SCHOENBAUM, ADMIRALTY AND MARITIME LAW, Vol. 1 [section] 3-4, p. 132 (5th ed. 2011).
(142) 46 U.S.C. [section] 30101(a). "In general. The admiralty and maritime jurisdiction of the United States extends to and includes cases of injury or damage, to person or property, caused by a vessel on navigable waters, even though the injury or damage is done or consummated on land."
(143) 46 U.S.C. [section] 30101(b).
(144) See THOMAS J. SCHOENBAUM, ADMIRALTY AND MARITIME LAW, Vol. 1 [section] 3-4, p. 136-37 (5th ed. 2011).
(145) The Death on the High Seas Act, 46 U.S.C. [section] 30301 et seq. was passed in 1920 to create a right and cause of action for wrongful death on the high seas beyond 3 nautical miles from the shore of the United States. The statute allows for an action to be brought in admiralty by the personal representative of the decedent on behalf of dependents. It overruled The Harrisburg which held that no action for wrongful death existed under general maritime law. At the time DOHSA was enacted, aviation was in its infancy.
(146) Exec. Jet Aviation, Inc. v. City of Cleveland, 409 U.S. 249 (1972).
(147) Id. at 250.
(148) Id. at 250-251.
(149) Id. at 251-252. Sixth Circuit precedent required two criteria including locality and traditional maritime activity to satisfy admiralty jurisdiction.
(150) Id. at 251. (citing Chapman v. City of Crosse Pointe Farms, 385 F.2d 962 (1967)).
(151) Jet Aviation, 409 U.S. at 251-252.
(152) Id. at 268.
(153) Foremost Ins. Co. v. Richardson, 457 U.S. 668 (1982).
(154) Richardson v. Foremost Ins. Co., 470 F. Supp. 699, 704 (E.D. La. 1979).
(155) Richardson v. Foremost Ins. Co., 641 F.2d 314, 316 (5th Cir. 1981). The court stated, "We hold that two hoats, regardless of their intended use, purpose, size, and activity, are engaged in traditional maritime activity when a collision between them occurs on navigable waters. We say this because boats, regardless of their size, purpose, and activity, are governed by the same 'Rules of the Road' as the largest seagoing vessel when those boats are traversing navigable waters."
(156) 1 U.S.C. [section] 3.
(157) Richardson, 457 U.S. at 676.
(158) 497 U.S. 358 (1990).
(159) See Ficarra v. Germain, 91 F. Supp. 3d 309 (N.D.N.Y. 2015), rev'd sub nom. In re Petition of Germain, 824 F.3d 258, 277 (2d Cir. 2016) in which the Second Circuit Court of Appeals held that a recreational accident is within admiralty jurisdiction because it had a potential to disrupt maritime commerce. The Second Circuit criticized the present test as complex and unclear.
(160) See generally Sisson, 53 U.S. 443.
(161) See generally Executive Jet, 409 U.S. 249.
(162) The Daniel Ball, 77 U.S. 557, 563 (1870).
(163) Army Corp of Eng'r, National Inventory of Dams, CorpsMap, http://nid.usace.army.mil/cm_apex/f?p=838:5:0::NO (last visited July 27, 2017). The overwhelming majority of dams are privately owned.
(165) In re Petition of Germain, 824 F.3d 258, 263 (2d Cir. 2016).
(166) Jerome B. Grubart, Inc. v. Great Lakes Dredge & Dock Co., 513 U.S. 527, 543 (1995).
(167) 2016 Recreational Boat Statistics, U.S. COAST GUARD 6, http://uscgboating.org/library/accident-statistics/ftecreational-Boating-Statistics-2016.pdf, Executive summary, page 6.
(168) Alford v. Appalachian Power Co., 951 F.2d 30 (4th Cir. 1991).
(169) Id. at 33.
(170) Three Buoys Houseboat Vacations U.S.A. Ltd. v. Morts, 921 F.2d 775, 779 (8th Cir. 1990), cert. denied, 502 U.S. 898 (1991).
(171) Three Buoys Houseboat Vacations U.S.A. Ltd. v. Morts, 878 F.2d 1096, 1099 (8th Cir. 1989).
(172) LeBlanc v. Cleveland, 198 F.3d 353 (2d Cir. 1999).
(173) Chapman v. U.S., 575 F.2d 147 (7th Cir. 1978); writ denied, 439 U.S. 893 (1978).
(174) Tundidor v. Miami-Dade Cnty., 831 F.3d 1328 (11th Cir. 2016).
(175) See generally Texas Menhaden Co. v. Palermo, 329 F.2d 579 (5th Cir. 1964).
(176) Waring, 46 U.S. at 498.
(177) 28 U.S.C. [section] 1873.
(178) THOMAS J. SCHOENBAUM, ADMIRALTY AND MARITIME LAW, Vol. 1 [section] 4-5, p. 244-45 (5th ed. 2011).
(179) Aqua Log, Inc. v. Lost & Abandoned Pre-Cut Logs & Raft of Logs, 709 F.3d 1055, 1058 (11th Cir. 2015) (quoting Grant Gilmore, Jr. & Charles L. Black, The Law of Admiralty 31-32 (2d ed. 1975)).
(180) Tundidor, 831 F.3d at 1328. ("[E]xtending jurisdiction to waters incapable of commercial activity serves no purpose of admiralty jurisdiction." Id. at 1333.
(181) Id. at 1334.
(182) E. River S.S. Corp. v. Transamerica Delaval, 476 U.S. 858, 864 (1986).
(183) Kaiser Aetna v. United States, 444 U.S. 164, 170 (1979); see also PPL Montana v. Montana, 565 U.S. 576, 592-593 (2012).
(184) Thompkins v. Lake Chelan Recreation, No. CS-94-206-FVS, 1995 U.S. Dist. LEXIS 17919, at *8 (E.D. Wa. 1995).
(185) 33 U.S.C. [section] 1251 et seq.
(186) U.S. Const, art. I, [section] 8, cl 3.
(187) Kaiser Aetna, 444 U.S. at 172.
(188) Id. at 174.
(189) Adams v. Montana Power Company, 528 F.2d 437, 439 (9th Cir. 1975).
(190) S. Pacific Co. v. Jensen, 244 U.S. 205 (1917). "Jensen thus established the principle that the general maritime law governs maritime occurrences and that state law must yield to the required uniformity of the maritime law." THOMAS J. SCHOENBAUM, ADMIRALTY AND MARITIME LAW, Vol. 1 [section] 4-2, p. 225 (5th ed. 2011).
(191) Act of Mar. 3, 1851, ch. 43, [section] 7, 9 Stat. 635-36 (current version at 46 U.S.C. app [section][section] 181-89 (1994).
(192) 46 U.S.C. [section] 30502.
(193) In re Garnett, 141 U.S. 1 (1891).
(194) Id. at 8.
(195) Id. at 9.
(196) Id. at 14.
(197) Id. at 18.
(198) Garnett, 141 U.S. at 18. "[W]e have no hesitation in saying that the Savannah River, from its mouth to the highest point to which it is navigable, is subject to the maritime law and the admiralty jurisdiction of the United States." (emphasis added).
(199) 46 U.S.C. [section] 30502 (2012).
(200) Waring, 358 U.S. at 354.
(201) Chief Justice John Marshall acknowledged three separate and distinct bases of federal jurisdiction. Id. at 365. See also The Sarah, 21 U.S. 391, 394 (1823) in which Chief Justice Marshall states that a federal court is a court of common law and of admiralty. "Although the two jurisdictions are vested in the same tribunal, they are as distinct from each other as if they were vested in different tribunals, and can no more be blended, than a Court of Chancery with a Court of common law."
(202) Sarah, 21 U.S. at 394.
(203) Amie L. Medley, Note: A Sea of Confusion: The Shipowner's Limitation of Liability Act as an Independent Basis for Admiralty Jurisdiction, 108 MICH. L. REV. 229, 251 (2009).
(204) 46 U.S.C. [section][section] 30302 et seq. (2012).
(206) 46 U.S.C. [section] 30308.
(207) Three Buoys Houseboat, 921 F.2d at 779-780 and Seven Resorts, 57 F.3d at 773.
(208) Three Buoys Houseboat, 921 F.2d at 779-80.
(209) Seven Resorts, 57 F.3d at 773.
(210) Am. Well Works Co. v. Layne & Bowler, 241 U.S. 257 (1916).
(211) Franchise Tax Bd. Of State of Cal. v. Construction Laborers Vacation Trust for So. Cal, 463 U.S. 1, 9-10 (1983).
(212) American, 241 U.S. at 259.
(213) See Three Buoys, 921 F.2d at 780.
(214) Romero v. Int'l Terminal Operating Co., 358 U.S. 354 (1958).
(215) Three Buoys, 921 F.2d at 775.
(216) FED. R. CIV. P. SUPP. F (1) (2012). A vessel owner must file a complaint for limitation within 6 months of receipt of a claim in writing.
(217) Pursuant to the savings to suitors clause, 28 U.S.C. [section] 1332, a state court may entertain a maritime claim such as a maritime tort or breach of contract claim retaining the right to a jury trial. However, a tort on a lake solely and exclusively within a state does not invoke the admiralty jurisdiction or require the application of maritime law.
(218) See Seven Resorts, 57 F.3d 771.
(219) Seven Resorts, 57 F.3d at 773 (citing American Well Works, 241 U.S. 257, 260 (1916) and Smith v. Kansas City Title & Trust Co., 255 U.S. 180, 199-202 (1921)).
(220) Norwich, 80 U.S. at 104.
(221) 28 U.S.C. Supp. Admiralty Rule F.
(222) FED. R. CIV. P. SUPP. F (1) (2012).
(223) Gordon S. Staring, Limitation Practice and Procedure, 53 TUL. L. REV. 1134, 1174(1979).
(225) Richardson, 222 U.S. 96 (1911).
(226) 46 U.S.C. [section] 30502 (2012).
(227) 28 U.S.C. [section] 1333 (1) (2012).
(228) Langes v. Green, 282 U.S. 531 (1931). The U.S. Supreme Court has allowed single claimants to proceed in state court to preserve the right to trial by jury. If there are multiple claimants and the fund is sufficient for all claims, the state court claims may proceed. Lake Tankers Corp. v. Henn, 354 U.S. 147 (1957). Even if there are multiple claimants and the fund is inadequate, state court claimants may proceed in state court if all claimants enter certain stipulations. Ingram Barge Co. Limitation Proceeding. 419 F. Supp. 883 (S.D. W.Va. 2006).
(229) 46 U.S.C. [section]30502.
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|Author:||Crais, Arthur A., Jr.|
|Publication:||Loyola Maritime Law Journal|
|Date:||Jun 22, 2018|
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